Cinemark Holdings, Inc. (CNK) Earnings Call Transcript & Summary

All right. Let's get started. I'm very happy to have back at the conference, Sean Gamble, President and CEO of Cinemark; and Chief Financial Officer, Melissa Thomas. Thanks so much for being here.

Thanks for having us.

Thanks for having us.

Why don't we start it off high level, Sean, you've been with Cinemark since 2014, first in the CFO capacity. And since the start of this year officially as CEO, a lot of changes over that time. How is kind of your understanding of the industry and Cinemark evolved over that period?

Sure. It's interesting. I joined Cinemark from the studio side of the industry. And a couple of things that really attracted me to exhibition and Cinemark specifically was just the sustained excitement and enthusiasm for moviegoing and what I felt was just a tremendous amount of opportunity in this space, opportunity to take the whole moviegoing experience to the next level. So there are a lot of opportunities [ to solve then ]. Many of those, we've pursued and made great progress on everything from premium amenities to enhanced food and beverage to more frictionless experience to taking guest services up a notch. And many of those opportunities that I saw then I still see, so I wouldn't say that has changed. Still very optimistic about the opportunities that lie ahead. Certainly, as we're fully exiting this pandemic. There's just a long road of potential, and we're seeing already the excitement and enthusiasm rekindle again as consumers come back to the movies once more.

And why don't we continue with that, right? How do you kind of view the current environment? Obviously, been a difficult 2 years, but real signs of recovery, had a few strong box office successes recently, you and I were just talking about Top Gun coming out this weekend. Obviously, there's a lot of momentum potentially associated with that. So how do you kind of view things currently?

Well, we're very optimistic. One of the questions, clearly, as we're going through the pandemic and how long it was, was what will consumer behavior look like coming out of it and how will movie performance look as we exit the pandemic. And I think at this point, over the past several months, we've seen numerous examples now of movies performing at or above their pre-pandemic levels. And it's not just the large superhero films or the films like Top Gun that are doing that. We're seeing it across all categories of audiences and genres. There have been several smaller, more older female skewing films like [ a dog ] or Everything Everywhere All at Once that have performed at significant levels. We've seen it in romantic comedies, and we've certainly seen it in large films as well. So I think that gives us a lot of confidence in where things are going, especially as the momentum continues to build as more and more of a significant lineup of films gets released over the course of the year.

And anything to note trend wise, when you look at geographic areas or demos that kind of stand out with audiences coming back?

Well, certainly, the quickest audiences to come back were young males. And we saw that really now at this point, we've seen terrific recovery across all categories, as I was just mentioning. If anything, there still is perhaps a touch of a lag with regard to older audiences, specific to that demographic. We're really encouraged and optimistic about Top Gun: Maverick this weekend, which tends to skew a bit older. We've seen how many of those larger compelling films can be the needle mover of getting people to come back for the first time. We saw with Spider-Man as an example, at year-end, how over 20% of the moviegoers that came to that movie hadn't returned to the theaters yet. And then once they come back, they continue to come. So we think Top Gun: Maverick has the potential to really be -- make a big progress there in the older categories. I would say, geographically, it's pretty comparable. Latin America -- globally, Latin America trailed a bit just -- particularly because of the rollout of vaccines across the region, but that has caught up within the U.S. specifically. If anything, the Northwest may be still trailing a touch. But again, everything has been continuing to build momentum.

I hadn't heard you mention the Northwest. Any specific reason for that?

Interestingly, I think partly like the Bay Area in particular, because they were hit so significantly early on. I think the general thinking is you just see it across behavior in that region all around. There still is a bit of apprehension relative to other parts of the country. with going out. It's not everywhere, but just in the aggregate, it's a little bit trailing still in terms of the mentality around going out. And that's not specific to moviegoing just general consumer behavior.

And what levers or kind of strategies do you at Cinemark have to drive increased visitation, whether that's marketing, Movie Club, your loyalty program?

Well, you just hit on a bunch of them. I mean it all starts with giving our guests a phenomenal experience when they're at our theaters. So we're hyper focused on guest service, the premium amenities. So making sure that each time they come, we leave them with a desire to come back again. And then leveraging more sophisticated marketing capabilities, digital, social, our various tools to attract consumers to our theaters. And then also the programs like our loyalty programs, which really are helpful to to drive incrementality of growth and frequency and more visitation.

