PENG - NASDAQ

Good afternoon. Thank you for attending today's SGH Third Quarter Final 2024 Earnings Call. My name is Jaylen, and I'll be your moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions-and-answers at the end. I would now like to turn the conference over to our host Suzanne Schmidt with Investor Relations. Suzanne, you may proceed.

Thank you, operator. Good afternoon, and thank you for joining us on today's earnings conference call and webcast to discuss SGH's third quarter fiscal 2024 results. On the call today are Mark Adams, Chief Executive Officer; Jack Pacheco, Chief Operating Officer; and Nate Olmstead, Chief Financial Officer. You can find the accompanying slide presentation and press release for this call on the Investor Relations section of our website. We encourage you to go to the site throughout the quarter for the most current information on the company. I would also like to remind everyone to read the note on the use of forward-looking statements that is included in the press release and the earnings call presentation. Please note that during this conference call, the company will make projections and forward-looking statements, including, but not limited to, statements about the company's growth trajectory and financial outlook. Forward-looking statements are based on current beliefs and assumptions and are not guarantees of future performance and are subject to risks and uncertainties, including, without limitation, the risks and uncertainties reflected in the press release and the earnings call presentation filed today as well as in the company's most recent annual and quarterly reports. The forward-looking statements are representative only as of the date they are made and except as required by applicable law, we assume no responsibility to publicly update or revise any forward-looking statements. We will also discuss both GAAP and non-GAAP financial measures. Non-GAAP measures should not be considered in isolation from, as a substitute for or superior to our GAAP results. We encourage you to consider all measures when analyzing our performance. A reconciliation of the GAAP to non-GAAP measures is included in today's press release and accompanying slide presentation. And with that, let me turn the call over to Mark Adams, CEO. Mark?

