Good morning, ladies and gentlemen. Thank you, everyone, and welcome to 21Vianet Group's First Quarter 2015 Earnings Conference Call. [Operator Instructions] Before we begin, I'll read the safe harbor statements.

This call may contain forward-looking statements made pursuant to the safe harbor provisions for the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties and other factors that's not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or expectations implied by these forward-looking statements.

All forward-looking statements are expressly qualified in their entirety by the cautionary statements, risk factors and details of the company's filing with the SEC. 21Vianet undertakes no duty to revise or update any forward-looking statements for selected events or circumstances after the date of this conference call..

With us today are Mr. Josh Chen, Chairman and Chief Executive Officer; Mr. Shang Hsiao, Chief Financial Officer; and Mr. Eric Chu, Vice President of Capital Markets and Business Development. Following management's prepared remarks, we will conduct the Q&A. At this time, I'll now like to turn the conference call over to Mr.

Josh Chen, 21Vianet's Chairman and Chief Executive Officer for opening remarks. .

one, developing ecosystems; two, improving operating efficiencies; and three, optimizing capital structures.

In terms of ecosystems, we are still at a very early stage in the China market, including verticals such as broadband ISPs, financial service and cloud computing service providers, which proved to be strong growth engines for many of our peers in more advanced economies. More specific in China is the broadband market.

Now government regulators are just starting to aggressively open up the market to private investment and more competition. For example, the central government has set clear goals to issue 100 broadband China license and target RMB 10 billion total investment by end -- by year-end 2015.

The trial cities will be increased from [ph] to more than 30 by year-end and open up to nationwide by 2017. As this market is further deleveraged, we believe these emerging broadband ISPs will create demand for interconnection and cross-connect service over time, which will offer attractive growth opportunities for our business..

In terms of operating efficiencies, we believe this is also a lot of room to make improvement especially compared to some of our peers in the more advanced economies.

From the purchase of the resource such as bandwidth and electricity to operating expenses such as sales, marketing and overhead expenses, we need to further optimize our business options -- operations, especially taking into account some of the changing market conditions, we have set up a special team to drive this initiative, which work very closely with our product teams, key custom teams and regional teams..

In terms of our capital structure, we believe there's also a room for further improvement as the Chinese government make the regulatory change to encourage Internet infrastructure buildup. There are potential financing opportunities that could offer low-cost, favorable capital that is supported by the government association financial institutions.

As a public listed company, we also continue to look for ways to further optimize our capital structure and support our data center expansion. While we are very excited about this potential opportunities, we also recognize that we face some challenges in a very dynamic market.

For example, as cloud computing service become an increasingly viable options for small customers, we have to continue to look for ways and increase our value proposition to these type of customers.

As hybrid cloud service provider become a reality, we are evaluating different approaches in attracting and retaining medium and large customers to addressing this change in the market. Meanwhile, we also recognize that some of our domestic peers are equipped with the cheaper capital resource and they might engage in the regional competition.

Our management team is spending a lot of time with our operations, financial and regional teams in finding solutions to address some of these changing market conditions..

Now moving on to our operating results. We are off to a good start this year as we witness continued growth in both our core IDC business and Microsoft Cloud Service business. This has led to a solid year of the [Audio Gap] top line revenues, profitability and scaled up operations.

In addition, we are on track with the integration of the Aipu Groups and Dermot Entities, both of which we acquired in 2014.

As we mentioned last quarter, 2014 was focused on strategically repositioning our business platform to seize new opportunities while 2015 will be a year of [Audio Gap] and execution of our enhanced platform and world-class strategy.

Chief among our 2015 objectives will be continued focus on our core IDC business after adding close to 3,400 cabinets in the fourth quarter in 2013 (sic) [ 2014 ]. We further increased our total cabinet count by another 500 in the first quarter of 2015 to over 22,000 cabinets, and now we're close to 68% in our self-built data centers.

They are key opportunities for us to serve not only retail co-location customers but also an increasing number of VIP customers such as Alibaba [Audio Gap] and others. As we further expand our scale and operational capacities, our goal is to be the most recognized and trusted brand in China Internet infrastructure market..

Now let's look at our cloud enabling business. We are very excited to outperform [Audio Gap] our Microsoft Cloud business, with revenue growing more than 200% year-over-year. In [Audio Gap] we also renewed the commercial operator agreement with Microsoft for their public cloud service.

