Akamai Technologies, Inc. (AKAM) Earnings Call Transcript & Summary

Good morning, everybody. Tim Horan, the cloud and communications analyst here at Oppenheimer. My pleasure to be hosting Ed McGowan again from Akamai, the Chief Financial Officer. Ed, we're going to hop right into it, unless there's any comments you want to make before we start?

No, just thanks for having me, Tim. Good to see you again.

Great to see you.

So really, the story to me right now and the most things we're getting questions about is your cloud compute business. And congratulations, it seems to be a great acquisition. You've got a lot of momentum there. Can you just talk about where you are in the ability to serve enterprise customers? What have you had to do from kind of SMB to enterprise? And how much maybe -- how much you've spent to CapEx or OpEx? And what type of exact service improvements have you done?

Yes. Good question, Tim. So we've spent the last 2 years really investing significantly in the platform. So we did two things. From a physical perspective, we built out 14 new core data centers. Those -- think of those as 5-, 10-megawatt facilities, pretty large data centers, so expandable. We don't build out right away into the full capacity of those but pretty good-sized sites. We connected those to our backbone. And we also connected the 11-or-so sites that we acquired from Linode and made those a little bit more robust. They weren't quite enterprise-grade in terms of the connectivity and the capabilities there. So we upgraded that quite a bit from a physical standpoint. And now we're out building the 100-or-so Gecko sites. In terms of CapEx, we spent a couple of hundred million dollars in CapEx. Some of that was for our own use. And we were sort of the first major enterprise customer. We added a lot of functionality to it, things that companies need, availability zones and things like that and other capabilities and some compliance, so PCI compliance, SOC 2 compliance. And we're still going along that journey, added some partners to our marketplace so that we have more robust offerings, repeatable offerings and things like that. And now we're out selling to enterprises. We've moved close to $100 million, still a little ways to go there, of our own capabilities and finding that performance in some cases is better and no issues as far as being able to move real production-ready workloads that have hundreds of millions of dollars of revenue behind them. And we're ramping up that enterprise customer count as well. As we talked about on our Q1 call, we were at $50 million in, call it, ARR with over 250 customers. And now we're projecting to be over 100 by the end of the year. So we're seeing very good receptivity from our customers and our sales reps and very excited about the traction. So I think the 2 years has started to pay off. And we're now starting to reap some of those rewards.

So a lot of questions there for me. The $100 million, is that showing -- that you're saving on cloud, where does that show up in the income statement at this point?

Yes. So it's a little obfuscated in the sense that it's mostly in cost of goods sold. But as I talked about, as we enter some of those big colocation data center sites, we're required to account for those under the lease accounting standards. So we've made some commitments, long-term commitments over, say, a 10-year period. You have to amortize those out on a straight line basis. So we're actually taking more expense ahead of our actual payments. So we've got about 1 point of margin pressure there. And then as we build out these sites, we have colocation expense that we're not quite utilizing yet. So we have some headwind there as well, just in terms of just getting the efficiency out of selling into those locations as well. So we've got -- we saved -- we're probably about 2/3 of the way done, closing in on 3/4 of the way done. And we haven't really seen it shown up. If we hadn't done it, our gross margin would be down a couple of points. So unfortunately, you're not really seeing it in terms of net improvement because of what's -- the investments we're making back in the business.

Yes. So the $100 million, that doesn't show up in revenue at all. That's showing up in...

No, no, no.

So it's almost entirely cost of goods sold. And it's a balance, you're saving some of your own money, but obviously, the spending is going up. And where do you think you are with the utilization of the cloud assets that you've deployed right now?

Yes, it depends on the location. Some locations are getting fuller than others. Obviously, when you sell compute, it's not like CDN, so you have -- it's based on where the customers want to deploy their applications. So we still have a ways to go though. Like I was asked on an earlier call about, given we took our guidance up that we had to take our CapEx up as a result, and the answer is no. We just have sold more into the excess that we've deployed so far. But I think as we get -- going into next year, we'll still add some capacity. If we get a specific large customer that might want to deploy several million dollars a month-type application into one data center, we may have to add some CapEx for that. But we do have some room to continue to grow our own usage as well as sell into what we've already deployed.