Got it. And a big topic at this conference has been macro and economic risk, very top of mind right now. Historically, we've always thought of moviegoing as generally recession proof. Does that still hold in your view? Is there any kind of data that you've seen on forward demand or per caps, which would indicate any softness?

Certainly, nothing that would indicate softness, more the contrary. And you just mentioned it. Interestingly, going to the movies historically has bucked the trends of inflation and recessions. It's -- we've seen that over the years, people will cut back on larger forms of spending, vacations, more costly types of entertainment, but they still ultimately want to get out and doing something. And going to the movies remains a very affordable form of entertainment that's local compared to other choices people have. Interestingly, in this environment, even right now, we're continuing to see how people are over-indexing in upgrading to premium amenities. So our XD premium large format screens, D-BOX seats, the higher levels of enhanced food concepts. So we haven't seen any data to suggest that that's changed. In fact, more the contrary, again, they've been upgrading versus downgrading.

Got it. And I want to stay with current trends. The latest Doctor Strange film was out earlier this month, very strong opening weekend, $185 million domestic box office, did see a bigger second frame decline than we would have thought down 67%. Can you help us kind of contextualize that drop off? Do you see it as kind of something that was film related? Or is it something more tied to the environment now?

Well, certainly not the environment. If anything, we don't think it was film related other than the fact that the movie did so well its opening weekend. It opened to over $185 million. It was more than double the first title, the first Doctor Strange. So we think that when we looked at it, part of it is just how big that opening weekend was. What we've seen since then in each successive weekend, the holds have been really strong. So it was really just that first weekend. So we think that was really the key driver of why you may have seen a slightly -- it skew on the slightly higher end for Marvel films in terms of the decline in week 1. When you talk about the environment, what we've actually seen is really long runs on movies that have performed well, longer perhaps than even pre-pandemic in terms of the holds week-to-week and the relative declines. So certainly, there are many examples of really strong successful positive runs in this environment.

Got it. I think that was a great explanation. But like even on the back of some of the Doctor Strange performance, there has been talk in the press about superhero fatigue and maybe these films aren't drawing the same casual audience that they used to. That's not really a stance we take, but it does bring to mind like past genre cycles like disaster films, right, or really extended ones like Westerns where moviegoers kind of ultimately moved on. I guess I'm wondering where do you think we are in the current superhero movie cycle?

Well, I don't subscribe to that notion either. It's interesting, superhero fatigue. You've been talking about superhero fatigue for, I don't know, the last 6, 7 years, and yet these movies continue to perform exceptionally well. My personal view is it really all boils down to the quality of the storytelling, right? You look at the Marvel universe, I think that's like the perfect example of how they've done such a phenomenal job of taking even characters that were lesser-known characters and making these unbelievable movies that now create these new worlds because of the quality of the storytelling and they've been able to sustain that storytelling, movie after movie after movie. So my view is, so long as the quality of the storytelling is there and now even there's this continuum of a storyline that bridges between movies and different types of series, just draws audiences in. As long as that's there, I don't see any fatigue. Really, the only risk that you run is if that quality of storytelling starts to drift, then you see the performance drift. And if it comes back, it starts to resurge again and there have been examples of that over time of franchises that have dwindled [indiscernible]. I lived through that at Universal when I was the CFO at Universal. The Fast and Furious franchise has started to dwindle a little bit, and then they brought back the original cast and started increasing the storytelling and the thing just launched back up and it just continues, yes.

Maybe sticking on the topic of genres. Family films have always performed really well in the Cinemark circuit, and that's especially true of Latin America. The family focus lead has been a little light since the onset of the pandemic, looks to be making it come back this year. How are you thinking about family and animated films? And do you kind of anticipate a more normalized volume coming down the pipeline?

I definitely anticipate a more normalized volume, still very bullish about family films. Really, the situation we're faced with this year is largely COVID-related. Just the impact on production cycles and release dates as a result of that. I mean, that's part of the overall recovery of the industry this year. But when you look at how different family films have been performing recently with Bad Guys, that's an example of a film that has held really well. The drops have been only about 30% week-to-week on that movie. And then Sonic. Sonic was a great example where it's on track to do over $200 million of box office, far exceeding the first film. So it just shows the demand that's out there, really the pent-up demand for this family type of content. And those movies just do exceptionally well globally. So we think that when you look at the pipeline of films coming down the rest of this year, it's starting to look a lot more robust in the family category, and we think that's going to completely fill in as we go forward into future years.

