Thank you for standing by. This is the conference operator. Welcome to the PROS Holdings Second Quarter 2019 Earnings Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Shannon Tatz, Vice President 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. 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 our guidance, our strategy, future business prospects, revenue, margin and market opportunities. Actual results could differ materially from our current 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 our non-GAAP measures and the most directly comparable GAAP measures to the extent available without unreasonable effort are available in our earnings press release. With that, I’ll turn the call over to you, Andres..

Thank you, Shannon and thank you everyone for joining us on today’s call. I am pleased to share that we had a strong second quarter as we continued to build on our momentum. We grew subscription revenue by 50% and total revenue by 35% in the second quarter.

The market is embracing our vision and we are humbled and proud to be recognized as a clear leader in our space by G2 Crowd in their latest evaluation of price optimization and management technology.

Companies are turning to us to power their digital selling which is helping us accelerate our growth and once again improve our growth outlook for the year. I would like to start by sharing our plan to realize our vision of being the AI platform powering sales in the digital economy.

Today’s buyers across industries expect fast, easy and digital buying experiences. Buyers want to move seamless across channels as they research and purchase online from their mobile device or with the help of a salesperson. Our research shows that nearly half of B2B buyers expect to make more than 50% of their purchases online in the next 2 years.

For many companies, meeting buyers’ expectation requires them to fundamentally rethink their go-to-market strategy. At our Outperform customers conference last quarter we showcased our digital-first commerce framework to help companies win in the digital economy.

Our digital-first commerce framework focuses on how companies must listen, personalize and engage with their customers, and our product strategy is helping companies execute in each of these areas. First, companies must listen to deliver a better customer experience.

We’re helping companies to do this by enriching our AI solutions with third-party data to provide companies with a more complete view of their customer demand patterns, preferences and purchase intent. Second, companies must personalize each customer interaction to provide a winning buying experience.

For example, with our Smart CPQ for agreements solution, we are leveraging historical customer data to help companies move beyond just selling spot deals.

This solution enables companies who create personalized sales agreements with customer-specific products, prices, volumes and terms, ultimately helping them deepen customer relationships and drive recurring business.

Lastly, companies must engage with their customers to deliver a great buying experience, and our vision is to intelligently power this customer engagement.

For example, in the airline space our vision is to help airlines engage with travelers in a more personalized way by delivering an AI-powered buying experience across their retail channels, including the airline.com, mobile and all online travel agents.

Our vision in latest innovations are resonating in the market as we see companies across industries realizing the need to sell differently to win in the digital economy. As more companies turn to our AI solutions to power their digital selling strategies, we’re driving accelerated growth in our business.

In the first half of this year we’ve increased our deal volume by more than 30%. Given the strong demand that we’re seeing in the market, we’re accelerating investments in our go-to-market strategy and plan to grow our quota-carrying personnel by 23% in 2019.

Our market opportunity is being fueled by both strong new customer adoption and existing customer expansions. So I’d like to end by sharing a few examples of how we’re helping our customers outperform. Last quarter AGL, an Australian utilities company that serves millions of customers, joined us as a new customer.

AGL’s strategy is to keep customers at the center of their business, and their goal is to become a true digital retailer to best serve their customers in a highly dynamic and competitive market.

AGL plans to leverage our guidance and real-time pricing engine solutions to help them execute on their strategy by delivering personalized offers and a greater choice to their customers. AGL is a great example of a company that’s putting AI at the heart of their go-to-market strategy to differentiate and win.

Also, last quarter a Fortune 100 industrial manufacturer named us their global standard technology to help transform how they sell across their business. This company has been a PROS customer for over a decade and originally began their journey by leveraging our price management capabilities.

As their market became increasingly dynamic, they adopted our next generation AI solution so they could evolve their strategy and react to their markets in real time.

Over the past several years we’ve helped them execute on their strategy as business divisions adopted our next-generation solutions to deliver personalized pricing and offers to their customers. With our new global agreement we will extend our partnership across their global business to power their selling in the digital economy.

And finally, we are helping airlines compete and win in the digital economy by partnering with them on their go-to-market strategy.