The agreement was extended by 4 years and will now being in effect until December 31, 2018. This extension will allow us to build on the strong results that we saw from Microsoft Azure and Office 365 service, which now support over 85,000 enterprise customers, including all multinational corporations and increasing number of domestic companies..

Finally, we are encouraged by the increasing -- increased adoption of IT outsourcing by financial institutions. As these enterprise become more sophisticated, they increasingly look to the Internet infrastructure provider to manage their mission-critical applications in a cost effective manner.

For example, we have already assessed our [Audio Gap] in migrating their core production system to [indiscernible] and expect the financial institution to follow suit as they gradually become more comfortable with the high level of security we can offer and are able to reduce their own infrastructure cost..

Now I'd like to take a moment and talk about our MNS and CDN business. We experienced some softness in both segments which caused a larger-than-expected impact to our financial result.

In our MNS business, we have mentioned in the past few quarters, we have faced some headwinds in this space, mostly due to an industry-wide pricing decline and greater competition. To that end, we have continued our network grooming process and adapt our base model to the changing market dynamics.

For the CDN business, most of the softness can be attributed to a stronger-than-expected seasonality and, to a lesser extent, declining bandwidth prices.

We are actively addressing these issues by working closely with our customers and suppliers as well as further optimizing our cost structure to ensure we get this base back on track with a stronger pipeline and as well as we enter a seasonally strong second half of 2015.

We are confident in our ability to continue executing on our strategies and reaccelerate revenue growth. To conclude, I want to thank all our colleagues and investors for your continued support. We are ultimately [Audio Gap] and excited about the [Audio Gap] and are confident we'll continue to grow with the dynamic Internet landscape in China.

Now I would like to hand the call over to Shang, our CFO. .

Thank you, Josh. Good morning, everyone. As Josh mentioned, we have a solid quarter in our core IDC business. In particular, we saw a record number of cabinet in the quarter, supported by the significant capacity expansion in the last few quarters. Our sales pipeline remains strong for the second half of 2015, as our year is typically back-end loaded.

As our customer ramped up their resource usage of these new cabinets and as we released our new data center location, we are confident that our IDC revenue growth can further accelerate in the coming quarters..

In the first quarter, we further improved our cost structure by more effectively managing our adjusted operating expenses. Our adjusted sales and marketing expenses, adjusted general and administrative expenses and adjusted R&D expenses as a percentage of revenue all improved sequentially from the first quarter of 2014..

I would also like to briefly highlight our working capital condition. As we mentioned during the past few quarters, we have been steadily improving our working capital situation. During the third quarter last year, our day sales outstanding, or DSO, was 92 days and decreased to 78 days in the fourth quarter.

In the first quarter of 2015, DSO has remained steady at 78 days despite the usual challenge faced around the Chinese New Year and is still currently surpassing our mid-term goal of 80 to 90 days. We are still striving to improve this important metric in 2015..

Now moving on to our financial result. Before I begin, I would like to state that we will present non-GAAP measure today. Our non-GAAP results exclude certain noncash expenses which are not a part of our core operations. The details of these expenses may be found in the reconciliation table including in our earlier release.

Also note that all the financial numbers we are presenting today are in RMB amounts and percentage change is year-over-year unless otherwise noted..

Our net revenue for the first quarter of 2015 increased by 46.8% to RMB 860.1 million.

Net revenue from hosting and related services increased by 51.6% to RMB 613.2 million, primarily due to an increase in total cabinet under management, increased demand for cloud service as well as the contribution from the acquisition of cloud VPN service provider, Dermot Entities..

The MRR per cabinet was RMB 10,031 in the first quarter of 2015 as compared to RMB 10,400 in the first quarter of 2014. The sequential decline in MRR per cabinet was primarily due to record sale of new cabinet, which used lower power and [Audio Gap] and due to higher contribution from [Audio Gap] outside of Beijing which carry a relative lower MRR..

Net revenue for our managed network service increased by 35.9% to RMB 246.9 million. This increase was primarily because of contribution from the acquisition of the Aipu Group, which was partially offset by the continued network grooming efforts due to an industry-wide decline in bandwidth price..

