EOLS - NASDAQ

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Thank you, operator, and welcome to everyone joining us on today's call to review Evolus' first quarter 2024 financial results. Our first quarter 2024 press release is now on our website at evolus.com. With me today are David Moatazedi, President and Chief Executive Officer; and Sandra Beaver, Chief Financial Officer; Rui Avelar, Chief Medical Officer and Head of R&D, is also with us for the Q&A portion of the call. Before we begin our discussion, I'd like to note that during our call, our prepared remarks will include forward-looking statements within the meaning of United States securities laws and management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current assumptions and expectations of future events and trends, which may affect the company's business, strategy, operations or financial performance. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this call, and the company undertakes no obligation to update or review any estimate, projection all forward-looking statements, except as required by law. These forward-looking statements are based on estimates and assumptions that, although believed to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties. A detailed discussion of the risks and uncertainties that the company faces is contained in its annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Additionally, today's discussion will include non-GAAP financial measures, which should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A reconciliation of GAAP to non-GAAP results may be found in our earnings release, which was furnished with our Form 8-K filed today with the SEC and on our Investor Relations website at evolus.com. Following the conclusion of today's call, a replay will be available on our website at evolus.com. With that, I'll turn the call over to our CEO, David Moatazedi.

Thank you, Nareg. Good afternoon, everyone. Thank you for joining us on our first quarter 2024 earnings conference call. Following a record year in 2023, which represented our third year as the fastest-growing neurotoxin in the U.S., we are very pleased to report the continued adoption of Jeuveau with another quarter of above-market performance and strong revenue growth. Our reported revenue of $59.3 million in the first quarter represents 42% growth over the prior year, highlighting our continued strength in execution and increasing momentum from 2023 toward achieving our 2024 net revenue guidance of between $255 million and $265 million. We continue to maintain a focus on operating expense discipline with operating expense growth at less than half the rate of revenue, putting us on a clear pathway to profitability in the fourth quarter of this year. Our differentiated approach to building a performance beauty company is gaining increased acceptance. These results underscore the continued growth of our brand and importantly, the loyalty of our customers and consumers who are increasingly choosing to partner with Evolus. I'm pleased to share with you the metrics that delivered the results in the quarter. In the U.S., we added over 700 new purchasing accounts, bringing our total number of customers purchasing since launch to over 13,000, which represents approximately 40% penetration of the roughly 30,000 customers in the U.S. that inject cosmetic neurotoxin. The standout metric this quarter was the number of consumers who are treated in our Evolus consumer loyalty program, which achieved an all-time high number of redemptions, with approximately 180,000 consumers who received treatment. Importantly, 60% of those were repeat treatments and the remainder were new to Jeuveau. Our loyalty program continues to gain momentum in the market with every consumer earning $40 off their Jeuveau treatment, which is a meaningful savings over loyalty programs in the toxin space. On the international side, we continue to expand our international footprint with a focus on deeper penetration in the U.K., Germany and Italy, while actively preparing to launch in Australia and Spain later this year. And lastly, on the R&D side, we've made significant progress with the development of our novel dermal filler line and remain on track for U.S. and international launch in 2025. Within the next 90 days, we plan to file our first 2 pillars with the FDA and will present the top line results of this pivotal trial on Friday, May 17, at the SCALE meeting in Nashville. I'm proud of the team at Evolus. They're highly driven, focused and believe in our mission of building a performance beauty company. It is their commitment that gives Evolus an outsized presence in the market. Our success in the quarter is largely driven by our continued market penetration on a strong underlying market, which remains healthy as consumers continue to prioritize their spending on the toxin procedure. Jeuveau's brand recognition, clinical performance and high satisfaction profile is well positioned for new consumers entering the category. This positioning will allow us to continue capturing demand from the younger generation, while we actively prepare to integrate our novel dermal filler line, Evolysse, when it becomes commercially available starting in 2025. Looking beyond 2024, we remain confident in our commitment to drive long-term value for our shareholders by achieving our total net revenue goal of at least $700 million by 2028. This confidence is driven by the strong market opportunity of Jeuveau in the U.S., the international expansion of Nuceiva and the commercialization of the Evolysse line of fillers beginning in 2025. Now I'll turn it over to Sandra, who will cover the financials.

