1stdibs.Com Inc

NASDAQ:DIBS

Earnings Call Transcript 2023-Q1

[Operator]

Good day, and thank you for standing by. Welcome to the 1stdibs.com First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Kevin LaBuz, Head of Investor Relations and Corporate Development. Please go ahead.

[Kevin LaBuz, Head-Investor Relations & Corporate Development]

Good morning, and welcome to 1stdibs earnings call for the quarter ended March 31, 2023. I'm Kevin LaBuz, Head of Investor Relations and Corporate Development. Joining me today are Chief Executive Officer, David Rosenblatt; and Chief Financial Officer, Tom Etergino. David will provide an update on our business, including our strategy and growth opportunities, and Tom will review our first quarter financial results and second quarter outlook. This call will be available via webcast on our Investor Relations website at investors.1stdibs.com.

Before we begin, please keep in mind that our remarks include forward-looking statements, including, but not limited to, statements regarding guidance and future financial performance, market demand, growth prospects, business plans, strategic initiatives, evaluation of alternatives, business and economic trends dynamics, including e-commerce growth rates and our potential responses to them, international opportunities and competitive position.

Our actual results may differ materially from those expressed or implied in these forward-looking statements as a result of risks and uncertainties, including those described in our SEC filings. Any forward-looking statements that we make on this call are based on our beliefs and assumptions as of today, and we disclaim any obligation to update them, except to the extent required by law.

Additionally, during the call, we'll present GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release, which you can find on our Investor Relations website, along with the replay of this call. Lastly, please note that all growth comparisons are on a year-over-year basis, unless otherwise noted.

I'll now turn the call over to our CEO, David Rosenblatt. David?

[David Rosenblatt, Chief Executive Officer]

Thanks, Kevin. Good morning, and thank you for joining us today. We delivered first quarter GMV and revenue at the midpoint of guidance and EBITDA margins at the high end of guidance, while continuing to make progress against our long-term objectives. Headwinds in the luxury home goods market, exacerbated by comping against a record GMV quarter, resulted in a disappointing first quarter growth rate. We are working to reaccelerate growth, but we believe it will likely take some time before we see significant improvements.

Despite these headwinds, supply growth and traffic growth continued and we have made progress on our strategic initiatives. Over the past few quarters, we've taken actions to reduce our expenses and improve our efficiency. Our work here isn't finished. Because our growth outlook today is below what we anticipated at the start of the year, we are evaluating additional steps to align our expenses with current demand. We're managing through this challenging period to emerge with more growth vectors, an improved cost structure and a stronger competitive position.

Digging into the quarter, continued conversion headwinds and lower AOV drove GMV declines. Although luxury home goods demand was subdued, marketplace supply remains robust with record seller acquisition double digit listings growth and near record low churn. Our annual seller survey indicates that 1stdibs is the top sales channel for our sellers after their showrooms. Additionally, we're seeing a larger GMV contribution from our influx of essential sellers in 2022, modestly boosting take rates.

We're also pleased with continued traffic growth. Our organic traffic mix increased to nearly 75% of total, up several percentage points, due to continued SEO strength and pulling back on performance marketing. This is encouraging because more supply and more organic traffic are barometers of marketplace health.

We are also pleased to see jewelry continue to perform well, with double digit order growth, highlighting the benefits of operating across multiple verticals. Though not yet large enough to offset macro softness, our strategic initiatives continue gaining traction. In the first quarter, we saw a record number of auction orders and record GMV from our French and German marketplaces. Given our strong international supply position, scalable tech platform and encouraging international results to date ,we plan to enter Italy and Spain later in 2023.

Moving to operations. Our goal is to stabilize and then reaccelerate GMV growth. Improving conversion, particularly for new buyers is our largest lever and top priority. To accomplish this, we are focused on four distinct tracks, pricing, personalization, narrowing the conversion gap between US and European customers and increasing app usage. Of these, we see the largest opportunity in pricing. Unlike an automobile or a smartphone there is not always a clear market price for rare and unique items. Indeed, our user research suggests that the primary obstacles for new buyers to convert are their perception of price and a lack of pricing context. For example is paying $3700 for a vintage Van Cleef & Arpels Alhambra ring, a good deal or not? Furthermore in this market buyer sensitivity to price is elevated. Our strategy is to leverage our decade-plus of proprietary transactional data to provide buyers and sellers more pricing transparency and advice.

