Good day, and thank you for standing by. Welcome to The RealReal Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to Caitlin Howe. Please go ahead.
Thank you, operator. Joining me today to discuss our results for the period ended September 30th, 2021, are founder and CEO, Julie Wainwright, President, Rati Levesque, outgoing Chief Financial Officer, Matt Gustke, and incoming Chief Financial Officer, Robert Julian. Before we begin, I would like to remind you that during today's call, we will make forward-looking statements which involve known and unknown risks and uncertainties. Our actual results may differ materially from those suggested in such statements. You can find more information about these risks, uncertainties, and other factors that could affect our operating results in the company's most recent Form 10-K and subsequent quarterly reports on Form 10-Q. Today's presentation will also include certain non-GAAP financial measures for which we have provided reconciliation to the most comparable GAAP measures in our earnings press release.
In addition to the earnings press release, we issued a stockholder letter earlier today, both of which are available on our investor relations website. I would now like to turn the call over to Julie Wainwright, Chief Executive Officer of The RealReal, for introductory remarks, and then we will go directly into a question-and-answer session.
Thank you, Caitlin, and to everyone for joining our earnings conference call today. We're pleased to announce strong financial results for the third quarter of 2021, with continuing robust top line growth as well as solid bottom line improvement. Based on what we know today, the effects of COVID-19 are effectively behind us. Importantly, we have a resurgence of healthy supply in our authentication centers. During the third quarter, our product supply ramped nicely, driven by at-home consignments that exceeded pre-COVID levels. Further, our retail stores continue to be an increasingly important and cost-effective channel for securing supply. Therefore, we believe we are well-positioned from a supply perspective as we enter the holiday season. Additionally, we believe The RealReal's unique business model is largely insulated from the supply chain shortages and certain inflationary impacts many businesses are currently experiencing.
During the third quarter, we also managed operational pressures within the business. Like many businesses, we are incurring elevated shipping costs and staffing challenges, specifically in our authentication centers. To address these issues, we developed and implemented multiple initiatives, including shipping diversification and last mile optimization for the shipping costs and expanded automation in our authentication centers to address staffing shortages. We are confident in our ability to manage these challenges. While we are in the early innings of delivering operational expense leverage, we believe the company is starting to see the benefits of previous investments. These will create significant opportunities for operating leverage as we drive toward profitability in the coming quarters. Overall, our business is continuing to experience very positive trends, and we believe these trends will continue through the end of the year and into 2022.
On a final note on providing forward-looking financial expectations, we intend to resume a more typical annual and quarterly guidance cadence in 2022, along with committing to a timeline to reach adjusted EBITDA profitability. Expect that to begin with our next conference call. With that, I'm going to open it up for questions. Caitlin, who do we have here? Operator?
Operator, we're ready for questions.
As a reminder, to ask a question, you will need to press star one on your telephones. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Mark Altschwager from Baird. Your line is open.
Good afternoon, and thanks for taking my question. I wanted to ask just about some of the supply strategies here. You sound pleased with the trends with at-home appointments. At the same time, I think the target on the number of LCO openings may have come down a bit versus what you've discussed recently. Correct me if I'm wrong there, but maybe just a little bit more on what you're seeing with kind of each of those channels. Now with some normalization in the operations, could you give us some current thoughts on how you think the supply mix might trend in the medium -term and what the implications might be on profitability trends? Thank you.
Well, that's a lot of questions. Let me just start with LCOs in our neighborhood stores, along with we do have one standalone in New York in Midtown. We actually have more luxury consignment offices than we originally planned because we did at the beginning of the year make a decision to open more neighborhood stores. We actually have more, but we did shut one down, and that was in San Francisco, because most people preferred to use our. Well, we have three in the Bay Area. We have one in Larkspur, one in Palo Alto, and one in downtown San Francisco. The center which is at the base of our office building became less and less relevant, so we chose to move that staffing.
In general supply, 30% of our new consignors are coming from our retail stores and coming drop-offs or appointments in the LCO. Supply across all segments, fine jewelry, watches, men's fashion, women's fashion, handbags, accessories, all of it is significantly up versus year ago. The average unit selling price, which we all internally call AUR, is actually on target, if not slightly higher. Now it'll be based on what people buy, and that will determine the mix. Certainly apparel has come back, and Robby can talk a little bit about that, but we're still selling a huge mixture of high-value handbags and fine jewelry. Just one other note, and then you can ask further questions if you'd like, if I didn't cover it.
