PRO - NYSE

Greetings. Welcome to the PROS Holdings Second Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Belinda Overdeput, Director of Investor Relations. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Our earnings press release, SEC filings and a replay of today's call can be found on the Investor Relations section of our website at pros.com. Our prepared remarks will also be available on our website immediately following the call and will be replaced by the official transcript, which includes participant questions once available. With me on today's call is Andres Reiner, President and Chief Executive Officer; and Stefan Schulz, Chief Financial Officer. Please note that some of the commentary today will include forward-looking statements, including, without limitation, those about our strategy, future business prospects and market opportunities and our financial projections and guidance. Actual results could differ materially from such statements in our forecast. For more information, please refer to the risk factors described in our SEC filings. PROS assumes no obligation to update any forward-looking statements to reflect future events or circumstances. As a reminder, during the call, we will discuss non-GAAP metrics. Reconciliations between each non-GAAP measure and the most directly comparable GAAP measure, to the extent to which available without unreasonable effort, are available in our earnings press release. With that, I'll turn the call over to you, Andres.

Thank you, Belinda. Good afternoon, everyone, and thank you for joining us on today's call. I'm proud to share we delivered an outstanding second quarter, exceeding our guidance ranges across all metrics. We grew subscription revenue by 14% year-over-year, total revenue by 11% year-over-year and delivered positive adjusted EBITDA. As a result of our Q2 outperformance, we will once again raise our revenue growth and profitability outlook for the full year, which Stefan will cover in his prepared remarks. Our strong first half performance demonstrates the critical need for our platform in the market. There is no question that the last couple of years have elevated the importance of doing business in real time. In today's markets, everything is in a constant state of rapid change, costs, currencies, supply chains, prices, demand patterns. And in response, businesses must constantly change what they sell, how they sell and how they price. Manual business processes and disconnected digital tools diminish productivity, deteriorating both the customer experience and the employee experience. Further, B2B purchasing continues to follow the trends we've seen in B2C. B2B buyers expect experiences that are self-service, personalized, transparent and accurate throughout all touchpoints. To meet expectations of buyers today and to consistently outperform in their markets, businesses need to embrace digitization, automation and AI. In fact, industry analysts believe AI software will grow 50% faster than the broader software market over the next two years, and we're already seeing growing interest in AI in our business. Additionally, our land realize and expand sales strategy has made it easier than ever for businesses to adopt our platform. And we're seeing incredible results as our team continues to execute against this strategy. We're landing new customers with greater velocity. Across the B2B industries we serve, sales cycles with new customers in 2023 are 30% faster year-over-year. We're also driving rapid time to value, leading to rapid expansions. A great example is the expansion we had with the specialized North American industrial distributor in Q2. This customer joined PROS as a new customer in Q1, selecting the PROS Platform to automate price management across their enterprise. The customer went live with the land solution in just over a month, realized value then immediately expanded to adopt our latest Gen IV AI price optimization capabilities. Now I'll share a few other examples of incredible businesses who adopted our AI-powered platform in Q2. PODS, a leading moving and storage solution provider selected the PROS Platform in Q2 to drive harmonized pricing across their sales channels. The PROS Platform is key to PODS strategy to drive a digitally connected customer experience. Novolex, a manufacturer of packaging products selected the PROS Platform to fuel profitable growth, and power better customer experience by digitizing sales across their enterprise. Novolex will use our AI-powered pricing and CPQ capabilities to drive market relevant real-time offers to their customers across North America. Marken, a division of UPS expanded their use of the PROS Platform in Q2 to power real-time pricing to their sales service portal and billing systems. With this expansion, Marken will drive an improved experience throughout the customer lifecycle. In Q2, we expanded the reach of our market-leading omnichannel CPQ capabilities with a new partnership with Adobe, that combines Adobe's Commerce offering with our CPQ product configuration capabilities. Going forward, Adobe's customers can now seamlessly use our best-in-class configurator solution to power personalized products and offers through their e-commerce channels. We also continue to innovate to deliver new predictive AI capabilities through our platform. Recently, we brought to market our capacity aware price optimization AI, a neural network powered AI model that determines the marginal opportunity costs associated with supply. Many industries struggle with the dual challenge of unpredictable demand patterns in diminishing supply when setting price strategy. Our capacity aware price optimization utilizes order confirmation data, competitive intelligence data, shopping data and inventory on hand in addition to other available market data signals to drive prices that will win. In Q2, Singapore Airlines Cargo selected the PROS Platform to take advantage of our capacity aware price optimization AI and digitize their sales motion to fuel profitable growth. In the travel industry, airlines are looking to win more market share through fully digitizing their sales and customer experience, starting with how they inspire passengers to book travel. In Q2, new customers, Condor and JSX and existing PROS customer Korean Airlines, among others, adopted our digital offer marketing solutions to drive higher conversion of sales. Airlines continue to lean into AI and automation to optimize revenue management. And our latest innovations in this space continue to position the PROS Platform as the best-in-class revenue management solution. In Q2, Lufthansa expanded their use of the PROS Platform by adopting the next generation of our AI-powered dynamic fare pricing, empowering them to drive more flexible fare options using an elasticity based approach. Before I close, I'd like to share some incredible industry recognition of our platform innovations. In Q2, Forrester Research published their Wave evaluation on CPQ, recognizing PROS as a Leader in the category and stating that PROS is unmatched with its next generation of AI-powered price and cost optimization science. PROS is now the only independent software solution to be named the Leader in CPQ by both Gartner and Forrester. I'd like to thank our global team for their relentless focus on our mission of helping people and companies outperform. Also I'd like to thank our customers, partners and shareholders for their ongoing support of PROS. With that, I'd like to turn the call over to Stefan to cover our financial performance and outlook.

