News Corp

NASDAQ:NWSA

Earnings Call Transcript 2019-Q2

[Operator]

Good day, and welcome to the News Corp Second Quarter Fiscal 2019 Conference Call. Today’s conference is being recorded. Media will be on a listen-only basis.

At this time, I’d like to turn the conference over to Mr. Michael Florin, Senior Vice President and Head of Investor Relations. You may begin, sir.

[Michael Florin]

Thank you very much, Aaron. Hello, everyone, and welcome to News Corp’s fiscal second quarter 2019 earnings call. We issued our earnings press release about an hour ago, and it’s now posted on our website at newscorp.com.

On the call today are Robert Thomson, Chief Executive; and Susan Panuccio, Chief Financial Officer. We will open with some prepared remarks, and then we’ll be happy to take questions from the investment community.

This call may include certain forward-looking information with respect to News Corp’s business and strategy. Actual results could differ materially from what is said. News Corp’s Form 10-K and Form 10-Q filings identify risks and uncertainties that could cause actual results to differ and contain cautionary statements regarding forward-looking information.

Additionally, this call will include certain non-GAAP financial measurements such as total segment EBITDA, adjusted segment EBITDA and adjusted EPS. The definitions and GAAP to non-GAAP reconciliations of such measures can be found in our earnings release.

With that, I’ll pass it over to Robert Thomson for some opening comments.

[Robert Thomson, Chief Executive]

Thanks, Mike. News Corp reported increased profitability and revenue growth during the first-half of fiscal 2019, highlighting the power of premium content and authenticated audiences in a fact-challenged world that craves credibility.

For the second quarter, the company saw 21% revenue growth and a 13% rise in total segment EBITDA, reflecting the consolidation of Foxtel and a healthy expansion of revenues at HarperCollins, Dow Jones and REA Group.

More generally, at News and Information Services, we saw a continuation of positive trends in paid digital subscriptions and digital advertising in Australia and the U.S., where growth mitigated declines in print revenue. Even though, our teams have been diligent in pursuing revenue opportunities, the digital world remains somewhat dysfunctional and subject to intensifying scrutiny.

We are in a world of exponential evolution, in which dominant players have the potential to manipulate markets for data, products, advertising, news and ideas. There is no doubt that some of these companies are arbitraging algorithmic ambiguity and hoping that regulators do not fully appreciate or define their dominance in certain sectors.

When one company controls much of the U.S. consumer audiobook market and has its own products in that market and can tweak its algorithm at will, the potential for abuse is almost limitless. It is clear that there has been a regulatory awakening and the time has come for a regulatory reckoning.

Turning now to our own businesses, which are certainly conscious of their responsibilities as custodians of customer data. It is clear that the ongoing digital transformation of Dow Jones is efficacious. Many traditional media companies are ailing, but that is certainly not the case of The Wall Street Journal, where paid digital subscribers grew 23% to over $1.7 million.

Dow Jones overall has approximately 3.2 million total subscribers, 13% higher year-over-year. Elsewhere in the Dow Jones family, MarketWatch saw strong gains this quarter, with visits up 45% year-over-year according to [indiscernible], while Barron’s grew its total subscribers 27% year-over-year.

The Professional Information business at Dow Jones also continues to show progress, with risk and compliance reporting a 26% increase in revenues. There has now been in excess of 25% year-over-year revenue growth for seven consecutive quarters.

At the times in the UK, print advertising revenues rose for the fifth consecutive quarter. The Times and Sunday Times saw solid growth in digital subscribers, while the Sun continues as the UK’s number one news brand across print and digital combined according to the latest PAMCO survey.

Last month, we made an application to the UK government to allow sensible sharing resources and cost reduction across The Times and The Sunday Times. The editorial independence and uniqueness of these PLS publications will be protected, but there are clearly areas of cost duplication and we want to ensure the very best use of our financial and of our journalistic resources.

Chris Evans, the gifted legendary radio broadcaster joined Wireless Group’s Virgin Radio last month and the audience growth has been remarkable. To put the impact and the potential in perspective, during the first day of Chris’ show, Virgin Radio saw more up downloads with digital listening than in all of 2018.

The breakfast program also deployed unique sponsorship partnership with Sky, so that the flow was not disrupted by conventional ad breaks. That model has already proven its worth and is likely to be replicated elsewhere on the radio roster.