Thanks, Suzanne. Welcome and thank you all for joining our fiscal 2024 Q3 earnings call. We hope you had a nice July 4th holiday. I am very pleased with the execution by our team in the third quarter. Our financial results are clear evidence of our transformation into a high performance, high availability enterprise solutions provider. We continue to make progress in areas such as growing new customer engagements, advancing our software and service offerings, and driving operational efficiency. We believe we are uniquely positioned to enable companies across the technology ecosystem from hyperscalers to corporate enterprises, to emerging cloud service providers in their AI design, build, deploy, and management. We have 25 years of deep experience in high-performance computing, or HPC, which is the very foundation upon which AI technologies like advanced multiprocessor cluster computing were built. With our heritage in the deployment of complex HPC infrastructure solutions, we have the expertise and know-how to address the complexity that businesses face when implementing AI at scale. Let me turn to our third quarter financial results. All key metrics came in at or above the midpoint of our guide. Revenues totaled $300.6 million, in line with the midpoint of our guidance range. Non-GAAP gross margin of 32.3% was slightly above the midpoint of our guide, and we achieved non-GAAP EPS of $0.37, which was well above the midpoint of our guidance range. We exited Q3 with a strong balance sheet with cash and short-term investments of $468 million. Looking ahead, we are excited about the opportunities for us to serve new and existing customers in HPC and AI. I have mentioned our deep experience, which differentiates us as a partner that can rapidly and reliably deploy advanced systems. We have a proven record of accelerating time to deployment, maximizing the potential of a given system, creating unique software to manage elements of a customer's infrastructure environment, and even expanding systems already in production with almost no downtime. Many of our customers work with us from the design phase of their AI journey, but we have also seen an increase in interest from customers who have started a deployment and faced challenges that they then turn to us to solve. From initial data center design to systems level architecture development to the integration of complex technologies such as compute, memory, storage, networking, and cooling to post implementation management, leveraging our software and services portfolio, we serve the role of a trusted partner in the development and deployment of these complex AI solutions. We'll share more detail in our positioning and growth strategy at next week’s Analyst Day in New York City. Before I review our individual business lines performance, I wanted to take the opportunity to welcome Nate Olmstead as our CFO. Nate was most recently CFO of Logitech, a multi-billion dollar international technology company. While at Logitech, he managed a business that scaled from $2.8 billion to $4.5 billion in revenue and from approximately $6 billion to $10 billion in market cap. Prior to joining Logitech, Nate spent 16 years at HP and HPE in various executive roles where he had responsibilities spanning from business planning to investor relations to operational finance. Now on to our individual business line performance. Starting with our Intelligent Platform Solutions or IPS business featuring our Penguin branded solutions. Our Penguin team has decades of experience with a wide range of HPC infrastructure solutions, enabling us to address the complex needs of our customers. We are sometimes compared to high revenue, low margin, hardware-oriented businesses, a baseline that doesn't align with our solutions-oriented engagement model. Today, we design, build, deploy, and manage a complex portfolio of hardware, software, and managed services for HPC solutions and AI applications on premise, at the edge and in the cloud. In Q3, 48% of our overall revenues come from IPS, which totaled $145 million in the quarter and was the largest component of our overall revenue. We are seeing increased activity in our Penguin business with some key customer wins, including a multi-million dollar non-hardware win, meaning that Penguin was brought in to provide software and managed services only. We've also secured follow-on orders from customers across the hyperscaler, defense, and education verticals. In addition, we've achieved our biggest wins to date with our ztC Edge and ztC Endurance fault tolerant computing platform, both of which address the critical need for reliable solutions at the edge. Last month, we announced our OriginAI solution, Penguin's AI Factory offering, which productizes our decades of knowledge and learnings, to simplify and accelerate the deployment and management of GPUs at scale. This platform integrates Penguin's intelligent cluster management software and expertise with proven AI architectures, enabling enterprises to harness the power of AI without the time and resource investment typically required to build and manage AI infrastructure from scratch. You will hear more about this at our Analyst Day next week and hear from some of the new executives we brought on board to bolster our go-to-market and sales development capabilities. This quarter's achievement highlight the pivotal role we can play in advancing AI and HPC. We believe we are in the early stages of this transformative market opportunity. Our unique experience is vital to enable customers who are looking for reliable and scalable AI solutions. Turning to our Memory business, which operates under the SMART Modular brand. Working closely with our customers in the areas of the HPC and AI, supercomputing, network and telecom, storage and data centers, we develop and manufacture high performance, high reliability memory solutions that leverage our decades of expertise in advanced memory technology. For Q3, revenue came in at $92 million or 30% of total SGH sales. Sales improved from Q2 levels as we expected and we believe will continue to improve from here. Margins were lower than we expected due to mix and higher-priced memory purchases. During the quarter, we achieved a number of important milestones in product development and customer engagement in our Advanced Semory solutions. In the area of new product development, we saw strong design-in and customer sampling activity for our new 8 DIMM DDR5 CXL Add-In Card, which enables compute performance by increasing memory capacity and speed. And we achieved an important milestone with our 4 DIMM Add-In Card, which was the first Add-In Card to pass the standards test set forth by the CXL Consortium Industry Group. Importantly, this ensures compatibility and reliability for customers using CXL technology. In Q3, we also received our first 8 DIMM CXL Add-In Card production sale to an AI compute vendor. In addition, we introduced our E3.S non-volatile CXL design combining DRAM and NAND devices. This new design operates like a DRAM module, but retains data even when powered-off, thanks to our custom backup and restore architecture that leverages NAND non-volatile capabilities. This is especially important for AI and high performance computing applications as it ensures that a critical data is not lost, making these systems more reliable and efficient. Our accomplishments this past quarter not only reinforce our leadership in Advanced Memory solutions, but also underscores the indispensable role of memory in HPC and AI. Efficient high capacity memory is essential to unlocking the power of GPU’s based processors in AI and to manage the vast amounts of data and complex computations required by AI applications. SMART's heritage in the design, manufacture and deployment for high performance, high availability memory solutions positions us well to enhance the overall performance of our customers' AI systems. Finally, our Cree LED business, which produces application optimized LEDs for products in markets such as specialty lighting, video screens, gaming displays, outdoor horticulture, and architectural lighting. In the third fiscal quarter of 2024, LED Solutions revenue grew by 6% sequentially to a total of $64 million or 21% of total SGH sales. Backlog and channel visibility are improving and the team is continuing to innovate for its customers while keeping operating expenses in line with current business scale. During the quarter, the team also continued to focus on developing advanced lighting solutions. Cree LED announced its new XLamp XFL LED family designed for peak performance in flashlights and portable lighting. Each LED in the XFL family is tailored for specific lumen targets, accelerating the design process for manufacturers and enabling quicker market delivery of high value products. This innovation underscores our commitment to advance lighting technology and supporting our customer success. Importantly, Cree LED’s advanced R&D capabilities and robust IP portfolio generated through decades of technology leadership set the stage for sustained innovation and future growth. Ongoing IP assertion activities across multiple LED applications, support and facilitate these growth opportunities. The broader market environment in LED continues to suggest that consolidation is likely in the sector at some point. Cree's outsourced manufacturing, capital light model positions us very well competitively as we return to profitability with strong gross margin performance vis-a-vis our competitors. In light of the fact that Nate just joined us as CFO two weeks ago, I've asked Jack to review our Q3 financial performance and our guidance for next quarter. Jack?