Got it. One of the upcoming family films, right, Lightyear is the first Disney Pixar movie to get an exclusive theatrical release since the pandemic began. I think at 1 point, it was turning red, was slated for that role than it went streaming in the U.S. at least. From your perspective, kind of what is the decision of putting Lightyear out in the theaters kind of say about Disney's view towards theatrical releases, and how do you kind of view the success of this film and the broader implications to the industry?

Well, I think putting that film out into theaters is just -- it's another sign of growing confidence specific to Disney in this case with regard to the theatrical environment, right? I think they've been clear that a lot of the decision making that has taken place over the last year or so was in a pandemic, and they were taking those considerations in mind. Now as we've seen the example I was just giving a film like Sonic, how well it's doing in the family category, I think that gives renewed confidence in the ability to generate meaningful cultural buzz and deliver meaningful results. And there's clearly a lot of excitement for that movie. So I think a lot of that is just -- is again, it's a sign of growing confidence in putting films out. I mean we've seen forever across different types of categories of whether of in-home evolution, how a theatric release benefits films in terms of creating greater awareness, building brands and franchises, creating larger cultural moments, staving off piracy. And we continue to see that again now in this environment with regard to -- now that the pandemic is subsiding and moviegoing has coming back, we're seeing how it's elevating the types of films and those films that have been released theatrically with the window are performing better and better than those that aren't. So I think all that just fuels into using theatrical as a phenomenal promotional vehicle for these films in helping them their overall value and the overall value creation maximizing box office, maximizing revenues and profitability for the studios.

Got it. I think that's a good segue into the broader discussion on windows and longer-term supply kind of just given the news of late in regards to some of the challenges that streaming platforms are having in subscriber growth. Can you update the audience on where conversations with studios broadly stand regarding theatrical windows and kind of how you see their longer-term supply?

Definitely. It seems like there's been clearly a lot of evolution and moving pieces throughout the pandemic now. It seems like the whole conversation around windows is starting to gel more around a 45-day window, certainly for more meaningful commercial films that have potential. Interestingly, there's -- I think there's been this false narrative created in the media around theatrical versus streaming as if it's one or the other. In reality, these are complementary formats. We've seen -- since streaming really has gotten going that the most active streamers are our most frequent moviegoers, right? And conversely, the least active streamers are the least active moviegoers. So it's not one or the other. And we've now heard a growing number of comments from some of the studios, which we think are really encouraging that their data is now showing them that the films they released theatrically with a window are performing better on their streaming platforms, particularly with regard to key things like consumer acquisition, engagement and retention. So it's no different than how films perform better on VHS or DVD or Pay TV or Free TV. The theatrical release helps to create a greater perception of quality, creates a greater event and it provides significant promotional value for the streaming platform. So we find that to be really encouraging that there's a growing recognition again and reaffirmation that, hey, this really is a good vehicle to drive greater overall value. And hence, things are starting to gravitate more back towards a 45-day window for the more meaningful films.

Got it. And what have you learned so far about the impact of a shortened theatrical window on maybe consumer behavior, right? Does kind of the knowledge or awareness of an impending release to streaming or VOD kind of impact incidence of repeat viewing, right? We talked about Doctor Strange. Obviously, you gave the explanation around the second weekend. How do you kind of see that?

Well, some of that, I think, is still to be determined. We're seeing at least -- the majority of box office takes place within the first 45 days. So those movies that have had that window, as I mentioned, we've seen them performing at pre-pandemic levels or better, right? There's been record results. Doctor Strange, by the way, for us, I didn't mention, but it was our fourth biggest opening of all time. So it's a huge opening result. So I think some of that is to be told, but we also know that a longer window reduces piracy, and that's to the benefit of everyone, not just exhibition, but the studios as well with regard to their films. So we tend to think that, that's part of the calculus that's going into the decisions around the releases for the studios. There could be ultimately some impact, but at the same time, for certain types of films, a more flexible window actually makes them more viable for the studios, which we haven't talked too much about that, but one of the, I think, the positives coming out of everything we've gone through in the pandemic where it was such a longer, more rigid window is there were certain categories of films, these smaller films and some mid-tier films that weren't getting produced as much because the risk factor was -- had grown significantly for the studios, but having the ability to have more optionality and flexibility with regard to that can actually lead to more of those movies being made and more of them being released theatrically, which I think personally will lead to more overall volume of movies being released as we fully pull through the pandemic.