Last quarter we expanded our partnership with British Airways, as they selected our fast search solution to work together with our pricing and shopping solutions to deliver a rich shopping experience across their distribution channels.

We are excited about the continued momentum we’re seeing in our business and believe that we’re exceptionally well positioned to power selling in the digital economy. Thank you to our amazing global team for driving our success, and we look forward to delivering a strong second half of 2019.

With that, I’ll turn the call over to Stefan to cover financial performance and business outlook..

Thank you, Andres. We are very pleased to have now delivered 2 consecutive strong quarters to start 2019, and we are now in position to improve our growth outlook for the year. But I will start by highlighting a few things we are seeing in our business that are contributing to our growth.

First, we are experiencing strong contributions from all of our B2B commerce products, and we’re continuing to see more customers adopt the combination of our Smart CPQ and guidance solutions as they recognize the value these solutions bring to their digital selling transformation plans.

Second, our existing customers are continuing to expand quickly. Strong expansion activity is helping us drive a roughly 50/50 split in new versus existing customer business, which is consistent with the mix we target to fuel our long-term growth. And finally, our next-generation solutions are resonating in the market.

We’re seeing companies embrace our next-generation revenue management and guidance solutions which is helping us win new logos, drive customer expansions and will enable us to deliver on our migration targets. Now I’ll move on to cover our financials, starting with our second quarter results.

Subscription revenue increased 50% year-over-year and was the main driver to our 35% increase in total revenue. This is the largest quarterly total revenue growth we’ve seen as a Cloud company and represents a total revenue run rate of over $250 million.

As we anticipated, services revenue was strong in the second quarter but still ended up slightly above our expectations, growing 62% year-over-year, primarily due to strong delivery execution.

We expect services revenue growth to continue to be strong for the rest of the year, but to normalize to the mid-40%s, which aligns with our subscription revenue growth rate for the remainder of the year. Lastly on revenues, we did see a slight one-time increase in license revenue in the second quarter, largely driven from a term license renewal.

Based on the particular strength of license and services in the second quarter, our recurring revenue percentage was 75%. We expect recurring revenue as a percent of total revenue to return to roughly 80% for the full year.

The recurring portion of our deferred revenue was $109 million, up 20% year-over-year, and our trailing-12-month calculated billings increased to 20% year-over-year, providing us with added confidence in our future revenue growth potential.

Now moving on to our profitability metrics, our non-GAAP subscription gross margins were 73% in the quarter, up more than 700 basis points over last year. Note that subscription gross margins slightly exceeded our own expectations due to a one-time expense benefit from our Cloud provider.

We expect gross margins to normalize down slightly in Q3 and once again gradually improve as we make further progress towards our long-term target of subscription gross margins in the mid-70%s. As we mentioned last quarter, we are increasing our investment in sales, marketing and R&D in order to take advantage of our large market opportunity.

These investment increases are starting to be reflected within our operating expense lines in Q2 and will continue in the second half of 2019. Although we are increasing the rate of growth in our operating expenses, we still expect some improvement to our profitability metrics.

For example, in the second quarter our adjusted EBITDA loss was $1.8 million, which improved approximately $3.7 million year-over-year and was our best quarterly EBITDA performance in 19 quarters. We reported a free cash flow burn of $5.2 million in the second quarter, which is roughly flat year-over-year.

While we are slightly behind the pace set last year, we remain confident in our ability to end the year above 2018 levels and within our free cash flow guidance range.

Our cash balance at the end of Q2 was $330 million, up $56.9 million sequentially, largely due to us successfully completing an offering of $144 million in convertible senior notes that are due in 2024.

The majority of the net proceeds from this offering were used to retire a significant portion of our 2% convertible notes that were due later this year. Now turning to guidance for the third quarter, we anticipate total revenue in the third quarter to be in the range of $63 million to $63.5 million, up 29% year-over-year at the midpoint.

The growth will be primarily driven by a combination of strong subscription and services revenue. We expect subscription revenue to be in the range of $36 million to $36.5 million, up 52% at the midpoint over the same quarter last year.

Our guidance for third quarter adjusted EBITDA loss is a range of $1.5 million to $2.5 million, which is a $2.9 million improvement over the same period last year.

