Ladies and gentlemen, thank you for standing by, and welcome to NETSCOUT's 3rd Quarter 2021 Financial Results Conference Call. At this time, all parties are in a listen only mode until the question and answer portion of the call. As a reminder, this call is being recorded. Tony Piazza, Vice President of Corporate Finance and his colleagues at NETSCOUT or on the line with us today. I would now like to turn the call over to Tony Piazza to begin the company's prepared remarks.
Thank you, Leo, and good morning, everyone. Welcome to NETSCOUT's 3rd quarter fiscal year 2021 conference call for the period ended December 31, 2020. Joining me today are Nelson Gall, NETSCOUT's President and Chief Executive Officer Michael Sabados, NETSCOUT's Chief Operating Officer and Gene Bua, NETSCOUT's Executive Vice President and Chief Financial Officer. There is a slide presentation that accompanies our prepared remarks. You can advance the slides in the webcast viewer to follow our commentary.
Both the slides and the prepared remarks can be in multiple areas within the Investor Relations section of our website at www.netscout. Including the IR landing page under Financial Results, the webcast itself and under Financial Information on the Quarterly Results page. Moving on to Slide number 3. Today's conference call will include forward looking statements. These statements may be Preface by words such as anticipate, believe and expect, and will cover a range of topics that are not strictly historical facts, such as our outlook, Our market opportunities and market share, key business initiatives and future product plans, along with their potential impact on our financial performance.
These forward looking statements involve risks and uncertainties, and actual results could differ materially from the forward looking statements due to known and unknown risks, uncertainties, assumptions and other factors, Which are described on this slide in today's financial press release as well as in the company's annual report and Form 10 ks for the year ended March 31, 2020, and subsequent quarterly reports on Form 10 Q. NETSCOUT assumes no obligation to update any forward looking information contained in this communication or with respect to the announcements described herein. Let's turn to Slide number 4, which involves non GAAP metrics. While this slide presentation includes both GAAP and non GAAP results, Unless otherwise stated, financial information discussed on today's conference call will be on a non GAAP basis only. The rationale for providing non GAAP measures, along with the limitations of relying solely on those measures is detailed on the slides and in today's press release.
These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. Reconciliations of all non GAAP metrics with the applicable GAAP measures are provided in the appendix
Anil? Thank you, Tony. Good morning, everyone, and thank you for joining us. Let's begin on Slide number 6 with a brief recap of our 3rd quarter non GAAP results. We are generally pleased with our 3rd quarter results.
They contributed to our strong year to date earnings per share growth over the same period in the prior fiscal year. Revenue for the quarter was $228,700,000 Earnings per share was $0.66 in the quarter. The quarter had solid gross and operating margins of 78.6% and 28.2%, respectively. This was attributable to high margin security product performance and reduced expenses from our continued cost control focus and benefits from the pandemic related restrictions on travel and events. Today, we are narrowing our revenue range and increasing our EPS outlook as a result of our year to date performance.
Let's move to Slide number 7 for some further perspective on market trends and Business Insights. From a market perspective, our offerings are being well received given our ability to provide service assurance with real Our security solutions mitigate disruption for our customers, and all of our Products provide solutions regardless of the customer's underlying infrastructure. This is important as customers further their information technology infrastructure in this pandemic environment that is training their networks in terms of volume and attempted security breaches. Despite this need, it continues to be a challenging selling environment as many companies are financially constrained As they manage through the current pandemic and macroeconomic environment and are forced to make tough choices on balancing visibility and protection against spending constraints. In the service provider vertical, revenue declined approximately 11% for the quarter And approximately 9% on a year to date basis.
We do not see any immediate changes to the service provider spending environment, But are optimistic about 5 gs given the recent spectrum options. As we have discussed on prior calls, the next Technology evolution that we believe will create increased customer spending in this vertical is 5 gs and specifically the build out of the standalone 5 gs network. Although we are not at the standalone 5 gs network point yet, we are starting to see progress on this front. The conclusion of the SDC U. S.
Auction process for the C band spectrum required to advance the standalone 5 gs networks are record breaking prices. Bakers are currently awaiting the spectrum allocations, which should be a catalyst to advancing the build out of standalone 5 gs networks in the U. S. Michael will highlight some recent customer wins in this article during his remarks. In the enterprise customer vertical, revenue declined approximately 13% for the quarter and 4% on a year to date basis.