Gross margin is clearly, and our take rate is clearly a key component on the path to profitability, but it's not the sole path. It's not the sole component. We feel good overall that everything's progressing better than we expected for the balance of this year, and we see things looking really good in 2022, and we'll give you more specific guidance in the February timeframe.
That's all really helpful. Maybe just a quick follow-up on the gross profit commentary. I guess with gross profit per order, I mean, have the buyer incentives, are those fully back to kind of normalized levels? Or how are you thinking about that as a lever as we head into the holiday period in 2022? Thank you.
We did use it when supply was short, in order to keep our cohorts engaged because we have such a high repeat rate, but that was last year. We returned to normal cadence of any kind of promotional activity earlier this year, and that means that, and we expect that to continue. That usually means one really bounce back, as we call it, a month. We're back to normal pre-COVID-19. Everything is either better than where we were pre-COVID-19 or back to normalcy.
That's great. Thanks again.
Sure.
Next question comes from Oliver Chen with Cowen. Your line is open.
Hi, thank you. Gross profit per order was very encouraging this quarter. As we look forward, what are some key drivers to continue to increase this? And Julie, as you think about supply gathering, you know, regionally and across the country, are you seeing pretty broad-based strength in your important markets? It sounds like you have a renewed confidence that we've entered a more stable phase. Thanks.
I'm gonna answer that last, your question first, and then I'll turn it over to Matt and Robert for the financial numbers. We have, yes, all markets are back. We have regional strength and national strength. I wouldn't say it's stability. I would say we're exceeding pre-COVID growth levels in all markets. It looks really good. I'm very excited. As y'all know, at one point, New York was shut down for us. That is not the case. In case anyone hasn't been to New York lately, it is vibrant. That market, all markets are doing extremely well. We're very pleased with the supply.
You know, I'll cover the gross profit per order just to state what's in the letters. We are at $94 gross profit per order in the quarter, which was flat versus the prior quarter. We'd expect that to go up in the current quarter as AOV typically is higher sequentially. That's one of the drivers on a go-forward basis. On a sustained basis, it's really, ultimately, it's going to be leveraging shipping expenses and other kind of costs. You know, we do expect to see over time meaningful improvements in our shipping expenses, not only because we're seeing short-term headwinds there. Beyond that, we have a number of initiatives that are trying to drive that down meaningfully.
Beyond that, the other just the key levers are really just our AOV and our take rate, which is stable and modestly increasing going forward as well.
Yeah, this is Robert. The only thing I would add is, the gross profit per order was up year-over-year $4.
Mm-hmm.
Okay. Thank you. Last question, the active buyer statistics look quite solid. What about the new buyers that you're seeing in terms of their purchasing behaviors and what might you do to make sure to engage them and keep them on the platform? Thank you.
You know what keeps new buyers on our platform is the same thing that keeps repeat on our platform, really good supply. That's coming in. The new buyers look like the other buyers. The difference between this new buyer group, which we started seeing during COVID, is we used to see an AOV that was slightly less than the repeat. And in fact, the new buyer AOV is strong. It's not as, you know, it's strong, as strong or stronger than repeat. It's a nice healthy new buyer, and again, it's driven by great merchandise on the site.
Thank you. Best regards.
Thank you.
Next question comes from Susan Anderson with B. Riley. Your line is open.
Hi, good evening. Thanks for taking my question. I was wondering if you can give us an update on your store plans and how many you expect to have at the end of the year and your expectations for next year, and if anything's changed on the rollout there. Thanks.
Yeah, sure. This is Rat i Levesque. Stores, our neighborhood stores, we have 15, which includes our five ship stores as well. We'll have 17 by the end of the year. They continue to be quite healthy for us. They continue to drive supply and high value supply. They continue to drive about 30% of our new consignors. The supply side, again, very healthy. On the demand side, AOV, average order value, higher average selling price, return rates are lower. We see a pretty big halo impact happening on a regional basis. We're very optimistic about the stores. This is the first season that we'll have our neighborhood stores open, and we're looking forward to a healthy performance there. We'll definitely keep you all posted on next year's plan.