Thank you, David. I would like to congratulate the Evolus team for another quarter of above-market sales growth and operating expense discipline. These above-market Q1 results represent a meaningful step towards achieving our top line guidance and delivering profitability for Q4 2024. Turning to the results. Global net revenues for the first quarter were $59.3 million, up 42% compared to net revenue in the first quarter of 2023. Sales in the U.S. comprised more than 95% of revenues this quarter. International revenue contribution will continue to increase as international toxin growth will outpace the U.S. In the U.S., where the pricing environment remains strong, our customer reorder rate remains at approximately 70%, and our sales were driven primarily by higher volumes. Our reported gross margin for the first quarter was 68.3%, and our adjusted gross margin, which excludes the amortization of intangibles, was 69.5% and in line with our full year guidance. Our GAAP operating expenses for the first quarter were $68.3 million compared to $69.6 million in the fourth quarter. Non-GAAP operating expenses for the first quarter were $42.1 million compared to $45.5 million in the prior quarter. Reported selling, general and administrative expenses for the first quarter were $45.1 million compared to $43.1 million recorded in the fourth quarter. This quarter, SG&A expenses included $5.1 million of noncash stock-based compensation compared to $4.4 million in the fourth quarter. Operating expenses remain in line with our Q4 spending levels. We anticipate modest operating expense increases throughout the year as we begin to prepare for the filler launch in 2025. Our non-GAAP loss from operations in the first quarter was $0.9 million compared to $3.7 million reported in the fourth quarter. This $2.8 million sequential improvement in the non-GAAP loss from operations represents a meaningful continued progress on our path towards profitability in the fourth quarter of 2024. Both non-GAAP operating expenses and non-GAAP loss from operations excludes stock-based compensation expense, revaluation of the contingent royalty obligation and depreciation and amortization. Turning to the balance sheet. We ended the first quarter with $97 million in cash compared to $62.8 million at December 31, 2023. The cash balance includes $47 million of net proceeds from the underwritten offering in March. Net cash used for operating activities was $10.6 million, which improved $10 million as compared to Q1 2023. It's important to note that the first quarter is seasonally the highest operating cash use quarter due to the timing of annual bonus payment. This reduction in year-over-year operating cash use represents continued progress towards cash flow breakeven. We continue to expect our existing liquidity will fully fund us to profitability for the fourth quarter of 2024, full year 2025 and beyond, including the repayment of our $125 million debt facility in 2026 and 2027. We continue to have confidence in the performance of Jeuveau as evidenced by our strong first quarter results and are on track to deliver $255 million to $265 million in revenues as we announced earlier this year. We continue to target total revenues of at least $700 million by 2028, driven by continued growth in share gains in our neurotoxin business in the U.S. and international markets, along with the growing contribution from our novel line of fillers that begin in 2025. This equates to a compounded annual growth rate of 28% on a total addressable market of approximately $6 billion today, growing to approximately $10 billion by 2028. With that context in mind, I'd like to summarize our guidance. Total net revenues of between $255 million and $265 million, over 95% of which will come from sales in the U.S. and the balance from international markets. Our quarterly revenue assumes typical industry seasonality. In addition, it is worth noting that we expect first half growth rates to exceed second half growth rates, primarily driven by the 2023 compare period and adjusted gross margin in the range of 68% to 71%, non-GAAP operating expense guidance in between $185 million and $190 million. We expect to achieve positive non-GAAP operating income on a consolidated basis for the fourth quarter of 2024 and the full year 2025. It is also worth noting that within the year 2025, profitability may not be sustained every quarter due to the filler launch. Finally, the company projects its total net revenue can reach at least $700 million by 2028. Now let me turn the call back to the operator to begin Q&A.

[Operator Instructions] Our first question comes from the line of Annabel Samimy with Stifel.

Congratulations on another strong quarter. So I just wanted to ask you about account momentum. Obviously, it's picked up quite a bit from the 500, 600 and you're sort of in a new, I guess, account addition level. And I guess what I'm wondering is, first, is it sustainable? And second, is it necessary? Do you have room to go a lot deeper than wider? So if for one reason or another, 1 quarter, you're not getting as many accounts you can still drive deeper into some of those accounts. And then, I guess, bigger picture, I want to get your thoughts on how you think the market dynamics may shift as we're starting to see some additional entrants coming to the market. I know you've touched on it before, but it's becoming -- it's coming closer and closer. And now Galderma is public and speaking about it themselves. So I just wanted to see how you feel about market dynamics playing out. And then I guess, can we use Europe kind of as a proxy for how things are going to evolve in the U.S. given they have a lot more product options over there? So I guess I'll start with that.

