The Arena Group Holdings, Inc. (NYSE:AREN) Q3 2022 Earnings Conference Call November 9, 2022 4:30 PM ET

Company Participants

Rob Fink - Investor Relations
Ross Levinsohn - Chairman and Chief Executive Officer
Douglas Smith - Chief Financial Officer
Andrew Kraft - Chief Operating Officer

Conference Call Participants

Mark Argento - Lake Street Capital
Daniel Wolfe - 180 Degree Capital
Dan Day - B. Riley

Operator

Good afternoon, ladies and gentlemen, and welcome to the Arena Group Third Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mr. Rob Fink, Investor Relations. Rob, the floor is yours.

Rob Fink

Thank you, Operator. Hosting the call today are Ross Levinsohn, Chairman and Chief Executive Officer; Doug Smith, Chief Financial Officer; and Andrew Kraft, Chief Operating Officer. Before we begin, I'd like to note that some of the comments made during this presentation may include forward-looking statements. All statements other than statements of historical facts are statements that could be deemed forward-looking. Forward-looking statements relate to future events, future performance and include, without limitation, statements concerning the company's business strategy, future revenues, market growth, capital requirements, product introduction and expansion plans and the additive suite of the company's funding. Other statements contained in the presentation that are not historical facts are also forward looking.

The company cautions investors that any forward-looking statements presented in this presentation where the company may take orally or in writing from time to time are based on the beliefs, assumptions made by and information currently available to the company. Such statements are based on assumptions and the actual outcomes will be affected by known and unknown risks, trends, uncertainties and factors that are beyond the company's control or ability to predict.

Although the company believes that its assumptions are reasonable, however, these assumptions are not guarantee of future performance and some will inevitably prove to be incorrect. As a result, the company's actual future results can be expected to differ from its expectations and those differences may be material.

Accordingly, investors should use cautious in relying on forward-looking statements, which are based only on known results and trends at the time they are made to anticipate future results or trends. Certain risks are discussed in the company's filings that are meeting with the SEC.

In addition, references will be made to non-GAAP financial measures. Adjusted EBITDA, Information regarding the reconciliation of this non-GAAP to GAAP measure can be found in the press release that was issued this afternoon and on the company's Investor Relations website.

With all that said, I'd like to turn the call over to Ross. Ross, the call is yours.

Ross Levinsohn

Thank you, Rob. Thank you all for joining us today. The third quarter has been a time of incredible growth at the Arena Group with some of the strongest results in our company's history. In Q3, we generated more revenue than in any quarter in our company's history. We were profitable for the quarter on an adjusted EBITDA basis. We expanded audience and engagement across all our properties, and we are now the 35th largest publisher with nearly 100 million users in the United States according to comScore. That's up 18 spots from number 54 at this time last year.

We significantly improved our digital advertising line and our yield from advertising in Q3 2021 and from last quarter. We continue to see acceleration on the digital ad side of the business, I'm so proud of our ad sales and marketing team for driving this incredible growth. We managed our costs aggressively, reducing our operating expenses versus Q3 of last year by more than $10 million, while growing revenue by 12%. 86% of our growth in digital advertising was organic and our acquisitions of both Parade and Morning Read are off to tremendous starts.

For the first nine months of the year, our performance has been incredibly strong. We've grown revenue by 41% to $180 million. Gross profit has improved by 44% to $64.3 million. Our net loss has narrowed by over $13 million, and our adjusted EBITDA has improved by 76% to negative $3.1 million. And most importantly, we expect to see full year profitability this year. Against the backdrop of a very difficult economic climate, we outperformed the industry, and that momentum has continued into Q4. I could not be prouder of this team and our mission to build one of the most dynamic consumer businesses in our sector.

Let me take you through a few key results. Third quarter total revenue grew by 12% to $66.7 million versus $59.6 million in the previous year period, the highest quarterly revenue in our company's history. Of note, last year in Q3, we had both the Summer Olympics as well as the debut of our 2021 swimsuit issue, which this year occurred in the second quarter. In the third quarter last year, these events contributed a combined $4 million to our revenue line yet even without these two staples and in the face of a recession, we grew our revenue by 12% year-over-year.

