Prepared remarks
Good afternoon, welcome to Asure's second quarter 2026 earnings conference call. Joining us for today's call are Chairman and CEO, Pat Goepel, Chief Financial Officer, John Pence, and VP of Investor Relations, Patrick McKillop. Following their prepared remarks, there will be a question and answer session for analysts and investors. I would now like to turn the call over to Patrick McKillop for introductory remarks. Please go ahead.
Thank you, operator. Good afternoon, everyone. Thank you for joining us for Asure's second quarter 2026 earnings results call. Following the close of the market, we released our financial results. The earnings release is available on the SEC's website and our investor relations website at investor.asuresoftware.com, where you can also find our investor presentation. During our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors in understanding our business and exclude the impact of certain items. A description and timing of these items, along with a reconciliation of non-GAAP measures to their most comparable GAAP measures, can be found in our earnings release. Today's call will also contain forward-looking statements that refer to future events and, as such, involve some risks. We use words such as expects, believes, and may to indicate forward-looking statements. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ materially from our current expectations. I'll hand the call over to Pat in a moment. I just wanted to take a moment to remind people of some of our upcoming investor relations activities. On August 26th, we will attend the Three Part Advisors IDEAS Investor Conference in Chicago. On September 10th, we will attend the Lake Street Conference in New York. On September 22nd, we will participate in the 19th Annual Barrington Research Virtual Fall Investment Conference. On November 17th, we will participate in the Craig-Hallum Alpha Select Conference in New York. On November 18th, we will attend the Stephens Annual Investment Conference in Nashville, Tennessee, as well as the Roth Conference in New York. On November 19th, we will participate in the seventh annual Needham Virtual Tech Conference. Investor outreach is very important to Asure; we'd like to thank all those that assist us in our efforts to connect with investors. Finally, I would like to remind everyone that this call is being recorded, and it will be made available for replay via a link available on the investor relations section of our website. With that, I would now like to turn the call over to Pat Goepel, Chairman and CEO. Pat?
Thank you, Patrick, and welcome everyone to Asure's second quarter 2026 earnings results call. I'm joined on this call by our CFO, John Pence. We will provide a business update for second quarter 2026 results, as well as our updated outlook for the remainder of the year. Our second quarter revenues came in at $37.1 million, representing a growth of 23% compared to second quarter 2025. Our growth was broad-based across our business lines. Our past investments in technology products and AI are showing real returns. Our organic growth rate for second quarter 2026 was 5%, compared with 1% in quarter two 2025, an improvement of 400 basis points and down slightly sequentially compared with 7% in quarter one 2026 due to seasonality. We continued to receive positive responses to our platform. We believe we will deliver double-digit organic growth as we move through the remainder of 2026 by driving expanded cross-sell of our products and go-lives of previously booked business on our Enterprise Payroll Tax management platform. On the Enterprise Payroll Tax management platform, we're pleased to share an important milestone that was recently achieved. As you recall, we signed an agreement with Vensure Employer Solutions. We are glad to announce that 2 million of their supported employees are now live on our payroll tax management platform. Our pipeline of opportunities remains robust. We're excited about the future. However, for competitive and confidentiality reasons, we are limited in our ability to share details. AsureCentral continued to progress nicely during the second quarter. We now have a majority of our 30,000 direct clients on the platform, as we forecasted on our prior call. We are increasingly well-positioned to accelerate cross-sells and attach rates through the second half of 2026 and beyond. The number of clients purchasing multiple products increased by 6% versus quarter two of 2025. We remain focused on moving clients from an average of two products per client relationship towards four or more products per client over time. Now, a brief update on AsureWorks, our administrative services outsourcing offering, which allows clients to delegate key