nCino, Inc. (NCNO) Earnings Call Transcript & Summary

Thanks for joining us. I'm James Faucette of Morgan Stanley, senior research analyst, covering fintech. And very pleased today to have Josh Glover directly to my left, center of the stage, President and Chief Revenue Officer of nCino; and David Rudow, CFO of nCino. So thanks for joining us today, guys. Before we get started with kind of my line of questioning here, a couple of quick things. First, I have to read the disclosure before -- or actually a point or two disclosure. For important disclosures, please see Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. And then the other thing that Dave was reminding me of is at 2:00, there is the Fed announcement. So if you guys want to check your phones at that time, feel free to hold up the hold off what the comments are.

We have a pool going as well.

Yes. Yes, we should actually run do an over/under, what is the market doing but that's not on the agenda. So we'll just go with our questions for now. So thanks a lot for hour joining us. Maybe we'll start with you, Josh, for those really that are less familiar with nCino, can you provide a brief description of what the company is? And in particular, what pain points you're specifically trying to solve for your banking credit union customers and kind of your approach to doing so?

Yes. nCino was actually created in a bank, right before the global financial -- excuse me, right after the Global Financial Crisis to digitize a lot of manual processes related to lending. In your normal commercial bank, you'll see spreadsheets. You'll see just a lot of unnecessary effort. So we digitize that, we give a customer a faster time to 'yes', give them a faster time to cash. And then once that end-to-end value chain is optimized, we give best-of-class analytics tools to help continue optimizing that workflow.

So let's dig in a little bit more on the technology and how it came out of the bank is -- one of the things, obviously, is that a lot of -- you have a close relationship with Salesforce. How do you work with them? What do you do? What does Salesforce do? What's the engagement with the customer, you versus Salesforce for the end customer, I guess?

Yes. The AppExchange has been a differentiator for Salesforce. They have 3,500, 4,000 applications kind of like the iPhone has the App Store. In the AppExchange, we're one of the top ISVs. And essentially, Salesforce has built a great sales and marketing platform. They have a domain-focused CRM Full Financial Services Cloud. We extend that to the critical processes actually help fulfill those loans in one place. Otherwise, a lender may use a great CRM tool to get a customer to say yes to a product. Then they have to manually enter that into another system. We do it all in to end on the Salesforce platform. And again, help them just take them to care of their customers.

So -- and when you go to -- so in that situation, in your go-to-market, is that entirely been driven by nCino? And what's the nature of the long-term relationship? I mean, one of the questions we get a lot from investors is how is the revenue share split between you and Salesforce and how long does that agreement last? And what happens at point of renewal of the agreement between you and Salesforce?

I could talk a little bit about the go-to-market, and I'll let David speak about the OEM arrangement and how that flows through. We co-sell with Salesforce in many situations. We've worked with them for quite a long time. We're in a lot of the same strategic accounts. nCino can be sold independently if that's the problem that the customer wants to solve and nCino can also be sold into a Salesforce account. If they're a well-adopted in CRM customer, they're happy. The -- Salesforce creates, I would say, a really good customer energy right behind our platform. They want to go deeper on the platform. They already have the admins and the technical piece, their IT people are happy with the platform. We can bring more into that and simplify their landscape in so doing it.

Got it, got it. And then David, on economics and agreements, et cetera.

Yes. So we -- right before we went to IPO, we did a 7-year deal. We're at the 5-year mark, so we'll go back and start negotiating that deal again. we pay a percentage of each and every seat with Salesforce, and that percentage has not changed over time. So think about it like a gross margin -- stable gross margin. We don't get volume discounts. We don't have minimums or anything else, the monthly payment that we make. And I would note, if you look at our nIQ products, we sell -- they're on AWS, we don't pay Salesforce with those seats. And then also SimpleNexus, we don't pay a Salesforce, obviously, for those seats because that's based on AWS.

Got it, got it. And so if there were a pricing change at the Salesforce level, as you said, you just treat it like a cost of good, and then...

Yes, yes. It's embedded -- all of the Salesforce costs are embedded in our cost of sales number.

Got it. And so you said that you did a 7-year agreement right before the IPO, and then you will start to revisit that at year 5?

