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Earnings Call Analysis
Q3-2023 Analysis
Riskified Ltd
In a testament to the company's resilience and strategic execution, it managed to achieve a revenue growth of 14% year-over-year for the third quarter, reaching $71.9 million, while year-to-date revenue rose by 17% to $213.5 million. This boost in revenue reflects confidence in the company's ability to not only attract and retain merchants but also to upsell existing ones, even against an uncertain macroeconomic environment.
Despite experiencing an isolated fraud event and a challenging period marked by the conflict in Israel, the company demonstrated notable operational flexibility. All employees were accounted for, and operations continued without material impact thanks to a robust business continuity plan and the dedication of a globally distributed team. Furthermore, the company anticipates no further impact to gross margins from the fraud event, suggesting sound risk management protocols and a strong commitment to merchant relationships.
Signaling diligent cost management, operating expenses saw a 6% reduction, coupled with an impressive 50% improvement in adjusted EBITDA over the first nine months of 2023. Additionally, non-GAAP operating expenses were 5% lower year-over-year, marking the lowest level since the company's IPO more than two years ago. The improved operational efficiency has prompted an optimistic view towards profitability on an adjusted EBITDA basis, expected in the fourth quarter of 2023 and for the full year come 2024.
With continued investment in global markets, revenue outside of the United States showcased strong growth, particularly in the Americas and APAC regions, each growing approximately 40%. An improved global footprint echoes the company's effective market penetration and share gains. In addition, despite the third quarter's margin being affected by the fraud event at 44%, the company expects an annual non-GAAP gross profit margin of around 50.7% and approximately 54% for the fourth quarter, indicating a solid recovery.
The company closed the third quarter with a strong liquidity position of roughly $482 million in cash and equivalents, with the absence of debt further highlighting financial stability. In alignment with capital allocation strategies, the Board has authorized a share repurchase program of up to $75 million, which is expected to enhance shareholder value and potentially offer opportunities for strategic mergers and acquisitions.
The full year 2023 revenue projection has been adjusted to between $297 million to $300 million. This projection reflects refined expectations with regard to the onboarding of new merchants and seasonal patterns in key categories. Moreover, the improvement in expense discipline over the past nine months allows for an enhanced full year 2023 adjusted EBITDA guidance, with anticipated figures between negative $12.5 million and negative $14.5 million—an improvement from previous guidance.
The tickets and travel sector, while being the largest category for the company, showed deceleration in growth, yet all other industries collectively contributed more significantly to the quarter's growth. The luxury goods and electronics sectors notably experienced flat or declining trends respectively; such industry-specific performances provide valuable insights for strategic decision making and resource allocation moving forward.
Good day, and thank you for standing by. Welcome to Riskified's Third Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker, Chett Mandel, Head of Investor Relations. Please go ahead.
Good morning, and thank you for joining us today. My name is Chett Mandel, Riskified's Head of Investor Relations. We are hosting today's call to discuss Riskified's financial results for the Third Quarter of 2023. Participating on today's call are Eido Gal, Riskified's Co-Founder and Chief Executive Officer; and Agi Dotcheva, Riskified's Chief Financial Officer.
We released our results for the third quarter of 2023 earlier today. Our earnings materials, including a replay of today's webcast, are available on our Investor Relations website at ir.riskified.com.
Certain statements made on the call today will be forward-looking statements related to our operating performance, business and financial goals, outlook as to gross profit margin, adjusted EBITDA profitability and expectations as to positive cash flows, which reflect management's best judgment based on currently available information, and are not guarantees of future performance. We intend all forward-looking statements to be covered by the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our expectations as of the date of this call, and except as required by law, we undertake no obligation to revise this information as a result of new developments that may occur after the time of this call.
These forward-looking statements involve risks, uncertainties and other factors, some of which are beyond our control, that could cause actual results to differ materially from our expectations. You should not put undue reliance on any forward-looking statement. Please refer to our annual report on Form 20-F for the year ended December 31, 2022, and subsequent reports we filed or furnished with the SEC for more information on the specific factors that could cause actual results to differ materially from our expectations.
Additionally, we will discuss certain non-GAAP financial measures and key performance indicators on the call. Reconciliations to the most directly comparable GAAP financial measures are available in our earnings release issued earlier today and also furnished with the SEC on Form 6-K and in the appendix of our Investor Relations presentations, all of which are posted on our Investor Relations website.