And where do you think the industry stands right now with regards to something like PVOD, right? If we were at this conference 5 years ago, I probably would have had 10 questions on PVOD. And it seems like studios had a run at this, during COVID. It's all what they saw and largely moved on. There is one notable exception. How do you kind of see that playing out?

Well, it's interesting. You're right. There's -- a couple of studios are still experimenting with PVOD. Obviously, there seems to be more of a shift in home towards the subscription model, right? So I think we're going to have to see. It worked well during the pandemic when people were stuck at home and theaters were closed to have that type of option. But when you're faced with the kind of price point that comes along with premium VOD in the face of -- in the consumer's eyes when they're paying for their monthly subscription fee to these streaming platforms. And then effectively, all that content is free, it's a tougher value equation in the home when there's so many choices consumers have to have to pay that incremental fee in the home when there's something else sitting there that conceivably is free it's a challenging model. But we'll see. I know there, like I said, there's still some testing it. It seems like the overall sales during -- in that category are going down now, but it doesn't mean that it will go away and may still be a piece of it. I think one of the positives is those questions and those unknowns of the scariness of what PVOD may mean to the industry now is all playing through, and we've got a clear view to the -- we will have a clear view to its overall impact.

And I would think quality perception is an issue as well, right? You talked about the theatrical release elevating the perception in downstream windows. I would imagine a release in the home potentially has the opposite effect.

We've seen that. It's interesting, some of the movies -- we've seen that actually even with the day and date experimentation that was going on. Movies that were going out with day and [ date ] are shorter windows didn't perform better in the aggregate, in most cases, they performed worse. So a lot of times as these channels become the channel for studios when they have a film that perhaps didn't turn out as well as they thought to get into the home faster is the same way before streaming existed and premium VOD existed, the movie got made and it didn't turn out as well as you thought, you were in damage control mode and trying to figure out a solution. And a lot of times, those would go direct to video or straight into the home. So it's a little bit of that play that the movies that really are of higher quality, they can make -- have a bigger life and bigger connection with audiences when they have that theatrical release. And then it performs much better across these other channels, like I was saying, versus when they just go simultaneous, it loses a bit of that overall [indiscernible].

Got it. It's been mentioned as recently as last week that Netflix has interest in releasing more films via theaters. You did a test of a slate with them. I think in the past year or so, including Red Notice, which I think you called a hit on your circuit. Can you walk through that experience at all and kind of say what Netflix was looking to get out of it when you went through the test phase?

Sure. Well, look, there was a lot of testing and learning going on over the course of the pandemic. We were doing the same with Netflix. We've been interested for a long while to showcase Netflix's films in our theaters. And 1 of the biggest challenges prior to the pandemic was just agreeing on terms and windows and things of that sort, whereas now through the pandemic, again, back to one of the positives was, all right, let's try some different things. And we've gained some valuable insights in doing so, both ourselves and Netflix. And it would seem that from their vantage point, certainly, they're making more compelling impactful films. And as they're looking to create greater cultural moments and greater awareness and use that as a promotional vehicle, certainly now that there's a much greater amount of competition in the streaming space. We think there's a real opportunity for both Netflix as well as exhibition to work together to help deliver that with a theatrical release as we talked about the impact and value that a theatrical release can provide to their consumers and their films. So we're optimistic about continuing to take the learnings and insights we've developed to help them as they look more and more to get into this space.

I think it's interesting, Netflix among streaming services is notably strong in Latin America. I'm wondering if you've had any discussions with them on utilizing or testing your circuit in LatAm region, right, to kind of showcase any of their content?

Certainly, the conversations we've been having in the U.S. we're also having in Latin America with regard to the potential for releasing films throughout that region theatrically.

Got it. Okay. Relative to pre-pandemic, we are seeing blockbuster movies take an increasing share of the box office. You mentioned flexible windows kind of potentially reversing some of that. But can you just kind of discuss the impact of film rents this mix shift is having and then the offset in terms of shorter windows.

