III - NASDAQ

Good morning, and welcome everyone to the Information Services Group Fourth Quarter 2023 Conference Call. This call is being recorded and a replay will be available on ISG's website within 24 hours. Now I'd like to turn the call over to Mr. Barry Holt for his opening remarks and introductions. Mr. Holt, please go ahead.

Thank you, operator. Hello, good morning. My name is Barry Holt. I'm a Senior Communications Executive at ISG. I'd like to welcome everyone to ISG's fourth quarter conference call. I'm joined today by Michael Connors, Chairman and Chief Executive Officer, and Michael Sherrick, Executive Vice President and Chief Financial Officer. Before we begin, I'd like to read a forward-looking statement. It is important to note that this communication may contain forward-looking statements which represent the current expectations and beliefs of the management of ISG concerning future events and their potential effects. These statements are not guaranteed of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. For a more detailed listing of the risks and other factors that could affect future results, please refer to the forward-looking statement contained in our Form 8-K that was furnished last night to the SEC and the risk factors section in ISG's Form 10-K covering full year results. You should also read ISG's annual report on Form 10-K and any other relevant documents, including any amendments or supplements to these documents filed with the SEC. You will be able to obtain free copies of any of ISG's SEC filings on either ISG's website at www.isg-one.com or the SEC's website at www.sec.gov. ISG undertakes no obligation to update or revise any forward-looking statement to reflect subsequent events or circumstances. During this call, we will discuss certain non-GAAP financial measures, which ISG believes improves the comparability of the company's financial results between periods and provides for greater transparency of key measures used to evaluate the company's performance. The non-GAAP measures which we will touch on today include adjusted EBITDA, adjusted net earnings, and the presentation of selected financial data on a constant currency basis. Non-GAAP measures are provided in additional information and should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. For the reconciliation of all non-GAAP measures presented to the most closely applicable GAAP measure, please refer to our current report on Form 8-K, which was filed last night with the SEC. And now, I'd like to turn the call over to Michael Connors, who will be followed by Michael Sherrick. Mike?

