Elliot Noss - President and CEO Michael Cooperman - CFO

Thanos Moschopoulos - BMO Capital Markets

Good afternoon, ladies and gentlemen. Welcome to Tucows First Quarter 2013 Conference Call. Earlier this afternoon, Tucows issued a news release reporting its financial results for the first quarter. That news release and the financial statements are available on the company's website at tucowsinc.com under the investors heading. Please note that today's call is being broadcast live over the internet and will be archived for replays both by telephone and via the internet beginning approximately one hour following the completion of this call. Details on how to access the replays are available in today's news release, as well as at Tucows' website. Before we begin, let me remind you that matters the company will be discussing include forward-looking statements and as such are subject to risks and uncertainties that could cause the actual results to differ materially. These risk factors are described in detail in the company's documents filed with the SEC. Specifically, the most recent reports on the Form 10-K and Form 10-Q. The company urges you to read its security filings for a full description of the risk factors applicable for its business. I'd now like to turn the call over to Tucows' President and Chief Executive Officer, Mr. Elliot Noss. Please go ahead Mr. Noss.

Thank you, operator. With me is Michael Cooperman, our Chief Financial Officer. As per our usual format, I will begin today's call with an overview of the financial and operational highlights for the quarter. Mike will then review our financial results for the quarter in detail, and I will return with some closing thoughts, before opening the call to questions. Q1 was a solid start to 2013, as we saw continued consistency and reliability in the overall quarter. Another quarter of double digit growth from Hover, while Ting continues to exceed our expectations. Total revenue for the quarter grew 9% from Q1 of last year, to $30 million, our 12th consecutive quarter of revenue growth. Let me walk through each of the three components of our business, beginning with wholesale. Domain Services, which is the largest component of our wholesale business, continues to perform well, with revenue up 4% compared to Q1 of last year, as we saw last quarter, growth here continued to be muted by the softness in transaction volumes at the industry level that we've discussed previously. Total transactions were down by 5% from the same period last year to $2.3 million. New transactions fell 23% year-over-year, but from an unusually high Q1 of last year. On a more normalized basis, domain transactions for Q1 of this year were down 5% from Q1 of last year. As I mentioned last quarter, the impact on corresponding gross margin was much less than the decrease in revenue, and these were very low margin transactions for us. Renewal Registrations were once again up year-over-year, increasing by 5% and we also saw a return to growth on a sequential basis. Total domains under management at the end of the quarter, grew by 17% from the same point last year, to just over $14 million. In the past, I have typically talked about OpenSRS growing in the mid to high single digits. However, from now until the new GTLDs are introduced, I would expect that growth to be in the low to mid-single digits. We are seeing the delay in GTLDs, creating a bit of a level of activity ahead of the first introductions late this year, early next year. We are also seeing some weakness, from the maturation and softness in North America and Europe. This is one of the reasons we have been focused on growth opportunities in other parts of the world. We continue to see success in the developing world, particularly in Eastern Europe, Southeast Asia, Africa, and Latin America. We had a big competitive win in South Africa this quarter with the largest hosting company, with more than one-third market share, selected Tucows to manage its ccTLD registrations. I will note that the combination of OpenSRS and EPAG which we acquired last year, was instrumental to winning this business, and I know this in particular, as we believe that our experience as the only large registrar, with a complete ccTLD offering, will service well with new GTLDs launched. Q1 also saw a noteworthy competitive win in email, as a large North American local search, media, and advertising company, which has been a OpenSRS domains reseller for many years, selected us as their new email supplier. In the portfolio component of our business, although total number of domains sold was up from Q1 of last year, we saw a relatively low number of high priced domains. As we have discussed in the past, sales of these gems, as we call them, can be lumpy from quarter-to-quarter. The contribution from network sales, where average selling prices tend to be less than $5,000 was strong, as our strategy to increase the average selling price of these names has paid off. The core buyer for domain names in the secondary