BlackBerry Ltd

TSX:BB

Earnings Call Analysis

Company Remains Positive Despite Revenue Dip

For the quarter, the company reported a total revenue of $132 million, with IoT contributing $49 million, cybersecurity $79 million, and licensing $4 million. Recurring software product revenue was approximately 90% of the total, and the company held a gross margin of 65%. However, they incurred a non-GAAP operating loss of $28 million and a net loss of $23 million. Despite a reported revenue volatility and a $0.04 non-GAAP loss per share this quarter, the management remains optimistic about the cyber business pipeline and expects to stay within their full-year revenue guidance for cybersecurity. They are also on track to achieve positive operating cash flow and non-GAAP EPS in the fourth quarter and the fiscal year.

IoT Business Unit Shows Steady Growth Amidst Industry Challenges

The IoT (Internet of Things) Business Unit experienced a 9% sequential increase in revenue, achieving $49 million with a notable 400 basis point gross margin increase to 84%. This growth is backed by significant new design wins, particularly in automotive software, which is on track to surpass the company's annual targets for the future fiscal year. These developments suggest the company's strategic positioning to capitalize on the trend towards centralized computing in vehicles, as they've logged 20 new automotive design wins in the quarter and seven additional wins in general embedded markets. Notably, an 8-figure lifetime revenue ADAS (Advanced Driver Assistance Systems) win reflects the company's dominance in the safety-critical digital cockpit space, forecasting a robust future despite the broader auto industry facing challenges such as strikes and supply chain issues.

Positive Outlook for IoT with Revised Revenue Projections

Despite current automaker challenges, the company remains positive about its IoT prospects, projecting a 9% to 17% year-over-year growth with an adjusted revenue outlook of $225 to $240 million. Confidence for the latter half of the fiscal year is bolstered by the impending release of QNX 8.0, expected to strengthen the company's lead in automotive software, and the growth of the IVY ecosystem, which is gaining momentum with over 40 partners and more than 20 pre-integrated solutions available for use. These factors contribute to expectations that the fourth quarter will be historically strong for IoT revenue, a prediction supported by the ongoing expansion in IVY platform partnerships, such as the integration with Mitsubishi Electric.

Cyber Business Unit Wrestles with Deal Timing Amid Government Sector Stability

The company’s Cyber business unit reported $79 million in revenue, with a steady customer retention rate and considerable deal activity within various government departments. However, extended deal cycles and timing impacts have led to revenue volatility. Nevertheless, the firm anticipates a rallying second half contingent on closing large government contracts. Commenting on the cybersecurity product updates, the company underlined the positive reception of its AI-driven threat protection enhancements among customers.

Financial Stability and Strategic Focus

Total company revenue hit $132 million this quarter with both cash flow and non-GAAP EPS expected to turn positive in the fourth quarter. The company's finances show a cash and investment balance of $519 million by the quarter's end, with a strategic focus on sustaining positive operating cash flow and non-GAAP EPS for the fiscal year. The management expressed confidence in navigating current volatilities and executing strategies as per Project Imperium, aiming for a timely conclusion to bolster investor confidence.

Commitment to Expansion Despite Market Uncertainty

The company's dedication to growth is underscored by its commitment to the IoT space, vowing not to decelerate its efforts or investment, regardless of industry delays or uncertainties. This resolve is exemplified by continued hiring and development within the IoT domain. Meanwhile, the company acknowledges the nascent stage of technologies like edge computing and AI at the edge, noting that while their focus remains on central computational power for embedded operating systems, they are ideally positioned to gain from the overall industry shift towards increased processing needs.

Innovation and Growth Prospects Beyond AI and Sensing

Advancements in AI and sensor technology are seen as a vital part of the company's future, with new, complex sensor applications emerging, like those being integrated into steering mechanisms for enhanced driver awareness. While the company expects Q4 to be stellar, they do not anticipate Q1 of the following fiscal year to outperform it; however, they are confident in maintaining strong double-digit, possibly 20% year-over-year growth.

Strategic Review Process and Impact on Performance

While there's speculation on the outcome of the strategic review, known as Project Imperium, management is optimistic that a resolution may occur before the end of the year. Customer relations and near-term financial performance have been largely unaffected by the review, with the company taking active measures to mitigate any concern among stakeholders. Assurances have been given that the company will uphold its quality and delivery commitments, focusing on swift and decisive action toward resolution.