With an estimated non-GAAP tax rate of 22% in the third quarter, we anticipate a non-GAAP loss per share between $0.07 and $0.09, based on an estimated 40.2 million basic shares outstanding. Now moving to the full year, we are increasing our ARR guidance to a range of $220 million to $222 million, representing a 17% increase year-over-year.

We are increasing our full year guidance for total revenue by $6 million, to a range of $247 million to $248 million, which would be a 26% growth rate year-over-year at the midpoint.

We are increasing our subscription revenue guidance to a range of $137.5 million to $138.5 million, an increase of $2.5 million over our previous guidance at the midpoint. This range would represent a 45% growth rate year-over-year at the midpoint, as well. We are reiterating our adjusted EBITDA loss guidance of $8.5 million to $9.5 million.

We are also reiterating our free cash flow guidance of breakeven to $2 million. Overall, we are very pleased with our second quarter financial performance and our outlook for 2019. Thank you for your support of PROS and we look forward to speaking with you at our upcoming events.

So with that, let me turn the call back over to the operator for questions.

Operator?.

[Operator Instructions] Our first question comes from Jackson Ader, with JPMorgan..

First one for you Andres. So if we just do some quick math on the sales rep hiring, it seems like you’ve got about a dozen or so reps to hire in the last 6 months of the year.

Any particular geographies or verticals that are seeing, that you just look at and say these are on fire, we’ve got to fuel these with some extra reps with these dozen or so hires?.

Yes Jackson, great question. I would say B2B Americas is an area where we’re actually killing it and we see a lot of opportunity to continue to drive growth. And that’s an area where we’re going to see a lot more adds as we continue throughout the year. But in general, I would tell you across the board we’re seeing good performance.

Americas extremely good performance. Also, rest of world we’re seeing good performance. But I would expect to add a lot of the headcount into the Americas, focused on the B2B end of things..

Yes. Yes, that makes sense.

And then Stefan, just a quick follow-up, this license deal, the large term license renewal, so I understand that now term license you have to recognize it up front, but are you still going to collect the cash Or are the terms still annual in advance in terms of collections on these?.

Yes, Jackson. That’s exactly right. So it’s a term contract that we’ll bill annually in advance. And then, as you know, under 606 the recognition is such that we take a significant portion of that immediately upon contract signature..

Okay. And sorry, I’ll sneak one more in.

Any more of those in the pipeline, do they just kind of pop up or do you see any more coming?.

There’s a few. We do not have many. But yes, there’s a few. And we did have some visibility to this because it was a renewal. This was not a new term contract that we’re talking about. But there’s less than a handful out there.

But unfortunately, because our license revenue is so small and because of the accounting treatment, it does tend to pop out more than it should, just as we saw in this case..

Yes makes sense. Alright, thank you..

Thank you..

Our next question comes from Scott Berg, of Needham & Company..

Hi Andres and Stefan congrats on the good quarter and thanks for taking my questions here. So many, so little time. I guess we’ll start with, Andres, the general performance in the second quarter. I want to dissect it just a little bit.

If we go back in time 3 months, you on the Q1 call talked about that your Q1 performance was very much like a fourth quarter performance in terms of the amount of bookings.

How would you characterize this second quarter performance here relative to maybe, a, Q1 and, b, a typical second quarter?.

Yes, now so what I would tell you is historically our Q2 and Q4 are our strongest quarters of the year, and our Q2 was a very typical Q2. It was a very strong quarter. So we continue to see the momentum from Q1..

Got it, alright. And then with the momentum that you’ve had in this first year, which has clearly been, at least appears to be, a nice acceleration over last year, I believe most of it is on the B2B side of the business. Stefan had highlighted Smart CPQ plus guidance as kind of a package you’re seeing more of recently.

Is there something else maybe driving that momentum? Is it maybe more these multi-module product sales up front? Help us maybe get an understanding just maybe what’s better..

I would tell you, look, B2B is definitely driving the growth. And I would tell you that the combination of our Smart CPQ solution with our real-time pricing engine and guidance, those are the solutions that are selling, not just for sales but also to power e-commerce. That’s an area we’re seeing CPQ is doing very well.

