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Edited Transcript of USAT.PK earnings conference call or presentation 5-Nov-20 9:30pm GMT

·25 min read

Q1 2021 USA Technologies Inc Earnings Call Malvern Nov 6, 2020 (Thomson StreetEvents) -- Edited Transcript of USA Technologies Inc earnings conference call or presentation Thursday, November 5, 2020 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Alicia V. Nieva-Woodgate USA Technologies, Inc. - VP of Corporate Communications * Anant Agrawal USA Technologies, Inc. - Chief Revenue Officer * R. Wayne Jackson USA Technologies, Inc. - CFO * Sean E. Feeney USA Technologies, Inc. - President, CEO & Director ================================================================================ Conference Call Participants ================================================================================ * Cristopher David Kennedy William Blair & Company L.L.C., Research Division - Associate * George Frederick Sutton Craig-Hallum Capital Group LLC, Research Division - Partner, Co-Director of Research & Senior Research Analyst * Michael James Latimore Northland Capital Markets, Research Division - MD & Senior Research Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for standing by, and welcome to the USA Technologies First Quarter 2021 Earnings Conference Call. (Operator Instructions) I would now like to hand your conference over to your speaker today, Alicia Nieva-Woodgate, VP of Corporate Communications and Investor Relations for USA Technologies. Go ahead. -------------------------------------------------------------------------------- Alicia V. Nieva-Woodgate, USA Technologies, Inc. - VP of Corporate Communications [2] -------------------------------------------------------------------------------- Thank you, and good afternoon, everyone. Welcome to the USA Technologies First Quarter Fiscal 2021 Earnings Conference Call. With me on the call this afternoon are Sean Feeney, Chief Executive Officer; Wayne Jackson, Chief Financial Officer; and Anant Agrawal, Chief Revenue Officer. Before we begin today's call, I would like to remind you that all statements included in this call other than statements of historical facts are forward-looking in nature. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including, but not limited to, business, financial, market and economic conditions. A detailed discussion of the risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included with our filings with the SEC and in the press release issued earlier today. Listeners are cautioned not to place undue reliance on any such forward-looking statements, which reflect management's view only as of the date they are made. USA Technologies undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. This call will also include a discussion of certain non-GAAP financial measures that we believe are useful for, among other things, evaluating USA Technologies' operating results. These non-GAAP financial measures are supplemental to and not a substitute for GAAP financial measures, such as net income or loss. Details of these non-GAAP financial measures, a presentation of the most directly comparable GAAP financial measures and a reconciliation between these non-GAAP financial measures as well as the most comparable GAAP financial measures could be found in our press release issued this afternoon, which have been posted on the Investor Relations section of our website at www.usatech.com. And with that, I would now like to turn the call over to our Chief Executive Officer, Sean Feeney. Sean? -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [3] -------------------------------------------------------------------------------- Thank you, Alicia, and thank you, everyone, for joining us today. I hope everyone is safe and well. Next week will mark my sixth month with the company, and I am pleased to say that we are making good progress against the initiatives I outlined on the Q4 call. On today's call, Anant and I will look forward to updating you on these items and our plans to drive our company growth strategy forward. Wayne will then review the fiscal year 2021 first quarter results, and we will also discuss our financial guidance for this fiscal year. As we carry on in the current COVID environment, frictionless commerce has become an increasingly important part of consumers' everyday lives. This dynamic extends to cashless and, in particular, contactless payments. We are well positioned to capitalize on these trends, which makes us extremely relevant for the markets we serve and a key component to our customers' success. Nevertheless, the pandemic is still affecting businesses and while we experienced positive results compared to Q4 fiscal year '20, it continued to impact the company during the first quarter. Revenue of $36.9 million increased sequentially by 13%, but this decreased 15% year-over-year. Gross margin was 38.6% compared to 26.3% in the prior year period due to mix of revenue during the quarter, which Wayne will discuss in more detail in a few minutes. Operating loss of $3.6 million in Q1 FY '21 compared to a loss of $11.3 million in Q1 last year. Adjusted EBITDA was a negative $500,000 compared to negative $4.9 million in the prior year period. We continue to take actions that are geared towards preparing for the economy to turn, especially in our go-to-market initiatives, network operations, while effectively managing costs that are