We are doing this in three ways. First, by giving buyers richer pricing insights. Second, by offering sellers more guidance on competitive pricing strategies. And lastly, by boosting the visibility of listings representing compelling value. For buyers, we launched new discovery experiences called Shops. Shops are dynamically generated pages that algorithmically aggregate our most performance supply. Historically listings and collections have seen higher engagement and sell-through versus non-collection items. While it's early we are seeing positive results. For example in December, we introduced the design values shop, which highlights well-priced items. This collection generated over $3 million of GMV in March despite representing less than 2% of overall listings. Data points like this increase our confidence in our pricing hypothesis.

Shops rewards sellers who price their items competitively and regularly add items to the marketplace. These behaviors drive seller success and we'll continue to encourage them. They also make it easier for buyers to discover great products. In addition to design values, we launched most saved items in February and new arrivals in April with more planned in the coming months.

We also introduced several pricing related features for sellers. For example, we added pricing guidance to item upload in early March. This leverages historical sales data to provide pricing recommendation when sellers create a new listing. Throughout 2023, we'll increase coverage and proactively share insights with sellers.

Additionally, pricing guidance has been incorporated into auctions listings. While, it's still early we are also exploring a number of different AI applications that could help to increase conversion and drive savings. These areas include pricing guidance, search and browse personalization, SEO content creation and reducing manual workloads.

We are also making progress on our strategic initiatives. Localized marketplaces in France and Germany posted strong traffic growth, translating into record GMV. Sessions from German and French IP addresses grew over 300%. Furthermore, SEO traffic continued growing over 220% in both markets. Orders from German and French IPs grew 20% year-over-year, while orders on our localized marketplace grew over 10% sequentially.

To foster the growth of our international business our product team continues working on features to drive supply and demand. In the second quarter, we will roll out localized seller tools in Italian. A pilot of the program is already underway. Our objective is to accelerate the growth of highly sought after Italian supply. Additionally based on the encouraging results of our French and German sites, we plan to launch localized marketplaces in Italian and Spanish by the end of the third quarter. Relative to our initial launches, these markets will be faster and cheaper as we apply our learnings and leverage upfront infrastructure work from 2022.

For example, it took about seven months to launch French and German sites. We expect that it will take about three months for Italian and Spanish despite having a smaller team. We're also anticipating meaningfully lower translation costs compared to France and Germany due to more efficient machine translation models and renegotiated rates.

Auctions continues to deliver on our priorities of buyer activation order growth and higher sell-through. Orders hit a record in the quarter, growing approximately 10% sequentially and accounting for over 6% of the total.

During the quarter, our product development efforts focused on demand generation and refining item level pricing recommendations. We expect these to help drive page views and bids. On the supply side, our strategy is evolving to focus on a narrower set of the most performance supply, like, specific categories of art and jewelry. Additionally in January, we also ran our first no reserve auction, which had the highest sell-through of any of our monthly curations.

Turning to supply. Seller and listings growth remained robust. We ended the quarter with over 8,100 seller accounts, up nearly 50% while seller churn remains near record lows. Additionally, listings grew 20% to over 1.6 million items. While demand remains soft, we believe our supply growth signals growing relevance to our end markets. Indeed, our recent seller survey indicated that 1stdibs is the top sales channel for our sellers after their showrooms. Furthermore, for legacy sellers defined here as those joining the marketplace before 2022, 1stdibs is typically the primary sales channel.

Our goal is to aggregate the world's most beautiful items regardless of where they are located while maintaining our high curatorial standards. Because we're a marketplace of one-of-a-kind items, breadth and selection matters. Growing supply improves marketplace liquidity drives traffic and deepen search results, creating new opportunities to transact.

In 2022, we introduced our essential seller plan, the subscription-free tier with higher commissions spurring a strong year of seller acquisition and helping to reduce churn. In 2023, we are focused on making this influx of new sellers successful, in part by growing listing volumes and launching new data-driven seller tools like pricing recommendations.

To this end, in early March, we launched the next evolution of this program introducing minimum inventory posting requirements for new essential sellers. We know that sellers who post more sell more. And our goal with inventory minimums is to encourage engagement and drive sales.

