Cellebrite DI Ltd

NASDAQ:CLBT

Earnings Call Transcript 2021-Q4

[Operator]

Good day and thank you for standing by. Welcome to Cellebrite Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker present, there will be question-and-answer session. [Operator Instructions] I'd like to hand the conference to your speaker today, Anat Earon-Heilborn, Vice President Investor Relations. Please go ahead.

[Anat Earon-Heilborn, Vice President, Investor Relations]

Thank you, Victor. Welcome to Cellebrite's fourth quarter and full year 2021 financial results earnings call. Joining me today are Yossi Carmil, Cellebrite's CEO; and Dana Gerner, Cellebrite's CFO. This call is being recorded and a replay of this recording as well as the presentation that accompany this call will be made available on our website shortly after the call. A copy of today's press release and financial statements, including GAAP to non-GAAP reconciliations, as well as supplemental financial information for the fourth quarter are available on the Investor Relations website at investors.cellebrite.com. Statements made during this call that are not statements of historical facts constitute forward-looking statements. All forward looking statements are subject to risk uncertainties and other factors that could cause matters expressed or implied by those forward-looking statements not to occur. They could also cause the actual results to defer materially from historical results and/or from forecast. Some of these four looking statements are discussed under the heading Risk Factors and elsewhere in the Company's registration statement on Form F-1 declared effective by the SEC on October 6, 2021. The Company does not undertake to update any forward-looking statements to reflect future events or circumstances. Please note that in the coming weeks, management will participate in a number of investor conferences as detailed in today's press release. Please visit the events section of the Investor's webcast to access webcast of our presentations at these conferences where applicable. With that, I'd like to turn the call over to Yossi Carmil, Cellebrite's CEO. Yossi, please go ahead.

[Yossi Carmil, Chief Executive Officer]

