Welcome to Oracle's Second Quarter 2016 Earnings Release. As a reminder, this call is being recorded for replay purposes. I'd now like to turn the call over to Ken Bond, Senior Vice President, Investor Relations.
Thank you, Holly. Good afternoon, everyone, and welcome to Oracle's Q2 fiscal year 2016 earnings conference call. A copy of the press release and financial tables, which includes a GAAP to non GAAP reconciliation and other supplemental financial information can be viewed and downloaded from our Investor Relations website. On the call today are Chairman and Chief Technology Officer, Larry Ellison and CEOs, Safra Katz and Mark Hurd. As a reminder, today's discussion will include forward looking statements, including predictions, expectations, estimates or other information that might be considered forward looking.
Throughout today's discussion, we will present some important factors relating to our business, which may potentially affect these forward looking statements. These forward looking statements are also subject to risks and uncertainties that may cause actual results to differ materially statements being made today. As a result, we caution you against placing undue reliance on these forward looking statements, and we encourage you to review our most recent reports on our 10 Q and 10 ks and any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock. And finally, we are not obligating ourselves to revise our results or publicly release any revision to these forward looking statements in light of new information or future events. Before taking questions, we'll begin with a few prepared remarks.
And with that, I'd like to turn the call over to Safra.
Thanks, Ken. I'm going to focus on our non GAAP results for Q2. I'll then review guidance for Q3 and Q4 and turn the call over to Larry and Mark for their comments. As you can imagine, we are very pleased with the quarter. Total revenue exceeded my guidance, driven by the combined strength of our cloud business as well as better than expected results from the on premise software business.
Earnings per share were also above my guidance, coming in $0.04 better than the midpoint of the constant currency range I provided last quarter. Q2 currency headwinds were mostly as expected around 6% in most categories, including total revenues. However, the currency effect to earnings per share was 0 point 0 $6 1p more than my guidance. We will continue to use constant dollar growth rates on our quarterly calls, we can have some measure of consistency across the quarter as well as to reflect how we measure the business. Considering the progress we've made in our transition to the cloud and the subscription business, from now on, I'm going to start with our SaaS and PaaS business.
We continue to see excellent momentum there with bookings growth of 75% for this quarter on top of the 147% we reported last year. SaaS and PaaS revenue was $487,000,000 up 38% from last year, 39% in GAAP. Sequentially, SaaS and PaaS revenue grew 8% and we expect the sequential growth next quarter will be even higher. The bookings growth that we have been experiencing will now translate into a significant acceleration in SaaS and PaaS revenue growth in Q3, where we could hit 50% revenue growth and in Q4, where it should be even higher. You can also see the coming revenue acceleration of our cloud business in the SaaS and past billings and deferred revenue.
SaaS and past billings grew 68% in U. S. Dollars this quarter, on top of the 70% growth last quarter. Also, the gross deferred revenue balance is now nearly $1,100,000,000 and was up 135% in U. S.
Dollars. We've put the billings numbers up on our website for you to see the detail. The balance of our cloud revenues come from cloud infrastructure as a service, which was up 11% to $165,000,000 While SaaS and PaaS revenue will see much higher growth rates, we expect Infrastructure as a Service revenue growth, which is currently dominated by our hosting business, will be more moderate for now. Total cloud revenues, which is SaaS, PaaS and IAS were $652,000,000 up 30%. As our cloud revenue business continues to scale from the growth we are experiencing, it is beginning to benefit our margins as I previously predicted.
The Q2 gross margin for SaaS and PaaS was 43%, up from 40% last quarter and we'll see further improvement in Q3. I also expect the Q4 exit rate gross margin for SaaS and PaaS will be around 55% to 60% and from there, we'll be targeting 80% in fiscal year 2018. The gross margin in the IAS business was up slightly to 45%. Capital expenditures for the quarter were $195,000,000 or $251,000,000 lower than Q1. And I expect the cloud based, cloud related CapEx for the full year will be lower than last year as we utilize we have made.
On premise software revenues, including new software license and software license updates and product support was unchanged at 6,400,000,000 dollars Software license updates and product support revenue was $4,700,000,000 up 5% from last year and up 1% sequentially. Attach and renewal rates are running at their usual high levels. New software license revenue was $1,700,000,000 down from last year, but a bit better than I expected for the quarter. Over the full year, I expect we will see modest growth in our on premise software revenue comprised of continued growth in software support that more than offset declines in new software license. Finally, total hardware revenue was down 10%, which included hardware products revenue of $573,000,000 and hardware support revenue of 550 $1,000,000 Total revenue for the quarter was unchanged at $9,000,000,000 Non GAAP operating income was $3,700,000,000 and operating margin was 41%.