Before I conclude, I'd like to take a minute to welcome Ryan Beauchamp, our new Chief Product Officer. Ryan joined 1stdibs in March following a decade at Google where he most recently led the product management organization for Google Ads core experiences. Prior to that, Ryan oversaw business development and strategy for Google Shopping and before that launched Groupon Goods. He brings a strong understanding of online business models and monetization strategies.

We entered 2023 facing headwinds from subdued demand for luxury home goods. But continued gains in traffic seller acquisition and supply growth as well as performance in out-of-home categories like jewelry, give us confidence that we remain as important as ever to our buyers and sellers. Our goal remains to be leaner and have more growth drivers when demand recovers.

I will now turn it over to Tom to review our first quarter financial results and second quarter outlook.

[Tom Etergino, Chief Financial Officer]

Thanks David. We delivered first quarter GMV and revenue at the midpoint of guidance and adjusted EBITDA margins at the high end of guidance. GMV was $97.1 million down 17% due to the soft demand for luxury home goods. As a reminder, we're lapping record high GMV from a year ago. Conversion remained a headwind, particularly for new buyers more than offsetting continued traffic growth.

In addition, the mix shift to orders under $1,000 that we saw in the fourth quarter continued. These orders accounted for 46% of total orders in the first quarter up from 42% a year ago. This trend is partially explained by auctions, which has a lower AOV, but it holds true even when excluding auctions. We believe this reflects a more cautious consumer amid macroeconomic uncertainty and some trading down.

Consumer and trade GMV declined at similar rates, a departure from the past seven quarters where trade outperformed. As the luxury housing market has remained volatile we've observed that trade projects are taking longer to complete and that end buyers are becoming more price sensitive. We've also seen instances of clients opting to spread out spending by planning for multiple smaller installations as opposed to one larger project.

Once again, jewelry showed the best relative performance. Jewelry orders grew 12% year-over-year. In contrast, demand for at-home categories like art, vintage and antique furniture and new and custom furniture, which account for the bulk of our GMV, remain soft. We ended the quarter with approximately 66,400 active buyers down 7%. We expect this metric will remain choppy near term as we manage through a period of soft luxury home good demand.

On the supply side of the marketplace, we closed the core with over 8,100 seller accounts, up nearly 50%. Additionally, there are now over 1.6 million listings on the marketplace, up 20%. While continued supply growth sets us up for long-term success, the near-term demand outlook for durables and luxury home goods is challenging.

Accordingly, we remain focused on driving efficiency and improving productivity. While operating expenses were down 2% and headcount was down 16%, our work here isn't finished. Because demand isn't evolving the way we expected at the beginning of the year, we're evaluating further cost reductions.

Turning to the P&L. Net revenue was $22.2 million, down 17%. On a pro forma basis, net revenue was down approximately 14% when adjusted for the sale of Design Manager in June 2022. Transaction revenue, which is tied directly to GMV, was approximately 70% of revenue with subscriptions making up most of the remainder.

Take rates improved modestly due in part to growing GMV contribution from our essential sellers, which carry a higher commission rate. Gross profit was $14.9 million, down 21%. Gross profit margins were 67%, down from 71% a year ago.

Gross margins were negatively impacted by approximately $0.5 million in amortization expense due to the acceleration of internal use software amortization related to our NFT platform, which we discontinued supporting in the quarter. Excluding this one-time charge, gross margins would have been approximately 69%.

Sales and marketing expenses were $9.8 million, down 17%, driven primarily by lower performance marketing spend. Consistent with the recent quarters, we pulled back on performance marketing and increased our efficiency thresholds to better align expenses with demand.

Sales and marketing as a percentage of revenue was 44%, flat versus a year ago. Technology development expenses were $5.8 million, up 1% due to increased stock-based compensation, partially offset by lower translation costs and lower salaries and benefits. As a percentage of revenue, technology development was 26% up from 22%.

General and administrative expenses were $8.1 million, up 26%, primarily driven by increases in legal and professional service fees related to our strategic alternative expenses and stock-based compensation. Excluding the approximately $900,000 in strategic alternative expenses, general and administrative expenses were up approximately 12% year-over-year. As a percentage of revenue, general and administrative expenses were 37%, up from 24%.

