Outbrain Inc

NASDAQ:OB

Earnings Call Transcript 2024-Q1

[Operator]

Good day, and welcome to Outbrain Incorporated First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.I'd like to turn the call over to Outbrain's Investor Relations. Please go ahead.

[Unknown Executive]

Good morning, and thank you for joining us on today's conference call to discuss Outbrain's first quarter 2024 results. Joining me on the call today, we have Outbrain's CEO, David Kostman; and CFO, Jason Kiviat. During this conference call, management will make forward-looking statements based on current expectations and assumptions.These statements are subject to risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. These risk factors are discussed in detail in our Form 10-K filed for the year ended December 31, 2023, and updated in our subsequent reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the call's original date and we do not undertake any duty to update any such statements.Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's first quarter earnings release for definitional information and reconciliations of non-GAAP measures to the comparable GAAP financial measures. Our earnings release can be found on our IR website, investors.outbrain.com under News&Events.With that, let me turn the call over to David.

[David Kostman, executive]

Thank you, [ Laine ]. Good morning, everyone, and thank you for joining us today for our first quarter 2024 earnings call. I'm pleased to share with you our progress and achievements over the past quarter as well as our strategic direction moving forward.On the financial front, I am pleased that we delivered Ex-TAC gross profit of $52.2 million towards the high end of our guidance and that we exceeded our adjusted EBITDA guidance, reporting $1.4 million. We generated positive free cash flow of $4.6 million.Strategically, Outbrain is on a journey to become one of the largest gateways to the Open Internet for advertisers. We believe we are uniquely positioned on the Open Internet to offer a cross funnel platform that enables advertisers to build their brands, drive consideration and deliver conversions. The Open Internet is estimated to be a $100 billion advertising opportunity, providing advertisers with access to incremental audiences across highly relevant, professionally produced editorial contents.As we look to the future, we believe the industry's focus on consumer privacy, premium quality, transparency and outcomes aligns favorably with our strengths. Now more than ever, we are seeing all buyer types, from brands to performance, focused on measurable outcomes. We believe that we possess a competitive edge in driving these outcomes from relevant audiences. Despite Google's announcement to further delay third party cookie deprecation on Chrome, we believe advertisers remain focused on finding more advanced solutions to drive brand outcomes from relevant audiences. Our foundational code on page and engagement data signals continued to enable us to leverage our proprietary data and AI to innovate these solutions for advertisers.Next, I want to provide a quick update on how we're progressing on our growth drivers for 2024. As you may recall from our last call, these revolve around 3 key pillars. Our first pillar focuses on expanding our share of wallet with advertisers, brands and agencies and performance advertisers.First, our business with brands and agencies. In Q1, overall direct spend from our brand and agency clients was over $100 million globally. This number represents spend from direct advertisers of all sizes, from mid-market to enterprise brands and independent agencies to holding companies. We are seeing good progress with Onyx, our brand building offering focused on enterprise clients, with revenues in Q1 exceeding $7 million. We launched Onyx in the Japanese market in Q1, which we believe represents a strong agency growth opportunity and plan to make Onyx available in additional markets in Q2.Speaking of Onyx, I'm excited to share the success story of one of our most recent enterprise clients, Leica. Leica chose to partner with Onyx for the launch of the new home cinema. Leica leveraged the Onyx brand studio to create a custom, high impact format that enabled audiences to experience the immersive moments of the Leica home cinema. Onyx enabled Leica to outperform attention benchmarks by 