The primary driver of the year to date decrease was lower federal government spending. As we have previously mentioned, even with a solid pipeline of user approved projects in the federal government sector, The timing and magnitude of funding for these initiatives has been difficult to predict in the current environment. Removing federal government revenue from the comparison, Enterprise revenue would have grown in the low to mid single digits on a year to date basis. Given the heightened awareness around cyber From the pandemic and the recent news of the Sunburst attack, I would like to take a moment to frame our security product line. Our security offerings, in particular, our smart DDoS solutions have done well this year.
Our year to date security revenue growth It is in the low single double digits with growth in both the service provider and enterprise verticals compared to the same period last fiscal years. Our security offerings currently make up approximately a quarter of our total annual revenue. From a competitive perspective, Our security offerings are differentiated in that they are driven by broad and deep visibility that illuminates our customers' network infrastructure using patented NETSCOUT Packet and Flow Crossing Technologies and our unique intelligence. We also focus in 2 areas, Speed of detection from the network to the application layer and fast access to currency capabilities that allow a customer to quickly understand what Most importantly, our products have delivered against the requirements of most demanding organizations all around the world. We are increasing our focus in the security area as we continue to integrate our service assurance security solution to provide these unique offerings in the market.
For example, we recently released 2 new products, Cyber Investigator and CyberStream, which combine our packet based technologies And are designed to accelerate threat hunting, forensics and incident response. Our AD product is designed to Michael will highlight more on this and some of our enterprise wins in this vertical during his remarks. Now let's move to Slide number 8 to review our outlook. Our focus during this challenging time Has been to keep our team safe and productive to serve our customers well with the highest quality solutions and the service And to drive overall margin expansion while preserving liquidity to maintain a strong balance sheet and financial flexibility. Our recent our relevant solutions, trusted brand, strong customer relationships, dedicated team and solid financial profile acquisition as well as we continue to weather the current environment.
That said, we are not immune to the impacts of the pandemic resulting challenges challenging macroeconomic environment that is causing elongated purchasing cycles. In the face of this climate, we remain committed to enhancing our profitability. Today, we are raising our fiscal year 2021 earnings per share outlook, Look, given our solid year to date earnings performance, with 1 quarter remaining over fiscal year 2021, we are also narrowing our annual revenue guidance range, Although the midpoint remains the same, Gene will provide more details on our updated guidance during her remarks. We appreciate the dedication and support of our employees and other stakeholders during this time. We also look forward to interacting with many of our users and partners at our upcoming Virtual Engage 2021 technology and user event.
Michael will provide more information on this event during his remarks. With long term market trends such as digital transformation, Cloud migration, increased cyber threats and 5 gs networks in NETSCOUT's favor, we continue to believe are well positioned as guardians of the connected world when we emerge from this COVID crisis. I look forward to updating you on our progress As we finish this fiscal year and sharing here our strategy for fiscal year 2022 and beyond on a future call. I'll now turn the call over to Michael Quaranti, Max.
Thank you, Anil, and good morning, everyone. Slide 10 outlines the areas that I will cover. In terms of customer wins, starting with customer wins in the service provider vertical, a notable win in the quarter Was 1 with a Tier 1 domestic mobile service provider that continues to build on our solutions to break out its 5 gs network. The deal was a low 8 figure order similar to the order they placed in the same quarter last year. The deal encompassed our entire software portfolio of service assurance solutions and is a key part of this provider's 5 gs offering.
Continuing with the service provider vertical, from a security perspective. We see additional opportunities emerging for our security products due to the strong increase in OTT or over the top traffic. During the quarter, we won a mid-seven figure deal with an existing customer That is a leading MSO or multi services operations company. They began an initiative to play DDoS protection Cyber edge of their network beyond the typical placement at the so called bleeding edge in order to optimize and offer managed services to the customers from these new installations. Smart DDoS opportunities are growing Due to the new, more sophisticated and complex attack types that necessitate on premises deployment in the enterprise market, Often in front of our customers' firewalls to protect them from being overrun by high volume ointment effects, Our AET product has benefited from this trend.
In the enterprise vertical, new logos are often competitive wins against an incumbent And in some cases, the opportunity arises in greenfield accounts due to growing threats to mission critical services. Such was the case with the low 7 figure deal in Asia where the customer is the back office service provider to a leading U. S. Bank, with a combination of our NGS and smart DDoS security solutions. Increasingly in our enterprise wins, Our superior portfolio breadth and depth are the deciding factor in our favor.