Definitely, the growth rates of CPQ are continuing to accelerate. But I would tell you our whole platform vision around powering digital commerce is really resonating well, and it’s definitely driving the momentum..

Got it. Helpful. Then one quick follow-up for Stefan, if I may. Stefan, your guidance in the third quarter obviously suggests that subscription revenue growth is going to accelerate from second quarter levels.

Is this just a reflection of the Q2 sales or the first half sales or were there maybe some travel deals that just happened to have go-lives here that are going to kick in maybe from prior periods?.

Yes, Scott, it’s really the former. It really does get to the success we saw in the first half of the year, both Q1 and Q2; mostly, as Andres indicated, primarily from the B2B side..

Great. That’s all I have. Congrats again..

Great. Thank you..

Our next question comes from Tom Roderick of Stifel..

So Andres, I was hoping you could just take a quick step back and by your words saying that you are killing it B2B in the Americas sounds fantastic.

Can you just talk a little bit more about the role of e-commerce in accelerating the digital transformations? And then the Cloud push for your customers? Because I think that was something that’s really kind of jumped off the page the last few quarters.

And in the scope of that I was hoping you could sort of address your partnerships with CloudCraze on the Salesforce side and of course SAP Hybris.

How are they helping you go to market? And how much is this whole dynamic around B2B e-commerce accelerating your Cloud shift?.

Yes now that’s a great question. Look, I would tell you that a lot of companies in B2B are waking up to the fact that they will have to support B2B commerce and that in knowing that a lot of the data points that 50% of the buying is going to be done in e-commerce for B2B within 2 years, they want to ensure they’re ready.

But we are seeing opportunities across the board. I wouldn’t say all of it is due to the commerce expansion. Definitely, we’re seeing a lot of opportunities that want to embrace a solution that’s not just for sales, that can help them in the future power e-commerce or it can help them today power e-commerce.

But we’re seeing good growth across all of our target industries, and e-commerce is definitely an important component. With respect to our e-commerce platforms partners that we have, I would say they’re helping to support, but I wouldn’t say they’re bringing us deals.

I would say that the strategic partners that we’re seeing a lot of opportunities coming from are partners like Microsoft, which we partner very closely. And I think we’re seeing very good success from both SI partners and some of our strategic technology partners like Microsoft..

Wonderful, that’s great. The other question, sort of following up on that, is I think last quarter you said deal volume, I believe, was up 40% year-on-year; this quarter, up 30%. Both are very good numbers.

And I’m sort of curious aside from the metrics on deal volumes, how are deal sizes trending as you, particularly, go back to the install base, move them to the Cloud? What are you seeing from deal sizes? Are they getting larger as your portfolio of products expands?.

Deal sizes can vary quarter-over-quarter, but I would say, look, there’s no meaningful change in terms of deal sizes. If anything, a little bit bigger, but not significant changes. And again, they can vary by the types of deals done in a given quarter..

Fantastic. I will jump back in queue. Thank you guys..

Thank you..

Our next question comes from Chad Bennett, of Craig-Hallum..

Great. Thanks for taking my questions.

Phenomenal quarter guys again So I guess the first question, maybe for Stefan, is maintenance conversions at this point in the year or year-to-date, how has that progressed? And then from a contribution standpoint, are you thinking any differently in terms of the impact to subscription revenue this year?.

Yes, Chad, we are actually progressing just as we had thought we would. That’s been pretty much going to plan. As you know, that’s not a, at least historically, has not been a significant component to the growth that we’re having. We are seeing migrations occur. We expect to see them continue to occur. And over time we do expect to see them increase.

But year-to-date they have been pretty much in line with what we thought, which is not meaning they’re not a significant contributor to the growth that we’re seeing so far..

Got it.

And then Stefan maybe a quick one, on the subscription gross margin, can you quantify what the benefit was from the Cloud provider?.

It was, call it, a couple hundred basis points. So, if you think about the benefit that we had and you take that out, we would have had a fairly consistent margin level to what we saw in the first quarter..

Got it. Then maybe one last one, for Andres if I could. So, Andres, I think a couple of people have asked this. Maybe I’ll try a different way. The 50/50 growth from both new and existing is phenomenal.