within our control. We are focused on these near-term initiatives without losing sight of our longer-term growth vision for the company. As a reminder, the strategic initiatives that the management and Board laid out for this fiscal year are: to drive sustainable organic growth, rightsize the company's cost structure, and invest in people and culture in order to achieve excellence. Keeping these in mind, let me give you some highlights from the last time we gave you an update. Last week, we announced the upgrade and expansion of our ePort product portfolio to now accept EMV contact and contactless payments. Earlier today, we also announced the cashless device upgrade plan to address the cellular sunsetting of the 2G and 3G networks and the upgrade to that hardware. We continue to execute upon our aforementioned marketing initiatives, showcasing our platform-as-a-service with an emphasis on the benefits of the Seed family of products. As part of our efforts to become a more customer-centric organization, we have continued to build out our customer service teams and have added additional account managers. In addition, we have also invested in our sales team, including adding 2 new regional sales directors during the quarter. Lastly, our migration to Fiserv remains on track. While we made a lot of progress over the past few weeks, in September, we experienced a network incident on our ePort transaction platform resulting in the inability to process payment transactions. We remediated the cause of the incident and replaced some old devices that were slow to reconnect in order to speed up the recovery of customers. We continue to look at further enhancements to the platform for our customers. Transactions on our Seed platform were not impacted. I will now turn the call over to Anant Agrawal, our Chief Revenue Officer, to give you more color on the quarter's business performance. Anant? -------------------------------------------------------------------------------- Anant Agrawal, USA Technologies, Inc. - Chief Revenue Officer [4] -------------------------------------------------------------------------------- Thanks, Sean. This quarter, we kept on executing upon our growth strategies, from providing a customer experience that is best-in-class to enhancing our platform-as-a-service and delivering the best cashless and software solution on the market. Here are some key highlights. As Sean mentioned, last week, we announced the upgrade to our ePort product portfolio, giving operators the choice to accept contact and contactless EMV, so they have full optionality to choose their EMV investments wisely, in many cases, only needing to upgrade the card reader or their telemeter rather than the whole kit. In addition and to the delight of our customers, we implemented a free over-the-air upgrade to a large number of our existing devices in the field, completely eliminating the need for any equipment upgrades. Along with the EMV enhancement, we rolled out the upgrade plan for customers who still have 2G and/or 3G devices. As you know, the carriers are starting to sunset their 2G and 3G network, and any customers with devices that are reliant on either of these networks will need to upgrade. Many of our 3G devices in the field only need a telemetry upgrade versus a full cashless kit. Key benefit to the ePort hardware design, saving them significant investment dollars in most cases, similar to the advantages of incorporating EMV with ePort devices that I mentioned before. These are just a few examples of how the company's platform-as-a-service leverages forward-thinking technology to help customers get the most life out of their hardware investments with the ePort platform. In addition to these initiatives, we continue to make strides towards getting our customers fully deployed with Seed and cashless. As we've maintained on previous calls, Seed penetration within our existing customer base is a key focus for our business, and we made great progress in Q1. What has helped us is the fact that the onset of COVID has provided further evidence to the benefits of Seed through our existing Seed customers who have been able to nimbly manage operating costs in real time, maximizing profitability during this challenging environment. In a recently published blog post, we highlighted how 3 operators: Duncan Smith, President and Chief Operating Officer of All Star Services; Bradlee Whitson, Operations Manager at K&R Vending Services; and Jared Detwiler, VP of Operations at One Source Office Refreshment Services, have leveraged our platform during COVID to better serve their customers via frictionless service. Our Seed operators are getting creative in how they can quickly adjust to address the changes this volatile business environment introduces. By leveraging all the capabilities of Seed, they have actionable, real-time data at their fingertips, which gives them the flexibility to adapt food orders, combine the routes to minimize operating costs, streamline operations across vending micro markets and OCS by leveraging hybrid routes and ultimately, maximize their profitability compared to their competition. With our efforts to reinforce the benefits of Seed, coupled with the secular cashless tailwinds, we believe we are well positioned to convert the vast majority of our customers on to the full platform. As we mentioned in the press release, we have 3 new customer wins that serve as a barometer to the