Zedge, Inc. (AMEX:ZDGE) Q4 2024 Earnings Call Transcript

Zedge, Inc. (AMEX:ZDGE) Q4 2024 Earnings Call Transcript October 29, 2024

Zedge, Inc. misses on earnings expectations. Reported EPS is $0.02 EPS, expectations were $0.04.

Operator: Good day and welcome to the Zedge Earnings Conference Call for the Fourth Quarter and End of Year Fiscal 2024 Results. During management’s prepared remarks, all participants will be in a listen-only mode. [Operator Instructions] After today’s presentation by the Zedge management team, there will be an opportunity to ask questions. [Operator Instructions] I will now turn the call over to Brian Siegel. Please go ahead.

Brian Siegel: Thank you, operator. In today’s presentation, Jonathan Reich, Zedge’s Chief Executive Officer; and Yi Tsai, Zedge’s Chief Financial Officer, will discuss Zedge’s financial and operational results that were reported today. Any forward-looking statements made during this conference call during the prepared remarks or in the question-and-answer session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results in the future to differ materially from those discussed on today’s call. These risks and uncertainties include, but are not limited to, specific risks and uncertainties disclosed in the reports that Zedge periodically files with the SEC. Zedge assumes no obligation to update any forward-looking statements or to update the factors that may cause actual results to differ materially from those that they forecast.

Please note that our earnings release is available on the investor relations page of the Zedge website. The earnings release has also been filed on Form 8-K with the SEC. I would now like to turn the conference over to Jonathan.

Jonathan Reich: Thank you all for joining us today. We wrapped up fiscal 2024 with strong momentum, posting 14% year-over-year revenue growth in the fourth quarter, driven by continued expansion in the Zedge Marketplace with subscription revenue up 31% and Average Revenue Per Monthly Active User, or ARPMAU, soaring by 43%, hitting a record $0.079. Zedge Premium’s Gross Transaction Value, or GTV, increased by 56%, driven by enhancements in content and monetization, further showcasing the positive impact of our team’s execution. For all of fiscal 2024, we delivered revenue growth of 11% representing $30.1 million in revenue, non-GAAP net income of $1.8 million, and flat non-GAAP EPS of $0.13, even while beginning to reposition GuruShots, continuing to roll out innovative product enhancements, testing new offerings, and scaling marketing and user acquisition initiatives across our core platforms.

While the Zedge Marketplace’s monthly active user numbers fluctuated between 25 million and 30 million, we significantly improved the revenue generation capabilities of our user base as evidenced by the growth in our premium offerings, including 25% growth in subscription revenue to a record $4.3 million, a nearly 40% increase in Zedge Premium’s GTV to a record $2.2 million and a nearly 10X increase in iOS revenue, all leading to the record ARPMAU we reported in Q4. We also strengthened our balance sheet during the year, with cash and cash equivalents up by more than 10% to $20 million, or $1.38 per share, even after repurchasing $600,000 in stock and paying off our $2 million term loan, not to mention the material investments we made in marketing and user acquisition mentioned earlier.

Additionally, Zedge’s stock appreciated by 71% from $2.12 at the end of fiscal year ’23 to $3.62 at the end of fiscal year ’24, leading to our inclusion in the Russell Microcap Index. Despite this performance, we still believe that, at a trailing enterprise value to EBITDA of less than 6X, we are significantly undervalued on both an absolute and relative basis, so we are putting our money where our mouth is. After completing the previous $3 million share buyback in July, the board approved a new $5 million plan in September. Looking to fiscal year ’25, we are committed to driving growth by further scaling our businesses, and optimizing our offerings with innovative product enhancements, testing new product initiatives, and expanding our reach across all business areas, capitalizing on the solid foundation laid in fiscal ’24.

One of our primary goals is to convert our user base, historically composed of content consumers, into content creators, a transformation critical to positioning us as a leader in the Creator Economy. To accomplish this, we will continue embedding generative AI capabilities across our product portfolio, driving innovation and enhancing users’ experiences. Our focus in the coming year is on agility and growth. In fiscal 2024, we centralized key support functions, including marketing, monetization, data, and analytics. In fiscal year 2025, we are turning more of our attention to evolving our technology platform to better enable rapid development of new apps and products by creating an engine with modular and reusable components that can be easily recycled and/or refactored from project-to-project.

