Operator: Hello and welcome to the ADT Inc. First Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to Elizabeth Landers, Head of Investor Relations. You may begin.
Elizabeth Landers: Good morning, everyone, and thank you for joining us to discuss ADT Inc.'s first quarter 2025 results. On today's call, we'll hear from ADT Inc.'s Chairman, President and CEO, Jim DeVries, and our Chief Financial Officer, Jeff Likosar. Following the prepared remarks, we'll have time for analyst questions. Earlier this morning, we issued a press release and slide presentation summarizing our financial results. These materials are available on our website at investor.ADT.com. We will also discuss non-GAAP financial measures on this call. The most directly comparable GAAP measures, along with a reconciliation to those measures, can be found in our earnings presentation on the ADT Inc. Investor Relations website. As a reminder, financials and metrics for current and historical periods discussed on this call will be for continuing operations except for non-GAAP cash flow measures, which include amounts related to solar, the second quarter of 2024. Today's remarks also include forward-looking statements that represent our beliefs or expectations about future events. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of the factors that may cause these differences are described in our SEC filings. And with that, I'm happy to turn the call over to Jim.
Jim DeVries: Good morning, everyone, and thank you for joining us today. I am pleased to report that ADT Inc. is off to a very solid start in 2025, delivering results consistent with our expectations and demonstrating the resilience of our business model. ADT Inc. ended the quarter with a record recurring monthly revenue balance of $360 million, up 2%, which benefited from another record in our customer retention with gross attrition at just 12.6%. Both accomplishments are a testament to the continued strong demand for ADT Inc.'s innovative offerings and premium customer experience. Total revenue also continued to grow, up 7% versus the prior year. Of note, our growth comes while we remain focused on balancing profitability and investing for the future. We delivered adjusted earnings per diluted share of $0.21, an increase of 11%. ADT Inc. also continued to deliver strong free cash flows with adjusted free cash flow, including interest rate swaps, more than double last year's level. In our first quarter, we returned $445 million to ADT Inc. shareholders through share repurchases and dividends. Jeff will provide more detail on our financial results later in the call. I'd like to spend the next few minutes updating you on ADT Inc.'s performance and strategic focus, which is consistent with the themes I discussed on our February earnings call. We remain centered on delivering safety and peace of mind to our residential and small business customers with our strategy anchored in three areas: unrivaled safety, innovative offerings, and a premium best-in-class customer service experience. Our focus on unrivaled safety is and will always remain core to who we are and what we do, and ADT Inc. will continue to strengthen the means by which we deliver peace of mind to our customers. While delivering our near-term financial objectives, we are continuing to invest in the product and experience ecosystem to develop additional differentiated customer offerings, which create even more reasons for customers to choose ADT Inc. and stay with ADT Inc. A key component of our strategy has been investing in our product and experience ecosystem to create innovative offerings for our customers. As I mentioned on our last call, our primary objectives in 2025 are to continue execution of our strategy, and importantly, optimize our newly developed and launched capabilities. This includes further expansion of our ADT Plus platform to a larger percentage of our new customers, increase availability across additional sales channels, and enhance capabilities to enable existing customers to enjoy some of the features available to new customers. With our new and proprietary ADT Plus offering now available to customers in all geographies, we are seeing an increasing percentage of our customers select our new ADT Plus platform, including substantially all new direct residential customer locations, where ADT Plus is the most efficient solution to meet customer needs. We are also seeing these new customers choose ADT Plus professional installation at an overall higher average price. As part of ADT Inc.'s disciplined capital allocation strategy, and as we roll out our new platform in a somewhat unpredictable macroeconomic environment, we continue to optimize economic value creation balanced with new subscriber additions. The successful launch of ADT Trusted Neighbor remains a highlight. This convenient feature allows our customers to grant trusted individuals temporary access to their