Trivago N.V. (NASDAQ: TRVG), a leading global hotel search platform, has reported its first-quarter earnings for 2024. The company experienced a 9% decline in total revenues compared to the previous year, primarily due to headwinds in performance marketing channels influenced by changes in Google (NASDAQ:GOOGL)'s search results and ad formats. Despite this, trivago (NASDAQ:TRVG)'s CEO, Johannes Thomas, expressed optimism for the upcoming summer season and the company's commitment to its strategic priorities aimed at driving growth and creating long-term value for shareholders. The CFO, Robin Harries, indicated that the company plans to maintain profitability targets with adjusted EBITDA expected to be around breakeven for the full year.
Key Takeaways
- trivago's Q1 2024 earnings show a 9% decline in total revenues year-over-year.
- The company is focusing on four strategic priorities: branded growth, improving hotel search, deal discovery, and value for advertising partners.
- Positive results from brand marketing campaigns were noted, with an increase in branded traffic and user engagement.
- Performance marketing faced challenges due to changes in Google's search results and ad formats.
- The company remains optimistic about the summer season and aims for double-digit top-line growth in the medium-term.
- trivago's market cap is below $200 million, but the company sees significant upside potential.
Company Outlook
- trivago expects revenues to decline in Q2 but to reverse the trend in the second half of the year.
- The company is optimistic about the summer season, with solid travel trends and strong demand for hotels.
- trivago is committed to maintaining profitability targets and guiding adjusted EBITDA to be around breakeven for the full year.
Bearish Highlights
- The company reported a decline in average daily rates and length of stay in certain regions.
- trivago is experiencing weakness in the performance marketing channel, mainly due to Google's adjustments.
- There is a strategic decision to focus less on Latin America because of lower returns and lack of optimization.
Bullish Highlights
- trivago is seeing growth in branded traffic, particularly in Developed Europe and the Rest of the World.
- The company is investing in AI to improve localization of ads and explore natural language search.
- Advertisers are expected to value the higher quality and better converting traffic from trivago.
Misses
- The company's Q1 2024 earnings reflect a 9% decline in total revenues compared to the previous year.
Q&A Highlights
- trivago discussed their auction improvement and user experience, aiming to complete goals by month-end.
- The impact of the Digital Markets Act (DMA) assessment by the commission was mentioned, presenting long-term opportunities despite current challenges.
- The company's investment strategy focuses on markets with more elasticity, expecting big advertisers to appreciate increased branded traffic and higher conversion rates over time.
In summary, trivago is navigating through a challenging period marked by external changes in performance marketing but remains focused on its strategic priorities to drive growth and create value for its partners and shareholders. With a positive outlook for the travel season ahead, the company is poised to leverage its brand marketing and AI investments to enhance its core product and user experience.
InvestingPro Insights
Amidst the challenges highlighted in trivago's Q1 2024 earnings report, certain financial metrics and analyst insights from InvestingPro provide additional context for investors assessing the company's position. Here are some key data points and InvestingPro Tips for trivago N.V. (NASDAQ: TRVG):
InvestingPro Data:
- The market capitalization of trivago stands at 177.68M USD, reflecting the market's current valuation of the company.
- With a negative P/E Ratio (Adjusted) of -96.76 for the last twelve months as of Q4 2023, the company's earnings do not currently justify its share price, according to traditional metrics.
- The company's revenue has seen a decline of 9.34% during the last twelve months as of Q4 2023, which aligns with the reported decrease in Q1 2024 revenues.
InvestingPro Tips:
- trivago is highlighted for holding more cash than debt on its balance sheet, which may provide a cushion against market fluctuations and investment in strategic initiatives.
- Despite the revenue decline, trivago is trading at a low revenue valuation multiple, which could suggest that the stock is undervalued relative to its sales.