Thank you, Andres, and good afternoon, everyone. We delivered another strong quarter, wrapping up an incredible first half of 2023, which put us in a position to raise our total revenue and EBITDA outlook for the year. I'll start by highlighting what is contributing to our success before I move to our results and guidance. First, our platform strategy and land-and-expand selling approach has continued to provide far greater access to our market-leading solutions. Our packaged modules allow customers to start at natural entry points, address an immediate pain point, generate rapid ROI and grow with us over time. This has resulted in significantly more transactions over the last two years. Second, through this go-to-market transformation, we have also been able to deliver our solutions with greater efficiency. Through platform and delivery innovations, we have been able to improve our gross margins and reduce our customers' time to value. Additionally, in Q2, our team delivered non-GAAP services gross margin of 11%, which is a 15 percentage point improvement over last year. Moving on to our second quarter results. Subscription revenue in the second quarter was $57.3 million, up 14% year-over-year and total revenue was $75.8 million, up 11% year-over-year. Our second quarter recurring revenue was 82% of total revenue. Our second quarter calculated billings increased 27% year-over-year and 10% for the trailing 12 months. The quarterly growth rate was slightly higher than we forecasted last quarter, and as expected, a significant improvement from our first quarter. The size and timing of many of our billings can have a significant impact on the quarterly calculated billings growth rate, which is why we continue to focus on the trailing 12-month metric. Our trailing 12-month gross revenue retention rate in the second quarter remained above 93%. Non-GAAP subscription gross margin was 78% for the quarter, improving from 76% a year ago. Also, as I mentioned earlier, our professional services team delivered 11% non-GAAP services margin in the second quarter. We expect services margins to be in the upper -- mid- to upper single digits in the second half of the year. We generated positive adjusted EBITDA in the second quarter, beating guidance in a more than 100% improvement year-over-year. This result was driven from our revenue outperformance and our continued focus on driving efficiency improvements. Our free cash flow burn in the second quarter was $6.2 million. As expected, our free cash flow burn in the second quarter was impacted by expenditures related to our outperform event. We historically experienced stronger free cash flow in the second half of the year, and we are expecting positive free cash flow in both the third and fourth quarters of this year. We exited the second quarter with $184.6 million of cash and investments. Additionally, as many of you already know, our May 2024 convertible debt of approximately $143 million is now a current liability on our balance sheet. We currently anticipate retiring these notes with cash and investments on our balance sheet at the time of maturity. We also added a three year $50 million revolving line of credit, which provides us with an additional source of capital in the future. Our non-GAAP loss per share was $0.01 per share. Now turning to guidance. We expect third quarter subscription revenue to be in the range of $58.6 million to $59.1 million, representing 14% year-over-year growth at the midpoint. We expect third quarter total revenue to be in the range of $75 million to $76 million, and we expect third quarter adjusted EBITDA of between $2.5 million and $3.5 million. Using an estimated non-GAAP tax rate of 22%, we anticipate third quarter non-GAAP earnings per share of between $0.03 and $0.04 per share based on an estimated 46.7 million diluted weighted average shares outstanding. For the full year, we are raising our guidance for total revenue to a range of $300 million to $302 million, representing 9% growth year-over-year at the midpoint. We are also raising our guidance for adjusted EBITDA to a range of $5.5 million to $7.5 million, which implies a year-over-year improvement of more than $21 million at the midpoint. In closing, I would like to thank our employees and customers for their continued passion and support. We also thank our shareholders for their continued support of PROS, and we look forward to speaking with you at our upcoming events. I will now turn the call back over to the operator for questions. Operator?