Thanks, Mark. I will focus my remarks on our non- GAAP results, which are reconciled to GAAP in our earnings release tables and in the investor materials on our website. Now let me turn to our third quarter results. Total SGH revenues were $301 million at the midpoint of our guidance and non-GAAP gross margin came in at 32.3% also at the midpoint of our guidance. Non-GAAP diluted earnings per share was $0.37 for the third quarter, which was above the midpoint of our guidance, helped by our continued control of expenses. In the third quarter, our overall services revenue totaled $67 million or 22% of revenue, up from $49 million or 17% of revenue in the prior quarter. Product revenues were $233 million in the third quarter. Third quarter revenue by business unit was as follows: IPS, $145 million; Memory, $92 million; and LED, $64 million. This translates into a sales mix of 48% IPS, 30% Memory and 21% LED. Non-GAAP gross margins for SGH in Q3 was 32.3%, up from 31.6% in the year ago quarter, driven primarily by lower memory volumes that were offset by improved mix within IPS. Gross margin was up sequentially from 31.5% in the prior quarter, primarily due to a higher mix of service revenue. Non-GAAP operating expenses for the third quarter were $63.6 million relatively flat compared to $63.2 million in the second quarter. Operating expenses were also down from $66.7 million in the year ago quarter, primarily due to lower variable expenses and cost reduction actions. Non-GAAP diluted earnings per share for the third quarter of 2024 was $0.37 per share compared to $0.27 per share last quarter and $0.57 per share in the year ago quarter. Adjusted EBITDA for the third quarter of 2024 was $39 million or 13% of sales compared to $33 million or 12% of sales in the last quarter and $49 million or 14% of sales in the year ago quarter. Turning to balance sheet highlights. For working capital, our net accounts receivables totaled $212 million compared to $170 million last quarter. Days sales outstanding came in at 41.8 days slightly up from 41.1 days in the prior quarter. Inventory totaled $177 million at the end of the third quarter, higher than $173 million at the end of the prior quarter. Inventory turns were 8.4 times in the third quarter, up from 6.8 in the prior quarter, primarily due to timing of receipts and shipments. Consistent with past practice, net accounts receivables, days outstanding and inventory turnover are calculated on a gross sales and cost of goods sold basis, which were $461 million and $372 million respectively for the third quarter. As a reminder, the difference between gross and net revenue is related to our logistics services, which is accounted for on an agent basis, meaning that we only recognize the net profit on logistics services as revenue. Cash and cash equivalents and short-term investments totaled $468 million at the end of the third quarter, up $2 million from $466 million at the end of the prior quarter. Third quarter cash flows generated from operating activities totaled $80 million compared to $22 million used from operating activities in the prior quarter. We didn't have these share repurchases in our third quarter from our share buyback program. Since our initial share repurchase authorization in April 2022, we've used a total of $72.3 million to repurchase 4.1 million shares through the end of the third quarter. As of the end of our third quarter, we have $77.7 million available for future repurchases under our authorizations. To remind everyone, our capital allocation strategy remains the same. First and foremost, we will continue to invest in our business as we see significant opportunities for further organic growth. Second, we will continue to evaluate acquisition opportunities in a disciplined manner. Third, the incremental share repurchase authorization provides us flexibility to return capital to our shareholders in an opportunistic and price sensitive manner. And finally, we would look to retire debt as appropriate to keep our gross leverage at reasonable levels. We retired $75 million of our term loan in the third quarter, bringing down the principal amount by $112 million since the first quarter to $425 million. For those of you tracking capital expenditures and depreciation, capital expenditures were $3.8 million in the third quarter and depreciation was $5.6 million. Turning to our fourth fiscal quarter of 2024 guidance. We expect that revenues for the fourth quarter of 2024 will be approximately $325 million at the midpoint, plus or minus $25 million. Our guidance for the fourth quarter reflects the following. For IPS, we expect revenues to be up in the low double-digits sequentially at the midpoint due to timing of deployments. For memory, we expect revenues to be up slightly in the low-single digit sequentially at the midpoint. And for LED, we currently expect revenues to be up slightly in the low-single digit range sequentially at the midpoint. Our GAAP gross margin for the fourth quarter is expected to be approximately 29.5% at the midpoint, plus or minus 1.5%. Non-GAAP gross margin for the fourth quarter is expected to be approximately 31.5% at the midpoint, plus or minus 1.5%. Our non-GAAP operating expenses for the fourth quarter are expected to be approximately $66 million, plus or minus $2 million, slightly up from the prior quarter, primarily due to variable expenses associated with our higher expected revenue. GAAP diluted earnings per share for the fourth quarter is expected to be approximately $0.03, plus or minus $0.15. On a non-GAAP basis, excluding share based compensation expense, intangible asset amortization expense, debt discounts and other adjustments, we expect diluted earnings per share will be approximately $0.40, plus or minus $0.15. Our GAAP diluted share count for the fourth quarter is expected to be approximately 55.7 million shares based on our current stock price while the non-GAAP diluted share count is expected to be approximately 54.7 million shares. Cash capital expenditures for the fourth quarter are expected to be in the range of $4 million to $6 million. As a reminder, we are utilizing a long-term projected non-GAAP tax rate of 28%, which reflects currently available information, including the sale of SMART Brazil, which was completed in the first quarter, as well as other factors and assumptions. We'll expect to use this normalized non-GAAP tax rate through 2024. The long-term non-GAAP tax rate may be subject to changes for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix or changes to our strategy or business operations. Our forecast for the fourth quarter of 2024 is based on the current environment, which contemplates the global macroeconomic headwinds and ongoing supply chain constraints, especially as it relates to our IPS business. This includes extended lead times for certain components that are incorporated into our overall solutions, impacting how quickly we can ramp existing and new customer projects. We continue to manage our operations in a prudent manner, as we navigate a challenging environment, while also investing in our long-term growth. Please refer to the non-GAAP financial information section and the reconciliation of GAAP to non-GAAP measures tables in our earnings release for further details. Let me turn it over to Mark for a few remarks prior to Q&A.