I will now turn the call over to Eido.
Thanks, Chett, and hello, everyone. Before we dive into a discussion on our financial results and outlook, I would like to first briefly touch on the evolving situation in Israel. Then I will share some commentary from the third quarter and end my remarks discussing why I remain as confident as ever in the positioning of the company? As part of this discussion, I'll provide some color on how we were able to efficiently adapt our workforce and enact our business continuity plan to ensure uninterrupted service to our merchants in the wake of the October 7 events. Then Agi will walk you through our Third Quarter financials and what to expect in the Fourth Quarter.
First and foremost, we condemn the horrific attacks in Israel, and we send our thoughts and support to all affected. The loss of innocent lives resulting from this unforgivable terrorist act and the award that ensued is truly devastating. To our customers, partners and shareholders who have reached out to support us during this difficult time, on behalf of everyone at Riskified, we sincerely thank you.
I am relieved to report that all of our employees are accounted for. I am proud of everyone in the organization for stepping up their efforts and for their hard work in the time of need, and I believe this speaks loudly to the strong culture at Riskified. This level of focus and flexibility has meant that we've seen no material impact on our ability to maintain day-to-day operations across all the critical functions.
Moving now to our Third Quarter Results. Once again, our revenue growth during the third quarter was primarily driven by the successful execution of our go-to-market strategy, which contributed to 14% year-over-year revenue growth and 17% for the first 9 months of the year. We are growing more confident in our ability to add new merchants, retain and upsell existing ones, and expand our market share despite an uncertain and challenging macroeconomic backdrop.
Our competitive win rates remained high during the quarter and we have onboarded more new merchants versus this point last year. We have generated over 20% more leads compared to this point last year, which is contributing to a large and growing pipeline.
We are working diligently on maximizing revenue opportunities, leveraging our machine learning capabilities to positively impact our business, while prioritizing investments in the areas with the highest return. I'm excited that we've grown top line revenue by 17% while simultaneously decreasing total operating expenses by 6%, which drove an improvement in adjusted EBITDA performance by over 50% in the first 9 months of 2023. We believe that these results are a testament to the overall strength of the business and our ability to execute and find leverage in the model.
Next, allow me to spend some time talking about the isolated fraud event that we discussed on our last earnings call. As a reminder, one of our largest merchants experienced a significant fraud event in July. This event was contained over the course of a handful of weeks, and as expected, the impact caused by this event contributed to a non-GAAP Q3 gross margin of 44%. We do not anticipate any further impact to our gross margin going forward as a result of this event.
And while we are disappointed by this onetime event, we did learn valuable lessons. For example, we have updated and solidified various go-live processes, improved some of our Chargeback monitoring tools, and added new detection capabilities. I should also mention that our relationship with the impacted merchant remains very strong, and this isolated example underscores the overwhelming reason why we believe that Chargeback Guarantee is a superior model that delivers the most value to merchants.
Overall, we remain encouraged by our underlying gross margin performance. I believe that our commitment to continuously invest in our machine learning capabilities through feature enhancements and model improvements continues to strengthen our market-leading technology.
Now back to the Israel conflict and how it relates to our business. Our core focus since the events of October 7 has remained the safety of our employees and continuity to services to our merchants. To support the well-being of our teams in Israel, we have provided flexible working arrangements for those who are not yet back to their normal office schedule, assisted those employees and their families who have been called on reserve duty, and expanded our existing mental health and wellness offerings.
To support our merchants, we've been working diligently as part of our business continuity plan to leverage our global network of employees to fill temporary capacity needs. Although we've experienced minor delays in a small number of long-term initiatives, there has not been any material impact to our current productivity. We remain 100% engaged with all our customers through increased communication efforts and have not seen loss of merchant volumes as a result of the October 7 events. This is a testament to the deep relationships that we have cultivated with many of our merchants, higher retention rates, and our track record of being a reliable and trusted partner.
Before I turn it to Agi, I want to emphasize that I believe the DNA of our company positions us well as we work through the current situation. While we are proud of being a company founded in Israel, we are truly a global company with business functions spread through 8 locations around the world and with merchants in nearly 40 countries. Our goal remains to maximize revenue and profit with our AI-powered fraud and risk management platform to all of the world's largest enterprise e-commerce merchants. And I am very confident in our ability to continue executing on that mission through all environments.