Third quarter digital revenue grew by 26% to $38 million and now accounts for 57% of total revenues as compared to 54% last quarter and 51% during the same period last year. Digital advertising revenue increased 56% in the third quarter to a record $28.5 million from $18.3 million in the period last year. Other revenue, including licensing events and sponsorships was $4.8 million in the third quarter, up 15% from the previous year. Our third quarter RPMs expanded, growing 10% as compared to the same period last year. and growing 17% as compared to the second quarter of this year, we are seeing yield improve.

Third quarter gross profit was $26.2 million, a slight decrease of 4% compared to a gross profit of $27.4 million in the prior year quarter. Again, this prior year quarter included the Summer Olympics and the release of SI Swimsuit which together contributed approximately $4 million to our 2021 revenues. This year, SI swimsuits launch took place in the second quarter. Our year-to-date operating expenses increased by only 1% against revenue growth of 41% during the same period, reflecting our commitment to manage our costs aggressively while driving growth in key areas.

Third quarter net loss improved by more than $8 million to $16.5 million. Of note, more than 100% of that $16.5 million was comprised of non-cash charges. Adjusted EBITDA was $3 million for the quarter as compared to $3.3 million in the third quarter of 2021. However, last year, $3 million of the $3.3 million was a result of an accounting benefit in print subscriptions and an accounting benefit in agency fees.

Our year-to-date adjusted EBITDA improved by 76% or $10 million to a loss of $3.1 million as compared to a loss of $13.2 million during the same period last year. We expect to deliver positive adjusted EBITDA in the fourth quarter and for the full year 2022. These results we are sharing today, especially given the backdrop of very challenging economic times and almost universal pullback from our competitive set demonstrate the strength of our company, our business plan, the laser focus on operations and the foundations we've laid over the past two years.

During the past few quarterly earnings calls, I have emphasized that strategic investments that we made in 2020 and 2021 to transform our business, and it's clear from these results that those investments are paying off. While others in our industry are dialing back, our growth continues to accelerate, both on the top and bottom lines, driving value for our partners, our company, our employees and our shareholders.

Of course, given these uncertain times, we continue to be extremely disciplined about how and where we deploy our resources and how we manage our business. As I highlighted earlier, we continue to manage our operations aggressively, investing in high-growth areas, eliminating operations, which we believe are not built for the future and keeping a close eye on headcount and spending across the board. We've taken actions this quarter to both optimize and accelerate our business in the coming months and years.

In September, we announced that we had made the difficult decision to wind down for ads print business. We acquired a broad set of assets when we completed the AMG Parade acquisition in April.

Over the past five months, we have invested in the Parade and Afon digital businesses and concluded that we should wind down the parade print operations. I want to thank all the employees who spent many years working on this incredible asset, and I'm very confident about the future of this brand. While it's never easy to close down a business, especially one that's been in operation for so many years, we are confident that by shifting our resources from print operations to Parade's digital business, we will not only protect but strengthen Parade's legacy of providing high-quality entertainment and lifestyle content to consumers.

That decision is already paying off. Parade's Q3 digital revenue is up 70% compared to the prior year quarter under previous management and monthly average page views are up 18% sequentially compared to Q2, according to Google Analytics. We have taken great care to work closely with our partners throughout the newspaper industry to ensure continuity of service and expanded opportunities on the digital side. I'd like to mention our incredible distribution team led by Kevin Craig for their tireless work with more than 900 newspaper partners. We've had significant interest from many of those partners in working with us on the digital side and with our parade e-Edition. We continue to look for assets that we can either acquire or partner with in a highly accretive way. We have a healthy pipeline of opportunities to expand our vertical model and brand portfolio in the coming months.

In September, we announced our acquisition for our golf partner, the Morning Read, with whom we've partnered for over a year now. The acquisition and subsequent launch of SI Golf has brought high-quality golf content to our audiences during the most dynamic time in golf history. By fully bringing the Morning Read into the Arena Group and expanding our playbook, we are confident that we will see the same strong traffic growth that we've driven across other properties.

We are also diversifying and devoting resources to growth opportunities where we see the most value across the Arena Group, in particular, e-commerce and syndication and licensing. Our e-commerce business continues to grow with over 2.4 million in products sold via sports illustrated in the street in Q3. During Prime Day in July, we averaged a 63% click-through rate and a 22% conversion rate on our extensive coverage across multiple brands. We plan to continue to expand our e-commerce capabilities in Q4 and beyond.

