Good day and welcome to the Elastic Second Quarter Fiscal 2023 Earnings Results Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Mr. Nikolay Beliov, Vice President of Investor Relations. Please go ahead, sir.

Thank you. Good afternoon and thank you for joining us on today’s conference call to discuss Elastic’s second quarter fiscal 2023 financial results. On the call, we have Ash Kulkarni, Chief Executive Officer; and Janesh Moorjani, Chief Financial Officer and Chief Operating Officer. Following the prepared remarks, we will take questions. Our press release was issued today after the close of market and is posted on our website. Slides which accompany this webcast can be viewed in conjunction with live remarks and can also be downloaded at the conclusion of the webcast on the Elastic Investor Relations website, ir.elastic.co. Our discussion will include forward-looking statements, which may include predictions, estimates, our expectations regarding the demand for our products and solutions and our future revenue and other information. These forward-looking statements are based on factors currently known to us, speak only as of the date of this call and are subject to risks and uncertainties that could cause actual results to differ materially. We disclaim any obligation to update or revise these forward-looking statements unless required by law. Please refer to the risks and uncertainties included in the press release that we issued earlier today, included in the slides accompanying in this webcast and those more fully described in our filings with the Securities and Exchange Commission. We will also discuss certain non-GAAP financial measures. Disclosures regarding non-GAAP measures, including reconciliations with the most comparable GAAP measures can be found in the press release and slides. The webcast replay of this call will be available for the next 60 days on our company website under the Investor Relations link. Our third quarter fiscal 2023 quiet period begins at the close of business on Friday, January 13, 2023. On December 8, 2022, we will be participating in the Barclays Global Technology, Media and Telecommunications Conference. With that, I will turn it over to Ash.

Thank you, Nikolay and thank you all for joining us. In Q2, revenue grew 34% year-over-year in constant currency. Elastic Cloud comprised 39% of total revenue, up from 34% in the year ago quarter and grew 52% year-over-year in constant currency. We ended the quarter with approximately 19,700 subscription customers, including over 1,050 with annual contract values of more than $100,000. I have continued confidence in our long-term market opportunity and the core fundamental strengths of our business. During the quarter, we continued to make progress across our three key focus areas: driving durable growth, widening our competitive moat and continuing our focus on profitable growth. We also saw customers continue to show a preference for consolidation onto our platform for multiple use cases. While our differentiated platform positions us well, we have also started to experience the shift in the macroeconomic climate ourselves. In the month of October, we began to see belt tightening and consumption slowing down in the SMB segment. We also saw increased scrutiny on deals overall, particularly in countries where the strengthening U.S. dollar has created adverse conditions. In order to help our customers through this clearly difficult environment, it is more important for us than ever before to stay close to them and help them realize the value of consolidating onto a single platform for multiple business critical use cases. That also requires us to be more focused on our coverage, our sales place, our product investments and our internal support as we drive greater operational excellence. Looking ahead, we intend to be even more focused on those areas of our business where we see the opportunity for continued profitable growth, optimize investment in other areas and drive overall profitability in the business even faster. In challenging times, those who adapt the fastest are…

Thanks, Ash. We are pleased that we delivered ahead of our commitments for Q2. We delivered 34% year-over-year constant currency growth in total revenue. We continued our momentum in Elastic Cloud, which grew 52% year-over-year in constant currency. We once again beat the high-end of both our top line and bottom line guidance for the quarter despite the current economic environment and despite greater FX headwinds on revenue than we had included in our previous guidance. On a currency-neutral basis, our total revenue beat in terms of year-over-year growth in Q2 was similar to Q1. In the current business climate and with the trends in our business that Ash described, we see room to focus more sharply on helping our customers derive the benefits of tool consolidation onto a single platform and also to realign resources internally to drive greater efficiencies in all functions. Accordingly, we are taking specific actions in the business. First, we are better focusing our investments to optimize our coverage in the SMB segment, emphasizing automation and low-touch approaches to better address the needs of customers in that segment while repurposing some of that investment towards enterprise sales coverage. Second, we are rebalancing investments across other functions to invest in priorities such as our serverless architecture and engineering and in digital demand gen and marketing. We will also drive greater efficiencies and align to business priorities in our customer success and G&A functions. Third, we are adopting a specific goal of non-GAAP operating margin at 10% for fiscal ‘24 and the actions announced today already put us on the path to achieving that. We believe these actions will not only help profitability in the near-term, but importantly, allow us to align our team to best capture the market opportunity ahead of us. While we navigate the…

[Operator Instructions] And the first question will come from Tyler Radke with Citi. Please go ahead.

