Paylocity Holding Corp
NASDAQ:PCTY
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Paylocity Holding Corp
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Ladies and gentlemen, thank you for standing by. And welcome to the Paylocity Holding Corporation Third Quarter 2020 Fiscal Year Results. [Operator Instructions]
I would now like to hand the conference over to your speaker, Ryan Glenn. Please go ahead.
Good afternoon. And welcome to Paylocity's earnings results call for the third quarter of fiscal year 2020, which ended on March 31, 2020. I'm Ryan Glenn, Vice President of FP&A and Investor Relations. And joining me on the call today is Steve Beauchamp, CEO of Paylocity; and Toby Williams, CFO of Paylocity.
Today, we will be discussing the results announced in our press release issued after the market closed. A webcast replay of this call will be available for the next 45 days on our website under the Investor Relations tab.
Before beginning, we must caution you that today's remarks, including statements made during the question-and-answer session, contain forward-looking statements. These statements are subject to numerous important factors, risks and uncertainties, which could cause actual results to differ from the results implied by these or other forward-looking statements. Also, these statements are based solely on the present information and are subject to risks and uncertainties that can cause actual results to differ materially from those projected in the forward-looking statements. For additional information, please refer to our filings with the Securities and Exchange Commission for the risk factors contained therein and other disclosures. We do not undertake any duty to update any forward-looking statements.
Also, during the course of today's call, we will refer to certain non-GAAP financial measures. We believe that non-GAAP measures are more representative of how we internally measure the business, and there is a reconciliation scheduled detailing these results currently available in our press release, which is located on our website at paylocity.com under the Investor Relations tab and filed with the Securities and Exchange Commission. Please note that we are unable to reconcile any forward-looking non-GAAP financial measures to their directly comparable GAAP financial measures because the information which is needed to complete a reconciliation is unavailable at this time without unreasonable effort.
In regards for our upcoming conference schedule, we will virtually attend the Needham Tech and Media Conference on May 19, Baird's Global Consumer Technology & Services Conference on June 2 and William Blair's Growth Stock Conference on June 10. Please let me know if you'd like to schedule time with us at any of these events.
With that, let me turn the call over to Steve.
Thank you, Ryan. And thanks to all of you for joining us on our third quarter fiscal '20 earnings call.
Before discussing our results, I want to first comment on the evolving situation around COVID-19. Our #1 priority has been ensuring the safety and health of our employees while also providing world-class service to our more than 20,000 clients. I'm pleased to report that we successfully transitioned nearly all of our employees to work from home in mid-March, and all of our business functions remain fully operational with no disruption to our clients. We have also been heavily focused on serving our clients in this challenging time.
Our teams quickly mobilized to digest the new legislation, including the CARES Act and the FFCRA legislations, add functionality to our systems to address these legislative changes in an automated fashion and proactively communicate to clients and prospects the impacts of these changes. We have seen an increase in interactions with our clients over the past 45 days as they look for support and assistance through the crisis, and I've been very pleased with our ability to maintain our service levels. Our service team has done a fantastic job of supporting our clients through this challenging environment, including helping them navigate the significant legislative changes. We believe we were first to market with both comprehensive communications around the new legislation and the incorporation of these regulatory changes in our systems, including Paycheck Protection reporting, higher levels of automation around paid sick leaves and extended family leave and employee retention credit functionality. In addition, our teams leveraged our learning management system to quickly develop and launch training sessions, including hosting a webinar on the CARES Act that garnered over 10,000 attendees.
Specific to our Q3 results, COVID-19 had a minimal impact on our financial results, which were highlighted by accelerating recurring and other revenue growth of 25.3%. Despite interest rate headwinds in the quarter, the strong performance of our sales team allowed us to exceed the midpoint of our revenue guidance by $2.6 million while also delivering recurring and other revenue growth north of 25% through the first 9 months of fiscal '20.
Consistent with the commentary we provided on our February earnings call, our sales team continued to perform at a high level with sales through March up nearly 40% over the same period last year. Additionally, April bookings were nearly double April 2019, and our sales team continues to win deals even now as we are coming through state shutdowns. That said, in April, we started to see a higher-than-normal rate of implementations pushing out to future months as a subset of clients and implementation focused on more immediate personal and professional challenges given the current environment.