Yes, we'll start -- start doing it now. We normally add a couple of years on to the end of it. Just -- because for our larger customers, they like to see that stability. If they're going to be signing up for a 5-year deal, they want to know that minimize the risk around that. We have no concerns with our relationship with Salesforce. It's a great relationship. But yes, just to give our customers comfort.

Got it. Got it. And then I guess there are a few key questions, particularly around the macro environment, and I'm sure you guys get these all the time. But let's start with the first is that recessionary environment. How do you think about the durability of the platform or that seat count and base within your customer set? And if the nature of the recession was more credit performance/profitability, versus inflationary, right? Like you can have different types of recessions. Like how do you think about like where you're likely to be durable versus where you may see some risks?

So we started the company in 2012. So we've seen the credit realities that these banks have to do in a challenging time. When the credit cycle is challenging, you have to spend more time on your credit book, right? You're actually spending more time in your accounts, looking at how they're performing, so you can stay ahead of any risk. So we have those muscles because we've used them before. And I don't see, especially as the banks think -- whether they think it's a recession or whether it's long or short, I don't see any bank saying, "I don't think I'm going to lend money to business anymore". So whether we're growing or whether we're in a challenging cycle, they're going to need to do that well.

Got it. Got it. And then how does -- a lot of times an inflationary environment would be accompanied, obviously, with higher interest rates. Like, how does that impact your customers and their willingness and ability to invest and spend on making the improvements that nCino can deliver?

The increase in interest rates, the banks are making more money and we believe they will reinvest that in digitization because of the tailwinds that we see in the industry from the 2 years of COVID, remote work and just the reality that there's no more digital deniers there. And of course, as we've been discussing in some of our one-on-ones today, it's always in the back of our mind that what happens if there's more structural impact, will banks have to make hard decisions if we see loan volumes drop? Will we see banks making harder decisions if credit quality deteriorates just because of the way that impacts their P&L? We'll absolutely look at that. But relative to the macro need in the industry to digitize, we don't see that changing. Anything to add to that?

Yes. I think as a reminder, we have -- our contracts are noncancelable, ranging from 3 to 5 years, something in that range. And this product becomes mission-critical. It's the app that all the middle and back office employees actually log into every single day, use it more than e-mail, and that's how they actually run their business. So to say, while the economy gets stuff just turned off, that can't happen, because it is critical to them actually making loans opening accounts and everything else.

So what about from a sales and decision cycle process? Like obviously, you started in kind of the -- around the global financial crisis. But there was a bit of an interest rate tantrum in 2018, then we had the beginning of COVID in early 2020. Can you talk through kind of what the initial reactions were at the time from a decision making? Did you see delays in decision-making by your customers? Do they continue to move? And then how quickly were they able to -- if there was a change in decision cycling, how quickly were they able to reevaluate and kind of move forward?

To speak to the COVID experience, and hopefully, that was a one-off is that they, frankly, immediately went -- they went from running their banks to trying to hold the walls up. In the U.S., we went straight into the PPP experience, which was the journey for a lot of us. And you just had kind of an unprecedented effort by the industry to get liquidity to the market. I think in this situation, they see all this coming. It's not like an overnight lockdown. The interest rate issue in 2018, and I was here at the time, did not see any impact on the sales cycles or decisioning. Again, sometimes, you'll have those conversations, but that's not what we saw in the business.

Yes. And then during COVID, we -- I panicked initially like, okay, let's -- let's really figure this out. We watched collections, we watched anything, any requests from customers for delays in payments. I think we had one charter bank that couldn't pay, so we put them on an extended payment cycle. But there was no other impact from the COVID situation. Now you have to -- I wish there was a way you could say what was a real impact to COVID. But because of PPP, many of our customers were busy actually processing loans, right? I don't -- they're so busy they didn't have time for anything else. This cycle, I think I listen every day. I talk to salespeople around the world every month and get a feel for things. We've not seen any additional signatures needed or lowering down of signatures on dollar amounts or anything else. In the back of my mind, I'm thinking, okay, we're watching for it and listening. But at this point in time, we don't see an impact. I think in our minds, we're thinking we expect something to happen, but we just don't see it yet.