For investors seeking a deeper dive into trivago's financial health and future prospects, InvestingPro offers additional insights. There are 7 more InvestingPro Tips available, which can help investors make more informed decisions. To explore these tips, visit https://www.investing.com/pro/TRVG and remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - Trivago NV (TRVG) Q1 2024:
Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to the trivago Q1 Earnings Call 2024. [Operator Instructions]. I must advise you the call is being today, Wednesday, the 1st of May 2024. We are pleased to be joined on the call today by Johannes Thomas, trivago's CEO and Managing Director; and Robin Harries, trivago CFO and Managing Director. Temporarily designated by Trivago's Supervisory Board pending shareholders' confirmation. The following discussion, including responses to your questions, reflects management's views as of today, Wednesday, May 1, 2024 only. trivago does not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward-looking typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to the Q1 2024 operating and financial review and trivago's other filings with the SEC, but information about factors, which could cause trivago's actual results to differ materially from those forward-looking statements. You'll find that reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in trivago's operating and financial review, which is posted on the trivago's IR website at ir.trivago.com. You are encouraged to periodically visit trivago's Investor Relations site for important content. Finally, unless otherwise stated, all comparisons on this call will be against results for the comparable period of 2023. With that, let me turn the call over to Johannes.
Johannes Thomas: Good morning, everyone, and thank you for joining us for our Q1 2024 earnings call. To begin, I want to reflect on the journey we've embarked on last year. In May 2023, the new leadership team and I took the helm. In the quarter when we arrived at trivago, we encountered a business that was declining at double-digit pace year-over-year. We experienced the aftermath of several years of rather low brand investment while simultaneously dealing with the substantial changes Google began making to their search results and ad formats. At the same time, we were thrilled to observe the enduring appeal and relevance of our meta proposition. Our data indicated an increase in the rate disparity since the pandemic, which has increased the value of price comparison. In addition, our research shows that trivago retained a significant global footprint as one of the most recognized global travel brands. And notably, we saw the company's highly capable team and unique culture as a competitive edge in a rapidly changing environment that is being disruptive by technology and AI. Our belief in these invaluable assets has only grown stronger since then. We are committed to learn and execute at an unrivaled pace. We have stated our intentions to revitalize our brand and improve our core product with the goal of returning to growth in the near future. We are making long-term-oriented decisions to increase our branded visitor baseline, which we expect to yield long-term compounding effects. We have been diligently laying the foundation of our plans, and we believe these efforts will bear fruit throughout the remainder of 2024 and beyond. The addition of Robin to our team as of April 1st is a key milestone. Robin's wealth of expertise and experience enhances our collective vision. We're delighted to welcome him back to lead our financial organization and help us execute our growth strategy. Now let me provide you an update on our four strategic priorities. Our first strategic priority is branded growth. We are pleased with the results of our latest campaigns, which is tracking well against our expectations. We are already seeing branded traffic growing on the back of this investment, reaffirming our decisions and strategic direction. Our renewed brand marketing team continues to impress us with the ability to drive positive impact and new TV ads that are being tested in preparation for our summer campaigns. The importance of our brand has grown even further as Google has become a less relevant and less appealing marketing channel for us. We are opportunistically participating in new ad formats, though expect the channel to remain volatile and a substantial headwind. Our second strategic priority is to improve our hotel search experience. We are here to help travelers find the ideal hotel. Our new AI powered hotel highlights feature has been scaled significantly during the last quarter. It's now available in seven languages across 25 markets and expanded to 120,000 hotels. Fully AI generated these hotel highlights are now visible in our search results and provide users with distinct aspects to know about hotel. Our tests indicate an increase in user engagement and improved search experience. We will continue to invest in this differentiating feature of our platform. Our third priority is to offer the best deal discovery experience. We aim to help travelers find great deals and get better prices. Our recent consumer survey revealed that 71% of respondents in the U.S. Compare prices from different websites in order to find the best deals. To deliver on the needs of price heavy travelers, we have increased the visibility of relevant deals on our platform and made our search results more price-sensitive. By providing more savings options to our users, we aim to create more and more memorable experience and increase with user retention. Our fourth priority is to create value for our advertising partners. An increased share of branded traffic and continuous product improvements have substantially increased our conversion rate and therefore, the quality of leads we send to our partners. As a result, we believe that trivago's attractiveness as a marketing channel is growing. We expect this to be appreciated by our partners over time. We have also innovated our auction model and further rolled out our second price auction test last quarter. This auction model simplifies bidding for our partners and reduces the economic risk. Based on the positive feedback and test results, we plan to introduce a second price auction in all markets before the summer. To summarize, we are seeing positive impact of our brand investment. We expect this to continuously increase our branded visitor baseline and improve monetization in the long run. Despite headwinds, we continue to be optimistic for the summer season and in our ability to return the business to double-digit top-line growth in the medium-term. With that, I want to say thank you to our teams for all your continued hard work and dedication. Now I'd like to hand over to Robin.