Hi, thanks for taking the question. So I think given that you just had an Analyst Day and put out some long-term targets, I think investors are keen to kind of hear the magnitude of what’s changed in the last couple of months. So maybe if you could just talk about where you’re seeing the slowdown by use case, whether it’s Search versus Security, Observability? And then if you could kind of comment on the trends throughout the quarter and into November, have things worsened in November? And then I just wanted to clarify if you’re backing away from the targets or if you’re reaffirming those. Thank you.

Yes. Thanks for the question, Tyler. This is Ash here. Maybe I can kick things off and then invite Janesh to also add more to it. So just in terms of what we saw, as we talked in September during the Financial Analyst Day, we had been watching the macro environment very carefully, especially given that we had seen the FX headwinds. And through all of Q2, what we saw was in October things started to change and act differently than what we had seen prior to that. Specifically in SMB, we saw a lot of belt tightening, and we are seeing this in a couple of places, very obviously. First is in monthly cloud. Monthly cloud tends to be – a lot of it tends to be SMB. We saw consumption construction there. We also saw fewer SMB customers signing on to the platform. So that was one. The second thing that we saw in October, which is sort of the last month of our quarter, as you know, in certain international geographies where we had seen the dollar tightening having the dollar increase having a significant impact on just the way customers are thinking about things, we saw customers going through more approval processes. And these were deals where we continue to compete very well. Some of these deals slipped out from Q2 into Q3. Some of them have even closed since then. But we see that, that pattern of more approvals, and we expect that to continue going forward. So the assumptions that we’re making effectively are that SMB, what we saw in October is going to continue for some time. The pattern of deal inspection is going to continue for some time, but having said that, our competitive position remains very strong. We continue to do…

Hey, Tyler, I’ll just add on because you had a question about how November has played out as well. I think Ash covered all the other points quite nicely actually. November has been steady so far. We have continued to see business play out as we expected. We’ve not seen any meaningful change in terms of customer tone in the month of November. So I think that we’ve reflected that obviously in the outlook here for the back half. So we feel pretty good about the number that we’ve called for the back half, and we’ve tried to incorporate all of these trends specifically into the guidance and suitably derisk the guidance for the back half to accommodate for these. So we feel good about the outlook for the back half and based on what we’ve seen in November so far.

Helpful. Thanks for all the detail. And just on the decision to do a force reduction here, I mean, obviously, we’ve seen the market kind of continue to prioritize profitability over growth. But I guess, why now? And I guess if you go into a little bit more detail the specific areas that you’re looking to make these changes and the confidence that this won’t necessarily be disruptive in terms of our growth aspirations? Thank you.

Yes. Thanks, Tyler. As you can imagine, these are very difficult decisions. And I’ll reiterate that we really could not be more thankful to our employees, everything that they do, their efforts. The – just everything that they put into Elastic and our success. Now having said that, like we had told you even during the Analyst Day we have been very carefully observing the data in the market, why now, because we have always made decisions based on data. And like we told you in September, we had not seen the impact of the macroeconomic environment affect our business other than the FX piece, which we had talked to you about then. But we wanted to be very watchful and that’s what we were doing. And once we started to see the impact, we were very careful about making sure that we understand the nature of that impact. And like I mentioned, the biggest area where we experienced this is in SMB. And in SMB, it was across the board. It was in all regions. It was across all use cases. And we’ve traditionally had a sales-assisted motion for SMB. And what that means is we would have customers land on monthly cloud and then we would have an SMB sales team that would spend energy in trying to convert those customers into annual contracts. And given the environment, what we have been seeing is really that, that effort that’s being spent on the SMB area is really not giving us commensurate returns. And we are not expecting the SMB environment to change either in the near future. We expect that that’s going to be an area where there will be continued stress in the economy. On the other hand, we continue to see on the enterprise side, long-term…

And Tyler, maybe the one thing I’ll just tack on to that is, as Ash said, we are doing this so that we can invest in the right places to drive growth. And a part of that is to ensure that we continue to invest appropriately in the second half so that we have the right outcomes in the second half, but also prepare ourselves for fiscal ‘24. We want to make sure we’re entering fiscal ‘24 with the right capacity and the ready to go.