I believe that for the fiscal year we are currently in, we are more than halfway through what will turn out to have been the trough year for operating income. The non GAAP tax rate for the quarter was 20.4% and the GAAP tax rate was 17.6% as we saw some onetime non cash benefits. Non GAAP EPS was $0.63 in USD and GAAP EPS was $0.51 in USD. As I said earlier, non GAAP EPS was $0.06 lower due to currency. Free cash flow over the last 4 quarters was $11,300,000,000 dollars We now have more than $52,000,000,000 in cash and marketable securities.
Net of debt, our cash position is over 10,400,000,000 dollars Short term deferred revenue balance is $7,000,000,000 up 9% in constant currency. This quarter, we repurchased more than 86,000,000 shares for a total of $3,250,000,000 And over the last 4 years, we have reduced the shares outstanding by more than 16%. The Board of Directors also declared a quarterly dividend of 0.15 dollars per share. Over the last 12 months, we have repurchased more than 250,000,000 shares for a total of $10,300,000,000 and paid out dividends of $2,500,000,000 for a total that is more than 110% of our free cash flow. I'd also like to formally welcome Renee James to Oracle's Board.
She's a great addition. Now to the guidance. I'm going to give you guidance for Q3 and then some preliminary guidance for Q4. We feel very good about the progress of our cloud transition and clearly customers are rapidly adopting Oracle. As you know, we are expecting to see a material second half acceleration in our SaaS Pass revenue based on our bookings growth and the expiration of customer promotion.
My guidance will reflect this, making it easier to see that we are taking share in the industry. Since we have a clear trend and visibility through the end of our fiscal year, I'm going to give not only Q3 guidance, but also some guidance for Q4. My intention is to share with you what we are seeing in our business now that we have a line of sight to it. All my guidance today is on a non GAAP basis and in constant currency. We expect to see continued volatility in exchange rates.
I'm going to give you constant currency guidance, but if current exchange rates remain the same as they are right now, we expect to see currency headwind of 4% on revenue and $0.03 to EPS, which is significantly less than Q2. So on to guidance. SaaS and Pass revenue is expected to grow between 49% 53%. Cloud IaaS revenue is expected to grow between 3% to 7%. Total cloud and on premise software is expected to grow 3% to 4%.
Total revenue growth is expected to range from 0 to positive 3. Non GAAP EPS in constant currency is expected to be somewhere between $0.63 $0.66 This assumes a non GAAP tax rate of 25.5 percent. Of course, if this quarter is any example, it may be it may end up being different, probably better. Looking further out to Q4, we expect to see continued acceleration in SaaS and PaaS as well as a return to EPS growth year over year. My guidance for Q4 is also in constant currency.
SaaS and PaaS revenue is expected to grow between 55% 59%. Cloud IAS revenue is expected to grow 1% to 5%. Total cloud and on premise software is expected to grow between 2% 4%. Total revenue growth is expected to range from 1% to 3%. Non GAAP EPS in constant currency is expected to be somewhere between $0.83 $0.86 which is a significant increase compared to last year's
0 point
78 As I've said before, I believe fiscal year 2016 is a trough year for profitability as we move to the cloud. As such, I expect to see strong EPS growth in Q1 and beyond. My Q4 EPS guidance assumes the same non GAAP tax rate as Q3 at 25.5%, but that's probably too early to get a real beat on. Finally, SaaS and PaaS gross margins are expected to improve in both Q3 and Q4, exiting the year between 55% 60%. I will, of course, revisit Q4 guidance with you as part of the Q3 earnings call.
With that, I'll turn it over to Mark for his comments.
Thanks so much, Safra. So in the spirit of giving you just a blizzard of numbers, I am going to extend that because our strong cloud bookings deferred revenue growth will lead to revenue acceleration in the second half and next year. We talked about a 38% year on year double digit growth. Our billings grew 68%. And again, just to give you a number, Salesforce grew 21 and Workday 41.