market, the business is starting up, where the more mature business is launching a new product to service our division, continues to provide solid results. We believe that market continues to grow, as more and more businesses understand both the value and the availability of excellent domain names in the secondary market. With the wholesale buyers, the domainer who is already sitting on a significant investment in domain names, have slowed their purchases. Likely due, either to the uncertainty of what the new GLTDs will bring, or to hold back some capital, to take advantage of opportunities next year. We've always about the seasonality in this business, and while we are seeing wholesale buyers take a breather, we are seeing increasing strength from end users, businesses, and marketers. Q2 numbers are already much better, and we are just halfway through the quarter. The retail component of our business continues to deliver solid performance. Hover had its best quarter ever, with revenue growing 25% year-over-year and 4% sequentially, as our value proposition, relative to our competitors continues to resonate with customers. Q1 also saw the continuation of our strong customer growth, with increases of 15% year-over-year, and 5% sequentially. New transactions, which include new domains, transfers and email accounts, grew 45% year-over-year, over Q1 of last year, and 37% over Q4. Renewal rates continued at their already high levels. Q1 was a record quarter in terms of transfers-in, while the ratio of transfers-in to transfers-out remained well above seven to one, an incredibly high ratio. The other side of the retail business of course, is Ting. All aspects of this business are moving in the right direction. New customer growth continues to build momentum since Q1 of last year, having added 2,000, 3,000, 5,000 and now over 6,300 accounts in each of the last four quarters, for devices, which correlates more closely with our competitor's accounts, it's 3,000, 4,000, 7,000 and 11,000 in each of the last four quarters. Total number of accounts, surpassed the 16,000 mark at the end of Q1, and the total number of devices was at almost 26,000 and this trajectory continues in the first half of Q2. We have been very transparent around Ting, to help the market understand the economics of this business, and I now am pleased to revise upwards, two of the metrics I have previously discussed. We have talked about devices per account, in the range of 1.5, of 1.5 devices per account. We are now above 1.6 devices per account, and trending up. It is not uncommon for us to (inaudible), when we are adding nearly twice as many devices, as accounts. By allowing unlimited devices per account, with just $6 monthly fee per device, the relative value of Ting increases, as people add spouses, children, or parents or small businesses add employees to their accounts. We believe we are seeing gatekeepers testing out the service, enjoying the experience, seeing real savings, and then doing just that. The other number we are recasting up, is the gross margin dollars per account per month or per year. I have talked previously about that number being around the $150 per year. It is now closer to $180 per year. This is certainly the result of increased devices per account, as well as an increase in usage, and a slight reduction in our cost of goods, as our volume grows. Our Bring Your Own Device program, which we launched in Q4 of last year, has proven to be a strong driver of new customers. With the addition of LTE, a broader range of devices, number porting, and a smoother transition experience Bring Your Own Device accounted for more than a third of new customers in March. It is also worth noting, that Bring Your Own Device has helped reduce dollars in inventory since last summer, by well over 50%. As I have discussed previously, a natural consequence of Ting's early success is increased investments support the onboarding of new customers. These costs remain relatively high for us, as new accounts still represent such a large portion of the base, and I remind you that, when we talk about relatively high, that's in relation to our cost structure, they are so significantly less than those of our competitors. We expect these costs to decrease as a percentage of revenue, as a number of new customers falls, relative to the size of our base. Ting is meeting our lofty expectations, particularly on gross margin dollars per month, and we have been able to achieve this, while generating solid customer growth, and maintaining our customer acquisition costs well below $100. In summary, Q1 was a solid quarter and a good start to 2013. We continue to see growth in the core domain registration business. Hover continues to put up outstanding growth numbers, and Ting continues to suggest, it might be our success yet. All of this positions us to deliver consistency and reliability and to generate growth. I would now like to turn the call over to Mike, to review our financial results for the quarter in greater detail. Mike?