Thank you.

The next question will come from Pinjalim Bora with JPMorgan. Please go ahead.

Hey, thanks for taking the quesiton. Janesh, I just wanted to understand the guidance a little bit more. It seems like it’s going – or coming down by about 1 point of growth, constant currency, about 200 points. I think you used the word de-risk for the second half. What makes you confident that the model is derisked at this point?

Hey, Pinjalim, I’m happy to talk about that. So in terms of the approach that we took on the guidance, to start with, obviously, please that we came in above expectations that we had set for Q2, both on the top and the bottom line. In terms of how we thought about the guidance, a couple of things. One is we first have factored in the current economic climate. We’ve assumed that the recent trends from October will continue for the foreseeable future. We’ve, as Ash mentioned, considered the trends in the segments, both SMB as well as Enterprise. We have considered what we see across the geographies. We have considered the consumption trends that we’ve seen in the business. We’ve looked at it from the standpoint of new and expansion motions as well. And then we’ve, of course, factored in the impact of all of the changes that we announced today also. So we’ve suitably factored all of these into our outlook. And then in case things happen to get worse out there, we’ve also built in some additional level of protection into our guidance, as we always do, to balance the risks of the unknown. So there is no court change to our guidance philosophy there. We don’t guide excessively conservatively, but we do guide prudently. So we actually feel pretty good about the outlook. And then as I said, November has played out nicely so far. So we feel pretty good about Q3 and the rest of the year.

Understood. And Janesh, another one for you, the [indiscernible], the net retention rate trending down, I want to ask about the retention, the growth tension side, has that – is that getting impacted because of the SMBs? Is that fair to assume? And then how the – or is it mainly on the expansion side?

Yes, it’s a great question, Pinjalim. So a couple of thoughts that I’ll put out there in terms of the net expansion rate. So in terms of the gross renewals, we actually didn’t see any significant change in the gross renewal rate for our subscriptions. We don’t break out the numbers specifically because individual projects obviously introduce some level of noise into the measurement. But as we looked at the renewal rates internally, they were very consistent with what we’ve seen before. And when I think about how that played out in terms of the expansion dynamics, we did see expansion slow a little bit, and I think that’s partly the effect of the – some of the trends that we talked about that we saw in the month of October. Within the net expansion rate, that does include some effect of SMB and monthly cloud consumption, which is annualized for the purposes of that net expansion rate calculation. So the softer SMB performance in October also would have had an adverse impact on that. But the way we think about that is that even at 125%, it is still a world class expansion rate. And when you look at the customers over $100,000 ACV, which is the other way that we think about expansion, we have continued to grow that number in a pretty solid way. And that’s a more current data point that indicates the expansion momentum that we are seeing. So when I think about it more broadly, the underlying trends continue to play to our advantage where customers continue to adopt us across multiple solutions. We continue to move further up within the enterprise. We are getting closer to the customers and becoming more strategic to their businesses. So, for all of those reasons, I actually feel quite good about the longer term opportunity ahead of us.

Got it. Thank you. I will get back in the queue.

Thank you.

The next question will come from Joel Fishbein with Truist Securities. Please go ahead.

Thank you for taking my question. Janesh, I would love to just here what happened in monthly customer cohort? I know you mentioned something about it on the call, I just want to go a little bit deeper. And what percent of business is that now? And where do you think that, that trends? And then the second follow-up to that is just how is the government business for you guys been specifically? Thanks.

Yes, happy to take both of those, Joel. So, in terms of monthly cloud performance, Monthly cloud was about 16% of total revenue, and that was a tick down from where it’s been in the past. In prior quarters, it was roughly 17% of total revenue. And I think that just reflects some of the consumption trends that we talked about, particularly on the SMB side because a lot of those customers are on monthly cloud. And in terms of context, 1% change there obviously translates to a few million dollars in revenue. So, it is quite meaningful. But monthly cloud continues to be a great way for us to acquire and scale new customers. We have talked already about some of the changes that we are making to double down on those and focus with even greater investments in digital demand, and in particular, as one example. So, those are some of the trends that we saw from a monthly cloud perspective. And then in terms of the Federal business, Fed continues to be a very strong practice for us. We have invested in the Fed business for some time now, and that team has been really successful in prosecuting many use cases and ensuring that we are used in mission-critical workloads across multiple agencies. In Q2, we were actually quite pleased with our performance in Fed. The team did well to close all of the business that we were looking to close, and we are excited about the opportunity in Fed looking ahead.