A sector that has continued to perform well in our Customer base in this environment is healthcare. During the quarter, we won a series of deals that amounted to a high 7 figure total with a leading U. S. Healthcare provider. These are long standing customers.
The transaction was a refresh and Expansion of their existing service assurance deployments at various sites. This refresh was an opportunity to convert their appliance deployments to our COTS Our commercial off the shelf offerings, which was a financially compelling value to the customer. Expansion opportunities have been developing in cloud initiatives, telemedicine and application assurance. In terms of go to market activities, We continue to focus on our strategic partnerships and customer engagement. One example of Our key strategic partnerships of our key strategic partnerships is one with Amazon, Amazon Lab Services.
In November, we exhibited at the AWS Annual Reinvent 2020 event and announced and demoed NETSCOUT Cyber Investigator in the cloud. Cyber Investigator is also available in all other form factors, as Anil mentioned, and It's designated to accelerate designed to accelerate threat hunting and investigation. We collaborated closely with AWS the development of pioneering packet access services, which enable packet based security and service assurance vendors to deploy their solutions simply and affordably in the cloud. On the customer engagement front, we are planning our annual Engage Technology and User Summit as a virtual event scheduled for April 19 to April 30. For Engage 2021, we are expanding the event to affect both users and prospects in both the service assurance and cybersecurity fields.
Over the 2 weeks, we will showcase our security, service assurance and DDoS capabilities And the highlight of the year for us given the opportunity to meet with our user and partner community and discuss how our solutions truly offer That concludes my prepared remarks, and I will now turn the call over to Steve.
Thank you, Michael, and good morning, everyone. I will year. As a reminder, this review focuses on our non GAAP results unless otherwise stated, and all reconciliations with our GAAP results appear in the presentation Slide number 12 details our results for our Q3 year to date fiscal year 2021. Focusing on the quarterly performance, revenue declined 12% over the same quarter in the prior year to $228,700,000 product revenue declined 19.8% Margin was 78.6%, up 0.8% over the same quarter last year, primarily attributable to the product mix within the Our software only sales were 31% of service assurance product revenue compared with 42% in the Q3 of the prior year. Quarterly operating expenses decreased 12.1% The prior year, McClaxseed continued cost control and reduced costs for sales and marketing and pandemic related travel restrictions.
We reported an operating profit margin of 28.2% compared with 27.3% in the same quarter last year. Diluted earnings per share was $0.66 compared with $0.73 in the same quarter last year. Turning to Slide 13, I'd like to review key revenue trends for the 1st 9 months of the fiscal year. At the end of our fiscal 3rd The service provider customer vertical revenue declined approximately 9%, while the enterprise vertical declined approximately 4%. Approximately 51% of total revenue for the 1st 9 months of the fiscal year was generated by the service provider vertical with the remainder of the enterprise vertical.
Turning to Slide 14, which shows our geographic revenue mix on a GAAP basis. Revenue by geography was 59% in the United States and 41% internationally. There were no customers in the quarter or the 1st 9 months of the year that represented 10 percent on board of revenue. Slide 15 details our balance sheet highlights and free cash flow. We ended the quarter with cash, cash equivalents, short Securities and long term marketable securities of $490,400,000 which is an increase of $62,600,000 since the end of the second quarter.
Free cash flow generated in the quarter was $62,000,000 During the quarter, we repurchased approximately 154,000 shares of our common stock at a cost of approximately $3,300,000 Which is an average price per share of $21.23 We currently have a share repurchase program in place We plan to be active in the market, pending our market conditions. From a debt perspective, at the end of the 3rd quarter, We had $450,000,000 outstanding on our $1,000,000,000 revolving credit facility. Our revolving credit We plan to repay $100,000,000 of debt in our 4th quarter. Accordingly, we anticipate outstanding debt to be $350,000,000 entering our fiscal year 2022. Our revolving credit facility expires in January of 2023 I had no required principal repayments until maturity.
To briefly recap all the balance sheet highlights, Accounts receivable net was $208,000,000 down by $5,500,000 since the end of March. DSOs were 70 days versus 73 days at the end of fiscal year 2020 77 days at the same time last year. The improvement in the DSOs in the Q3 of this year, comparing with the Q3 of the prior year It's primarily attributable to the timing of orders within the quarter. Let's move to Slide 16 for our guidance. I will focus my review On our non GAAP guidance, we have updated our fiscal year 2021 guidance, which was originally issued on October 29, 2020.