We haven't seen it yet. So let's talk about -- and you kind of alluded to there, David, that you do have international presence. And to me, that's one of the unique things about nCino, at least within this space. This tends to be an area that is dominated in local markets, primarily, et cetera. But yet nCino is starting to perform quite well internationally. And then frankly, it's been a little bit of a surprise even for us. Can you comment on how you're able to localize your offerings so efficiently? And why, I guess, other digital banking providers haven't been nearly as successful with their international efforts? Like how do you get to market in these other countries and then deliver in a way that others maybe haven't in the past?

Well, I think the first benefit we have is being on Force.com. With Force.com, we can go anywhere, Salesforce has a data center. We get currency 120-plus currencies, 120-plus languages. We get entitlements, data residency. That's our leg up. We don't have a big capital outlay needed to enter any given country. We then go and land salespeople. We set up entities. We set up entities in Germany, Spain and France last year, put people in country, start selling the product. Once you get those products live, then you can start using them as a reference. I think international is just different than the U.S., not like you can pick my Kentucky bank and, say, use it as a reference for my Louisiana bank. You really have to do it in-country and be successful and then start building on that. I think Canada is a great example of how we view other countries developing. Landing in Canada, put local people there, start selling product initially deployed, and last week we closed 3 of the top 5 big banks, we have 5 of the top 7. I mean, once you start seeing that traction, then you start seeing it kind of building on itself. And in terms of investing internationally, we'll do that initial setup in country. We'll put some salespeople there, start building the brand, deploying product. And then as we see traction, then we'll start adding additional heads. It doesn't require 20, 30 heads to start. We're just, I would call it responsibly investing for growth just because you have more heads doesn't mean you sell more product.

Right, right, right. What -- so on that -- so let's -- a couple of quick things there, David. So once you do make even a small commitment to a country by putting a few people in that market, what do you -- have you found is the typical time to start to at least get initial wins? And then are there things that you're able to do or experiences you can bring to bear or even just the referenceability. Is there a path to accelerating that? Or do you feel like it's likely to be pretty consistent from market to market?

Yes. I think each country is different. We landed a German bank initially. I think we were there probably 1.5 years. And then you deploy that product. Now granted, we've not sold any additional German deals yet, but that one is going live this year.

Okay. So it's kind of the first point of reference for other customers, right?

Yes. Japan, I think, is a great example. Japan is just a much different country than any other country we just sold into. We've sold 3 deals with 3 different SIs. We're in current deployment with them. The deployments are going well. I think in that country, as they go live, it's very conservative. They want to see proof points. I think as you see those proof points on top of the relationship with SIs in Japan, I think that's when you'll see acceleration in that country too. So it really just depends on the country.

Right. So you talked about Canada, initial deals in Germany, Japan. What are the countries that the company is most excited about? And what should we really be tracking from a country-specific standpoint? Who can contribute most incrementally the soonest? And how would you rank order those? Or what are you looking to see maybe to decide who will be the contributor?

Yes. I think Canada did just an awesome job last year, and hopefully, we can build on that momentum. U.K., Ireland, that was our initial move outside of the U.S. We're very pleased with the performance, closed a big bank in the first quarter. And then I think on the continent in Europe, we won a great deal in France. That's ongoing -- the deployment is ongoing. So I would look to France and Germany to go live this year with the products. And Australia and New Zealand has really picked up after COVID. Josh was out there a couple of weeks ago, talking to the team. But we'll look for strength in Australia and New Zealand. And then Japan is small, but it's a great market. And it will take time to build in Japan. But these little proof points in Japan, I think -- mean, in some cases, more than a bigger win somewhere else.

One piece of the international effort that I do want to hit for anybody who wants to understand nCino is the critical nature of our system integrator ecosystem, what we do, roughly 2,700 consultants, certified global SIs, Accenture, Deloitte, B2BC. So as you say, you're pleasantly surprised by the international momentum. A big piece of why we're able to do that, the scalability, the extensibility of the platform helps. But we go work with those SIs who have the account relationship. They've been in there before we showed up and they'll be in there after we go live. And we can leverage the global scale infrastructure, integration capabilities, change management team of those SIs as well. So when we signed 3 deals in Toronto last year, you see those great SIs taking care of the accounts. And we put a couple of people on the project for quality control to maintain a relationship, but they do the heavy implementation lift.

And so as part of that implementation, are the SIs also doing the localization, language translation as appropriate, et cetera?

