Good afternoon. My name is Stacy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Teradata Q2 2020 Earnings Call Call. Pound key. Thank you.
Navil Salsharshai, Corporate Development And Investor Relations, you may begin your conference.
Good afternoon, and welcome to Teradata's 2020 2nd quarter earnings call. Steve McMillan, Teradata's President and Chief Executive Officer, will lead our call today. Followed by Mark Culhane, carried out as CFO, who will discuss our financial results. Our discussion today includes forecasts and other information that are considered forward looking statements. These statements reflect our current outlook and they are subject to a number of risks and uncertainties that could cause actual results to differ materially.
These risk factors are described in today's earnings release, period of its most recent 10 K filed with the SEC and in the Form 10 Q for the quarter ended June 30, 2020 expected to be filed with the in the next few days. We undertake no duty or obligation to update our forward looking statements. Discussing certain non GAAP financial measures, which exclude such items as stock based compensation expense and other special items described in our earnings release. We will also discuss other non GAAP items such as free cash flow and constant currency revenue comparisons A reconciliation of non GAAP to GAAP measures is included in our earnings release, which is accessible on the Investor Relations page of our website at investor. Teradata.com.
A replay of this conference call will be available later today on our website And now I'll turn the call over to Steve.
Thanks, Nabil, and good afternoon, everyone. I'm truly honored as well as incredibly excited to join Teradata as CEO and lead this great organization that is rich with opportunities. I've joined a quite a unique time in history when this pandemic has caused companies to rethink and rework their business models. The crisis has made one thing very clear. The essential role Teradata plays and our customer success Organization's need data to help them manage through these tumultuous times.
As companies address rapidly changing market situations, and customer needs reengineer supply chains to source critical supplies or pivot to remotely support all operations we realized the need to leverage data as an important asset to make better informed business decisions. Leveraging all of the relevant data possible helps organizations have the agility they need to weather through the disruptions of today's uncertainties. Companies of the size and reach of our customers need access to data at the scale only Teradata can address with the reliability, security, and pendability they require and we deliver. Data and analytics are foundational elements to digital transformation a transformation which will be accelerated for many by the pandemic. Organizations need to rapidly adapt to this changing landscape, and to transform themselves to be leaders in the new economy.
To accomplish the transformation, they need analytic insights leveraging data from all relevant sources. Teradata's ability to deliver these enabling capabilities in both hybrid and multi clouds is unique. And present us with a tremendous opportunity. With this market backdrop, it gives me great pleasure to open my first earnings call as CEO delivering news of strong results in Q2. The organization executed extremely well in the quarter, despite the uncertainties posed by COVID 19.
In Q2, we exceeded our expectations and street guidance for our key met with strong sales execution and good cost discipline, we generated robust ARR growth, significant free cash flow, strong recurring revenue growth and solid earnings per share. Mark will cover our financial results in greater detail as usual, And today, I will speak to 3 areas important for Deradata's success. 1st, our ongoing technology innovation second, a resilient execution during these unprecedented times and third, our continued customer success And then I will close with a few personal comments as Teradata's new CEO. I want to start with our technology innovations, body of work from our products organization as to develop and engineer new data and analytics technologies for both hybrid and multi cloud environments. We are pleased that Vantage with native object store or NOS support has become generally available in the cloud on AWS and Azure, and we will be delivering advantage on GCP very soon as well.
With North, analytic models can take advantage of exponentially greater amounts of data stored in public cloud environments. Massively improving the scope and accuracy of the resulting insights. NOOS support also reduces the friction in using data and a cloud object store with data already in Vantage. This new release advantage continues our focus on driving innovation and our software so that customers can apply analytic insight to data, whatever it resides in an on premise appliance, external data store, or cloud storage environment. Because Vantage software is consistent from one environment to the next, rest is reduced and the process is greatly simplified bringing faster tanker value with the scale, security, availability and analytics performance customers rely on from Teradata.
Vantage with North Support was developed with direct input from our customers and partners about the real world use cases. One early access customer leverage Vantage and IoT sensor data stored in AWS 3 to perform predictive maintenance on more than 650,000 pieces of equipment, keeping the fleet running drives more consistent and predictable operations for them and increases customer satisfaction. We're also bringing a 30 day trial advantage in the cloud for customers to directly access and experience the power advantage and test out advanced analytics on our leading platform in the cloud. Starting in Q2, this global program is available by invitation and brings faster evaluations as well as reduced time to value for our customers. The trial offers in database analytics and not support and includes access to preloaded data sets so that customers can easily explore various business outcomes from advanced analytics.