Thank you, Barry, and good morning, everyone. Today we will review our results for the fourth quarter and full year, including our recurring revenue growth and our strong Q4 cash generation, our investments in two growth initiatives, enterprise AI and next-generation sourcing, and the current demand environment and our outlook for the first quarter. Although our fourth quarter was soft, 2023 was largely a successful year for ISG. We grew our top line 2% in an industry that was down 6% last year. We advanced our recurring revenues by 16%, and we invested in two growth areas, enterprise AI and next-gen sourcing. For the full year, ISG delivered record revenues of $291 million. Given the overall IT and business services industry was down 6% last year. As reported by the ISG Index in January, we consider our top line growth of 2% to be solid. Our strategic investments in recurring revenue streams continue to pay off. For the year, we generated record recurring revenues of $125 million, up 16%, driven by our research and ISG platform businesses. Recurring revenue represents 43% of our total firm-wide revenue, up 500 basis points from the prior year. Our Q4 results, $66 million of revenues and adjusted EBITDA of $6 million, were impacted by slower client decision-making due to the uncertain macro environment, as well as the advent of AI, which is extending sales cycles. More on that latter point in a moment. During Q4, we saw growth in our research, platforms, and software advisory businesses, and in our consumer services and public sector industries. Recurring revenue represented 45% of our total firm-wide revenue for the quarter. We also generated nearly $10 million of cash in the fourth quarter, the highest amount to end the year since 2019. Now, a further word on the demand environment. It's easy to understand how current macro conditions are impacting client decision making. What's less evident is the impact of AI on the market. And we have seen this before, most recently with the advent of cloud computing. It takes a while for the market to adjust to a major new technology. For many enterprises, knowing how to apply and govern AI is a challenge. They need time to understand the practical applications and see the potential for ROI before they go all in. Much of the hype today is around generative AI. But other forms of AI are already taking root. Clients are asking us to embed AI in almost all of our sourcing transactions in areas such as AIOps and AI enabled applications. They are also seeking data and AI capabilities to experiment. To take full advantage of AI, however, however our clients need to see the big picture and create a strategic plan for adopting AI at scale. And this is where ISG comes in. ISG launched a new enterprise AI advisory business at the start of this year to guide clients through the intricate maze of AI adoption. We brought together our trusted experience in technology sourcing, our deep expertise in AI, and our broad access to the provider ecosystem to create a new and unique approach to sourcing AI. Clients are relying on our experts to establish their AI strategy, set guardrails, identify use cases, and build their AI ecosystem. And to ensure we are capturing new opportunities, We have skilled up our workforce, training and certifying more than 1,200 of our employees in enterprise AI during the fourth quarter. Demand for AI and digital transformation is growing. Our pipeline, though slower to close, is 14% larger now than it was last year. Our other key investment is in our new sourcing platform. Yesterday, we announced the launch and availability of ISG Tango, the first fully integrated digital platform designed to simplify and expedite sourcing. ISG Tango is the result of a year-long development effort. It digitizes all elements of ISG FutureSource, the industry's most respected sourcing process and methodology from initial service scope to provider selection to contract creation and signature. The new platform leverages ISG's market-leading transaction data, provider evaluations, and market insights, and includes a virtual deal room to secure document exchange and user interaction. Powered by AI, ISG Tango also automates contract creation and provides real-time predictive insights to streamline the entire transaction process and accelerate time to value. Because of its ability to scale, ISG Tango will allow us to capture more unadvised transaction activity over the next few years among our current G2000 clients. And for the first time, it will allow us to penetrate the underserved mid-market, which spends about $130 billion on technology and business services annually, most of it through unadvised transactions. This is an exciting new development for ISG. We expect ISG Tango to help us expand our margins in line with our other elements of our ISG NEXT operating model. Now turning to our regions, the Americas delivered $40 million of revenue in the quarter, down 8% versus the prior year. For the full year, revenues were $173 million, up 4%. During Q4, we saw double-digit growth in our consumer, public sector, energy, and utilities industry verticals. And among our services, research was also up double digits. Key client engagements during the fourth quarter included Centene, US Steel, Carnival, and Safe Life. During the quarter, a global hospitality and entertainment company awarded ISG a strategically important data analytics and AI engagement. Our work will help this client leverage recent advances in AI to support personalized marketing and optimize their operations. We were also selected by a US state government to support an upcoming implementation of a new statewide ERP system for finance and procurement. Turning to Europe, our Q4 revenues of $20 million were down 15% from last year. For the full year, revenues were flat at $90 million. During the quarter, Europe delivered double-digit revenue growth in our banking industry vertical and in our network and software advisory business. Key client engagements in Europe in the fourth quarter included the financial services firm IQ-EQ, Nestle, Volkswagen, and Deutsche Bahn. In the fourth quarter, we expanded our already robust relationship with a European CPG company by delivering a nearly $2 million software advisory engagement. We helped this client renegotiate its worldwide contracts with SAP, Microsoft, DocuSign, and Adobe at a savings of more than $10 million, and we began an assessment of the company's procurement and vendor management organization to generate ongoing sustainable savings. Now turning to Asia Pacific, our Q4 revenues of $6 million were down 12%. For the full year, they were down 5% to $28 million. In the fourth quarter, we saw double-digit growth in our banking and manufacturing industry verticals. Key clients in the quarter included the Australian Taxation Office, the Department of Home Affairs, CBH Group, and Insurance Australia Group. In Q4, ISG delivered a sourcing advisory and software negotiation support to a leader in the Australian grain industry for its transformation journey from legacy SAP to S/4HANA. Now let me turn to guidance. We expect the market to accelerate over the course of this year as inflation continues to cool, central banks respond, and clients become more comfortable with AI decision making. With this in mind, for the first quarter, we are targeting revenues between $65 million and $67 million and adjusted EBITDA between $6 million and $7 million. I would point out that we will face a difficult comp with our record first quarter last year. Based on our next two-year business plan and in anticipation of accelerating demand and the margin impact we expect from ISG Tango, We remain committed to driving toward our target of a 17% adjusted EBITDA margin for the firm by the end of 2025. So with that, Let me turn the call over to Michael, who will summarize our financial results. Michael?