Thanks Elliot. Net revenue for the first quarter of 2013 increased by $2.4 million or 9% to a record $30 million from $27.5 million from the first quarter of 2012, and marked our 12th consecutive quarter of record revenues. Cost of revenues before network costs were $22.1 million, an increase of $2.8 million or 15% from $19.3 million for the first quarter of last year. Primarily, the result of our -- offsetting Ting devices, [as] was slightly below costs. Gross margin before network costs decreased by $363,000 or 4% to $7.9 million from $8.3 million for the first quarter of last year. This decrease was primarily due to the lower contribution from our portfolio revenue stream, which I will discuss in a moment. As a percentage of net revenue, gross margin before network costs decreased to 26% from 30%. I will now walk through the gross margin performance in each of our three service categories; wholesale, retail and portfolio. Gross margin for wholesale services, which includes domains and other value added services, decreased by $101,000 or 2% to $5.6 million from $5.7 million for the first quarter of last year. As a percentage of revenue, gross margin from wholesale services was 23%, compared with 24% for the first quarter of last year. Gross margins for domains declined slightly to $3.4 million from $3.5 million, primarily, the result of certain marketing initiatives undertaken by both end-user and resellers in 2012, either being significantly scaled back, or cancelled for 2013. In addition, gross margin has been impacted by certain of our customers, acquiring their own registrar accreditation, and therefore no longer registering new domains on our platform. Gross margin from the other value added services component or wholesale, decreased marginally by $55,000 or 3% to $2.1 million from $2.2 million from the first quarter of last year. Gross margin for the retail services, which includes the contributions of both Hover and Ting, increased $486,000 or 53% to $1.4 million from $920,000 in the first quarter of last year. The increase is a result of two factors; the first is the continued success of Hover, in attracting new customers, and increasing domain name sales for the existing customers. In addition, Ting's growth to more than 16,000 active customers by the end of the quarter, has allowed it to contribute more than $200,000 on this quarterly gross margin increase. As a percentage of revenue, gross margin for retail services was 33% compared to 50% for the first quarter of last year. When evaluating this metric, I will remind you that gross margin for Ting is significantly impacted by the investment we make towards customer acquisition, by selling Ting devices at or slightly below costs. As Elliot discussed in the past, Ting's gross margin is also in the low to mid 40% range, meaningfully less than the low 60% margin generated by Hover. Gross margin from our portfolio revenue stream, decreased by $748,000 or 45% to $933,000 from $1.7 million for the first quarter of last year. This decrease is primarily the results of two factors; first, as Elliot discussed, we saw lower sales of big ticket domain names, which accounted for approximately $0.5 million of the decrease; and second, as I mentioned among the [go], certain of our vendors elected not to repeat marketing development initiatives they undertook in the first quarter of last year, which generated $100,000 in gross margin during that period. On a percentage basis, gross margin from our portfolio was 82%, compared with 89% for the first quarter of last year. Turning to costs; network expenses for the first quarter of 2013 were unchanged from the same period last year at $1.4 million, as we continue to benefit from efficiencies in operating and managing our collocation facilities, as well as the relatively low capital expenditures we require for our operating platforms. Total operating expenses for the first quarter was $6.2 million, up $1.4 million or 29% from $4.8 million for the same quarter of last year. Two factors primarily account for this result; first, as I have discussed last quarter, to mitigate the impact that changes in the fair value of the forward contracts, [as we have] on our quarterly results. We have adopted hedge accounting for foreign exchange risk, and that we are (inaudible) apply any hedge accounting for the majority of the context to meet our Canadian dollar requirements on a prospective basis. It will however, take some time for the impact of the context we place prior to the adoption of the hedge accounting, to work their way through the system. Accordingly we incurred a loss on foreign exchange contracts in the first quarter of this year, of $235,000 compared with a gain on foreign exchange contracts of $562,000 in the first quarter of last year. Second, workforce, marketing and other costs for Ting increased by $1 million, when compared to the first quarter of last year, as a result of the incremental investment we are making to grow and support Ting. While our customer acquisition and customer service costs are incredibly efficient, relative to our competitors, they are still significant, given the size of the customer additions relative to the base. These higher costs are a function of customer growth, and a natural consequence of the success of Ting. Overtime, as the size of the additions relative to the base goes down, these costs will become less significant. As a percentage of revenue, total operating expenses increased to 21% from 17% for the first quarter of last year, largely the result of the investment we are making in Ting. Net income for the first quarter of 2013 was $77,000 or less than $0.01 per share, compared to $1.7 million or $0.04 per share for the same quarter last year. The decrease was primarily the result of three factors; first, the incremental investment of approximately $1 million we have made in the first quarter of 2013, for the acquisition and support of Ting customers. Second, the negative impact of the loss on foreign exchange contracts of $235,000, versus the gain of $562,000 in the first quarter of last year, and the benefit in the first quarter of last year of $0.5 million, resulting from the sale of certain tangible assets with no book value, that is not repeated this year. Cash and cash equivalents at the end of the first quarter was $4.3 million, compared with $6.4 million at the end of both the fourth quarter and the first quarter of last year. Essentially the result of our investments in Ting, and our stock buyback initiatives. We generated cash from operations of $416,000 in the first quarter of this year, compared to $2.1 million in the first quarter of last year. This decrease in cash flow from operations was mainly due to the timing of payments in the normal course of the business. During the quarter, we also invested $6.5 million to repurchase [4,114,121 million] of our shares at $1.50 per share under our modified Dutch auction tender, that we completed in early January. The repurchase of shares was partially funded through a drawdown of $5.2 million on our credit facility. We also used $800,000 for principal repayments under our credit facility, and invested $450,000 in equipment purchases. Deferred revenue at the end of the first quarter was $72.4 million, down 1% from $73 million at the end of the first quarter of last year, and up 2% from $71 million at the end of the fourth quarter, largely reflecting the impact of customers acquiring the accreditation it had on new domains being registered on our platform. Our financial results for the first quarter continued to demonstrate the consistency and reliability of our business, as well as our ability to deliver growth from new services, notably Hover, which repeatedly generated growth for the past several years, and more recently Ting, our biggest opportunity since OpenSRS. Ting continues to ramp very nicely, and while in the short term, the required investments for the success here, will mute our overall cash generation, we expect Ting to contribute meaningfully to EBITDA in the years to come. As a result, we remain very well positioned over the long term to continue to enhance value for shareholders, and with that, I would now like to turn the call back over to Elliot.