Thank you, Anat, and thank you all for joining our call. We are pleased to report that we closed the year with excellent fourth quarter results, and we are happy to share our outlook for 2022. We finished the year with strong Q4 results, delivering record revenue of $68 million and ARR of $187 million, and we ended the year with record bookings, record revenue, and record adjusted EBITDA. The healthy market environment coupled with our strong business fundamentals enabled us increase our revenue forecast for 2022. Furthermore, these factors reinforce our confidence in the long-term growth model, which we shared with you during our going public processing 2021. Now since this is our second quarter as a public company, I would like to use the opportunity and provide a brief overview of Cellebrite before diving into the results. Cellebrite customers are mostly law enforcement agencies whether it's federal, state or local as well as private sector corporations. Our largest market is in the USA followed by Europe. Our growth strategy is based on continued product innovation in the digital intelligence space and based on building a world-class go-to-market focused organization. The context is as follows. For many years, we have been driving and leading the digital collect and review business. Our solutions allow tens of thousands of police experts globally to quickly provide digital evidence collected mainly from mobile devices, computers, and the cloud as well as other digital sources. Now through our significant R&D investments in this space, we will continue to meet this sub-segment of the digital intelligence markets. Cellebrite is also building a suite of solutions that address the needs of hundreds of thousands of investigators, prosecutors, and decision makers in law enforcement agencies. This digital intelligence suit which includes collect and review, investigative analytics, digital evidence management systems, what we call DEMS, case management and services, VCI suites opened vast opportunities in a very large market. And we believe that we are at a very early stage of realizing this potential. We also continue to invest in a world-class enterprise sales organization, which enables us to dramatically increase our wallet share within our customers as we become increasingly strategic to their operation. The demand for our solutions is driven by few key factors. First growing crime rates in categories such as violent crime and organized crime as well as homeland security threats. This increase in crime is coupled with an increase in the quantity, variety and complexity of digital evidence in investigations. Now on top of that, currently, prevailing investigation practices are manual, silos, and inefficient and as such are just unsustainable. And in addition, there is a growing pressure on governments to increase police funding to fight crime more effectively and therefore to deal with a massive growth in digital evidence. Just as an example, in the USA, pandemic-related federal funding became widely available to law enforcement agencies. And in the UK, the upcoming budget year will still increase of over £1 billion or 7% in policing funding. And in this context, let's review our Q4 business results. We are pleased to report strong net retention rate of 137% for the end of December, which demonstrates our wallet share expression, and let me share with you a few examples. The first is a $1.5 million deal, a three year subscription deal with large West European National Police Agency. The deal includes advanced collect and review capabilities in an enterprise solution that connects dozens of endpoints and is expected to deliver nationwide benefits. This is an example of growth. So, the up-sell of higher grade solution as well as an expected higher lifetime value through the optional subscriptions. The second deal is a multimillion U.S. dollar expansion with an Asia-Pacific based government entity that includes collect and review solutions, investigative analytic solutions, and extensive professional services. The value of this deal was over $11 million and to-date the largest deal in Cellebrite's history. In this case, we play a key role in planning and designing the investigative flow and it is an example of the value becoming a customer trusted advisor. The third is a large through its state agency but formed a new narcotics unit, following a sharp 20% increase in overdose death cases. In order to accelerate criminal investigation and reduce the flow of illegal narcotics, the unit implemented advanced collect and review solutions. We continue to work with this police force to further enhance their digital intelligence capabilities. And this is an example of growth through selling to additional buying centers within an existing customer. Last, regarding wallet share, our success in wallet share expansion is also reflected in the fact that through 2021 we booked 83 views larger than $0.5 billion compared with 63 such fields in 2020. Now moving to our offering. We believe that our digital intelligence end-to-end investigative platform is the best solution to address current and future public safety challenges. And in Q4, we continue to enhance the platform. First, we launched our cloud-based digital evidence management system designed to transform investigative workflow. And second, we've added open source intelligence via the acquisition of digital tools to help jumpstart investigations and extend our platform's reach to earliest stage of the case. Of these additional conclude is early active year from an innovation perspective for Cellebrite. Just to remind, you earlier in 2021, we also achieved the following. We enabled mobile data collection on an agency-wide network based solution. We also boosted our analytic solution with data ingestion from a broader range of sources, and we added remote computer and mobile collection to the private sector. Now, let's look at our plans for 2022. We will continue to invest in our go-to-market in order to develop close and direct relationships with an even larger number of customers. We will focus our investments in our offerings on several key areas. First, bringing access capabilities to the broader customer base specifically for smaller law enforcement agencies as well as the private sector; second, broadening our cloud offering to allow public safety customers to enjoy scalability and efficiency; and third, further streamlining the investigative flows allowing close collaboration between examiners, analyst, investigators, agency managers, prosecutors and defense teams. Now before I here conclude, I would also like to highlight our ethics and integrity advisory committee, which we formalized in Q3 2021 with an amazing group of outside experts in the social, legal, academic and regulatory communities. They are viral all by the way. They can be found on our website. We are actually aware that our solutions are powerful and powerful enablers of digital intelligence, and we are committed to working only with customers we use our solutions in the legal and in an ethical manner. Our Board will work closely with this group on ethics and corporate integrity issues on an ongoing basis. So, in summary, our results for 2021 show that we have a strong growing business. We start 2022 excited, excited about opportunity in front of us, and we are confident in our ability to drive forward our position as a strategic partner to our customers. We intend to continue be an undisputed leader of digital transformation in investigations and with that to lead the growth of our markets in the coming years. As a one stop digital intelligence vendor, Cellebrite modernizes the investigative process, and we look forward to continue to help law enforcement and the justice system, while delivering growth and profitability to our shareholders. Before I turn the call to Dana Gerner, our CFO, I would like to thank the entire Cellebrite team for the dedication and for the excellence throughout this exceptional year. Dana, please go ahead.

[Dana Gerner, Chief Financial Officer]