Earnings Call Transcript 2024-Q2

[Operator]

Good afternoon, and welcome to the BlackBerry Second Quarter Fiscal Year 2024 Results Conference Call. My name is Rocco, and I will be your conference moderator for today's call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn today's call over to Tim Foote, Vice President of BlackBerry Investor Relations. Please go ahead.

[Tim Foote, executive]

Thank you, Rocco. Good afternoon, and welcome to BlackBerry's second quarter 2024 earnings conference call. With me on the call today are Executive Chair and Chief Executive Officer, John Chen; and Chief Financial Officer, Steve Rai. After I read our cautionary note regarding forward-looking statements, John will provide a business update, and Steve will review the financial results. We will then open the call for a brief Q&A session.This call is available to the general public via call-in numbers and via webcast in the Investor Information section at blackberry.com. A replay will also be available on the blackberry.com website.Some of the statements we'll be making today constitute forward-looking statements and are made pursuant to the safe harbor provisions of applicable U.S. and Canadian securities laws. We'll indicate forward-looking statements by using words such as expect, will, should, model, intend, believe and similar expressions. Forward-looking statements are based on estimates and assumptions made by the company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors that the company believes are relevant. Many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forward-looking statements. These factors include the risk factors that are discussed in the company's annual filings and MD&A. You should not place undue reliance on the company's forward-looking statements. Any forward-looking statements are made only as of today, and the company has no intention and undertakes no obligation to update or revise any of them, except as required by law.As is customary during the call, John and Steve will reference non-GAAP numbers in our summary of our quarterly results. For a reconciliation between our GAAP and non-GAAP numbers, please see the earnings press release published earlier today, which is available on the EDGAR, SEDAR and blackberry.com websites.And with that, I'll turn the call over to John.

[John Chen, executive]