Thank you, Mike, and good morning everyone Before I begin I want to provide some context on a bad debt reserve we took in the quarter. During the fourth quarter, we recorded a reserve for bad debt of $4.8 million related to collections from a Dubai-based client that were past due and for which we were unable to agree upon a revised payment structure. I want to stress that this is a reserve. We are early in the collections process and that we are pursuing collections of the full amount owed. We will use all channels, legal and other, available to us towards such collections. Now onto the details of the quarter. Revenues for the fourth quarter were $66.2 million, down 11% compared with the fourth quarter last year. Currency positively impacted reported revenues by $0.7 million versus the prior year. In the Americas, reported revenues were $40.1 million, down 8% versus the prior year. In Europe, revenues were $20.2 million, down 15%. And in Asia Pacific, revenues were $5.9 million, down 12%. Fourth quarter adjusted EBITDA was $5.9 million, down from $11.1 million last year, resulting in EBITDA margin of 8.9% compared with 15% in the prior year's fourth quarter. ISG had a fourth quarter operating loss of $3.5 million compared with operating income of $7.2 million in the prior year. Our reported net loss for the quarter was $2.9 million, or a loss of $0.06 per fully diluted share, compared with net income of $4.3 million, or $0.09 per fully diluted share in the prior year. Excluding the previously mentioned reserve, net income and GAAP EPS would have been $0.8 million and $0.02 per fully diluted share respectively. Fourth quarter adjusted net income was $3.1 million or $0.06 per fully diluted share compared with adjusted net income of $6.5 million or $0.13 per fully diluted share in the prior year's fourth quarter. Headcount as of December 31, 2023 was 1,518, down 32 professionals or 2.1% from the third quarter. Consulting utilization for the fourth quarter was 65%, impacted by slower client decision making in the quarter, and our retention of advisory talent. Our full year utilization was 70%. Even with some cost cutting moves in Q4 and Q1, we are maintaining our core strength in advisory services, retaining the key talent we need when demand begins to accelerate this year. Our balance sheet continues to be solid and provides us with the flexibility to support our business over the long term. For the quarter, net cash provided by operations was a solid $9.7 million and $12.3 million for the year. We ended the quarter and the year with $22.6 million of cash, up strong from $18.7 million at the end of the third quarter. During the fourth quarter, ISG paid dividends totaling $2.2 million and repurchased 1.7 million of ISG shares. Our next quarterly dividend will be payable March 29th to shareholders of record as of March 19th. We ended the fourth quarter with a debt balance of $79.2 million, unchanged from Q3. Importantly, we remain comfortable with our debt to EBITDA ratio. Our average borrowing rate for the quarter was 7%, up from 5.2% last year, and we ended the quarter with 49.7 million fully diluted shares outstanding. Mike will now share concluding remarks before we take Q&A. Mike?

Thank you, Michael. To summarize, ISG achieved record revenues and grew our recurring revenues by 16% in 2023, despite Q4 results that were impacted by slower client decision making. We had an outstanding cash quarter in Q4, generating almost $10 million of cash. We made investments in both enterprise AI and next-gen sourcing to accelerate our growth. We are excited and optimistic about the future. We expect client demand to accelerate over the course of 2024 as macro additions improve and clients become more comfortable investing in AI. Overall, we have a solid business plan in place to enhance our growth and profitability, and we remain confident in reaching our stated objectives. As always, we are focused on creating shareholder value for the long term, and we are steadfast in our mission to deliver operational excellence to our clients. So thank you very much for calling in this morning. And now, let me turn the session over to our operator for your questions.

[Operator Instructions] And your first question comes from the line of Dave Storms from Stonegate. Your line is open.

Good morning.

Good morning, Dave.

Just hoping we could talk about the sales cycle a little bit. I know you mentioned that clients are taking their time making decisions. How willing are you to negotiate on things like price and terms to get those sales over the line?

So, David, first of all, I think it's not a matter of price. The challenge from clients is what we are seeing is there's a lot more variables that they want to consider primarily around AI. They want to understand some use cases. They want some tutorials. And they need to be educated on how AI before they enter into a multi-year agreement with a tech provider. That's an added feature. It's going to be a good feature for the enterprise and it's going to be good for ISG. But what it does instead of moving right straight ahead into let's move on a transaction, let's understand what the ecosystem is. It is being slowed down by a bit more on the AI and understanding what that is, because AI will be a solution, part of the solution of every deal. So I don't think it's price. I think that the slowdown is both a macro or the confidence level to move forward on things that's a little more discretionary in some cases is slower. And then also, we are educating and tutorializing, if you will, and providing use cases to our clients around AI. So I think that's really where the sluggishness, if you will, of decision making, not around price.

Understood. That's great color. Thank you. And then just I want to look back at the acquisition you made last quarter. Is there any update you can give us there about customer acquisition and how that integration is going? I know that opened up a lot of white space for ISG. And so, just hoping for an update there.