Optimizing our tech platform enables us to increase efficiency, reduce costs, and fosters a rapid fire organization. These efforts will enable us to explore, adapt, test and launch new products, enhancements, or ideas quickly. We will also be positioned to make faster decisions to double down on the initiatives that deliver attractive ROIs or pull back on ones that don’t, ultimately allowing us to achieve sustainable and profitable long-term growth. Core to our ongoing success is the world-class marketing organization that we built and tuned in fiscal 2024. The team is scaling user acquisition investment responsibly and is delivering cohorts with attractive Return on Ad Spend, or ROAS, profiles. At the same time, it is addressing a myriad of other challenges with skill and proficiency, including the need for producing lots of ads efficiently, analyzing performance, ensuring each platform that we use to market our products adds incremental value, and finally, that we focus our ad spend on targetting the right user segments despite having less information about them than existed a couple of years ago.

Now, I’d like to discuss several key product initiatives. For the Zedge Marketplace, pAInt, our Gen AI image creator, has been a standout success with over 22 million images generated since its introduction in 2023. We are committed to converting our users, who traditionally consumed our content, into master creators. We are also working to attract new user cohorts that may not have found Zedge relevant when we only focused on mobile phone personalization. With the release of pAInt 2.0 in September, we introduced a powerful set of image-to-image capabilities powered by AI. By enabling capabilities beyond creating wallpapers, users can now reimagine any image, creating entirely new visuals either by text prompting, via image upload or even by taking a photo in real-time.

They can then add filters, edit photos, create avatars and/or stickers, and render output in any size. We expect that these enhancements will unleash higher levels of creativity that will improve engagement and retention. We are already working on the next iteration of our suite of AI tools, with the focus being on introducing an AI audio generator. As the year progresses, we plan to release even more features and enhancements to provide best-of-breed service. Taken together, we expect these activities will assist in driving user growth, improving engagement, and bolstering retention. Turning to Emojipedia, we remain excited about its growth potential as we head into fiscal 2025. Over the past year, we introduced the Emoji Playground, availing users with popular features like emoji mashups and quizzes.

In keeping with our consumer into creator theme for fiscal year 2025, we will soon enhance the Playground with custom emoji creation and digital sticker capabilities powered by Gen AI. Additionally, in the second half of fiscal 2025, we expect to roll out a redesigned Emojipedia experience and improve the Playground’s games section. At GuruShots, reversing our losses and resuming growth are our top priorities, and we will chart its future based on how successful we are in these endeavors. To accomplish this, our strategy has shifted towards prioritizing product features and enhacements that can drive new user growth ahead of elements designed to appeal primarily to legacy player cohorts. This is evident from the changes we have already made, and the roadmap that we have planned for this fiscal year.

To-date, we have introduced a robust onboarding experience to ease more users into the engagement funnel, adopted a coin-based in-game economy with multiple currencies, and most recently, launched Missions, a proven gamification technique for driving engagement and improving retention by rewarding players for completing specific goals. Later this fall, we will introduce Duels, a fast-paced, real-time, player-vs-player dynamic that allows users to compete against each other, even while they are playing in longer-duration GuruShots Challenges. Our pivot wouldn’t be complete without coupling these activities together with robust marketing initiatives that seek to target a broader range of potential new players with attractive ROAS profiles as well as utilizing LiveOps strategies to optimize in-app purchases.

Taken together, we believe that this multi-layered approach will ultimately widen the top of the funnel, bring in more users, engage them in a fun, exciting and strategic experience and ultimately unlock revenue growth. While not a slam dunk, early results from the recent introduction of Missions point to improved engagement, adding to the successes we’ve experienced with the new onboarding funnel and coin-based economy. Finally, from a new product standpoint, in early fiscal 2025 we began testing WishCraft, a stand-alone generative AI app created with the goal of radically simplifying the creation process to draw in users that have not historically thought of themselves as creators. We also continue monitoring AI Art Master, a casual AI art battle game born from GuruShots’ leadership in the photo competition vertical, where players create AI art and compete in themed and fast-paced competitions in order to earn accolades for creativity, style, and aesthetic talent.

