Good day and welcome to this Varian Conference Call. This call is being recorded. Now at this time, I'll turn the call over to Ms. Deborah Margoly. Please go ahead.
Thank you. And we appreciate the attention of everyone who is joining us today. On today's call, management will be reviewing the financial results and business highlights of the Q2 and first half of twenty thirteen. The press release detailing the results is available on the company's website atferion.com. Before we begin, I'd like to read the following Safe Harbor statement.
Today's discussion will include forward looking statements. These statements reflect the company's current views with respect to future events. These forward looking statements involve known and unknown risks, uncertainties and other factors, including those discussed under the heading Risk Factors and elsewhere in the company's Annual Report on Form 20 F that may cause actual results, performance or achievements to be materially different from any future results, performances or achievements anticipated or implied by these forward looking statements. The company does not undertake to revise any forward looking statements to reflect future events or circumstances. In addition, and as in prior quarters, the results reported today will be analyzed on a non GAAP basis, which better conveys the operational state of the business.
We have provided a detailed reconciliation of non GAAP measures to the comparable GAAP measures in our earnings release, which is available on our website and has also been filed on Form 6 ks. With that, I'll turn the call over to Joseph Mendelbaum, Chief Executive Officer. Joseph?
Thank you, Deborah, and good morning, everyone. Welcome to our 2013 Q2 earnings call. As usual, I will begin with remarks about the quarter, provide some color on our operations, and Iako will review our financials in more detail before opening the call up to questions. The 2nd quarter was highlighted by great year over year growth in both revenues and EBITDA as well as strong cash flow from operations. Revenues grew by 99%, EBITDA by 61% and cash flow from operations grew to $6,800,000 from breakeven last year.
These results were achieved through a healthy mix of organic and acquired growth resulting from our acquisition of SuitePaks last November. Operationally, the Q2 was highlighted by the successful diversification of our search business, the development of new products such as Guardius, which was launched last week, as well as continued optimization of IncrediMail and Smilebox. When we announced our 3 packs acquisition last November, we said that one of the main benefits in addition to the economics was scale. This has certainly proven to be true was the main driver in our ability to close 4 additional search distribution partnerships in the past 7 months. We have transformed our search business from total reliance on Google to one where we have partnerships with Bing, ask.com and most recently as you heard today Yahoo!
And Canduit. This has proven to be especially important given the recent industry trends as a result of policy changes earlier this year. In the Q2 alone, our search diversification strategy resulted in Google accounting 51% of search revenues, while Bing and Ask combined were the same. Revenue addressed in slightly more detail the search side of While our search revenue increased 183% year over year, it was down sequentially as we expected and discussed on our Q1 earnings call. The main reasons behind this are the after effects of the Google policy changes last November and this past February, heightened competition in the application download environment and some execution delays in the implementation of our additional search partnerships.
The industry is in a state of transition following the policy changes and we expect this to continue through the Q3. A byproduct of these changes is that the distribution environment of 3rd party apps has become more competitive. In the short term, this translates into higher pricing and more aggressive practices putting pressure on margins. As I mentioned last quarter, this isn't the first time the industry has been in transitions following policy changes. In fact, it has happened twice before and each time it has taken 2 to 3 quarters before accelerated growth returns.
We are confident the same dynamics will play out this time as well. The reason is actually simple. Macroeconomics always wins out. There will continue to be a strong demand for downloading applications, continued resistance from consumers to pay for the majority of them and the need by developers to monetize their work. Finally, our 2nd quarter results were impacted by certain execution delays and will return to sequential growth in the Q4 of 20 and will return to sequential growth in the Q4 of 2013 and beyond.
Turning to the product side of our business. Smilebox and eCreditMail are performing very nicely and we continue to invest in their mobile expansion. We expect to launch an iPhone version of eCreditMail and Android versions of both Smilebox and IncrediMail by the end of the year. While we are only at the beta stage, we are very excited about Cardio's launch. This product is designed to facilitate better browsing through the wisdom of the cloud.
Our Guardia's product enables users to manage and control the numerous add on extensions that have been installed on the web browser. Users are presented with a graphic display showing how much faster their browser will become once they disable specific apps. And in order for them to make an educated decision regarding whether to keep or disable an add on, we inform them what other users have done with these add ons. We have received great coverage in The Wall Street Journal, TechCrunch, The Next Web and Tech Investors News. We will update you on our progress on future calls.