Robin Harries: Thank you, Johannes. Good morning, everyone, and welcome to our first quarter earnings call. It feels very good to return to trivago after nearly six years. I would like to express my gratitude to our interim CFO, Kevin Hu and the entire team for their outstanding work during the transition and onboarding process as well as Johannes, Jasmine and Andre who laid the foundation for our strategic initiatives over the last couple of months. I can say that I joined a highly energized team that wants to win. My return alongside Johannes, Jasmine and Andre underscores our belief in the tremendous opportunity we see to create value for our users, partners and shareholders. Today, our market cap is below $200 million despite having over €100 million in cash, generating €485 million in revenues and €54 million in adjusted EBITDA in 2023. Our valuation today is significantly lower than in 2012 when I first joined trivago. We see tremendous upside potential. trivago still stands as one of the world's foremost travel brands, operating across 53 local websites and apps in key global markets. Our products value proposition remains highly relevant scaling up brand marketing worked well for us in the past, and we already see successes from the initial campaign started at the end of 2023. We believe that our winning formula still works and remain confident in our ability to progress step-by-step towards renewed growth on the horizon. Now I would like to discuss our performance in Q1. I will start with a review of our results as well as provide an update on our outlook for the remainder of 2024. All comparisons for 2024 are on a year-over-year basis unless otherwise stated. During the first quarter of 2024, we achieved total revenues of €101.4 million, which was a 9% decline compared to prior year first quarter. The year-over-year decline was of a lower magnitude as to what was observed in the past three quarters. The year started with softer bidding dynamics that gradually improved over the course of the quarter to healthier levels in the Americas, whereas Developed Europe and Rest of World are below the previous year. Overall, profitability decreased as we incurred higher selling and marketing expenses. We invested into our brand marketing activities globally as part of our strategy shift to long-term growth. Let me share some additional insights into our brand marketing efforts. We saw first successes from our renewed brand marketing campaign that featured our AI driven creative that we launched late last year. We observed a total global brand traffic increase during the first quarter of 2024 compared to the same prior year period. We have seen significant branded traffic growth in Developed Europe and Rest of World and mixed results in Americas. Our North American markets performed much better than Latin American markets. As we see positive branded traffic development, our total traffic decreased due to higher performance marketing traffic losses as we continue to observe higher levels of competition on Google. During the first quarter, we continue to observe Google Ad changes which has made Google a less attractive marketing channel for us. We continue to invest opportunistically in performance marketing channels, though we plan to maintain or selectively increase our profitability targets. We are not planning to compensate volume losses stemming from performance marketing channels at a cost of long-term oriented brands investments. The overall volume losses in performance marketing channels were partially offset by our brand marketing gains. I would like to next discuss the results of our three reporting segments. Referral revenues declined by 6% in Americas and by 15% in our Developed Europe segment, while it increased by 8% in our Rest of World segment. We invested across all three segments, advertising spend increasing by 45% in Americas, 12% in Developed Europe and 51% in our Rest of World segment. The increased brand investments made during the quarter resulted in our return on advertising spend, or ROAS, our key ratio that compares referral revenue with advertising spend to decline across all three segments as a result of our marketing campaign. The declines in our Americas and Developed Europe segments were largely driven by performance marketing volume losses as a result of continued higher levels of competition. In Developed Europe, the losses were further driven by softer bidding dynamics on our platform compared to the same period in 2023. In our Rest of World segment, we continue to see referral revenue growth, primarily driven by higher traffic volumes as a result of increased brand investments and better booking conversion, which was partly offset by softer bidding dynamics. Moving on to our operational expenses. We incurred €16.7 million higher operating expenses, totaling €113 million during the first quarter of 2024. The increase was primarily driven by €19.1 million higher advertising spend, which was partly offset by €1.4 million lower share-based compensation costs. Overall, we had a net loss of €8.4 million and an adjusted EBITDA loss of €9.2 million during the first quarter. Looking ahead, the main travel trends remain solid and we continue to see strong demand for hotels as we head into summer. We have continued to observe improved booking conversion levels on our platform, providing our partners with high-quality and better converting traffic. We expect advertisers to react to this over time. We plan to maintain our profitability targets and do not plan to compensate for performance marketing volume losses as we continue to focus on our brand marketing campaign to drive long-term growth. We continue to expect revenues year-over-year to decline in the second quarter and to reverse the trend in the second half of the year. We continue to guide our adjusted EBITDA for full year to be at around breakeven levels. The initial results of our brand marketing campaigns are overall in line with our expectations, and we remain confident that our brand investments will help us to further increase our branded traffic over time to fill long-term growth and profitability. With that, let's open the line for questions. Operator, we are now ready to take the first question, please.