The trial also showcases our completely modernized UX for Vantage, which makes it easier for business users to take advantage of our platform. While I am still evaluating the business, I am pleased to see the strength of innovation at Teradata However, we can improve our execution in this arena and accelerate our cloud efforts and momentum. Turning to our execution during the COVID-nineteen crisis. The Theradata team demonstrated great resiliency and evicted quickly and smoothly to remote work environments. We're focused on supporting our employees through the challenges posed by the pandemic, as well as being there to support our customers regardless of physical constraints.
To further support our customers during the pandemic We enable customers to extend their knowledge of how to leverage data and its insights by offering our training for free. And a great showing of the demand for Teradata Expertise, we saw more than 14,000 people take advantage of this learning opportunity. Further, we reimagined all of our events into 100% virtual experiences and our teams collaborated remotely with 100 customers and prospective customers, explaining how companies can leverage Teradata to get the insights they need. Last quarter, we talked about developing virtual executive briefing centers to advance our sales motions while the world needed to work remotely. We've had tremendous response from customers as well as superb contributions from Teradata Employees to these high quality virtual interactions Our virtual engagements have end up continuing to develop into opportunities for us.
As we move through Q3, our virtual engagements continue and our offices remain closed. Our goal is the safety of our employees globally in the face of this highly dynamic situation. We plan to reopen offices only when we believe there will be safe environments for our employees and guests. In the meantime, we will continue to operate remotely and I'm pleased with how our teams have demonstrated their ability to adapt and keep advancing the business. Our strong relationships with our stable customer base, combined with a deeply rooted dedication to delivering business value for our customers, are serving as well during these uncertain times.
As we continue to support our customers in their digital transformation, we are modernizing our go to market motions. In Q2, we continued the rollout of our customer success program, where our teams are working to ensure our customers are maximizing the business value from their investment in Teradata Technology. Our customer success program also focuses on increasing customer satisfaction. We are seeing very positive response from customers with the program and believe it will drive significant expansion opportunities over time. The work on building our modern sales capabilities remains underway as we enter Q3.
Simultaneously, our marketing programs are pivoting to focus on customer use cases and deeper digital experiences. We are assertively taken back the narrative on Teradata's capabilities in the cloud. With an integrated campaign addressing the misperceptions that others have proliferated, it's great to see us on the offence. Just one example is an outstanding webinar we recently held with independent analyst William McNate and Printer International one of the world's leading casual gaming restaurant companies with brands, chilies and Maggiano's Little Italy, This webinar centers on Brinker's journey to the cloud with Teradata and why Brinker chose Vantage on AWS to drive advanced analytics machine learning and biggest science across its organization. With Vantage delivered as a service in the cloud, Brinker can now apply advanced analytics and predictive modeling to its business to improve demand and traffic forecasting team member management and recommendation engines for customers and more.
You're welcome to listen to this great example of how our customers migrate to the cloud. It's available from our website. So we are advancing on many fronts all to support and grow our customer base We have a broad number of wins in the quarter, and I'd like to walk through a small sample of our recent cloud wins. Vodafone extended strategic partnership with Teradata with a new multiyear multimillion dollar commitment utilizing Vantage to improve network intelligence, digital customer experience, ILT And Finance. We look forward to continuing to work with Vodafone to help drive its vision for the telcos the future.
A major U. S. Supermarket chain is migrating to Vantage on AWS. And here, we won over cloud only vendors. This is the first step in growing Teradata's value proposition and expanding into new use cases, including expanded store information, shrink loss prevention, HR analytics, and more.
A European energy company migrated to the cloud with Lanti John AWS, Here, we won against competition from cloud only providers. Based on our unmatched capabilities and scale and the flexibility and pay for what you use consumption model. The customer has an extensive set of use cases, including expanding its 3 sixty degree view of its 11,000,000 B2C customers, improving the customer journey and defining these customer segments based on advanced analytics 1 of the world's largest gaming and hospitality companies select advantage on Azure versus acquired only technology. The firm utilizes Teradata to drive its loyalty rewards program, and 9 out of every $10 of revenue flows through applications run on Vantage. As the company continues to modernize and transform its business, it is working with Teradata to simplify the way its stakeholders analyze data to make better and more timely decisions across the entire enterprise with a consistent data set.