payroll and HR compliance processes to Asure. The positive trajectory we saw at launch has continued to grow into the second quarter. Our pipeline keeps growing. We've added new clients. The reception across our target buyer types—small hotel chains, restaurants, HVAC companies, among others—remains very strong. These are main street businesses that need payroll and HR compliance support, but lack the internal resources to manage it themselves. We're training additional sales reps on AsureWorks every day and building out the dedicated team beyond our original pilot group. AsureWorks remains strategically very important. Clients who adopt managed payroll and compliance services typically represent up to five times the revenue of a payroll-only client. Importantly, AsureWorks is not a PEO model. We're not taking on co-employment risk. For clients constrained by the cost or rigidity of traditional PEO, we believe AsureWorks is a compelling and flexible alternative. On the sales force front, we are working very hard towards our goal of 150 reps by the end of 2026. This isn't just about headcount. We're being deliberate about the types of sales reps we hire. We want full solution sales reps. People who can sit down with the business owner and sell the entire product suite, not just a single point solution. That's a fundamentally very different skill set than traditional single product selling. It's core to how we drive both our new logo acquisition and multi-product cross-sell within our existing base. Historically, we hired more transactional small business sales professionals suited to selling point solutions. Now that we're selling the broader platform, and especially with AsureWorks, it's a more consultative needs-based sale, and we've been disciplined about bringing in sales reps who fit that profile. The good news is those reps are ramping faster than what we've historically seen. Today, our existing to new customer logo split is approximately 53% to 47%, which is an improvement from last quarter, and we're still targeting a 35% new logo, 65% base expansion mix over time. On the M&A front, we did not complete any reseller acquisitions in the second quarter, but we continue to actively evaluate opportunities, and I would expect to see us complete a few deals in the second half of 2026. Our new sales bookings for core human capital management payroll grew 14% over quarter two 2025, and our contracted backlog remains at approximately $80 million. We expect to convert approximately 41% of that backlog over the next 12 months. Our client base, primarily small and mid-sized businesses in payroll-intensive, compliance-driven industries, remains strong. We continue to conservatively model for our clients to have flat headcount growth in our forecast. We haven't seen any meaningful shifts in sales cycle length or competitive intensity during the second quarter. I also want to take a moment to reiterate our thoughts on AI and what it means for our business. We've discussed this on prior calls, but we feel it's important to remind investors of our view here. Payroll and HR compliance isn't the type of workflow software a generic AI can replace. We hold money transmitter licenses across the country, interface directly with the IRS and state and local tax agencies, and manage compliance obligations where the margin for error is effectively zero. That regulatory complexity, combined with high switching costs and a consumption-based revenue model, is what makes Asure a system of record and our expertise with enormous moats. At the same time, we continue to see AI as a meaningful accelerator for us as we're already far along in the AI evolution journey. We witnessed an over 30% increase in platform adoptions with Luna, our AI agent, since the first quarter, and the number of interactions with Luna has increased by approximately 38% versus the first quarter. Additionally, 147,000 voicemail calls have been transcribed and about 196,000 emails have been screened for sentiment analysis, extending our capability to capture sentiment analysis from both voice into email. We continue to replicate the automated Luna-powered model that is generally available for our Canadian tax solution across U.S. payroll, U.S. tax, and HR compliance, bringing our AI capabilities into the flow of work and from human check to AI verified. The same foundation underpins AsureWorks and continues to sharpen our sales intelligence and our support operations. We remain confident in both the durability of our system of record model and the opportunity AI creates for us going forward. With that, I'd like to turn the call over to John to discuss our quarter two financial results in more detail and provide an update on our 2026 guidance. John?