Lastly, provision for transaction losses were $1.4 million, 6% of revenue, flat year-over-year. Adjusted EBITDA loss was $5.3 million compared to a loss of $4.7 million last year. Adjusted EBITDA margin was a loss of 24% versus a loss of 18% last year. This year-over-year change was driven primarily by negative operating leverage from lower revenue.

Moving on to the balance sheet. We ended the quarter with a strong cash, cash equivalents, and short-term investments position of $150.5 million. Additionally, interest income increased to approximately $1.5 million, up from roughly $50,000 a year ago.

Turning to the outlook. Our guidance reflects our quarter-to-date results and our forecast for the remainder of the period. We forecast second quarter GMV of $85 million to $92 million, down 19% to 12%. Net revenue of $20.1 million to $21.3 million, down 18% to 13%. And adjusted EBITDA margin loss of 34% to 28%, primarily driven by lower revenue resulting in negative operating leverage.

Our GMV guidance reflects a number of converging factors including shifting consumer behavior, ongoing economic uncertainty, continued conversion headwinds, and lower average order values.

Turning to adjusted EBITDA margins. Guidance reflects the fact that lower revenue is driving the substantial majority of the sequential decrease in EBITDA margins and a full quarter of annual merit increases.

To close, we are in a period with limited visibility. While comps ease moving throughout the year, the macroeconomic environment remains difficult to handicap. Given recent softer than anticipated demand, we will continue realigning our expenses. When demand rebounds, our goal is to have more growth drivers an improved cost structure and a stronger competitive position.

Thank you for your time. I'll now turn the call over to the operator to take your questions.

[Operator]

Thank you. [Operator Instructions] Our first question comes from Mark Mahaney with Evercore ISI. Your line is open.

[Mark Mahaney, Evercore ISI]

Okay. Thanks. Two questions. If I just look at the numbers that you're guiding to for the June quarter maybe at the optimistic end of the range, it implies that the year-over-year trends are the same or maybe even a little bit better. Is there anything that you've seen quarter-to-date that suggests that sort of stabilization or an improvement in end market demand?

[David Rosenblatt, Chief Executive Officer]

Hey Mark, it's David. I mean listen I think overall we're continuing to see both quarter-to-date and also in the first quarter essentially a continuation of the same kind of underlying drivers that we have seen before positive and negative. So, on the positive side traffic's strong, supply our supply position is great, retention is as good as it's ever been. Sub fees actually for the first quarter in the first quarter were flat sequentially for the first time in three quarters.

And our strategic initiatives continue to make progress both auctions and international. And on the downside, we saw a further deceleration of AOV. That hasn't changed. And then similarly, the conversion rate, while improving the -- while sort of improving in the sense that it's not declining as fast and that rate of deceleration has improved it is still meaningfully negative and the biggest drag on performance. So, overall, I'd say not a fundamental change in any direction.

[Mark Mahaney, Evercore ISI]

And then the second question is can you tell to what extent is this -- what you're looking at these demand trends, these are probably very representative of what's happening in the market. Is there any particular reason to think that your -- versus the category that you're underperforming or outperforming?

[David Rosenblatt, Chief Executive Officer]

No, not at all. I mean that is actually how -- based on the data that we've seen, that's our assessment as well both in terms of our comps and also just commonsensically. So, much of our business, not all of it, but so much of it is driven by luxury real estate and that's obviously under pressure. The meaningful component of our business that's not really driven by luxury real estate, jewelry is performing pretty well. I mean orders were up in the first quarter by double-digits. But again, that's only the minority of our business today. The majority is still driven by the macros. And those macros are producing an impact for us that we think is consistent with the market as a whole.

[Mark Mahaney, Evercore ISI]

Okay. Thank you very much, David.

[Operator]

One moment for our next question. Our next question comes from Trevor Young with Barclays. Your line is open.

[Trevor Young, Barclays]

Great. Thanks. First one, just results on the quarter. The prior few quarters you'd come in at or above the high end of GMV guide, but this quarter coming in right down the fairway even given the guide was given more or less two-thirds of the way through the quarter. Can you just talk a little bit about the cadence throughout the quarter month-on-month? And did things kind of deteriorate in March around some of the banking turmoil and has that persisted into April? And then second one for Tom just on the gross margin. I appreciate the commentary around that amortization charge. Just to clarify that's a one-time charge. And then is that 69% or 70% range a reasonable bogey going forward?