We grew 68. Bookings, 2.84 in USD, in cloud 75% growth. Let me give you some customer numbers. We added 857 new SaaS customers in the quarter, 720 customer expansions. Our installed base is now over 10,000 customers.
Over 3,000 of these are Fusion and almost 50% of our bookings in dollars are now Fusion. In HCM, we added 2 11 customers, growing faster than Workday. CX, 4 0 9 customers. ERP, we added 311 customers. We're now over 1500 customers in our installed base.
450 are now live. 5x Workdays, 90. ERP and EPM, more than half of our Q2 wins did not have Oracle on premise apps, meaning that in 1 quarter we sold more net new customers than Workday did in its lifetime. In PaaS, we added 13 43 new PaaS customers, 4,100 now over the last 12 months, bookings $100,000,000 in USD and 75% of what we sold is now subscription, non metered, 25% metered. Our PaaS business is scaling nicely.
Now, I am going to read you a bunch of names. I just want you to get a context for sort of the brands we closed in the quarter. In ERP, Blue Shield of California, DHL, FDIC, McKesson, Toshiba Mitsubishi Electric, Wipro, a very large phone company in France, a very large industrial manufacturing company, perhaps the largest in the world with over $130,000,000,000 of revenue. In HCM, AAA, Allergan, City of Aspen, Crocs, Think of many of these now that I'm naming again beats against Workday, Exelon, Kaiser, McGraw Hill, Genesis actually a replacement of Workday, Brocade, more HCM, the United Nations, Stanford University and CX, Ambev, CX being customer experience, Ambev, Expedia, Halliburton, Lufthansa, Maersk, Motorola Solutions, Sears, Toshiba Mitsubishi and United Airlines. And pads, Anthem, IKEA, Kaiser, Kia Motors, Maersk, Qantas, Symantec and Windstream.
I could have named a lot more. I just wanted to give you a flavor for what we did in the quarter. Just to wrap up and connect a few dots for you on the Oracle SaaS PaaS Cloud. We are currently at a $2,600,000,000 run rate in total cloud revenue. It's likely our quarterly run rate will exit the year around 3,200,000,000 dollars and will grow further after Q1 bookings.
We will book roughly 11,000,000 more than 1,500,000 ARR this fiscal year. 1,000,000,000. Sorry. Thank you. 1,000,000,000.
If we continue to book the way we expect, we should see our first $1,000,000,000 quarter for SaaS Pass revenue next year. Gross deferred revenue is now nearly $1,100,000,000 That is up 135% year on year, 9% quarter on quarter. Gross margin improved sequentially as Safra described 40% to 43%. We're headed to 60% and then as Safra described on to 80. With that, I'll turn it over to Larry.
Thanks, Mark. I don't have nearly as many numbers. I'm moving right up to 25,000 feet and talk a little bit about strategy. Oracle's strategy is to differentiate our cloud products from our competitors. In SaaS, we differentiate by delivering the industry's most complete suite of cloud applications.
In customer experience, we offer a CX suite made up of sales, service, marketing, e commerce and a lot more. In human capital management, we have an HCM suite made up of the human resources, recruiting, training and so on. In enterprise resource planning, we are delivering an ERP suite made up of financials, supply chain, manufacturing and all the rest. Oracle is the 1st company to market a complete cloud ERP suite for midsize and large enterprises. By pioneering this market, we have become the ERP market leader with over 1500 cloud ERP customers.
Cloud ERP is now our fastest growing SaaS application suite. In past, we have differentiated by making it effortless for our 100 of thousands of customers to move their millions of existing databases and Java programs to our cloud with the push of a button, thereby obtaining the low cost and ease of use of the cloud without having to sacrifice any performance loss or any security degradation. We now have highly differentiated rapidly growing SaaS and PaaS businesses. This coming year, we will deliver a number of innovations in Infrastructure as a Service as well. We expect that our rapidly growing cloud business will drive Oracle's overall revenue and overall profit growth for years years to come.
Thank you, Larry. Holly, could we please move to the Q and A portion of the call?
Your first question will come from the line of Heather Bellini with Goldman Sachs.
Thank you so much. Safra, I had a question for you just based on yours and Mark's comments about the $1,500,000,000 plus in SaaS Pass bookings this fiscal year. Is it reasonable then to assume that in fiscal 2017 we should see SaaSPaaS revenue growth accelerate versus what you're guiding to for fiscal 2016? Thank you.