While these products remain in beta, we are, as described earlier, hard at working at filling our pipeline with a host of products that we can iterate on quickly with a fail fast approach. I feel compelled to underscore that we believe that this strategy can yield outsized returns, with Rovio as a great example. Rovio launched 51 games prior to hitting the jackpot with Angry Birds, which as of February of 2023 had grossed in excess of $500 million and 360 million installs. Long story short, we have a great team of product, marketing, monetization, designers, and engineers, all focused on unearthing that diamond in the rough and taking it to the next level. Both our fourth quarter and full year results show that we are on the right track to generating sustainable, profitable long-term growth.

Our strong performance is a testament to the investments we’ve made in growth and innovation, and despite the ongoing industry and geopolitical challenges, and macroeconomic uncertainties, we remain well-positioned to capture market opportunities across our product lines. Lastly, as part of optimizing our business, we are committed to smart capital allocation strategies, including implementing the new stock repurchase program for up to $5 million, which, when combined with our operating leverage, we believe will deliver long-term shareholder value. Now I’ll turn the call over to Yi to review the financials in more detail. Yi?

Yi Tsai: Thank you, Jonathan. Total revenue in the fourth quarter was $7.6 million, up 14% from last year. For the year, revenue grew 11% to a record $30.1 million. The continuous work we do on optimizing our ad stack bore fruit this year, with advertising revenue up 13% for the quarter and 15% for the year. Subscription revenue was up 31% for the quarter and 25% for the year versus last year. Our net active subscriber trends continued to improve and was up sequentially for the fifth straight quarter, and our higher value iOS subscriptions and value-added Zedge+ offering for Android replaced lower-cost legacy subscriptions, which only removed ads. Zedge Premium’s GTV, achieved quarterly and yearly revenue records at $600,000 and $2.1 million, up 56% and 39%, respectively versus last year.

This growth drove record ARPMAU of $0.079 up 43% year-over-year. Two things have become clear. First, our strategy to drive growth is working, and second, the initiatives Jonathan spoke about are driving higher quality revenue for the Zedge Marketplace. Unfortunately, this growth was partially offset by year-over-year revenue declines for GuruShots, which is reported under digital goods and services of 24% in the quarter and 25% for the year. Given the shift in strategy to prioritize new player acquisition, these declines were not unexpected, but, we are cautiously optimistic based on the early positive returns from the new feature releases that the business will return to growth soon. Cost of revenue was 6% of revenue for both the quarter and the year, and decreased 4% and 17% respectively, when compared to the same periods in the prior year.

SG&A increased by 33% to $6.9 million during the fourth quarter. For the full year, SG&A increased 17% to $25.6 million. These increases were mainly driven by marketing expenses related to an increase in paid user acquisition, which is helping to drive growth. As we scale, we expect to see operating leverage rebound, but today, between the higher spending and lower revenue from GuruShots, we are seeing the impact of high operating leverage. Additionally, our subscription model causes higher near term expenses, as revenue and costs don’t align. To demonstrate, when we get a lifetime subscription, we receive the cash up front, but also pay upfront fees to Google and Apple based on the full amount of the subscription. However, revenue is then recognized over 2.5 years.

While this disproportionately negatively impacts expenses in the current quarter when a subscription is sold, over the remaining recognition period, the revenue is recognized at a 100% gross and operating margin. GAAP loss from operations was $0.1 million for the quarter compared to income from operations of $0.2 million in the fourth quarter last year. For the full year, loss from operations was $11.8 million compared to a loss from operations of $6.9 million last year. For the full year numbers, both years were negatively impacted by non-cash, accounting write-downs related to acquisitions, with the FY’24 writedown being much higher at $12 million versus $6.8 million last year. At this point, we have written off 100% of the value of the assets on the books related to the GuruShots acquisition, so we don’t expect any large write-downs moving forward.

GAAP net income and EPS were nil for the quarter compared to net income and EPS of $0.2 million and $0.01 last year. For the full year, GAAP net loss and loss per share were $9.2 million and $0.65 versus $6.1 million and $0.44, respectively, in the prior year. Both years’ losses reflected the tax-adjusted, non-cash, accounting write-offs for acquisitions I mentioned. For the fourth quarter, non-GAAP net income and diluted EPS were $0.3 million and $0.02 versus $0.6 million and $0.04 in the prior year, respectively. Adjusted EBITDA for the quarter was $0.8 million versus $1.6 million in the prior year. Note that D&A decreased 56% versus last year primarily due to the write-offs. For the full year, adjusted EBITDA was $4.7 million versus $5.7 million last year, primarily due to higher SG&A.