And with that, I'll turn the call over to Yaacov and then take your questions. Yaacov?
Thank you, Joseph. As Joseph just mentioned, in addition to the operational and strategic achievements, this was a very good quarter from a financial standpoint as well. Revenue in this quarter were $24,400,000 nearly double the $12,300,000 in revenues in the same quarter last year. This increase reflected growth across all our revenue streams year over year, reflecting organic growth with added growth coming from our SuitePAX acquisition. Product and other advertising sales were $6,300,000 compared to $5,900,000 in the Q2 last year, reflecting 6% growth.
Gross profit in the Q2 of 2013 grew both nominally and as a percentage of sales, reaching $23,300,000 more than doubled the $11,500,000 in the Q2 of last year. This reflects an increase in our gross margins to 95% compared to 93% of sales in the Q2 of 2012. In the Q2 of 2013, GAAP gross profit was net of $1,900,000 amortization of acquired intangible assets, which were not deducted from our non GAAP gross profit. In the Q2 of 2012, the difference between gross profit in our GAAP report and that in our non GAAP report totaled $600,000 Total operating expenses were $19,400,000 in the Q2 of 2013. Excluding customer acquisition costs of $12,500,000 these expenses totaled $6,900,000 This represents a 34% increase compared to the same expenses in the Q2 of 2012, demonstrating the continued leverage of our model as revenues nearly doubled.
EBITDA was $4,300,000 in the Q2 of 2013 compared to $2,700,000 in the Q2 of 2012 increasing 61%. In the Q2 of 2013, GAAP operating expenses included $200,000 of non cash share based compensation and another $500,000 amortization of acquired intangible assets for a total of $700,000 deducted from our non GAAP operating expenses. In the Q2 of 2012, expenses included in our GAAP report and excluded from our non GAAP report totaled $400,000 Net income in the Q2 of 2013 increased 85% reaching $3,400,000 or $0.26 per share compared to $1,800,000 or $0.18 per share in the Q2 of 2012. The EPS increase was lower than that of our net income due to the increase in the number of fully diluted shares to 13,000,000 from 10,000,000 in the same quarter last year. Turning to the financial results for the 6 months ended June 30, 2013.
Total revenues were $52,000,000 a 121% increase compared to $23,600,000 in the first half of twenty twelve. This increase was driven by a $26,500,000 or 2 22% increase in search generated revenues along with a $1,900,000 or 17% increase in our product and other advertising revenues. Gross profit in the first half of twenty thirteen increased 126% to $49,700,000 or 95 percent of revenues compared to $22,000,000 or 93% of revenues in the same period in 2012. In the first half of twenty thirteen, GAAP gross profit was net of $3,700,000 amortization of acquired intangible assets, which were not deducted from our non GAAP gross profit. In the first half of twenty twelve, the difference between gross profit in our GAAP report and that in our non GAAP report totaled $1,400,000 including a $900,000 difference in revenues.
R and D expenses in the first half of twenty thirteen were $6,200,000 compared to $5,000,000 in 2012. As a percentage of sales, R and D decreased from 21% in 2012 to 12% in 2013. As we look forward, we intend to increase our investment in developing new products for new platforms without increasing the expense as a percentage of sales. Sales and marketing expenses excluding customer acquisition costs in the first half of twenty thirteen were $4,300,000 compared to $2,700,000 in 2012. This increase resulted from adding to our marketing spend from the SweeTEX acquisition.
As a percentage of sales, these expenses have decreased as well from 12% in 2012 to 8% in 2013. Customer acquisition costs in the first half of twenty thirteen reached $23,900,000 compared to $6,500,000 in 2012. And as you know, this is a forward looking expense and as such will contribute to the revenue growth projected for the remainder of 2013. G and A expense was $3,800,000 or 7 percent of revenues in the first half of twenty thirteen as compared to $2,900,000 or 12% of revenues in 2012. GAAP operating expenses in 2013 included $700,000 of non cash share based compensation and $1,000,000 amortization of acquired intangible assets totaling $1,700,000 which were adjusted for in the non GAAP numbers.