In terms of where we are winning, we continue to see unit strength coming from clients with under 50 employees as well as healthy momentum in the core and upper end of our market. Channel referrals once again represented more than 25% of new business for the third quarter. While we don't know how long the COVID-19 environment will last, we do believe that in a post-COVID-19 environment, we will be well positioned to regain the sales momentum we've seen in the first 9 months of fiscal '20.
Adjusted EBITDA for the third quarter was $68.2 million or 39.8% margin and $3.9 million ahead of guidance as we continue to drive leverage in an adjusted gross margin and G&A while investing in R&D and sales and marketing to drive growth. Our sustained investment in product development continues to pay dividends in the marketplace with our product suite being a key differentiator versus our competition.
Additionally, in March, we launched a new website and a company rebrand under the tagline, Forward Together. Our rebranding efforts placed an increased emphasis on fostering a culture deeply invested in our client success and the technology they need to achieve it. This focus on product development, coupled with providing technology that helps our clients achieve their goals, continues to be confirmed by third-party research. Paylocity earned multiple spots on G2's Best Software Companies of 2020 report, including a top 10 ranking in the Best Products for HR, Top 50 products for Mid-market, Highest Satisfaction Products and Best Software Product categories.
We also continue to be pleased with the client adoption and use of both our Community and LMS products, which we believe are even more valuable to clients and their employees in the current environment where communication is more important than ever and more challenging than ever. To deepen our strength in video communication capabilities, in early April, we announced the acquisition of VidGrid, a leading video platform provider that enables peer-to-peer video learning courses. Paylocity has partnered with VidGrid for several years to deliver a video-enabled learning management system to our clients. And over this time, we've seen success with our LMS solution due to the growing demand for video communication from our clients. We believe video will play a critical role in transforming workplace communication, and we see an opportunity to leverage VidGrid's video capabilities more broadly throughout our HCM product suite.
We also continue to receive strong feedback on Community with client usage up significantly during the month of March and April as clients continue to develop use cases for increased communication and messaging in the current environment. Internally, we rely heavily on Community during the COVID-19 pandemic as we've provided real-time updates to our employees, including video messages from our leaders.
This has been an exceptionally busy time and a challenging time on many levels for our clients and our employees. I want to thank all of our employees for their hard work and dedication in helping our clients through this crisis. I would also like to thank our clients for their perseverance through this difficult time. We are here to help.
I would now like to pass the call to Toby to review the quarter's results in detail and provide guidance.
Thanks, Steve.
Total revenue for Q3 was $171.6 million, an increase of 22.9% with recurring and other revenues up 25.3% from the same period last year. As Steve noted, our sales team had another strong quarter, and we're pleased with the consistency of our performance, specifically the growth we're seeing in recurring and other revenues through the first 9 months of this year offsetting some of the headwind of 5 interest rate cuts since July.
Our adjusted gross profit was 75.7% for Q3, up 20 basis points from Q3 fiscal '19. We continue to make significant investments in research and development. And to understand our overall investment in R&D, it is important to combine both what we expense and what we capitalize. On a combined non-GAAP basis, total R&D investments were 12.1% of revenue in Q3 and on a dollar basis, our year-over-year investment in total R&D increased by 24.6%. On a non-GAAP basis, sales and marketing expenses were 20% of revenue in Q3. On a non-GAAP basis, G&A costs were 10.7% of revenue in Q3 versus 12.5% in Q3 of last fiscal year, a 180 basis point improvement. And we remain focused on consistently leveraging our G&A expenses on an annual basis. Adjusted EBITDA for the third quarter was $68.2 million or 39.8% margin, 50 basis points over Q3 fiscal '19 and $3.9 million ahead of guidance.
Covering our GAAP results for the quarter. Gross profit was $123.6 million, operating income was $47.7 million and net income was $40.1 million. Our cash flow generation remained strong year-to-date, and we generated $86.7 million in cash from operating activities through the first 9 months of fiscal '20.
In regard to the balance sheet, we ended the quarter in a strong position with cash, cash equivalents and invested corporate cash of $187 million. Additionally, we drew down $100 million from our revolving credit facility in early April, purely out of an abundance of caution given the uncertainty we've all experienced.