homes for everyday events like package delivery or more urgent issues like water leaks. As mentioned last quarter, we continue to explore innovative and secure ways our customers are able to grant access to their home, such as with the ADT Plus app on a neighbor's phone, codes, or in combination with Nest's familiar face feature. We are excited that this innovation will also be available through a touch lock feature later this quarter. Recently, we also launched the ADT Plus, which makes it possible to convert signals from certain legacy ADT Inc. sensors into a format that ADT Plus can also process, allowing many of our existing customers the ability to utilize components and features of our new ecosystem. The translator provides a faster, lower-cost transition from ADT Inc. legacy equipment designed to function seamlessly with our new ADT Plus platform. We will also be launching an additional feature which allows an automated home away status to trigger certain trusted neighbor automations and features. We are pleased with the results and positive customer feedback we are receiving on Trusted Neighbor and the overall ADT Plus customer experience, averaging 4.8 stars across thousands of reviews in the Apple App Store and Google Play Store. Consistent with ADT Inc.'s strategic objective of delivering the best-in-class customer experience, we are pleased that our customer satisfaction is at a three-year high. This record high results from our commitment to continuous improvement across several areas, especially including improved agent satisfaction and almost all of our customer experience metrics. Our progress has been aided by actions including virtual service, first call resolution initiatives, the customer onboarding processes, and agent training enhancements. These combined successes contribute to the record level customer retention I mentioned earlier. We are also pleased with the progress we've made with our remote assistance program and early artificial intelligence efforts. Continuing our 2024 progress, we are resolving over half of our service calls utilizing cost-efficient remote alternatives rather than conducting in-home service visits, avoiding thousands of truck rolls and contributing to reductions in our field service costs. Our initial AI efforts are focused in our customer care operations to improve the customer service experiences for both our customers and our agents while also improving efficiency. First quarter results show 90% of our customer service chats are being processed by AI agents, with nearly half of these chats being resolved for our customers without the need for a live agent interaction. Examples of the types of resolutions our AI chats are handling include general troubleshooting, rescheduling, or canceling appointments, and even ordering a yard sign. We are excited about the many opportunities to leverage AI to support our virtual agent capabilities and serve our customers efficiently. As the year progresses, we plan to leverage AI to expand this capability to even more agents and processes. Concurrent with the launch of ADT Plus, we also continue to evolve and optimize our go-to-market. We are now able to offer more flexibility in product bundles, configurations, and pricing to appeal to different segments of customers. And we are accordingly enhancing our marketing messages to highlight relevant features and differentiators. We made adjustments during late fourth quarter and into the first quarter, which contributed to strong installation revenues and overall subscriber economics. ADT Inc.'s partnership with State Farm remains a promising sales channel, showing continued progress during the first quarter. Our joint offering is available in 17 states, including innovative solutions in select states focused on leak detection, along with DIY alternatives. Before closing, I would like to mention two recent additions to our executive leadership team. We appointed Fawad Ahmad as our Chief Operating and Customer Officer, along with Omar Khan as our Chief Business Officer. While both are new to our ADT Inc. family, they bring strong, relevant talent and experience. And I know they will complement our existing team very well. We also announced during the quarter that Don Young will be leaving ADT Inc. in June, and I want to thank him for his many contributions at ADT Inc. and wish him well in his next chapter. I've had the great privilege of knowing Don for over thirty years. And the camaraderie, professionalism, and support he's provided has been unwavering and deeply appreciated. In closing, I want to take just a moment to express my gratitude to our nearly 13,000 employees, our dealers, and our equity and business partners, State Farm and Google. I'm incredibly proud of our ADT Inc. team and their accomplishments. We remain encouraged for the opportunities that lie ahead. Thank you for your time today. I'll now turn the call over to Jeff.