In 2012, the adjustment of GAAP numbers totaled $1,300,000 In the first half of twenty thirteen, EBITDA was $12,200,000 increasing 128% compared to $5,300,000 in 2012, despite the $17,300,000 increase in customer acquisition costs. Non GAAP net income increased in the first half of twenty 13 to $9,100,000 or $0.71 per share compared to $4,000,000 or $0.40 per share in the same period in 2012. In the first half of twenty thirteen,
GAAP cash
flow from operations was $14,300,000 compared to $2,500,000 in the same period last year. And as of June 30, 2013, we had cash and cash equivalents of approximately $30,400,000 up from $21,800,000 as of December 31, 2012. As Joseph mentioned, we are working through implementation delays with new search partners and adjusting to search policy changes. However, we continue to expect a record year with significant year over year growth. Given the current industry trends, we have decided to provide an outlook for the Q3.
That being said, we are not committed to provide quarterly guidance in the future. Looking forward, we expect 3rd quarter revenues to be between $20,000,000 $22,000,000 reflecting a 30% year over year growth and EBITDA to be between 4 point $5,000,000 $5,500,000 reflecting 32% increase year over year. At this time, we remain optimistic we can still achieve our full year guidance. This concludes my financial review. We will now open the call to questions.
Operator?
We will hear first from Kerry Rice with Needham and Company. Thank you. Just a couple of questions on search. I guess the first one is, it looks like that the Bing and Ask search partners have been launched given the growth of revenue driven by those 2. Can you talk a little bit about maybe the timing regarding Yahoo!
And Conduit? And maybe what you expect the search revenue mix to look like exiting 2013? Thank you.
Sure. Thanks, Carey. First with regards to Bing and Ask. To be precise, Bing was fully launched already in Q2. Ask really was towards the very end of Q2.
So really Q3, we're still in the midst of working on optimizing ask.com. We're very optimistic and bullish about that. It's a great partnership and it's working very well in terms of relationship, but we're still not fully running with ask.com into Q3. In terms of Yahoo! We just launched also recently with Yahoo!
We have some testing we're doing and we're probably in the next hopefully few weeks we'll be up and running with them as well. One of the important things and I'm glad you asked the question is from our standpoint, we went from 1 search provider and we're working with Google for, I don't know, 8 years. So it was all our systems and all our processes were designed to work with them. We're adding on 2 almost new partners each quarter. It takes a while to ramp up, frankly, to do testing to get the history about the LTV and the ROI.
And actually just technically working with them and with our other partners, it takes a while and frankly longer than we expected in some cases. And we're working through that as we go. And that's as Yaacov and I said, that's one of the biggest issues in terms of kind of pushing out our results a quarter. With regard to what it looks like at the end of the year, I would expect that probably a very well balanced mix. I would expect in the range I think you probably have in the range of 15% to 20% to 25% and some will be a little higher.
I think it depends on who's stronger in certain territories. But you should see a pretty good mix. So we're going to look to optimize obviously for yield. And we'll certainly have a much better feeling for that over the next 2 or 3 months as we conclude a lot of our testing, get the history we need to kind of predict accurately the LTV as we have done with Google in the past and we're doing that with Bing. And we're very that's one of the reasons why we've given the outlook for Q3, but also very confident that we'll have returned to significant sequential growth in Q4, which will lead us into a very strong position for 2014.
Would you mind just commenting on your partnership with Conduit? Is it kind of a different partnership than with your other search partners? Or do we kind of see that providing the same kind of search results? Or can you just talk a little bit about that partnership?
Sure. So as you look I think Ask and Conduit are similar in the sense that obviously both of them use other search engines, whether it's Google or Bing. But both of those are some of the largest players out there. Conduit has proven itself to be an excellent company executing very, very well over the past few years and as Viking got great results from everything you read. So from that perspective, we're excited to work with them.
I think in general with all of our partnerships, we are looking at different types of business models to go forward. It's not necessarily only with one partner. And as we look forward to that, some of it is looking at Frank and Kerry adjusting the risk reward ratio of the partnerships, So that in a lot of cases what has happened historically and this is I think a changing trend in the industry. Historically is someone like Google gave a rev share type of deal to somebody and then someone like us took all the risk and down the road partnerships. As you start doing more 3rd party distribution, I think some of those deals are changing so that there are different business models that have a different risk reward ratio.
Some of it may be recognition of immediate payments on certain things versus only rev share terms of combination. So we're trying to be creative as the industry changes to change with the industry and one of the reasons why we're confident about Q4.
Thank you very much. We'll now hear from Jared Schramm with Roth Capital Markets or Partners, excuse me. Hey, good morning.
Hey, Jared. Good morning.