With 1 quarter remaining in the fiscal year, we are narrowing the range of our expected revenue performance and increasing our earnings per share expectations. We now expect revenues for fiscal year 2021 to be in the range of $825,000,000 to $840,000,000 We expect non GAAP earnings per share to improve over the last fiscal year and be in a range of $1.60 to $1.67 I would also like to note a few of the items related to our outlook for fiscal year 2021. We anticipate our gross margin to be approximately 76%. We expect the full year tax rate to be approximately 21 Additionally, we expect the diluted weighted average shares outstanding for the fiscal year to be approximately 74,000,000 shares. That concludes my formal review of our financial results.
I'll now turn the call over to Lino
We'll take our first question from Matt Hedberg of RBC Capital Markets.
Hey, thanks guys. Good morning. Thanks for the questions here. Aneel, you noted service provider spending was down 11%. I wonder if you could talk a bit more about the dynamics And maybe a little bit more on your large deal pipeline there that might get you more confident on Q4 expectations on the service provider side.
Well, overall, as Matt, we have mentioned in the past, I think there has been Consolidation changes in the large customer, large carriers, the top 4, It's consolidation and lack of spending with one of them and that has affected our business over the last few years. And we think we are hitting the all the bottoms of all the negative effect of these events. And so we don't think that situation will get worse into next year. But on the international side, Our pipeline is improving and I think there is still a lot of 4 gs spending and we have spent Tremendous R and D and with G on 5 gs. While 5 gs is not bringing the revenue, it is allowing us to drive 4 gs business.
And so when we are doing 5 gs trials, traffic for 4 gs continues to grow. So I overall feel that I think we have Generally hit the bottom in the carrier area. 2nd is that there is a lot of interest in being able to We use plug in modules for security with our service assurance products. So there is a lot of questions about IoT based attacks and DDoS attacks on the carrier, on the mobility network, on the RAN. And we are positioned properly in the right places as incumbent in big carrier accounts where we can sell Software modules without the need for them to buy additional hardware.
And when they buy, they spend a lot of money on hardware, that means there's less money left over for us. So, Adi, those are the dynamics and I don't know whether I directly answer your question, but overall the U. S. Situation is normalizing And I think there is improvement outside of U. S.
That's great. No, that helps. And then, Gene, In your prepared remarks, you noted that software only sales were 31% of Service Assurance product revenue, maybe a little bit lower. I think you noted 42% last year. Just sort of curious on why that's the case.
I mean, I guess I would assume that over time software only would continue to mix up rather than down this quarter, maybe there was a dynamic
I would
the way we've discussed it before is that We have many different offerings for customers and they can buy in any form factor that they prefer. So the mix is generally a function of the preference of customers. Last quarter, last year's Q3, we had many deals that were including some
deals in the enterprise that were software only. So I would just
say it's a function of the That was software only. So I would just say it's a function of the customer projects that actually happened in Q3 of this year versus Q3 of last year.
Got it. So more of a
comp. I'm sorry, we've made significant headway also in some of our software only and our Purity products, which we don't have in that particular 30% to 33% that we discussed.
Got it. No, that makes a ton of sense. Thanks guys.
Thank you.
Our next question is from Eric Martinuzzi of Lake Street.
Yes. I also wanted to focus on the carrier spend. Just to clarify, I realize I may not quite understand, Aneel, when you say carrier spending hitting bottom or Does that mean that there's kind of a maintenance level of spending from carriers that stops The carrier spend on an annual basis from going down anymore or it's hit a bottom and you expect it
I think on the U. S. Carriers, The top 4 U. S. Carrier, now there are only 3 left.
I mean, that's what I mentioned that I think we are doing a reasonable business on both the product side and the renewals have stabilized. And that's what I'm That a further decline into next year is unlikely, and that was a big portion of our total carrier spend. And that is totally clear. The contribution to revenue, but outside of U. S, I think there is an uptick And as people are continuing to be interested in that, we have increased our focus on And lastly, I think we have talked a lot about Tier 1s and one of the things We are doing now without some pricing model is to see how do we go after the Tier 2 market, which is much more price sensitive.
So I think overall effect of all these things is a normalization of services revenue and carrier With security potential upside and 5 gs as a potential upside next year.