Our Q3 syndication business and revenue far exceeded our expectations as we added new licensing partners and expanded existing deals, and we anticipate further growth in the future. Our audience development team continues to see strong follower growth across all social channels where we also saw record social video views as we continue to focus on this high-growth area of the market.

Overall, audience growth has been strong yet again. In September, the Arena Group ranked as the 35th largest publisher in the U.S. according to comScore, up nine spots from number 43 in August and up 18 spots from number 54 from the same time last year. It's clear that our strategy and our playbook are working across our more than 250 brands.

In our sports vertical, our audience continues to grow with the Sports Illustrated Media Group reaching the number four spot according to comScore rankings in the sports category in September. In addition, yesterday, the alliance for audited Media released its Magazine 360 report, a measure of total magazine brand audiences across print, web, mobile web and video. Sports Illustrated is ranked as the second fastest-growing magazine brand measured as a comparison of the first nine months of 2022 audience compared to last year.

These are huge achievements for our teams and reflect the breadth and depth of our sports content, from high-quality sports journalism from Sports Illustrated to breaking and trending sports news from the spun to deep team content from our fan Nation publishing partners. We've also started applying our playbook to Athlon Sports, which we acquired as part of the AMG Parade acquisition in April.

As a result, Athlon's monthly average page views for the third quarter increased fivefold quarter-over-quarter according to Google Analytics, another testament to the repeated success of our playbook. In the finance vertical, we've continued to see strong traffic growth as we diversify the Street's editorial voices. It's been near -- it has been a full year since Jim Cramer left the Street and the Street's monthly average page views and digital advertising revenue in the third quarter have more than tripled year-over-year.

We continue to see the Street's content resonate on social platforms as well with a 48% increase in Facebook engagement in Q3 compared to the prior year quarter, according to ListenFirst. We have also opened our news desk on the floor of the New York Stock Exchange, and Twitter video views have increased by 62% in Q3 as compared to Q2, according to ListenFirst, as we continue to focus on producing high-quality live video content.

In our lifestyle vertical anchored by Parade, we have driven strong traffic growth on parade.com since acquiring the property in April, and I'm proud to share that just last month, for the first time, the Parade Lifestyle Group broke the top 10 in the comScore rankings of all lifestyle publishers. We're very optimistic about continued growth at Parade, especially as we allocate resources from the Print business to our digital businesses.

At our Hub Pages business, our playbook and content strategy have now expanded across 10 sites with plans to double that number in 2023. As a result of this strategy, our total Hub Pages monthly average page views in Q3 grew by 92% or $88.2 million from the same period last year. I'm extremely proud of the growth that we've achieved across all of our verticals this quarter. I'd like to share more about our outlook for the fourth quarter and beyond, but first, I'd like to let Doug Smith, our Chief Financial Officer, take you through the numbers. Doug?

Douglas Smith

Thank you, Ross. Let me turn to the results. In the third quarter, revenue was approximately $66.7 million, up 12% compared to $59.6 million for the third quarter last year. Breaking down our revenue, total digital revenue of $38 million represented 50% -- excuse me, 57% of our total revenue and grew 26% versus the third quarter of last year.

Digital advertising revenue of $28.5 million was up 56% versus the third quarter of last year. This growth was driven by a 32% increase in traffic across all of our major business lines as well as a 10% lift in revenue per page view. The yield improvement was a result of higher mix of direct digital advertising, which is a much higher priced product. 86% of this digital advertising growth was organic, driven by the traffic and yield improvements with the acquisition of the Athlon Parade properties accounting for the balance of the growth.

Digital subscription revenue was $4.6 million, down 40% as compared to $7.7 million in the prior year quarter as we transitioned some of our digital subscriber base at the Street to new products catering to the influx of new users that Ross mentioned. This decline was largely offset by the increased digital advertising at the Street, driven by the near tripling of traffic in this year's third quarter versus the prior year.

Other digital revenue, largely licensing and syndication, increased by 15% year-over-year to $4.8 million during the third quarter of 2022. Despite the fact that the Sports Illustrated Swimsuit Magazine launch added $3 million of revenue to the third quarter of last year. The growth in licensing and syndication revenue is driven by new relationships as well as growth with existing licensing and syndication partners, and it leverages our existing content with no outlay of incremental expenses.