[Operator Instructions] Our first question is from Brian Schwartz with Oppenheimer & Company. Please proceed.

Yes, hi. Thanks for taking my questions. Congratulations on a real strong quarter. Andres, wanted to follow-up on the commentary about the increase in the momentum around the sales cycles. I think Stefan did a good job of giving us some of the company-specific initiatives that you've done, what that's helping with the go-to-market. But can you may be shed light on the macro side, specifically, if part of these faster cycles are coming from the end market demand strengthening or even AI is just - AI as a topic is that also somehow helping the speeding and the accelerating of the sales cycles that the business experienced in the quarter? And then I have a follow-up? Thanks.

Great, Brian. Good question. So I would tell you a little bit of both. I would give credit to our go-to-market team. There's been, as we talked about, as we launch our new packages late in '21, we really focus on bringing land motions that we can activate very quickly, and we can expand quickly. And I think a lot of those improvements that we put in place, we're seeing continue to drive sales efficiency. In addition to that, I would say that our Gen IV AI has been a hit. I would say, overall, it had a very positive impact in our deals, and we're seeing a lot of companies wanting to implement AI as a first land, and that was indicative of what we saw last quarter. So overall, I would tell you a little bit of both. I did talk about overall sales cycles for new deals and B2B improved by 30%. And that's a testament to - we have solutions that really resonate, we can get to value quickly and we can expand quickly. And I think that's what's driving accelerated growth.

Thank you. And then the follow-up question I had was just if you could provide a little more color on what you're seeing in terms of the geography, specifically Europe and the U.S., the Europe, looking at, at least the revenue growth results, it's the best that we've seen in a long time. The U.S., not so much. But again, we don't have visibility into the bookings and the backlog. So just wondering if you can shed some light on what you're seeing in terms of the geographies? Thanks.

We're seeing strength both in the Americas and North America, U.S. and in EMEA. And I would tell you, we're seeing strength across pretty much all of our B2B industries from technology to automotive and industrial to chemical and energy to healthcare, pretty spread out, both from a B2B industry perspective as well as from a geography, in both EMEA and the Americas did very strong in the quarter.

Thank you for taking my questions.

Thank you.

Our next question is from Parker Lane with Stifel. Please proceed.

Yes, guys. Thanks for taking the questions this afternoon. Stefan, first one for you. When I look at the RPO figure, both year-over-year and sequentially, that was down here. I was curious if you can help us square away that RPO performance with what was a strong billings quarter and the subscription revenue growth. Anything you have to offer there would be helpful?

Yes. Absolutely, Parker. So one of the things that Andres was just talking about was the changes that have occurred as a result of our platform strategy and the packages and the - this land, realized and expand sales motion that we've been going through. And so, our RPOs are going through a bit of that change as well. And so you're going to see our - what I'll call our long-term RPO metric starting to come down and our short-term metrics starting to come up. All of that on the same backdrop is Q2 is typically our lowest billing order - and so that was still the case in Q2 on a relative basis. And so, I think what you're going to see is you're going to see our short-term RPO metrics start trending up as we go exit this year in the latter part of 2023, and I think you're going to continue to see our long-term RPO metric come down because we're focusing on shorter-term deals, not as much of the long-term deals that we've seen in the past.

Understood. Okay. Very helpful. And then, Andres, you just mentioned that you've had strength across pretty much all B2B industries. When we look at the rule of 40 target and the associated growth rate there, how much of the share of growth do you think comes from the strategic industries and geographies that you currently focus on versus expanding into that large underpenetrated market, maybe that's new teams or new geographies that are going after that opportunity. Just - as far as the split is concerned, do you need to go outside of where you're currently focused or is there enough on your plate?