Thanks, Jack. Before turning to your questions, I'd like to reiterate how proud I am of our team and their accomplishments to-date. We continue to advance our offerings and drive operational efficiency in support of our customers and their AI deployments. Our deep expertise in HPC and Specialty Memory honed over 25 years equips us to address the complexity of AI implementation across various environments. We are excited about the future opportunities in HPC and AI and we look forward to sharing more detail of our growth strategy at the upcoming Analyst Day. As we continue to innovate and strengthen our position in AI and HPC, we are committed to delivering exceptional value to our customers and stakeholders. Operator, we are now ready for Q&A.

We will now begin our question-and-answer session. [Operator Instructions] Our first question is from Kevin Cassidy with the company, Rosenblatt. Kevin, your line is now open.

Thank you, and congratulations on the good results. And Mark, with all the - you've made changes in management and also the HPC and AI market is changing rapidly. How is IPS' go-to-market strategy changing?

Kevin, thanks for the question. It's really, really a good question for where we sit today. If you look back at our evolution over the last 3-plus years, from a memory module company to an infrastructure solutions, high reliability, high-performance company, the nature of what we do is evolving and transforming. And as we do that, it's the talent and the capabilities that we need are evolving as well. And so, if you think about last quarter, when we named Pete Manca as the President of IPS Penguin; and, of course, we just named a new CFO in Nate. These are continued growth opportunities for us as a company to mature and expand our capabilities from a scale and a process standpoint. Specific to go-to-market, we brought on new sales leadership over the last six months to 12 months. Recently, we just hired Dave Osborne, who's SVP of Partnership and Alliances after spending over 16 years at SAP in an executive role there and helping us build out partnerships, because historically, we've been mostly a B2B direct sales company, and that's still a very key part of our strategy. But working with industry partners to expand our reach and expand our capabilities and development opportunities will be critical for us as we continue to grow. So, a lot changing as we're looking for new talent to come in and blend with our existing team to build out. And I actually think it's a really big responsibility for the CEO to review this and make sure we're always improving, whether it's internally through development capabilities or bringing the right talent in and a new leader as a CFO or a new head of the business in Pete Manca in Penguin. We always have to be getting better and make sure we don't assume that we're going to get there in a static way. We have to be reinventing ourselves all the time.