Great. Annabel, thanks for the questions. I'll just go through each of them as you just went through, starting with new accounts. Look, we're really thrilled to see the step-up over the last 2 years in new accounts from about 500 on average, as you mentioned, up to 600. And now we've consistently been in and around 700. I think as we stated in the past, we don't have a target for new accounts. Ideally, it's north of 500. I think what you're seeing in this increased demand, up to the 700 new accounts per quarter threshold, it's largely just driven by the influx we're getting in demand of new accounts that want to partner with Evolus. As our co-branded media increases the quality of our product, as it continues to perform and more consumers in our loyalty program, as you can imagine, the noise level around both the company and the brand are increasing. And all of those are catalysts that are driving more new accounts to consider partnering with us. And so we believe that it is sustainable in the sense that we're only about 40% penetrated into the total account base of 30,000. To your point, there may be quarters in the future, especially with the launch of a filler, where we may retrench and spend more time with our existing accounts and may not be able to spend as much time opening these new accounts. But I think as we peel the onion back, the new accounts are important because they allow us to go wider in the market, but the majority of our growth is coming from going deeper within our existing customers. So overall, we have a very healthy composition in our business of going deeper as well as going wider in order to penetrate the market. And whether that cadence is 500 or 700 accounts, I think the growth rates would be very healthy with our business going forward anywhere in that range we feel confident. Moving on to additional market entrants. Look, this -- we anticipated new market entrants beginning this year, right? As you saw with one other product that was FDA approved. Earlier this year, we anticipate they're going to enter the market before year-end, and that was factored into our guidance. Keep in mind that, that is a product that we currently compete with in Europe. And we feel confident about our positioning. In the end, we've defined a unique position in the market, not just in our cash pay strategy, but our focus against this younger generation and then the value of the partnership when these customers partner with Evolus. And as you know, looking back over years, it takes time to build the partnership and those capabilities, and that's something that we've continued to build over time. And you see a brand now that's entering its fifth year this year on the market and growth accelerating over where they were in the front half of last year. So I think we feel very good about where our brand is positioned in the market and then the tailwinds that we get by focusing on that younger generation. And then there will be more competitors down the road just like there are in other markets and fillers, and I think these are high-growth markets. And as new market entrants enter, you see that they can benefit without affecting the growth of existing players. I think that was evidenced by the latest entrants that came in and our business continued to perform well. So we feel good about where we are on that side. And I think, to some degree, the Western world is a proxy. So Europe is not an unreasonable one. For the U.S., there are similar dynamics. So I think we do look closely at Europe to be a predictor of where we think the opportunity is in the U.S.

Okay. And if I could just squeeze one more in. Is there anything you can tell us about performance in the filler market? And what kind of dynamics we should expect as you enter this market? Obviously, it performs just a little bit differently than the neurotoxin market. What kind of trends should we be thinking about in that market?

Well, you have a market that's valued at about 3/4 the size of the toxin market. So it's a $1.8 billion market in the U.S. It's a market that, over time, has had very healthy growth trends and we expect will continue to. Hyaluronic acids make up anywhere from 80% to 90% of the value of that total filler category. And so being one of just a few families of fillers, once Evolus enters the U.S., I think, positions us very well as we enter that space. We also believe that there is a catalyst looming with the GLPs that does create a market opportunity that is not fully baked in for the filler category just yet. And I think it's a function of timing before we start to see that be a meaningful catalyst. But that's something that we're closely watching. But we think it's a very healthy market that will be mid- to high single-digit growth going forward. And if you look at it historically, it's largely, over time, near the toxin market as it relates to growth rates.

Our next question comes from the line of Marc Goodman with Leerink.

David, what did you think the U.S. market grew in the first quarter? And then can you talk a little bit about what you thought some of the key markets that you're participating in overseas in Europe? How is the growth there? And maybe you can talk to the Galderma numbers and the numbers from AbbVie, just as extension of the previous question.