Thank you, Yossi. I'm very pleased to present an analysis of our financial results for the fourth quarter of 2021, which once again exceeded our expectations in revenue and profitability and help us to close a very strong year for Cellebrite. We delivered best-in-class NOI of 137% and continued to grow our AAR. The strong performance in these two metrics reflects the successful execution of our growth strategy. Revenue in Q4 was up 19% from Q4 2020 and full-year revenue was up 26% from 2020. Total subscription revenue increased 32% in Q4 '21 from Q4 '20, and full year total subscription revenue was up 41% from 2020. Total subscription represented 74% of the total 2021 revenue, up from 67% in 2020, and in line with our goal of increasing the recurring components of our business. In 2021, 84% of our revenue came from collect and review solutions, 5% from managing analyze solutions and 11% from services. We expect strong growth across our entire portfolio. This means that while the manage and analyze solutions are more nice and expected to grow at faster rate than the collect and review solutions, the revenue mix is expected to shift gradually overtime. ARR grows 37% or year-on-year reaching $187 million by the end of December '21. The main drivers for ARR growth continue to be the up-sell and cross-sell of additional modules and solutions to existing customers. Customers are increasing their spending with us driven by the needs to deal with the increasing complexity of accessing data and delivering insights that help to solve cases. The American customer that Yossi described earlier is an example of that. The Q4 win increased the number of licenses used by this customer by 25%, and the ARR from this customer by more than 3x, reflecting assets in addition to expansion. Please refer to the slide that the Company disclosed for framework granular breakdown of the total ARR growth from the end of 2020 to the end of 2021. Now moving to operating expenses, I will discuss on a non-GAAP basis. So, the shared based compensation, amortization of intangible assets, acquisition related expenses, and one-time expenses are all excluded. Non-GAAP operating expenses of $47.9 million in the quarter increased 29% from Q4 in the previous year. We ended 2021 with 898 employees, up 18% from the end of 2020. And so, the major driver for the operating expenses increase was headcount growth and recruitment costs. In addition, we encourage food quality public company costs and experience an increase in travel and marketing events cost due to the higher in person interaction. We continue to record in a very targeted manner to support future growth and skill. In Q4 '21, adjusted EBITDA and margins are $8.9 million and 13.1% respectively. For the full year, adjusted EBITDA and margins were $47.9 million and 19.5%, reflecting the higher profitability rates before we begin occurring public company costs. Non-GAAP net income was $5.2 million for the quarter and $38 million for the full year and non-GAAP fully diluted EPS was $0.03 for the quarter and $0.24 for the full year. Operating cash inflow in the fourth quarter of '21 was $29.8 million, and in the full year, it was $36.1 million. After a cash payment of $20 million and digital crude acquisitions, we ended the year with approximately $181 million of cash, cash equivalents in short-term investments. Now moving to 2022 outlook, we expect December '22 ARR of $250 million to $265 million. Each range represents between 34% and 42% growth from December '21. We expect the vast majority of the ARR growth to come from selling additional new licenses to existing customers, as was the case in '21. We expect full year revenue for '22 to range between $285 million and $300 million. Please note that typically our revenue is weighted towards the second half driven by the September ending of the U.S. federal fiscal year and the December ending of the fiscal year for most of our other customers. We expect the gross margin of between 80% to 82%. The full year expected adjusted EBITDA is $39 million to $44 million. We expect profitability to be significantly higher in the second half of the year compared to the first one used to the operating leverage of the higher expenses revenue in the second half. With that I will turn the call to the operator to open the Q&A session.

[Operator]

[Operator Instructions] Our first question will come from the line of Jonathan Ho from William Blair. You may begin.

[Jonathan Ho, William Blair]

I just wanted to maybe start out with some of your comments around pandemic funding and maybe seeing some of that flow through to your law enforcement customers. Can you maybe help us reconcile how you're seeing that impact the pipeline and your thoughts around maybe the U.S. government strengthen your guide for 2022?

[Dana Gerner, Chief Financial Officer]

So in principle, what we are saying Jonathan and thank you for the question is the increase in interest from our U.S. government customers in our enterprise solutions and the ability to look at a long-term pipe for longer periods of engagement with us, which usually used to be a one year engagement. They're taking into consideration that those funds are looking at a period of more than one year and I'll just to discuss a multiyear deals with them and longer engagements.

[Jonathan Ho, William Blair]

And then just in terms of sort of the adjusted EBITDA guidance for 2021. There is some sort of drop off on the implied margin relative to what you're doing -- sorry for 2022 relative to 2021. I think you've said that some of this is the public company costs and then expectations for investment. Can you give us maybe a waterfall or a breakdown of where do you see additional investments that you're making? And just whether there's additional impact beyond sort of the public company costs?

[Dana Gerner, Chief Financial Officer]

Yes, I would like to refresh your memory that we have acquired digital clues in November '21. And we also shared that there will be some additional costs related to the operation of this business acquired in '22 is a full year impact and that will impact somewhat on our profitability. Furthermore, we did budgeted into our '22 budget, getting out of the pandemic, restrictions in more face-to-face activity, going to motion human life throughout the year compared to '21 and 2020.