Print revenue decreased 2% to $28.7 million from $29.3 million in the prior year quarter, primarily related to a planned decrease from Sports Illustrated Magazine as we reduced the rate base from $1.7 million to $1.2 million, so that we could focus on more profitable subscribers. This was largely offset by the addition of the Athlon publications, which were acquired during the second quarter of 2022.

Gross profit decreased slightly to $26.2 million compared to a gross profit of $27.4 million in the prior year quarter. Our cost of revenue increased by 26% versus the prior year quarter, primarily due to the increase in printing distribution and fulfillment costs of $5.8 million, which was largely a result of the Athlon Parade acquisition in the second quarter of 2022. We announced that we would be shutting down a free print this month, eliminating the unprofitable aspects of the business.

Total operating expenses were $38.6 million in the quarter compared to $49.8 million in the prior year quarter. This decrease was primarily driven by lease termination costs of $7.3 million that were recorded in the prior year quarter and a decrease in selling and marketing expenses of $2.8 million. The decrease in selling and marketing costs was primarily due to a decrease in subscription acquisition costs or agency fees largely to $3.2 million and advertising cost reductions of $0.9 million and stock-based compensation of $0.6 million.

This was partially offset by increases in payroll of selling and marketing and account management support teams of $2 million and circulation cost increases of $0.8 million, both of which were a result of the addition of the Athlon properties. As a result, net loss was $16.5 million as compared to $24.7 million in the prior year quarter, an improvement of $8.2 million or 33%. Over 100% of the third quarter of 2022 losses were non-cash charges, including stock-based compensation, amortization of platform development depreciation and intangible assets and other noncash charges. These noncash charges totaled $16.6 million.

2022 third quarter adjusted EBITDA was $3 million, a 9% decline as compared to $3.3 million in the third quarter of the prior year and this is primarily related to an accounting benefit in both print subscriptions and agency fees that added approximately $3 million to the prior year numbers.

Looking at liquidity, we ended the quarter at $13.3 million in cash and cash equivalents compared to $14.8 million at June 30 and $9.8 million at year-end 2021. In the quarter, net cash used in operations was $7.2 million. We had $3 million of tax payments to repurchase restricted common stock and $0.9 million of net acquisition payments and $1.2 million capitalized platform development expenditures. Primarily offsetting these payments was a $10.7 million borrowing under our working capital line of credit.

With that, I'll turn the call back to Ross for closing comments.

Ross Levinsohn

Thanks, Doug. Q3 has been a record quarter for the Arena Group, revenue and audience growth, profitability, a hard-core focus on optimizing operations and an eye towards further growth. We are continuing to sharpen our focus for Q4 in 2023, and despite the economic outlook, our performance and the visibility we have for Q4 and Q1 remain positive. I am extremely optimistic about what's to come. Our strategy and playbook are working with strong audience and revenue growth in our key segments and across our KPIs. The M&A market is improving as companies across our industry struggle against uncertain economic data. We will continue to look for opportunities that are accretive and that fit our strategy.

We are transforming great brands to operate in the digital age. We are accelerating strong business models by integrating businesses into our verticals anchored by those great brands. That one-two punch has enabled us to dramatically improve margins and the investments we've made throughout the last 24 months are bearing fruit today and will in the future with revenue and audience growth, profitability and by driving value for our shareholders.

And with that, I'd love to answer any questions that you have. Back to you, operator.

Question-and-Answer Session

Operator

Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] Thank you. Your first question is coming from Mark Argento of Lake Street Capital. Mark, your line is live.

Mark Argento

Hey good afternoon guys. Congrats on a really strong quarter – models continuing to pick along here especially in this environment. I just wanted to drill down a little bit. You had mentioned RPMs. You need to be pretty solid. Just wanted to see what kind of trends you're seeing here post quarter? Also, maybe you could juxtapose the various segments, financials versus sports or lifestyle as well, thanks.

Ross Levinsohn

Sure, hey Mark thanks. We're seeing RPMs continue to improve. Q4 is always the best quarter as it relates to yield. There's clearly stress in the industry. We're seeing it almost daily being reported across all outlets, including the Street, but we have laid a lot of groundwork over the last couple of years. That coupled with our audience growth and those comScore numbers that I'm referencing, and really the hard work that our sales team is doing led by Adi Ziac and Jeremy Foss is really paying off. So we've seen expansion in our RPMs, which is revenue per 1,000 on our pages. And obviously, we've seen growth in our businesses. So we're optimistic. We're obviously into Q4 at this point and have some visibility for the rest of the year.