Well, I mean, it's obviously -- it's an enormous market, approaching $300 billion for the big 3. And obviously, they're growing revenue, like $60 billion, $70 billion a year on top of that $300 billion. It's just an enormous, enormous market. And everybody seems to want some diversification, for sure. A lot of your customers are competing against big 3 cloud guys, which is also an issue. So I guess, to me, it's not too surprising that enterprises want to use you. And it almost seems like it's in your control to grow revenue almost, I'm not saying, at will. But if you have the product and you have the capacity, I think you're going to be able to sell it, I guess, is what I'm saying.

Yes. No, I'm with you on that one. I think one of the things that I'm most encouraged by is the -- as we get to our first $100 million of enterprise customers, I would have expected it to be more customer-concentrated with a handful of sales reps going after our biggest media customers and getting them to move a significant portion of their -- not a significant portion of their business but a decent chunk of revenue. What we're finding though is the -- all sales regions, all reps are selling, and we're seeing a lot of repeatable use cases and a couple of different things like observability and data analytics and insight, encoding, transcoding, storage. You're seeing customers doing things that are latency-sensitive, say, complying with like the Apple Pay standard for financial services and things like that. So we're seeing a lot of participation from many, many different reps across many different verticals. So I'm more encouraged by that. Because to your point, the market is enormous. And there's a lot of business that we can go after that wouldn't be a traditional CDN customer. So we are looking at augmenting the sales a bit to put some hunting regions in place that you wouldn't if you were just selling CDN and web security.

So your -- so your service, you think, it lends itself to some lower latency products at this point?

Yes.

And is that primarily how you're winning customers, do you think?

There's a number of reasons. I think cost is a big one. It's cheaper just to buy it. If you're just buying it straight up, it's about half of what you'd spend in, say, in AWS. But also if you have data that moves around a lot, say, you're -- you might even be using a hyperscaler for your origin for your website even, some simple use cases like that. And even if your CDN is getting 90% -- 99% offload, that 1% of cache miss can cost you as much as you're spending on your CDN bill with egress fees. So anyone who's having data that moves around a lot is a perfect opportunity for us to go after. You mentioned folks that are concerned about, "Hey, look, I just lost the rights to XYZ to AWS, why am I paying my competitor?" We don't compete with our customers. So that's a good selling point as well. But we also have built up trust with a lot of these customers for 25 years. So to your point, folks are looking for diversification and then -- so other use cases for, say, latency could be we're seeing a lot of ad serving, ad targeting and ad decisioning. So the closer you can do that to where you're serving the content, it just gives the user a better experience and you could get overall better efficiency.

And are you doing anything to support AI in the cloud and in your services?

Yes, I mean, you wouldn't run -- we're not looking at building up massive GPU farms, so someone would say, "Hey, I'm going to go build a big training model on Akamai." We do support GPUs and we do have them in the platform. But we do see some use cases for AI as well. I think over time, I think you'll see more kind of inference engines, the smaller compute use case that you would want to have more distributed. We wouldn't necessarily run a big training model in hundreds of locations, obviously. But for the more distributed inference engine use case, and we're seeing a little bit of that today, there's not a huge market yet for that. I think that's coming, but we are seeing some AI use cases.

And one of the pushbacks that we get is AWS probably has 1,000 different compute instances. They have like 10 points of storage. They have 5,000 value-added services. I mean, despite all that said, probably 70% of the revenue is coming from basic processing and storage. So I guess, is it an impediment not having all the bells and whistles at this point? Do you get much pushback?

Yes. I mean, obviously, there'll be certain opportunities that are foreclosed. But if you think about what an enterprise does, there's so many different opportunities within a customer. And it's not a zero-sum game. It's not like customers are saying, "Hey, I'm not going to use AWS. I'm going to move 100% to you." I don't expect that to happen. Maybe there's a few small startups and things like that where that may happen. But for a larger enterprise, I don't expect that to happen. But you could pick up ancillary use cases. Like for example, we have some customers that are using us for observability, and they're just taking all their CDN logs and putting it into our platform and doing all the data crunching and storage and instead of using AWS, you could certainly use them for that and they might be using them for five other use cases. So it's not a zero-sum game there. And I think some folks look at it as you've got to go convince all the developers to dump that and move to you. And that's not the case. You can pick up small use cases, small applications. And we found sometimes in going into some of our conversations that some of these developers inside of some of our big enterprises have used Linode for their own purposes. So they might be doing, say, a demonstration or they want to do some kind of a test or something like that, and they're using -- or maybe just as a hobbyist, they're using it. And so folks like the platform. It wasn't enterprise-grade before, now it is.