Thank you so much.

Your next question will come from Raimo Lenschow with Barclays. Please go ahead.

Hi. This is Vinod Srinivasaraghavan on for Raimo. Thanks for taking my question. You had mentioned 30% of Elastic clusters are using APM now, just wondering if you could give us a sense of how that’s progressed from last quarter or last year? And from a sales perspective, how do you kind of go about incentivizing more customers in this type of environment to try and use and scale up on APM or security or some of your newer product areas?

Yes. Hey Vinod, maybe I can touch upon this. So, we don’t break out discretely the growth percentage in terms of how APM is being adopted. We gave this data point primarily because as we have been driving customer adoption, not just across solutions, but within a solution, so Observability going from log analytics to APM metrics and so on, there is a growing need that we are seeing in growing interest and consolidation. And so this data point was one that we are sort of giving for the first time because it’s now pretty clear that our APM solution is one that is gaining a lot of traction, has gained a lot of traction. Matter of fact, one of the customer examples that I gave in my prepared remarks, the large eight-figure deal that we signed with a large financial services institution was really all about APM. So, it’s being used at scale. It’s being used in very significant ways. And the way we tend to drive that expansion motion is in a couple of ways, right. So, one is the pricing model tends to be incredibly relevant in that scenario because our pricing model is completely based on consumption. So, it’s not like the customer has to start with going all in on Elastic on any of those newer use cases, we typically tend to suggest that they play with it. They tried for instrumenting a few applications at a time getting familiarity with the capabilities and then deciding if it’s something that they want to roll out across their entire real estate. And that’s how we have been growing in a very viral manner, the expansion scenarios. And it’s gotten to the point now where a significant percentage, like I mentioned, of our Observability customers using APM in some way, shape or form. And we just expect that to continue growing. The other thing that we are doing is also making sure that, that’s the play that our sales teams are driving with all our enterprise and commercial customers. It’s that that land-and-expand motion that we really focus on. Once the customer lands and they typically tend to land on cloud, like we have talked about in the past, the real focus for the sales teams ends up becoming all around expansion. And that expansion is centered around starting from logs in Observability to APM to metrics. If the customer starts with security, specifically with SIEM then going from SIEM to XDR. I also gave some stats about the adoption that we have seen around XDR and some of our security use cases. So, we are starting to see that flywheel work quite nicely. And that’s really going to be the focus going forward as well.

Thanks. Appreciate that. And just one more for me. I think last quarter you mentioned that you weren’t seeing too much impact from macro on – from on-prem to cloud migrations, are you seeing an impact to there now, or is the slowdown mainly attributed to lower expansion like you said from SMB on the cloud?

Maybe I will take that one. So, on the self-managed side, we are actually quite pleased with the performance there. It grew 20% year-over-year in constant currency, which compares favorably to the prior quarter. So, we were pleased with what we saw there. In terms of the overall business perspective, there is nothing in particular I would call out other than customers just continuing to express a preference for cloud. So, we generally view that as a positive for the business. And in fact, as you know, encourage that preference as well. We do think that self-managed will continue to grow. And that growth over the long-term should just mimic where workloads reside. So, it’s not a substitution effect. We are not trying to do any kind of forced march. It’s just that cloud workloads are growing faster than on-prem workloads. The way we think about it from a longer term perspective is that our opportunity set is large and our penetration rates are low. So, we should have plenty of room to grow in both the cloud and the self-managed formats.

Understood. Thank you.

The next question will come from Matt Hedberg with RBC Capital Markets. Please go ahead.

Yes. Thanks. This is Matt Swanson on for Matt. Kind of a follow-up to the last question around consolidation. I mean obviously, this is a positive, but I would assume this is also making deals, maybe a little larger, but also more complicated. You mentioned the increased scrutiny that we are seeing in this macro. Could you just talk a little bit about how this consolidation theme might be impacting sales cycles? And then I mean you went into it a bit, but just kind of things you are doing to streamline this from a go-to-market perspective?