They can. And what they can do is reach out to their in-house credit team who understands the local nuances. Maybe this is a different way we look at collateral in a specific country, they just pull in an expert, right? And we can leverage them, our interest in line. And the good thing is once they get one of those, and they get the project live and the other client account leads this team making money with nCino they're encouraged to help us in those accounts as well. So you get some lifts from that.

Got it. So you're adding a lot of big name accounts outside the U.S. But what about here in the U.S.? How should -- and Dave, this is really for you. How should investors and us, frankly, be modeling the impact of Wells Fargo signing in fiscal 2Q? Like -- in terms of like revenue, when does that ramp, the bookings contribution, how does that affect year-over-year comparability? Just make sure that we're kind of modeling that correctly.

Yes. So the Wells Fargo deal we closed in Q2 of last year, so you saw a big jump in the RPO because of that specific contract. That's longer term in duration. The seat activation schedule extends beyond our normal 2-year period. So think about that. But it does compete -- on the RPO basis, it will create a tough compare in Q2. Just because we had -- now with Wells Fargo, we closed a number of other enterprise renewals in that period, too. So it was a phenomenal second quarter are kind of unnatural. And then the revenues, they will just ramp with the activation schedule assuming it will be a 4-plus year activation period for that contract.

And is that pretty linear then? Or...

It bumps along just depending. I don't remember the specifics of that. Normally you get a handful of seats live and running to start the deployment. And then as you start scaling into the deployment, they'll anticipate what seats they needed and what they plan for, and then those will activate to get them up and running. And then by the end of the contracts, all those seats would be up live and running for the training piece. And so make sure everybody is live and up ready for training on the product at that.

And so -- and I guess, as you guys get bigger, it becomes less a little less of an issue, but in the event that you -- or like Wells Fargo or in the event that you add bigger customer, is that -- should we think about it almost like a bit of an S? Or is it more linear through the seat additions?

I think it's probably more linear in nature.

Okay. Got it. So let's talk about margins generally. Where do you expect you can drive gross margins over time? As the subscription component grows international looks like it's likely to grow faster than domestic. So how should we be thinking about margin evolution, generally?

Yes, on the subscription side, I think last -- we're in the low 70s range. I think our target in the long run on subscription is in the 75% range? We also charge support in that number too. So we do have support costs in there. It's not -- it is at a higher rate gross margin than our professional service gross margin. As we sell more international, that is an uplift to gross margins because in the U.S., we're able to sell bundle of Salesforce seat in $5 billion and below banks. And so as we sell more enterprise and international see a natural uplift in that. SimpleNexus, which the company required in January, they're on AWS. They do have a relationship with ICE, so they do pay a referral fee to ICE to integrate to the platform. And then on the professional services side, I think the long term, we're targeting 20%. I think that's a reasonable level with -- we talk about 10% to 20% of revenues coming from professional services. I think that still holds in the long run. And as nIQ accelerates, that's AWS, which is a much higher margin. And so if we see an acceleration in nIQ, you could see a gross margin potential uplift from that as well.

So I want to talk about some of the specific product groups, if you will. But as we're talking about margins and bookings and P&L, I want to make sure we open it up to the audience if there are any questions. Please just raise your hand, and we'll get you a microphone. Awesome. Everybody wants to hear about the product group. So we'll go -- we'll start with commercial lending. One of the questions we get asked the most, and sometimes I don't really know where to start, but one thing that we get asked about is how far can nCino ultimately drive your share in commercial over time? What has to happen to get yourself to 10%, 15%, 20% of the potential market there?

Yes. So right now, we are sitting at about a 10 -- 6% market share within commercial. I think in the U.S., obviously, that number is higher because we just have a higher exposure to the U.S. right now than international. But I think if you think about, we have 12 of the top 25 banks in the U.S., there's 400 big banks globally that we can go after. So I think as we see success, it builds on itself. I think the IPO helped in our marketing of the brand. Internationally that really helped with customers. But I think the more SIs we have trained on the product, the more SIs we have actually going out and bringing -- helping bring business to us, we work with them outside of our regions that we're selling directly into. We have the opportunity to sell for them to walk into Southeast Asia or South America to try to sell deals to their big bank customers as well. I think that could accelerate our market share gains as well.