Great. That sounds good. If I could just add one follow-up. Wanted to get your thoughts around holiday with, you know, kind of now, I guess, the return to much more normal supply. What are your expectations around holiday, and do you foresee any shipping issues around the holiday demand? Thanks.
Yeah, we don't see any. We are not forecasting any issues on the shipping side. Like Julie mentioned, we don't have any supply chain issues, so our shelves are full of supply. We're very excited about that. Yeah, we're excited about a healthy quarter with those two things said.
Great. Thanks so much. Good luck this holiday.
Next question comes from Michael Binetti with Credit Suisse. Your line is open.
Hey, guys, thanks for taking all our questions here, and congrats on a nice quarter. Julie, you know, so at the time of the IPO, I think we were thinking we'd be approaching breakeven right around now. Obviously, there was you know, a pandemic in between there, so clearly we got to where we are. You know, thinking about what EBITDA profitability, I think you guys were thinking for on a run rate for a year, about $2 billion was what you needed to get there. I know you're gonna give us a path to profitability on the next call, but and I know there's a lot of numbers moving around, but at a very high level, it seems like the biggest parts of the cost structure feel pretty favorable today versus what we knew about back then.
Phoenix seems like it's more efficient than Brisbane. Small stores seem like you're very happy. I think cost-effective was what you used in the prepared remarks to describe it. I think a lot of the automation you talked about along the way has happened. Are there new takes to think about to help us think about what happens to profitability at 2 billion versus where we thought we were a couple of years ago?
Michael, I will be so excited to have our CFO walk you through our timeline in February. I think that's better left said, but I have to say, you know, we clearly lost a year, so we did lose a year. You're right. At the end of COVID, if we would've continued on our track of growing 40% a year, we would've been in a different situation. I think the key takeaways from today, we're growing faster than we were pre-COVID. Supply is strong, and we're gonna resume to normal cadence and put out the path to profitability in February. You've got a pretty energetic team here around the table.
Okay. Let me ask you another thing. If I'm trying to look at, I guess, the model and compare the business to, you know, pre-COVID levels to 2019. I think in the quarter, your sales were up about 46%. Excluding stock comp, there's about 200 basis points of operating expense leverage on that kind of a sales growth rate. Is that, you know, until we get to February, and we have to do our models before then, about the right amount of leverage to think about if we see that kind of GMV from you? Or are there inflection points along the way over the next few quarters that we should think about?
Robert?
Yeah. I'll make some comments on that. One, I believe our GMV growth was 50% year-over-year, and our revenue growth was 53% year-over-year. We're evaluating the business and the cost drivers and the unit economics, and I think when we give guidance next quarter, we'll give you a better sense of what sort of leverage that we should expect going forward. I do think that there were incremental investments that have been made along the way that we're starting to see some benefit from. I would not expect that you'll continue to see investments like that that will prevent us from showing leverage. I expect that we will see a fair amount of leverage. Again, I don't wanna be more specific before we give actual guidance.
I don't think that the past is a good indication of the future. Relative to what sort of leverage you will see in this business.
Right. I, you know, just as one example, we made a commitment to automate our op centers, which meant that we really doubled down and actually doubled the budget and technology. We started doing that in late 2019. It really shows up, you don't have the isolated numbers, but it's a key driver of our expense structure. We are seeing the results of doing that as in both our data scientists and our technology group. That isn't something we're gonna be doubling every single year at all. In fact, we're at a really good rate where we're getting incredible leverage in our op centers given the work that they've been doing.
Okay. That's very helpful. Thanks so much. Bye-bye.
Next question comes from Ike Boruchow with Wells Fargo. Your line is open.
Hey. Good afternoon, everyone. Two from me on the model. There's clearly a lot of different things going on from a mix perspective that are more volatile than normal. Your take rate normally takes a leg down sequentially for Q4. Can you kinda help us with how to think about that given, you know, what's going on with the platform mix perspective? And then on the marketing side, there was a very large uptick in marketing in Q4 last year. I know you guys are just starting to really reinvest, 'cause you saw the consumer demand coming back and supply coming back. How should we think about marketing? Is there a chance the dollars come down? Just kinda curious how to model that out given the competitive data against. Thank you.