Thanks, Pat. As Patrick noted, several figures discussed today are on a non-GAAP or adjusted basis. Reconciliations are available in our earnings release and our investor presentation at investor.asuresoftware.com. Second quarter total revenues were $37.1 million compared to $30.1 million in Q2 of 2025, representing growth of 23% year-over-year. Recurring revenue for Q2 2026 was $34 million, compared to $28.6 million in Q2 of 2025, an increase of 19% year-over-year. Recurring revenue represented approximately 91% of total revenue in the quarter. Professional services, hardware, and other revenue was $3.2 million in Q2 2026, compared to $1.5 million in Q2 of 2025. The increase was mostly driven by increased hardware sales from our Lathem acquisition. As a reminder, we are in the early stages of transitioning Lathem to a hardware-as-a-service model, and we are forecasting a headwind of approximately $600,000 to revenue during the first half of 2027. As that shift progresses, you'll see more of this revenue move into the recurring line with some of the corresponding pressure on the non-recurring line. A mixed shift that is good for the long-term health of the business. It should enable us to deliver better customer experience while improving total customer value. We expect Lathem will continue to have hardware-only customers for the foreseeable future. Growth revenue was relatively flat in Q2 2026 compared to Q2 2025, and we no longer are forecasting any further rate cuts this year based on current market sentiments. Gross profit for Q2 2026 was $25.1 million, compared to $19.9 million in Q2 of 2025. GAAP gross margin for Q2 2026 was 68%, compared to 66% in Q2 2025. Non-GAAP gross margin for Q2 2026 was 73%, unchanged versus Q2 of 2025. Net loss for Q2 2026 was $4.4 million, compared to a net loss of $6.1 million in Q2 of 2025. EBITDA for Q2 2026 was $4.6 million, compared to $1.4 million in Q2 of 2025. Adjusted EBITDA for Q2 2026 was $7.7 million compared to $5.2 million in Q2 2025, an increase of 48% year-over-year. Adjusted EBITDA margins for Q2 2026 were 21%, compared to 17% in Q2 2025, an increase of 400 basis points. For the full year, we continue to expect to generate positive levered free cash flow in the mid to high teens range, which we calculate by taking adjusted EBITDA at the midpoint of our guidance range, less software capitalization of approximately $15 million and approximately $6 million earned cash interest expense. We ended the second quarter with cash and cash equivalents of $19.7 million and total debt of $68.9 million as of June 30th, 2026. Based on the current positive momentum in our business, we are updating our full year 2026 guidance and providing Q3 guidance. We expect revenue of $159 million to $163 million for the full year of 2026 and adjusted EBITDA margins of 24% to 25%. For Q3, we anticipate revenue of $38 million to $40 million and adjusted EBITDA of $8 million to $10 million. We expect our cost structure, including capital expenditures and capitalized software development costs, to remain relatively stable on a dollar basis. With that, I'll turn the call back to Pat for closing remarks.
Thanks, John. Stepping back, I think quarter two tells us a clear story. We're growing. We're becoming more profitable as we grow, and we're doing it on the back of a platform strategy that's all coming together. AsureCentral has reached the majority of our client base. Luna is doing real work for us and orchestrating real work on behalf of our clients. AsureWorks is gaining good traction in its early days, and we're being disciplined about building a sales force that can sell the whole solution, not just a piece of it. We have truly leveled up from a year ago. In quarter two, we grew revenue by 23% in the second quarter and adjusted EBITDA an impressive 48%. We also expanded adjusted EBITDA margin by 400 basis points with increased scale in AI and efficiencies. We did all that while continuing to invest in the platform and the team. That's the model working the way we designed it to. As you know, we will typically receive revenue tailwinds in the second half, and we expect that trend to continue, with continued acceleration from this point through the rest of 2026 and into 2027. We are increasingly optimistic about 2027 as our initiatives continue to take hold with increasing adoption of ASO, Luna-enabled automation of U.S. payroll and tax, and more. We remain on track for our medium target of $180 million to $200 million in revenues, with adjusted EBITDA margins of 30% or better. Our longer-term vision, which we've discussed with investors, reflects the potential for margins to expand well beyond 30% as we achieve scale. AI continues to reduce our cost to serve while simultaneously expanding our revenue opportunities. We're proud of the progress this quarter and even more excited about what's ahead. Thank you for your continued support and for joining us today. I will now turn the call back to the operator for questions and answers. Operator?
Questions and answers
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we pull for questions. Our first question today will come from Richard Baldry with Roth Capital Partners.
Thanks. In your wrap-up comment, you sort of hit on what I wanted to go a little deeper on in terms of the ability of AI to cut costs and drive revenue. Could you maybe break that into the two pieces and talk about where you feel you're at now in terms of the cost-cutting or efficiencies you can gain with it, and how much still lies ahead? Also in terms of your ability to monetize either new features, tools, or modules built upon these AI abilities that previously wouldn't have been available. Thanks.