Marc, it's Sandra here. Thanks so much for the question. As it relates to the overall market, I think one of the benefits of having more companies reporting, it gives us a little more clarity on sort of how to triangulate the full market, obviously, so one yet to go. But as indicated by our performance and what you're hearing in the market, we still believe this is an underlying very healthy market. We can't get to a precised number on market growth on any quarter, but certainly growing and growing at a healthy rate, which gives us that confidence that there's a continued demand for the product in the market, and there continues to be overall health. In Europe, for us as a newer entrant into many of these markets are facing, it's significantly above market in terms of growth. It makes it a little harder for us to see when you're new to a market, what the underlying market growth is, particularly as we are entering into new markets in Europe. We're penetrating our share as we did here in the U.S. much more deeply in those that we entered first, most notably the U.K.. And we're still earlier days and those like Italy that we entered into the back half of last year and growing at a rate that's significantly higher than what we expect the market is growing. Hard for us to read through one other competitor that might be reporting as it relates to Europe.

And maybe the only other thing I'd add is the Europe launch, we track each market very closely and look at analogs like the U.S. and Canada. So we feel really confident about the uptake we're getting out of these new markets we're entering. But keep in mind, the pricing dynamics between Europe and the United States are pretty significant in terms of the difference. And so that's what factors into the values of the respective markets.

You talked about the customer loyalty in the U.S., that $40 certificate. Is that the same thing that was going on last quarter as well?

Yes, that's part of our Evolus Consumer Rewards program that we've launched several years ago. And we've continued to be consistent about our offer, which is $40 off for every consumer. So it's been a multiyear effort. Marc, to that point, that consistency in offering $40 off for these consumers for multiple years is what's really driving the increased traction you're seeing in the market. That's a meaningful savings for these consumers. When you think about a $300 to $500 treatment for them when they can count on $40 on every visit.

Our next question comes from the line of Navann Ty with BNP Paribas.

A follow-up on U.S. toxin competition, if I may. If you could discuss your assumptions for 2025 -- '24 and '25 outlook in terms of price, timing and differentiation for the new entrants? And then separately, if you could discuss the potential uses of proceeds of the opportunistic $50 million offering?

Great. Thanks for the question, Navann. I'll let Sandra take the last portion around the use of the proceeds. I'll start with the marketplace. Look, I think we expected to see a new entrant coming in later this year. We're very well aware of the product profile. I think, at this point, rather than comment on any one competitor, I think we'll address that as each new entrant comes in. Probably important to note that we expect this market to be healthy and growth. We have forecast this year that we're going to gain share. That assumption assumes a new market entrant. And when you look at our forecasted 2028, achieving $700 million, that also assumes several new market entrants. So I do think there's an opportunity for new entrants to come in and carve out their own unique value proposition and for us to continue to do the same. As it relates to how we consider each new entrant and what we may or may not do, I think those are the types of things that we'll probably be sharing with you after the [indiscernible].

Navann, as it relates to your question on the proceeds from the raise, as we said before the raise, and nothing has changed since, we felt very confident we have sufficient cash and liquidity to carry ourselves through to profitability and beyond. The raise was specifically due to high inbound demand for our stock. We continue to see opportunity to shore up the balance sheet and give ourselves that incremental capacity in the event that there should be an opportunistic moment where we could invest. And a deal like you saw us do with Evolysse, which is an incredibly capital-efficient deal to expand our portfolio, with the cash we had on hand, we would have been limited in our ability to pursue those opportunities. And we now have a much healthier balance sheet position to be able to consider strategic opportunities. Having said that there's nothing imminent in front of us, there's no reason why it was really an opportunistic moment in time when we could get new investors into the stock.

Our next question comes from the line of Uy Ear with Mizuho Securities.

So the first question is just digging a little deeper in terms of breadth and width of accounts. Maybe can you speak to the average Jeuveau dollars per account? And like what proportions may have a larger share of the dollars? That's the first question. And the second question is, what should we expect to see at -- when you present the data for the derma fillers? Just maybe some colors around expectations.