Adjusted gross profit increased by 59.4% to RMB 272.7 million. Adjusted gross margin was 31.7% compared with 29.2% in the prior year and 34% in the fourth quarter of 2014. The year-over-year increase in adjusted gross margin was primarily due to a higher-margin revenue contribution from acquisitions and Microsoft cloud service.

The quarter-over-quarter decrease in adjusted gross margin was primarily due to the higher-than-expected seasonal fluctuation in CDN revenues continues and also continued softness in MMS business..

Adjusted operating expenses increased to RMB 209.4 million. As a percentage of net revenue, adjusted operating expenses was 24.3% compared with 18.8% in the prior year period and 27.5% in the fourth quarter of 2014.

More specifically, adjusted sales and marketing expenses increased to RMB 85.1 million from RMB 39 million in the prior year period due to the expansion of our sales and service personnel to support growth and due to acquisition with higher sales and marketing expenses, partly benefited by the cost control initiatives..

Adjusted general and administrative expenses increased to RMB 91.7 million from RMB 47.4 million in the prior year period, primarily due to an increase in headcount, professional fees and other expansion-related expenses and due to acquisitions that have higher general and administrative expenses, partly benefited by the cost control initiatives..

Adjusted research and development expenses increased to RMB 32.6 million from RMB 23.6 million, which reflected our efforts to further strengthen our research and development capability, expand our cloud computing and CDN service offering.

The difference between the adjusted operating expenses and our high GAAP total operating expenses amount is primarily due to change in the fair value of contingent purchase consideration payable, which was a loss of RMB 20.9 million and share-based compensation expense of RMB 44.2 million.

The change in the fair value of contingent purchase consideration payable resulted from an increase in the present value of estimated cash and share consideration as of March 31, 2015, associated with our company's past acquisition..

From a profitability perspective, adjusted EBITDA increased by 47.8% to RMB 166.9 million from RMB 112.9 million in the comparable period in 2014. Adjusted EBITDA margin was 19.4% compared to 19.3% in the prior year period and 18.8% in the fourth quarter of 2014.

Our adjusted net profit was RMB 18.9 million compared to RMB 33 million in the prior year [Audio Gap] period. Adjusted net profit margin was 2.2% compared with 5.6% in the prior year period and 0.8% in the fourth quarter of 2014. Adjusted diluted earnings per share was RMB 0.02, which represents the equivalent of RMB 0.12 or USD 0.02 per ADS..

As of March 31, 2015, our cash and cash equivalents and short-term investment was RMB 2.02 billion equivalent to USD 326.1 million.

Pro forma for the equity investment transaction with Kingsoft, Xiaomi and Temasek for a total amount of USD 296 million, the fund of which was received in the earlier second quarter of 2015, our cash and cash equivalents and short-term investment totaled approximately RMB 3.2 billion or USD 516.2 million..

Looking at our financial outlook. Currently, we expect second quarter 2015 net revenue to be in the range of RMB 886 million to RMB 922 million which, at the midpoint, represents growth of approximately 37% from comparable period [Audio Gap].

Adjusted EBITDA is expected to be in the range of RMB 152 million to RMB 172 million which, at the midpoint, represents growth of approximately 23% from the comparable period in 2014.

Net revenues for the full year of 2015 are expected to be in the range of RMB 3.91 billion to RMB 4.11 billion which, at the midpoint, represent approximately 39% from the comparable period in [Audio Gap] 2014.

For the full year of 2015, adjusted EBITDA is expected to be in the range of RMB 760 million to RMB 860 million which, at the midpoint, represent approximately 45% growth over 2014. This forecast reflects the company's current and preliminary view which is subject to change. This concludes our prepared remarks for today.

Operator, we are now ready to take some questions. .

[Operator Instructions] The first question comes from the line of Colin McCallum from Crédit Suisse. .

A couple of questions from me. First of all, can you tell us what was the cloud revenue in 1Q '15 both from Microsoft and IBM? And could you also confirm that you're putting that revenue into the hosting and related services line item? That's the first question.

Secondly, can you tell us what the revenue from the Aipu and Dermot business units were in the first Q of '15 and can you also confirm that both of those are going into the managed network services line item? That would be great. .

Okay, thank you, Colin. Okay, just starting from the Microsoft. In 1Q, Microsoft actually had the revenue around USD 10 million, okay? And here, we reiterate, okay, compared to the whole year, Microsoft revenue will be around USD 50 million. So that's for Microsoft.

