Caesars Entertainment Inc (CZR) — Q2 2021 Earnings Call Transcript

Thank you, Boena, and good afternoon to everyone on the call. Welcome to our conference call to discuss our second quarter 2021 earnings. This afternoon, we issued a press release announcing our financial results for the period ended June 30, 2021. A copy of the press release is available on the Investor Relations section of our website at investor.caesars.com. Joining me on the call today are Tom Reeg, our Chief Executive Officer; Anthony Carano, our President and Chief Operating Officer; and Bret Yunker, our Chief Financial Officer. Before I turn the call over to Anthony, I would like to remind you that during today's conference call, we may make certain forward-looking statements about the company's performance. Such forward-looking statements are not guarantees of future performance, and therefore, one should not place undue reliance on them. Forward-looking statements are also subject to the inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release as well as the risk factors contained in the company's filings with the Securities and Exchange Commission. Caesars Entertainment undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after today's call. Also during today's call, the company may discuss certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website at investor.caesars.com by selecting the press release regarding the company's 2021 second quarter financial results. Starting with our earnings press release today, we are now breaking out sports and iGaming into our new Caesars Digital segment. This segment includes sports betting, iGaming, and poker. And finally, as we mentioned in our press release today, we have divested London Clubs, so starting in the third quarter of this year, our former Managed and International segment will just reflect our managed operations on a pro forma basis. I will now turn the call over to Anthony.

Thank you, Brian, and good afternoon to everyone on the call. The second quarter of 2021 represented a consolidated EBITDA and EBITDA margin record for the company. Starting with Las Vegas, demand trends accelerated meaningfully versus Q1. We generated $425 million of adjusted EBITDA in the quarter and $436 million of property level EBITDA excluding real rent payments. EBITDA improved 162% on a quarterly sequential basis. EBITDA margins were 50.9% excluding the real rent payment, up 1,200 basis points versus Q2 of 2019. Total occupancy for Q1 was 89%, with weekend occupancy at 99% and mid-week occupancy at 85%. We delivered these outstanding Las Vegas segment results despite operating with capacity and social distancing restrictions for the first 2-plus months of the quarter. In addition, we had minimal group business and weak table hold in the quarter. Looking ahead, we remain encouraged by booking trends for the second half of '21 and into 2022. We're expecting groups to start returning to Vegas with each month getting better as we progress throughout the second half of the year. Group and convention revenues on the books for the second half of '21 versus '19 are currently pacing up approximately 18%. 2022 group revenues on the books are pacing up approximately 15%. CAESARS FORUM continues to exceed the original underwriting expectations with over 176 events booked currently representing 1.7 million room nights and $657 million of revenues for all future periods. 76% of this business is brand new to Caesars. Turning to our regional markets, operating results improved significantly versus Q2 of 2019 with EBITDA growth of 56%, excluding Lake Charles, which remains closed. EBITDA margins in our regional segment were 40.4%, excluding Lake Charles, and expanded 1,280 basis points versus Q2 of '19. On a same-store sales basis, we achieved the highest EBITDA and EBITDA margin in the regional segment in the history of the company. 26 regional properties set all-time quarterly EBITDA records with 31 properties setting all-time EBITDA margin records during the quarter. In our newly disclosed Caesars Digital segment, we generated revenues of $117 million in Q2 of '21. We currently operate sports betting in 17 states plus Washington, D.C., 13 of which offer mobile sports betting. Our apps are now rebranded to Caesars Sportsbook, and our new marketing campaign launched on August 2. We have now integrated our digital offerings with Caesars Rewards, and our customers can interact with us both online and in our physical casinos while earning loyalty rewards. On the development front, construction is well underway on our new land-based facility in Lake Charles. This significantly upgraded property should be completed and ready for business in the second half of '22. In New Orleans, construction work has started on our new hotel tower and property upgrades. In Las Vegas, the remodeling of the entrance to Caesars Palace has begun, and we look forward to a dramatically improved arrival experience later in the year. In Indiana, we are well underway with our casino expansion at Indiana Grand, which should be finished by January of 2022. We have come a long way in a short time. Our operating teams are collaborating and sharing best practices across the enterprise. This is leading to continued efficiencies. We believe our margin gains are sustainable, and we'll continue to look for incremental cost savings opportunities. I'm extremely proud of our operating teams, their execution, and their exceptional guest service during the second quarter. With that, I'll now turn the call over to Tom for some additional insights on the second quarter.