Yes, Heather. In fact, it will accelerate very strongly. It can't help itself. Our bookings are so strong. We have so many contracts already, and we'll be recognizing those basically regardless of how bookings go.
And of course, as you can see, our bookings are also accelerating. So but yes, we're going to have a phenomenal FY 'seventeen in the Clapets.
Yes. And you know Heather right from the start it's going to be strong because you're going to wind up with Q4 at the revenue rate that we just gave you some guidance on. Add the bookings on top of it. And when you start Q1 and into Q2, you can already do the math on what the comparisons are going to look like. So it's going to be a strong year and particularly strong start.
Thank you.
And your next question will come from the line of John DiFucci with Jefferies.
Hi, thank
you. Safra, it's nice to see some modest progress in your gross margin goals for the cloud business, 43% versus 40% last quarter. But non GAAP operating margin was at 41%, was a little bit below what we were looking for anyway. I guess can you expand a little bit on the gross margin progress into the end of the year? I mean, this is going to be a steep ramp.
And I'm just trying to figure out how much of this is just based simply on this sort of top line growth you're going to see as the sales promotions sort of end and you start to see the top line growth that's going to happen? Or how much of it if there's any just due to increased efficiencies as you move along? And then on the operating margin side, I realize you don't hedge the income statement, but was this due like could it like what would have been the impact on excluding foreign exchange effects?
So, okay. So let's back up. It is all the bulk of the SaaS and PaaS margin improvement is because we are now recognizing revenues for which and much, much larger revenues for which we have already paid for many of the costs. And so we built up an infrastructure that can handle massive amount of usage, significantly more usage, and we have not been able to recognize the revenue because we're recognizing it ratably. As we scale, this is absolutely an area where it is inevitable that we that this improves.
In addition, we also have efficiency gains at all times, but that is again because of our larger scales and those are simply economies of scale. But the bulk of it is we are starting to be able to estimate revenue for which we have already invested. As how many points I actually the impact on operating income for us was quite significant from a currency point of view. But hold on, I'm doing the math. 2, 3.
I don't know. I've got to actually do it on our margin. I'll have to do it while you're talking while other people are talking and then I'll give you the exact answer at that point, how much of it was
John, we'll circle back to you later in the call here. Why don't we go to the next question, please?
Great. Thank you.
Your next question will come from the line of Ross MacMillan with RBC Capital Markets.
Thanks for taking my question. Mark, I think by my math, the cloud bookings are about $475,000,000 year to date. And so to hit the $1,500,000,000 for the year, dollars 1,500,000,000 you need to deliver $1,000,000,000 ish or so in the second half. Just how confident are you in that goal? And then related to that, I'm curious on the platform or database as a service.
You commented that non metered was a higher percentage. I was just curious to get a sense of how you see customer usage trending on the database as a service product? Thanks.
Okay. Well, let me tell you confident that that would be my answer to your question. Our pipeline, I think I mentioned this at Financial Analyst Day, but I'm going to mention it again. Our pipeline, I can't come up with a better analytical statement than just huge. And so our pipeline now is multiple 1,000,000,000 of dollars.
Let me give you more color. If I looked at the next 6 months, our pipeline of things that are in the next 6 month funnel, you have a multi $1,000,000,000 funnel and our conversion rate is increasing. So that would tell you and it now
is behaving like a large business begins to. It now
is behaving like a large business begins to in terms of the scale of the funnel, the pipeline, the discipline we have, the PaaS, we have had a change to your point of going away from metered to subscription bookings. So the bookings are now the bulk as I mentioned to the 75% now subscription as opposed to metered. And I would say the usage of our PaaS has increased not significantly, but sort of geometrically, meaning that it's gone from when we originally started the usage to jumped up over the last 4 or 6 months, I'd say, to where the usage is extremely high, extremely high in terms of the increase of our usage. So it's very exciting both in the bookings, the type of bookings and the usage that we're seeing of what's booked. Thank you.
Your next question will come from the line of Philip Winslow with Credit Suisse.
Hi, thanks guys. Congrats on a great quarter, particularly in the cloud. Mark, you gave some pretty impressive metrics just on the customer account side, obviously, in addition to the numbers that Evert talked about in terms of just cloud billings. But if I focus on the SaaS side in particular here, really just a competitive question here. Obviously, you put some numbers that are sort of multiple times the size of your competitors.