Before providing our Q4 and updated fiscal '20 guidance, we'd like to provide some color on the current operating environment across sales, implementation, retention and employee count. While we cannot predict the depth and duration of the COVID-19-related economic environment or the flow-through impact to our business, we have seen headwinds in Q4 from COVID-19 that will impact our business for a period of time. On sales, while our sales team experienced great momentum in the first 9 months of fiscal '20 and their activity remains strong as they continue to engage with prospects via video and phone, the pace of our new client start activity is lower so far in Q4 than the year-to-date Q3 trajectory.
Through Q3, revenue retention remained strong and consistent with historic levels at 92% plus. And while we have not yet seen a significant increase in client losses through April, there is clearly a heightened risk of clients going out of business in the current environment. We have seen a significant number of clients utilizing our system reporting built for the Paycheck Protection Program loan application process, though we don't have visibility into how many actually received the PPP loans.
In April, we also began to see a reduction in active employees per client despite seeing positive employee per client counts across our base through March. Going forward, we anticipate the changes in client employees on our platform and the related revenue headwinds will trend directionally with the unemployment rate.
In regards to client-held funds and interest income, our average daily balance of client funds in Q3 was $1.6 billion. We are estimating the average daily balance will be approximately $1.3 billion in Q4, and we assume an average yield in the quarter of 10 to 15 basis points. We expect the 150 basis point interest rate reductions that occurred in March to impact Q4 interest income on client-held funds by approximately $4.5 million compared to Q4 fiscal '19.
Finally, I'd like to provide our guidance for Q4 in fiscal '20, which incorporates known and some estimated impacts related to COVID-19. For the fourth quarter of fiscal '20, total revenue is expected to be in the range of $121 million to $131 million or approximately 5% growth at the midpoint over fourth quarter of fiscal '19 total revenue. And adjusted EBITDA is expected to be in the range of $14 million to $22 million. And for fiscal year '20, total revenue is expected to be in the range of $551.7 million to $561.7 million or approximately 19% growth at the midpoint over fiscal '19 total revenue. And adjusted EBITDA is expected to be in the range of $143 million to $151 million.
Operator, we're now ready for questions. Thank you.
[Operator Instructions] Our first question comes from Drew Kootman with Cantor Fitzgerald.
I was hoping you could talk about maybe the playbook from '08, '09 and what's different now, what you can use, what you can't use, anything along those lines?
Sure. So I think, obviously, this is a very different crisis affecting us in different ways. It's much more sudden than even what we saw in '08 and '09. And so I think one of the big challenges is our ability to be able to make sure that we can be there for our clients during heightened level of activity, a lot of legislation changes that's very different than '08 and '09. Just in terms of that level of activity, it's almost like a second year-end for our service teams in terms of the interactions with our clients.
I think second part of this is just the suddenness of what we're experiencing. As you look at the employment levels across the country as a whole, you understand that we've got a lot of employees on our platform and clients that are also affected that way. So directionally, you see that's incorporated into our guidance, that we're certainly forecasting lower employment levels as you see in the unemployment numbers.
I got it. And then maybe you could touch on -- I know you guys tend to be in the smaller employee space. And maybe just how many would be at risk for potentially going out of business or at least taking a while before they recover?
Sure. So our target market has largely been, for most of our history, kind of 20 to 1000 employees where our average-sized customer is more than 100 employees. So we're not in that micro start-up, small business space. And as a result, we have not seen a lot of our -- very many customers at all come to us and say, I'm shutting down. They may temporarily suspend operations, and we'll have to wait to see as those states open up if they're able to continue to reopen. But at this point in time, we've not seen any impact to our losses.
And our next question comes from Siti Panigrahi with Mizuho.
This is actually Michael on for Siti. On the same note for retention, do you guys count furlough? Are you guys charging for furloughed employees? Or how do you guys charge in terms of recognizing revenue share pay grade?
Yes. So it does vary. It depends on the product bundles that we've got and the -- we do change pricing over time. And reacting to the marketplace, we bundle and package it to make it efficient and easy for our clients to buy. I think the way to think about revenue tied to number of employees is very much in the same direction as employment. So as you see unemployment rising, then the number of employees that are going to be on our platform will decline, and then we'll get the revenue impact. And as Toby kind of went through in the prepared remarks, the biggest impact to our guidance is that bucket of reduced number of employees on our platform.
Just as a clarification, if they're furloughed, but there's -- haven't been paid that period, it depends on the product if you recognize revenue for that pay period.