Got it, got it. And then retail. Retail is complicated because there's a lot of regulation. Some of it varies from state to state. And there's -- whether it be disclosures or other things. So can you talk a little bit about the retail lending product? Have you been challenged by that? And -- how are you able to overcome any challenges that you have seen? And where do you think you are from a product capability standpoint now?

We were really pleased last week at our -- first of all, just to be able to have a user conference, so...

Right.

But we had Hancock Whitney Bank on stage with us. They went live with retail. And it was just great to hear them talk to us. It's about a $36 billion bank, really conservative Southern banks. So for them to go on record with us, it was a great validation. Many of our bank operating system customers, when they bought nCino, bought it to solve a specific problem with the vision of running a single platform where you can give that consistent experience across multiple products. Retail is really hard. In commercial, we're typically replacing a manual process, maybe a poorly used or poorly adopted commercial lending system. Retail is a lot more users of different training level for the retail branch banker and a lot more regulation. So it's been a big piece of work, but we're proud of the progress. And one of the metrics that we really like to track and that we talk about is the number of bank operating system customers using multiple solutions, and our goal is to keep that going up as we take that great customer base and expand retail in there. Anything to add to that, David?

Yes. No. About 25% of our customers use more than one product. And that's a metric that we track internally to make sure that we're cross-selling as much as we can with our customers.

How referenceable for that product, do you think Hancock Whitney is as a bank? I mean, are they so unique that it's hard for any other potential customers to really look at them? Or do you think there's a lot of commonality and that, that will be a good touch point for people?

Yes. That's a great question, and we're really excited about that one because that is a very common business model for a really nice-sized regional U.S. bank. So they're pretty indicative of a lot of our customer base. We have a very nice market in the regionals and the enterprise. And the sophistication of Hancock and the size of that account from our perspective is really good proof point.

Got it. So why don't we -- this is -- we've kind of been touching on probably the easier topics, but I want to talk about SimpleNexus here. And we're talking to one of a long-time shareholder earlier this week. And they expressed reservations about the SimpleNexus or at least at the time the deal was announced, both in like why go into that space, at least now and into the mortgage space, it's obviously difficult. So can you talk through a little bit the -- let's start with the strategic rationale. What was the attraction or what is the attraction of SimpleNexus generally?

Yes. And so what we really see the opportunity with SimpleNexus, they focus very heavily on the independent mortgage broker, mortgage banker space. They did not heavily focus on banks. And we do not see much presence in our customer base for people that can truly digitize the home buying journey. So we're really excited to take them into the bank market. Now they have a package solution that they can take up-market. It would be really hard to have a heavily customized big bank solution and try to take it down. We see that. So when we look at the technology, they're digital focus. nCino's DNA is very much focused on that middle, back office transformation piece, and we've expanded into digital. They started with digital with the loan officer journey, with the borrower journey. And as they look at eClose, they're going more in the middle back office. So it's a nice complement for us.

And how much work do you need to do or should you do in terms of integrating it into the existing nCino product portfolio, even if it's just simple things like UI, et cetera? Is there a lot of work that needs to be done there to harmonize that? Or do you feel pretty good about where you're at already?

There's work to be done. What we showed for our first use case is the ability from the SimpleNexus app to have the customer also open a deposit account. Typically, we see people using other point-of-sale solutions in mortgage space that will give a great digital home buying journey than if they have a PDF in a document or going to a branch to sign for them. So the ability to do that concurrent with the mortgage is something that's going to help banks really think more strategically about those relationships, not just about a mortgage transaction. other use cases are combining, for example, in a secured personal loan with the mortgage. And you can do that with nCino and that was SimpleNexus integrated.

So if that's a SimpleNexus, the logic and kind of what you can do from a product perspective, the question is that we get more than anything or just around durability through a mortgage cycle that we're obviously in right now, and we're on the downside of it, at least for the time being. How much do layoffs at mortgage originators or large banks -- how much of an impact does that have? And at what point or what's the sensitivity that you would have to kind of revisit your growth targets for SimpleNexus for this year?

Yes. So as we were doing due diligence on the company, we analyze loan officers. There's tons of data out there, where you get quarterly data on loan officers. And through cycles, the numbers don't change that much for loan officers. Where we see layoffs happening is in the middle and back office of the IMBs. Loan officers are normally commissioned people, and so the cost to carry them is low. And in the meantime, you're still closing mortgages, right? And what we've seen from our customers is they're trying to gain share right now in this market, take advantage of the dislocations. And so granted, you'll probably see some IMBs go bankrupt, you're going to see M&A pick up in the space. But I think it's key that the share gains are on top of mind for all of these customers. I think that's it.