This is Matt. I'll hit a couple of pieces. We're not gonna start going down the path of giving all the components of that would add up to guidance. Directionally, with respect to take rate, you're right, there's an inverse correlation between AOV and take rate. Typically, AOV is at its high point in Q4. We had a really unusual Q2 this year with our highest ever AOV, so I wouldn't say that's necessarily a likely outcome. Sequentially up is very likely, so you should expect to see take rate be somewhat down sequentially. Then with respect to marketing, I don't think you can look at 2020 as a guidepost for anything, frankly.
We know obviously what our intent is for marketing in this quarter, which reflects more typical seasonal investment levels, which means it'll be up versus Q3, but not in a particularly significant way.
Got it. Thanks, Matt.
Mm-hmm.
Next question comes from Simeon Siegel with BMO Capital Markets. Your line is open.
Thanks. Good evening, everyone. Sorry if I missed it. I know it's a little tougher, but any way to frame how some form of like-for-like ASP did just to try and neutralize the product mix? I'm basically just wondering if you guys have an opportunity to capture the benefit of probably higher industry prices without absorbing most of the inflationary cost inputs. Just trying to think through how you think about prices if you exclude mix.
Sure. Yeah, I'll take that, and Rati , feel free to jump in. Over time, there's an industry, a kind of environmental component. There's also an operational and execution story. Our like-for-like ASPs today are significantly higher than they were years ago, but that really ties back to our efforts over time to leverage technology, to optimize pricing at an increasing granular level. The overlay in the environment is very favorable from a promotional perspective. Certainly there's kind of a knockout effect for us. I follow your train of thought and concur that makes sense. To the extent that you see robust prices across the industry, that's true. There's no incremental cost to us to process.
ASP upside would be a pretty powerful lever throughout the P&L.
Okay, great. Maybe you could elaborate a little on the comment, the vendor transactions to secure additional products for holiday? Anything there worth flagging?
Oh, go ahead, Rati. She's got vendor under her.
Yeah. No, we don't see any. I mean, vendor is a driver for high value for us. Again, fine jewelry, watches, handbags, and we'll continue to see that trend for the holiday. Because we have a really robust supply coming in from our consignor base, which we didn't have before, it's not gonna be an unusual activity. It will just be business as normal.
We've seen an increase in that channel because of the purchases we were making during COVID-19. We have inventory which is selling through, which has some impact until that inventory has been sold.
Great. All right. Congrats on the progress, Matt. Good luck on the next chapter. Rob and Caitlin, congrats on the new roles. Thanks, guys.
Thank you.
Thank you.
Next question comes from Erinn Murphy with Piper Sandler. Your line is open.
Great. Thanks. Good afternoon. A couple from me. First, I wanted to go back to the neighborhood store conversation. You talked about 30% of supply coming from neighborhood stores today. What percent of your consignors in these retail stores are also buyers? Then I-
Sorry. It's actually 30% of new consignors are coming from our retail location.
Of new consignors. I'm sorry, not supply. What percent of your overall supply comes from the retail locations then?
Yeah, I'm sorry. We don't give out that number at this time.
Got it. Okay.
On your question, how are the new consignors, are they becoming buyers like the old, like our current? Yes. As you guys may recall, we have a really great flywheel effect for over 50%, about 57% of our consignors end up being buyers. We're seeing that trend continue across our new consignor base.
Okay, understood. Then a question for the CFOs. On OpTech, that was better than expectations. Should we expect this type of leverage moving forward now that Phoenix is operational and grouping is rolling out? Or is there anything else we need to be mindful of, particularly in the fourth quarter as we round out our models on the OpTech bucket there? Thanks.
Start with you, Robert.
Yeah. Well, one thing I would say, there were certainly some redundant costs in the move from California to Arizona that I think is largely behind us, and we should not continue to see that.
That's absolutely true. I think in the quarter, if you're looking back to Q3, OpEx in general, certainly inclusive of OpTech, was somewhat lower than we expected, and that's largely due to the, you know, the difficulty that everyone's experienced in hiring hourly labor. We do expect to get caught up with our hiring. In the near- term, we'd expect to see OpTech go up somewhat sequentially, and it's really around supporting our growth. The fixed components of OpTech, you should see very little growth going forward. The leverage that you're seeing now is really just the beginning.
Excellent. Thank you so much.