success of our new go-to-market strategy of going all-in. First is a large operator in the Midwest, which was a partially deployed legacy ePort customer but fully engrained with the competitor's VMS and other cash flow solutions. They will now be completely moving to the Seed platform plus deploy our full 4G EMV cash flow solution as they upgrade their existing 3D cashless devices. We have also signed one of Los Angeles' largest independent vendors, Continental Vending. The company has gone all-in on USAT switching all of its devices to ePort from a competitive cashless solution and signing up with Seed by converting off of a competitive VMS in the process. And last, but not least, we have Fresh Fruit Group, a legacy USAT customer and the largest independent operator in Houston. The company will be upgrading all of its 3G devices to 4G and EMV as well as migrating from a competitor's VMS system to be fully deployed on Seed so they can be on a single platform. These are significant players in the industry going all-in and choosing our best-in-class platform, and we look forward to accelerating the pace of upgrading all of our operator businesses to our full platform. With that, I would like to turn it back over to Sean. Sean? -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [5] -------------------------------------------------------------------------------- Thanks, Anant. Now to move on to cover a few other highlights before turning it over to Wayne. Earlier this month, Denis Kouznetsov, who left the company a few months ago for a large financial services firm, rejoined our organization and was named Chief Architect. We're very excited to have his expertise and 15 years of institutional USAT knowledge back on the team. We also continue to build out our finance organization with the hiring of Scott Stewart, our new Chief Accounting Officer. He has made some key hires for his team, which speaks to our commitment to eliminate our reliance on outside consultants and reduce professional services fees. I also want to address our NASDAQ relisting efforts as I know it's top of mind for everyone. The only update I can provide on the process is that our application remains pending, and we have been in regular communication with the NASDAQ organization. They have welcomed the changes made to the Board and the management team. I want to reiterate that we remain focused and dedicated to getting us relisted on NASDAQ. Just to wrap up, while we may have experienced a few bumps this quarter due to legacy factors as well as external variables, particularly COVID, we continue to believe that we have an incredible foundation from which to grow this business and will emerge stronger. With that, let me hand it over to Wayne to walk you through the fiscal year 2021 first quarter financial results. -------------------------------------------------------------------------------- R. Wayne Jackson, USA Technologies, Inc. - CFO [6] -------------------------------------------------------------------------------- Thanks, Sean. Good afternoon, everyone, and thank you for joining our call today. Revenue for the first quarter of FY '21 totaled $36.9 million, a decrease of 15% over the prior year first quarter and an increase of 13% from Q4 of last year. License and transaction revenue totaled $33.1 million for the first quarter, a decrease of 4.3% from the prior year first quarter, primarily as a result of lower transaction volume in the current quarter. License and transaction revenue increased 18.9% versus Q4 FY '20 primarily driven by an improvement in transaction volumes. Equipment sales for the current quarter of $3.8 million decreased 56.9% compared to the prior year quarter of $8.8 million. The decrease was primarily due to lower hardware shipments during the first quarter of FY '21 compared to the same period last year. As you may recall, in the prior year first quarter, shipments of equipment increased significantly due to a large contract with a new customer. Total gross profit margin for the quarter was 38.6% compared with total margin of 26.3% for the prior year first quarter and 34% in the fourth quarter of FY '20. License and transaction margin improved to 41.6% in the first quarter of this fiscal year, up from 36.2% in Q1 of last year as license revenue with higher margins was a larger percentage of L&T revenue in the current quarter compared to the prior year quarter. The current period margin is more in line with Q4 FY '20 of 42.3% due to a similar mix of revenue between transactions and licenses. As we noted on our fourth quarter earnings call, transaction volumes and revenue are expected to accelerate during the second half of FY '21, so we anticipate the L&T margins to be more in line with historical rates by the end of FY '21. Equipment margin was a positive 12.4% for the quarter compared to negative 12.6% in the prior year. As more fully disclosed in our Form 10-Q to be filed tomorrow, we recorded an adjustment of $800,000 as a result of amounts due to the company for USAT-provided parts that were incorporated into the assembly of hardware that was ultimately sold to customers. Operating expenses in the first quarter totaled $17.8 million, a 21.4% decrease over the prior year. SG&A expenses in the first quarter of FY '21 totaled $16.8 million, which decreased 2.4% from $17.2 million in Q1 of the prior year. This decrease was driven by $2.8 million in lower professional services fees and $500,000 in lower travel expenses, offset by $2.9 million of charges primarily related to $1.1 million of costs associated with the network incident and $1.8 million in compensation expense, which consisted primarily of an increase in stock-based compensation. The operating loss for the first quarter was $3.6 million compared to a loss of $11.3 million in the first quarter of the prior year. In addition to the higher gross margins for the current year first quarter, the other primary driver of the $7.7 million improvement from the first quarter of FY '20 was a $4.5 million reduction in investigation, proxy solicitation and restatement expenses. Net loss applicable to common shareholders for the first quarter was $6.9 million or $0.11 per basic share compared to $11.8 million or $0.20 per basic share in the prior year period. Adjusted EBITDA for the first quarter was a negative $500,000 compared to a negative $4.9 million in the prior year period. Regarding liquidity, the company had $34.7 million of cash and cash equivalents on hand as of September 30, 2020. Moving to our guidance for the full year 2021. We continue to expect revenue to be between $170 million and $180 million and adjusted EBITDA to be between $2 million and $5 million. In addition, we expect net loss applicable to common shares to be between $11.1 million and $14.1 million. This range assumes no further unforeseen COVID-related impacts that create substantial economic duress for the remainder of this year and into calendar 2021. The first half of the fiscal year will be more negatively impacted both by COVID-19 and our continued turnaround in the business. We will begin to see the benefits of our investments and refocus sales efforts in the second half of our fiscal year, and the second half of our fiscal year will be a more robust year in terms of office, school and hotel traffic. With that, we will turn it back over to the operator for questions. Operator? ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) We will now take our first question from Michael Latimore with Northland Capital Markets. -------------------------------------------------------------------------------- Michael James Latimore, Northland Capital Markets, Research Division - MD & Senior Research Analyst [2] -------------------------------------------------------------------------------- I guess, Sean, you've talked in the past about transaction volumes kind of year-over-year. I think you had history -- last time you talked about down 10% to 15%. I guess, what are you seeing currently? And are you seeing any kind of sequential improvement? -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [3] -------------------------------------------------------------------------------- I would say that looking at our revenue, you've seen a little bit of sequential quarter improvement, but when you look year-over-year, we're still down in that 10% to 12%, 13% off. And while that sounds like it's been consistent, remember, transactions were growing, and our transactions do continue to grow, just we're about 10% to 12% off of year-over-year on a weekly basis, that's kind of how I look at it. -------------------------------------------------------------------------------- Michael James Latimore, Northland Capital Markets, Research Division - MD & Senior Research Analyst [4] -------------------------------------------------------------------------------- Okay. And then in terms of the visibility into sort of new connections, should we think about connections kind of building every quarter sequentially to where fourth quarter is lying? And I know you're not as focused on connections versus overall SaaS, but is that generally the way to think about it? -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [5] -------------------------------------------------------------------------------- Yes. I think we would expect that you would see continued connections growth. We continue to focus on that. While I think it's not the best measure, it's one we've traditionally given and continue to look at. So yes, I would look at it that way. -------------------------------------------------------------------------------- Operator [6] -------------------------------------------------------------------------------- Next question, George Sutton from Craig-Hallum. -------------------------------------------------------------------------------- George Frederick Sutton, Craig-Hallum Capital Group LLC, Research Division - Partner, Co-Director of Research & Senior Research Analyst [7] -------------------------------------------------------------------------------- Sean, one of the things you mentioned is primary goal is substantial organic growth, and I wondered if you could just give us a better sense of what you view as substantial organic growth. And at what point would you expect that normalized situation to enable that kind of a rate? -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [8] -------------------------------------------------------------------------------- Thanks, George. I'm not sure I remember using the word substantial, but we are looking for consistent organic growth. And I think when you look at it -- I kind of look at it, there's 2 ways you look at it. You look at it pre-COVID and post-COVID. And really the environment I'm in right now is with COVID. So I think you saw good growth off of the last quarter, in this quarter, and if you look at kind