Jeff Likosar: Thanks, Jim, and thanks everyone for joining our call today. I'll take the next few minutes to share some additional detail on our first quarter results along with an update on our outlook for the full year. Like Jim, I'm very pleased with our first quarter performance and very strong start to 2025, particularly our continued cash flow and earnings growth. First quarter adjusted free cash flow, including interest rate swaps, more than doubled year over year to $226 million, and adjusted earnings per share grew by 11% to $0.21. Key drivers of the strong performance include steady RMR growth, and efficient service and subscriber acquisition costs. Additionally, some timing items benefited cash flows in the quarter, and lower share count benefited our adjusted earnings per share. Our top line was also very strong, with total revenue up 7% to $1.3 billion. Monitoring and services revenue was up 2%, driven by a record RMR balance of $360 million, also up 2%. Installation revenue was $184 million, up $57 million or 45%. This was driven by outright sales, more than doubled compared to the prior year due mainly to our transition to the ADT Plus platform. As we have described, ADT Plus subscribers acquire ownership of the relevant equipment, resulting in upfront recognition of installation revenue and cost. This differs from our historic model, which we retained equipment ownership and therefore capitalized and amortized the installation revenue and costs. Jim mentioned the optimization of our ADT Plus offerings and subscriber economics. A relevant highlight in the quarter was improved installation revenue per unit, approximately $1,500. This was driven by continued customer interest in more comprehensive systems along with our efforts to sell on value and to rely less on promotions and discounts. Adjusted EBITDA in the first quarter was $661 million, an increase of 4%. Building on Jim's comments about our ongoing discipline, we are highly focused on strong subscriber economics, and returns on the capital we deploy. We accordingly have continued to balance our SAC spending with other uses of cash, especially in the current macro environment. During the first quarter, we generated 72,000 gross new customer additions, adding $10.6 million of new RMR. Consistent with recent trends, our net spending on the acquisition of new subscribers remains efficient. In addition to the improved revenues I mentioned, we continue to progress initiatives focused on sales and marketing efficiencies and on installation costs. We also renewed our receivable securitization facility late last month with enhanced terms. Our reported cash SAC, which reflects net receivable and securitization flows rather than contractual revenue, was approximately flat year over year, and revenue payback was consequently slightly higher than the fourth quarter. We expect this to tick back down in the second quarter as we settle securitization cash flows under our refreshed facility. Our net debt of $7.6 billion remained at two times adjusted EBITDA with a very efficient weighted average interest rate of approximately 4.5%. This includes the new $600 million seven-year term loan B we closed last month and the partial redemption of our April 2026 notes. We intend to refinance all or part of the remaining $850 million of these notes later this year. We continue to return significant capital to shareholders in the first quarter, enabled by our progress reducing debt and leverage, and strong cash generation. In addition to our January dividend payment of $49 million, we repurchased and retired 53 million shares at an aggregate price of $397 million. This included 20 million shares repurchased concurrent with Apollo's secondary sale of 80.5 million shares in March. In April, we repurchased an additional 6 million shares, and we now have $148 million remaining under our current repurchase authorization. We were able to do this with only modest usage of our revolving credit facility, which as of today is undrawn. As we look to the rest of 2025, plans remain anchored on our resilient and growing recurring monthly revenue and our focus on efficiency. Despite current macroeconomic uncertainty, especially including the effect of tariffs, we are reaffirming the full year guidance ranges we shared in February. At the midpoint of the respective ranges, adjusted free cash flow, including interest rate swaps, would be up 14%, adjusted earnings per share would be up 8%, and total revenue and adjusted EBITDA would be up 5%. As a reminder, we expect monitoring and services revenue to be up approximately 2%, and our transition to outright sales and the treatment of some other expenditures, while cash neutral, pressures our adjusted EBITDA margins. I'll add a caveat around tariffs with the landscape still highly uncertain. If fully enacted, the tariff structure as most recently publicized will lead to higher equipment costs. We are developing several mitigating actions to offset our gross exposure, which includes supplier negotiations, inventory management, potential source changes, and potential customer price increases or surcharges. While any new tariffs pressure the midpoints of our 2025 guidance, we currently believe we can manage our net exposure within the ranges we've shared. Additionally, there are some seasonal dynamics in our business and other timing items that affect the quarterly phasing of our full year results. In consideration of these factors, we expect second quarter revenue to be slightly higher than the first quarter due to more installation revenue. We expect adjusted free cash flow to be similar to the first quarter, with higher cash taxes offsetting lower interest. And we expect adjusted EBITDA and EPS to be similar to or slightly lower than the prior quarter due to some timing items and the potential initial effect of tariffs. Before turning to questions, I want to reiterate my enthusiasm about our strong start to 2025 and highlight again the resilience of our business model. I also want to echo the gratitude Jim expressed to our employees and partners. I want to welcome Fawad and Omar to our team, and I want to wish Don well in his new endeavors. Thank you everyone for joining our call today and for your support of our company. Operator, please open the line to questions.
Operator: Thank you. If you would like to withdraw your question, simply press 1 again. Please ensure you are not on speaker phone and that your phone is not on mute when called upon. Thank you. Your first question comes from Manav Patnaik with Barclays. Your line is open.