Operator: [Operator Instructions]. Your first question comes from the line of Naved Khan of B. Riley Securities. Your line is open.
Naved Khan: Couple of questions from me. Maybe just on the weakness in the performance channel. I mean, we had seen some weakness even in the prior quarters. Did any changes related to the implementation of DMA have any additional impact in March? And can you maybe just talk about the travel demand broadly across different regions? Did you see any changes in there and on that front?
Johannes Thomas: Hi. Thank you for the question, Naved. This is Johannes. I think on the first quarter in terms of performance marketing, there was weakness starting second half of the year already where Google gradually did changes to their search results and tested new ad formats, and that has gradually increased over time. In Q1, from what we observed, the visibility of the new ad formats PPA, especially in Europe and the U.S., our observation is PPA and GHA being more visible has increased in Q1, which we think is probably part of the DMA adjustment. So, it basically has increased the visibility. We are participating in these formats. Though we are very focused on brands. We see opportunistically where we are joining and what makes sense for us, we are seeing not the performance we would appreciate from a conversion perspective and also, we lack an optimization levers that would help us optimize these ads effectively. And I think that's the performance marketing perspective. Robin, can you comment on demand there?
Robin Harries: Yes. Thanks for the question. Regarding demand, so we see a robust demand. So, it remains strong. It's rather increasing. So, on that side, it looks quite good.
Naved Khan: Maybe just a related follow-up on your answer to the headwinds and performance. So, what gives you the confidence that you can see positive growth in the back half given these headwinds are continuing in the third channel?
Johannes Thomas: We are seeing a strong response of our branded campaigns and branded campaigns have a compounding effect over time. So, it's a matter of doing the right things and brand consistently. That means optimizing markets, optimizing our creatives. We see room for improvement and whenever we do improvements we see further impact. So, it's a matter of doing this consistently throughout the year and we see a very good chance to offset losses in performance marketing. And we certainly are learning and how to adapting and participating in the new ad formats which we're trying to optimize overtime as well.
Naved Khan: Thank you.
Operator: Your next question comes from the line of Stephen Ju of UBS. Your line is open.
Unidentified Analyst: Hey, guys. Good morning. This is Jeremy on for Stephen. So, I have two questions. First on brand marketing, can you talk broadly about how the ROAS and the payback period may be different from performance? And then second, as a follow-up on the demand side, the softer bidding activity you're calling out for Europe and Rest of World, is this largely a consequence of local currencies devaluing relative to global, for example, with the yen and making it more expensive for travelers than APAC, or is this something underlying you're seeing in terms of consumer demand? Thank you.
Johannes Thomas: So, let me comment on the first part on the ROAS. The difference in performance marketing is that you have a good level of ROAS with the acquisition of the users and that is basically in performance marketing the beauty you invest in quick and quickly get a return. With brand, it's just a little bit of a longer horizon that we put on the perspective. But we see short-term impact and we know what the short-term impact are as proxies for long-term impact. That's where we have a ton of data about and good assumptions on how the branded visitor baseline would evolve over time and that translating into long-term returns.
Robin Harries: So, regarding travel trends, what we see across the three segments is that ADRs are slightly down in the segments, so in our trivago internal data. And we see that length of stay is slightly down in Americas and Rest of the World, slightly up in Europe, yes. So, and this leads to slightly lower ABVs in Americas and Rest of the World and stable ABVs in Europe. So, when we look at the star hotels, yes, so we see a share of 4 Star to 5 Star Hotels continues and that is continuously going down, yes, so in all three segments. And yes, so this indicates that people are more price-sensitive and we also see this in rest of the world. So especially when you look into Japan, and we see ADRs going down there as well. Also, in local currency.