of bad to get to our guidance that we've given you and that we continue to look at, I think, you'll continue to see sequential growth. When you look at it kind of pre-COVID, that's really dependent on really when we see people 100% back in offices, 100% back in schools, kind of sporting events, all of the things that will return to normal. And I've seen -- and when I talk to operators, they look at that beginning to come back, hopefully, after somewhat in this quarter and some look at it and go, they may not come back until the end of next calendar year. So we're focused on kind of the environment we have, and I think that we can grow well within that environment, and we really need kind of a return to normal or pre-COVID to really get to the kind of growth numbers we think we can do. -------------------------------------------------------------------------------- George Frederick Sutton, Craig-Hallum Capital Group LLC, Research Division - Partner, Co-Director of Research & Senior Research Analyst [9] -------------------------------------------------------------------------------- Got you. And if I overuse the word substantial, I apologize, I think among my 15th earnings call today, somebody used the word substantial today. So moving on to my second question. This is for Anant. The -- you mentioned a couple of wholesale takeaways and having covered this space for a long time, we rarely, frankly, see wholesale takeaways, particularly, on the payment side. I'm curious what you see changing? Is this really driven by Seed or is there something else that's driving these takeaways? -------------------------------------------------------------------------------- Anant Agrawal, USA Technologies, Inc. - Chief Revenue Officer [10] -------------------------------------------------------------------------------- Yes, sure. So I think it's a couple of pieces. One is, I think a lot of companies, as we've been talking about, are seeing the value of being on a single platform for both cashless and logistics software, which is really what our platform is. A lot of the other solutions out there are fairly kludge. So I think that is helping, especially with our existing customers showing that they're doing well during COVID, that's helping drive that notion of -- I just want one supplier for it all because it really is one solution. The other piece is that when we announced the upgrades for EMV and through 2G and 3G on our own network, the reality is a lot of our competitors' devices out there are also going to need to be upgraded. And so when you couple that with us having the best-in-class solution in the market, we are seeing deals where customers are moving off other competitors' cashless solutions to go to the full platform with us. -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [11] -------------------------------------------------------------------------------- And George, this is Sean. The one thing that I would add that excited me was, similar to your question, I had heard that it was very difficult for people to switch VMSs, and I think the success that we've had while we're in the middle of implementing those has shown that we can do that, and I was just recently at another customer that just had signed a little while ago, but had -- was switching over to Seed and I was happy that the day I was there, they were migrating, and it went very well, and they were very happy. I actually went out and rode with some of the route salesmen and some of their sales guys and got a good look at their operation, which was a great education for me, but I was excited to see that people could switch and that it could go off pretty well. -------------------------------------------------------------------------------- Operator [12] -------------------------------------------------------------------------------- (Operator Instructions) Next question, Chris Kennedy with William Blair. -------------------------------------------------------------------------------- Cristopher David Kennedy, William Blair & Company L.L.C., Research Division - Associate [13] -------------------------------------------------------------------------------- When you look at -- think about the business, what do you think the long-term margin opportunity is for the company? -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [14] -------------------------------------------------------------------------------- Chris, what I would say is that's a work in progress for us. Wayne and Scott, and we're really kind of adding some additional people, the team is new and while we think that there's positive margin there, I'm not ready to give you kind of what I think that number will ultimately look like. But as we've said, we believe that there's a good growth opportunity here, and we want to do that while being kind of a positive earner. So we're working towards that, and as we get more clarity and begin to look into next year, we'll probably give you some thought on that. But I think you can tell from the guidance that we've continued with that we're optimistic that we're making progress. -------------------------------------------------------------------------------- Cristopher David Kennedy, William Blair & Company L.L.C., Research Division - Associate [15] -------------------------------------------------------------------------------- Okay. And then another one, expanding beyond the core vending market is a key opportunity for