And then what else have you had to do to make it enterprise-grade? And where are you in that process? Do you think you're 80% all the way through or...

Yes. I mean, obviously, we're able to handle our own stuff when we were big consumers of all three platforms. And we haven't had any difficulty finding alternatives for anything that we were using. Tom said on the call that we've actually designed out Snowflake and Databricks. So we haven't found any limitations that have prevented us from using it. And I'd say, obviously, there's more capacity that's needed. There's more compliance. We're not FedRAMP-compliant, for example. Our marketplace is not that robust at the moment. We're going to obviously continue to add to that. There's other things that we need to add. But right now, we've got -- like I said, we're spending a -- using a ton of it ourselves, and we have on our way to $100 million of enterprise use cases right now. So I'd say the platform might not be able to handle everything, but it can handle an awful lot.

And how hard is it or how hard was it for you guys or for your customers to transfer the data or workloads or all the processes from one of the major three to you? Or is it more new workloads, do you think?

I think, it's a mixture of a lot of new use cases, I'd say, we're getting. But we are seeing movement of someone, say, maybe doing all their transcoding or video uplink or something like that with one of the hyperscalers and moving maybe it's several channels or some property or something like that to us. So you're seeing a little mixture of both. I'd say it does depend on how sticky the products that you're using from the hyperscaler. So if you're using some proprietary software that you have to either find an alternative for or design yourself, that can be a bit of a challenge. And obviously, as we continue to grow and add more options in the marketplace, that will become less and less of an issue. But those workloads, we're kind of telling our -- if you find that objection, move on because there's other things to go after. Because some folks will -- we're seeing more and more of this, where you're trying to design things that you're not stuck, right, because you want to have alternatives. So if you're using a proprietary solution from one of the hyperscalers and you have an outage, you're in big trouble. So you want to be able to port your applications. We actually -- we were doing that ourselves before. Like if I look at some of the big applications, like our portal, for example, we designed it specifically so that we could pick it up and move it from hyperscaler-to-hyperscaler. So that was a fairly easier thing for us to move because we designed it with the principle of wanting to be able to have alternatives.

So what is this -- obviously, you're moving a lot of your workloads onto your own cloud infrastructure. Where are you in that process? Can you migrate the whole company to more of a platform strategy, where almost all your security and delivery are all operating in the same infrastructure over time? Where is that now?

Yes, it's good question. I would say, I guess, technically, you could, in theory, move your CDN to the x number of locations we have. But you wouldn't want to do that because it's not ever going to be as distributed as your CDN. But I think from a technical perspective, you could obviously take the 25 core locations and 100-or-so Gecko locations when they get built and run a CDN on it. It wouldn't be as good as the 4,000-location CDN we have today. So it wouldn't technically make a ton of sense. And then like when you're doing web application firewall, a lot of the data crunching and stuff like that, that you do to inform the decisions that you make or make your security products better would be done in more of the central locations. But you want to apply the web application firewall rule at the same time you're doing the delivery. So there would be technical reasons why you wouldn't want to do it and performance reasons why you wouldn't want to do it. But we're -- as far as the journeys go, we're probably 2/3 to 3/4 of the way done moving what we wanted to move. Obviously, every time we do an acquisition, typically, most startups will use one of the hyperscalers, so you always have other stuff to move. We'll continue to use them in certain cases for small things. But our spend will be very, very manageable, small amount of spend.

I guess, is it possible that if they operate the infrastructure a little bit more, integrate it more and, from a customer's perspective, I guess, they probably wouldn't even know about all the different components of the infrastructure that you have?

Yes. So I would say we've connected all of our core data centers to the delivery platform. So you've got your backbone connected. So if you're using -- let's say, for example, you said, "Hey, I want to move my mobile site and run that on Linode and use that as my -- use them as the origin for my mobile applications," you could use us for a CDN and be connected right away to be basically very, very low latency because you're connected through our backbone. So there's that aspect of it. I mean, most of the hyperscalers have some type of a CDN offering. Obviously, we have a better CDN offering. And it's already connected to the platform. So you've got that advantage. And then security, it depends on what the product is, right? So there's some benefits to running stuff on Linode. But we don't have -- say, for example, like when people move applications to the cloud, you want your cloud security posture management, workload protection. We don't have those offerings today. But maybe that's something we could do in the future. But there is obviously some synergy between the platforms, for sure.