I think what I’m trying to get my arms around is I understand you’re selling more-Smart CPQ or cross-selling, up-selling into the base and you’re probably expanding pricing or price guidance. Is there any way to quantify? Your subscription revenue has been up, call it, 50% for the last 4 to 5 quarters.

How are you expanding that dramatically in the base? And then I’ll hop off. Thanks..

That’s a great question.

I would tell you, look, in the base we are seeing very good interest, especially expanding not just migrations but executing to our strategy that as part of migrating customers we’re also expanding their usage, whether it be with Smart CPQ, but more often also with our real-time pricing engine and powering e-commerce and very good expansions across the board.

I talked about a Fortune 100 company that’s now expanding globally. So, we’ve seen a lot of over the past 3, 4 years, and even prior to that, customers that adopted in the Cloud that are also expanding in the Cloud. And some of them, like this one I talked in my prepared remarks, are now expanding globally.

So, I think our success of driving value to our customers and then being able to measure a good uplift in return is getting them to expand faster across the organization. And I think the Cloud gives us that canvas to allow us to expand faster.

So, I think its contribution from migrations some, but also from customers that have already adopted in the Cloud that are expanding faster. So, we see the great thing is that we’re seeing this balance of still driving a lot of net new growth while we’re also driving good expansion and maintaining this 50/50 split..

Got it. Thank you. Nice job..

Thank you, Chad..

Our next question comes from John King, of Bank of America..

Yes, hi thanks. I’ve got two questions. Firstly, Andres, on the B2B side of the business I’m wondering how much of the growth that you’re seeing is coming from the strength of the market relative to your market share potentially increasing.

Is there anything going on there from a competitive standpoint? Perhaps your strength in the AI piece is becoming a real differentiator more than it was. That’s the first question..

Yes, John. That’s actually a great question. Definitely I think our differentiation. I think AI is top of mind, where I would say 5, 10 years ago companies would hear AI but they all felt they weren’t ready for AI. I think companies today are embracing AI.

And if anything, I think they all feel that they’re getting behind and they’d better adopt AI solutions. So, I would say there’s more of a pool of wanting to have AI, and our differentiation there is huge.

I also think that a lot of very global companies that need enterprise-ready software, and I think we have a lot of differentiation across our CPQ or price management and price optimization capabilities that help support global enterprises. And I think our innovation advantage is really paying off..

That’s great.

And then on the airline side obviously the business probably not growing quite as strongly as you’re seeing in B2B, but there is a lot of change going on there at an industry level with NDC, from your standpoint, is that a driver that is beneficial this year? Is that something that really there’s a lot of debate and talk but maybe it’s something that will kick in more in future years?.

Yes, you’re exactly correct. I think the areas around NDC is what’s driving growth in our B2B business, everything from shopping to merchandise to offer optimization. Those are top of mind and areas where airlines are wanting to invest.

I expect that investment to continue to accelerate into next year because a lot of airlines are really wanting to move forward with more dynamic pricing and not just of the seat; of the ancillary and offer optimization and personalization really around this digital retailing capabilities that we’re innovating on.

So, we see that as a great opportunity for growth for the travel industry..

Got it. Thank you..

Thank you..

Our next question comes from Chris Eberle of Nomura Securities..

Hi guys. Great job. So just kind of touching on the B2B and CPQ, we often hear from a number of B2B customers, surveys and just conversationally, that suggest they’re willing to pay a significant premium for quicker response times, real-time pricing quotes, et cetera.

And having said that, we hear about some of these native CPQ solutions that are purpose-built for specific CRM systems that can only handle up to a few hundred-line items.

Where do you guys stand on that? Do you guys have any constraints? And I think some even say they experience a significant slowdown even managing quotes with anything more than, like, 100 products? How do you guys compare to those levels?.

Chris, that’s a great question. I would say that’s where we really differentiate. And I think a lot of companies are waking up to this reality that they may have bought a CPQ solution that, like you said, has been bolted on to a CRM platform. CRM platforms aren’t transactional systems. They don’t scale very well.

And the way that we architected our solution, it’s a micro service technology that’s very scalable. Like, today we can handle tens of thousands to 100,000-line items, to give you an idea. None of our competitors in the space can handle, say, more than 100 or a couple hundred-line items. And after that, they struggle.