Yes. So we have been successful in negotiating economic consideration, including modified film rental rates for those shortened theatrical windows. But this will likely be offset, as you mentioned, by an increasing share of large tentpole films, which tend to skew at the higher end of the sliding scale. It's also important to note that our marketing -- our film rental line item also includes marketing spend, which we continue to invest more heavily in relative to the pre-pandemic period as we look to reignite moviegoing, enhance or expand our audiences as well as drive loyalty to Cinemark. So net-net, overall, most reason -- it would be most reasonable to assume that our film rental rates will be more in line with pre-pandemic levels as the industry begins to recover.

Would we expect that marketing spends to normalize at some point? Or is it just important to have that while you're trying to still establish the momentum?

Yes. At this stage, we feel it's important to maintain our levels of marketing spend, particularly as we're starting to see that film slate ramp and trying to get moviegoers back in our theater.

And just staying on cost, right? Inflation continues to be top of mind for investors. How should we think about inflationary or supply chain pressures across different expense lines and kind of what savings or efficiencies can you realize to kind of offset some of these headwinds?

Sure. There's two key areas that I would highlight where we're facing cost pressure. So first is on the concession side, so concession costs. Second would be with respect to labor. So starting with concession costs. There, we have done a nice job of offsetting the cost pressures that we've seen. However, costs are rising, particularly within commodities. It's unclear the full extent of the impact that we'll see from the variability we've seen in commodities as well as other inflationary impacts. But we do expect, based on what we're seeing today, that we could phase up to about a point of pressure in our full year 2020 COGS rate relative to full year 2021 COGS rate. We are, of course, looking to offset wherever possible, the increases that we're seeing. A couple of avenues that we're looking to do so include expanding our supplier base, looking at different product alternatives. Also on the top line side, driving higher concession purchase incidents as well as pricing is certainly a lever available to us as well. With respect to the labor side, just a couple of callouts that I would make there. We have seen in the first quarter of 2022, we saw that our average hourly wage rates were up 14% versus Q1 of the prior year. So we are seeing wage rate inflation. Now the team has done a nice job of identifying and successfully actioning on various labor productivity initiatives, including tools and processes that allow us to have more flexibility and more quickly adapt to changes in attendance levels. So we can now flex our operating hours as well as our labor hours to adjust real time, which has helped us offset some of the pressure, a meaningful portion of the pressure that we've seen in wage rate inflation over the past year. Now again, unclear the extent -- full extent to the impact we'll see as we progress through the year and look to ramp up for the summer season on the wage rate side. So we are continuing to seek opportunities to drive further efficiencies going forward.

And just going back to the commentary on concessions, but flipping it, right, per caps are running very strong for Cinemark right now all across the industry. Obviously, there's mix factors and hours that kind of play into that. But what would be the kind of impact of some of that normalizing, but then what strategies do you kind of see to support your per cap levels?

We've been very pleased with the per cap trends that we've been seeing. In the first quarter, we reached another all-time high domestic per cap. And the nice part about that is it's been driven by higher incidence rates. So it's really the volume side. As we think forward or as we look forward to your point, we do expect some normalization as our operating hours expand and as the audience mix expands. That being said, we are deploying strategies to look to maintain a meaningful portion of those elevated per caps that we've seen even as conditions start to normalize. There's really three key areas of focus: first, as Sean mentioned earlier, the customer experience and removing friction. So through our Snacks In A Tap mobile ordering platform as well as through self-service product displays. The second area of focus is proactive category management that includes new product introduction, introducing new taste flavors. And then the third callout that I would make is strategic pricing. That's an area that we do also see an opportunity to drive per caps.

Got it. We have about 5 minutes left. If anyone in the room has a question, just raise your hand. There's a microphone in the back. Sean, I want to ask you on dynamic pricing. It's been very early innings for the industry for you. I think it's in a testing phase. But at a conceptual level, can you maybe discuss some of the opportunities that you see as viable, whether that's something like charging higher prices for the best times on an opening weekend. And then maybe also, what are the challenges of implementing this, right? I would think something like selling different seats at different prices like an airline is something that would be kind of difficult to enforce, right, or something that you wouldn't want to enforce?

Well, I would say, look, we think there's a lot of potential for more sophisticated pricing tactics. We've had a range of things. Actually, Melissa's leading that effort. So I don't know if you want to speak to?