[David Rosenblatt, Chief Executive Officer]

Yeah. This is David. I mean we didn't see -- relative to the overall performance for the quarter I mean there's always variability month-to-month. We didn't see anything that was I'd say material within the quarter. In terms of the impact of the banking situation, I mean look it's not -- it wasn't positive. It's very hard to quantify the exact impact. And I guess I would just leave it at that. I don't know that we can kind of fairly attribute any change in performance to that specifically. Tom?

[Tom Etergino, Chief Financial Officer]

On the gross margin side, yes, so you're correct. The discontinue of the NFT platform and the -- where we recognized about $0.5 million in accelerated internal use software did have a 2% impact on gross margins for the quarter. And yes I think you can expect that we'll be brought back to more normalized historic trends in gross margins going forward. It is a one-time item.

[Trevor Young, Barclays]

Great. And just one quick follow-up. On the strategic alternative costs realized in the quarter, should we interpret that to mean that the strategic review with Allen Co is largely completed at this point?

[David Rosenblatt, Chief Executive Officer]

We really can't. I can't offer any commentary on that. I mean it's active and underway. But -- and beyond saying that we're committed to evaluating every possible alternative both in terms of buy-side M&A, sell-side M&A and working on our balance sheet to improve the shareholder value of the company there isn't much I can say.

[Trevor Young, Barclays]

Okay. Thanks, David, thanks, Tom.

[Operator]

We have a question from Nick Jones with JMP Securities. Your line is open.

[Nick Jones, JMP Securities]

Great. Thanks for taking the questions. Two if I can. The first one on AOV. I think I might have this right. It did kind of accelerate the declines year-over-year, but sequentially it actually increased. Does that indicate maybe these are the right levels for AOV from here as we think about the rest of the year and 2Q?

[David Rosenblatt, Chief Executive Officer]

Yeah. I mean so AOV in the first quarter was down 8% year-over-year which was an acceleration versus Q4 of -- Q4 was down 6%. What we're seeing is a decline in AOV across all price tiers which does suggest that it's primarily a macro phenomenon. In addition to that, the growing share of auctions, auctions is about 6% of orders in Q1 and grew on an order basis sequentially roughly a little bit more than 10%. That does contribute to it. Auctions are a value -- is a value format and has a lower AOV than the rest of the marketplace. But I think primarily as I said it is a market phenomenon.

[Nick Jones, JMP Securities]

Great. Thanks. And then I guess as you continue to add supply and listings, but demand remains strained is there any evidence that you're potentially diluting some of the stronger performing sellers as you essentially add more supply to the platform given what demand there is more options? Thanks.

[David Rosenblatt, Chief Executive Officer]

No, we haven't seen that. Actually retention is as high as it's ever been in the history of the company and that's ultimately the most important metric for the satisfaction of sellers. We -- so no we haven't seen that. I think at the end of the day what drives conversion more than anything else is the perception of value, fair value. And that's why it's important for us to continue to make progress, not just on our new auction platform, but also we've got a whole range of efforts around helping sellers price competitively relative to market clearing prices on one hand and also arming sellers with better historical transactional data with which to negotiate.

And what we see is that when that results in market-based pricing, the conversion rate is very strong. So, for example, we added a collection, which we call design values, which specifically highlights well-priced listings based on historical transactions for comparable items. That collection generated over $3 million in GMV in March despite the fact that the items represented only 2% of our total supply. So that's where a lot of our energy is increasingly is around the communication of value as it relates to pricing.

[Nick Jones, JMP Securities]

Great. Thank you for taking the questions.

[Operator]

Thank you. One moment. We have a question from Ralph Schackart from William Blair. Your line is open.

[Ralph Schackart, William Blair]

Good morning. Thanks for taking the question. You talked about pricing being the biggest lever particularly with a tough macro and providing more transparency and then providing more to the buyers on that side as well as sellers better pricing tools. And then maybe you'd mentioned boosting value listings. Maybe sort of talk about is this a newer initiative continuation of something you'd been working on? And then just any more color you could share that would be great. And then I have a follow-up.