Yes. It depends what even furloughed means, right, in terms of how an employee -- how a client is going to be able to do that. I would say that if you kind of look at -- if you look at what the unemployment rate is and you understand that, okay, as that increases, the number of employees on our platform are going to decline. And then you kind of ignore the leave status, whether they're furloughed or leaved and active, I would try to look past that complexity because the reality is the number of employees on our platform has declined. We incorporated that into our guidance. And then as employment and states start to open up, we should get the benefit of them coming back to work.
Okay. Great. And then a quick follow-up. Is the -- I guess, quantitatively, could you describe -- are you above or entering Q or at the end of April, are you below 90% retention? How do we think about the retention level today or just -- for today?
Yes. So we typically will say give you annual retention is 92% plus, and we view that at the end of the year. It was -- if you look at the trailing 12 months through April, it's still over 92%. So no change to that.
And our next question comes from the line of Terry Tillman with SunTrust.
I guess the first question is -- the prior question just kind of helped on that and looking at the correlation of job cuts with the employee per client, how you charge on payroll. So I think I'm comfortable on that, that is the biggest driver. But what about the slowness to deploy? Is there any kind of quantification how that's impacting the model in 4Q in terms of -- is there -- how many more weeks it's taking? And then I had a follow-up.
Yes. So I think, as we mentioned in the prepared remarks, April was a fantastic booking. So the number of clients that were scheduled to go live in April was almost double what it was last April. So great bookings. We had that -- those queued up in implementation. In any given month, we typically have some of our customers because they might get busy with other projects, say, "You know what, I'm going to wait another week or 2" or "I'm going to go next month." That is -- that happens in normal course of business. I would say the rate of what we would call pushes to a future date probably doubled in the month of April, just to give you some sort of context.
And so not surprising. Many of those have scheduled dates where they're going to go live in May or some might even have pushed it out to June as they kind of start to understand the landscape around them in terms of their state and potentially opening up. Well, others might have actually said, "Listen, give me a call in a couple more weeks. Let me try to get my feet underneath me and then see if I can figure out the right time to go." We have not gotten customers though, say to us, "I'm no longer interested in transferring to your platform." That has not happened at all. So the idea of someone saying, "I don't want to start with you anymore," that is usually a very low percentage and continues to be a very low percentage even during the COVID crisis.
Okay. And I guess maybe a follow-up question is, somebody asked a good question earlier about how it compares to '08, '09. I guess maybe looking at comparability, what about just the legislative changes? Remember, ACA, remember all the questions we got and all the work you all had to do? We've been talking to HR people. And there is a lot of complexity in furlough versus job cuts, COVID taking effect or not. How do you actually potentially compare the situation now with ACA? And where I want to go with if it is glass half full coming out of this and hopefully sooner than later. Maybe this isn't catalyzing, it's just a quicker pace to modernize and getting more business.
Yes. Sure. So I think a couple of things that we're seeing from our customers is they are really struggling to stay connected with their employees, communicate with their employees, keep their employees informed. Employees, obviously, in general, are nervous. They want more information. They want to be able to understand that. And so we've seen our usage in products like Community almost double in the month of April across our client base. And so there's definitely this need to not only digitize and automate manual processes, which certainly, that's something that's important, and you want to be able to manage costs closely in this environment, but on top of that, you've got to find different ways to engage with your employees.
We're also seeing significant increase in utilization of our survey product where they might be taking a poll, they might be asking for feedback, they might be doing pulse checks with employees. And so this time of uncertainty has created this pressure for organizations to communicate. And then I think lastly, some of the organizations that maybe are not quite as impacted in terms of closures are also still driving certain projects. And so we're seeing increased activity in our learning management. So this becomes an opportunity to actually train. I've got to train people to be able to work from home in different ways than maybe they were working in the past.
So I would highlight community, surveys and learning management all as products that have -- were gaining momentum prior to COVID-19 and were accelerating through COVID-19. And so we hope to be able to take advantage of that momentum whenever we get back to a point where we've got things open back up, and we're starting to see the other side of this.
And our next question comes from Alex Zukin with RBC Capital Markets.
This is Robert Simmons on for Alex. My connection was a little problematic, so I apologize if you addressed this at some point. Can you talk to what kind of what assumptions you're embedding in your guidance for next quarter in terms of like employment levels or anything like that?