Are you worried about the Linode legacy business growth slowing as you're more focused on enterprise or maybe some of the products focus not being as good for that SMB? And have you seen any slowdown in the legacy business of Linode?

It's still growing. It's not a primary focus for us. When we bought it, it was $120 million or something like that. It's still -- it's growing. Every time we do something, we add something to the marketplace, we add more locations. We make the locations more resilient. We add compliance. All the SMB customers have access to that. So they could -- the platform keeps getting better. As we get more well-known in the marketplace, there's -- in the market, there's opportunity for folks to go there instead of going to, say, a DigitalOcean or some other competitor. But again, it's not a big focus. And even if that slowed down, it wouldn't really impact the growth that dramatically because it's a smallish business. Like I said, it's bought at $120 million, it's still growing, so it's bigger than that, obviously. But it's not -- you're not talking about a massive business.

So $100 million enterprise revenue exiting the year, it's phenomenal. What's the gating factor for growth going forward? I mean, for every -- I mean, do you have a -- I guess, the way to say it, it seems to me if you get the capacity out there, you're going to be able to sell it. So for every $1 of CapEx that you spend on success-based cloud, how much can you get in revenue off of that? And how are you thinking about how to allocate CapEx for the next few years?

Yes. So we're seeing -- our model suggests it's at least $1 of revenue. It could be a little more. I think the gating factor really is about the go-to-market efforts, I'd say, or more of an issue of just getting ourselves better-known, getting customers to use more applications. There's, like I said, verticals that don't really care much about their website. Think of things like bioscience, health care, oil, natural gas, manufacturing, don't generally have a big web presence, so they're not a big enterprise customer. But if we start to add some hunting capabilities or build up a channel there, huge opportunity. So that's just -- they don't know who we are at this point. So once we get in there and start to bring our value proposition in, you'll start to see more selling there. So I think -- it's -- you're right, as you build it, you should be able to sell it, so you need people to sell it and you need to get the message out there. So it's just -- I think it's just a time aspect in terms of getting more well-known in the marketplace, getting more success, getting more applications with existing customers and building out the sales force to go after some verticals that spend a tremendous amount in that market but not really big traditional CDN customers.

But I would assume you're still extremely underpenetrated with some of your lower CDN customers, so there's quite a bit of opportunity there.

Absolutely, yes. I mean, just to put it in perspective, you could have -- one of our big CDN customers, one of the 1% customers is probably spending 10x to 20x on compute, so $50 million customer is $0.5 billion or more, maybe upwards of $1 billion. We've heard a couple of our bigger customers tell us they're spending $1 billion in compute. So the market is huge.

So any way to think about -- so it sounds like the gating factor is a little bit more go-to-market than the CapEx.

It's both really, right? It's -- you can't sell what you don't have. So you need both. But in terms of like building the CapEx, it's the lead times, we've been able to get down to 60 to 90 days. Now at some point, I'll outgrow the existing footprint that I have with my core data centers and I'll have to get more colocation space. And at some point, maybe I buy my own data centers. That's down the road, probably 5 years or so. But at some point, you might do that. So that is -- at some point, that becomes a bit of a factor, but there's a lot of room between now and then though.

We are hearing that the demand for data center capacity is off the charts right now for obvious reasons. Are you having any -- do you have enough visibility on supply for the next couple of years to meet your growth?

Yes. So we already are a very large procurer of data center space. We're also investment-grade credit, which in the data center space, a lot of times, you're going in with partners who are building out new projects. So we'll go into someone and say, "Hey, look, we'll take 5 megawatts or 10 megawatts in 3 or 4 years in your new project that you're building," and having us as a tenant that's got investment-grade credit is very helpful for them as they finance those projects going forward. So we're an ideal customer. And we're already a big customer already. Colocation is probably, next to labor and depreciation, one of our largest expenses.

Got it. Very good. So maybe just switching gears to the -- well, I guess, at this point, how much of the CapEx is going to be for success-based versus building up the basic infrastructure that you needed?