And for the IBM, okay, the first quarter, actually, we had somewhere around RMB 6 million. So it's close to USD 1 million, okay, revenue, okay. So that's revenue we have right now, okay.

And for the Aipu and also VPN revenue, that we are talking about a lot of number also with intercompany elimination, et cetera, after the call, we will provide all the detail to you, okay?.

Okay. Can -- and in terms of such line items they're going into, was what I suggested correct? So cloud revenue's going into... .

Yes. .

Colin, this is Eric. Just wanting to clarify there really quick. So if you look at the breakdown that we provided on our P&L, the hosting and related services items, that line item actually includes the Dermot Entities, the DYX that's included in the hosting and related services.

The Aipu Group -- contribution from Aipu Group, that's included in MNS, managed network services. .

Got it.

And cloud is included in hosting, right? Cloud revenue, is that included?.

It's on the hosting revenue. .

Your next question comes from the line of Harish Agarwal from Deutsche Bank. .

I had 3 questions, actually. One was, you're sitting on a lot of cash balance, can you give a sense of what is the company's CapEx plans for this year and also if you're looking for any more acquisitions over the course of this year given the high cash balances you're sitting on right now? That's my first question. .

Okay. Yes, right now, we have a higher rate of the cash on hand, okay? For this year, okay, right now, current plan, our CapEx plan will be RMB 900 million to RMB 1 billion. But due to the, I have to say, strong demand, okay, from the market, we may, okay, consider to adding the cabinet in the second half of the year.

If we do that, we may increase the CapEx amount accordingly, okay? This is number 1 question. Number 2 is, currently, the company has no plan to do any acquisition at this moment, okay? Thank you. .

Okay, got it. Sorry, just 1 more housekeeping question was, you said your cash balance at the end of March was about USD 326 million.

And then, once you receive the USD 296 million from the equity investors in the second quarter this year, your pro forma cash balance, how do you get the number of USD 516 million? I thought the pro forma cash, if I just add the 2 numbers, should be more than USD 600 million?.

Okay, yes. Actually, the equity investment by Kingsoft, Xiaomi and Temasek, actually, is our cash came in under 2 phase, okay? The total amount is close to 300 million. So in the first quarter, 100 million cash is already in.

And when we go into the beginning, okay, of the second quarter, actually, in April, and the other 200 million, okay, remain into the company.

So it's 100 million plus 200 million, okay?.

The next question comes from the line of Cheng Cheng from Pacific Crest Securities. .

A quick question on utilizations in Q1. It seems like that took a bit of a drop. I'm just wondering the rationale behind that and kind of expectations around utilizations or maybe just the billing cabinets for the rest of this year. .

Okay. Thank you, Cheng Cheng. Yes, utilization actually was dropped according to -- that's consistent with our expectations because, in the last quarter of the 2014, the company totally deployed more than 3,000 cabinets -- actually, 3,400 cabinets.

So those number of cabinets, okay, we need to enter into the sales process, okay? But in the first quarter, actually, you had Chinese New Year, et cetera, so the sales is actually a little bit slow, okay? So that's why you see the 65% utilization rate, okay? But when we came into the second quarter, then we expect that utilization rate was starting to climb, okay, maybe increase 2 to 3 percentage, let's say, go to the 67%, 68% in the Q2.

But when we enter the Q3 because, currently, we have more than 2,000 cabinets planned to be deployed in the second quarter, and that's another big amount of the cabinet to be deployed in the second quarter.

So as to the third quarter, you'll probably see the utilization maybe drop back to 65%, okay? So that's the utilization rate, okay, rationale, okay? That's all based on the number of cabinet we deploy per quarter.

Okay, Cheng Cheng?.

Yes, great. And just a quick follow-up.

Is there any update on any of the large cloud deployment bids that are currently going on? Is there any update there?.

Okay, yes. Actually, currently, there are a couple of big projects, we are working on it.

And it's a big one, the size is big, okay? But once we sign the contract, okay, we will let the market know, okay?.

Your next question comes from the line of John Choi from Daiwa. .

I have a quick question on the CDN and MNS business. You did mention that it was weak due to seasonality.

Can you elaborate a bit more on what kind of challenges that you guys are facing between CDN and MNS and what should we be expecting for -- in the second quarter and the second half?.

Okay, I think from the business view, maybe Josh can say something, my CEO, and I can talk about financial results.