65% and sparked 550,000 audience interactions. This case study exemplifies Onyx's ability to deliver beautiful brand experiences that deliver measurable outcomes.In addition, we announced Onyx's partnership with Scope3, enabling us to launch OnyxGreen in early April. OnyxGreen provides buyers with access to curated deals that reduce carbon emissions by up to 30% compared to open exchange video and display. As we said in the past, we are focused and will continue to invest in this flywheel of demand and supply. Premium global publishers, like the ones on the Outbrain platform, are looking for better quality advertising, and brand advertisers are attracted to our premium publisher base for the cross funnel objectives.The second pillar, growing our share of wallet from advertisers across our core performance offerings. We are invested in enabling growth of large scale advertisers on our performance DSP Zemanta. As part of those efforts, we saw increased total spend to Zemanta by approximately 40% in Q1 2024 compared to Q1 of last year. We look forward to leveraging our DSP as a strategic enabler for savvy clients to drive strong performance across the Open Internet. In addition, our ad manager, Amplify, remains our core offering for advertisers of all sizes to drive scalable performance. Our focus has been on enabling greater automation of workloads and bidding strategies through AI.Growth in adoption of our AI creative tools nearly doubled from Q4 2023 to Q1, with 14% of our customers utilizing creative AI tools. This suite of tools empowers our teams to deliver innovative creative solutions that enable advertisers of all sizes to scale. AI also sits at the core of our prediction engine and corresponding automated bidding technology. Continued investment in the performance of this technology has led to high adoption, with 89% of advertiser spend now leveraging one of our automated bidding logs.Moving on to our next pillar, we've continued to expand our supply footprint, enabling advertisers to reach consumers across the entirety of the Open Internet. We've accelerated the expansion of partnerships beyond our core publisher inventory, which drove over 25% of total advertiser spend in Q1 on our platform. Bringing our prediction technology and performance capabilities beyond traditional web publishing is a major focus in 2024 that we believe will enable advertisers to reach wider audiences across diverse media types.The next pillar focuses on growing our differentiated premium publisher partnerships. Publisher logo retention remains strong in Q1 at 98%. This achievement reflects the enduring nature of our publisher partnerships, which remain core to our future success. Exclusive colon page inventory continues to be a differentiator for our demand business, both through access to proprietary supply and corresponding page level and engagement data. We are focused on expanding the breadth of services we offer to these premium publishers in an effort to expand monetization opportunities and access viewable brand suitable placements.Our premium publisher base is also continuing to expand. In Q1, we added new supply partnerships, including News Corp Australia and Webedia Spain, both of them moving from a competitor. In addition, we signed the Telegraph, which is working with us on the Keystone platform, showcasing Keystone's ability to bring incremental partnerships and margin opportunities to our portfolio.On the AI front, in addition to our AI efforts on the product side, our team has also been exploring the use of AI to drive business efficiency and operational effectiveness, seeing real success thus far. We've been able to automate the handling and resolution of 40% of account management support cases with our small and medium publisher team by leveraging AI and robotics process automation. We've applied the same approach to our demand operation team support cases and plan to expand the capabilities to more teams.In conclusion, our first quarter results underscore our commitment to broadening our relevance to more advertiser segments, with the objective of becoming one of the leading gateways to the Open Internet. We are confident that with continued execution on our growth drivers, we will be able to deliver on the growth and profitability targets for this year and 2025.With that, I'll turn it over to Jason to cover the financials.