Looking at customer acquisition spend,
it was $23,900,000 in the first half of the year. Are you still looking north of $50,000,000 in total CAC spend for 2013? And do you think that will be evenly spread out between Q3 and Q4?
The answer to the first thing is in general, yes, we see $50,000,000 but absolutely not. Q3, the customer acquisition spend will be down from Q2. As I mentioned to Cary earlier, we are I think, Jerry, you know this. We've always been very prudent. We're not going to spend money recklessly.
And as we got delayed in launching some of these partnerships, it does take time when you launch the partnerships to make sure that you're optimizing your ROI and making sure you're getting a return on the money spent. And therefore, we will be not we will not be spending as much customer acquisition spend in Q3. That's one of the reasons why the revenues are a little lower. And obviously as we go into Q4, we expect to fully be beyond that and into growth mode again in Q4. And we expect to heavily spend in Q4 assuming all the numbers and right now we're seeing good trends and we're optimistic about that as we go forward.
So we still expect to be very close to the $50,000,000 but it's going to be back in terms of back half loaded back half of
the second half loaded. Okay. And then in this quarter, 51%
of search revenues were derived from Google. Looking into 2014, how do you expect the mix to look as far as search revenue contribution is concerned?
I would say unless Google does some significant changes to their policies, Google will be in, I mean, low double digits, maybe even single digits in 2014. I think if you look at all the public companies in the space who have announced the results, I'm extremely confident all of them are seeing the exact same thing. The policy changes that Google has implemented certainly had a desired effect for, I guess, Google. And Google announced the public on their earnings call as well that they are certainly seeing a decline and that's been their choice. So I think that you'll see that shift as it has been shifting with all the public companies out there to Yahoo!
Ask, Bing and people like Kundu.
Okay. And then can you just give some a little feedback on the initial reaction to Guardius? I realize the launch, it's pretty early on. But as far as your optimistic outlook for what you're seeing there and how you think the market will take to it?
Yes. Thanks. We so I think one of the things we've been working on with Guardius and I think is really planning for some of the industry trends we're seeing today. And we spent a lot of time working on that. So far, we have I think about 15,000 beta people who have been using the product.
I'd say it was probably an engagement rate in upwards of about 40% of those who are actively using the product. And what we're seeing is that it's really we're getting great feedback that it's really helping them improve their performance and some of their privacy of what's been on their computers that they didn't know about or they forgot about that either slowed them down or Frank is gathering data about them that they didn't want. We're optimizing it now. We just really opened it up to more people as we did the official launch a little over a week ago. But one of the things which we will do over time in the next couple of months is we will introduce to that a monetization play that says, help us let us help you, right, manage your search so that, in fact, don't leave it to somebody else to take it without you knowing it to have an add on and put it on there.
And we want it to be active. So this is it's as almost as opt in as you can get by being in your face and presenting it as a value added product versus sometimes what has been known to happen in the industry is more of an after effect where someone doesn't realize something's happened to them.
And are you planning on launching a specific ad campaign targeted at getting users onboard with Guardia's here or just going to let it play out as you have some of the other products?
We'll do a mix. We're certainly going to do some testing with the acquisition marketing and overall marketing for it probably in the next 2 months. We're really beta launching out to get better feedback, optimize it, kind of make some changes based on consumer feedback. And then we'll probably take some of our marketing spend that we would have spent on other things and put it against Guardius and hoping that it improves the LTV and helps us get
a better ROI. And lastly here, just in regards to
the acquisition space, what are you seeing right now from your end as far as nice targets out there that you could tuck in as far as property wise? You think valuations are getting a little loftier right now? Just maybe some quick color on what you're seeing in that space.
Sure. So actually what we're seeing I think before, we're actually seeing a pretty healthy pipeline. You're right. There are some companies that are in our opinion probably at least for us a little overvalued and we we're not going to go after them. We're looking at accretive acquisitions and we see pretty good pipeline.
I'd say what in general we see is that fundamentally as always it takes 2 to tango. So we've had a couple of things that to be candid we're close. But at the end of the day, we're being very disciplined about what we think is the right acquisition for us at the right time. And we're being focused on that. But we have a good pipeline and we certainly still hope that by the end of this year, we will have announcements to make about acquisitions.
Okay. Thank you.
And the next question will come from Dan Kurnos from Benchmark Company.
Yeah. Great. Thanks. Good morning. On the policy side, just a quick question.