So what is -- I think one of the other things that kind of dovetails with that is like, all right, so even if your loan officer account maybe doesn't fluctuate nearly as much, obviously, as the market itself does, and there's a desire to keep them retained and they're on commission, so maybe the fixed cost is a little lower. What about just the reach that SimpleNexus already has? Like it's reasonably large within the market. How much share incrementally do you think there is to gain for them? And is this a period where you can gain share? Or is that harder when you're kind of going down while the market is shrinking?

Yes. I think there's an opportunity to gain share. I think this creates opportunities. While others might be laying off employees and being distracted, we have -- we're funding their growth still. So I think we can attack the market, we can gain share. we can go to our customer base that might not have looked at SimpleNexus in the past and say, they're backed by your partner, and it gives us the opportunity to sell into that banking space. And we've seen the initial good traction so far. I think what we saw in the first quarter, they came in -- in line with our numbers. I'd say we are content with their results. I think it was a good showing relative to the backdrop of the mortgage market. But I think what was helpful is that we had a good participation rate from the new salespeople that we have. And I don't only care if they close 20,000 -- whatever the size deal is, we're actually closing deals and shows there's interest in the market for us. So I look at that with the logos that we added. In the quarter, could mortgage get worse? Of course, they can. We're focused on the home origination side. Refis we can do. That wasn't the focus of the company. And I think we can weather the storm relatively better than others can.

Got it, got it. Just in the last couple of minutes, I want to hit quickly on nIQ. What's been the reception from clients thus far? And maybe what's the functionality that you're most excited about?

So if you look at the asset, the nCino customer base, you have all these banks that are now doing their complex lending on nCino. The first nIQ offering that we've talked about was auto-spreading. Auto-spreading can take some structured financial statements, gets it into spreads really quickly, cuts about 85% of the effort out of that. That's up 400% year-over-year. And I would hope to replicate that with pricing and profitability. Last week for users that are user conference, that was a big area of focus for us is really pushing harder on the launch of that integrated pricing tool, seamlessly integrated within the actual LOS, not requiring a relationship manager to toggle screens, reenter data. It's really nicely integrated with nCino and I've been really pleased with that response. Also, our portfolio analytics team is working very hard. We have a pending CECL deadline, which is a piece of regulation that has been punted a bunch of times, and it's not going to get punted again. So once that is in there, those institutions are going to have to maintain compliance with CECL that will be a fun place for a while as well.

So -- and I guess on that CECL point, can you just talk a little bit about the ebb and flow and the impact on that? Because some people have wondered like, well, is this kind of a onetime buy? And then like after that, because of CECL, but once CECL is fully implemented, that there's not really an incremental opportunity for growth? Or is there? Like how should we think about that?

CECL is definitely the alligator that's closest to the boat just because of the regulatory deadline. However, there's a much bigger opportunity relative to loan and deposit analytics and actually understanding the portfolio. So that team does lots of things that CECL is a great opportunity for us. And as those accounts are live they adopt us for CECL, we can then go continue growing that with more portfolio analytics offerings.

Any other key points of potential synergy of nIQ within the rest of the product base and opportunity to grow that?

Talk about that a little bit, like nIQ decision.

Yes. It's -- I think, on the nIQ side, commercial pricing and profitability is the biggest one behind auto spreading. We're starting on the community bank side and then graduate up to the region and enterprise and then go international. On the SimpleNexus side, they didn't acquisition LBA where they acquired, and they have a product that does compensation management for the mortgage space. And so you think about how many people get paid on a mortgage like, in some cases, 20 different people. And how do you monitor that and ensure that you're paying everybody the right amount and the right percentages. And then they also have a data analytics tool as well that help give visibility on your loan book, on your pipeline and everything else. So I think those 2 products gives us a great opportunity to sell into that SimpleNexus space and also then backfill into our customer base as well.

Got it. Well, Josh, David, that's all the time we have. Thank you very much for joining us here today. Anybody who has follow-up questions, they are going to be in the corner.

Thank you.

Thank you very much.

Thank you. Thanks a lot.