From a liquidity standpoint, we added nearly $2 million in cash to our balance sheet and finished the year with $20 million in cash and cash equivalents. We also bought back about 200,000 shares of stock. Thank you for listening to our fourth quarter earnings call and I look forward to speaking with you again on our first quarter call in December. Operator, back to you for Q&A.

Q&A Session

Operator: We will now begin the question-and-answer session. [Operator Instructions] Your first question is coming from Derek Greenberg with Maxim Group. Please pose your question. Your line is live.

Derek Greenberg: Hi. Thanks for taking my question. In terms of GuruShots, I was wondering if there’s any metrics you can provide, whether it be like the number of users, how that’s changing, as well as just retention and engagement rates associated with that app?

Jonathan Reich: Derek, it’s Jonathan. Thanks for the question. And at this point in time, the KPIs that we’ve included in the release are the ones that you should be looking at. Directionally, as I said during my call, during my comments, the focus for GuruShots is really geared towards new users and having them come into the funnel, convert into players, and then having them engage to a point where they are generating revenue by purchasing coins that they can use to accomplish certain goals within the gameplay. And generally speaking, what we have seen is that engagement from these new users is increased. They are consuming coins. They are converting. And as those numbers hopefully continue to grow, that will also translate into driving revenue for us. And we will consider going forward, if there are additional KPIs that we can provide, which will provide — which will yield greater detail with respect to how performance unfolds.

Derek Greenberg: Okay. Got it. In terms of the Zedge offering, could you just talk about for the fact that it’s driving the growth in Marketplace gross transactional value as well as subscription numbers as well as how you’re getting to that higher average monthly revenue per monthly active user?

Jonathan Reich: Sure. So, in terms of GTV, gross transactional value, for our premium artists, we are doing many things in the app in order to promote content as well as making Zedge relevant to the Creator Economy. And for an artist that wants to gain access to the mass customer base, Zedge is one of the platforms that they can turn to. Coupled with that and we’ve actually published the piece about this on our blog around 1.5 months ago. We are actually seeing growth in premium art from the use of AI and the ability to offer outstanding content that meets the need and the desire of our users. Moving to subscriptions, we have done many, many different things to optimize and improve our take rate on subscriptions, things from the internal messaging and how that is actually viewed.

So going from a static in-app message to an animated in-app message. We’ve been doing a lot of testing in terms of different price points and the value-adds that we fold into the subscription offering such as the AI features and the like. We’ve done a lot of work in terms of localization, localization in terms of both the messaging as well as the pricing. And then, we’ve also been trying and expanding with lifetime subscriptions. So pay once and you are a subscriber into perpetuity. And if I were to provide a metaphor, it would be going into some sort of a lab where one is trying to solve for curing an illness. There are many, many different approaches that one will see in that lab and that is what we have. So it’s relentless A/B testing. And then, based upon the results of those A/B tests, another set of A/B tests and so on and so forth.

And then, with respect to our overall ARPMAU, average revenue per monthly active user, increasing, as we’ve said, for many, many quarters, we are constantly focusing on improving our ad stack and optimizing and doing so in a fashion which is beneficial both from a financial perspective, as well as from a UX perspective, user experience perspective. And that is also an area where we literally have dozens of tests that unfold on a monthly basis. And the incremental value of a test, if it has a 2% improvement. Well, when you begin to stack that up over time based upon the volume of users and the volume of ads that our users are exposed to, that helps us in terms of improving that average monthly per active, average revenue per monthly active user.

I hope that answers your question.

Derek Greenberg: Yes, definitely. That’s helpful. Thank you. And then, in terms of the advertising revenue of that business. Can you just talk about how that’s trending and how you’ve been able to respond to some of the industry changes in terms of the data you’re able to access?

Jonathan Reich: I’m sorry, I didn’t hear the last part of your question.

Derek Greenberg: Just how you’ve been able to respond to like changes in how you’re able to access data and target customers, following changes on different platforms?

Jonathan Reich: Okay. Well, remember, we’re — when you say advertising, do you mean our advertising revenue or do you mean how are we spending marketing dollars and advertising to customers to come to Zedge or GuruShots?

Derek Greenberg: I guess, we could touch on both, but primarily was, the advertising revenue side of the business.