[Jason Kiviat, executive]

Thanks, David. As David mentioned, we achieved our Q1 guidance for Ex-TAC gross profit and exceeded our Q1 guidance for adjusted EBITDA. Revenue in Q1 was approximately $217 million, reflecting a decrease of 6% year-over-year. New media partners in the quarter contributed 5 percentage points or approximately $11 million of revenue growth year-over-year. Net revenue retention of our publishers was 89%, which reflects the continued headwind from the impact of the demand environment on pricing, which remains the consistent factor driving pressure on our revenue and on our net revenue retention.I'll touch on the demand trends in a moment. As noted in the prior quarter, we also experienced a decline year-over-year on ad impressions, contributing to the retention being below 100%. Again, this was driven largely by page view volatility from certain supply sources as opposed to churn. Consistent with recent quarters, churn has remained at similarly low levels with logo retention of 98% for all partners that generated at least $10,000, and our 5 largest churns amounted to only 2 combined points of year-over-year headwind on NRR in Q1.Turning to advertising demand. Following a seasonal step down in January, CPC remained fairly stable throughout February and March, but remains down significantly versus the prior year. Despite the lower pricing, we experienced RPM or yield growth for the second consecutive quarter, thanks to the ongoing click-through rate expansion, which continues to exceed our previous highs. Ex-TAC gross profit was $52.2 million, flat year-over-year, outpacing revenue growth for the fourth quarter in a row, driven primarily by improved yield performance on certain media partners and the net impact of revenue mix.As noted previously, the investment areas we are focused on are largely areas that we expect will drive a higher Ex-TAC take rate. We experienced supply volatility from a key partner, which negatively impacted year-over-year Ex-TAC gross profit by mid to high single-digit percentage. Our Ex-TAC would have grown year-over-year by this percentage, excluding this one key partner. This impact was primarily a result of this partner's transitioning from their legacy bidding platform.Our tech migration to the new platform was completed last week. However, the optimization and rescaling of our demand is ongoing. And while we see an impact in Q2 results more than we anticipated, we expect to see sequential growth over the coming months.Moving to expenses. Operating expenses decreased by approximately 5% year-over-year to $48.2 million in the quarter as we continue to balance investments in our strategic priorities with continued cost discipline.We began 2024 with a headcount of approximately 870 FTEs, which is down 11% from January 2023 as we have focused our attention on driving greater efficiencies in our operations and, now, on redeploying resources towards higher confidence growth areas. The decline year-over-year was partially offset by a prior year onetime benefit around variable compensations that did not repeat in the current year. Of note, we saw reduced bad debt expenses in Q1, down nearly $1 million year-over-year as we continue to focus on collection efforts and we expect to see lower levels over the remainder of the year. As a result, we doubled our adjusted EBITDA year-over-year to $1.4 million.Moving to liquidity. Free cash flow, which, as a reminder, we define as cash from operating activities less CapEx and capitalized software costs was approximately $5 million in the first quarter. This was driven largely by working capital benefits coming from seasonality, timing of payables around period end and focused improvements in DSO. As a result, we ended the quarter with $232 million of cash, cash equivalents and investments in marketable securities on the balance sheet and $118 million of long-term convertible debt.In December 2022, the company's Board of Directors authorized a $30 million share repurchase program. And in 2023, we purchased approximately 3.7 million shares for $17.8 million. We continued share repurchases in 2024. In Q1, we repurchased approximately 1 million shares for $3.9 million. So as of March 31, we have $8.6 million remaining under our current authorization, and we continue to believe it is an attractive way to enhance shareholder value under current market conditions.Now turning to our outlook. In our guidance, we assume that current macro conditions persist with no material deterioration or improvement, regular seasonality, and as noted in the prior quarter, continued execution of our growth drivers. Additionally, to add color, we expect to start to lap a softer comparison period as the year progresses in H2 and particularly in Q4.With that context, we have provided the following guidance. For Q2, we expect Ex-TAC gross profit of $53 million to $57 million, and we expect adjusted EBITDA of $1 million to $4 million. We maintain our previous full year 2024 guidance provided at the beginning of the year of $238 million to $248 million of Ex-TAC gross profit and $30 million to $35 million of adjusted EBITDA.Now I'll turn it back to the operator for Q&A.

[Operator]

[Operator Instructions] And we'll take our first question from Andrew Boone from JMP Securities.

[Andrew Boone, analyst]

Dickey, I have a big picture question and then Jason will go a little bit more tactical for the second. But Dickey, can you just talk about the key growth drivers in terms of returning revenue to growth for Outbrain? What do you view as kind of the key 1, 2, 3 things that you guys can do to drive better top line growth? And then, Jason, tactically on take rates, how should we be thinking about that for the remainder of the year? And can you talk about the drivers that you saw in 1Q?

[David Kostman, executive]

So I think the biggest growth driver if I had to rank them is really our move to full funnel. I think this is very unique in terms of participation on the Open Internet, and we have a unique opportunity here to link brand and performance and to offer advertisers a full funnel solution on the Open Internet. The opportunity is very large. It requires formats like video and high-impact display. It requires you to have placements on site. So we're very confident that that's a great opportunity for us and pretty unique in terms of the ability to combine upper funnel, mid funnel and lower funnel.And the second one is just growing our share of wallet with advertisers, including our performance advertiser, which is the biggest base of our advertisers. So we're investing a lot in 2 directions there. One is moving some of those large advertisers to Zemanta or DSP platform that delivers performance across the entire Open Internet, not just on our publisher base. And continuously improving Amplify, which is our own direct access platform. We've seen record CTRs in the last couple of quarters. So we feel very good about the ability to drive growth there. So I think these are the 2 main ones.