[Yossi Carmil, Chief Executive Officer]

Jonathan. I would like to add a little bit to the former questions, Yossi. Regarding our comments to the pandemic, is that okay. Maybe started a little bit to the current business climates and business environment that we see which is very positive. The environment today is I would say healthy and pretty much across the board. In late 2020, when the 2021 budgets were planned, the funding trends were pretty much mixed in some of the geographies or the geographical areas, budgets increase, but in other they were still under the, I would say COVID impact. In late 2021 and end of 2022, what we see and what we saw is a stronger budget environment. And one of the most important factors, and by the way especially in the U.S. is the pandemic related federal funding is became widely available to agencies, so basically providing significant source of income, especially pushed by the Biden Administration. We can also see that or other examples of budgets related to pandemic in other areas such as in the UK, as I mentioned, in Australia where for example Queensland police received 7% budget increase in 2021, 2022, compared to previous year, often -- and again, so maybe in that context, there is a positive business climates, I would say supported by such pandemic related fundings.

[Operator]

Our next question comes from Mike Cikos from Needham. You may begin.

[Mike Cikos, Needham]

Thanks for taking the questions here. Maybe to start with Yossi. The number of large deals that you guys are doing headcount substantially on a year-on-year basis. Now, I'm trying to figure out what would you say is driving that success? Is it having more products? Is it having this broader platform? Anything you could talk to there would be incremental? And then for Dana, it's just to put a finer point on unlike the previous questioner, but I wanted to make sure you guys are looking at, I guess, increased costs as we move post-pandemic towards this more normalized environment. And I guess I've heard from other companies that these costs could be in the way of maybe 2% to 3% drag on EBITDA or operating margins. Is that a fair characterization as we think about the impact that Cellebrite is seeing in its own assumptions as we look to calendar '22?

[Yossi Carmil, Chief Executive Officer]

Thank you for the question. So as you suggested, I will take the first one regarding those large deals, and the large deals are obviously not mentioned by us and not happening just like that. It has a meaning because we continue to see a momentum with large deals, and I will say also multi solution deals which we were, by the way, highlighting, not only in this release, but also in former releases. And it basically shows our ability to growth and nurture and get more wallet share by the same accounts, or as we said, the original set in our plan, grow within the accounts selling to existing and new buying centers within the same accounts, and basically see more DI relevant budgets, every climb up the food chain from the labs, where we used to be to the rather head of investigation and the entire agency end-to-end investigative flow. And for example, the large deal that we have done, the five-year deal, which is basically by a customer who is a relatively low customer of Cellebrite shows, by the way, a situation of a customer who reached a very advanced situation already purchased in the past many of our solutions. And here, there is a focus on expansion of the sources of digital evidence from which is, let's say, collection alongside with analytics and extensive professional services. And it goes basically to the same thing, large deal, more expansion, more nurturing within the large account, as reflected or as we promised, basically as part of our go to market and growth strategy. Dana?

[Dana Gerner, Chief Financial Officer]

Yes. And I would like to confirm that indeed the opening of the market would have an impact of around 3% additional expenses on profitability.

[Mike Cikos, Needham]

That's very helpful. And I know it didn't come up in the prepared remarks, but I just want to make sure I'm doing my due diligence here. But if I think about, some of the companies that across the market have spoken about global supply chain shortages and inability to get product, it sounds like that really isn't a factor for you. I know on the quarter specifically, you guys said that -- your team has done a great job as far as building inventory to kind of component shortages, but curious is that still the case as we stand today? Thank you.

[Yossi Carmil, Chief Executive Officer]

Yes, it's still the case. We are basically in a situation that we planned ahead very well in all relevant components. And we can say for sure that there is no impact or definitely, no any negative impact or only positive impact on our business. We are on-track, well-equipped, and based pretty much, and based on the good planning and based on the good sourcing. There is no negative impact on us, basically positive, and we continue with our plan as originally stated.

[Operator]

Our next question come line of Shaul Eyal from Cowen. You may begin.

[Shaul Eyal, Cowen]

Thank you. Good afternoon, guys. Congrats on fourth quarter performance and outlook for 2022. Yossi or Dana, I wanted to ask about the great promises seeing with large deals in from a different direction. Are there any initial investments needed on your end at the early phase of these contracts? Or are they similar in cost structure and profitability let's say to a typical six figure transaction?