Terra Data will be collaborating with Global Integrator Cognizant on this project. Our leading U. S. Wholesaler is migrating 2 on prem systems to Vantage on AWS Despite competition from cloud only providers, Theradata's new consumption model won the deal, The customer is beginning a multi phase deployment that will ultimately replace redundant data march running on other databases throughout its ecosystem. Teradata is collaborating with AWS and a major global systems integrator to expand usage, advantage and drive business value for this customer.
A large Canadian retailer is migrating key applications to the cloud as part of its cloud first mandate. Terra Data and Microsoft work together to provide a compelling offer that involves replicating data on a near real time basis from the customer's on prem system to Vantage on Azure. This allows it to seamlessly transition key business reporting initiatives in the case of a disaster with minimal disruption. This customer has a long history of working with Teradata and use that with the volume of couriers processed daily, It couldn't seriously consider a cloud ordinary solution that can or scale to meet its price performance requirements. We will continue technology and services.
Before I pass the call to Mark, I would like to take a little time to talk to you about why I joined Teradata what I see as our opportunity and how I see our business. Teradata's market position and opportunity are tremendous As I previously stated, data and analytics are the foundation of a company's digital future and Teradata provides the best technology in the world to enable companies to leverage the data, apply analytics to solve mission critical problems and compete in the market. This is why companies build their future on Teradata and the incredibly knowledgeable people we have bring truly unmatched strategies to help companies get great value out of the data. I've only been at Teradata for 2 months, so now it's not the time for new strategy statements. But rest assured we are tirelessly working on driving our cloud transformation and improving financial returns.
A primary focus of mine is to create a strategic context and operating plans for the company, which we will share in the coming quarters. For now, I want to address a few foundational elements crucial to our future. We will win an cloud and will continue to offer choice in cloud deployment options to meet our customers' needs. That part of the strategy will not change and I will make sure we are focus on accelerating our move to the cloud. In addition, I believe, great technology companies focus on platform and not product, and there's a huge opportunity as we transform Teradata to be the leading analytics platform for a hybrid and multi cloud world.
We will continue to leverage our differentiated expertise in consulting and services to enable our customers and our partners to achieve the best analytic outcomes. And finally, we will aim to grow profitability with a balanced focus on growth and returns, optimizing and streamlining paranoia as we move Teradata into the future. As we grow, our ethos will continue to be one that values inclusion and diversity Our entire leadership team recently stood together and pledged to all employees to take a set of actions ensuring that Teradata Cultivate a workplace where equality, inclusion, diversity and openness are a company wide priority And in relying with our deep commitment to social responsibility, we have begun holding dialogues in some of the challenges facing the world today as open conversation and knowledge are key to driving change. And it will take some time to get to where we should be. We are starting from a strong foundation.
We have the technology built for a hybrid and multi cloud world, We have outstanding people and a very strong customer base. We have a vibrant and strong culture and the passion I see to help customers get the greatest value from the data assets is absolutely energizing. I'm confident that I made the right decision in joining Teradata. With the ongoing pandemic, the 2nd half remains uncertain for many organizations and no one knows when everything will return to a more normal predictable environment. Despite uncertainties, we are listening to the market and our customers.
We are committed to responding with speed and agility and ensuring we are providing value for our customers, supporting our people and delivering on our expectations. I look forward to providing updates as we progress.
I would like to publicly and I am very proud of the way the organization has come together and executed. Strong free cash flow growth, healthy recurring revenue given the uncertain environment. We mentioned on our last call some of the actions we took in Q1 in support of our customers. Including temporary free capacity or extended payment terms, and these actions helped move transactions forward this quarter. But more importantly, helped us to deepen our relationships with our customers.
Before I continue to highlight a few key elements of our Q2 operating results. I want to make it clear that unless otherwise stated, my comments today reflect Teradata's results on a non GAAP basis which excludes items such as stock based compensation expense and other special items identified in our earnings release. Additionally, commentary on key segment trends can be found in the earnings discussion document on the IR website at investor. Teradata dot com. We generated $52,000,000 in incremental ARR this quarter, $39,000,000 in constant currency.