Thanks Mike. As I stated earlier, it has been our goal to be transparent around Ting, which we have tried to balance with managing expectations around growth and contribution. We are thinking about how to start providing more information about the Ting business, and we plan to do that over the next couple of quarters. We are now more than a year past launch, and Ting is clearly a success, but the path to that success is a little different than we originally envisioned. When we first started down this road, our belief was that the real opportunity for Ting was going to be through our wholesale channel, our network of resellers on our OpenSRS platform. The wholesale channel however, has not meaningfully contributed to the success of Ting. The retail channel, has far surpassed our expectations however. In retrospect, we probably shouldn't be so surprised. We have had great success with Hover, based on a very similar approach to acquiring and supporting customers, and is that exact user experience, skill-set and customer service infrastructure that we are leveraging. Ting is more distinct from OpenSRS than we initially thought, and so we want to think about how we present the businesses going forward. In addition, as investors who follow the company know, we have not provided guidance for several years. With the maturation and stability of the core business, and the rapid growth of Ting, we are rethinking this a bit. While the domain business has some parts, like the sale of gems and registry rebates, which can fluctuate from quarter-to-quarter, with some large numbers, it is quite predictable on an annual basis. Therefore, we would like to initiate annual guidance for the domains business. In 2012, that business generated roughly $10 million of adjusted EBITDA; and the aforementioned single digit growth, should get to around $10.5 million this year. Separately, we would also like to provide a little guidance for Ting. As we have said, Ting has been consuming cash since we launched it last year. In 2012, that figure was about $2 million. We expect a big larger cash drag in 2013, however, it should be declining from a peak, in the first quarter, and at its current pace of growth, we expect Ting to cross over the breakeven threshold in the fourth quarter this year. The way we are thinking about it internally, last year, the domains business contributed about $10 million of adjusted EBITDA, and Ting consumed about $2 million. This year, we expect the domains business to contribute a little more, and Ting to cost a little more, leaving the net around the same. Direct comparisons are clouded by the fact that they require cost allocations between the two units, that we were not making in 2012, and are making in 2013. Finally, by the end of this year, we expect Ting to be the second largest business unit inside of Tucows, already bigger at that point, than Hover and YummyNames, and to become a meaningful contributor in 2014. This will be true, both in terms of revenue and gross margin dollars. We think this is a remarkable accomplishment, as both Hover and Yummy are strong businesses, that have grown significantly over the last few years, and have been around for many years. We continue to be pleased with OpenSRS, Hover and Yummy, and are especially excited about what new GTLDs will bring in 2014. On top of that, we are thrilled to have a big winner on our hands in Ting, and recognize the size of the opportunity it provides. The mobile internet is the biggest technology trend of the next 10 years, and we have a service that is leading the whole mobile industry in key areas, most importantly customer service and customer experience. That bodes extremely well for the future. And with that, I'd like to open the call to questions. Operator?

[Operator Instructions]. Your first question comes from the line of Thanos Moschopoulos from BMO Capital Markets. Your line is open. Thanos Moschopoulos - BMO Capital Markets: Hi good afternoon.