Thanks, Jim. Good afternoon, everyone, and thank you for joining us today.Let me start with the IoT business unit. Revenue for the quarter increased 9% sequentially to $49 million, and gross margin increased by 400 basis points to 84%. The most important long-term leading indicator of the health of this business is securing new design wins and building royalty backlog. And that we had another strong quarter. In fact, by the end of the first half, we have secured more than 2/3 of our FY '24 annual targets for new backlog and expect to exceed it.In the quarter, QNX secured 20 new design wins in auto and 7 in general embedded market verticals. The largest of these was an 8-figure estimate lifetime revenue ADAS win where one of the top 5 global automakers to deploy our QNX OS for safety. These wins illustrate a strong secular trend of consolidation of software into centralized compute domains. With this ADAS module powering drive monitoring, surround view, lane-keep assist, adaptive cruise control and other safety features all on a single chip. As automotive software stacks becomes more complex and require significantly higher compute power, it plays with the QNX strength.In addition to our strong win rate for ADAS, we are also the clear market leader for foundational software in the digital cockpit. The combination of our high-performance safety-critical RTOS and hypervisors allows for mixed criticality in this domain. Given our market-leading positions, our design wins continue to be well diversified across all major global markets. In Asia, we secured a design win with LG Electronics that include our hypervisor will be deployed in a number of vehicle models for a top 10 global automakers. We also secured wins with Vision and leading OEM Cherry, via Bosch among others.In Europe, a digital cockpit win also include our acoustic middleware, this is exciting because feedback from customers suggests that this relatively new market opportunity for software-defined acoustic is likely to be fast growing. As well as our strong footprint in auto, QNX is well diversified in other verticals, particularly medical and industrial. Building on our position in surgical robotics, this quarter, we secured a design win for our QNX Medical OS for safety to be deployed in the robotic arms for dentistry. These design wins confirm that QNX business is strongly positioned for the long term. With revenue for Q2 being largely in line with expectation, we continue to expect IoT to deliver solid year-over-year growth this fiscal year. That said, we are taking a prudent view on our IoT revenue outlook for the next 2 quarters.Automakers are currently addressing a number of significant challenges, including the industry strike action, the transition to software-designed vehicles as well as in electrification pivot and supply chain challenges related to either preproduction software development programs, or to production schedule could impact our revenue this fiscal year. However, we expect this to be a relatively short-term timing issue. As a result, we revised and broadened our IoT revenue outlook range to $225 million to $240 million. This represents a 9% to 17% year-over-year growth. This means that we still expect a strong second half of the fiscal year. We expect further sequential growth into Q3, and we currently expect Q4 to be the strongest quarter for revenue in QNX history. This confidence is based on a combination of the pipeline of potential new design wins, our service schedule and royalty expected from the backlog.Turning now to product. At our Analyst Day in May, we announced the upcoming launch of our new generation QNX real-time operating system, QNX 8.0 targeted for December. This release will make a fundamental shift in market performance, and we expect it to further cement QNX leadership position in automotive and beyond. Feedback from the beta trial has been very positive with customers and partners impressed with performance, scalability and functionality. Perhaps some of these will convert into revenue in Q4. This significant enhancement of performance and scalability comes at a time when chipmakers are focused on developing hardware to power generative AI. We believe that our QNX 8.0 software is uniquely positioned to maximize the potential of Gen AI in the metal systems, particularly in safety critical use cases. QNX 8.0 will combine best operating performance with the ability to run mission-critical process safely and securely alongside Gen AI stack on the same chip.Now moving on to IVY. We were delighted to announce that IVY was selected by Tier 1 supplier Mitsubishi Electric to power its new FlexConnect.X in-cabin systems. IVY [ hash ] technology and the high-quality real-time insight that it provides will help enhance road safety and enable new in-vehicle experience. In addition, we have solid traction with new IVY proof-of-concept trials. Currently, we are progressing POC with a number of major OEMs, including a top 10 global automaker and also a leading commercial vehicle OEM Scania. The strong level of interest for IVY POC clearly confirms our strategy.On the product front, this month, we released an updated version with significant enhancement to cloud features and increased hardware and software support. IVY's development has moved from the early heavy lifting phase, and the focus is now on refinements, enhancing stability, expanding sensor supports and improving the developer experience. The IVY ecosystem continue to expand and mature. We now have over 40 partners currently building on IVY, and there are more than 20 pre-integrated solutions that are being used by customers in POC trial and at industry events. This month, the IVY Innovation Fund made its latest investment this time in CorrActions, an exciting Israeli startup. CorrActions has developed an AI power application that will leverage the IVY platform's sensor insight to detect potential driver awareness issues. Their AI model analyzes micro muscles movement such as through steering view sensor data to understand brain activity, and we are pleased to add them to the ecosystems.Moving now to Cyber business unit. Revenue for the quarter was $79 million, and total contract value billings were $74 million. Gross margin was 54%, ARR came in at $279 million. The dollar-based net retention rate was stable at 81%. Revenue this quarter was lower than expectation due to deal slippage. BlackBerry along with many others in the cybersecurity space is experiencing elongated deal cycles, deals that require multiple rounds of review and scrutiny, and while this isn't impacting win rates, it's having a real impact on the timing of when the deal close. This is especially true in government where Blackberry has a very strong presence. In particular, a small number of large mainly perpetual deals, which government had a significant portion of in-quarter revenue slipped to later quarters. While this materially will impact Q2 reported revenue, we remain confident with how these deals are progressing and expect them to close this fiscal year. Further, we have a well-defined pipeline of significant deals that are progressing well. These deals are primarily the government vertical, where BlackBerry is well known and trusted and we have strong customer relationships. Due to the overall confidence in the strong improvement in revenue in the second half compared to the first, we are reiterating the full year cyber revenue outlook for the current fiscal year. Because large government deals like these are both complex and binary, we will, of course, update you on the progress made in closing them during the next earnings call.Let me now highlight some of the deals closed during the quarter. In government, we secured new deals with U.S. Department of Justice, the Department of State, Department of Energy and Department of Education. Also, the internal revenue services, the Canadian Revenue Agency, the U.S. National Nuclear Security Administration, Customs and Border Patrol Protection and the Ministry of Justice in Quebec. Outside of North America, we secured business with the Bank of Italy, Netherlands Share Service Center-ICT as well as the Federal Court, Australia, the Australian Federal Police and the Director General of Force Intelligence in Bangladesh. In fact, we see a good pipeline of opportunities developing in Asia Pacific currently. In addition to government customers, we secured wins leading banks, including Morgan Stanley and Santander as well as with leading technology firms, LG, Philips and Toshiba, just to name a few.Moving now to product. Cylance is the pioneer in the use of AI in cybersecurity with AI at the very core of its suites of products long before it became today's buzz word. Our battle-hardened AI model has been trained for many years, continually learning to distinguish threats from non-threats by referencing trillions of data points. Last month, we released a major update to this model, which has been rolled out to our customers, providing an increased level of protection. The model has driven even stronger threat prevention rates than before and further reduced false positive. This release is part of the investment we made in our product portfolio, and these enhancements are being well received by our customers. This is validated by CylanceENDPOINT, our AI-driven prevention, detection and response solution being placed in the top right-hand quadrant for the Gartner's Peer Insights, Customers' Choice. This positioning is based on feedback from real customers, reflecting the experience of our product and us as a company. This pairs nicely with the same recognition we received by BlackBerry UEM in February, where it was the only endpoint management solution identified as a customer choice.Let me now hand the call over to Steve, who will provide more color on our financials.