I'd say most of it at this point. There's some further Gecko sites, but that's very small. Those are -- in a lot of cases, we'll put those -- just put some Linode capability in some of our larger CDN locations, where we've got -- some places in some larger countries, you have places where you have five or six telcos all coming together and a big CDN pops. So you could deploy there. That makes a lot of sense to do that. But that's not a ton of CapEx. So a lot of it is success-based CapEx. And we'll need some for ourselves as we continue to grow. But that won't be dramatic relative to what we're going to be selling.

So I mean, obviously, CapEx is up a lot here lately. Any way to think -- which I think The Street will tell you as long as the revenue and ultimately the margins are kind of coming in. Can you give us any help how to think about how CapEx should trend in the next few years?

Yes. So in the short term, certainly -- remember, you've got about half of the -- so we're 16% this year. Half of it is capitalized R&D. That probably stays in the 7% to 8% range for a while. As revenue starts to grow faster, we're not going to continue to grow engineering at the same pace so that maybe ticks down a bit over time. You've got CDN capacity, tends to be low single digits, probably 3% to 5%, probably a little bit lower now that traffic is not growing as much. And then you've got 1% for your kind of back office, G&A, office spaces and all that kind of stuff. But then the rest would be for compute. So you're probably running 15% to 19%, somewhere in that range. And it would just kind of flex up. If we're seeing a lot more demand for compute, you might get on the higher end of that. So I think we see big delivery increase, might have 1% or so more for delivery. But really, the CapEx is going to be skewed mostly by what we're seeing in terms of demand for compute.

Well, I hope you're closer to 20%, but good luck.

I mean, I'd love to have investors feel that way. Yes. I mean, that's -- and I think, too, if we do get large opportunities where we have to do custom build-outs, that's something that we'd probably tell you, right? We'd say like if I had to take CapEx up 1 point or 2 because I just signed a multiyear tens of millions a year-type deal and it's concentrated in a few locations, I'm going to tell you that.

Well, if you're getting up to 20%, then I think you're going to be growing consolidated revenue over 10% overall. But I guess, the big question is, not to put words in your mouth, but just mathematically, how are the margins on the cloud business versus your consolidated margins at this point? And where can they be longer term?

Yes. So there -- we had given some numbers a couple of years ago, when we did our Analyst Day. We're seeing that they're -- at scale, we think they're going to be in that range. And I don't think it's going to be that different. Because we're getting an enormous amount of scale on the go-to-market side and on the operations side. So now that we're not -- we're turning away some of that big build-out, peaky CDN business. We're able to redeploy the people that build the data centers and run the CDN business to build the data centers that are required for compute. We've also shifted a lot of engineering resources, so folks that are worried about all the compliance and keeping up with the standards, doing that for CDN and for compute. So we're seeing a lot of engineering effort, transferable skills. So a lot of the stuff we've done internally, we've hired a bunch of people, but we've been able to repurpose a lot of folks. So we're scaling down all the investment in CDN, parking it over in compute and not having to go out and do massive hiring. And I think from the go-to-market side, there'll be some shifts and stuff like that. But I don't see a huge investment in go-to-market required to do this, nothing that is outside the norm, maybe a little bit but nothing substantial there. So you're going to see a lot of scale in the operations, engineering and go-to-market. So I think you can potentially see margins expand as the model shifts more towards compute and security.

And on the delivery side, we are getting a lot of questions. Is this even a business longer term? Revenues are down like 50% from the peak almost a few years ago. I know this year, you're kind of getting hit with a perfect storm that you had a lot of repricing of your contracts and volumes have slowed down a little bit. But I guess, over time, what do you think? Is this a business that can stabilize at some point? And what enables that stability?

Yes. So first of all, it's a necessary evil, meaning for the security business, having the delivery platform is incredibly helpful. All the information, data you get to be able to block these big attacks, to be able to deliver the security that we do and deliver the same performance at the same time is very important as well. So I don't see it going away. And every cloud platform has some type of a delivery platform. So it does go in conjunction with your compute goals. So I don't see it going away. And I do think it can stabilize at some point, certainly not decline double digits. And what you need for that is to see volumes pick up a bit, we're way under trend line in terms of traffic growth, what we normally see. And I think it's hard to say exactly what that is. There's -- video traffic is a little bit sluggish. You could say maybe some of that's the economy, where people are canceling subscriptions, some of it is password sharing crackdowns, maybe the writers' strike has something to do with it. We're not seeing -- there was a dearth of content that was -- like new content not coming out on time and that sort of stuff. That should work itself out over time. But really, it's volumes coming down and pricing moderations in terms of the reprices should align with the growth. So therefore, you should get to a point where it's maybe single-digit decline to flattish.