Hey Thanos. Thanos Moschopoulos - BMO Capital Markets: Hi Elliot. The guidance you provided for 2013 is very helpful. As we think about the GTLDs starting to get up and going, what do you think they will do for your growth rate in the wholesale registration business at that point?

I am still not ready to put a stake on the ground around that, primarily because, it's still difficult to tell when -- not only when new GTLDs will be coming out, but when the ones that will meaningfully contribute will come out. As you'd appreciate, the most desirable new GTLDs, are the ones where there's contention; and where there's contention, they will tend to be towards the back of the line. The one exception to that is the city TLDs, and we do think we could still see a couple of attractive city TLDs in the very late part of 2013, certainly in early 2014. I am more looking at it as -- we do think new GTLDs will provide a step function to the whole domain market, and I am really roughly swagging a kind of a 20% number. But you want to think about that pop as -- the pop that will -- that the industry will experience, once all of the material launches have taken place. Thanos Moschopoulos - BMO Capital Markets: Right. So more towards latter part of 2014, or maybe even to 2015?

Hopefully. Because these issues are political, it often makes it that much more difficult to predict. Thanos Moschopoulos - BMO Capital Markets: Okay. Fair enough. On the Ting side, you mentioned that the gross margin per account is going up, and so, can you just expand on drivers for that? Is that more on the cost side, as you are getting some economies of scale, or its also on the ARPU side?

Both. So little bit ARPU, even just the extra devices provide some extra ARPU, right. So it's a little bit of ARPU, little bit of costs. Thanos Moschopoulos - BMO Capital Markets: Okay. And now you have the Galaxy S4 ad launched, which seems to be a competitive differentiator, relative to your number of the other MVNOs, and so has that had a material impact in your growth, or is it kind of really the same?

Not yet. With the S4 -- so first of all, previously, we announced that we would be getting it shortly after or almost contemporaneous with Sprint. We just yesterday, started taking pre-orders. So I don't mind saying we had a good first day of pre-orders on the S4, and what some people, with the sharper pool -- no sorry, the less patient people will do, is go to Sprint, and pay full ticket for an S4, and then immediately port at the same. So we could see some -- impacted our BYOD numbers there as well. Thanos Moschopoulos - BMO Capital Markets: Okay. (Inaudible) your portfolio business, you called out some of the factors there, and you mentioned that you are seeing an uptick in Q2. But I guess you highlighted, maybe a longer term factor about the domainers being less active in that market. And so, as we think about it towards the second half of the year, can that number start to get more back up to what we saw historically, or will it be subdued because of that factor?

It's tough to say, because when you are dealing with these big ticket transactions, five or 10 of them really can have a big swing. So what goes on in the macro market, may or may not impact us because of the smaller unit numbers. So we could end up having a huge second half or gems, while the macro market is really continuing to struggle, or the reverse can be true. Thanos Moschopoulos - BMO Capital Markets: Right. Which is why you are not providing guidance for that line?

Yeah. That's very [critical]. Thanos Moschopoulos - BMO Capital Markets: Fair enough. Great. Thanks. I will get off the line.

Thanks Thanos.

Your next question comes from the line of [Stuart May] from Cormark Securities. Your line is open.

Hey guys. Just on Ting. I guess, what is it, that is driving this sort of momentum here, in terms of the sub-adds, like -- I know obviously marketing is one, what's working with (inaudible), maybe you can talk about that, and is it like serving a viral growth, where people are trying to talk about a lot more? Like, what are you guys seeing?

We think that almost all of our growth is viral. So it really is people coming over, saving money. So they will come for the savings, and they will stay and proselytize and stay and promote, because of the great customer service experience. So we are seeing that pattern happen repeatedly, and I think we are doing a great job of using social media tools like Facebook and Twitter, and always, you are going to hear me say all the time, if I was an investor and I wanted to follow along, we think the best place to do it is the Facebook site, you know facebook.com/ting. You really get to see customers interacting with the company in a very-very transparent way, and a great set of that customer connection to the service. The other bit is, we are continuing to push down the road, not just podcasters now, but also some YouTube celebrities. And there's two things, there is the good news, which is we again have had a little bit of good fortune, or success in finding a couple of YouTube celebrities that have really worked well in promoting the brand; and by the way, the ones that work well, are the ones that immediately get what we are selling. They connect to the service, they love it themselves, and they promote it within them. The bad news of that side, is we are definitely seeing more and more traditional marketing money coming into those mediums. We have one of our very early successes of the podcasting site that's basically -- where our dollars have basically now been crowded out by a large automobile manufacturer. So we think what that means is, we have got to keep our head down, keep looking and finding and cultivating these successes, and then over time, we may end up losing to the mainstream media, and we've got to keep pushing harder.