Rich, I'll start on the revenue side. As we get more to intent data and trigger data, AI is really helping us quite a bit in just having customer data available, Luna and/or the data's available to us to help cross-sell. A couple of examples, and I've brought this up before. When a company has 20 employees versus 19, they're now subject to COBRA, and they have to have COBRA. We can now, with that intent data, ask them if they'd like us to provide COBRA services on their behalf. It can be when there's a new hire, would they like to have a 401(k) solution and/or, when there's a raise, invest more in the 401(k)? All of this intent data with AI, with Luna, is going to really tee up those opportunities for revenue. The other aspect of it, if you think about the marketing and the sales motion, there's a whole series of data available that would make it very predictive, such as where they use AsureWorks, where they want a system done for them, but maybe they're not ready to go into a PEO. We think there's a lot of revenue opportunities that I'm talking about and we're putting them into use cases as we speak. On the cost side, where we see opportunity, Luna's been very active. Luna's already taking some of the calls or some of the data that would go to people, and some of those easy answers or what-if questions are being answered with Luna as opposed to getting into a queue or getting into customer service. What that allows our customer service folks is to build a much more strategic relationship with the customer as opposed to a transactional one. John, I don't know if you have some ideas on this, but those are some that we have in place right now.
I think you're asking where we are in the journey. I would say really early days, but it's pretty interesting stuff. Here's an example of one use case the operations team is using right now with AI. They've done sentiment analysis on all the calls coming into the customer service center, and they can tell based on transcription and key trigger words that there's a customer that somebody needs to reach out to because their language indicated a heightened issue. So we can proactively reach out and address customers that might have had a bad experience. Again, early days. Is that a cost-cutting right now? Not necessarily a direct cost-cutting, but it's definitely going to, I would think, impact retention over time and customer satisfaction over time. Early days of the cost out, but you can start to see examples in implementation and some other areas of the business where we're going to get a lot more efficient.
Great. Last for me, if you think about you've been adding to sales on a pretty steady basis. Can you talk generally about your overall sales productivity levels? How good you think they are now, how much they could improve, and what do you think the implication for that for, let's say, a medium-term sustainable growth rate for the company on an organic basis? Thanks.
As I look at the second half, we believe there will be double-digit recurring revenue organic growth. Some of that is laying the foundation with salespeople we've already hired. If you look at productivity, our productivity around attach rates and having more dollars available to sell, and getting to the right level with a software model or managed services model, we think we're in the early innings. We've had some really good successes in productivity. I would think that next year, we'll be targeting 25% plus productivity, especially in year-one to year-two sales reps. That will work through to overall productivity over time. Those are the things that really excite me. I think what's happening is we're bringing all these products together with AsureCentral, layering AsureWorks, adding salespeople, adding training, and getting up to the business owner as opposed to an office manager. All those things are really good for productivity. From a growth rate perspective, we're going to be relentless on getting to double-digit organic growth. We think that's a really important part of the model, layering in tuck-in acquisitions, especially where we already own the platform.
Thanks. Congrats on a good quarter.
Thank you, Rich.
Next, we'll hear from Jared Levine with TD Cowen.
Thank you. First, I want to dig into some of your commentary in terms of expectations of hitting double-digit organic growth in the second half. I guess if you look at the midpoint, it suggests closer to 7%. Would you attribute that to conservatism or anything else to note here?
What we're trying to say, Jared, is if you look at last year and the composition of the revenue, we had some pretty healthy non-recurring professional services, specifically with some of the large tax deals. The way we've got the back half of the year currently forecasted and modeled is those are going to be negative on a year-over-year compare, so we're going to lose some of that non-recurring revenue on a compare basis. We think that will be offset by the growth in recurring organic side of the business, which again, is healthier. That said, we have a little bit of a compare on the non-recurring from the prior year that's causing overall revenue growth to be a bit muted because of that. A lot of the motion is already in place, so we feel real confident in getting to those kinds of outcomes.
Understood. I was hoping you could dig into some of the ASO offering traction here. We have seen a number of your competitors roll out managed service offerings too, and how do you expect to differentiate versus some of the competitors out there in terms of these ASO managed service offerings as well?
If you think about our history, we really had managed payroll as part of our core offering before competitors focused on it. We have the software to run a business and keep them compliant and efficient, but we can also do it for them. Luna, introduced a couple of years ago, does a lot of the work around workflow and AI, and orchestrates work from a team approach—payroll, benefits, general ledger interface, etc. We built AI into our product and into AsureWorks. If you think about our core customer base, the average company hires an HR professional at about 80 employees. We're there every day, helping people do work where we've already done it at the payroll manager level. Now we're extending it through managed services. We feel that this is a core offering where we have quite a bit of a lead, and we think the competition will help draw more attention to the space. This is right in our core competency.