At News Australia, profitability improved. Thanks to continued digital advertising growth and cost efficiencies. news.com.au. was again the number one news website, significantly ahead of its competitors, reaching almost 10 million unique users in the month of December according to Nielsen.

Meanwhile, The Australian, where digital paid subscriptions account for more than half of the total subscriber base, we saw strong digital subscription growth this quarter, up 23% year-over-year.

Since we brought together Foxtel and FOX SPORTS Australia, we have made extensive changes in management, enhanced the sports and entertainment portfolio and upgraded the technology. Average audiences across FOX SPORTS Australia channels are up over 70% year-over-year, with the addition of live cricket boosting viewership during the summer, traditionally a relatively quiet period for customer acquisition.

Our new sports streaming product, Kayo, has certainly changed the traditional trend. As of February 5, Kayo had attracted over 115,000 users, of which approximately 100,000 were paid. And we expect that number to increase markedly as we head into the peak selling season for the more popular winter sports, Australian football and rugby league. It is clear in a competitive world of content that the passion for sport drives subscription growth and Foxtel has by far the best collection of that cherished content.

In our Digital Real Estate Services segment, REA Group in Australia continues to outperform the competition, posting robust results, despite a challenging listings environment, driven by strong residential growth and the inclusion of the data services business, which was not in the prior comparative period.

The continued success of REA would not have been possible without the leadership of Tracey Fellows. She will be driving global expansion and seeking new opportunities for our fastest revenue-growing segment in her new role as President of Global Digital Real Estate at News Corp.

Since the creation of the new News Corp in 2013, Digital Real Estate Service revenues have more than tripled and segment EBITDA has more than doubled. The appointment of Tracey underscores our increasing commitment to the sector. We are particularly pleased that Owen Wilson has become the new Chief Executive of REA, where he is overseeing strategy, M&A and operations, all of which have thrived.

Turning to U.S. real estate, our long-term optimism is undiminished, even as shorter-term trading in the property market has been somewhat sluggish. As evidence of the enduring strength of our business, real estate revenues at the operator realtor.com, Moving, we’re up 23% this quarter, with total revenues up 11%. This includes Opcity, the acquisition of which we successfully closed in October. Its strategic importance is evident in the higher-quality value-added leads it provides with brokers about potential clients.

Unlike a certain other company in the sector, we are not in the business of flagrantly flipping houses or covertly competing with our clients. Our aim is to provide the best possible service to buyers, sellers and realtors.

In Book Publishing, HarperCollins delivered another outstanding performance this quarter. Fostered by bestselling titles, such as Homebody by Joanna Gaines, and Girl Wash Your Face by Rachel Hollis, both of whom are set to publish new titles in the current quarter. And in the UK, also very successful with The Ice Monster by the irrepressible David Walliams. Digital sales also grew 12% in the prior year, driven by a 58% increase in the sales of audiobooks.

Our results this quarter and for the first-half of the fiscal year demonstrate the power of our premium products and reflect our ongoing digital transformation, which is building a muscular platform for the future and for our investors.

Now Susan will provide incisive insights into the finer details of our accounts.

[Susan Panuccio, Chief Financial Officer]

Thank you, Robert. Turning to the financials. Fiscal 2019 second quarter total revenues were over $2.6 billion, up 21% versus the prior year and total segment EBITDA was $370 million, up 13% versus the prior year. Results reflect the impact of the consolidation of Foxtel.

On an adjusted basis, which excludes the impact of the Foxtel consolidation, currency fluctuations and the other items disclosed in our release, revenues increased 3% and EBITDA increased 2%.

For the quarter, earnings per share were $0.16, as compared to a loss of $0.14 in the prior year, which included a charge related to the U.S. tax reform. Adjusted earnings per share were $0.18 in the quarter versus $0.24 in the prior year.

Turning now to the Individual Operating segment. In News and Information Services, revenues for the quarter were $1.3 billion, down 3% versus the prior year. Currency had a $34 million negative impact accounting for more than half the decline.

Within the segment, reported revenues at Dow Jones rose to 4%; News UK declined 10%; News Australia declined 5%, although it was relatively stable in local currency; and News America Marketing fell 7%. Approximately 32% of the segment’s revenues were digital, up from 29% in the prior year.