Got it. You talked about or one of the things in the quarter that took place was a nice renewal and expansion with Vodafone. I know you've had Vodafone got to be over probably 10 years, if not 15 years, you had a relationship there. What can you tell us about how that relationship changed on this renewal versus the prior
I think it just strengthens the revenue stream coming from them. So this deal is about Covering all the Avcos in Europe and so about 17, right, so it's a master deal and they get price they are Predetermined price points. If anybody wants to buy, it's a blanket contract. And so it just solidifies our business in that Vodafone op For the next 3 years and where there is not going to be a big price negotiation moving forward. And it's an extension of the deal we had done with them Earlier so and this time it was a little bit tougher because we had more people Bidding for this, there were discussion about cloud based deployments and 5 gs direction and in the end we won.
And so I look at it as Vodafone business. It's not going up or down. It's a continuation of the similar margins and The revenue we had in the last 3 years.
Got it. Congrats on that. One last question for me. The Fed, as you It's somewhat unpredictable as to when that business hits. Given change in Administration, is there anything that allows you to predict that business a little bit better In over the next 12 months versus the prior 12 months?
Or is it really unrelated to the administration in charge?
I think Gene may have some other things points there, but I think it's unrelated, but that doesn't mean there may not be a positive impact. But overall, I see there is a lot of interest in our cybersecurity solution in the federal area, and I think that could be a bigger effect. And as you may remember, we announced a product last year in the security area beyond the DDoS, but it has been very difficult to do trials Because of pandemic and to put new equipment there. So we feel that The comparison from last year federal last year federal was there. I mean, there was a great year.
So part of it is that. But we think that Cybersecurity push for solution in the coming year, next year will be a bigger contributor to Positive trend than the government change or administration change.
Okay. And then one for Gene. Given the repurchases that you did in the December quarter, I see the guidance Your expectations for the weighted average share. Historically, you've had some kind of calculus on the buyback. I know because of COVID, you revisited that, so maybe it was 9 months ago.
The use of cash, You've said in the press release, hey, we're going to pay down $100,000,000 on the revolver. So how aggressive are we going to be on the buyback?
Well, when we look at the buyback, we always look at what our future valuations will be based on our plans and where the market is. So it's really a It is. So it's really a condition of what the share price is at the moment when we put the grid These grades were put in place back at the beginning of our last quarter after our earnings call, so probably sometime in November. So they would have been based on market conditions at that time.
Okay.
And then the pay down on the debt is just really Have more breathing room on covenants or just aversion to debt?
Well, when we looked at it, we have We generate a lot of cash. We have a lot of free cash flow, especially sitting in the United States. And rather than keep it on our balance sheet, We thought at the moment it made sense to pay down the $100,000,000 on the revolver. That will bring us down into a slightly lower Price on the on our LIBOR margin, so we should save some earnings per share in FY 'twenty two on that. But the important thing is that that revolver is a flexible vehicle.
So that means that I could pay it down and then in the quarter if thought I needed to ratchet the debt back up or for whatever opportunity arose, I could do that very easily. So it's a very flexible instrument.
Our next question is from James Fish of Piper Sandler.
Hey, guys. Thanks for the questions here. I wanted to start on the product upside. How much especially with enterprises was related to budget flush SolarWinds breach for security. And just related to the SolarWinds breach, has this caused some enterprises to look actually at the NETSCOUT's service insurance portfolio as
a replacement at all?
So I'll answer portfolio as a replacement at all?
So I'll answer this SolarWind question or the sunburst attack. And So we don't directly our product didn't directly detect that attack. But once the attack was detected, Once this threat vector was known, our product was used to provide visibility into how vulnerable people were like it helped in the cleanup attempt. But I think the biggest part was that while it didn't drive any new revenue, I think our approach, which is less vulnerable to Because not only security products have to be able to detect attack And do forensic analysis, but they can themselves cannot be vulnerable. So it's not just our product, but our approach.
The way it's a standalone appliance or a software appliance, what is being installed on the server, It's less prone to hacker and that approach is getting validated For the security guys, and there is much more appreciation of what we do. And this will help us. And James, indirectly, as we launch our new security product, We don't need to defend our approach too much because of what's happening in the marketplace. So it didn't really revenue in this, but it solidified our position in the market And people will look at more favorably at our approach and product as we launch our cybersecurity solution. And maybe Jean can mention anything about the contribution.