Now I will turn the call over to Agi.
Thank you, Eido, team and everyone, for joining today's call. I echo Eido's thoughts on how incredible the team and organization has been in the face of a difficult situation in Israel.
Our GMV for the third quarter was $29.7 billion, reflecting a 17% increase year-over-year. We achieved third quarter revenue of $71.9 million, up 14% year-over-year, and year-to-date revenue of $213.5 million, up 17%. Our GMV and revenue growth during this quarter was primarily driven by the continued expansion of our platform across new merchants and upsells, similar to recent quarters.
Tickets and travel remains the largest overall category with year-over-year growth in the mid-teens. The step-down in growth from previous periods was primarily driven by the lapping of a large merchant in this category that was onboarded in the third quarter of 2022. Encouragingly, for the first time in 8 quarters, all industries outside of tickets and travel in the aggregate contributed more than a single category or approximately 60% to our quarterly growth. In particular, this quarter, we saw solid performance in our home category, primarily driven by upsell activity.
Similar to the first half of the year, the third quarter growth in one of our largest categories, fashion and luxury goods, remained relatively flat year-over-year. We continue to see softness in particular within our luxury brands and sneaker subsegments. In addition, our electronics category declined further from their second quarter levels during the third quarter as demand for in discretionary category slowed.
Finally, we also saw revenue growth across all geographies. Our third quarter revenue in the United States, our largest region, grew by 9% year-over-year, and we experienced 12% year-over-year growth in EMEA. Our Americas and APAC regions each grew approximately 40%, primarily due to momentum in new and upsell activity. We believe that our continued revenue growth from regions outside of the United States demonstrates market share gains and validates our decision to invest in this region.
Moving on to gross margin. As Eido mentioned, our Q3 margin was negatively impacted by the isolated fraud event announced at our last earnings call. The impact of the event was in line with expectations and our non-GAAP gross profit margin for the third quarter of 2023, reflective of this impact, was 44%. As a reminder, gross margin is best analyzed on an annual basis, as gross margin may fluctuate on a quarterly basis. However, given the unique nature of the third quarter margin, allow me to provide clarity on the annual range as we approach year-end.
As of today, we anticipate that our annual non-GAAP gross profit margin will be at the midpoint of our range of 50% to 51.5%, or 50.7%, which translates to a fourth quarter gross margin of approximately 54%.
Moving to expenses. Total non-GAAP operating expenses were $40.2 million for the third quarter of 2023, a 5% decrease year-over-year as a result of our continued focus on optimizing our expense base. Our third quarter expenses represent the lowest absolute quarterly level since our IPO over 2 years ago.
Our non-GAAP operating expenses as a percentage of revenue improved year-over-year, from 67% to 56%, reflecting leverage in the business model. For modeling purposes, we anticipate a modest step-up of approximately $1 million in expenses in the fourth quarter.
Adjusted EBITDA for the third quarter was negative $8.4 million and negative $18.2 million for the first 9 months of 2023. Even with the onetime impact of the aforementioned merchant fraud event, we have been able to improve our adjusted EBITDA performance year-over-year for the fifth consecutive quarter and have improved our adjusted EBITDA performance by 50% year-to-date. As previously mentioned, we continue to anticipate profitability on an adjusted EBITDA basis in the fourth quarter of 2023 and on an annual basis in 2024.
Moving to the balance sheet. We maintained a very strong liquidity position and generated positive free cash flow during the quarter. We ended the third quarter with approximately $482 million of cash deposits, investments and accrued interest on the balance sheet, and we carry zero debt. This amount represents a sequential increase of approximately $2 million.
We remain confident in the business ability to generate positive operating cash flow over the long term, as was demonstrated during the third quarter. And we continue to believe that our balance sheet and strong liquidity position are under-appreciated assets.