[Dana Gerner, Chief Financial Officer]

I will take it. So, in principles, Shaul, there are no different in other size deals which are not very transactional, so most of these deals are coming from our large customers. And this was discussed before we have a very experienced account executives coupled by experienced tech, sales tech people. So, in most cases, it's just a very good sales motion, but Yossi please elaborate.

[Yossi Carmil, Chief Executive Officer]

Obviously, strange to work [indiscernible] Shaul. We are still in the mode of I would say plug and play as much as possible. Selling basically simple, fast, adopted solutions to a fast. Well, I hope, fast adopting environments. We are not going that much to tailor projects it's still our products, our solution. And in most of the cases, there is no need for extra preparation. There will be in the future, as we basically go deeper into what we called strategic mega accounts. There will be situations that we will need to do some customer stops, integrate our solutions with others. But in the majority of this strategic account penetration and even in those large deals, there is no doubt much preps and it's pretty much in the course and in the start of our offering.

[Shaul Eyal, Cowen]

And Dana, we'll, you see -- did you meet your 2021 hiring plans or targets? And what are those for fiscal '22 maybe just from a qualitative perspective?

[Yossi Carmil, Chief Executive Officer]

Let's put it this way. Basically, we were -- I would say, we're pretty much in a good shape. We're glad to meet, I would say, the headcount targets for this year, as we did. And basically due to relatively low attrition rates and comparison to the market, and then successful recruitment efforts, we met the headcount targets for 2021. All that needs and takes, I would say to meet the 2022 financial targets. And like everyone else, we are -- we see in some of the areas or in some of the professional or the professions that the market is in a very, I would say, more competitive environments. And I would say that to sums it up, we have a very strong value proposition as a company, and we don't see any special difficulties.

[Operator]

Our next question will come from the line of Jamie Shelton from Deutsche Bank. You may begin.

[Jamie Shelton, Deutsche Bank]

Just a quick one for me. Premium Enterprise is compelling value proposition and as of last disclosure I believe 28,000 usage only a few 100 Premium units. I mean, going forward, is the innovation going to be the kind of product innovation going to be focused on those advanced extraction capabilities. I guess, is it a carrot and a stick type scenario trying to connect more of those uses to premium? Just trying to frame how your approach in trying to connect that large existing base to advice extraction capabilities at variance price?

[Yossi Carmil, Chief Executive Officer]

I would -- first of all, you describe it and it's great to, let's say remember this because indeed we spoke about it. And we spoke about it because in the area of collect and review, we're plan plans our ability to use the Premium Enterprise to connect the uses to a central premium and deploys. And then deploy special capabilities to all well entrenched use in the field is a key element. So, there is only positive in that because again for the case, I go back to the last time we spoke about it. One is enabled the user to consume remotely the advanced capabilities of the premium license is including the support in collection of all the unique operating systems around Android, around iOS and so on and so forth. And for the large customers with significant case of, I'd say, first of all large amounts of Cellebrite licenses in decisions and industries, and those who are having this device backlog feature, if you remember that one of the things we are talking about in investigation is the backlog due to the huge amount of digital sources. Here we are improving the mode of operation, because these advanced capabilities are going very efficiently into the field without the need to rule physically thumb drives and all that stuff. We intend to invest to sum it up or to have and finish. We intend obviously to invest a lot as I mentioned in our previous presentation. In special capabilities around research, around access, I mentioned obviously small customers, but obviously to the large agencies. And the Premium Enterprise is the vehicle, the major vehicle to bring all those capabilities into the field.

[Jamie Shelton, Deutsche Bank]

So just last question. I guess, as you move -- as you try to connect more of those UFED to Premium via the connect client server architecture of the enterprise devise. Is it so much, as we assume that as security hardening encryption challenges increase then the need for premium will increase and therefore the demand for enterprise will increase. I just try to kind of how you're going to change that ratio between 28,000 users and any couple 100 premium?

[Yossi Carmil, Chief Executive Officer]

Couple of hundreds of premiums can serve thousands and dozens of thousands of UFED. Because imagine an agency where a premium in a central place today or a certain location and without connectivity to UFED. You need basically today to move evidence in a physical way from one place to the other from one location to the other. The entire principle here either in a placing a Premium Enterprise in one location and serving well connected hundreds of them, okay, or basically to place it in a SaaS mode, or on a private cloud will enable basically an easier distribution quicker, faster and it's basically again, less Premium Enterprise, but more than we are placing today in comparison to the regular premium will serve thousands and I would say dozens of thousands of UFED. And one need to remember that within that move the number of UFED will increase because it ease basically the rationale to acquire more licenses of collect and review and place them in end station, which are very well connected either in a premium, which is placed on-prem and is well connected or on the cloud. Definitely when it comes to security demands and all that stuff we already, we will mix all the local needs, as we do in other parts of our products, which are cloud-based and placed in customer environment, for example, in a private cloud.