Yes. I can speak really to that. So we do see dynamic pricing as an area that we want to move to, and we are in early innings there, but we have started a series of tests, and we have been really pleased with the results and the learnings that we've gotten to date from those tests. For competitive purposes, we're not going to get into the specifics around the pricing strategies that we're instituting, but we do see that as a key opportunity for us going forward and something we're going to continue to lean into. Now that said, we are going to remain cautious as we look to capture that in light of high inflationary environment, and we're in the process of reigniting moviegoing. So there's a balance there that we're looking to strike, certainly opportunity.

I would just say one of the big things we're working on, too, to add to that is obviously, how have elasticities evolved as we are coming through the pandemic in this dynamic environment with inflation and things of that sort. And it cuts both ways in terms of the better sophistication. We already have a highly varied schedule of pricing throughout the week, throughout the day and we're just looking to continue to take that to the next level and figure out what are the best ways to optimize to maximize both box office attendance as well as incidents on the food and beverage side.

I think we have one from the audience.

We've heard a lot of mention of the idea that flexibility might drive a broader slate into the theatrical window. Are there any examples currently in the slate for '22 or '23, that would be a good indication of that?

Well, I would say, at least my comments on that are as we look to future production of films and getting into categories. So some of those mid-tier films, a good example would be Lost City, right? You don't see as many romantic comedies, which released [ tweener ] budget-type films as you used to several years ago. And part of the reason for that is because of the risk factor for the studios. The cost to market the films, the cost to make those films becomes a bit intrusive. When you look at the potential for the results. If they hit, they can work really well. But if they miss, they've struggled. And part of the challenge for them had been well having to wait a really long time to get into the home became less efficient, right? They have to remarket it again. So as there's more opportunity to deal with those types of situations for the studio, it gives them more confidence to make more of those movies and put them out. Because if it works, great, you can have a great long run like a Lost City is doing exceptionally well going to do about $100 million of box office. Whereas if it doesn't, then they know they've got a channel they can look to recoup some of those potential losses and still make some money. So I think that's an example. Another one that we've just seen, I mentioned earlier, Everything Everywhere All at Once, right, is more of a specialty film -- a lower budget film, so less risk there, but a film from A24 that actually is going to be their biggest movie of all time, where it's actually had a more of a platform release, which you haven't seen too many of those in recent times where they go out small and then grow as word of mouth, ramps up. So those are the types of examples where I think there'll be more and more inclination to be able to put those movies out and take a chance theatrically when there's knowledge that they can have some flexibility if for whatever reason it doesn't. And if it does, great. So I think we'll see more and more of that as we go forward.

We've got about 2 minutes left, not nearly enough time to touch on Latin America, but we'll give it a shot. Can you maybe -- you talked a little earlier, it was slower to come out of the pandemic that had to do with the vaccine. Can you maybe just discuss where things stand across your footprint in the region and how you see that maybe differently positioned relative to the U.S. coming out of the last few years?

Well, I would say Latin America, big picture real quick. Yes, they lagged the U.S. They're still -- like the U.S., still recovering. This is still a recovery year. The good news is they've largely caught up to the U.S. in terms of that lagging performance. A big part because now vaccines across most of the region actually exceed -- vaccine penetration exceeds the U.S. but also some of the government restrictions that had been in place are now largely lifted like the U.S. That was the other hold back. So because of those two things, it's now performing in line with the U.S. as it continues its recovery going.

And we do have one coming over digital. Melissa, this would be one for you. Any plans to buy back your expensive debt issued during the pandemic and reduce interest costs?

Yes. So at this point, from a capital structure standpoint. We certainly -- I would say the team has done a really nice job prior to me coming on board on extending our maturities to late 2024, 2025 at the earliest. So we have flexibility to opportunistically take out or refinance higher -- some of our higher interest that we took on during the COVID time frame, if and when it makes sense for us. And that's certainly something that we would look to do opportunistically over time. But we do have the flexibility to wait for the right time to do that, given that our maturities are pushed out. As we think about our current focus right now from a capital allocation standpoint, we're really looking at strengthening our balance sheet as we head out of the pandemic as well as making sure that we're positioning the company for long-term success by making the right investments in the business. So right now, that's the key area of focus, but we'll certainly look to be opportunistic over time and delever.

Okay. Great. Well, we're out of time. Thanks so much for being here.

Thank you for having us. Appreciate it. Thank you, everybody.

Thank you.