Related to our capital allocation initiatives, as we announced alongside our second quarter earnings, our Board has authorized a share repurchase program of up to $75 million, subject to approval from Israeli Court which is required by law. Due to the event of October 7, Israeli courts are currently operating under rolling emergency orders and certain court processes are delayed. We anticipate receiving a decision from the Israeli court in the next several weeks and we'll announce the court decision promptly once it is obtained. We expect to leverage this program to take advantage of opportunistic repurchasing opportunities and manage share dilution, at valuation levels well below that of companies with similar financial profile, we believe that we have a great opportunity to repurchase our stock at attractive prices. We believe our strong balance sheet enables us to continue driving shareholder value by investing in the growth of the business, while maintaining significant capital to continue pursuing M&A opportunities.
Now moving to our guidance, which assumes no further worsening in consumer spending patterns or material changes to the macroeconomic environment. As we approach year-end, we have more visibility on the timing and ramp-up of the onboarding of certain merchants and expect a more muted than originally anticipated tickets and travel season, especially in the tickets and live event vertical, for the remainder of the year.
As a result, we are refining our full year 2023 revenue range to be between $297 million to $300 million. That being said, as a result of our ongoing expense discipline in the first 9 months of the year, we are improving our full year 2023 adjusted EBITDA guidance to be between negative $12.5 million and negative $14.5 million, an improvement of 7% from the midpoint of our previously disclosed guidance range.
Overall, from an operational perspective, I believe that we're executing from a position of strength even in a challenging environment. And despite the evolving geopolitical situation in Israel and the continued challenging macroeconomic landscape, we remain excited about prospects for long-term growth and our ability to deliver value to shareholders.
Operator, we are ready to take the first question, please.
[Operator Instructions] And our first question comes from the line of Ramsey El-Assal with Barclays.
This is Owen on for Ramsey. I wanted to ask specifically about your sales pipeline. And I was wondering if you could provide any more color on the portion of new sale that's being driven by cross-sell compared to net new logo growth. And if you're seeing any difficulty in one versus the other? Any clarity there might be very helpful.
Owen. Sure. So we feel great about the pipeline. I think we mentioned it's about 20% larger than this point a year ago, and that's really across the board, both in the newer products around Policy and Dispute, also from a geographical perspective. So the pipeline increase, I would say, is relatively broad-based.
Understood. I appreciate that. And I also wanted to follow up, if I may, on your take rate and kind of longer-term expectations there. and how you expect that to trend relative to the business? Is there any sort of point in which you might choose to favor new logo growth by passing along some expense savings to customers? Any kind of update there might be interesting as well. I appreciate it.
Sure. So I would say, look, take rate is always risk adjusted, right? So depending on the risk of the segment or the merchant or the category, that informs our pricing. And that means that there's really variance within take rate based on those profiles.
To be just a bit more specific if we work with a digital goods merchant that sells high-risk product internationally, the fee would appropriately be higher than a merchant that sells domestically in the U.S. low-risk products. And that would influence the take rate. Our pricing philosophy is to make sure that there's always value to merchants when they start using Riskified, right? So our pricing, which impacts our take rate, would always provide them savings relative to their existing costs. So that's how we think about pricing.
Our next question comes from Robert Napoli with William Blair.
We're always thinking about you all during this time. I'm glad to hear everybody is accounted for it. But I guess on the -- as we think about -- you're turning to profitability and maybe a longer-term picture, Eido, Agi, how do you think about a glide path to getting to your long-term targets of EBITDA margins?
Look, I think the things that are within our control, right, around OpEx discipline, around executing on the sales side, like we've been focused on them for the past 8 quarters, we'll continue to focus on them as we march towards kind of those longer-term margin targets.
Yes. I mean, for the last couple of quarters, I think that we've been able to improve our OpEx line and ultimately kind of pass this to adjusted EBITDA. We're still expecting Q4 to be profitable and next year to be profitable. It's very much of a focus and something we're executing on.
And -- from a geos perspective, I mean, great to see the strong growth out of Asia. Just over the next -- where do you see the bigger opportunities? Are you just scratching the surface in those markets? Or those international going to become a much higher portion of the business over time? And is the international business to profitability, is there any -- are there any differences geo-wise in the profitability of the business?
I think we're all very proud of the GMV gains and kind of the market share we do have. Having said that, we still feel we're scratching the surface of the overall e-commerce market and penetration. So we still think there's significant growth definitely in some of these newer regions where we're seeing kind of that higher growth rates like you mentioned, but also in the more traditional industries and regions.