And apologize, I did get about 20 questions, which we're not going to have time for. But I'll just try to go through a few of them, this is from the audience. Will Guardicore and Noname be enough to continue to drive security revenues in the low double-digit overall for the company, do you think?

Yes. I think those businesses, Guardicore is getting to a pretty interesting scale. Last we broke it out, we said it was $100 million growing at 60%. It's obviously gotten bigger. And we haven't broken it out in a couple of quarters. Noname is about a $40 million business roughly and we guided to about $10 million a quarter, give or take. That, I think you've got two market-leading products. And I'd say the adjacency for API security with our installed base is huge. So that should grow very, very fast. So yes, I think as those businesses get bigger, they should be able to contribute a lot more meaningful contribution to the growth rate. The bigger franchises are still growing at a pretty good clip. Obviously, those will slow down as you get more penetrated and that sort of stuff. So yes, I think we have the right product set to keep that growth going in the low double digits for a while.

And we're probably going to run a couple of minutes over, if that's okay with you, right?

Sure. Yes, so I was -- maybe a little technical difficulty, sorry.

Yes, no, it's quite all right. A lot of good questions here. You obviously bought some CDN revenues last year in StackPath and Lumen. Do you think there's more opportunity to do that? Are you interested in it? Did it work out pretty well for you?

Yes, good question. I mean, if the economics make sense, we'll always look at any opportunity that we think is -- can create value for shareholders. The one thing in doing, say, a big acquisition there is there is splitting in the market, so some of that will go and go off to other places. The dynamics in the market aren't great. So it's not something that we're seeking out and looking at actively. But if something shows up, we'll certainly take a look at it and evaluate. And if it makes sense, we'll think about it.

And then a question on the gross margins. I know we touched on it a little bit, but a lot of puts and takes. You've been running basically 73% here lately. Do you think that's a good run rate going forward?

Yes. I mean, I would think at some point, we should get maybe 1 point of improvement. I wouldn't expect it in the near term. Maybe in another year or so, we might see that go 1 point. But I don't think it will go dramatically higher from there.

Okay, got it. And the gross -- sorry, operating margins have also been around 30%. Sorry, they've been a little bit lower here lately, a little bit below 29%. When do we get back to 30% here?

Yes, Tom said near term. So I'm not going to give any guidance out. But hopefully, in the near term here, we should be able to do that.

And then lastly, can you update us at all on what the Olympics means for the fourth quarter, what you saw for the Olympics? It seemed to be more popular than expected, I think.

Yes. I mean, we gave guidance of about $3 million to $4 million. So if it's more than that, it won't be dramatically more. It's a pretty popular event. But I don't think it's going to drive a ton of upside.

And then have you had any more -- and then back to the CDN, I mean, like every 2 years, we get a lot of these repricing of contracts. So it does feel like next year -- I mean, how much of an impact did that have to this year's growth? Can you give us a little bit more color? And I only ask because it will help us model next year.

Yes. So I would say it's a meaningful hit, right, because you've got 7 of your top 10 customers all renewing at the same time. I don't want to get into too much specifics because I'll then start talking about like what percentage discounts we get. But it was a meaningful hit. So next year -- these contracts are generally 1 to 3 years, so you have a couple that will renew next year. But you won't have 7 of the top 10. So it won't be -- you won't have that dynamic. I think the biggest question next year is this sort of -- for the delivery business, number one, what happens with the government and our big social media customer. That's out of our hands. We've disclosed it, it's about $50 million, give or take, impact if that were to go against us. That's in our 10-K. We weren't required to disclose, but we did. The other thing would be what happens with traffic growth. If we have another anemic traffic year, delivery will be disappointing. And then pricing is probably the least of my worries with variables that isn't going to dramatically change things. It's traffic growth and what happens with the government and TikTok. That's going to be the...

And I could talk to you for a few more hours, but we're out of time. I really appreciate you participating and sharing all the information. Thanks so much.

Thank you, Tim.

Thanks, everybody.