And I think that’s a big differentiation. The other part is that how do you actually drive real-time pricing into the CPQ solution, that’s another differentiation for us.

So, I think as companies realize that they’re not just powering direct sales, but they want to empower a channel in e-commerce and they want a digitally connected selling motion omni-channel capabilities that’s where we truly differentiate, versus just thinking of a bolt-on CPQ solution on top of a CRM platform.

And I think definitely that’s what’s driving our growth and that’s why we’re seeing in many cases us replacing kind of the first-generation CPQ solution to more of an enterprise product like ours..

Got it. Great. And you answered my second one on scalability. So, we can leave it at that. Great job, guys..

Thank you..

Our next question comes from Jason Celino of KeyBanc Capital Markets..

It seems like you’re doing very well competitively.

How has your win rate changed, maybe on the airline side and on the B2B side also?.

I would tell you, look, our win rates remain strong across the board. We’ve always said we’ve won more than we’ve lost, and that continues to be the trend. I would say our win rates continue to be very strong..

Would you say they are improving or the same?.

Look, I would say, you could say but really, it’s more about momentum and deal volume and pipeline than purely just driving a higher win rate. I think we’ve always had strong win rates. We continue to have strong win rates. But we also see our pipelines growing and more deal volume, and that’s what’s driving the success, not just a higher win rate..

And one housekeeping question, did you guys give the calculated recurring billings growth rate for the quarter?.

We did not give it, but I can tell you it’s 20%..

Okay thank you..

Thank you..

Our next question comes from Tim Klasell of Northland Securities..

Hi guys. Congrats on yet another fine quarter. I wanted to drill in just a little bit on the sales motion there.

I missed the exact number of the quota-carrying sales people you’ve added so far, but could you refresh me on that? And then with that, what’s changing as far as quotas are concerned with the new sales people? Are the quotas staying the same or higher or lower? And what’s the attainment there? So, I’m basically trying to drill in on the capacity expansion [indiscernible]..

So, we’re up to 122 quota-carrying personnel, and that’s up 20% year-over-year. I would tell you our quotas from the beginning of the year we don’t change quotas mid-year, but they’re remaining consistent. And our quotas vary depending on seniority levels, like many companies, but they’re pretty typical enterprise-size quota.

In terms of productivity, our productivity continues to be very good. And I would say that the performance of the sales organization has been very good. We see our productivity continuing to improve..

Okay. Great. Great. And then with that, if I go back to an Analyst Day a few years ago you had some interesting metrics around, as you were doing this transformation, on the CAC ratio. And with the sales cycles, it seems like they’re decreasing. You guys are getting more productive.

Is that, as we look further out, do you see the leverage points that you highlighted back then becoming attainable? And maybe you can sort of give us an update on what your CAC ratios are, if you even track them..

Tim, this is Stefan. So yes, I recall that Analyst Day that you’re referring to. And yes, we still see those types of CAC ratios or that type of leverage in our selling motion, and we have been making progress on those.

I would tell you that for the time being you’ll probably see the CAC ratios level out, maybe even slightly increase a bit, as we make some further investments to take advantage of the market opportunity that Andres talked about, that we are going to be looking to add more quota-carrying reps and we are looking to add those, especially in the United States.

But if you think about where we were when we did that meeting here a couple of years ago, we were well in the 2s. We have come into the upper 1s. And like I said, we may stay relatively flat to that for a little bit as we make these investments..

Okay. Great. Great. And then one follow-up, a quick one on the customer side.

On the travel side, BA, is that a new customer? Or were they an existing customer?.

They were an existing customer that expanded with us..

Okay. Great. Great. Alright thank you guys very much..

Thank you..

This concludes the question-and-answer session. I would like to turn the conference back over to Shannon Tatz for any closing remarks..

Thank you for joining today’s call. We look forward to speaking with you this quarter. We will be attending the Oppenheimer Technology, Internet and Communications Conference in Boston on August 6 and the KeyBanc Technology Leadership Forum in Vail on August 12. We will also be marketing in Kansas City and Milwaukee on August 27 and 28.

If you have any questions, please contact us at ir@pros.com. Thank you and goodbye..

This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day..