So when I think about growth outlook, it's continuing to focus on our existing categories and geographies. It's strengthening some of these international markets, APAC, LATAM, and moving more towards a platform sale where Policy and Dispute Resolve have a more pronounced impact. So I think all of those will help us with the growth moving forward.
Our next question comes from the line of Tim Chiodo with UBS.
This is [ Ching ] on for Tim. So my question is around the Plaid partnership that you announced for ACH payments. Can you provide us any update on how the partnership has contributed to your business so far? And where do you see most of the use cases among your verticals?
I think ACH is a growing and evolving payment method, and we see more merchants want to offer it as an alternative to credit cards, either to build recurring payments less the interchange fee or to take care of high amounts or different verification statuses. So we do see it as a growing consumer payment option. And what we've heard from our merchants is, because the risk there is slightly different than traditional credit card fraud, but they still need to help solving those problems.
So really, the partnership with Plaid is aimed at offering merchants an end-to-end solution that includes a way to accept guaranteed payments via ACH. And it has been meaningful in building some of that pipeline that we discussed earlier.
Got it. It's really helpful. And a quick follow-up on the new products in addition to Chargeback Guarantee. So it was encouraging to see the pipeline growth and the cross-sell opportunities that you highlighted in the release. So how does the momentum look like with Policy Protect contributing to your new revenue bookings? And do you see any difference in terms of product adoption between U.S. and the international side?
Sure. Yes, we feel great about the pipeline, the way it's building. We feel that the merchants are -- that are live at solving a very meaningful and significant pain point for them. I'm not sure that I can differentiate between the global and kind of local market, but we definitely don't see a -- inherently, there shouldn't be a difference in the ROI that it's providing to either. So we look forward to continuing to sell and update you on the progress.
Our next question comes from the line of Terry Tillman with Truist Securities.
Yes. Thank you, Eido, Agi and Chett. And also my thoughts are with everyone impacted by the conflict. I had 2 questions. Maybe the first question, Eido. I think in your prepared remarks, you talked about having increased confidence, I think, just in general, in the business and monetizing new logos. I hope I didn't misrepresent that. And that you all did [ help ] the top 10 new customer deals in the quarter, particular strength in the U.S.
What I'm curious about is what's driving the increased confidence? The macro isn't any better. So it can't be that. Is it stuff on the sales side with leadership? You've got a new CMO. Is the market just from 12 months prior based on the RFP activity just starting to come around to these advanced ML decisioning engines? I'll stop with my rambling, and maybe you could just put a little bit more meat on the bone in terms of the increased confidence and just winning the business? And then I have a follow-up for Agi.
Sure. Happy to do so. I think -- so let me tie that up. I have increased confidence on the things within our ability to control. right? So when I think about some of the initiatives we started probably 2 years ago about the increased investment and additional products in our platform, additional investments into our global enterprise sales force, sitting here today, I think we're starting to bear the fruit of some of that, right? And some of that is reflective in some of these products being fully deployed and in the hands of merchants and generating value. Some of that is reflected in the growth rates in APAC and the pipeline that's building. Some of that is reflective in kind of the ML platform and the performance that it's been providing to us and our merchants.
Also, you mentioned Jeff, our new CMO from a few quarters ago, also very confident and happy with our current leadership team. So I think all those things are definitely helping me become more confident in the business longer term. Like you said, macro, I have not seen inflect meaningfully this quarter, like you mentioned.
Yes. Understood. And then, Agi, in terms of the fourth quarter outlook, I know the comp was tougher in 3Q, so that made sense on maybe kind of growth year-over-year. But in 4Q, it is an easier comp. I think I'd love to just get a little bit more perspective on, is there an incremental degree of conservatism? You did say tickets and travel, maybe that's the sole factor. But I did hear that, well, maybe there's -- some of the rollout will take a little longer. Just a little bit more in terms of maybe some of this is timing, and then actually 1Q, there's some incremental benefits from some of the rollouts. Just a little bit more on the roughly 7% growth at the midpoint comment.
Yes, Terry, thank you for the question. So in terms of the fourth quarter and what's kind of changed some of our perspective since we last reported, I would say some of the nuances and trends, specifically about the ticketing subvertical, in tickets and travel, mostly in live events, it's something that we saw a little bit softer coming out at the end of at the end of the quarter and kind of like early in October. And it's mostly -- the way I look at it, it's mostly coming out of a really busy season starting from the beginning of the year, but also through the summer, and a little bit of a different seasonality in this industry than what we saw last year. So that's kind of like one of the aspects there related to Q4.