Moving on to the segment highlights. Advertising revenues accounted for 50% of segment revenues and were down 5% versus the prior year, with approximately $18 million, or 2% being due to currency fluctuations. Second quarter advertising trends across our new businesses improved modestly from the prior quarter ratio.

At Dow Jones, advertising revenues were flat with the prior year. Digital advertising revenues improved significantly, both year-over-year and sequentially, offsetting print declines. The improvement was driven by strong programmatic growth, resulting from audience going to MarketWatch.

At News Australia, advertising declined 7%, but down just 1% in local currency, again, showing moderating declines versus the prior quarter, with improvements in the rate of print declines and strong year-over-year gains in digital. On the digital front, we saw further expansion of news.com.au, a national news portal and news extend a small to medium business offering.

News UK advertising fell 8% versus the prior year, or down 4% in local currency, due mostly to soft print trends at the Sun, which had challenging prior year comparisons. We saw modestly higher print advertising revenues at the time.

Finally, at News America Marketing, advertising revenues fell 7% due to weak home delivered revenues, which included FSI products and lower install advertising revenues, which were partly impacted by the timing of product campaigns.

Turning now to circulation and subscription revenues, which accounted for 42% of segment revenues. We saw an increase of 1%, with foreign currency negatively impacting these revenues by $12 million, or 2%.

We are continuing to see very healthy digital paid subscriber growth, which has been a core strategic focus and key to improved performance. At Dow Jones, circulation revenues grew 7%, benefiting from strong pay digital-only subscriber growth at The Wall Street Journal, which were up 23% year-over-year to over $1.7 million, and an increase of 125,000 subscribers from the first quarter. Digital paid subscribers accounted for 67% of total subscribers at The Wall Street Journal, up from 60% last year.

In addition, we again saw healthy year-over-year digital subscriber growth at The Times and The Sunday Times, up 22% to 269,000 and at News Australia, up 18% to over 460,000. In Australia, cover price increases and rising digital sales offset print volume declines, while circulation revenues were down modestly in the UK.

Turning to segment EBITDA. News and Information Services segment EBITDA was $120 million, down 15%, mainly driven by the clients in the UK from lower revenues, including the exit of Sun Bets and higher expenses related to newsprint prices. However, we again had increased contribution at both Dow Jones and News Australia.

Turning to the Subscription Video Services segment, revenues were $562 million versus $120 million a year ago. Segment EBITDA in the quarter was $84 million versus $33 million in the prior year.

On a pro forma basis, reflecting the Foxtel transaction, segment revenues in the quarter decreased $69 million, or 11% compared with the prior year, an improvement from the first quarter decrease of 17%. $39 million of the decline, or 6% was due to the negative impact from foreign currency fluctuations.

Broadcast trends were relatively similar to the prior quarter, with the revenue decline driven by a lower broadcast subscriber base, higher ARPU costs and mix shift to lower. The subscription revenue decline was partially offset by an increase in Foxtel Now revenues.

Broadcast ARPU was A$78, down about 3% versus the prior year, reflecting a 2% negative impact from the new revenue standard. Compared to the first quarter, broadcast ARPU was up over 2%, reflecting a price increase implemented on October 1.

Pro forma segment EBITDA in the quarter decreased $71 million, or 46% compared to the prior year. The year-over-year decline reflects the lower revenues, higher sports programming and production costs, including approximately $26 million of costs related to Cricket Australia and about $9 million for marketing related to the commercial launch of Kayo Sports. This level of reinvestment was consistent with our expectations, as we focus on better positioning Foxtel for future growth.

On operating metrics, Foxtel’s total closing subscribers were approximately 2.9 million as of December 31, up 4% against the prior year, driven by higher Foxtel Now and Kayo Sports subscriptions and the inclusion of commercial subscribers of Fox Sports Australia.

In terms of the subscriber mix, about 2.5 million subscribers were broadcast and commercial, the remainder were Foxtel Now and Kayo Sports subscribers. We launched Kayo Sports in late November and are very pleased with the early adoption.

As Robert mentioned, we had 115,000 subscribers as of February 5, of which approximately 100,000 were paid subscribers and expect to see it scale into the important winter sports selling season.

Pleasingly, the Kayo Sports user base is engaged with average viewing time per active user currently at 69 minutes per day, with over 70% watching live video and smartphone being the primary device.