[Steve Rai, executive]

Thank you, John.As usual, my comments on our financial performance for the second quarter will be in non-GAAP terms unless otherwise noted.Total company revenue for the quarter was $132 million. IoT revenue was $49 million. Cybersecurity revenue was $79 million, and licensing revenue was $4 million. Software product revenue as a percentage of total revenue remained in the range of 85% to 90% with professional services making up the balance. The percentage of software product revenue that was recurring remained at approximately 90%.Total company gross margin was 65%. Operating expenses for the second quarter were $114 million, lower sequentially in part due to onetime costs associated with the patent sale in Q1 that did not recur and the release of some IP-related accruals in Q2. Non-GAAP operating expenses exclude a $6 million fair value gain on the convertible debentures, $10 million in amortization of acquired intangibles, $10 million in stock-based compensation expense, $3 million in restructuring expenses and $1 million in impairment of long-lived assets.The non-GAAP operating loss was $28 million, and non-GAAP net loss for the second quarter was $23 million. The $0.04 non-GAAP basic loss per share for the quarter beat expectations. Adjusted EBITDA, excluding the non-GAAP adjustments previously mentioned, was negative $22 million. BlackBerry remains laser-focused on maximizing efficiency and expanding margins, and we remain on course for both positive operating cash flow and non-GAAP EPS in the fourth quarter and for the fiscal year as a whole.Total cash, cash equivalents and investments decreased by $59 million to $519 million as of August 31, 2023. Net cash used by operations this quarter was $56 million. The current debentures mature in November, and we intend to fully repay them. With respect to raising any new debt, the outcome of Project Imperium will obviously have a significant bearing on future needs. Accordingly, we are developing clear executable plans for a number of potential scenarios that could arise. That concludes my comments, and I'll turn the call back to John.

[John Chen, executive]

Thank you, Steve. Before we open the line for Q&A, let me quickly summarize the key messages. While this quarter saw some volatility in reported revenue due to slip deal, we remain confident in the pipeline of opportunities for our cyber business. We expect this to translate into a much stronger second half and subject to successfully closing a number of our larger government opportunities, we expect to finish within our reiterated full year revenue range for cyber. We also remain very confident and excited about the fundamentals of our IoT business. And like cyber, expect a stronger second half, albeit we are taking a prudent view given the delay in the start of some development programs as well as the auto industry labor actions.Let me also provide you with an update regarding Project Imperium. The Board and its advisors are very actively engaged in the process and recognize that it is in everyone's interest that will be completed as soon as possible. All stakeholders should rest assure that we will provide an update as soon as we possibly can. That concludes my prepared remarks. We will now take your questions. Operator, could you please open the line for Q&A?

[Operator]

Absolutely. We will now begin the question-and-answer session. [Operator Instructions] Our first question today comes from Mike Walkley with Canaccord Genuity.

[T. Michael Walkley, analyst]

The first one is just really on the cybersecurity business. Can you provide a little more granularity on which parts of the cybersecurity driving these big perpetual government contracts that you expect to close? Is it mainly Secusmart or is it kind of evenly spread across the portfolio?

[John Chen, executive]

Mainly Secusmart, also UEM, the Spark platform. So mainly those 2.

[T. Michael Walkley, analyst]

Great. And then I guess on my follow-up question, just any update on how Cylance is trending in the market. You had some good technology there, but some larger companies such as CrowdStrike and others are moving more into the SMB market. Can you maybe talk about how Cylance is faring in the marketplace?