I mean, we had taken the opportunity given the current interest in The cybersecurity landscape to explain a little bit about our DDoS offerings, which are under the brand name Arbor. Within the enterprise on a year to date basis, ABRA has been growing very well. They've been growing probably somewhere in the 20% to 25% within the enterprise. And again, we're focused mostly in your very Hi. And again, we're focused mostly in your very high end enterprises, like financials and government areas.
So, the Saba has grown very well for us this year. I think as Anil said in his remarks, it has grown in the low teens in total On a year to date basis at this time.
Right. But really, I'm trying to understand if there's any way to flush Really what the upside like how why enterprises looked pretty good this quarter, but relatively speaking, but Between budget flush that we're seeing with kind of the infrastructure space as a whole versus kind of the project deferrals, anything to comment there?
No, nothing comes to mind about any deals that will pull forward in the enterprise. I would say for the most The quarter came in line from a revenue perspective with what we had anticipated.
All right. And then I know it's Is there any way to understand what the penetration of security is actually into the Service Assurance At this point or how many products per customer you have today for security?
I think the number of customers who are actively looking at I would say maybe 10% of our service assurance customer are actively looking at our hardware solution. And Out of that, some of them have already purchased and that some of the growth that Gene is talking about is original hardware customer base and some are Service Assurance customer and the other product Cyber Investigator, which complements the hardware solution, Yes, there is a lot of interest in that. But as mentioned, that was introduced recently and there has been some challenge in doing proof of concepts. So overall, yes, we are using the Service Assurance customer base, but also wanted to mention that we are using a sole sales overlay structure this year. We started that.
That means that our service assurance sales force also gets commission on the security sales. So that is having some positive effect
Our next question is from Kevin Liu of Kevin Liu and Company.
Hi, good morning guys. First question here, just kind of following up on your last point, Daniel, just last quarter, you guys talked about good growth for Arbor Edge Defense. It sounds like that's continued so far, but you did also mention that some of the opportunities to demo it were limited by COVID related restrictions. Have you seen those opportunities start to pick up? Or have you guys identified other ways in which you can get this product in front of customers and get them to purchase?
Yes. So right now, Kevin, as mentioned, bulk of the growth in the enterprise On the Arbor side and not for the new product and bulk of That also is existing expansions of AED where the evaluation has not been a big issue, like going from 5 gig Mitigation to 10 gig or changing the model number where we are already relying on our incumbency Maybe something like a refresh. But the new opportunities in meaning new opportunities in NETSCOUT service assurance account I'm going through the slow cycles because of the POCs. And nevertheless, there is much more interest Dan, it was at the beginning of the fiscal year. And lastly, there is a next year, there is an upsell opportunity to all AED programs because AED allows us to detect and mitigate the attacks, whereas the cyber investigator sort of Gives you some insight into what the hacker was doing before and after the attack, which prevents tomorrow's attack.
So There's been a lot of interest and I've done, I mean, 30 to 50 calls with customers and there's slow traction, But very positive news for the next year.
Got it. And then maybe just shifting towards Arbor within the service provider environment, you guys Talked about kind of an interesting use case for feed offs at the subscriber edge with an MSO customer. I'm just wondering if you see that as more Kind of a one off where this does actually open the door for additional growth opportunities with other cable MSO providers?
No, that was more of a one off and because people tried to deploy that and they could have easily got with But it depends, but this was more practical for them. And so we see bigger opportunity on the enterprise side for security. And On the carrier side, we have still similar challenges of carrier spending in the overall business like in the service assurance side. So while this is a good thing, this is another way of deploying our solution. But this mode of deployment, I don't see that as a big opportunity in other carriers.
Got it. And one last one for team here. Just as we head into your fiscal 'twenty two, obviously, you're still going to be virtual with Engage How are you guys thinking about kind of the return of pre pandemic travel and marketing type events? Is that more kind of a back half 'twenty two type event Or do you actually see that starting to trickle in even earlier in the year?
Yes, I would say our first Half of our fiscal year ends in the end of September. So I would have to agree with your assumption or your statement that probably travel will pick Again in our Q3 and Q4. So that's calendar year last quarter and the first Quarter of calendar year 2022. I mean, it just makes sense with the vaccines and everything and how the rollout is coming. I heard a comment and everyone has their own thoughts that people thought they would be anybody that wanted to be vaccinated in the U.
S. Adult would be vaccinated by So that would lead to a belief that you could start traveling again sometime right after that, hopefully, fingers
And this does conclude today's question and answer session as well as today's call. You may now disconnect your lines, and everyone have a good day.