Ronan Kennedy: Hi, good morning. This is Ronan Kennedy on for Manav. Thank you. You referenced uncertainty in the macro environment. Could I just ask for kind of a holistic assessment of that demand environment and what you are seeing from customers, and then also kind of what you've spoken to before, the two sides of the coin with regards to the housing market, attrition, gross ads, etcetera, please?
Jim DeVries: Sure, Ronan. It's Jim. Thanks for your question. So from a macro perspective, I think the headline for us is we have an exceptionally resilient business and feel very good about that. As you know, Ronan, demand for personal safety increases during uncertain times. Factors that pressure new subscriber ads for us, such as fewer relocations, actually contribute to customer retention. We're not particularly reliant on new home builds, perhaps 5% or so of our gross ads. So net, we've done well in past recessions and generally expect our model to be resilient this time around.
Ronan Kennedy: Thank you. And can you talk about some of the metrics that would be indicative of the strength of the consumer? Whether it's, you know, voluntary, or non-pays and delinquencies, things of that nature.
Jeff Likosar: Yeah. It's Jeff. We've seen a little bit of an uptick in slower payments, not enough to rise to a level of materiality, but I'd also point to some positive trends we're seeing even in this environment, such as higher average pricing on install, higher average monthly pricing, and we delivered record attrition in the environment. And then just one other point further to what Jim mentioned, if you go back and look at our performance during the last downturn or downturn around the time of COVID, you'll see that we weathered that very, very well, and we would expect to do the same here.
Ronan Kennedy: Thank you. Thank you. If I may just sneak in a follow-up to that. You talked about the potential higher cost in tariffs and the leverage you can pull with regards to prior negotiations, inventory management. Can you further contextualize or quantify potential impacts and then your actions? And, obviously, the situation with tariffs is fluid, dynamic, volatile. You know, what about if you can also speak to kind of a general downturn playbook and levers that could be pulled within the cost structure, etcetera, please?
Jim DeVries: Sure, Ronan. Jim, I'll provide maybe a couple of contextual comments for you on tariff pressure, and then Jeff will jump in and share some perspective on the quantitative side. Jeff covered this topic in his prepared remarks. But maybe a few brief items to add some color. As you said, it's obviously difficult to predict given the frequency of changes, but we've got a team focused on mitigation plans. Those mitigation plans in the immediate term include negotiating with existing partners. We're even considering in some cases selecting new partners. We're doing a lot of work around management, buffer stock, considering buy forwards, and considering potential price increases or tariff charges for new customers. So net, we're monitoring very closely with a team of talented leaders. We're benefited from the fact that our two biggest sources, countries of origin for our product, are Vietnam and Mexico. Much of the product we buy in Mexico is covered under USMCA. And so we're managing it and feel pretty good about where we are for now. Anything else there, Jeff?
Jeff Likosar: Yeah. I would add as we quantify it internally, it's, of course, challenging because of the frequency of changes, in some cases, lack of clarity as to the exclusions and carve-outs, and then the timing, of course, matters. So in our prepared remarks, I noted that it could put pressure on the midpoint, but we believe we could cover our net exposure for the year within the guidance ranges. So you can deduce from that that of the range of expected outcomes that we could envision, our 2025 results are within those ranges. And then even on the mitigating actions, we expect to take those timely or very soon upon starting to actually incur some expense. And I also noted that maybe there's a little bit of pressure in the second quarter, but we see this as more of a second-half challenge to work through than a second quarter.
Ronan Kennedy: Thank you very much. Appreciate it.
Jim DeVries: Thanks, Ronan.
Operator: The next question comes from George Tong of Goldman Sachs. Your line is open.
George Tong: Gross RMR additions fell 7% year over year. Can you talk about some of the dynamics driving that? And then also whether you expect any bulk purchases potentially to reverse that?