In the second quarter, broadcast churn was 15.6% versus 14.5% in the prior year, which was mainly impacted by the October price rise. Churn management is a major focus for the team in Australia, and we’re investing to better utilize data and advanced analytics to predict churn going forward in order for the business to be much more proactive with customized solution through attention and win back. Capital expenditures related to new Foxtel was $139 million in the first-half, which would have been down modestly had we consolidated Foxtel in the prior year.

At Book Publishing, we posted another very solid quarter, driven by strong sales in general books with the release of Joanna Gaines Homebody and The Next Person You Meet in Heaven by Mitch Albom; as well as Rachel Hollis, Girl, Wash Your Face in Christian publishing.

Revenues for the quarter increased 6% to $496 million and segment EBITDA increased 13% to $88 million, and both achieved record levels for HarperCollins. This growth came despite recent tighter supply conditions of both paper and bookbinding across the industry.

Total digital revenues for the quarter grew 12%, consistent with the previous quarter, and represented 17% of consumer revenues, up from 16% last year. Downloadable audio again grew over 50%.

At the Digital Real Estate Services segment, revenues increased 7% to $311 million, which was driven by strong organic growth and the impact of acquisitions, partially offset by currency headwinds. Acquisitions contributed $7 million to revenues, while currency had $13 million offset. On an adjusted basis, revenues grew 10%.

REA Group revenues grew 6%, or 13% in local currency, due to residential debt revenue growth in Australia, reflecting higher penetration for premium all and increased yield and modest contribution from the Hometrack acquisition.

We also saw an improvement in developer revenues. Revenue growth was partially offset by an overall 2% decline in new listing volume, which included a more pronounced decline in Sydney and lower media revenues. Please refer to REA’s earnings release and their conference call, following this call for additional details and comments on their outlook.

Move revenues rose 11% to $122 million versus the prior year, helped by growth of its connection plus product and the inclusion of the Opcity acquisition. Real estate revenues increased 23%, including Opcity. Revenue growth was partially offset by reduced display advertising to drive user experience and engagements, similar to last quarter.

We also saw moderating growth in connection plus lead volume, partly impacted by the transferring of leads to Opcity, as well as a more challenging U.S. housing market, including declines in existing home sales in the second quarter.

Average monthly unique users at realtor.com were approximately 53 million for the quarter, rising 6% versus the prior year. On Opcity, we are very pleased with how the integration is going. The team at realtor is focused on leveraging their extensive industry relationships to expand adoption of the new platform.

We are using advanced AI machine learning and algorithms to better match consumers with agents. We are taking advantage of the Opcity platform to monetize consumer leads that in the past have gone unsold or underutilized.

Segment EBITDA rose 2% to $121 million. The quarter reflected additional cost move related to the Opcity acquisition, including deferred compensation combined with continued reinvestment in product development. And on an adjusted basis, segment EBITDA grew 12%.

I would now like to mention a few things for the fiscal third quarter. At News and Information Services, we expect higher cost at Dow Jones in the third quarter to drive execution growth initiatives, including expansion into live events. In addition, we expect continued challenges at News America Marketing, mostly related to the FSI advertising. We will continue to seek cost efficiency to streamline the business.

In Subscription Video Services, similar to the second quarter, when comparing with the prior year, we will have additional costs related to cricket of US$25 million to US$30 million, an incremental marketing for Kayo Sports of US$10 million to US$15 million.

In Book Publishing, overall trends remain favorable and we are encouraged by our upcoming releases together with the ongoing strong performance of our backlist. Some key titles this quarter includes Girl, Stop Apologizing by Rachel Hollis, On the Come Up by Angie Thomas and We Are the Gardeners by Joanna Gaines.

At Digital Real Estate Services, similar to Q2, we expect continued reinvestment to drive revenue growth at realtor.com and Opcity, including high marketing and product development.

With that, let me hand it over to the operator for Q&A.

[Operator]

[Operator Instructions] We will take our first question from Alexia Quadrani with JPMorgan. Your line is open.

[Unidentified Analyst]

Hi, this is [indiscernible] for Alexia. Thank you for taking our question. And just New York Times reported another strong quarter of digital subscriber growth yesterday. And from your numbers, The Wall Street Journal is also growing really nicely. Do you believe that longer-term, both The Wall Street Journal and New York Times can grow at this pace? And that – is there room for two meaningful paid digital properties longer-term?