Jonathan Reich: Okay. So from an advertising revenue perspective, we are using third-party for mediation, and it’s really a function of being in the programmatic offering that, that third-party has. So it’s less around our — having specific customer segments that we are selling. So let’s say, I don’t know, auto lovers or cigar, aficionados and stuff like that. However, we are beginning to focus on collecting both zero-party and first-party data, obviously, being very sensitive to compliance with any regulations, whether those be legal regulations or they be platform-specific regulations. And as we begin to amass enough information there, we may be able to go out and offer cohorts of users that have an attraction to a particular type of demographic message or the like.

From a marketing perspective, we are hard at work in terms of understanding what are the triggers that prospective Zedge or GuruShots users would be inclined to take and then using the benefit of having a mass volume of ads that can articulate those benefits and make Zedge or any of our businesses attractive to prospective users and those that will install our apps and the like.

Derek Greenberg: Okay. Got it. In terms of new products and features, I saw in the press release that there was plans for an AI audio offering. And then on the call and in the press release, you’d mentioned the WishCraft beta app. I was wondering if you could just give some commentary around both?

Jonathan Reich: Sure. So, as you know, with pAInt 2.0, we’ve taken our initial foray into the world of Gen AI creation, which was launched, give or take, around a year ago and that was a text-to-image experience that would render a really great mobile phone wallpaper. pAInt 2.0 just elevates this experience. First of all, it is no longer text-to-image alone. It can be image-to-image. It can even be you click a phone, you click a photo from your phone, and you can then use pAInt 2.0 to accomplish all sorts of different things, whether it be make an avatar, do photo editing, render that picture, that image in many different styles, and so on and so forth. And it’s no longer limited to simply a wallpaper. You can determine the size of it, so it can be really any size that you would like.

And we feel that based upon the fact that we are known in the world of personalization for not only wallpapers, but also ringtones, believe it or not, there is a tremendous amount of demand from our consumers to consume wallpapers, engage with, to consume ringtones, engage with the audio that we have. And that audio spans all sorts of different genres, to music, to humor, to funny sounds, and so on and so forth. And we feel that the next iteration of pAInt needs to be something specific to audio. We’ve actually found that when marketing Zedge to users, we see that there’s actually improved results when focusing on the fact that we have audio ringtones and notification sounds for users to consume. And we think that it’s a logical next step to say, well, now let’s empower our consumers with the ability to actually go out and create various forms of audio, specific ringtones, notifications to start with.

But then, depending on how users interact with that, there are many different things and paths that we can take in order to mature that upcoming product enhancement. WishCraft, as we’ve talked about in the past, is a standalone Gen AI image app, so either text-to-image or image-to-image. But what we’ve done differently in WishCraft and WishCraft’s beta, we are setting specific thresholds in terms of what KPIs need to be reached as we iterate rapidly to make sure that if those KPIs are meeting the thresholds, we continue, if not, that we can fail quickly and then focus our efforts on other opportunities that will provide greater success. But the notion of WishCraft really lies in a belief that many people are intimidated with the notion of figuring out how to use AI.

What should they prompt? How do they actually engage with an image and make it better or transform it into something that they couldn’t even wildly imagine, let alone explain? And at its core, what WishCraft does is it has an alternative user interface where the user doesn’t have to type. They can actually see tiles and begin to click on tiles and then they will see the output associated with those tiles, which can be used as well to improve or change an image that they’ve uploaded. And our hope is that with this enhanced and improved user interface that we will be able to draw in prospective users that would otherwise be latecomers to the world of Gen AI creation and bring them in at an earlier point, build a relationship with them, entice them, and so on and so forth so that they do not feel scared or anxious about, oh, what is AI?

How do I do this? I don’t want to try something because I’m not familiar with it. Does that answer your question?

Derek Greenberg: Yes, that makes sense. I have one more question, and then that will be it for me. But for Emojipedia, I was just wondering your outlook for that in ’25, as well as just how that performed compared to the third quarter. And I believe, there was, I think, a redesign that impacted performance in that quarter. I was just wondering if this has been remedied and the business has turned to normal during the quarter?