Jim DeVries: Sure, George. Good morning. Thanks for your question. So the headline on gross ads that I want to underscore is that we're going to be disciplined. We clearly prefer for gross ads to be up versus down. But let me share a little bit more color on the 7%. I think that quantifies to 15,000 units lower than Q1 2024. And here's a bit of detail. DIY, where we tightened our credit standards and we're very returns-focused, accounted for 9,000 of the year-over-year decline. And our health business, which can be fairly lumpy, accounted for another 8,000 ads less this year than last. And we also tightened our credit standards there. The dealer channel got off to a little slower start than what we would like, but it's starting to come back in Q2. Small business, George, was about flat to last year. But most importantly, in our core business, pro install direct ads versus last year were actually up 4%. So again, we'd like to see gross adds higher, but in the core, we feel pretty good about it. Your second question with regard to bulk, we did no bulk deals in the first quarter. We don't have anything I would say on the immediate horizon. There are opportunities available to us. We're not going to chase those transactions. We're exploring alternatives with a couple of different parties now. And like with gross ads, we'll stay disciplined and focused, but we are kicking tires on bulk.
George Tong: Got it. Very helpful. And then revenue payback increased year over year. Can you talk about what that means with respect to subscriber acquisition costs that you're seeing or any other moving parts that may be causing that?
Jeff Likosar: Yeah. George, it's Jeff. I'll take that one. The short answer is, as I noted in the prepared remarks, we expect it to reverse in the second quarter. There's some timing dynamics associated with our securitization facility for our customer receivables. We have historically reported cash SAC inclusive of the cash flows back and forth between us and our financing partner. If we look at our revenue payback as we do internally, on the basis of our contractual arrangements with customers, in other words, how much revenue did the customer agree to pay irrespective of timing, we see revenue payback approximately flat. And I'll also note that we renegotiated our securitization facility with our partner with some more favorable terms. So again, we expect that particular trend to reverse. And then I'd highlight again that we delivered RMR overall consistent with our expectations while doubling our adjusted free cash flow. So we feel really good about our overall cash performance in the quarter.
George Tong: Got it. Thanks for clarifying that.
Operator: The next question comes from Ashish Sabadra with RBC Capital Markets. Your line is open.
David Page: Hi, good morning. This is David Page on for Ashish. I was wondering if you could give an update on two fronts. One, the State Farm partnership, I believe you have some pilot programs in several states going on. And then how is the AI initiative going in terms of virtual calls, call center efficiencies? I know you progressed really nicely last quarter and have some targets for '25. So, just an update on those two fronts. Thank you.
Jim DeVries: Sure. It's Jim. Thanks for the question. On State Farm, I'm pretty certain I shared this last time, but we're feeling good about the trajectory, 5,500 units in '23, 18,000 units in '24. Gross ads for us in Q1 of '25 were 4,000. That compares to Q1 of 2024 last year of 3,200. The pilots are underway. We're early-ish in the process. DIY is having more success than the pilot with regard to leak detection. DIY represented about 10% of our gross ads in the first quarter. And the relationship and working teams are doing well. I should mention customer satisfaction is holding very high. Your second question with regard to AI, the initial focus for us has been in the area of customer care operations. So this is call deflection, agent efficiency, improved customer experience. At the end of Q1, 90% of our customer service chats were processed by AI agents. We had a nice percentage of containment with those chats, meaning the customer request is addressed without the need for any human interaction. And we started to roll out AI agents for voice calls late in the quarter. And we expect to have 20% of our voice calls completely contained by AI agents by the end of the year. Savings in 2025 are not material. We expect those to begin to ramp up nicely for us in 2026.
David Page: Great. Thank you so much. Appreciate it.
Operator: The next question comes from Peter Christiansen with Citigroup. Your line is open.
Peter Christiansen: Good morning. Thanks for the question. Jim, you gave some good macro content on the residential side. Just if you could juxtapose that versus what you're seeing on your small business channel in terms of price realization, system purchases, versus leasing versus purchases, that kind of stuff. Thank you.
Jim DeVries: Thanks, Pete. Good morning. On the small business side, I'd say we're holding our own. Things are generally going well. We see this as an opportunity to drive a bit of growth. One of the things that we pay very close attention to in SMB is attrition. I think that's a bit of a leading indicator of where things are. And we're generally flat in SMB attrition. It's an area that we're going to be focusing a bit more on going forward than we have in the past. There's some pretty exciting product work that the team's developing. But generally speaking, I think that the market for us has been holding its own.
Peter Christiansen: That's good to hear. And then, Jeff, in terms of the outlook, if you could, if possible, can you give us a sense of mix between monitoring and installation? Installation was certainly a bit higher in the quarter as a percentage of the total mix. How should we think about that as we look at the full year outlook? Thank you.