It looks like IAC sort of hit their reset button in Q3, reflecting the timing of the Google Polish implementation. Joseph, is this having any impact on your Ask business? And was the timing really unique to IAC in terms of their Google policy agreement?
I'll start with the second half. I mean, obviously, I'm not privy to the contract with ask.com. I don't know Google specifically, but from the marketplace, I can tell you, yes, the Ask implementation of Google policies was 5 to 6 months after everybody else's just from what I know from being in the industry. I did not know that from a contractual or factual standpoint. But certainly, that had an impact into the industry and just of the competitiveness of the industry when you everybody else had to go to one set of policies and you had partners out there with a different set certainly made ROI a little bit harder obviously from that perspective.
With regards to going forward, again, you have to ask physically about their products. I can't comment that because we have a contract with them and confidentiality. But there are still some things that the because of the size and nature of their relationship that the ASP will still have some advantages. And one of the reasons why we partnered with them is we fully expect to work with them to take advantage of those advantages they have in the long term. But as for when it takes effect officially as you did mention, it took effect in July of this year.
Got it. Great. And then just a quick one again on search. Has Google's enhanced campaigns had any impact on results or the marketplace in general?
We're not seeing a ton of change from the introduction of enhanced campaigns thus far. I think it's pretty standard. And I don't really have a big concern on the monetization front. So I mean, we know about it. We haven't seen a huge change at this point in time.
I'm not saying that won't happen, but I don't think it's been a big issue at this point in time.
Great. And just one follow-up on the acquisition side. You talked about maybe having something to tell us by the end of the year on the acquisition front. So you're still looking to potentially make an acquisition this year or that would be more of a 2014 event? And I'm assuming that your guidance doesn't include any impact from any projected acquisitions, correct?
Our guidance does not include any impact on acquisitions. And the answer is we are looking to make Stoll acquisition in 2013, yes.
And then just one more for me. On the mobile front, now that you guys are launching iPhone versions for Smilebox and in CreditMail, maybe talk about the path to monetization there and how big an impact on revenue you think mobile could be for you guys in 2014? Thanks.
Sure. Don't think monetization is going to be a huge impact on us in 2014. I do hope we will start seeing a little bit monetization in 2014. The answer I think is the standard answer I hate to sound like a broken record, but there's advertising. We have deals in place already to when we have enough traffic to kind of make some modest income from advertising.
We have today, Renee, for example, on our iPad product within credit mail, we have Bing search baked into our product on credit mail. And we have experiment within app purchases. But as we mentioned earlier, all this at the end of the day, we're focusing on getting to scale first, getting enough overall downloads and enough installed base and active users. And then as the mobile market matures, we'll be in position to take advantage of it, like Franky, everybody else. I don't pretend to be a market maker in the mobile space.
What we believe we are is we can create compelling value products that have value to users. And if we do that and get enough of them to use it, we'll be in a position to make money.
All right, great. Thanks, Joseph.
Thanks. Now we'll hear from Jay Srivatsa with Chardan Capital Markets.
Yes. Thanks for taking my question. Joseph, if I look at your Q3 guidance and your full year number, it appears to me you would have to have a very strong Q4 as much as roughly $37,000,000 if I take the midpoint of your Q3 guidance. So help us understand what gives you the confidence you're going to see such a big jump in revenues in Q4 given the environment you have painted for us currently?
First of all, thanks Jay for joining the phone call. So I think everybody in the phone call knows myself and Yaacov. And there's no question first of all, I'll answer your question directly. We have obviously now multiple partnerships we just invested in. We are launching them as we go forward.
We have some history now as we get more familiar with them in the marketplace. And we are seeing the marketplace evolve and transition. And I think as frankly anybody else in the industry who's already reported their numbers, they're all seeing they're already saying the same thing, which tells you what we're saying, which is Q3 will still be down from Q2 and Q4 is expecting to go up. And I think the reason, Jay, is relatively simple. At some point in time and we've seen this before, as I mentioned, with the past two changes that Google has done over the last 4, 5 years, it takes a while for the market to adjust.
And there are small companies today, I'll just without giving names, who have approached us to be bought. We've said no and they're supposed to be bought because they're not going to be able to survive. As we think as the business frankly transitions and stabilizes, the bigger players will be in a better position. And with now 4 new deals added, we think we have a unique ability, which most other companies don't have for, to increase the yield on the monetization as we go forward. That's answer number 1.