Great. So let me just start with the market. Look, we don't report out on the value per account. But I think just to dimensionalize it, right? I think 30,000 customers in the U.S. You could simply apply an 80-20 rule to sort of get a better understanding of the category. And from there, you can see that there's about 24,000 customers roughly. If you did an 80-20 rule, that represents the long tail. So certainly a lot more smaller value customers out there throughout the U.S. that are either newer to aesthetics or just dabbling in aesthetics and treating a smaller number of patients. And then the remaining 20% or call it, roughly 6,000 customers are the ones that are driving the large majority of the revenue. And clearly, our preference would be to try to take on the highest value customers. But in reality, some of those smaller value customers several years ago are now some of the biggest customers we have today. So I think we continue to support the overall market of 30,000, and we'll penetrate it. As you've seen each quarter methodically and properly train these accounts on the differentiation, Jeuveau introduced some of the unique cash pay advantages that we offer. And I think Jeuveau then gets into these practices. And whether they're existing practices that switch more of their patients to our brand or new practices that are attracting a younger generation to this performance beauty category, I think there's many ways to grow this pie. So as we look out, we feel very good about the overall dynamics that there's many ways to grow in this market, and I think we're capitalizing on both. We're in approximately 40% of accounts, but we estimate we may be in roughly 60% of the dollar value of the toxin market. Of course, these are estimates, they're rough estimates, but that gives you a gauge in terms of how we're tracking.

And for the second question, with respect to the filler, there's a format at scale that allows for late-breaking news, it's called hot topic. So that will take place at the end of the day on the 17th. So kind of in keeping with late-breaking news, you can expect to see the top line results and some select secondaries and then just a quick snippet of the safety profile in the conclusion.

And at this time, we're not prepared to provide more color on our commercialization efforts. I think we'll provide that as we get closer into the launch date and after FDA approval.

Our next question comes from the line of Douglas Tsao with H.C. Wainright.

Congrats on the progress. Maybe just on the broader market. I think Sandra sort of you highlighted your belief that the market continues to be healthy. It doesn't seem that everyone is necessarily experiencing the same kind of growth that you are, and obviously, you're at a different stage than some of the participants. But how would you characterize the competitive dynamics right now? And given the fact that some players aren't necessarily performing as well as you or as well as the broader market, are they making any tactical changes?

Yes. So I think the comments that we made around the broader market, we feel very confident. And we have a healthy market here. We had forecast this year would be roughly in this mid- to high single-digit growth. The first quarter is confirmatory of what we expected to see. And frankly, that is the trajectory we see over the coming 5 years as we guide out to 2028. I don't want to speak to 1 quarter on any competitor because I think, in all fairness, there's a lot more moving parts likely within any one company. So I'd rather not go there, except to say that, "Look, if I were looking at this category overall, I'd expect every toxin player in the space to deliver some level of growth this year because we have a healthy backdrop of the market." I think our contribution to the growth and perhaps our over-indexing on growth that you're seeing as a function of our positioning against this younger demographic that, that is the catalyst and growth driver for this category. And the way that our brand is positioned, the benefits that, that consumer receives and the practices received in order to go recruit more new consumers to their office are the catalysts that are driving our above index growth. And to the extent that, that leads to further share gains, that's hard for us to estimate, but we believe it's a function of where we're positioned in the market. And we think it's a sustainable differentiation that we can continue to build on to grow this category.

And David, maybe -- and I hope this doesn't get too granular. Can you sort of provide some perspective on how you think the different segments of the market might be growing? And that would be like the millennials versus Gen X versus boomers to the extent that they're still getting aesthetic procedures. How much variability across those segments do you see?

Yes. I'm expecting, in the coming quarters, we'll likely have concrete data set that could answer that from a third party. And I think that's an important question, Doug. Unfortunately, we don't have that in front of us, aside from sharing with you that we continue to increase our mix towards millennials. And we believe the millennials are approaching the majority of users in the toxin market or they're right near that tipping point. And I wouldn't be surprised to see a data set that suggests that they're already there. That backdrop is a very favorable one. I think for the whole category, frankly, because that's what going to fuel this category over the next 5 years. But importantly, for us, given where we positioned the company when we launched about 5 years ago, we're starting to see the benefits of that forward thinking positioning as a company.

Our next question comes from the line of Serge Belanger with Needham & Company.