Thanks, Anthony. Good afternoon, everyone. When I spoke last quarter and mentioned that I expected us to reach $1 billion in EBITDA in a quarter in 2021, I wasn't anticipating it would be the second quarter. I actually thought it would be this quarter, so we're slightly ahead of schedule. As you consider this quarter, Anthony highlighted some points, but keep in mind that with mask mandates returning in Nevada, the Las Vegas figures account for just over two months of social distancing, restricted occupancy, and masks in restaurants and on the casino floor. Despite this, we achieved the numbers we did this quarter. There were challenges, as we underperformed in Las Vegas, the losses from the London Clubs business affected our results because we didn't close that transaction until mid-July, and Lake Charles was closed for rebuilding after the hurricane. The total impact I see this quarter amounted to about $40 million compared to what we would typically expect. We achieved 89% occupancy in Las Vegas. Looking ahead, if we review the months, May was the best month in Caesars' history from an EBITDA viewpoint, June surpassed May, and July outperformed June. I anticipate that third-quarter occupancy will significantly exceed the second quarter's 89%. Brian discussed how we are presenting our financials now; you can see Caesars Digital separately, allowing you to track our progress. I will elaborate on that shortly. You can also view the bricks-and-mortar business, as well as the managed business, which has been consolidated in the past. This managed segment generates over $100 million in annual EBITDA and will grow when the Southern Indiana transaction closes, as we'll receive a management fee and licensing revenue from the Cherokee tribe at that property. Regarding the bricks-and-mortar business, which I mentioned in relation to Las Vegas, we are currently generating free cash flow significantly over $10 per share, with a noticeable increase from June to July. We recognize the same public health challenges you're aware of, and will have to adapt to masks and protocols, but the demand remains very strong and continues to grow. We feel confident about our position in the bricks-and-mortar sector. Yesterday morning, we launched Caesars Sportsbook. We completed the William Hill transaction just over 100 days ago, and had a lot to prepare before the deal closed because of U.K. regulations. We aimed to be ready for the launch ahead of the football season. You'll notice us fully committing to this area. You can see our ad campaign featuring J.B. Smoove and Patton Oswalt, and our first national commercial will air during the USA Men's basketball game this Thursday night in the Olympics. We're activating the entire enterprise, linking it to Caesars Rewards, which has over 60 million members and allows them to earn and use points both online and offline. Our player development teams are ramping up to onboard new accounts, and our entire workforce will have unique QR codes to help sign up customers and be incentivized to do so. This marks a true commitment from the organization that hasn't been seen before. The results we achieved previously were in a kind of interim phase after acquiring Caesars, restructuring partnerships, and navigating the period between announcing and closing the William Hill deal. This transition represents a genuine all-in approach by our organization. I view this as any other business opportunity. I believe we can achieve cash-on-cash returns at maturity well over 50% of our investments. We understand we are in a competitive environment and must actively engage in it. Thus, you can expect us to invest over $1 billion in the next 2.5 years to expand our customer base. While I can't provide a precise figure since much of the acquisition expenditure is performance-based, I do expect it to exceed $1 billion, and I forecast generating at least 50% to possibly nearly 100% of that in EBITDA at maturity. Unlike bricks-and-mortar investments that typically show up in our financial statements, you're going to see the separation between our bricks-and-mortar and digital businesses. With our free cash flow surpassing $10 per share, we believe we have ample capital to invest. We recognize that growth won't be linear, and we may encounter setbacks as we refine our marketing and technology strategies. However, I'm thrilled about the tools we possess to seize this opportunity, and we're just beginning as of yesterday. I will now hand it over to Bret for a discussion on liquidity.