In that case, then I guess in terms of marketing spend, I mean -- I know you don't give guidance, but I guess just really between customer acquisition costs, do you think there is leverage there in terms of where it may be, in 2014, you sort of like -- whether it's flat or is scaled back, and while the subsequent new adds are increased, I guess?

You know, I won't be surprised if you should -- if I look at it, and the way we are thinking in modeling the business, we never like to waste money, so it's definitely not linear. As size of the base goes up and obviously the revenue and gross margin go up, the marketing spend is not going to go up correspondingly. That being said, we are always trying things, and so we love experiments like the ETF funds that we did last quarter, or experimenting with the bounties that we put into our Refer a Friend program. We have a couple funds promotions that we will try with next quarter as well, and because there is such leverage in the model, I am really encouraging folks to be experimental there. So, generally there is sort of great efficiencies in that marketing spend, as it grows, marketing spend should come down as a percentage of sales, but I am again, encouraging experimentation wherever possible; because it is such a great business model.

And I guess what's the -- are you seeing sort of the renewals coming through, I sense you guys have sort of a one year for (inaudible), maybe couple of thousand subscribers. But is that maybe your margin kind of profile sort of --

The one bit I am sure and I will tell you though, we are still very happy with where the churn numbers are, and of course, as time goes on, we dig more and more and more into the data. The one nugget that I will share this quarter is the vast -- not the vast, but for the single biggest group of handfuls, and for us, it's more -- it's a little bit different; because remember, there is no contracts, and there is no, you know, annual events. Anybody simply goes, tick a radio button on the website and leave tomorrow. The biggest chunk of cancels come in the first 30-45 days; and so what we -- when we connect that to some of the -- just kind of the anecdotal data, or the comments that we collect on cancels, what we think we are seeing there, is predominantly people who weren't from the Sprint network before, coming over, experiencing less than satisfactory network coverage, and leaving. So there is kind of nothing we can do about that, and the two comments I will make there is again, those numbers in absolute terms are really very healthy and low. And two, Sprint is continuing to rollout their Network Vision, which not only expands their LTE footprint, but also should be increasing coverage more broadly. So we feel good about where that is today, and we hope that gets better.

Right. Okay. And just, I know previously you talked about the net quality adds being, I guess, in absolute terms increasing (inaudible) order. Is that still the same thinking, based on what you guys are seeing right now, or?

Nothing big a change. The one thing that we want to be heads-up about, there's certainly nothing in the data where we see that changing now. The one thing we want to be heads up about, is we are always reminded of the seasonality in this business. Summer tends to be a little bit slow. Now, we didn't see that last year, but we were so new. So maybe, we will, but we don't -- again, we see nothing to suggest that's the case.

Just on your -- can you just sort of give guidance, because it's really [good to hear]. In 2014, do you expect Ting to sort of cut through positive margins here or?

Yes.

Okay.

I didn't mold that clearly enough. Yeah 2014, we see Ting as a contributor.

And just in the domains retail business, you guys are sort of suggesting low to mid single digits. So I guess, based on your view, is that sort of a growing rate probably until mid next year, given that sort of -- when the new GTLDs might come through?

Depends when the introductions are. It depends sort of -- so what nobody on the registrar side yet really knows is what the economics of the launches are going to be. We have all lived in a calm world for a long time, and it's going to be different. There is no question of power shifts from registry to registrars, as you go from a very small oligopoly through a competitive registry environment. It's really tough to know what that's going to look like, and when it's going to look like that. So I kind of want to take you through 2013, and then, going forward from there, all I can do is, sort of [teak] you a price as we are learning. But all of the registry applicants today are so head down on dealing with their contention sets, dealing with their startups, that they really haven't turned their minds fully yet, to the way they are going to manage and incent distribution.

Okay. All right great. Thank you.

Thanks.

Your next question comes from the line of Aram Fuchs from Fertilemind Capital. Your line is open. Aram Fuchs, your line is now open. There are no further questions at this time.

Thanks very much to all, and I look forward to seeing you all again, next quarter.

This concludes today's conference call. You may now disconnect.