Okay?.

I'll actually speak in Chinese and Eric will make the translation. The CDN and MNS business, [Chinese].

Yes. So in the -- the first thing that Josh mentioned is that right now we are going through, really, the early stage of the broadband market changes from a regulatory perspective and also driven by very rapidly increasing network traffic.

So the bandwidth, as a result of those 2 factors, the bandwidth prices are declining, and we are actually getting some outside impact from those changes. But at the same time, we believe that we're going in the right direction as the overall market is moving closer and closer to the more open, more developed economies. .

[Chinese].

So when we look at the U.S. market, say, about 10 years ago, it was really -- the data center and the interconnection market started really after the, really, the openness of the competitive local exchange carriers as enabled by the Telecom Act of 1996 back in the late 1990s. And so in China, we are about 10, 15 years behind the U.S.

But we are literally just at the starting point of seeing more and more Internet traffic being transmitted based on peering, based on interconnection rather than purely based on transit. So during this transition, we are seeing some impact especially with our MNS business.

But at the same time, we are also working very diligently to take advantage and leverage the fact that we're in this market position and to capture the market opportunity in interconnection and cloud connect as that market develops. .

[Chinese].

More specifically for our CDN business, because of the relatively easiness -- easier to change from carrier to carrier, we do have a higher fluctuation as compared to our core co-location business.

And in the first quarter more specifically, especially around Chinese New Year, there was some expected revenues that we -- that have expected to be coming in but did not come in, in reality, which impacted our overall financial conditions. Thank you. .

This is Shang. Okay, we talked about CDN and MNS. From the financial side, with the MNS business, okay, this year, okay, we expected the revenue from the MNS will be flat. Flat, okay, no growth. But we already see the revenue, okay, and [indiscernible]. And right now, we are in the pattern. So the revenue, okay, we expected no growth.

But for the CDN business, you guys can recall, okay, 3 years ago, we acquired Fastweb. Since the acquisition, okay, Fastweb actually, under any -- more than 50% growth year-over-year already for 2 years. This year, again, we expect our CDN revenue will have a growth of more than 50%.

So seasonality impacts our Q1 revenue, but based on the sales of our pipeline, et cetera, we do expect very strong second half of this year to see the CDN revenue grows, okay? Thank you. .

Next questions comes from the line of Matthew Heinz from Stifel. .

Just wondering just in terms of the Cloud business and the $50 million guidance you have out there for Microsoft. Does that include -- does that assume bookings of the -- a few large customers that had been discussed late last year? And I think that's slipped into this year and you kind of alluded to a large deal on the pipeline as well.

Does the guidance include kind of the onboarding of those customers?.

Matthew, okay, the answer will be yes, okay? So that's -- we have a contract with Microsoft, okay? So when you mentioned about a couple of big contracts, that's -- we mentioned that, and those contracts continue, we are working on it.

When we book in the $50 million revenue, okay, we did -- okay, actually, that shall include certain parts that we are working on, okay?.

Okay. And then maybe secondly just an update kind of on the regulatory front.

Has the conversations changed or evolved at all with respect to the basic broadband license, what kind of visibility do you have around that at this point, particularly as the government sort of assesses the shift in Internet infrastructure towards the peering model?.

Okay, yes. We talked about the broadband license. Actually, during the last month, okay, the central government, okay, through the MIIT, they issued a circular to talk about -- they were open to open license in certain cities. Actually, right now, the cities they're planning to open is somewhere around 16 cities.

But they also -- later on, they come out saying they will increase the cities to be opened, okay, from 16 to 31, okay? My CEO already mentioned about it. But the open license right now, they try to open, okay, including, number one, the last mile, okay? The second one is including the -- we call metropolitan area network, [Chinese].

So right now they are planning to open this. And for the timing, okay, we believe the timing should be around the middle of this year, okay? But the key message over here, the central government, the MIIT, they won't issue a nationwide license to a particular company, et cetera.

Actually, that will be -- each local city, MIIT, they will issue the local license. Let's say, if you plan to operate for 10 cities, then you're supposed to get 10 licenses from each local MIIT, okay? That's the current plan by the government. .

This is Eric. I just wanted to add a couple of things really quick there. So in addition to the licenses that we need to receive from the regulators, we are also working on a couple of other fronts. One is on the ecosystem.