When you kind of look application by application, because not obviously every segment is the same, Where do you think you're kind of pulling away from the competition? Where have you seen sort of the biggest change you think in that position over the past, call it, 1, 2 years? That would be great. Thanks.
Well, I'd start again. I'm going to make this this is going to be like the 5th time I've said this, but I'm going to try it again that in SaaS overall, we are just better overall. We have more people, we're well trained, our products all have matured and we have a lot of references. Our position in ERP is just unique. We don't have a competitor per se.
I use these metrics to against Workday just to describe to you how exponentially far ahead of our sort of only person I can think of that's built up product. Just to be clear in ERP sat, I don't ever I'm not saying SaaS from my have somebody she knows or Larry might know somebody. I don't see SAP. I'm out in the market a lot. I don't see them.
So I don't know what they're working on, but it's not ERP SaaS. In HCM, I think we are continue to just get better and better and better. I mentioned because I had a blizzard of names that I may have done myself a disservice by mentioning so many names. But in a couple of ways, we actually replaced Workday. So imagine, in a period of time, Workday sold sorry, in HCM, we replaced Workday.
So we continue to get better and better and better at HCM. And now we're beginning to see a lot of deals that are where you sell ERP and HCM is attached to the ERP sale. So because of ERP being a in many ways a very strategic, very sticky sale, We now see our attach rates moving up and up and up where somebody buys ERP and they buy HCM at the same time. The scale of our Fusion products, the reason I gave you that metric for the first time is that it's now a very high it's now beginning to become a reasonable percent of our total portfolio versus everything that we've got including marketing, which is having a great run as you know. But I add to it fact that now Fusion products, which are extremely sticky, are almost 50% of our total bookings.
So I mean, I could feel I could keep going down these metrics for you, but I think we're unique in ERP and getting farther ahead. I mean, we're at a point now we're over 1500 customers. We'll give you a prognostication where we end the year, but it's going to be well over 2,000. I guess it is dead. It's going to be well over 2,000.
We're getting better and better at HCM. We're in a leadership position in marketing. I feel good about where we sit.
Got it. Perfect. Thanks. Congrats, guys.
Thanks, Bob.
And your next question will come from the line of Raimo Lenschow with Barclays Capital.
Hey, thanks for taking my question. We talked a lot about cloud, but can I talk ask about the database business? So 12C is in beta since OpenWorld. Can you talk a little bit about what you're seeing? We're coming closer to Release 2 now hopefully.
What are you seeing out in the market? Thank you.
Well, we see our customers with a much higher uptake of 12 2, simply because they have 2 key features that are very important to our customers. 1 is the in memory aspect of the database, where we now have the fastest in memory database. And the way you take advantage of that, you take any existing Oracle application and you run it without change on 12 to 12.2 and it runs much, much it runs in memory without changing. So, other people say, we'll use my memory database. We have to rewrite the application.
In this case, you don't have to rewrite the application. You press the button. We run much faster. And by the way, we run faster than the competition. So, we have a lot of our customers who want to take advantage of the in memory acceleration.
That's one of the reasons they buy the new version of the database. The other thing is multi tenancy. They'd like to do a lot of consolidation. They have a lot of small databases. They'd like to run on one machine.
And you can do that much more efficiently by running the Oracle database with multiple tenants. You consume less hardware resources. It's easier to manage. You can back up a whole suite of databases. A group of databases is 1.
It's thoroughly automated. So that's the other major reason. We see a very rapid uptick. And finally, we're seeing our customers as our past business begins to increase in adoption, The customer wants to run the latest version of the database in the cloud and they want to match that up with the latest version of the database in their data center. They want to run this basically the same technology both in our cloud and in their data center.
And that's one of the unique value propositions that we offer our cloud customers, the same exact technology on premise and in the cloud. And those things will then coexist for years years to come. Then the customers are syncing up their versions. We have the latest version in the cloud. They want the latest version on prem.
That's also accelerating the adoption of the database on prem.
Next question, please.
And your next question will come from the line of Brad Ryback with Stifel Nicolaus.
Great. Thanks very much. If I look at the results geographically, Asia and Europe look to be pretty solid, especially given what's going on in Asia. North America seemed to lag a bit. Were there any specific items that led to that underperformance?