Thanks, Tom. Our record-setting operating performance in the second quarter generated over $500 million of free cash flow, which, in turn, we applied to retire our remaining convertible debt and make a one-time payment to acquire the license rights for Planet Hollywood in Las Vegas in perpetuity. This combination of debt repayment and license fee buyout results in over $40 million of annualized free cash flow and sets the table for further free cash flow benefits from deleveraging and refinancing activity. With investment plans for Caesars Digital now formalized, our 2021 calendar year capex moves to $500 million to $550 million, which includes approximately $100 million for Caesars Digital and acceleration of spend in New Orleans. Net of growth capex, our annual core capex remains approximately $400 million. We commenced the sale process for William Hill's non-U.S. assets in the second quarter and expect to announce the transaction no later than early Q4 of this year. With that, I'll turn it back to Tom.

Thanks, Bret. Boena, with that, we'll turn it back to you for question and answers.

Good afternoon, everyone. Congratulations on the strong results. My first question is for you, Tom, regarding Las Vegas. The sequential flow-through there was about 75%, which is impressive, and seeing 50% margins is also quite remarkable. Can you discuss whether there is an operating expense lag in relation to revenue recovery? If so, is there a way to quantify that, particularly concerning labor?

The answer to your first question, Joe, is no, not really. I mean, we're having challenges across the country in terms of filling available positions, but to the extent that we sell them, we're also seeing revenue lift. As I said, July was stronger than June, which was stronger than May. So I'd tell you Vegas margins in July were stronger than they were in the second quarter. So I think you should expect us to be in that 50% neighborhood for the foreseeable future.

Great. One thing that stood out to us in the quarter was that digital achieved positive EBITDA despite the ongoing investments. Can you discuss your outlook for the next few quarters? I understand you're focused on building the business and have plans for investment over the next 2.5 years. Do you believe you can continue to invest while maintaining positive EBITDA each quarter? Or should we expect some EBITDA losses initially due to the new launch before seeing the incremental EBITDA benefits and reaching the strong returns you are aiming for?

You should anticipate that digital will significantly impact EBITDA negatively starting this quarter as we launch a new brand alongside all the customer acquisition efforts we plan to undertake. This includes a nationwide advertising campaign in addition to our social media activities. Expect expenditures on both national and local television advertising, particularly in some high-cost markets. I would estimate that over the next 2.5 years, we will see more than $1 billion in spending impact the EBITDA line, and this should be reflected primarily in the upfront expenses.

That's helpful. Thank you.

Okay. Thank you. Tom, kind of a bigger picture question, and really just playing on the success you guys are having right now. Obviously, 90% occupancy in July, 89% in the quarter. The EBITDA numbers you're putting out, the margins you're putting out. I guess, Las Vegas as a market has migrated more towards group and convention business and whatnot. Has this period made you guys at all think about the go-forward strategy and the use of kind of group and convention type elements to fill rooms just given how strong it is at this point? I mean, you talked about some of the tailwinds, obviously, that you still expect to see coming out of the business. Have you guys thought about at all the way the model is configured in terms of room night mix on a go-forward basis?

Yes, Carlo, that's a good question. I would say, as you know, we're a company that kind of lets the math dictate what's the correct path to go down. I fully expect that, that convention customer coming back is going to help us in terms of rate compression. And when you see what's missing even running 89% versus what was two years ago, 97%, 98%. It's an extraordinary amount of EBITDA that's left on the table. So I think there's absolutely a significant addition as that group business comes back; it is heartening to see what we can do without that business, though, because in the second quarter, we had very little group business to speak of. Nothing that's even statistically significant, and we're still able to post the best quarter that Caesars had ever posted from an EBITDA perspective.

Understood. Thank you. And then if I could just follow up. You talked a little bit about kind of what I think the way I interpreted your comments was a stabilized Caesars Digital business that was doing $500 million to $1 billion of EBITDA at some point in the future. Just holistically, as you think about those numbers, what do you kind of envision as a mix between the iCasino piece versus the sports piece? And how do you think about the two?

I believe that when considering the current landscape, the distribution will likely be fairly balanced due to the fewer number of iCasino states compared to sports states. However, on a per-state basis, iCasino is significantly more profitable than sports.

Thank you. Tom, your comments on July sound incredibly strong, but I just want to be very clear around the increasing cases for COVID and specifically the new Nevada mask mandate. Any impact to the outlook or timing for Vegas recovery, whether that's group or international? Just want to get any color there.