Number 2, as that increases and as the overall increases, Q4 is a great is a better quarter for us in terms of our products and advertising revenue, and we see that coming. And last but not least, as I mentioned earlier to response to I think Carey's question, we are certainly adjusting the type of deals we do And to allow us to scale the business faster and with a different risk reward ratio, there are certain things that we think we can see through partnerships that can allow us to grow the revenues and the profits at the same time into Q4. And I think if you look at the numbers, Jay, on the profit side, it's not a big stretch where we were in Q1. On the revenue side, it is certainly a big jump. We understand that, which is why Jaco and I both said we're optimistic we can hit our numbers for the full year.
We are there's no question we are a little bit of a delay more than we expected. And I think we are being transparent as we always are with you and with everybody on the phone. Can't say I'm extremely happy about that. But to be candid also the industry is changing and is going through a transition which some of which we predicted and some of it is not as we predicted. At the end of the day though, as I said earlier on the script, the macroeconomics still play out here.
I mean, we don't see we actually don't see a decrease in number of downloads. We're not seeing a decrease in the number of people or an increase in the number of people who all of a sudden want to take out their credit card and start paying for applications. And as we see the market rebound and the industry rebound, we think we're well positioned then in Q4 to have a great quarter.
All right. You mentioned execution delays during the quarter. I suspect it's because of the systems being a little different with your existing systems for Google versus the Yahoo! And the Bing. I mean, I'm sorry, the Bing and the Ask.
Do you as you look ahead, now that you're absorbing Yahoo! Into the fold, are you feeling comfortable with how you're set up to not have any more delays? Or is that a concern for you as we look ahead?
The delays are not a concern for me as we look ahead. But each partner by itself, I mean, just to give you an understanding, there's example, everybody has their own set of policies, just as an example. And the way that the general flow works is you sign a contract, you start working with the account teams, the technical teams and then basically they give you some technology that you include in your products and your installer and then you we do QA on it to make sure it actually works the way it's supposed to. Then we send it to the other party. The other party does QA on it and then we send it back to us.
And then if we work with other third party distributors, we send it to them and then all process repeats and you have to make sure that the information gets sent to the database in the appropriate way and that in fact you're adhering to the policies of now all the different partners out there. And what I just described just physically takes 1 to 2 months. There's just no shortcuts. And I think so I don't expect delays because of anything internally where they were at the beginning as we mentioned. I think now it's just a normal process of what it takes to get a partner up and running, which again is one of the reasons why we decided to give a Q3 outlook, which we usually do not do and we don't intend to do going forward, because we wanted to be more open and transparent with people who don't understand how the operations work of getting our partners.
And going from 1 to 5 partners, it's a lot of work to do. And honestly, the team here has done a great job in actually working almost day and night to try to get us as fast as we can. There are limitations of just what physically can be done. But we're excited about the partnerships we have. We're very happy to work with all of them, and we think that they will yield good results going into Q4 and beyond.
All right. Last question from me. In terms of competition, you mentioned 3rd party apps. Can you paint us a little bit of a picture on how you see that playing out going forward? Do you see it intensifying?
Or do you feel comfortable with how you're holding up relative to some of these newer competition competitive pressures that are coming through?
Yes. I think we're holding up actually very nicely, and we're very confident with our position. And again, I know nobody likes maybe missing Street estimates, but at the end of the day, we look at the overall business and the health and look at the long term of the business and we're very actually very excited about the future and very confident about it. It is true that, I mean, if you look at other big players in this industry without naming names, I think everybody is going through the same transition. What is happening is there are some other players who are smaller or more aggressive and they're trying to fight through this as well and that has made a more competitive environment than we probably anticipated 3 or 4 months ago.
We don't see it and I don't think anybody sees that lasting for a long time and which is why going back to your original question, we're very confident in Q4 we're positioned well to have significant growth. Thank you. Good luck. Thank you.
And it looks like that's all the time we have for questions today. I'll turn the call back over to Joseph for any closing remarks.
Thank you. As I look at our accomplishments in the 1st 6 months of the year, including exciting new product launches for both the mobile and desktop platforms and the progress we've made in significantly diversifying our search business, I feel that Paragon has never been stronger and is well positioned for future growth. We generated phenomenal cash flow and significantly increased revenue, EBITDA and net income. None of this would have been impossible without the great team we have at Parion. And I'd like to thank all of them for their continued hard work, dedication and innovation.
Thank you all and have
a great day. Ladies and gentlemen, this will conclude your conference for today. We do thank you for your