And as I said, I think we're going to be -- we certainly were adjusted EBITDA positive in Q3. I think we’ll be adjusted EBITDA positive in Q4, and I think we will be for the whole year. So optimistic on a segment-by-segment basis, obviously, we don't break that out. But what I can say is that we're seeing growth across the board fairly consistently across Parade, lifestyle vertical, which is our newest. The Street, I referenced some numbers of just tremendous digital ad growth there on the Street side and then at our Sports Group, continued growth across all those brands within our Sports Group. Doug, feel free to jump in if you'd like.

Douglas Smith

No, I think you hit most of the important points. I would also add, as I mentioned, that one thing that's also improving our yield is that we continue to see a higher mix of direct digital advertising as opposed to programmatic where we get higher pricing. So that improvement in the mix as well as the improvement in the underlying CPMs is what's driving it.

Ross Levinsohn

Mark, just as a reference, I hit it in the script, but our RPMs were up 10% over the same period last year and they grew 17% Q2 to Q3 this year. So we're seeing acceleration on the yield side of our ad business, as Doug said. We're out there selling more direct deals. We're excited about Q4. We've got some, obviously, a lot of sports, a lot of volatility in the stock world, a lot of opportunity on the lifestyle side of things. There's a lot of holiday movies and big TV shows launching. We're seeing commerce opportunities as well. So there is a lot that we can point to. In addition, we will be announcing the Sports Illustrated Sportsperson of the year in December, which is always an anchor event for the company and usually attracts very strong sponsorship and advertising.

Mark Argento

Thanks for that additional color. That was really helpful. And then just one other quick one. I noted you kind of called out in the -- I think in the script, but also maybe in the press release, but the kind of licensing and syndicate revenue opportunity as you guys continue to grow the content and the breadth of the content. I just wanted to better understand kind of the opportunity there, could that be a significantly bigger business over time, given you're able to check a bunch of boxes or some of these other publishers in terms of the breadth of content.

Ross Levinsohn

Yes, great question. So one thing of note that we didn't touch on in the script. As we said, the SI Swimsuit addition in 2021 happened in Q3, and there is a significant contribution to that line. There was a significant contribution to that line in 2021. That was not in this year. So we showed about 15% growth, but it's actually greater if you extract the SI Swimsuit business and moved it into another quarter. So we're seeing real acceleration in how we monetize content that we're producing. So in simple terms, we produce it once and we can monetize it multiple times. We've got some great partnerships with traditional media companies, with digital companies across the board, ranging from MSN and others.

So what we're seeing is the ability to take quality content and distribute it multiple times to multiple places, whether it be Apple or MSN or newspapers around the country. And that's part of the great thing about trusted brands like Sports Illustrated or Parade or the Street. We're able to take that content and move it around. So yes, we have very high hopes for that business. It's already a significant line for us, and we think that's only going to grow.

Mark Argento

Great. Thanks guys.

Operator

Thank you very much. Your next question is coming from Daniel Wolfe of 180 Degree Capital. Daniel, your line is live.

Daniel Wolfe

Hey Ross and Doug, great quarter and the rest of the team as well. As we look out and you see all of the news that publishing ad tech is having massive trouble, layoffs, taking guidance down, you guys are the opposite. And I know before you spoke about historically that performance-based advertising as advertisers are really looking for performance, that's a place where you benefit. But is that how -- are you winning market share because -- and new customers because they are seeking out that high performance? Or what is it that is really in your mind separating you from these other groups that are out there that are really running into trouble?

Ross Levinsohn

Yes, great question. There is stress in the marketplace. I think dollars are shifting around. I think before you'll probably see a much larger scatter market than we -- anybody had anticipated. That's probably true for television and print assets as well as digital.

In sort of dissecting some of the earnings of our competitors or big digital publishers online, there is, it seems, a move not only the performance but also the quality brands. So some of the biggest publishers in the country are seeing real pressure. We're seeing the opposite. I think some of that is attributable to our growth in terms of audience. Some of it is attributable to the hard work that our teams are doing. We're doing a lot of direct deals that have custom components to them. So we're out listening to advertisers and understanding what they need, and that's heavy lifting.