Got it. Thank you.
Next, we'll hear from Vijay Homan with Craig-Hallum Capital Group.
Hi, guys. This is Vijay on for Jeff Henry. First question on the sales heads. I know you guys have set the goal to be at 150 by the end of the year. I was wondering if you can give any update on whether you're on trend? I know last quarter you were a little bit below.
We're on track for the 150 by year-end. We're probably still about 10 where we want to be, but we've top-skilled and up-skilled sales leadership in a number of cases. Those leaders bring people along. About half our resources are manager-led versus pure recruitment. We've added a couple of recruiters and have good traction from a pipeline. From a selectivity perspective, we are being deliberate about who we hire and are building efficiently. We're selling the whole solution as opposed to a point solution, which requires different skills. We feel like we're doing a good job getting the salespeople we want, can see the productivity, and are confident we'll be at 150 by the end of the year.
Got it. That makes sense. As far as the multi-product attach rates, you obviously had success getting customers to two products. What's standing in the way of getting people to three or four that you alluded to in the remarks?
First, we're getting a lot of traction in our HR area combined with payroll and 401(k). We're seeing confidence and growing unit records each quarter. Those two tie in with the Lathem acquisition and integration. The four products—payroll, time and attendance, HR compliance, and 401(k)—will be core. Tax filing is always part of the offering. Depending on where you are in a hiring cycle, our recruiting solution and benefits-related investments in broker of record, HSA, FSA, COBRA are rounding out the offering. Simply put, time and attendance, HR, and 401(k) have good line of sight to being added to our core offerings. We're seeing that already.
Got it. Thanks for taking the questions.
We'll move on to Joshua Reilly with Needham & Company.
Thanks for taking my questions. Maybe starting with the 5% organic growth number in the quarter. Would you say that it's fairly balanced in terms of the contribution across product lines, or did the large enterprise tax deals have an outside influence on that? Along with that, you mentioned seasonality impacted the quarter-over-quarter change in organic growth from 7% to 5%. Can you give more color on that dynamic?
A couple things. The tax work: we've been busy installing a base of large customers with tax. There's potential and you'll see activity in the second half around new logo acquisition and partner acquisition. Field pipeline is really strong. As for the second quarter, the recurring mix that John talked about is where we are confident in double-digit recurring organic growth in the second half versus one-time revenue. The quarter's success was small business-related. Attach rates around 401(k), time and attendance, and HR compliance offerings, combined with payroll, led our growth. You'll see more as recurring revenue builds in the second half. Tax filing continues to be an area we're excited about. We accomplished a lot, such as taking Vensure over 2 million live. That didn't have an outside influence on second quarter growth.
Got it. That's helpful. AsureCentral now has 30,000 direct clients on it. Are you actually seeing cross-sell and increased attach rates now that you have a bigger sample size? What are you seeing in near-term trends, or will it take a few quarters to build awareness?
It will build on itself exponentially. In the quarter we had a 6% improvement in cross-sell. We're just getting started. As we layer in cohorts from reseller acquisitions that historically were one or two products, they now have the ability to cross-sell our full suite. As we layer AsureCentral to the multi-product family and increase trigger event analysis, this will continue. I'm very pleased with transactions sold around time, 401(k), and HR compliance, and I think it'll build in the second half as trigger event opportunities become standard.
Got it. Last question: regarding the enterprise payroll tax pipeline, is the pipeline up year-over-year in terms of opportunities? Is there any large deal potential that could be signed in the second half of the year? If so, have you factored any of that into guidance?
The emerging pipeline is extraordinarily strong. When that turns into revenue, cycles can be shorter or longer, but we're pleased with the opportunities. As for forecasting, John mentioned the one-time revenue; we didn't forecast a lot of professional services work and may be conservative there. Whether that falls in 2026, 2027, or even 2028 remains to be seen. Our guidance does not include a lot of tax. Over the next quarter or so, you'll see press releases that reflect growth opportunities in the business.
Next we'll move to Eric Martinuzzi with Lake Street.
John, I wanted to ask about the adjusted EBITDA margin midpoint. Looks like you tweaked things a little bit higher, so you raised that low end of the adjusted EBITDA margin guidance, and I was just curious to know, is that a result of the mix you're assuming in the revenue, or is there something going on with your cost of goods?