[David Rosenblatt, Chief Executive Officer]

Yes. So pricing is something -- just to sort of start with first principles. Based on consumer research extensive consumer research that we've done and not surprisingly price both the belief that an item is too expensive, and also importantly an inability to evaluate the list price given that these are one-of-a-kind items is the biggest obstacle to conversion especially among new buyers who aren't as familiar with the ability that we offer to negotiate.

So pricing has been a focus for I don't know 1.5 years or so. I think kind of our first initial offering to address that was auctions, and auctions, I think remains an important part of the story going forward. What's changing now is that we're beginning to leverage the historical transactional data that uniquely we have in this market to help to both help buyers negotiate better pricing by showing them historical item pricing or transactional pricing for comparable items on one hand and using that same data to help sellers price more effectively.

These are both things that we had never done before and they're new as of -- we began this we began to commercialize it probably about two quarters ago. And again, as I mentioned in the example of the design values collection, where we're able to scale that it has a meaningful and quick impact on GMV. I think that's true in all markets but of course as you point out, it's especially true in a weak macro environment like the one we're in.

[Ralph Schackart, William Blair]

Great. Thanks. And then just you had mentioned trade projects taking a little bit longer to complete and some clients spreading that out. Is that something new in the quarter or is this something that's continued or acceleration of that trend? Anything you could add there on trade would be great. Thank you.

[David Rosenblatt, Chief Executive Officer]

Yes. I mean, certainly in a GMV sense, it's new. So over the last two years, as you know trade has outperformed consumer. That changed in the first quarter where both trade and consumer had similar growth rates, and we expect that consumer will grow faster than trade over the coming quarters. And I think that's again for a very straightforward reason. Trade is a proxy on the state of the luxury real estate residential market and that state is not great right now. So that's reflected in trade purchasing.

[Ralph Schackart, William Blair]

Great. Thank you.

[Operator]

One moment for our next question. Our next question comes from Curtis Nagle with Bank of America. Your line is open.

[Curtis Nagle, Bank of America]

Good morning. Thanks for taking the questions. Just I guess, a quick update on -- give me attributable to auctions and international? I know you had mentioned that orders, I think you said about 6%. But in terms of, how those two new categories translate to GMV, where is that now? Where should we expect that to be by the end of the year? Feels like it's around low-single digits combined, but any color on that would be very helpful.

[David Rosenblatt, Chief Executive Officer]

Yes, so we don't break out the percentage of GMV that's attributable to both of those initiatives. What I can say is, we're happy with where both of them are not satisfied, but happy. So on auctions like I said, the primary driver on auctions is conversion specifically new buyer conversion. And there, we're seeing a positive impact. And as I mentioned, order growth sequentially was up over 11%.

GMV from auctions was down sequentially because that order growth was offset by AOV declines. Again, those AOV declines given the fact that auctions is by definition a value product, is something that we anticipated that weakness in AOV. Of course over time, we're investing this to grow GMV and we expect that order volume will offset those AOV declines.

International similarly, we're pretty happy with where the progress to date. So as you may remember, we launched our first two non-English language markets in France and Germany in the summer last year. In Q1, we had organic traffic growth of over 200% year-over-year and like I mentioned, double digit order growth.

Based on the successful experience there, we're going to launch our next two largest international markets which are Italy and Spain. We anticipate doing that before the end of the third quarter. And we're hopeful, that we'll see similar results there as well. We have yet, to put paid behind these markets in a major way, but again we're very happy with the organic progress that we've seen to date.

[Curtis Nagle, Bank of America]

Okay. Great. And then just a quick modeling question. Just how to think about GMV dollars, for 2Q and the rest of the year. And presumably, the guidance for EBITDA does not include any additional cuts. Is that, correct?

[Tom Etergino, Chief Financial Officer]

This is, Tom. So on the GMV side, we gave the guidance for Q1. We don't really guide to full year. On the expense side of things, the EBITDA does not anticipate any major cost actions in Q2. Again, we did talk about adjusting our expense structure to reflect our current demand and we are looking at all items, on the expense side to adjust for that across the board. But right now, our guidance does not anticipate large changes to our expense structure in Q2.

[Curtis Nagle, Bank of America]

Okay. Thanks Tom. Appreciate it.

[Operator]

Thank you. And I'm showing no, further questions. This concludes today's conference call. Thank you for participating. You may now disconnect.