[Robert Thomson, Chief Executive]

Well, listen, I can’t speak for the New York Times. In fact, I can speak for the prime meaningful newspaper, which is, of course, The Wall Street Journal. At Dow Jones, the subscription business is performing well and obviously, has much potential for growth. And if you look closely, you’ll see the wsj.com, circulation revenues were up 15%. That’s not crosswords or couscous recipes, not – low rent up is we’re seeing elsewhere in the sector.

As for professional content in a clustered world, companies want to incorporate Dow Jones content network and that is happening at pace. To be honest, advertising needed work. We have a new ad team at Dow Jones and that team is certainly making a positive difference. Digital ads at Dow Jones were up 15%. And as for risk and compliance, the fastest growing business at Dow Jones, if any of you out there want to minimize risk and maximize compliance, then you simply must have a Dow Jones contract. If not, feel free when the regulator comes out knocking.

[Michael Florin]

Aaron, we’ll…

[Unidentified Analyst]

All right. Thank you very much.

[Michael Florin]

Thanks. Aaron, we’ll take our next question, please.

[Operator]

Certainly. And the next question comes from Entcho Raykovski with Credit Suisse. Your line is open.

[Entcho Raykovski, Credit Suisse]

Hi, Robert. Hi, Susan. My question is around Subscription Video Services and particularly Kayo Sports given you’ve launched over the quarter, very useful that you provided us some stats around the subscribers. Just interesting whether you expect the sort of right of net adds to continue over the next couple of quarters? And where do you view the addressable market to be suffering, just interestingly high-level thoughts there?

And then more broadly, if we’re looking at the churn rate we just stepped up and I pointed to the higher pricing, but do you think there’s a level of cannibalization taking place as well, given you’ve watched Kayo? Thank you.

[Robert Thomson, Chief Executive]

Entcho, Kayo was in the early innings. In cricket, I would say, it was in the first of four innings or in baseball the second of nine innings. One can definitively say is that, we have 115,000 customers, around 100,000 paying and that number has indeed been rising week after week in two months since we launched.

And indeed, we are on the cusp of the peak sports selling season, which is Aussie Rules and Rugby League, as you know. It is beyond clear that sports events are crucially important in an age of confected, concocted content. And we have the events that matter in Australia for the next four or so years. That’s an incontrovertible fact and an extraordinary asset.

So you can be in platform agnostic, but you can’t be content ideastick [ph]. Of course, there is more churn when you increase prices, as we did late last year. But what we’re absolutely not seeing is massive spin down to Kayo from premium subscribers. The fact is that the earlier versions of the IQ Box were inadequate, and the current version is much more sophisticated and satisfying. The iQ4 really does go to show that the higher the iQ, the better.

[Susan Panuccio, Chief Financial Officer]

I think, Entcho, I’d also add. Just in relation to your question on the addressable market, obviously, our penetration has been sort of sub-30% for some years and there’s old past audience out there within Australia, the other 70% that we haven’t managed to reach that our research has been very clear are open to paying for proposition if it’s at the right price point. So that would be the addressable market that we’re having a look at.

And just in relation to churn, I did mention it in the release. But the team in Australia are very focused on churn management and they are – and we are investing a lot of money in data capabilities in order to effectively manage that churn going forward. And as Robert said, we really have seen very little spin down as a consequence of Kayo, but it is early days and we will continue to focus on that metric as we move forward.

[Michael Florin]

Thank you, Entcho. Aaron, we’ll take our next question, please.

[Operator]

Certainly. Our next question comes from Kane Hannan with Goldman Sachs. Your line is now open.

[Kane Hannan, Goldman Sachs]

Good morning, Robert and Susan. Just be [indiscernible] that comment made around Tracey and taking new opportunities following that appointment. Could you just elaborate on what you meant by that comment? And then just a couple of brief comments around the only traction of the opportunity model and what you’re seeing on the ground following that completion?

[Robert Thomson, Chief Executive]

Well, Tracey has just settled into the job and it’s a task obviously to increase the corporation among our various properties around the world, and that will be the first priority. Beyond that one, of course, can’t speculate. It’s interesting, the U.S. real estate market is a tad sluggish. And obviously, listings are down in Australia and yet digital property revenue growth remains real.

You could indeed say that these are testing times and model and investment is definitely passing that test. And it shows the value of the Opcity purchase, because we’re providing a higher level of market intelligence and analysis and value-added services, in the case of Opcity. And that is appreciated by our clients who know that there are both quantity leads and quality leads and quality leads mean revenue for our customers.