I guess, another part of my question is the -- maybe you have, I think, somewhere -- little over 10 customers for your Penguin products. How can we get this to be more scalable to be able to handle, say, 50 customers? It seems that AI is going to be going out to corporate and other parts of the industry.

Well, I'll tell you, I'm -- Kevin, I'm pretty pleased from where we were just six months to nine months ago relative to that expansion. And, first of all, I think we've done a better job getting the right people in place to go out and build these relationships and target the right engagement. Secondly, when I mentioned partnerships, there are definitely customers who are working with other companies who don't quite have the skillset in software and managed services that Penguin has. And so, when we talked about the customer base just back in the fall, we're already adding new customers, and I would say at a pace that I'm very comfortable with as it relates to the business expansion. Part of it, for us, is going to be how do we scale the resources in the company to take on the new business opportunities over the next two to three years. And we mentioned that as kind of a horizon for expanding our customer base and trying to start to tease out some of the lumpiness in the business, and I'm really pleased with where we are today. I think you heard in my script. We -- in the quarter, Q3, we had a customer that was a software and services only, meaning we didn't sell the hardware. We actually got called in, in an environment where the customer couldn't stand up the data center infrastructure they bought, and they've asked us to come in with our software and our managed services to help them get their data center up and running, which is a great testament to our value add, not just on the systems level that people know Penguin for, but more on the software and services.

Okay. Great. Thank you.

Our next question comes from Thomas O'Malley with the company Barclays. Thomas, your line is now open

Hi. This is Scott on for Tom. I noticed the gross margins are guided to take a step back next quarter, but the sequential growth will be driven by IPS. And as you guys are talking about more software and service revenue coming on there. So, can you just give us an idea of the puts and takes of the margin pressure you're seeing?

Yeah. I mean, if we ship a little more hardware in a quarter than software services, that will drive the gross margins down a little bit in the business. So more of a mix issue in the quarter than anything else.

That will be the case -- sorry, I was going to say that will be the case as we grow when we're taking on new engagements, the software and services kind of accumulates over time, the hardware tends to be upfront in our deployment, and so, margins can move around a little bit. But we try to give the Street enough advance notice on the guide to get you there.

Great. Thank you. And then on the memory side, you guys guided to slight growth there. Obviously, elsewhere in the memory industry, you're seeing improving fundamentals as well as the CXL product that you guys are layering on later this year. Can you give us an idea of, I guess, what you're seeing near term and then further out?

Yeah. As we've always said that our enterprise Memory Solutions business is kind of less volatile than what I would say, I describe as the -- high-volume consumer business in memory. And so there -- the volatility works both in our favor, but we also don't see a snapback as much because we didn't really decline as much. And so, if you think about price reductions and revenue, kind of in the 50%, 55% in the broader semi perspective, we didn't see that severe downturn. We saw some and some of it was units, some of it was pricing. And so, on the recovery cycle, ours will be a little bit more muted than the large-scale memory folks when they see the pricing switch back. We believe it will switch back. We're starting to see demand forecasts for Q4 and beyond look pretty strong going in the back half of the year. You mentioned CXL, we're excited to get our first production order in the quarter in Q3. It's an early validation of our leadership position. So, obviously, we'd love the memory business to be further ahead in the recovery cycle, but we know it's on track and the customer design wins are fairly healthy. So I think it's just a matter of -- the nature of our enterprise business is a little bit less volatile on the downturn and the recovery cycle pace.

Great. Thank you.

Our next question comes from Brian Chin with the company, Stifel. Brian, your line is now open.

Hi. This is Dennis on for Brian. I just wanted to ask about these largest wins for ztC Edge and Endurance. Could you speak more about which verticals are adopting these systems and what the time frame for implementation for these is?