Next question comes from Marvin Fong with BTIG. Your line is open.
Fantastic. Thank you for taking my questions. Most have been asked, but two if I could. Congratulations, it's great to hear that the at home business is above pre-COVID levels. I thought maybe we could just ask about some additional color, like you know how what's the mix now between at home versus virtual. Has the virtual channel kind of gone down quite a bit. Any color there would be great. Secondarily, just on the return rate, is that improved yet again this quarter. Just curious if that's a function of the policy on handbags and jewelry, or is there actual kind of like-for-like decrease in the return rate. Thanks.
Yeah, I can take that. At home, yes, has increased, but mostly back to pre-COVID new normals like we mentioned. Virtual is still a component. I will say that our sales organization is becoming more efficient. I think that's where you're going with the virtual question. They have become more efficient, and that's driven out of our stores and our van pickup that we launched during COVID. We feel good about their productivity. Return rate, yes, slightly lower, and that's driven out of two things, the stores becoming a larger component as well as product mix. Those items that are not returnable, like handbags, growing in contribution.
That's on a sequential basis, but our returns, which on a year-over-year basis, are going up. That's just reflective of how low they were in the middle of COVID-19. They're starting to get closer to what they were historically. To Rati's point, it's really just a function of category mix at this point.
Right. They were an all-time low because people didn't leave their house. I mean, you know, you can't really compare versus year ago. We're still significantly better than we were in 2019 for returns.
Yes.
Driven out of what Rati said.
Mm-hmm.
Great. Well, thank you. Congratulations and best of luck, Matt, on your next move, and welcome aboard, Caitlin and Robert.
Thank you.
Thank you.
Next question comes from Michael McGovern with Bank of America. Your line is open.
Hey, thanks for taking my question. Two, if I can. The first is just for the AOV in-store versus online. I think you've given some commentary on that in the past, and I was curious if you have any commentary this quarter or also if you could comment on, like, the AOV in neighborhood stores versus more legacy stores in urban markets?
AOV in stores, you know, we track average selling price. They are a bit higher or much higher in stores versus online. That's driven again out of fine jewelry, watches, and handbags. I'm sorry, what was your second question?
Flagship versus neighborhood.
Oh, we're not seeing any differences between neighborhood and flagship stores in product mix or value. They are driving the same amount of value on the demand side as well as the supply side.
I think in the past.
Got it. Yes.
AOV in the stores is about two times greater than what it is online, and I think that still holds.
Got it. Thanks. One more. I was curious on if you have any commentary on, like, in-store GMV, maybe in those core legacy stores from international travelers, given the restrictions that were lifted today. I was curious if, like, you think there could be some pent-up demand from international travelers that are coming to, say, New York and shopping for luxury goods.
We don't know. I mean, we weren't really driven that by that. When we tracked international in the past, it's been, of the people in the stores, it's been a pretty small percentage. Hence, we weren't really impacted by having no international travelers. I would say all of our stores, and Rati can give a little bit more commentary, all of our stores are. Well, we opened one right before shutdown in COVID. That was San Francisco. In Chicago, we opened up during COVID in October 2020. Every single flagship store except San Francisco is exceeding pre-COVID revenue and doing really well. San Francisco, in case you all haven't been there, has been a little slower to come back to life. We're expecting that it does have a longer tail, but the neighborhood stores are also on fire. The stores are.
They were never dependent on international, so planes certainly. I know the ocean liners or the tour ships or cruise ships are arriving here, so we'll see. We'll see if they go to Union Square in San Francisco.
Got it. Thanks so much.
Next question comes from Anna Andreeva with Needham. Your line is open.
Great. Thanks so much, and good afternoon, and welcome to Robert and Caitlin.
Thank you.
A couple of questions for us. Apologies if I missed this, I was hopping from another call. In the past, you talked about approaching $100 in gross profit per order in the fourth quarter. Is that still the case? I know pulling back on buyer incentives is a big part of the story here. Are incentives now back to 2019 levels, or do you think there's room to cut back a bit further there? Secondly, I'm curious if you could talk about the Get Paid Now program. I know it's early days, but what has been the initial traction? How big do you think this could get for Real down the road?
How do you think about the working capital component of this new initiative? Thanks so much.