you guys. Can you give an update on the progress you've made? -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [16] -------------------------------------------------------------------------------- We continue to look for those opportunities and continue to kind of sell-in those. We did close the deal in the air vac space in the quarter and between that and then looking kind of a geographic expansion, but we also think we've got, in the near term, a lot of good growth just in the vending space as well. -------------------------------------------------------------------------------- Operator [17] -------------------------------------------------------------------------------- As a follow-up question, we have from Mike Latimore from Northland Capital Markets. -------------------------------------------------------------------------------- Michael James Latimore, Northland Capital Markets, Research Division - MD & Senior Research Analyst [18] -------------------------------------------------------------------------------- Just trying to think through the SG&A line here, you had $16.8 million in the quarter. I think you've mentioned some onetime charges and so forth, but like what was this kind of a good baseline SG&A number to be working with here? -------------------------------------------------------------------------------- R. Wayne Jackson, USA Technologies, Inc. - CFO [19] -------------------------------------------------------------------------------- So this is Wayne. The reduction of the $2.8 million in the -- is real. If you think about we sort of delivered in cash real savings, the $2.5 million professional services while we still have some work to do and that was at a high watermark last year first quarter, but we still have some work to do to convert the work streams to in-house people, but that's real savings. And then that is offset a little bit by a sustained charge on the stock-based comp side, but then the one-offs is the network incentive of about $1.5 million. So you can do the math there to give us sort of sustained SG&A. -------------------------------------------------------------------------------- Michael James Latimore, Northland Capital Markets, Research Division - MD & Senior Research Analyst [20] -------------------------------------------------------------------------------- Great. And then you guided to $170 million to $180 million, reiterated that guidance. Any color on how much hardware might be in the mix there? -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [21] -------------------------------------------------------------------------------- I don't think we want to break out, but I think if you look at with the 2G, 3G upgrade, the hardware there is a decent size. So the success of our upgrades there and driving that will drive -- help us drive that hardware number. -------------------------------------------------------------------------------- Michael James Latimore, Northland Capital Markets, Research Division - MD & Senior Research Analyst [22] -------------------------------------------------------------------------------- Yes. And then I guess just getting back to this replacement notion, I guess, Sean, is that something that is the opportunity to replace competitors in cashless? Is that something that you sort of seen is a new opportunity now in the last month or so because of the 2G, 3G upgrade plus the SaaS or is that something that's kind of always been part of the plan here? -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [23] -------------------------------------------------------------------------------- Well, I think our preference would be is that we didn't have to -- that there was no 3G, 2G upgrade. It is an opportunity for us, and we're doing reviews with every customer of size and our SMB team is working on that. And that's something that's driven by the cellular companies, not by us. So we do see it as an opportunity to potentially replace people. And of course, our competitors see it as an opportunity to replace us. So I've got a lot of confidence in our offering and in our sales team, and we're out there doing battle every day. -------------------------------------------------------------------------------- Operator [24] -------------------------------------------------------------------------------- There are no more questions. Presenters, you may continue with any closing remarks. -------------------------------------------------------------------------------- Sean E. Feeney, USA Technologies, Inc. - President, CEO & Director [25] -------------------------------------------------------------------------------- Great. Thank you, everyone, for your interest in the business, and we look forward to talking to many of you over this evening and over the next couple of weeks, and we're focused on getting to some of the questions that you asked, and you're focused on the right areas of the business, and we continue to be excited about what we're doing and the opportunities in front of us here at USA Technology. So thank you very much. And operator, thanks for your help with the call. -------------------------------------------------------------------------------- Operator [26] -------------------------------------------------------------------------------- You're always welcome. Ladies and gentlemen, thank you all for participating. This concludes today's conference call. You may now disconnect. Have a good day.