Operator: Your next question comes from the line of James Lee of Mizuho. Your line is open.
James Lee: Great. Thanks for taking my question. My question is on AI investments. And can you help us understand what you're doing there specifically? Are you developing apps on top of the, find foundational model? If so, can we get a sense of who you're working with and what use cases you are developing that could differentiate your product versus your peers? Thanks.
Johannes Thomas: Yes. Thank you for asking the question. I think it's pretty central to our efforts. On the one side, there's a ton of things we do internally to improve operations and be more efficient and we create a lot of awareness and it's on everybody's strategic priority internally to think about it. If you see our TV ads, we mentioned how we are leveraging AI to localize our ads. In the past, we have a lot of different speakers per market, which was quite expensive. Production was a very long period. We now use AI to localize our TV ads. So that's something you see teams innovating and leveraging AI like at the edge of what's actually possible. And that's what we expect from every team in the company. When it comes to our product, I've mentioned the AI highlights. So, you can go to New York, look at the Mandarin Oriental and you will see snippets that says unbeatable use, gourmet cuisine and then we give context around it, breathtaking, panoramas of Manhattan. So very distinct things USPs hotel can offer. These are not human-generated. They are AI-generated. And to be able to do this at scale for 120,000 hotels, we have built the infrastructure, we have used a range of models, tested different models where we are experimenting with. We have a solid set up that works for us now that is using, that is operational and effective and we continue doing that. We're not sharing who we work with and this changes over time as well as we don't want to be locked into one model, but continue run on where we see biggest impact. And then the last thing, so it's about content aggregating, bringing what's really relevant for users into their mind when it's relevant. And then the last one where we're excited about where we have put a team on is natural language search. Everybody that is in the search field certainly is thinking about conversational search and how you create a different experience for the user and that's what we have built core models on. How do we not use city plus date and region and like aesthetic data infrastructure, but rather a free search environment that gives you a list of hotels. And we call this natural language search that we're exploring, but it's super early in our space. But I think we can expect everybody in the search space including us will find ways of use cases where we make the search results more relevant through that. And machine learning and AI we've used for a long time in showing more relevant search results already. But improving our search, showing more relevant content, leveraging it in marketing, that's a focus for us.
Operator: Your next question comes from the line of Ron Josey of Citi. Your line is open.
Ron Josey: I wanted to ask, Johannes, if you talked a little you talked about, trivago's second price auction test and plan to launch here shortly. Talk to us a little more about the results that you're seeing from the testing there and what makes you feel confident about moving forward here in launching that? And can you just provide some additional thoughts on just the DNA and the DSA and some of the newer rules or regulations regarding the gatekeepers and maybe how trivago is positioned here? Thank you very much.
Johannes Thomas: Thank you for your question. Maybe the SPA part, I think it has been a very big project for us. We have been working on this now for about nine months, great effort. And this is a work with our partners internally quite complex infrastructure change. And we have rolled this out in record speeds and very consistently. And we are seeing that the intentions were twofold. On the one hand, we want to improve our search results. In a first price auction, you have the problem when advertisers bid up, the hotel gets pushed up in the ranking very fast. And that means you can pay hotels up the ranking and then that means that not the best hotels are in front of users' minds. And at a second price auction, this is milder. We have a more stable search results. That's the expectation over time with indication that we get there. And that has been an important qualification. Are we improving the user experience? And that's what we want to see. And the second part, our partners are working on Google on other marketing channels in the second price auction. So, we simplify the world, so they only need to think about first and second price and we make it more simple for them. Also, when you bid in a second price auction, you don't have risk of overbidding and don't need to bid down to understand who's this next highest bidder. So, you maybe are overpaying in the auction. That risk is gone, which means the marketplace overall becomes more efficient and also medium-sized players can be more aggressive without huge economic risk. So that is I think on the expectations. We see both signals on the user side and the feedback we get from our partners that they are satisfied with how things are going, with how they are steering our auction. And then when you get to the tipping point where partners are excited, we see the right results on our user end, that's when we want to push the pedal. We want to be done by end of the month ideally, but complexities there. So, there's a little bit of room. Before summer, we want to be out, so auctions normalize and partners and we have a new normal that we all feel good in and can optimize with forward. And that's it on the SBA. The DMA I commented on it. That is something where you have seen now a new reality in Google where this is now being assessed by the commission and we will find out what the commission is happy with and what's not. And overall, we see less entry points in Europe into GHA. So, their hotel product from our perspective has been weakened and that's good for us in the long-term. In the short-term, it's still a headwind that they put PPAs more visible and PPAs for us not converting as well as text ads did. And that's I think would be interesting. We look at it as hard to predict where this is going. We know they are experimenting further. They have other types of formats that they will be testing. So, it's volatile and hard to predict where this normalizes. And we are learning fast and how to find our sweet spot in this game. I think given we focus on brand and it's less relevant for us already because it has been happened for a while and we now see the traction in brand we aim this to offset. And then it would rather be an opportunity that we can dive into if we are excited about the dynamics in that space.