Yes, Barry, this situation is happening in real time. The mask mandate was implemented less than a week ago. Currently, the restrictions associated with the mask mandate are much less severe compared to what we faced in the last quarter. It's unclear what effect this will ultimately have on group bookings. Last week, we had a leaked internal memo regarding cancellation rates, which I want to clarify measures a week's worth of reservations. For example, if I receive 10,000 reservations and 4,700 cancellations, that results in a 47% cancellation rate, while the typical rate is around 27%. We did not experience a drop from 98% occupancy to 50%. We expect to maintain occupancy in the low to mid-90s in Vegas during the ongoing situation with the Delta variant.

Got it. And then just how are you thinking about land-based expansion here? Whether that's Florida? Chicago is always out there. And I know you're starting to do something in Nebraska.

So I have no interest in Chicago. Florida we already operate in Pompano. We've got a significant joint venture development that's still churning at that site. Nebraska was a unique opportunity in that we have significant operations in Council Bluffs right on the Nebraska border. That would be impacted by Nebraska utilization, and doing the Columbus track allows us to participate in sports and online to the extent that we're able to in that state. So for a modest investment in entry into a state where we think we can get a good return out of that investment, that was a very easy decision.

Perfect. And thank you so much and congrats for winning the billion.

Thanks, Barry.

Hi, good afternoon everyone. Thanks for taking my question. I appreciate it. We've been dealing with a $10 share free cash flow target for quite a while. How should we consider the current situation and the potential for growth moving forward, without expecting specific guidance?

So we're still missing group business in Las Vegas. We still see plenty of opportunity in the portfolio in terms of areas where we could tighten up. So if you think about it in broad terms, I've got to do about $4.5 billion of EBITDA out of the bricks-and-mortar business to be $10 a share in free cash flow. I told you that we're significantly in excess of that at the current run rate, and we see further upside from there. Did I lose you, David?

It's possible that I lost connection on my end. If I may follow up on the topic of labor, which has been a significant subject of discussion in the hospitality industry regarding the challenges of attracting and managing staff and the associated costs. I'm curious about your perspective on this issue. It's been noted that Las Vegas is facing fewer challenges compared to other locations, but how significant is this issue for your operations?

I believe this is an issue not just in Las Vegas, but everywhere. I'm sure our colleagues at MGM will agree. Finding enough frontline employees is challenging, and it affects our operations. We don't expect a quick fix to this situation. We are optimistic that as supplemental unemployment ends, conditions will improve. In response, we are offering incentives, increasing wages, hosting job fairs, and providing referral bonuses to attract as many employees as possible. In regional properties, it's usually easier since they are not reliant on hotels, so having 300 hotel rooms versus 175 doesn't significantly impact my EBITDA. However, in Las Vegas, the situation is quite different. Our teams in Las Vegas are doing an excellent job managing this, but there is considerable pressure, and at times we need to scale back to ensure a good customer experience.

Perfect. Thank you.

Yes, good afternoon, guys. Tom, so if I start with the digital side of things. Obviously, we've seen all these sports betting companies out there, and they're spending like crazy to try and gain market share, and now they're going to have new guys out there throwing around a decent amount of money as well. So I guess the question is, what gives you the confidence that the $1 billion spend will eventually turn into $2 billion or some higher number if the competitive environment stays pretty cutthroat at this point?

If we manage to reach $2 billion, it indicates we are effectively attracting customers. Beyond the initial brand launch, our success largely hinges on bringing new depositors into the system. This situation is somewhat unique, resembling a Wild West scenario where the market has opened up quickly and everyone is seeking their customers. Companies with extensive databases or those that have successfully converted smaller ones have an advantage because they know where to find the customers. Our database includes over 60 million individuals, allowing us to cater to a wide range of customers. We have a robust rewards program that increases service levels as customer value rises. This system has been established but not utilized effectively in the sports business, partly because some companies starting out lack a comprehensive database and infrastructure like ours. We are systematically aligning our resources to maximize our potential. By utilizing our 54,000 salespeople and dedicated player development executives, who have longstanding relationships with customers, we can drive account openings and build on those connections. Additionally, we can offer physical experiences integrated into our business, which positions us well for achieving success. While it’s possible others will succeed too, we are well-equipped to thrive in this space, and we've made significant progress recently.