[John Chen, executive]

Yes. We do actually reasonably well, the numbers are obviously smaller than the competitors. But we do reasonably well in the win rates on SMB. We actually have a pretty good quarter in new logo. And it will continue. I said it many times, our products are now up to class, took us a while. We are working very hard with channel partners to swing them our way. And so once we have more achievement there, we will have more leverage. But clearly, the product could win and guard as a good solution.

[Operator]

And our next question today comes from Luke Junk with Baird.

[Luke Junk, analyst]

John, for starters, last few quarters here, customer software delays have been we've seen repeat a few times. It just be great to get your perspective on how widespread this issue within your customer base is right now? And most importantly, what the affected customers are telling you, needs to get done to get back on track. You mentioned in the script that you have confidence this will be a relatively short-term timing issue. Could you just expand on the reasons why you believe that to be the case?

[John Chen, executive]

Right. Okay. That's good question. So the company that are looking at their software design vehicle effort and to push out some and delay either the start of the designs or starting into the production are the really big companies. And some of them are very visible. They announced reorg that actually the outcome favors the software-defined vehicles strategy. And Toyota has announced reorg. VW has announced reorg. And a number of others that we have not announced reorg, and then pardon me for not being able to repeat that because that's customer proprietary information. So they will not be happy with me. So you could guess that sense. However, everybody has kind of tell us it's like not in a precision way, but it's kind of like a 1-year move, 4-quarter move. And frankly speaking, we are in the third or the fourth quarter already. So this is one of the reasons why the team has some really strong pipeline that they believe in for Q4. And as I want to repeat this, we expect Q4 the best quarter in revenue for QNX ever.

[Luke Junk, analyst]

Okay. Great. And then for my follow-up, I'll stay within IoT. Going back to the Analyst Day earlier this year, one of the things that you mentioned strategically was looking to continue to engage more directly with OEMs. Is it Tier 1 and accelerating your OEM account coverage. I'm just wondering to what extent the current delays you're seeing impact your appetite for those sorts of investments in IoT that are outward facing and just how to reconcile that with the overall desire to expand margins?

[John Chen, executive]

Because we believe our fundamental is so strong and because we believe our new product scalability is so good. We are not slowing down any of our appetite at all. We are steadfast moving forward IoT's hiring people. So we won't worry about us kind of taking our foot off the gas pedal. That's not going to happen.

[Operator]

And our next question today comes from Tripa Chowdhry with Global Equities Research.

[Trip Chowdhry, analyst]

The auto industry seems to be super exciting with QNX and now at least like companies like NXP, they term something like you talk IoT as Edge Square where they put a lot of AI and they call tiny ML that powers these devices. I was wondering like QNX definitely with the low footprint and real-time operating system is ideal. But I was also wondering, have you come across some new sensors, the categories that may have been created because of AI in the Edge and these neural network processors like NXP that they make, the industry Structure is changing. That's my basic question is tiny ML, Edge Square, QNX and some new use cases that may be evolving. So I was wondering if you have any thoughts on that?

[John Chen, executive]

Yes, it's a good point. What you're explaining, I read it, it's still early in the industry. And I also want to emphasize the fact that we are an embedded operating system, real-time secure operating systems. And so we tend to go into the MPU type, the central complex, computing complex. So the edge of this, which will be driven with different new use cases. Some of them are AI-based and all that. But that's a level higher than us. And of course, we will be benefiting from it from needing more central compute power. So I guess we do benefit from it. We don't directly go create a selling motion into the Edge, and that Edge selling motion and use cases are created by the code that is on the stack, there's one level above us.

[Trip Chowdhry, analyst]

Excellent. Yes, I got it. The second question is regarding IVY, phenomenal traction on the developer side apps, I don't know, probably we are about 6, 8 months away from it. But I was wondering, have you come across any new categories of apps that may be coming on top of IVY? And that's all for me.

[John Chen, executive]

The AI and sensing, actually interesting to tie back to your first question, the different type of sensors that's being demanded in the car, we have seen different types and more increased and more complex. And like one of the examples when I talk about CorrActions was they monitor the sensors on the steering wheel. And then through that, they monitor and they help define the micro muscles of the individual and then dictate or indicate what the status is of the driver on a learners basis and awareness basis. So this is a little bit more esoteric than just measure how much gas you have in the tank or how much charging amps that you still have before you need to do the next charge. So we have seen more and more modern type applications. But I still believe, for the initial usage of IVY is going to be very fundamentally managing the safety and the comfort of the car.