[Jason Kiviat, executive]

Andrew, it's Jason for the second question. So yes, the take rates have been up a few quarters in a row, I mentioned about 1.5 points year-over-year this quarter in Q1. Less about new -- part of it is obviously mix and some of that new deals or just different weighting of deals. Of course, mix kind of works both ways. But really, the optimization and performance is something that we're just always working on.I mean David included it in his third pillar of growth, which is improving yields, improving click-through rates and optimizations to drive better performance. We added a ton of supply a couple of years ago, and we kind of preached we are -- we see ourselves as a land and expand trade. We see our AI learning the users and ourselves learning the users and driving better performance in time. And that's certainly part of what's happening here.And beyond that and going forward, we are focused on areas of these investments that we see as all things that should drive higher take rates. So whether it's supply beyond the feed, where we think we have -- our bidding technology can help us drive higher take rates. And Onyx and video, these tend to drive higher take rates. Additional margin opportunities from getting more share of wallet through our DSP. And of course, more optimization of yields, right? So they are all things that we're focused on, kind of a more efficient growth. And so that's what we expect going forward.

[Operator]

And we'll take our next question from Laura Martin from Needham.

[Laura Martin, analyst]

So I have 3. One is Outbrain has traditionally been a performance-oriented ad tech company. But what we're seeing in connected television is that with the rise of RMNs, they're closing the loop and they're making CTV more performance-oriented. And it feels like that segment is growing the fastest, CTV. So I'm wondering if you think the competitive landscape is worsening for your piece of the market, which is performance, as connected television does more performance-oriented tasks.My second one is that in your commentary, you said that you are adding supply that is nontraditional. I'm interested in learning more about that. What kind of supply that's nontraditional are you adding? And then third, when you mentioned cookies, I would have guessed that you don't actually have a lot of cookies risk because you have an end-to-end platform. Could you just remind us in the first quarter, how much of your ad placement was targeted by using cookies?

[David Kostman, executive]

So I'll take the first one on CTV. We are today a relatively small player, but if you recall, we made an acquisition a couple of years ago of a company called video intelligence that has capabilities that have brought us into CTV. And we believe that video as a format is a very large opportunity. We've made that a position. We're seeing good growth in the deployment of BI players on our base of digital publishers. And we need to find a way to grow our CTV business, but we believe that definitely it's a combination also of branding and performance that we see there, and it is becoming a more significant share of market of performance advertisers. We believe we in the future need to find a way to play there in a bigger way.When you talk about nontraditional, it's what we call platforms. It's third-parties, it's gaming platform, it's news apps, it's lock screens and other such environments where users today consume content. So we're growing that. It's part of our strategy of becoming the gateway to the Open Internet, again, full funnel, brand building, consideration and performance, but also getting way beyond our publisher -- traditional publisher base. So that's one of our big efforts. It's -- today about 25% of our business is done outside of our traditional publisher base, which we think is an important lever for growth, again, leveraging the core capabilities we have on those premium publishers, which are anchored for those brands who want to spend. So we're not giving up on that. We're growing that. We mentioned News Corp Australia. But we're also expanding beyond that.And your last one on cookies. I mean, we said it from the beginning, we are based on contextually driven algos primarily. We have corresponded data on our publishers that we leverage. So we don't see a risk from the cookie application. On a relative basis on the Open Internet, we think we actually have a big advantage versus other companies that are very focused on retargeting, they need to track users across third-party sites. So for us, it's a relatively minimal impact on our algos when cookies go away. We tested it when Firefox deprecated it, and it had minimal impact.

[Operator]

And we'll take our next question from Zach Cummins from B. Riley.

[Zach Cummins, analyst]

Congrats on the strong start to the year. I really wanted to dig in a little bit more on Onyx. I appreciate the disclosure with the $7 million of revenue here in Q1. But can you just talk about which customer side is this really resonating with? And kind of what's the strategy to continue to drive adoption on that side since it appears to be a pretty meaningful growth driver in the overall scheme?