Thank you for that. Regarding the margins, it seems you believe they are sustainable moving forward as circumstances improve. What do you think is the main factor driving these higher margins compared to the period before the pandemic? Is it just a couple of elements, numerous factors, or perhaps the opportunity presented during the business closures to examine everything closely? Or was it simply that the previous management wasn't effective?

I'll set aside the unhelpful comment. However, everything else you mentioned is relevant; we are operating with less labor than historically at both the property and corporate levels. The key is our attention to detail and our focus on every profit and loss statement. For instance, this quarter, we achieved positive operating income in food and beverage for the first time ever at Caesars, equating to over a $60 million cash improvement from the previous quarter, which translates to $250 million annually. This success is determined by how we price our products, manage yield, labor, marketing, and promotions. These factors all contribute to significant outcomes. With 53 properties, if each one finds $5 million in efficiencies, that adds up to $250 million. Historically, we have been effective at achieving these savings.

Okay great. Thanks I appreciate it.

So as we think about the digital business, as the market matures, customer acquisition is becoming less of a driver in product picks up some of it. You launched your new sportsbook yesterday, the new app. Can you just talk about some of the key features of it?

Bret, do you want to take that?

Yes. We encourage you to download and experience it yourself, but it has very deep betting markets. It's very fast, the UX is great. Again, it's going to tie into Caesars Rewards here. And we think it's a best-in-class app looking at funding and withdrawal and the clarity for any sports better. And then you layer on top J.B. Smoove and a great marketing campaign and tie that together not only online but across our brick-and-mortar portfolio, and we like our digital mousetrap.

Perfect. Thanks Bret.

And then just a numbers question. So when you announced the William Hill deal in 2020, you said you expected sporting betting and iGaming to deliver $600 million to $700 million of revenue in 2021. Is that still a good baseline? Or how are you thinking about it?

Thomas, with the rollout of the Caesars Sportsbook yesterday and our new strategy for marketing and investment, I think promos, so net revenue could be below that $600 million to $700 million as we invest in the business. But it doesn't diminish from the long-term growth opportunity at all. But relative to that initial $600 million to $700 million, our attempt to increase and be more competitive in the market could impact that net revenue line this year.

Yes. That was the business in a world that was somewhat directionless, lacking clarity on the changes happening in the business yesterday.

I will say we're $260 million year-to-date. Obviously, we're coming into the seasonally strongest period. So you should see those revenues start to accelerate into the all-important Q3.

Alright. Thank you all.

Hi to all. Thank you for taking my question. To stick on the digital theme, perhaps a 2-part question, Tom. A lot of the discussion so far today has been on the vast and probably underappreciated opportunity of mining your database and brand, but you also have a lot of other customer acquisition channels that were assembled over the last couple of years between you and the predecessor William Hill. Like ESPN and CBS agreements, or daily fantasy stuff. I was wondering if you could talk a little bit about how those kind of fit into the strategy going forward? And as a tag along to that, if there's other media partnerships or channels that you could look at to bolt on going forward? Or if you think you've got everything you need?

No, you're right, John. We have numerous league and team partnerships plus the ESPN and CBS partnerships that give us access to databases that are certainly extremely interested in whatever team or sport they're following and likely sports betters. And part of what we're doing here in addition to Caesars Rewards, we're leaning into all channels into our own database into the databases of partners that we have transactions with and then out into that Wild West for people that we don't have a relationship with yet. We are looking to build a leader in this space, and we think tying it to everything that we've described should make it an attractive option for players.

And kind of the second part, is there other things that you're looking at or potential tuck-in M&A, whether it's additional technology or other avenues that you'll continue to look at going forward?

The technology will continue to evolve for as long as we're doing this. So if there are areas where a tuck-in acquisition makes sense to advance the ball on the technology side, you should expect we would look at that. If there's some brand or M&A opportunity that allows us to improve our position in customer acquisition, you should expect us to look at that. You've known us a long time. We're looking for how do we drive the most value for our stakeholders. And the answer can change over time. But as we sit here today, we think we've got everything we need to launch with strength and then to add to that over time as we build the business.

Very good. Thanks, Tom. And good luck on the rollout.

Thanks, John.

Hi, good afternoon. Thanks for taking my question. Tom, given your Las Vegas margin success in the quarter of running over 20,000 rooms and a much higher EBITDA result than any of us were expecting, I'm wondering if anything has changed in terms of your thinking of divesting an asset out there and the timing around that. Thanks.