[Operator]

And our next question today comes from Paul Treiber with RBC Capital Markets.

[Paul Treiber, analyst]

In regards to your comments about Q4 being the best quarter for IoT, how do we think about the momentum beyond Q4? Do you expect it to be carried through to the subsequent year? Or is it more just a 1-quarter phenomenon?

[John Chen, executive]

No. So it's a good question. I don't believe we're going to have a Q1 FY '25 bigger than Q4. That's what you're asking. But I do believe that we're still following the 20% growth on year-over-year when we presented to you all in the May meeting. So you do expect us to have double-digit growth and pushing to a 20% growth year-over-year. And by then, I hope that this so-called software-defined vehicle efforts delay. And hopefully, everybody seems to have a reasonable handle on supply chain despite of the political situation between U.S., China, Western World and so forth. And so that's gradually getting under control. Electrification is on everybody's, it's in their product specs, so to speak. Although to us, it's really hoping that, that drives more volume of a car, not so much as electric versus gas, we have a difference there. And so if that is removed, then we will start seeing design wins that will turn into developer seats to come into professional services engagement and then will ultimately turn into royalty. So fundamentally, we see nothing concerning at all. We see this as a purely timing issues. And we see it starting to get better in Q4 unless some other industry events like the UAW strike that last longer, that's a little bit out of our control and -- but even the UAW strike, it's not going to last. As you probably know this very well, it's not going to last in perpetuity and because both sides got hurt. So I think they will resolve it. I certainly hope they will, and then we'll get back on track.

[Paul Treiber, analyst]

Okay. And then for my second question, I don't know how much you can answer it, but I'll throw it out there. Just in regards to Project Imperium, I know you can't give specifics, but have you or the Board reached a point where you've narrowed down to a few high-level paths? And can you sort of share the high-level paths?

[John Chen, executive]

Yes. I can't comment on it, but the answer is yes.

[Operator]

And our next question today comes from Daniel Chan with TD Cowen.

[Daniel Chan, analyst]

You expected the strategic review to conclude by the end of summer. And your contract with BlackBerry is quickly approaching. Would it be possible that this review goes past November? Or should we expect something in the next month or so?

[John Chen, executive]

I think there is better than 50-50 chance you should expect something sooner.

[Daniel Chan, analyst]

Okay. That's helpful. And then maybe another question on the timing. To what extent do you think the uncertainty from the strategic review is having an impact on the near-term financial performance, whether it be from staff productivity or even customers waiting for a conclusion?

[John Chen, executive]

No, actually, I mean really seriously. I checked this a lot because that's an obvious concern. And from a customer point of view, no, I don't see there might be 1 or 2 conversations I had, but it kind of like, when I talk to the customer, they say, "Oh, by the way, what's going on there", that kind of thing. And somebody asked me as part of the long conversation and also said, should I be concerned about this? I said, "No, no, you have nothing to be concerned about. When you stand behind everything we do and build and deliver it." So not much really coming, and the sales force hasn't fed back to me about this being a road block or [indiscernible]. But having said that, the longer it lingers on the works they're going to get. And even though it is not a big worse. So I have no intention -- because of being an operator, I got employees, partners, customers, shareholders to worry about. So we're not going to let this thing. It might take a long time, multiple steps, but there will be some decision made.

[Operator]

Thank you. I would like to turn the call back over to John Chen, Executive Chair and CEO of BlackBerry for closing remarks.

[John Chen, executive]

Okay. Thank you. Thank you, operator. Before we end today's call, I'd like to remind everyone of an upcoming BlackBerry Summit on October 17 at the Conrad Hotel in New York downtown. The event anchored around the theme of trust has been expanded this year to include IoT, and we have a strong line of keynotes as well as product demos and breakout sessions. You can register to attend at blackberry.com/summit. Stay tuned for more announcement around the event. I thank everybody again for joining the call. I look forward to speaking with you very soon. Thank you.

[Operator]

And thank you, sir. This concludes today's call. Thank you for your participation. You may now disconnect.