I think it's more about what's already in the barn. We've had pretty strong quarters in terms of adjusted EBITDA, so we feel pretty steady state that we can hit that bottom line. We wanted to tighten up guidance a bit because we felt it was achievable. Nothing structurally has changed dramatically. It's really based on the strong performance in the first two quarters and where we think we're going to land.
Okay. Second question: you've owned Lathem Time for about a year now. If you could comment on retention versus what you forecast and the opportunity for cross-sell—whether that's in second half 2026 or more like 2027.
Retention has been very consistent. That business has been around over 100 years and performed at or a little above our expectations when we bought it in terms of revenue production. We've realized most of the cost savings we planned for, if not a bit more. It's performed as we hoped from that perspective. I'll let Pat talk about cross-sell.
Culturally, Lathem has been a great fit. Bill Lathem did a great job and our GM, Lance, has done a great job integrating Lathem. It's been spot on. We're evolving the strategy: Lathem was more of a standalone time solution on the smaller end; we're integrating but keeping key standalone relationships while aligning go-to-market. In some cases where the time clocks are moving to Hardware-as-a-Service, that will impact revenue about $600,000 in the first half of next year but aligns the value proposition with an integrated approach with payroll. Long term, it's about a $2 million positive at current numbers. We think the opportunity with AsureCentral and AsureWorks fits us well. We have a plug-and-play product, and we're aligning pricing strategy. We're just getting started. A year ago I wouldn't have predicted where we'd be with Lathem—we've hit almost every milestone and have more to build on.
It sounds like more of a 2027 cross-sell opportunity with Lathem?
There will certainly be more in 2027, but we've been pleased with payroll opportunities and the attach rates of time and attendance already. We think recurring time revenue will continue to build. The second half of this year and even the first half have been strong on cross-sell and it will continue through 2027 and 2028.
All right. Thanks for taking my questions.
Next, we'll hear from Greg Gibas with Northland Securities.
Great. Thanks for taking the questions, guys. In your prepared remarks, you mentioned expectations to complete a few M&A deals in the back half; wondering if there's any incremental color you can share around those expectations, and perhaps if anything's included in guidance.
No, there's nothing included in guidance right now for acquisitions. It would be incremental if we do complete deals. We've been discerning; some deals have come across where we decided not to proceed for price or other reasons. We don't have anything imminent, but we'll continue to look.
As you know, the reseller market is active and we'll continue to be active. We've been working on a couple deals we believe could happen. You'll see more when they finalize, likely in the back half of the year.
Fair enough. I wanted to follow up regarding the composition of recurring versus non-recurring strengths year-over-year as we head into the back half and how that fits into guidance. The guidance implies more recurring strength. Where do you have confidence in the recurring side given the expected drop in non-recurring?
Our current guide: last year in the back half we had about $10 million of non-recurring revenue, a big chunk of which was hardware from Lathem and professional services around large tax deals. Right now, we don't have those same large tax deals, so we expect non-recurring in the back half to be in the $5 million to $6 million range as opposed to $10 million last year. That math shows the growth is coming from recurring. We don't have acquisitions imminent; we're lapping Lathem. Most of the growth in our current guidance for the back half comes from recurring organic revenue.
More specifically, 401(k), HR compliance, time and attendance combined with payroll are the leading products we're cross-selling. Last year we had roughly a 70/30 new logos to customer mix; now it's closer to 53/47, and the additional revenue per customer is building recurring revenue. We think it's a very predictable story. If we do have acquisitions or professional services dollars, those will be additive. Right now, we feel very good about where we are as a company.
Got it. Appreciate the color, guys. Thank you.
All right. Thank you.
There are no further questions at this time. I would like to turn the floor back to Pat Goepel, Chairman and CEO, for closing remarks.
I appreciate your time today in reviewing the second quarter results. We feel like we have a lot of momentum and a predictable set of results going forward. We feel good about where we're at, and we always take stock at halftime and look forward to a strong second half and the beginning of 2027. We appreciate you as an investor and look forward to talking to you again soon. We'll do some outreach with different conferences in the third and fourth quarters. Hopefully we'll see you soon. Thank you.
Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.