[David Kostman, executive]

So Onyx is targeting enterprise brands and agencies who are looking for -- to launch campaigns that build brands. So this is -- we've been very, very focused since our start on performance, but we see a huge opportunity to, a, leverage a lot of our prediction capabilities and our unique supply to drive much better value also for brand building campaigns. I mean there's a good positive trend on the Internet generally that also for brand building, advertisers are looking for measurable outcomes. We've been very focused on driving attention as the key metric and then leverage our heritage of predictions.This -- we launched it in the second half of last year. We had about $15 million in the second half of last year. We see good growth getting into Q1 and Q2 of this year. And we believe that this will also position us in a very unique way on the Open Internet, being able to provide the full cross funnel. If you think about -- just an example, take BMW. I mean, they could do with us a campaign that would promote a new engine with a super cool video. And then we, understanding the interaction of the user with that campaign, could drive performance or consideration of a new car, and then, on the bottom, really drive a lead to their dealership.So being able to combine that is pretty unique. And we're leveraging, a, our existing base of enterprise brands and advertisers to leverage them from driving performance also to brand building. And it's opening new doors for us at the holding companies and very large enterprise brands that have not worked with us before. So it's a great opportunity to really -- that's why we emphasize it as one of the most important growth drivers and uniquely positions us on the Open Internet.

[Zach Cummins, analyst]

Understood. That's helpful. And just one more financial-related question. In terms of the reaffirmed guidance that you've given this year, I mean, Jason, can you parse out how should we be thinking about just the expansion of the take rate versus overall growth in terms of gross revenue? And kind of what's the right way to think about seasonality and progression, especially into the second half of the year?

[Jason Kiviat, executive]

Yes, of course. So yes -- maybe just a reminder on our forecast methodology. So what we do is we take current trends that we're seeing kind of right up until the timing here, and we build seasonality on top of that based on our history that we know month-to-month and quarter-to-quarter what to expect over our 15-year history or so. Of course, later on, other known items or growth driver assumptions, et cetera. And it does come out altogether as a slightly higher percentage of Ex-TAC in H2 relative to H1.If you compare it to 2023, we're at 56% this year, which 53% was the actual of last year. And 56% -- we're using the midpoint of the guidance. And so maybe breaking that down to a couple of pieces, if you're using the midpoint of the guidance, close to half of that H2 growth is coming from easier comps. And what I mean by that is, last year Q4 -- and it really started with October and the attacks on October 7 and the onset of the war, we saw just a smaller increase from Q3 to Q4 as a whole than we historically have seen.We talked in prior quarters about the impact, obviously, on our local business in Israel, but also on our global business, where much of the page views of our largest partners were temporarily showing lots of news about the war, which were monetizing lower than they typically would due to brand safety concerns and things like that, right? So we did see a softer Q4 last year, which sets us up for a little bit of a bit easier comp this year.And the other thing is -- and I mentioned on the call about supply volatility from a key tech partner. We started to see changes from that partner over the course of '23, but really Q4 was the first meaningful period of impact. And so, again, as we kind of play out this year, we'll -- I mentioned on the call that we had a mid to high single-digit growth, excluding this one partner on Ex-TAC this year in Q1, and we expect similar in Q2. As we make our way into Q4, that year-over-year headwind subsides. And so, obviously, also expecting some modest sequential growth in the coming months. And that partner also aids it as well.And then the other things are just things that are in our model. Obviously, we talked about our growth drivers. Onyx is one where we expect it to be more seasonally Q4 focused than our core business has been historically. And then other things flowing through. Click-through rates we said and yield growth for the last 2 quarters continuing to flow through. We've seen strength in Europe, which we have flowing through. And then global events like the U.S. election, of course, will be a little bit of a lift in the second half of the year. So hope that helps.

[Zach Cummins, analyst]

And congrats again on solid results.

[Operator]

And we'll take our next question from Ygal Arounian from Citi.

[Unknown Analyst]

It's Max on for Ygal. Maybe first, if you could just give us some color on what you're seeing in the ad macro? It seems like we've seen a better start to 1Q. So I was just wondering what you're seeing there with ad budgets, maybe if there's any geographical or vertical strength and weaknesses to call out? And then maybe more like a capital allocation question, but you mentioned the $232 million of kind of cash and investments on the balance sheet. Just wondering how you guys think about the cash position. And understand you have the buyback authorization, but if there's anything else you guys are thinking about on how to deploy that capital, whether that's M&A or some other uses.