[Operator]

Our next question comes from line of Louie DiPalma from William Blair. You may begin.

[Louie DiPalma, William Blair]

Good morning, Yossi and Dana. Last October, you launched the Remote Endpoint Inspector for commercial customers. And in the past you have discussed how your solutions are used by accounting firms, law firms, and many financial services organizations. However, commercial today is still a small percentage of revenue. So, I was wondering, can you talk about how your commercial vertical is steering relative to law enforcement and your federal customer verticals?

[Yossi Carmil, Chief Executive Officer]

Yes. I'll take it at least for the beginning. First of all, I think that, we continue very successful with our plans regarding the private sector. As you mentioned, indeed, we launched the Endpoint Inspector. And from an offering perspective, the endpoint, which represents remote mobile collection combined with computer that we offered is I would say the first step in bringing a disruptive offering to this market, and we are very pleased with that. And for the fact that we have this part of the offering, I can also just refresh as we said that at this stage, we are building our go-to-market on bringing a disruptive offering, combined with winning more logos. And in fact, in 2021, we acquired additional I'd say approximately 300 new logos for the private sector. And basically, there is a long-term target here because we are focusing on the collection piece. We intend within collection and especially with the remote collection to acquire more customer and by that coming basically with a solution, more solution approach to customers. With that using the trends of the remote collection is one of the, I would say, the trends, which are pushing budgets within the private sector. And we see those budgets, which are getting bigger in the commercials in the private enterprise market and that's in an option. So, we are very pleased with what we have today. Import is out there, ready for 2022. I would say disruptive enough in order to increase our share within this market.

[Operator]

Our next question comes from the line of Tal Liani from Bank of America. You may begin.

[Tal Liani, Bank of America]

I have a question on the ARR guidance. You previously lowered the ARR guidance from 44% to 34% of the growth. But then you close the year at 37% and you've guided -- the growth guidance for 2022 is up from 32% to 38% or at least that's what I had. So you lower this, but now you're increasing it versus what we had before. And the question is. Can you talk about your confidence with the higher ARR numbers? What are the trends? And can you explain the decline? And then once again, we're seeing very good numbers coming out. So what are the trends, the underlying trends with these changes? Thanks.

[Dana Gerner, Chief Financial Officer]

I'll take it. I believe that when you look at our ARR growth plan for 2022, these are very healthy one that you mentioned. 34% to 42%. When we provided the guidance for '21, we said that we will meet our long-term ARR targets and catch up with the little bit of a delay that we had in '21. As you know, we used to sell only perpetual. We are moving very, very strongly into subscriptions. The ARR is pending on the pace of the adoption of the subscription model. We've seen a very nice adoption in a '21. We're seeing even a nicer adoption into '22. The strategy of selling more to the customers, more licenses through after quarter actually fortify a confidence in our ability to bring the ARR growth for '22.

[Operator]

[Operator Instructions] Our next follow-up will be from the line of Shaul Eyal from Cowen. You may begin.

[Shaul Eyal, Cowen]

Maybe just a quick housekeeping question for Dana. Dana, can you reminder us the source of the $49 million of net financial income for this quarter? Thank you.

[Dana Gerner, Chief Financial Officer]

Yes, of course. Through this packing, we've introduced three financial instruments. One is the warrants that we just came from this pack, the public warrants and the private warrants. There are no churns and the price adjustment churns or all of them are in our long-term liabilities in our balance sheet. All three instruments are being evaluated on a quarterly basis to their fair value and the difference in their face value flows into the financial income or expenses.

[Operator]

Thank you. And I'm showing no any further questions in the queue at this time. I would like to turn the call back over to Yossi Carmil for any closing remarks.

[Yossi Carmil, Chief Executive Officer]

Thank you very much. Before we conclude today's call, I would like to thank you all for joining us and wish you all a nice day and thank you.

[Operator]

And this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.