Yes, Parker, great question. I would tell you that within the industries we're already focused and the geographies that we're already focused, we can achieve a rule of 40 long-term goal that we set. So, we feel very confident that it's continuing to grow within these industries. I mean, we're sitting in a great position that with our platform, we can expand to other industries, but I don't believe we have to do that now to reach that long-term goal that we set.

Got it. Very helpful. Thanks again guys.

Thank you.

Our next question is from Chad Bennett with Craig-Hallum Capital Group. Please proceed.

Great. Thanks for taking my questions. So maybe a couple of different things I'll pack here. So - just on the land and expand, and I know it's been - that go-to-market and platform strategy has been in place, I think, greater than a year and a half now. And I know deal count, especially in B2B increased significantly last year. But Andres or Stefan, for that matter, is there any kind of indication of - on the B2B side how deal growth or deal activity is growing maybe relative to subscription revenue growth and maybe how that deal activity, well, maybe it's not doubling year-over-year like it did last year, which was phenomenal, but it's still very robust relative to maybe the subscription growth you're seeing?

Great question, Chad. I would tell you that Q2 was another record quarter from a deal perspective compared to last year. So while last year was very strong, we had another strength in Q2 and overall. I would tell you, look, our win rates are improving, our velocity is improving. But I think a lot of it has to do with the work that's been done over the last year plus, like you talked about. I mean the example that I gave in the prepared remarks of a customer landing in Q1, and lighting [ph] just over a month and then expanding that really was not possible before. And that's really the power of the platform now is that we can get to value very quickly, prove the value and driving expansion faster. We're also seeing - continuing to see strength in new wins on significantly more than - we're continuing to sell more into net new accounts than existing like we typically had in B2B and the overall market reception has been positive.

Got it. And then maybe just - I don't know if you commented specifically on travel, which I think people have asked you for a couple of years now. But just kind of qualitatively or quantitatively, has travel picked up from a booking standpoint? What's your kind of level of comfort there. And I think, if I remember, Stefan, you talked about we would see in the second half on the travel side from kind of booked deals already in the backlog some revenue contribution and maybe acceleration on the travel side in the second half of this year. Is that still true? Thanks.

Yes. So I would tell you, on the travel side, we're seeing that the travel - the airlines have - are recovering quite nicely, but we're seeing the IT spend still below pre-pandemic levels. And I would tell you, still what we're seeing is airlines are significantly understaffed. So even when we're getting selected, getting through contracts and signature is taking longer than what it traditionally took. So still, I would say, similar to last year, not seeing the uptick yet, but we do see activity is just getting - continuing to drive acceleration there. I think we'll see it more in the back half and into next year, but that's not fully recovered yet.

Yes. And Chad, the second part of your question about the revenue coming online from previous book deals. We are on time with those. So part of our guide includes some of the revenue that we're going to pick up from the bookings that were done earlier through the go-lives. So, we are going to see that happen.

Good. Great to hear. Congrats on the quarter. Nice job again.

Thank you.

Thank you.

Our next question is from Rob Oliver with Robert W. Baird. Please proceed.

Great. Hi, guys. Thanks. Good afternoon. So, I think first question, Stefan one for you. And I think you guys just kind of touched on a little bit of it, but so is it fair to say that the strength near term in terms of upside is coming predominantly from B2B in light of Andres of you're just your commentary right there that airlines are still a little bit slower to recover. And I guess, corollary to that would be that your commentary around sales cycles, I assume, is also on the B2B side as well around the kind of more land and expand market motion. Is that correct?

Correct. Correct. Yes. B2B is really what's driving the improvement, both on the sales efficiency acceleration and overall on the bookings growth.

Great. Great. And then, Stefan, for you. I mean strong quarter. So just a small nitpick here, but subscription revenue guidance was reiterated despite the Q2 beat and the raise of the full year. So it looks like the raise is coming from maintenance and services and stuff. Is that the right way to think about it? And how should we think about that? Thank you.