I think Sandra mentioned that Jeuveau growth in the first quarter was mostly driven by volumes. So I assume pricing was very stable. Just curious what your expectations are on the pricing front for this market as more competitors come in? And could it eventually kind of replicate what we're seeing now in the European markets in terms of pricing levels?

Thanks for the question, Serge. Yes, that is exactly how we frame the quarter. And it is the right inference that pricing has remained very stable. We've said in the past, nothing has really changed despite continued movement in the market. That we see nothing but strength in terms of upward mobility for us on price, right? So we could see modest increases. I'm not expecting to see meaningful decreases in the price. The U.S. market doesn't behave like the European market. It's not a raise on price. It really is driven by the quality of the performance of the products first and foremost. And we tend to differentiate ourselves against the quality of Jeuveau, and that continues to give us that strength in our pricing position.

The only other piece I'd add is we did look at what drove some of the pricing dynamics in Europe relative to the U.S.. To Sandra's point, our ability to do direct-to-consumer advertising creates a different market environment in the U.S. relative to Europe, where you can't advertise to the consumer of drugs. Our ability to offer programs, like consumer loyalty programs, not just for Evolus, but the competitive set is part of the reason why you've seen price only increase despite new entrants over the last 20 years. And we believe that these are very sustainable trends, and we've modeled accordingly. And if you think about it, there's 5 players today, and that's been over 20 years. If we pick up several more over the next 5 to 10 years, it's not really a significant shift over what you've seen in the past. So I think our assumptions are very realistic and give us the opportunity to continue to deliver on volume primarily, but to see price potentially appreciate by some nominal amount.

And our next question comes from the line of Balaji Prasad with Barclays.

This is Mikaela on for Balaji. Just thinking about -- as we get closer to the launch of your filler line, how are you thinking about implementing any bundling-like programs? And just any further color here on what your strategy might look like, especially what you're thinking in terms of the size of your sales force?

Sure. Thanks for the question. We are actively in the process of assessing how we would potentially launch the filler upon approval next year. As you heard from Rui earlier, we're very excited that in the next 90 days, we'll be filing the first 2 fillers with the FDA, which will put us on a clock, which is very exciting, considering we signed this agreement in the second quarter of last year. So the pace by which we're moving is very fast. And we're also excited about the fact that we have 13,000 customers now since launch with Jeuveau, that gives us a significant base of Evolus customers that we can launch from. And I think you can expect that, obviously, that partnership is an important one, and it's a group of customers that we will focus on at launch, but there's an opportunity to continue to expand beyond it. We also have a significant infrastructure that we provide medical education, hands-on training. That team is capable of supporting not just neurotoxins but fillers as well. In addition to our Evolus co-branded program, which is designed today for Jeuveau, but it was also built from the outset to absorb more than one product. and that carries all the way through to our digital infrastructure, which was designed with the intention of the company building out a portfolio in aesthetics. And so we expect that the entire platform will benefit from the addition of the filler, which gives us a more comprehensive offering for our customers that are purchasing toxins and fillers in addition to the consumers, which we know a large number of consumers that are currently in our toxin loyalty program will benefit from adding on a filler. So we see a lot of opportunities for these two to intersect. How we go about doing it, it's something we'll share as we get closer to launch.

Thank you for all your questions. At this time, I would like to turn the call back over to David Moatazedi, President and Chief Executive Officer, for closing comments.

Thank you. The results of the first quarter reaffirm the unique difference Evolus brings to the market as a cash-pay focused performance beauty company. Our continued strength in execution, above-market performance and building momentum will enable us to continue to outpace the market. We remain laser-focused on product performance and consumer and customer centricity as we evolve from a single product aesthetics company to a multiproduct performance duty innovator. Our journey towards profitability, slated for the fourth quarter of this year, marks a significant milestone in our trajectory, underscoring our financial excellence and operating discipline. As we navigate the competitive landscape within aesthetics, we are consistently gaining market share and setting Evolus apart. Our long-term goal remains clear, to achieve at least $700 million in revenue by 2028. With a strong balance sheet, a differentiated product portfolio, solid infrastructure and sustainable competitive advantage, we've demonstrated the effectiveness of our business model. And I'm confident that we are well positioned to deliver growth and value for our shareholders for years to come. We look forward to keeping you apprised of our progress as the year unfolds. Thank you for joining us today.