Sure. So you see that we widened our guidance range, obviously, because it's a little bit more difficult to be able to predict this. And I know that some others in our space haven't -- chose not to be able to give guidance, but what we were able to do, we have a lot of data and we look at it very closely. So we're looking at this daily and weekly in terms of how many people do we have on our platform that we're able to monetize, what's the trend rate of that? We can look at recruiting data in terms of early indicators, are people hiring? We can also look in time and labor, how many people are punching in, and you see certainly a greater impact to the hourly workforces in general across our platform. And so we saw very precipitous declines early -- late in March, but really early in April. And what I would tell you is we start to see that flatten out over the back half of April.
And so we've taken those trend lines and we've kind of run them through the quarter to be able to come up with where you see our guidance. And so that's kind of the thought process that we've got into it. And clearly, we would anticipate that there is some level of very slow kind of recovery as you see these states opening and by no means, if we forecasted anything where all of a sudden, you're going to get a resurgence in the next quarter.
Got it. That makes sense. And then can you talk about kind of what you're doing on the spending side of things and where are you cutting back? Where does it happen kind of automatically and then kind of where are you doing more on share?
Sure. So if you take a look at some of the remarks we said, our clients are calling us, e-mailing us and interacting with us more frequently than ever. And so we think it's really important to be them -- be there for them during these times. And we've done a lot with product and service for that. And so there's no opportunity to cut there. In fact, there's really a need to continue maybe more moderate hiring in that area.
If you look at our sales and marketing team, they were crushing it before we got into COVID-19 and phenomenal bookings in April and continue to have momentum around selling there. So I would say, once again, not necessarily an opportunity there. We think that it's important to be able to maintain the talent we have there and then be able to come out of the other side and, frankly, sell our way through this.
And then you look at product and technology and we clearly feel passionate about investing in the product. I think that's really helped us from a selling perspective this past fiscal year and will continue to help us. So what I would tell you is a lot of the other nonessential stuff, obviously, just like most business, travel budget and meetings and conferences. And we certainly have been more judicious around hiring. So we certainly are not ignoring it by any means, but we really want to balance investing in the areas where we've got great ROI, which is really product and sales and marketing, be there for our clients and then look for these other opportunities where we can kind of manage cost in a disciplined fashion.
And our next question comes from Pat Walravens with JMP Security.
This is actually Joe on for Pat. Just real quick, can you talk about the level of investment that's going into the broker channel and maybe how that's changed? And any additional color you can provide regarding the broker channel, what you're seeing there?
Sure. Yes. So the broker channel was more than 25% of our new business revenue, both in the quarter and in the 9-month period. And we still think that, that, even in during these times, it continues to be a way to be able to get to customers. So once again, as customers are struggling to be able to communicate with their employees in this environment, the pressure of this environment in terms of trying to figure out how to be as automated as possible and manage cost, all those things resonate with the broker community, and those are conversations they're often having with customers. And so we continue to have virtual meetings with our brokers and look for content that we can share with them that is helping them. And so we've seen continued activity over the last month and change with brokers in terms of our sales and marketing folks. And so I would say consistent level of investment is probably our thought process around brokers.
And our next question comes from Mark Marcon with Baird.
Just wanted to ask, with regards to vertical exposure, can you -- Steve, can you talk a little bit about that, like areas that you're exposed to broadly speaking? And specifically, if you could delineate how much exposure you might have to areas like restaurants, hospitality, smaller retailers, things of that nature that could be a little bit more challenged than others?
Yes. What I would tell you is there's no real concentration. It's very horizontally focused in terms of who we serve. And so if you look at it across the U.S. and you were to look at what percentage of the U.S. small- to medium-sized businesses are in hospitality, you would come up with a very similar percentage across our clients -- our client base. And so there is no really any concentration to speak of. Obviously, our roots in history are a little bit in the Chicagoland area. So you might see a slightly larger number of customers in Illinois versus some of the other states, but it really follows population trends after that.
And can you just remind us what percentage of the small business environment is typically restaurants and hospitality related, broadly speaking, as you understand it?
Yes. I think it depends on your exact definition on how broad you go with hospitality. But if you think that restaurants being the key component, it's less than 10%.
Okay. And I understand you've got packages and bundles. How direct is the relationship between employment relative to revenue? I'm assuming you've got a subscription-based fee in there as well. So if we have a 10% reduction in the number of employees, broadly speaking, how does that translate to revenue?