This resulted in $358,000,000 in recurring revenue, growing 6% reported and 8% in constant currency and was well above our guidance range. As we said last quarter, We wanted to remain conservative in our outlook given the overall uncertainty, but as you can see, we had a very strong quarter. Consulting revenue declined 26%, 24% in constant currency. This is an area that has seen more headwinds from COVID-nineteen, as some customers continue to manage discretionary spending. We believe consulting will continue to see headwinds in the second half given the ongoing uncertainty due to various levels of outbreaks and continued remote work mandates.
Moving on to gross margins. Recurring revenue gross margins was 69.8%. Up 2.30 basis points sequentially, but down 120 basis points year over year as the mix of recurring revenue that includes hardware and lower margin cloud revenue created a near term headwind. Over time, we expect recurring revenue gross margins to expand as we see less mix headwinds and expect to see significant gross margin expansion in our cloud offering over the next 18 to 24 months Consulting revenue gross margin was 15.9 percent as improved utilization and better price realization helped drive significant movement versus last year. Some of this performance was due to catch up of projects impacted at the end of Q1 and will normalize in the second half.
And we are still expecting consulting revenue margins to be in the low double digits for the year. Total gross margins came in at 58.9%, up 6.20 basis points year over year. The improvement was driven primarily by revenue mix shift to higher margin recurring revenues and away from perpetual and consulting revenue. Total operating expenses were up 2% year over year. The primary driver of this increase was amortization from capitalized sales compensation as required under ASC 606 We continue to reallocate spend towards our cloud initiative as well as our expanded go to market efforts with partners and customer success.
To fund these efforts, as well as manage expenses given the uncertain environment, we took several to manage operating expenses including limiting travel and entertainment, moving marketing events to virtual as well as limit other discretionary spend. Additionally, we also converted a portion cash based incentive comp to share based performance grants. That potentially helps non GAAP operating margin and EPS in 2020 between 50 and 100 basis points and $0.05 to $0.10 of EPS. Which we believe will have no significant share dilution impact in 2021 when the final annual performance incentive achievement is determined. For the full year, while investing in our key strategic initiatives in cloud and transforming our go to market organization to support our recurring revenue model and expand our opportunities in the market.
As a result of the cost actions we have taken in the first half we now We had an exceptionally strong free cash flow quarter, driven by excellent execution from our collection organization. As we mentioned last quarter, we had roughly $30,000,000 in collections that slipped from Q1, but were collected in April. And this combined with the overall strong quarter resulted in free cash flow for the quarter of 115,000,000 bringing free cash flow for the that 2019 was the bottom and we have already exceeded that number as of the first half of twenty twenty. In addition, We expect incremental free cash flow for the 2nd half to be positive as well. Our financial position remains very strong and we ended the quarter with 4.94 to our customer base As a result, linearity in the second quarter was better than our expectations for Q2 And so far, customer engagement trends have remained healthy at the start of Q3.
We will continue to and rock solid technology are advantages that will allow us to continue to expand our existing customer relationships. While our customer base isn't immune, we serve the largest most stable companies in the world. As a reminder, less than 12% of our revenue comes from industry's hardest hit by the economic changes brought on by COVID-nineteen. We came into the year set up for a strong year and remain cautiously optimistic based on the pipeline we see for the second half. However, with continued disruption of daily life, and uncertain business conditions, we quarter, we will only be providing guidance We expect recurring revenue in the range of $359,000,000 between the range of expect our full year tax And finally, out of an abundance of caution, our share buyback program will remain suspended until further notice.
And with that, Operator,
And your first question comes from Katy Huberty, Morgan Stanley.
Questions on the quarter. Steve, welcome to the team. We look really look forward to working with you. I wanted to first ask you a question and that is it sounds like cloud in your mind is the biggest opportunity for Teradata. So can you provide a little more detail around what it is you are asking the team to go do around cloud?
Is it entirely engineering? What what features need to be added to the product, what needs to be done around go to market? And then how should we think about the timeline for Teradata to become incredibly competitive against a growing field in the cloud space in particular?
Hey, Katie. Thank you very much for the question and thank you for the congratulations I'll accept the congratulations on behalf of the entire Teradata team. As you know, I was just appointed as CEO, beginning of June, you're absolutely right. We see cloud as, the substantial opportunity in the marketplace, if you reflect on the IDC numbers, we see cloud growing at just under 38% and we see, on premise workloads growing around 4%. So there is a fantastic opportunity there.