Because license is one thing and in order to really capture the market opportunity, you really do need to have a ecosystem, be it financial services, or ISPs or cloud computing services providers. So that's something that we are working on currently right now.

The other thing is we also need to educate some of our customers because in China, a lot of customers, even though they are becoming increasingly sophisticated, some of the customers, frankly speaking, just don't know the benefit or the possibility of the benefits that can be provided by interconnection and cloud connect services.

So that's another factor that we also have to work on. .

Next questions comes from the line of Leping Huang from Nomura. .

So my question is also about the MNS business. So the state council now recently pushed operator to increase the network speed and to lower the tariff.

And also, we see a lot of negative media reports about the -- how do I say, China -- I think, in my knowledge, China Mobile buy a lot of bandwidth through the independent companies, from Unicom, Telecom, [indiscernible]. I'm not sure whether this is related to your MNS service, but there seems to be -- there's negative news report about this one.

So do you think that this government push on the lower tariff will affect -- mainly affect your MNS service? The tariff will also negatively affect your volume or what do you see? Or do you think if you look at the organic growth of the MNS business, if you take out the acquisition, the Fastweb acquisition, do you see, long term, this will -- it will stay flat or decline?.

Okay, Leping, okay. It's like this, okay, MNS actually is a volume business, okay? In fact, our volume sale to our customer continue to increase, but the pricing, okay, decreased a lot, okay? We monitor the pricing. I can give you an example of the pricing.

Actually, in the same quarter of the last year, okay, the pricing, at that time, probably 3x, 4x of the current price, okay? What I mean is the pricing has been declined by more than 60%, 70% year-over-year, okay? So we face the pressure, okay? We face the pressure. But our customer continue to increase.

I have to say the traffic from those MNS revenue, they are very, very important for us. Even this business, okay, without the revenue growth, but our traffic amount continue to increase, okay? We do have our network strategy and plan.

So we already guide to the market, okay, the revenue of the MNS this year will remain stable, okay, as well as their margin actually will remain stable, okay? So that's the current situation.

But you also need to consider, okay, because China is going to open the broadband license in a very short period of time, accumulate of the traffic from the last mile from the metropolitan network as well as the traffic from platform are also very, very important for us, not because of revenue but somehow that's very important to our network cost structure, okay? Thank you.

.

Your next question comes from the line of Louie DiPalma from William Blair. .

A quick one, when do you forecast that utilization will return to 70%?.

How many percent, I'm sorry? 7%?.

70%?.

70%? Okay. With the 70%, okay, that's for the first -- that's for the Q4 number, right? And for the 70%, I think, if we look at maybe in the Q4 this year, okay, maybe we can see the 70%.

Did I answer your question?.

Yes.

And just a follow-up, can you remind me how many cabinets of capacity you expect to add in total for 2015?.

Okay. Our guidance right now is between 7,000 to 9,000, okay, with the midpoint of 8,000. And I can reaffirm, okay, that guidance, okay? So if you want to do your model, so it's 8,000 cabinet deployment for this year, okay? With the second quarter, okay, somewhere, okay, of more than 2,000 cabinets.

And again, more than 2,000 cabinets in Q3 and more than 2,000 cabinets in Q4. In total, more than 8,000 cabinets. .

[Operator Instructions] You have a follow-up question from Mr. Harish Agarwal from Deutsche Bank. .

Do you mind reminding us again what has been the change in the VAT system that you talked about in the results?.

I'm sorry, Harish, could you repeat your question?.

What has been the change in the VAT system that you mentioned in the results that has impacted your revenues?.

Okay. So VAT, okay, actually, that is a company impact, okay? Maybe something like this, okay? Right now, the company use VAT tax system, okay, because we have been required to do that, okay, after the June, okay, of the last year. And in the beginning, we save the VAT invoice because the local tax bureau, they did not deposit enough, okay, VAT.

But after the end -- close to the end of the last year, okay, and we will see the sufficient of VAT invoice and evident by -- everybody can see, our DSO right now is quite stable, around the 78 days, okay? So that one right now is not an issue anymore, okay?.

Ladies and gentlemen, we have no further questions on the phone line. I would like to hand the call back to the management for closing remarks. .

Thank you, everyone. .

Ladies and gentlemen, that concludes the conference for today. Thank you for your participation. You may now disconnect the line..