[Susan Panuccio, Chief Financial Officer]

And I think, Kane, just to add on the Opcity, sort of the way that we look at this is the conversion of the leads into revenue will continually evolve as we move forward and we reported best-in-class [indiscernible] company, which will enable realtor to better monetize their leads by offering higher quality leads that will enable a better closed rate for the agents, which will provide higher revenue.

It also gives us access to high-quality data as a consequence of bedding the leads, which we can use to branch out into other adjacencies be it mortgage type of insurance, moving, et cetera, which is what we’re currently looking at building out now. So I think the combination of those comments is what we think will drive the results with the Opcity and realtor.

[Michael Florin]

Thank you, Kane. Aaron, we’ll take our next question, please.

[Operator]

Certainly. Our next question comes from Craig Huber with Huber Research. Your line is now open.

[Craig Huber, Huber Research Partners]

Great. Thank you. I have some quick housekeeping questions. What should we expect for CapEx for Foxtel for the full fiscal year and also for the entire company? And also curious if you could just tell us how the circulation of revenues did with or without currency in the UK and Australia in the quarter?

And my last one, if I could, give a comment on how you think the Australian economy is doing, given all your media assets down there? Do you think it’s about stable, or you think it’s getting worse, [indiscernible] I’m asking? Thank you.

[Susan Panuccio, Chief Financial Officer]

So just in relation to your first question on CapEx, I think, we’ve given guidance on this before. So $285 million was the number for last year, U.S. dollars that we quoted for Foxtel and we’re expecting it to be $15 million higher. We haven’t changed our expectations in relation to that, but obviously we continue to monitor that CapEx as we progress through the year.

I think, your next question was in relation to circulation in local currency. So I think, from a Dow Jones perspective, circulation revenues were up 7%; from News UK, circulation revenues were down 1%; and News Australia, circulation revenues were up 3%. [What was the third part in your question?] [ph]

[Craig Huber, Huber Research Partners]

Yes, CapEx for the whole company, please, and also Australian economy comment?

[Susan Panuccio, Chief Financial Officer]

We haven’t given that out before, Craig. But what I can say is, we’re broadly expecting it, excluding Subscription Video Services to be roughly in line with last year.

[Robert Thomson, Chief Executive]

Craig, for the macro economics, it’s obviously a little difficult to tell, there are two events upcoming as state election in New South Wales and federal election locked [ph] to be held in May in Australia. Both of those events could have some impact on business activity. But the underlying macro trends in Australia are positive. There has been something of the decline in the housing market.

But that – in some respects, welcome, because it means that the rapid increases in property prices, which many analysts were unsustainable have indeed come to an end. And as in many countries, ensuring that there is enough excessively priced property is not just an economic issue, but a political issue, and one which is generating a lot of debate.

So that trend of itself is efficacious. And News Australia and the team, led by Mike Miller, is performing very well. EBITDA is growing, the digital transformation of the company is continuing at pace and we’re particularly optimistic about the potential for the business.

[Michael Florin]

Thank you, Craig. Aaron, we’ll take our next question, please.

[Operator]

Certainly. And our next question comes from Brian Han with Morningstar. Your line is open.

[Brian Han, Morningstar Inc.]

Hypothetically, if you had strong buyer interest for Wall Street Journal, is that a master that you and the Board would consider selling or is the journal an absolutely integral part of your digitization strategy across the Board?

[Robert Thomson, Chief Executive]

Hypothetically, you shouldn’t answer hypothetical questions. But The Wall Street Journal not only is a powerful platform for us. That the network effect that you have, for example, and the relationship between realtor and The Wall Street Journal, the ability to cross promote for us increasingly to get sophisticated permission data on those platforms and right around to HarperCollins and the New York Post Digital Network. It is truly more than some of the pause at the very center, but is The Wall Street Journal.

[Brian Han, Morningstar Inc.]

Okay.

[Michael Florin]

Thank you. Aaron, we’ll take our next question, please.

[Operator]

At this time, there are no additional questions. I’d like to turn the program back over to the presenters for any additional comments.

[Michael Florin]

Great. Aaron, thank you very much. Thank you all for participating. And have a great day, and we’ll talk to you soon. Take care.

[Operator]

Thank you for your participation. This does conclude today’s program. You may disconnect at any time.