Sure. We are seeing success in oil and gas and financial institutions are the primary markets, although we've got a broader set of markets we attract to. These type of environments are really where the availability and lack of need for on-site support are critical. And if you think about financial environments, trading desks or even point-of-sale ATM -type environments, as well as in the oil and gas energy sector, you think of things like oil rigs and just remote locations. This type of reliability is a necessity to help people compete. And again, it really -- it's kind of proven to be our hallmark of offering these 5 9s and 7 9s (ph) type availability where the system will go down for minutes a year. It's really -- it's a great platform as we think about the evolution of the Edge and the evolution towards AI inferencing in the future. It's a nascent market today, but the platform we have will be a great benefit for customers who are looking to build those type of platforms in the future.

Great. And then on a similar note, I think you've previously also spoken about some new household names. I don't think you said who it was, but they were taking an interest in HPC and AI systems. Can you say more about how progress is going with those customers and maybe kind of what industries they're from?

Yeah. Actually, we're seeing strong interest from, I would say, with the traditional enterprise, and that could be large-scale software, data center type companies, that could be financial institutions. It definitely is oil and gas and education as well, a number of really good engagements. And I think you'll see us continue to talk to that at our Analyst Day next week. As I mentioned earlier, when Kevin asked the question about our go-to-market, we're very pleased with the progress we're making, as I said, in terms of the wins we've had. We'll speak to some of those next week. But I would just say, across the broader enterprise space, beyond hyperscalers, where the initial investment was going in this industry, Enterprise is now kind of in the mix. And a subset we talked about on the last call was Tier 2 Cloud service providers are -- they're almost a vehicle for traditional enterprises. So they're working together and needing the deployment expertise and help in the design expertise, and that's where we come in as part of a solution provider. So, I think the verticals again are financial and oil and gas, education, as I mentioned. And I think that you'll see more of that in the coming quarters as we matriculate some of these opportunities we've been engaged in.

Great. Thank you for the detailed answer. That's all. That's it from me.

Thank you.

Thank you, Brian. Our next question is from Nick Doyle with the company Needham. Nick, your line is now open.

Hey, guys and welcome Nate. What was Stratus' contribution in the quarter? And has it been trending in that $40 million to $45 million range? Just wondering if these fault-tolerant wins that you're talking about, is that going to be associated with Stratus? And I guess, is that a hardware or a software and services type product?

Yeah. Let me just say, we're not going to break out kind of brands like that in terms of the business on a go-forward basis. I can tell you that any product we sell at the Edge and back in the data center on-prem environment. We sell software and services along with our hardware platform, and that's a business that we're going to be disciplined in how we bid out our capabilities. We do not want to be in just a hardware-only game. The Edge platform that you're referring to that we got from the Stratus acquisition continues to perform very well. Gross margins are accretive to the overall gross margin of the company. And I think we're really excited about the evolution of AI at the Edge. Now, I don't think that's a market that's here in 2024, but I think the opportunity for developing solutions and platforms that provide high availability, high performance compute capability at the Edge, I think we're really in good position as that market evolves over the next two to three years.

Thanks. And then normally, Specialty Memory is seasonally down in the fiscal fourth quarter, why are you able to grow low single digits? Is that just the memory up cycle and inventory getting in a better place, and some of the other demand drivers you've discussed offset, and then at the same time -- are the memory gross margins able to expand with new product introductions like CXL and

Yeah. I think you kind of nailed it on the front end, which is the severity of the memory cycle. In terms of dollars, it was probably the worst memory cycle on record and even bright price declines were significant. If you use a data point of publicly available information, Micron's revenue fell from over $8 billion, down below $4 billion in just two to three quarters. And so -- and again, that was just a proxy for everybody else's challenges as well. And if you look at what's going on in the business today, memory pricing has started to recover. And for us, our largest customer's inventory has been a little bit of a headwind over the last couple of quarters, but we're starting to see that alleviate. And despite the seasonality that you referenced in terms of Q4, we're coming from such a low base that we expect the growth that Jack acknowledged in our Q4. So, it's really just a market recovery story and the inventory is starting to normalize at some of our largest customers heading into Q4.

Thank you, Nick. At this time, there are no other questions registered in queue, so I'd like to pass the conference back over to our managing team for closing remarks.

Thank you. Before closing, I wanted to remind everyone that we will be holding our Investor Day on July 16 in New York City at the NASDAQ MarketSite. We hope many of you will be able to join us in person. And for those not able to be in person, we look forward to joining -- having you join via our webcast. Please contact Suzanne for more information on how to register. Thank you all again for joining today.