Jonathan Reich: Great question. So, yes, you’re correct. In Q3, we had launched a redesign, and that redesign did not perform as was anticipated. We made the changes, that has been remedied, and Emojipedia has been humming along nicely. For fiscal year 2025, we, I think, are focused on three areas. One is never-ending ad optimization and the ad stack and so on and so forth. That is a part of our standard operating procedures. Number two is testing and introducing some new content verticals. So we’ve talked about emoji stickers or, let’s call them, bespoke emojis that a user can create with AI. So that’s a second area of focus. And third area of focus is a more comprehensive redesign of the Emojipedia property to add a little bit more, what shall I say, luster and excitement to it.

Today, it is almost very much like a, as it sounds, Emojipedia, a Wikipedia type of experience. But we believe that there is more opportunity in terms of driving engagement and encouraging retention and the like with a design overhaul. And one of the things, which is, I think, an obvious question would be, well, who is to say that you don’t experience the same thing that happened in Q3, where we rolled something out and then we found out that it did not perform as was anticipated. Well, when we remedied the Q3 issue from ’24, we also had upgraded some of the technology, which will — which essentially has positioned us in an area where we have a lot more data that we now have access to than we had in the past. And I don’t expect that, that will be a problem that recurs again, based upon the investments that we’ve made with respect to data capture and the technology around that accordingly.

Derek Greenberg: Okay. Got it. All right. Well, thanks for taking my questions. I appreciate it.

Jonathan Reich: Sure. Thank you.

Operator: Your next question is coming from Allen Klee with Maxim Group. Please pose your question. Your line is live.

Allen Klee: Yes, hi. Two quick questions. One, how do you feel about the returns that you’re getting from paid advertising? And second, how do you feel about how you might manage your operating expense growth relative to revenue growth in the next fiscal year? Thank you.

Jonathan Reich: Hi, Allen. Thanks so much for the question. So, one of the accomplishments that we had undertaken in fiscal year 2024 was a commitment to building a world-class marketing team. And that not only includes the ability to create great ads and lots of great ads, but also the ability to closely monitor how those ads are performing and dialing up when we have a winner and dialing back when an ad does not perform well. And then, how do we spend our test budgets so that we’re very, very specific and precise in terms of utilizing that money to the best of our ability without having a lot of wastage. And the marketing team is a very, very analytical team. So everything from attribution to creative a funnel, to conversions, to monetization is being looked at.

And we have actually seen, just by way of focusing on the Zedge app, we’ve actually seen that we have been able to reduce our CPI cost per install and do that by spending actually less money, but even seeing an improvement in terms of the number of installs. So, long story short, that is core to how that team operates today, looking at not only those KPIs, but also dealing with incrementality, which is essentially by way of example, we are highly ranked in the world of personalization. One goes into Google Play, just naturally, our app ranks at the top. And then, what does one do in order to ensure that when it comes back in the first or second spot, there’s also not an ad there. So is it the fact that the ad is promoting an install or is it the fact that we are just so highly ranked?

That notion of incrementality is also key to how we measure and better manage our budgets to provide for improved return on ad spend. And overall, I feel pretty good that we’re being very efficient in terms of how we’re spending money and that will continue to improve over time. It’s almost the complements to what we’ve done with respect to ad optimizations in the ad stack and the like. So that is, I think, really critical to how we operate. In terms of managing expenses compared to revenue, that is an area of great focus for us. We are very, very much committed to ensuring that we’re not racking up the expenses unless the ROI is there. However, if the ROI is there, then we want to pursue it. And I was just, by way of an example, in a meeting yesterday where we were having a conversation about a particular marketing endeavor, and we want to ramp up, we want to accelerate, but the marketing team had said, let’s be a little bit more patient right now in terms of what this specific goal was.

We’re in Q4, and we don’t want to get too far ahead of ourselves, and then extend the payback period to a point where we’re taking on more risk than we choose to. I think that there will be seasonality in that regard. And like I said and I’ve said this now for the last couple of quarterly calls, we are managing our business based upon return on ad spend with ever-increasing and ever-improving tools to measure what the impact is of a particular ad unit, particular platform, a particular message, and so on and so forth, such that we can be efficient with how we spend money. And then, when we have success, how do we add to that success by throwing more dollars there, but at the same point in time, looking for that point of optimization where throwing more money, the law of diminishing returns just doesn’t make sense.

So I hope that, that answers your question. And if you have any other areas, please feel free to ask away.

Allen Klee: Thank you.

Operator: This concludes our question-and-answer session and conference call. Thank you for attending today’s presentation. You may now disconnect.