Yes. So, the deals that actually ran into more approvals and so on weren’t necessarily tied to consolidation per se. So, we are not necessarily seeing a correlation between consolidation and deals taking longer, the fact that certain deals took longer because there were more approvals needed. And by the way, that is something that our sales teams are now actively accounting for. We sort of know that, that’s going to be, like I mentioned, more the norm, so we are sort of accounting for that. But those were in regions and countries where the strengthening U.S. dollar has given those customers reason to just be that much more thoughtful. And several of those deals actually came in into Q3 already. So, these were not deals that got affected in terms of us losing them from a competitive standpoint. We did very well. It was just the timing of things. So, that was number one. The second is to the point of consolidation, we agree that consolidation is an opportunity. And that’s, like I mentioned, that’s something that we are really leaning into. And the field is actively having those conversations, right, because at this point, we see that the spend is something that’s on everybody’s mind, how do customers be a little more thoughtful about what they are spending on. And there is a natural desire to ask, how can I do more with Elastic, where else can I use you in such a way that my incremental – my overall cost of ownership comes down, and those are the conversations that really we are driving as sales plays now throughout our organization. And that’s – I expect that, that’s going to be a greater aspect of what we do going forward. But I am not seeing any correlation between that and deal cycles because the change that we saw in deal cycles, that was somewhat we are talking on.

Yes. That’s extremely helpful. I guess the second part, just given that macro and given the cost sensitivity you mentioned, have you guys seen any changes in adoption around the free tier over the last couple of quarters or maybe this quarter, either customers migrating down or additional usage from companies that are in that new to Elastic?

We have not seen that. Matter of fact, one of the things that we have seen is people who might have been using the free – and I actually mentioned one of these customers. I referenced one of these customers, a government agency, in my prepared remarks. I mean what we are seeing is, as the economic environment becomes such that everyone is inspecting their spend, we are seeing customers actually think about the cost of managing things themselves and recognizing that they are better off with a fully managed cloud service as opposed to trying to install and manage everything themselves. So, we did see customers adopting some of our higher tiers, and we haven’t really seen any impact where customers are saying that they want to go to the free tier, simply because the moat is massive. The difference between our premium tiers and the free tier is very significant. So, if you are using any of our advanced capabilities, giving all of that up is an extremely high hurdle. And we haven’t seen any of that behavior.

And then, of course, the other thing I would just point out there, Matt, is that on cloud, as you know, there is no free tier. Everything is paid beyond a couple of weeks of the trial period.

Appreciate the color.

The next question will come from Koji Ikeda with Bank of America. Please go ahead.

Hey guys. Thanks for taking my question. Just one for me here and I am really kind of trying to focus on this less than 100,000 customer ACV cohort here. So, just given the commentary with the SMB and really thinking about these two components being a fairly big component of the total revenue and really that $2 billion fiscal ‘25 target. I really want to understand the growth potential of this category of the medium-term. I heard that you guys are repurposing SMB spend to enterprise sales, a higher focus on self-serve for SMB and then some investments for digital demand generation. So, a lot of puts and takes there. So, I guess the question is, how should we be thinking about the growth in this sub 100,000 ACV segment here? Is the second quarter kind of the net add a good way to think about a sustainable net adds in this category? I mean does it go down from here? Does it go up from here? Any sort of help on how to think about this category? Thanks.

Yes. Koji, maybe I will try and unpack that a little bit. So, a couple of thoughts. In terms of our customer acquisition motions, we continue, as we have done over the past couple of quarters to focus on driving towards customers who have a greater propensity to spend over time with us, which has meant focusing on those customers that are above that 10,000 ACV threshold and focusing less on the long tail of smaller customers that might spend just a few hundred dollars a month, for example. And you see that in the numbers. So, when you look at the total subscription customer count, although sequentially, we added fewer total customers. When you look at the customers that are more than $10,000 in ACV, that customer additions was consistent with what we have done in prior quarters. So, we feel pretty good about the new customer acquisition motion and the effectiveness that we are driving as we try and work the cost to acquire customers into the calculus as well. So, I think that’s working quite nicely now. If you think about how those customers then eventually expand into the greater than 100,000 category, I think that’s where we – you can look at a couple of metrics. Obviously, the net expansion rate and then also just the sheer number of customers in the greater than 100,000 count in that particular category. And again, in both of those categories, you will see that the expansion motions are working quite nicely. Here in Q2, they were a little bit slower than what we would have ideally liked. And I think that just reflects the broader trends that we have talked about from an enterprise perspective. So, what that does for us in terms of continuing to drive growth into the future suggests that the areas that have been working nicely for us, we need to continue to expand investment in those areas. So, for example, in digital demand gen and marketing to continue to acquire customers at the right pace and the right kinds of customers at the right pace and then to continue to invest in the higher touch selling motion where we can continue to expand those customers into larger customers over time. And those are the two areas where we are continuing to shop in and invest a bit further, while focusing our – and pulling back some of the investments in some of the other areas that were less productive in those selling motions.