Jeff Likosar: Yeah. Generally, when we shared our initial guidance, with revenue at the midpoint of the range being up around 5%, we noted at the time, and I would still say this is the case, that we would expect monitoring and services revenue in a range of 2%, which, of course, implies meaningfully higher from install revenue. The reason for that, as we've described, is our transition to a larger percentage of our transactions with customers, particularly with the ADT Plus platform being outright sales, which causes us to record the revenue and effectively the SAC expense upfront. So it's lower margin revenue and maybe a little bit more subject to some seasonality than monitoring and service is because we tend to have more ads in the middle part of the year than around the holidays. So all that we use is factored in, and you see 7% in the first quarter on total revenue. No change to our guidance of it being in the mid-single digits for the full year.
Peter Christiansen: Okay. So we should see, I guess, normalizing for the trend last year, we should see roughly a similar sequential uptick in 2Q, 3Q versus last year just on the higher base?
Jeff Likosar: Yeah. I think you could think of an uptick from Q1 to Q2 looking kind of like the uptick from Q1 or from, I'm sorry, from the fourth quarter last year to the first quarter of this year. And that's just because we are continuing to roll out, continuing to increase the percentage of our new customers with ADT Plus that are outright sales.
Peter Christiansen: Okay. That's helpful. Thank you so much.
Operator: The next question comes from Toni Kaplan with Morgan Stanley. Your line is open.
Yehuda Silverman: Hi. Good morning. This is Yehuda Silverman on the line for Toni. I just had a question about attrition. So record attrition in the quarter, improving 50 basis points. I was just wondering how much more room do we see for improvement, and what is an ideal range or target for attrition?
Jim DeVries: Hi. It's Jim. Thanks for the question. I'll share a little bit of color on the quarter and try and give you a sense for where we're headed with attrition. For the quarter, 12.6%, that's, I think, about 50 basis points, I believe, better than last year. Nonpayment cancels are flat to last year, a good sign for us. Relocation losses were a little bit better than last year, and voluntary losses were solidly better than last year. Our NPS scores had steadily improved. We're now at a record best in the last three years. Call metrics are continuing to improve. And there's some new initiatives underway that give us some optimism. We're being more proactive with at-risk customers. There's a new program for new customers around white glove treatment. There's some new retention offers that are getting some traction. You know, longer term, I'd like to see this start with an 11 versus a 12. But, you know, next up for us is 12.5% and 12.4% after that, and we'll keep plugging away. I've often said that the improvement isn't necessarily linear in this space, but it's generally been linear the last few years. We were 13.5% in 2021, 12.9% in '23, and now down to 12.6%. So feeling good about it at a high level when you parse out some of the details, there's cause for optimism, and I like what I'm seeing on some of the new programs.
Jeff Likosar: And then one point to emphasize, if comparing to other firms, we report the number on a gross basis. So if a relocating customer signs back up for ADT Inc. service or if a home that we've previously secured signs back up, we don't net that against our attrition. If we did so, we'd be closer to the ranges that Jim's already describing.
Yehuda Silverman: Got it. And just one follow-up about pricing. So the quick question about revenue and inflation. So is the guide implying or with the understanding that inflation is more moderating or steadying? Was just wondering if there's any update to the inflation outlook for the remainder of the year.
Jeff Likosar: Not anything that I would add beyond, of course, the tariffs as an avenue with which we'd incur inflation in our material cost. But by and large, and including our overall outlook for revenue, we do have price escalations and in some cases, even richer mix of pricing because of richer configurations is certainly considered, but the macro economy comments that Jim made earlier and the comments about tariffs, I wouldn't add anything beyond that with respect specifically to inflation.
Yehuda Silverman: Great. Thank you.
Operator: This concludes the question and answer session. I'll turn the call to Jim DeVries for closing remarks.
Jim DeVries: Thank you, Sarah, and thanks, everyone, for taking the time to join us today. We had a strong first quarter. We feel very good about the momentum in the business. We're confident in our plans for 2025. The priority of our team is to execute on our commitments. Again, I'd like to extend my appreciation to our ADT Inc. employees and dealer partners. Congrats on a great quarter and an excellent beginning to our 151st year. Thanks again, everyone, and have a great day.
Operator: This concludes today's conference call. Thank you for joining. You may now disconnect.