Yes. That is the right way to think about it, but let me give a little color into why that is. We're very happy with the first half performance from a booking standpoint. And I think what you will see and through Andres' comments and what's implied in the guidance is we've had an uptick in new logo demand, mainly because of the land and expand strategy that we put in place. So what's happened Rob, is that our migrations have been a little a tick behind where we thought they would be in the first half of the year. And so as a result of the migrations being a little behind, we're expecting to see them happen later in the year to early next year. What that means is maintenance is going to hold on a little bit more than I think we were previously thinking. And that, in turn, impacts the guide for subscription ARR and subscription revenue. Now the good news is that's going to still come to bear to fruition as we go into the latter part of the next - of this year and early part of next year, but that's the reason for it is a little bit slower migrations in the first half of the year.

Okay. Okay. Got it. Yes, that's helpful. All right, guys. Thanks very much. Appreciate it.

Thank you.

Our next question is from Scott Berg with Needham & Company. Please proceed.

Hi, Andres and Stefan. Thanks for taking my questions here. Stefan, I wanted to follow-up on your last answer there to Rob a little bit on the slower migrations here in the first half of the year than maybe what you were expecting. I guess, what's the key driver to the slowness? Is it something on the customer side? Is it purely you guys are focused on net new business, which seems to be ahead of expectations? They seem to be like I don't know, maybe a little bit independent of each other, but you seem to indicate that there may be a little bit more connected than what we think?

Yes, Scott. I understand the point about that intuitively, they would be kind of disconnected because there's different motions going on in terms of a migration versus a new sale. But - in reality, there's more similarities than what kind of you see on the surface - customers that have been leveraging our solutions now for over eight years are getting a lot of value from it. They've got a cadence to their IT changes and the things that they're wanting to do within their business. And our time line for wanting customers to migrate doesn't always match up with theirs. So in order to move migrations, there is a big selling effort. There's a marketing and sales effort that takes place with that. And given the strength that we've seen in our pipeline and the opportunities on new logos, our reps have tilted more towards that. And I think several years ago, we talked about this. Naturally, reps are more attracted to new logo wins. And so, we do see that - and so that's one of the reasons why we've seen a bit of a delay on some of those migrations. But the good news is those are going to still come. We still see those in the future. They're just going to be a little later than what we had initially thought at the beginning of the year, and that's what's impacting our subscription revenue and subscription ARR guide.

Got it. Very helpful. And then from a follow-up perspective, Andres, I attended your annual customer conference perform, obviously, in May, would certainly see the attendance this year was heavier than last year, especially given where we are relative to the pandemic. What type of momentum do you see off that conference? Because I know historically, it's been a very good marketing and pipeline driver for the company?

Yes, Scott, great question. Overall, we always see our event. It really drives a lot of momentum. And I would say a lot of our results last quarter were in large part to Outperform and Outperform tends to be a great close event, an event that drives acceleration in our deals as well, it creates a lot of new expansion opportunities. And I would say that the Gen IV AI resonated across the board and a lot of our new innovations. So, we have seen quite a bit of interest post-Outperform as well as we saw last quarter with many of our wins that were part of Outperform.

Great. That's all I have. Thanks for taking my questions.

Thank you. Scott.

Our next question is from Nehal Chokshi with Northland Capital Markets. Please proceed.

Thanks and congratulations on a strong quarter. Recurring revenue billings was up 27% year-over-year for the June quarter, well ahead of what - I think you had guided to, Stefan, of 20%. What's the big driver here of that upside? Was it expands or rather what was the bigger driver, I'm sure both of them are drivers, but which one is a bigger of - the expands or new customers for that Outperform some recurring revenue billings?

Yes. It was new customers. We've seen very strong new customer adds. Typically, we talk about a 50-50 split between new and existing. It's trending higher this year, and overall new is definitely driving. We're seeing very good expansions as well, but I would say still tilting a little bit more towards new.

Yes, Nehal, I'm glad you asked that question because I want to take the opportunity to talk a little bit about what we're going to see in the second half, because as you pointed out, we saw a good second quarter coming, not quite as good as it was, because of the reasons Andres just highlighted. But we're expecting to see something very similar in the Q3, Q4 quarters as we did in Q1, Q2. So Q3 is going to be a flattish, maybe even slightly down, because of the timing of billings and then we'll see a nice recovery in Q4. So almost identical to what you saw in Q1, Q2 will happen in Q3, Q4.

I'm sorry, just - by the way, you took my next question right out of my mouth. But just to be clear, when you say Q3 down, do you mean deceleration or down year-over-year?