Thanks Janesh. Thanks for taking the question. Appreciate it.

Yes. Of course.

The next question will come from Kamil Mielczarek with William Blair. Please go ahead.

Hi, thanks for taking my question. I just want to double-click on the competitive environment. I believe you said win rates are unchanged. But as you look across your three products, can you provide more detail on where you are seeing the most competitive pressure? And there is a large number of private vendors entering the Observability space, are you seeing any change in who you are coming up against some deals?

Yes. So let me maybe touch upon that. So in terms of the three different segments, like I mentioned, where we tend to lead with in new accounts is almost always either in log analytics for Observability or SIEM for security or Enterprise Search. In Enterprise Search, we really haven’t seen any change. In security and log analytics, we really haven’t seen any change either. What we have seen is, as we land and we expand, as we expect – when we are trying to talk about XDR, we tend to see the vendors that have already been in the XDR space, but that’s where we typically tend to go with that expand motion, not with a new customer, but with a customer that’s already familiar with the Elastic platform that’s already using us for say SIEM. And then we basically get the point across to them that the same agents that they have deployed for ingesting data into SIEM for analytics are the agents that can help them with actual endpoint protection. So, it tends to be a different kind of a conversation as opposed to just going head-to-head against other XDR vendors. And it’s the same thing even in Observability, because we also tend to start with log analytics, which has been an area of extreme strength for us. That’s an area where we are very well known. We tend to have the advantage. We compete incredibly well in that area. And once we start with log analytics, the progress that we have made on APM has been with existing customers, right. So once we land with log analytics, we will expand from there, we don’t tend to just go into completely new APM scenarios for APM itself, like for APM alone. So, it’s because of all of those dynamics, we have not seen the competitive environment change in any meaningful way at all.

That’s really helpful. And just a quick follow-up, you have well over $800 million in cash and cash equivalents. Can you update us on how you are thinking about the decision to build versus buy? And given the declining valuations in private markets, would you be more open to a more transformative acquisition?

Yes. Look, from our perspective, typically, one of the things that we have been very focused on is we want to make sure that we are building a platform, not just assembling a portfolio. We believe that, that’s the right answer in the long-term. When you have a clear well integrated platform, the land and expand motion tends to work much better. Your overall efficiency tends to only improve over time in terms of how you go to market, even in terms of your engineering efforts. So we want to be consistent with that. And so that’s one of the reasons why traditionally we have always done tuck-in technology acquisitions. In the private markets, to your point, at this point, to be honest, I don’t think that the private markets have corrected the way we have seen the changes in the public markets. It will happen in time. That’s what history has always shown us. But as that happens, when that happens, we are always going to be looking for technology tuck-ins that allow us to bring our future forward, because we tend to integrate them deeply to make sure that we have a consistent platform. So I don’t expect that strategy to change. When you say transformative, some of those small tuck-in acquisitions could end up being transformative just in terms of what that lets us accomplish in new areas that lets us get into. And we will always be on the lookout for those kinds of things, but that’s how you should think about our strategy there.

That’s helpful. Thanks, guys.

This concludes our question-and-answer session. I would like to turn the conference back over to Ash Kulkarni for any closing remarks. Please go ahead.

Well, so thank you all for joining us. The thing that I’d say in closing is we are absolutely focused on our execution and we remain confident in our ability to both drive growth and build a generational company and also continue to focus on profitability, as we have demonstrated through all the things that we have done. So thank you again. Have a great day.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.