Yes. I'd say nothing has changed there. We still expect to sell a Vegas Strip asset, a single asset, and I would expect that sale to take place in 2022.

Great. And then with that cash or, I guess, the near-term cash of selling the U.K. William Hill business, what are your plans with the cash that you have on the balance sheet? You've talked about what the digital vision will cost, but you'll still have some excess cash, particularly given the $10 free cash flow projection. What will you do with that?

You should expect us to be reducing our debt. We aim to lower our leverage to below four times on a gross lease adjusted basis, which I anticipate happening in the relatively near term. Considering our investment of over $1 billion in sports and online, I believe the proceeds from the assets we will sell related to William Hill will align well with our spending needs in sports and online to develop that business in the U.S.

Great. Thank you very much.

Hi. Good afternoon everyone. Thanks for taking the questions. For Caesars Digital, it sounds like that segment includes both your retail sports betting business and online. Is that correct?

That's correct.

Okay. So can you break out what online-only revenue and EBITDA was in the quarter in that segment?

No. No, I can't, Dan.

Okay. And then Tom, I'll take another stab at this, but I'm wondering if you have a long-term target online sports betting and iGaming market share number in mind that you'd be willing to share with us?

I would expect us to be a leader in mobile market share, definitely among the leaders in both sports and online.

And Daniel, given that we operate in 13 states mobile and now we've rebranded the Caesars Sportsbook, the bulk of the growth, obviously, for the sports business is going to come online over time and as new states legalize.

Okay. It makes sense. Alright. Thanks guys.

Hi good afternoon everyone. I just want to go back to the Vegas environment. Tom, you gave some really great color on sort of your occupancy thoughts. And I was wondering if you could sort of give us a little bit of color on what you're seeing on the rate side of the equation in the past. There's been some volatility there, and it's been competitive. But obviously, what you're seeing now is really different from the consumer. So I was just kind of curious on what you're able to see out in the future and maybe how that trended across the quarter as well.

Yes. For the past few months, we have seen higher rates; occupancy that climbed to equal prior year levels. We would expect that to grow further and faster as group business comes back. We're fairly comparable from a rate standpoint over the last, call it, 2.5 months, to prior year, a little bit ahead.

And historically, we have seen some seasonality in Vegas, but obviously, that's been driven a bit by the group business. I know the booking windows can be short, especially now. But just any thoughts on sort of, let's call it, the fall progression as some people may head back to work and schools may be more back in session, that trade-off in August relative to sort of the upside opportunity as you probably see the group calendar fill in post Labor Day?

Yes, I expect to return to more typical seasonality in Vegas for the rest of the year. I anticipate the usual holiday softness compared to previous years, and we'll observe the recovery of group bookings. Overall, I expect 2022 to reflect a standard seasonal pattern in Vegas.

Great. Thank you very much.

Hi. Thanks. I've got a couple of follow-up questions on the digital side. I guess, starting with the database. How do you think about the overlap of sports betting customers versus iGaming versus kind of the existing total awards database? Do you have any sense for how much of your total rewards customer base may be overlapping with peers or you may be fishing for a customer who perhaps has already been caught?

I don't have any real insight into what's in others' databases, but I'd tell you with the amount of people and ours that that database has been built over 20 years in mind. I would expect that a substantial amount of the gambling customers that everybody is searching for is in our database and has a relationship with us. So giving them an ability to stay home and not look elsewhere is a key piece of what we're doing here.

And then perhaps on the regulatory front, I know you mentioned you always follow the math. I guess what's your strategy and willingness to pursue states where taxes and/or license fees are materially higher? Do you need to be in those markets to get national scale? Or are there other ways to create value?

Yes. Each state will be evaluated individually. I can foresee situations where it may not be economically viable to participate in certain states, although I haven't encountered one of those yet. You should expect us to be active wherever feasible. There are states that we might overlook if profitability is unattainable. However, historically, in states where the initial tax structure posed challenges, adjustments have been made. You need to be engaged from the beginning to benefit from those changes.

Helpful.

Thank you so much.

Thank you.

Alright. Thanks, everybody. We'll talk to you again after the third quarter.