Down year-over-year. So it's really more of a - yes, I think when you look at the trailing 12-month metric, which I highlighted in my prepared remarks, that's really the metric to focus on, because timing of billings year-over-year change and the dollar amounts of those invoices can be quite large, that could have a material movement in terms of growth rate on a quarter-to-quarter basis. So trailing 12 months is the best way to look at it. And at the end of the day, when it's all - the dust has settled and we look at how we're going to perform over the course of 2023, you can expect to see a growth in calculated billings that will be similar to our total revenue growth rate.

Great. And then if I could sneak one in here. Salesforce announced list price raise on average 9%. Do you see that impacting your projected time to achieve rule of 40 performance?

Sorry, I didn't catch that last part.

Do you see Salesforce's price raises impacting PROS ability to achieve their rule of 40 performance, either positively or negatively?

If anything, potentially positive, because their prices were already high and bringing them higher just creates more opportunity for us, especially on the CPQ front. But overall, we don't see that really impacting our business.

Why is that? Why wouldn't you expect to impact your business?

I don't see any negative potential impact. If anything, it's positive, but I don't see it affecting in any negative way than raising prices.

Got you. Yes. Okay. Exactly quick. Thank you.

Yes. Thank you.

Our next question is from Jason Celino with KeyBanc Capital Markets. Please proceed.

Good afternoon. Thanks for filling me in. Nice to hear the momentum on the airline side. I guess that is not quite back to pre-pandemic IT spending levels, but nice to hear the momentum. If we can kind of double-click on the pipeline a little bit. I'm curious if you can share anything related to - are you seeing strength for some of these new ancillary products like digital offer. I know you mentioned a couple of customers there. Is it revenue management upgrades that you're more confident about or is it just new logo wins there? Thanks.

Yes. First of all, I did want to clarify something. The momentum we've seen in the quarter was more B2B oriented. So travel, we're seeing it's continuing like last year, but not the momentum compared to B2B. But in terms of travel, the areas we did highlight the digital fare marketing technology. It's one of the technologies we're continuing to see momentum. The whole future of digital retailing, next-generation of RM in those type of solutions are the ones we're seeing the airlines invest. Think about the digital experience for the passenger and how you're creating more relevant offers. And those are kind of the areas that we're seeing interest in the travel industry.

Perfect. And then maybe trying to clarify that prior question on competition. Maybe just an update on the competitive environment. Are you guys seeing anyone less - or just any updates on that front?

Yes. No major changes on the competitive environment. Nobody that we're seeing less or more, I would say, just in general, I feel our competitive positioning is continuing to strengthen. We did talk about continuing to improve our win rates in sales velocity on the B2B side. So overall, no major changes on the competitive environment.

Okay. Thanks Andres.

Thank you.

Our next question is from Victor Cheng with Bank of America. Please proceed.

Hi, Andres and Stefan. Congrats on the end of the solid quarter, and thanks for taking my questions. Most of that has been answered, but maybe one from my side. I'm thinking about '26 outlook. Can you talk a bit about the assumptions - you have for the growth into '26. Is it - what are your assumptions on macro? And should we expect some M&A for that - for you to achieve the growth. And then more specifically, thinking about airlines as well? Are you baking in some level of success in offers management, which would be a bigger market compared to what you're currently addressing?

Yes. So Victor, for '26, I assume you're asking relative to the color that we gave for - at our Analyst Day. We are not assuming any significant change from what the market looks like today. So, the market conditions that exist today are we basically assumed a steady state of what that would be into the future. So nothing better or nothing worse. So that's kind of what we assume. And then as it pertains to the TAM that we were considering for the growth in our travel business, we really were not assuming in any expansion of TAM, at least in this model. Now I do feel like there's upside related to that. As we see TAM expansion occur through offer and order management, I think that's going to present some opportunities to help us maybe achieve that or even outperform that. But as of the model that we pulled together and the color we gave last month or so, that does not include the TAM expansion from offer and order management.

Got it. Thank you.

Thank you. Ladies and gentlemen, we have reached the end of our question-and-answer session. I would like to turn the call back over to Belinda Overdeput for closing comments.

Thank you for listening to today's call. We look forward to speaking with you at conferences and events this quarter. We will be attending the KeyBanc Technology Leadership Forum on August 7 in Vail and the Virtual Oppenheimer Technology, Internet and Communications Conference on August 9. If you have any questions following today's call, please contact us at [email protected]. Thank you, and goodbye.