Ron Josey: Very helpful. Thank you, John.
Operator: Your next question comes from the line of Brian Fitzgerald of Wells Fargo. Your line is open.
Brian Fitzgerald: In the prepared remarks, you mentioned that branded traffic volumes are growing nicely in Develop Europe, Rest of World, but not so much in Latin America. To what extent is that a function of you running material different campaigns or is it just the timing in the markets there? Anything different with respect to Latin America with regard to branded campaigns?
Johannes Thomas: That is, I think we in Latin America we have strategically not focused on at the beginning of the year and the reason was that the levels of optimization and the focus we put there were not at the levels we liked. So, you are trying to find out where you have the best dynamics across the globe and where you want to invest your money. And that was not the place where we had seen the returns. We wanted to, we quickly stopped investing in those markets to be able to invest into markets with more elasticity.
Brian Fitzgerald: Thank you.
Operator: [Operator Instructions]. Your next question comes from the line of Doug Anmuth of JPMorgan. Your line is open.
Doug Anmuth: Hey, this is Dave on for Doug. Thanks for taking the questions. I have two. So, the first one, I'm curious to hear your thoughts on why you're seeing accelerating dynamics, and if that's profit across all advertisers and why specifically in Developed Europe and Rest of World? And what makes Americas different? And I have a follow-up.
Robin Harries: Yes. Thanks for the question. So, we saw that big advertisers, a bit softer at the beginning of Q1. So, but went back to more healthy levels in Americas and remained softer in Developed Europe and Rest of the World. So, the reasons, yes, so I think we, I mean, we expect more branded traffic and higher conversions will be appreciated by our partners over time. We see at the moment in Americas, there might be more heated competition on our platforms, so which leads to better bidding dynamics. And yes, so this is at the moment on a healthy level in Americas and it's increasing in Developed Europe and the rest of the world. So, but it's still softer compared to last year.
Doug Anmuth: So, I guess related to that, and you kind of put it through the top line already, but what do you think is needed for advertisers to react or appreciate the higher quality and better converting traffic that you're sending right now?
Johannes Thomas: I think here the most important or one of the important factors in our engagement with advertisers and they are very engaged, yes, big ones, small ones, medium-sized suppliers. There's very active discussions. What they certainly want is traffic that's incremental. So, if we compete in Google and buy the same traffic and it's not incremental for them, it's not that attractive. And if we look at the recent years, our share of performance marketing has been bigger. And now leaning back into brand, we expect them to see more incrementality. If that comes and we are showing that by much higher conversion rates already, our branded traffic converts much better. So along with product improvements, conversion rates are up. And I think that is an aspect that in the next review they will hopefully see that our traffic is more incremental. And then on a relative basis to other channels, you become more attractive. And that's a matter of how quickly does this materialize. We have seen the year started much softer and over the course of the quarter numbers have normalized and as Robin said in Americas very healthy and Europe and Rest of the World a bit softer, but overall at good levels.
Operator: With no further questions, this concludes our Q&A session. I will now turn the conference back over to Johannes for closing remarks.
Johannes Thomas: We are committed to delivering sustainable growth and creating long-term value for our shareholders. The success of the company will be driven by our continuous transformation in marketing and innovation in our core product. I'd like to thank everyone for participating in our earnings call. We appreciate your time and your ongoing interest in our company. We look forward to updating you on our progress and results in the next call. Thank you, and have a great day.
Operator: This concludes today's conference call. You may now disconnect.
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