[Jason Kiviat, executive]

Sure. So maybe I'll start on the demand trends that we've seen. So it's been kind of more of the same. I'd say we haven't seen a material increase or decrease really for a couple of quarters now. We did drive yield or RPM growth year-over-year for the second quarter in a row. So there is some strength there. Now a lot of that is coming, as I said, from breaking our previous highs on click-through rates, which comes obviously from improvements in our tech and our ability to predict what to show to different users. And on the contrary, we've seen pricing or CPC remaining down year-over-year.So part of that is because we're optimizing not for pricing, but for yields. Obviously, that's what makes us and our partners money. And so driving higher click-through rates at the cost of pricing might be something that we're -- that's inherent in our model here. So it's hard to say that pricing down is a sign of anything deteriorating versus we're able to drive higher yields from it.And as far as geographically, in Europe, we've seen stronger trends, Spain, Italy and Germany. Germany is our second largest market, have been showing really positive metrics over Q1 into Q2 relative to U.S., which has been flatter. And then verticals, we don't really overly kind of rely on any verticals. I mean, just for color, we've seen strength in entertainment and health, while CPG, retail and tech probably have been weaker verticals for us. But again, not overly meaningful to our results those verticals.

[David Kostman, executive]

And maybe in terms of -- I'll take the other question. So we have a very strong balance sheet. We are continuously only looking to use some of this cash flow for acquisitions, and we think buyback is still an attractive opportunity. So we have an authorization. And we still have around, I think, $8 million on that authorization.

[Operator]

[Operator Instructions] And we'll take our next question from James Heaney from Jefferies.

[James Heaney, analyst]

So you saw 40% growth in ad spend on the Zemanta DSP. So curious if you could just talk about what's driving the success in that channel and also just how you're balancing spend coming from third-party DSPs?

[David Kostman, executive]

So I didn't get the second part, but I will start with the first one on Zemanta. It's really we are strategically shifting some -- certain types of performance advertisers that had very large elastic budgets into that platform. So to give you a numerical example. If they spend with Outbrain $100,000, now they will shift it to Zemanta. And they think they can also buy a lot of third-party supply as effectively and delivering ROAS. They will spend the same $100,000, hopefully, or close to that, on our brand, and will now spend a total of $150,000. We will also get a service fee on that like a DSP, and we would see increased and very effective spend and ROAS for that advertiser. So there are certain types of segments, it's very technical, that -- where the Zemanta platform fits better and delivers better ROAS. So we're shifting some of those. And that's been very successful for us and for these advertisers. And I think that's a great growth opportunity.James, can you repeat the second question on the DSP part?

[James Heaney, analyst]

Yes. Yes. Sorry. The second part of the question was just about just overall trends that you're seeing from spend that's coming from third-party DSPs.

[David Kostman, executive]

Okay. So we see, I mean, on the brand side of the business good spend on that from our programmatic partners. It's about -- it's -- a little less than 20% of our total business comes from DSPs into our network, but we've seen stable positive trends overall.

[James Heaney, analyst]

Great. And then maybe if I could just ask one more quick question on -- you talked about your AI creative tool that you're giving customers. Just any sense for what some of these tools are? And then just any case studies of clients seeing success or improved return on investment from implementing these tools?

[David Kostman, executive]

The use of this tool is very exciting when you see -- it allows customers to much faster test with different types of images and text and in real time understand what's working, what's not working on which placements and iterate on it in a way that -- prior would require a lot of manual intervention. So I think the models are learning it and automatically updating. It allows you to test thousands of variations, which you couldn't do before. We've seen increased adoption of it.And right now, it's still early. We're measuring ROAS. It's definitely improving the ROAS for advertise because it optimizes their campaigns. We see -- right now, we're really focused on adoption and working and analyzing that. So again, that's -- we mentioned it on the call. It's -- a big part of our investments generally are now on AI, on text and images and also on internal tools, leveraging AI to optimize our business.

[Operator]

And that concludes our question-and-answer session. I'd like to turn the floor back to management for closing remarks.

[David Kostman, executive]

Thank you very much, everyone, for attending the call today. We are very excited about the growth opportunities we highlighted today. We think the Open Internet is a great opportunity. Being a player that can provide the full funnel solution is where we're very, very focused on, again, driving brand building, consideration and performance. And look forward to updating you on our progress on our next call.

[Operator]

Thank you. Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time, and have a great day.