No. No. You're also looking at the Americas. So for example, hardware revenues, particularly problematic for us in Latin America, things like that. So you look at the Americas, you're actually seeing Latin America, which has issues, of course, Brazil and North America, Canada altogether.
Yes, U. S. Was fine. I think to your point, Asia was strong. We've been doing our team has we've talked about this before.
We've been doing a lot of rebuilding in Asia and that has really shown promise for us and the results reflect that in the quarter. Europe had a solid quarter overall, excellent results in the cloud And U. S. Was fine with BOS. In the Americas, to Safra's point, you have the inclusion of Latin America, which is a great organization, has done a great job, they're gaining share.
In fact, if I look at every sort of metric we have in Latin America, we've gained share in virtually every category we compete in Latin America. But within the context of the quarter, the situation in Brazil is tough, which is reflected in these overall Americas results that you're describing. Great. Thanks very much.
And your next question will come from the line of Kirk Materne with Evercore ISI.
Thanks very much. Mark, I just wanted to double click on the strength in Fusion ERP again, if we could. Just given how far in front you seem to be in that area, are there any specific verticals or geographies that are sort of outsized in terms of how you guys are doing? And I was also curious about how much of the strength is sort of you guys going into the mid market in a bigger way, the mid to upper mid market in a bigger way? Or are you actually starting to see some broader G2000 deals as well in terms of the ERP product?
Thanks very much.
Well, my inclination to answer your question, yes. But let me try to describe sort of what's happening. We talked a bit this a little bit of financial Analyst Day. The good news about ERP or ERP suite is it's still not available. It's just going into other geographies.
So with the last release we had, we've now brought on manufacturing and supply chain. We're now releasing the product for sale in some like for example in Brazil and some European countries. So we actually get some geographic expansion with the last release we had. So this is actually good news. The strong in this case actually get stronger.
We actually now have material number of references. I think I mentioned, but I'm going to try again, we have over now 450 customers live. This is a big, big metric. Our market also expands in a couple of ways with ERP, which makes it so important. We get 2 increases on our total available market.
1 is what you mentioned, the fact that we actually get to go down market now. And now we do have broad market expansion. We get to compete for companies that otherwise would never have had an IT staff, couldn't have assembled an ERP system. We now get to compete. We also now remember when we win an ERP system, we win the hardware, we win everything, we win the whole stack.
So our TAM really goes up on to our total available market on 2 dimensions. The total stack in addition to our ability to compete down market. Now that broad base, that's why I specifically used the names I did. Our success is not unique to mid market or up market. It's really both.
I mentioned the name of the biggest I didn't mention the name, very, very big telephone company in France, very big industrial company. These are huge companies at the same time as we have $50,000,000 companies that are moving to our cloud ERP. So it is broad based success across geographies. But the good news at Halfway is, I think we're just really getting started.
Great. Thanks. Happy holidays.
Same to you.
We do have time for one final question. Our final question will come from the line of Joel Fishbein with BTIG.
Hi, Larry, at Analyst Day, you talked about, building 2nd generation data center architecture that should improve Oracle's overall competitive positioning. Can you give us a little more color on what changes you're making and when this will be rolled out?
Well, again, I said in my short remarks before we start the Q and A, as I said, we will be delivering innovations in infrastructure as a service. And we have a next generation data center that we've been architecting and building. And in fact, we've actually put the data center is actually kind of up and running. There are actually 3 data centers, what we call an availability zone. They're all connected by a fiber optic ring.
And the thing we've really we focus on a number of things. Obviously, availability, performance, security are all things you'd expect us to focus on. The big surprise the big surprise is we think we will be by far the lowest cost provider of infrastructure as a service. We think we've been in this business a very long time. We're very focused.
This is data center version 2. We've been doing this for a while now. And we think that our cost of delivering infrastructure service in the cloud are much, much, much lower than anyone else's costs with this new architecture and these new data centers. We'll be passing that on to our customers.
Great. Thank you.
Okay. You know what, I just needed to answer, I think, Gianfucci's question, which I think it's about from here of 3.5 points to 4 points, something like that. Okay?
Thank you, Zafra. A telephonic replay of this conference call will be available for 24 hours. Dial in information can be found in the press release issued earlier today. Please call the Investor Relations department with any follow-up questions from this call. We look forward to speaking with you.
With that, I'll turn the call back to the operator for closing.
Thank you. This concludes today's conference call. You may now disconnect and we thank you for your participation.