Well, we've got an average-sized customer of a little more than 100 employees. And so we do have base fees, as you indicated, in some of our products. And so those smaller clients doesn't have the exact 1:1 ratio. But what I would tell you broadly across the customer base, it's still very close to that 1:1 ratio. It does have a bit of a muted impact, as you're calling out, but it wouldn't be something that takes you from a 1:1 to a 0.7:1 or anything like that.
Okay. That's very helpful. And then what are your expectations with the companies that have kind of slowed down? How -- what are you thinking in terms of when those companies may bring their employees back? How are you planning? I know it's early, but...
Sure. Well, I think it's very different by geography and based off the individual state orders around reopenings. And so, obviously, you see some level of activity with takeout in restaurants, as an example, and we see that they'll have a reduced level of staffing in a lot of our restaurant clients where that's allowed. And then as states reopen, you start to see a little bit of a tick up in terms of activity. I think we're just at the start of that, so very difficult for us to know where that goes. Again, what we saw was heavy cuts the last week of March into the first couple of weeks of April, and then we saw stability over the last 2 weeks of April. And so that's probably the best indicator for us and then we'll obviously track that day-by-day and week-by-week the rest of the quarter.
Great. And can you just talk about VidGrid real fast just in terms of revenue impact that you're expecting here over the next 12 months and into the quarter? And then what sort of expense contribution it has?
Yes. So I would say it's fairly small both in terms of -- we're talking not a large group of employees. So we're talking a dozen employees or so as part of that organization. And so not a huge expense at all. And they did have a revenue stream, but it was also very small. So not really having an impact on the quarter. I think what we're really excited about that product, though, is we would imagine ways that we could incorporate video into a variety of different places in our platform. So think of something like recruiting and being able to respond via video answers. Think of recognition across the organization and instead of just a badge, I can have a video message.
Community, we're seeing real great video use cases where different leaders are communicating. Rather than a giant e-mail or blog or message, they're actually recording a video and sending that out. And so we have got a number of ways beyond LMS that we think video can really modernize our platform. So we would hope to be able to -- we're working with the team that we acquired from VidGrid with our own product teams, and we're starting to embed that into our suite. We don't have an estimated time to be able to launch a video option on top of our platform, but it's something that we're really excited about and actively working on.
[Operator Instructions] Our next question comes from Samad Samana with Jefferies.
This is Jordan Boretz on for Samad. Congrats on the quarter. You spoke to the importance of broker channel and driving sales. How is your go-to-market strategy evolving? Do you see a structural change in cost due to virtual selling? And additionally, are you seeing any changes in the competitive or pricing environment?
Sure. So I think, first, what I would tell you is a fair amount of our sales process would happen virtually pre-COVID-19. And so what I mean by that is yes, oftentimes, our sales reps would be on-site with the customer and dealing with the customer. But all those in-between steps that would happen from the on-site meetings would actually happen virtually with our sales organization. Secondly, our solution consultants are those often the individual is doing the demos and the follow-up demos, that has been 100% virtual for a long period of time. And in many cases, we didn't have any physical offices in any of the places that we operate. So the salespeople are used to working out of their house. Their management team is used to managing a remote workforce. So really, the change was that those key appointments that happen on-site are happening via Zoom video essentially today and all the rest of our process really works quite well virtually.
Great. And do you mind speaking to the competitive pricing environment?
Yes. I would say the competitive environment, it's a competitive environment. It's always been that way. I think we see mostly very rational approach towards pricing in the environment. Once in a while, you see somebody with much deeper discounts, but I wouldn't say anything different in this space. I think people at the end of the day are still looking for value and they're looking for solutions that are trying to solve some of the challenges that they have. And when our averaged-sized revenue is about $25,000, I don't think people make a decision based off $2,000 or $3,000 difference in pricing.
And I'm not showing any further questions at this time. I'd now like to turn the call back to you, speakers.
Yes. Well, I certainly appreciate all of you taking the time and interest. And I would like to take the last moment to once again echo my earlier sentiments of thanking all of our employees for the great work over this past quarter and obviously into the COVID-19 crisis, and then also all of our customers who have been really diligent in terms of trying to find the best way forward. So everybody, thank you very much for your interest and stay safe.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, you may all disconnect. Everyone, have a wonderful day.