The team have made some good progress in the cloud already, and you can see that from some of the wins, but the impact to the focus on cloud really does touch every single part of the company. From a product perspective, you saw some of the innovations that were delivered in Q2 from native objects store as an example. The trials capability and updated which is much more cloud wise in terms of how it operates. But we also, we also see the changes impacting our go to market motion So looking at things like customer success, how can we work with customers that are using our products in the cloud to ensure that they are getting incremental usage. The product development focus will continue.
I'm currently reviewing all of our spend from a product development perspective and ensuring that we are prioritizing the cloud and cloud development as part of our spend envelope from a product development angle. We really do feel that we are currently competitive in the cloud, but as we move forward, that will be able to increase that overall level of competition. And competitive ability by introducing new features and functions. The one thing I think that we do have to address from a teradata perspective is, we're not seen as a modern and relevant cloud player. And the focus from the marketing organization is really to change perceptions in the marketplace You heard from the strength of the wins that we were having in cloud, but clearly, we can win well.
And we've launched a recent campaign called Myth Busters, which looks set to really reeducate the marketplace in terms of, the misperceptions that may have been put around about Teradata and our ability to from a cloud perspective. So I think, there's not just one aspect to a focus on cloud. It's a total organizational transformation. I would be remiss as well if I didn't say it also has to do with a cultural transformation of the company. In terms of icing with agility, really being conscious of speed and time to market, and delivering incredibly well.
So it was great to see the product development team coming out on time and against the commitments that they've made for, delivery of new features and functions inside the cloud? Did I hope I answered all of the questions there for you?
No, that's great. Mark, can I just ask one follow-up? And it's about guidance for the September quarter. If I remember back when you guided the June quarter, you essentially said that it assumed very little in the way of new business in the remaining 2 months. In May June.
Is that the same way that you approach September guidance or how would you characterize it as it relates to the degree of conservatism?
Sure. Yes, we're taking a conservative approach. The bottom end of our guidance is very similar on that front. Clearly, we were the beneficiary in Q2 of, as we said, in Q1, there were deals that didn't happen with all the shelter in place scrambling going around the last 2 weeks of March on both to get renewals done as well as some of the new add on stuff. So that clearly benefited Q2.
We didn't have that same phenomenon. Experienced at the end of June. So it's, yes, we're taking a conservative view towards going forward.
And your next question comes from Phil Wins
Liu, Wells Fargo.
Hi, this is Richard LeGrande. Thanks for taking my question. First of all, Steve, congratulations on the role, but we're looking forward to working with you and the rest of the team. As for the questions, I'm wondering if you can talk a little bit about building on the last question here. If you can talk about the mix of new versus expansion business in the quarter, I'm just curious how your customer conversations are going.
Are expanding on any particular fronts or was a lot of the conversations that you've been having and given the reason that the hesitance on maintaining foot
I guess I'm just just trying to get it on. Thanks. Okay. Thank you so much for the question. Flanks up a little bit, but, I think the essence of the question is around, are we seeing expansion?
Are we seeing new use cases, how are we doing in terms of our existing customer base and attracting new customers So let me just touch on a few of those points. Expansion is a key driver for us. One of the really interesting things and, items that I've found out during my initial pain is that our customers only tend to use 20% of the features and capabilities of the product. And as they expand the use of those capabilities, it really gives us the opportunity to deliver new use cases for the customer and set Teradata on a growth trajectory NSAID, NSAID or existing customer base. And obviously our focus on our customer success function really looks to drive that.
The other thing I would say, that's been a real eye opener for me is the expertise and innovation of our people in terms of how they utilize Teradata to drive new and innovative use cases for our customers? You heard about some of that in the prepared remarks in terms of working with companies around IoT, working with companies with predictive maintenance. But some of the fantastic innovations are also incredibly relevant to what we do today. So as an example, We've developed a dashboard, which allows us to process information from Excels data sources for our company and internal data sources that can provide executive management inside the company an idea of when you should reopen, offices or stores or, their overall business in terms of this COVID 19 environment. So it's incredibly exciting to see some of those existing use cases.