We did cover most of your first question earlier on, Anna, so I'll just reiterate very briefly. Yeah.
Got it.
We would expect AOV to be up sequentially in Q4. Buyer incentives are back to pre-COVID levels, and they're very steady. You should expect higher GP per order in Q4. With respect to Get Paid Now...
Sure, I can take Get Paid Now. We launched the program to our consignors and our sales team. It's going quite well. It's another offering to get high value goods. But, you know, we still pay more on the consignor side, so when a consignor is offered both to cash up front and to sell via consignment, they usually go with the consignment offering because that's how they're earning more money. It's a great way to bring someone in our door and get them interested in TRR, and then consignment usually is what gets them converted.
The second part was just around working capital, and the answer, there's no impact, really. This is a relatively small use of capital. There's no meaningful impact.
Got it. All right. Well, thank you so much, guys. Good luck for the holidays.
Thank you.
Thank you.
Next question comes from Edward Yruma with KeyBanc Capital. Your line is open.
Hey, guys. Thanks for taking the questions. I guess first, I think this is more of a follow-up to Ike's question. As pricing of goods kind of continues to escalate and commensurate kind of the price on the secondary marketplace, is it your sense that you also have to chase and kind of pay more for, on the sourcing side from your consignors, or are you able to kind of hold that steady? Second, you know, I know it's kinda early days, but any initial commentary from Mytheresa and maybe helping us dimensionalize how big this handbag program could be. Thank you.
I'll kick it over. Look, we don't pay. We don't buy a lot of things, so we don't really have any impact on, and we, you know, on the consignment side of our business. For us, it's more about do we have enough product flowing in so our shelves aren't empty. Do we have tons of product. Where inflationary forces are hitting us are, which we mentioned at the beginning, are on our shipping costs, and we've offset that by last mile diversification, shipping optimization, and diversification of carriers. We feel good about our shipping expenses, being to keep those low going into the holiday and going forward. Even if they creep up, we have other methods we can employ.
Other than that, it really comes down to, we buy so much upfront for things like cardboard boxes that we don't have a real impact on our, you know, on our pick, pack, and ship side on supply. We're really untouched at this point, and how it impacts the consignors in theory and in practice, those things are gonna sell faster. They've always sold fast with us, and we're always looking to give optimal prices in 90 days. You know, we have a healthy sell-through, as we always do, which means they get paid faster. Right now, you know, we don't have the same issues that other retailers have. On Mytheresa, early days, good press from both of us.
Supplies coming in, they're smaller in the U.S., but it's still a good relationship, and, you know, we're happy we have it. Still early days. These things take a while to get going.
Operator, I think we have time.
Sure.
Thank you. I think we have time for one more question.
Sure. Your last question comes from Lauren Schenk with Morgan Stanley. Your line is open.
[Hey, this is Ethan on for Lauren]Understanding it's early, but on some of the new categories you've launched recently, like sporting goods, collectibles, and tech, if you could provide an update on what you're seeing there, it'd be very helpful. Is there any difference in the types of buyers you're attracting for those categories? You know, is it then more of a new buyer driver or more so helping increase revenue per buyer? Thank you.
Yeah, sure. This is Rati. I can take that question. Our new categories that we've launched in trading cards, collectibles, as well as, yes, sporting goods, are doing quite well. You know, how we launch these categories is our consignors ask us to launch these categories. It's what's in their homes now, and they have these extra pieces that they wanted to also give to their luxury manager or drop off in stores. I will say, especially in the trading cards and collectibles space, we're seeing quite healthy consignment as well as demand, so feeling really good about that. I'd also say that they do skew more male in general.
Okay, great.
Okay.
Thank you.
Hey, thanks, everyone, for joining us. In closing, we wanna thank the entire team at The RealReal for their hard work and dedication, for delivering these strong Q3 results. We wanna thank Matt for his last call. He's doing a little happy dance from his studio. But everybody's commitment to excellence helps drive our business forward every day. We now have over 24 million members, so thank you very much, members, who are joining us on this mission to extend the life of luxury and make fashion more sustainable. Thank you all, and we'll be back in the new year. Have a wonderful holiday. Just leaving one final note, we are ready, so we're gonna have a good one. Thanks so much, everybody.
This concludes today's conference call. Thank you for participating. You may now disconnect.