So it's not just about looking for a specific segment of an audience. It's attaching a sponsor or a brand to our brands in a way that's meaningful and then tracking it and doing the back-end work for it. So I think it's a combination of great brands, great growth of our audiences’ really hard work from our teams to deliver it. And at the center of it is great experiences for the consumer, great content, trusted content trusted brands. I think all of that matter. Advertisers may be holding money, some, but we think that money is still out there and the flow of RFPs that we've seen have been pretty strong.

So some of it is each part of what I just mentioned, Daniel. And I think we're optimistic about where we sit today. Yes, there's a lot of stress in the marketplace for a lot of our competitors, but as I've said, we've seen nothing but sequential growth quarter-over-quarter, and we've headed into the two biggest quarters generally for our business. And Q3 was really, really strong and Q4, at least early, the indications are very positive.

Daniel Wolfe

That’s great. And as you think about going forward and you've mentioned this in the past, but hitting sort of that inflection point of potentially having a full year of positive EBITDA, in the core and next quarter as well. Do you think we're really at that inflection point with the business that substantial growth in the bottom line is if things continue along the path you're on, that we're at that point where we start to see really, not only acceleration on the top line, but also a pretty substantial acceleration on the bottom line?

Ross Levinsohn

I do. We've talked about it over the last several calls. We have much better visibility, our system, the infrastructure that we've built, which we've talked a lot about. We have spent real money investing in our platform, in our people, in the data, in the tools that we have in our sales team, et cetera. We have the ability to drop businesses onto this platform, whether we own them or we partner with them in a very, very accretive way.

That, coupled with the results of what I'd count as eight real experiences with brands where we've taken them from either being distressed to profitability or brands that were doing okay, but once they got into our ecosystem accelerated dramatically. We have a lot of case studies on that.

And that bodes well for us in the future. When you think about the stress that a lot of companies are under, we're seeing real opportunity to grow this business both organically, in the work we're doing on audience development and the playbook that we're running, but also through acquisition in a highly accretive way. We've been very, very disciplined in how we acquire. And what we're seeing in the M&A landscape is prices that have come down really dramatically in the last six months. And I think there are -- there is a lot of pressure for a lot of companies out there, and I think we can get bigger, faster if we do it wisely.

Daniel Wolfe

That’s great. Thanks guys, keep it up and look forward to catching up again soon. Thank you.

Operator

Thank you very much. Your next question is coming from Dan Day of B. Riley. Dan, your line is live.

Todd Sims

Hi guys. This is actually Todd on for Dan. So one question I had was just the move to all-digital at Parade, how should we be thinking about modeling the G&A and selling and marketing lines within OpEx in 2023?

Ross Levinsohn

Doug, do you want to jump on that?

Douglas Smith

Yes. So the G&A line, there's not a whole lot in G&A from the inside of the business, but there was a significant sales force as indicated in our press release in the conversation we just had. So we will see some reduction in that cost line. But the bulk of the expenses with Parade print business or in cost of revenues between their print production costs as well as their content editorial costs, which are included in cost of revenue.

Todd Sims

Great, okay. And then one more from me. Looks -- we think it looks like gross margins for the full year for 2022 should come in a little under 40%. Can you give any kind of commentary on where you expect this to trend in 2023?

Ross Levinsohn

Well, we haven't been giving guidance. We didn't give guidance this year because of the Parade acquisition and our need to determine what we're going to do with the business. So I think -- it will be -- we'll probably be in a position to give guidance in the fourth quarter, looking out into 2023. But not that this time.

Todd Sims

Great. Thank you very much.

Operator

Thank you. Your next question is coming from John Fichthorn of Dialectic Capital. John, your line is live. John your line is live. [Operator Instructions] Okay, gentlemen, appears we don't have any further questions in the queue, I will now hand back over for any closing remarks.

Ross Levinsohn

Thank you. I want to just thank everyone for joining us today and mostly thank our employees for just an incredible quarter and first nine months, and I want to thank them all for the hard work that's gone into this year, and we're super optimistic about the future. So thank you all for joining, and we'll talk to you next quarter.

Operator

Thank you so much, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.