It's really nice to see that happening in the cloud, but I want to stress that we are truly a hybrid and multi cloud player. And so we see those use cases being deployed both on premise and in the cloud. So think the opportunity is there to continue to expand the customer base and we're seeing some really nice wins and some really nice growth in our credit business.
Okay, thanks. Then I guess I'm wondering what you're hearing in terms of managed the service in recent months given the backdrop? I know you mentioned a little bit about GCP and maybe for your prepared remarks. I'm just wondering how that other conversations have changed and how demand has changed given the backdrop? Thanks.
Yes. We're really excited that in 3rd quarter, we'll be announcing Advantage on GCP. And we really believe given the success that the Google Cloud platform is having in the place, we really think that that will expand and open up a whole new set of customers for us. We've already got some pilots going on with our existing base in terms of utilizing Vantage on the Google Cloud platform that are really driving some, some interest in the use cases. What we're finding is that, winning in the cloud is very much around helping customers reduce the risk in that transformation.
And then we went in the quote because Teradata has got the scale and the performance. We're provide security and reliability, we're truly the safe choice for customers that are moving from and on premise environment and moving workloads towards the cloud. And obviously, our native objects store technology that we launched will enable us to access exponentially larger amounts of data in the cloud. And really open up brand new use cases for our customers and how they deploy.
Thank you.
Hey, thank you for taking my question and welcome to the team, Steve. I wanted to ask you, first, you said you had a win on the based on the consumption pricing model in the cloud. I was hoping you could kind of expand on what the consumption pricing model is for Charter Data and how it's different, against cloud vendors?
I think, Preet, thanks very much for the welcome. And thank you for the question. Not surprisingly, our consumption pricing model enables our customers just to pay for what is being used. So it's very much in line with what you'd expect from a cloud based delivery model. I think where we set ourselves, where we set ourselves apart is the fact that Teradata allows you to utilize those capabilities at performance and scale.
So not only is it about paying just for what you use, but you also get the benefits of, or what we think to be a lower cost for queries when you utilize Teradata Technologies compared to some of the other cloud providers. And that consumption based pricing is something that's, gives us the flexibility and a real hybrid and multi cloud environment in a consistent way. So it gets consistency for our customers as we deploy, workloads across lots of different environments. So I think that's really the differentiation of Teradata as comes about when we combine that consumption pay for what you use pricing model with all of the benefits of Teradata in terms of low cost for queries and scaling that across both on premise and public cloud environments. Hopefully, that answered the question for you, Chris.
Good. Thank you. And just a quick question on, for Q2, recurring revenue growth of 19% in EMEA, It seemed like an extremely strong number. I was hoping to get a little bit more color on what drove the strength there.
I mean, strong quarter clearly had some things that came out of Q1 that didn't close, that closed early, so help from a linearity perspective. And they've shifted very well from perpetual to subscription, which is helping much more so than they did across 'nineteen and 'eighteen. So, that's a big piece of it. The U. S.
Was the first to make the shift Now we're seeing really good shifts in both our other regions in both APJ as well as EMEA. Hey,
Mark, I think it's well. It was a fantastic quarter. One of the key and it wasn't the only reason for our growth in EMEA, the executing well across, lots of different countries and lots of deal sizes and deals. But I'd like just to point ever be to the front when Vodafone, which was referenced in the prepared remarks, that really drove, a fantastic when it it's really core to Vodafone strategy in terms of how they are running and managing their network. And how they want to be a telco and a service provider of the future.
So there was some really fantastic ones for me. Yes, please. Thanks for supporting that.
There are no further questions at this time. I would now like to turn the call over to Stephen McMillan for final comments.
Thank you so much. And I'd just like to iterate again. It's an absolute pleasure for me to, have joined Teradata as the CEO. I'd like to thank publicly the Teradata team for their execution and 2Q the resilience that they've shown through the pandemic and the focus that they've had in terms of delivering to our customers, the pandemic is a challenging time for all of those. And, we very much think that, We're going to have some success as we move forward through the second half of the year.
And care is clear that Teradata is essential in helping the largest organizations in the world's leverage data to get the answers that they need, or execution we we really do expect that to continue. And we're going to move forward with a balanced view of growth and returns while keeping our customers at the center of all that we do. So thank you very much, and thank you for listening in to this earnings call.
Thank you for joining today's conference call. You may now disconnect.