And the other aspect is more around new deals coming in. We're looking at kind of like 2023 growth, it's primarily driven by new business, and it's a very, very strong driver for us. Looking into Q4, I think there was some push slightly in a little bit of deals still coming in just a little bit in the back half of the quarter, maybe early next year. But all of them are really strong deals. All of them are still kind of like in the forecast just a little bit later in the cycle.
Yes. And I would maybe -- I would just add to that. Again, I think like you've seen throughout this year, sometimes there can be fluctuations between quarters for us because of underlying e-commerce trends across our different categories. And it is important to point out that we don't feel that the Q4 rate is reflective of what we would anticipate next year.
Our next question comes from the line of Reginald Smith with JPMorgan.
Most of my questions have been hit. I just need a point of clarification. Did you guys size the actual impact of that fraud loss during the quarter? And I have a quick follow-up.
Yes. Thank you for the question. So it landed up within the range of whatever we expected, more precisely, around $4.5 million. And the gross margin that we that we expected based on this fraud event is also 44%, just aligned with our expectations.
Perfect. And I'm not sure to what extent you guys can provide color on this, but I'm just curious if there's -- maybe you can kind of walk us through e-com trends in general throughout the quarter, maybe through the first 1 month, 1.5 month, of 4Q? Anything you're seeing there worth kind of calling out.
Yes, of course. So as I already mentioned, I think the biggest kind of change from prior expectations are around live events in the ticket sub-industry, it's been a little bit softer. But overall, it's still a very strong growth driver for the year and still overall performing well. The other trend, I would say there's some strength in the food and home category, the later one primarily driven by some of the upsells that we were able to execute. And electronics has been a little bit soft. I think it was soft last quarter, but continued the softness in this quarter. Yes, these are probably kind of like the biggest highlights.
So are you suggesting that tickets and travel weakened toward the end of the quarter and into this fourth quarter? Just trying to clarify the comment. I guess that would coincide with the Beyonce concert, if I'm thinking about that correctly.
It's hard to say. We do see it in more than one merchant. I don't see exactly what's driven it, but it's really like across geos and in more than, I would say, like probably 2, 3 of the merchants in this category.
You're right to highlight that it's more specific to live events than other types of ticketing.
Our next question comes from the line of Brent Bracelin with Piper Sandler.
This is Hannah on for Brent this morning. I'm glad to hear all your employees are accounted for. I just wanted to echo my support for you, your colleagues and your families here. Eido, in a previous answer, you mentioned moving more to the platform sale. I guess, can you talk about your ability to land new merchants with more than just Chargeback Guarantee upfront and how that's evolved?
Sure. Thank you for that commentary. Look, I would say that when we sell Chargeback Guarantee, we're solving for chargebacks related to fraudulent reason codes, right? And that leaves a lot of pain points and inefficiencies for our merchants, such as chargebacks related to non-fraud reason codes, different forms of financial loss related to policy abuse. And right now, we have the ability, whether it's through a new sale or a cross-sell or upsell, to solve a wider set of problems, right? So sometimes merchants are saying, "Hey, that's great. I don't just have a chargeback issue, I have issue with some of these other problems." And that's helping us advance conversations with the platform sale initially.
It's actually also helping us even when a merchant might say, "You know what, I'm not ready to make a change on my fraud platform right now," we can actually start with policy or dispute, which has been showing great attraction and is a really easy and good initial sale. So we feel good about the opportunities and conversations with new merchants from then more platform approach.
Okay. Super helpful. And then Agi, in terms of upsell strength, are you seeing more strength on the volume side or the cross-sell side? And how do you expect that to trend over time?
I think it's -- upsell has been a strong category and a strong driver. It's coming from a lot of different areas. Definitely, the ability to expand both to -- for higher approval rate or also to kind of expand and take more of the GMV and from existing customers have been like -- have been a factor.
I'm currently showing no further questions at this time. I'd like to hand the conference back over to Mr. Eido Gal for closing remarks.
Yes. Thank you, everyone, for the support. We look forward to updating you in the coming months on our next call.
This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.