Yeah, Ventana Research outstanding as we mentioned when we acquired the asset, Ventana kind of gives us more access to the $800 billion software industry. They are a terrific team of about two dozen analysts that understand software. They are a key part of the future of part of our recurring revenue streams because of the research associated with that segment. And as you can see with the overall research part of the business, is part of our recurring revenue and it's been growing at double digits. So we are very pleased. It's early stages. It's early stages and we can't be more pleased with the team and what they bring to the table.

Your next question comes from a line of Michael Mathison from Singular Research. Your line is open.

Good morning, you guys.

Good morning, Michael.

Yeah, a difficult macro environment. Congratulations on your resilience and doing better on the market as a whole.

Thank you, Michael.

A couple of questions for you. You really intrigued me with the idea of Tango that's potentially transformational, opening up a lot of transactions that you're not currently a part of. Do you have pilots lined up already?

Yes, we are -- we have been beta testing this with a few clients that we are active in today. And just to put some parameters around this, our view of ISG Tango, this platform, is it's going to provide two new opportunities for us in addition to being more efficient. The two new opportunities are taking our current client base, where they have smaller technology deals and we are thinking of it as kind of less than $5 million of ACV a year. So some of these things are two and three years. So think about it as $10 million or $15 million-type contracts that the G2000 have that we have not really been able to tap into in an efficient way that we think Tango will allow us to then expand with the current client base. And then secondly, the mid-market. And the mid-market, think about it, certainly well below $10 billion of revenue, but probably closer to the $5 billion and under. Again, same kind of parameters, less than $5 million of ACV. That mid-market is essentially unadvised. And our sense is using the platform that we will be able to penetrate the mid-market at a much different price point for them and a good margin for us, where it's a lighter touch, but we will be able to have an access to that area. So that's how we think about Tango as we think about our margin target that we set for ourselves internally which is to try to get to about 17% at the end of next year. We think Tango will allow us part of that way by margin expansion. So that's how we think about it, Michael.

Interesting. Thank you. Turning to the macro environment, we're nearly to the end of Q1. Do you see any signs yet of stabilizing in the revenue environment? If so, in which geographies and which verticals would stand out?

You want to take that one, Michael?

Yeah, no. I think you meant me, I'll take that one for you. Yeah, no, Michael, I think we've seen as Mike noted, we've seen the strength in recovery in terms of pipeline, right? So the demand is there, it's the decision making. I think that, we're pleased with what we're seeing in terms of building that pipeline and progressing it, really in both Europe and the Americas. I mean, Asia-Pac, I think, is more stable, if you will. So I think we feel good as we look at it. It really just comes down to the client decision-making component, right? It's how quickly they make that decision and we're able to begin the projects and burn the revenue. So I don't think it's really that different by geo, to be quite honest. I think we're looking at the same. I think last year we saw softer in Europe. That has improved in terms of the pipeline and what we're seeing there.

You should not see it in the first quarter. That's why we gave the guidance we did. So you should see this as an acceleration as we progress through the year, Michael.

Got that. Thank you. Well, thanks for all the color, and good luck in the coming quarters.

Thank you.

Your next question comes from a line of Vincent Colicchio from Barrington Research. Your line is open.

Yeah, Mike, curious how you would wait the two factors, you know, comfort with AI and general economic concerns in terms of holding back better spending for the balance of the year.

Yeah, I don't know if I could wait at Vince, but I would say there's two things. The slower decision making clearly is the macro cloud. The confidence level to move forward on transformation at a pace is not quite there yet. And that's why I've said before, I think if there is some movement around rate cuts, that it will add a level of confidence to the buying community that things are on its way back. So that's one part of it. The AI piece is just a bit of a slowing down of how you can pace it. So we are started in the number of clients around AI, around helping them with their sourcing strategies. But they want to be educated because they want to be able to use AI to their benefit. Now, the providers themselves are going to want to try to take some of that AI margin for themselves. And of course our role from an enterprise standpoint is we want to get the enterprise to be able to recover that AI productivity. So in order to do so, they want to make sure they understand what is there, what is possible, how fast could it happen, and if I sign a three or four or five-year contract with a large technology provider, what can I expect to have in terms of AI productivity and how will I benefit as an enterprise? So that would be how I would distinguish the two events.

And if we look at the pipeline, I think you said it's been improving. Are you seeing a better mix away from cost reduction or is that still a relatively high portion of the mix?

No, it's still a heavy mix. I would say that the transformation piece is picking up. So the balance is getting closer on transformation in the pipeline. And I think what we'll see as the year progresses, I think we'll start seeing the pipeline in the back half of the year to be heavier on transformation than cost.

And the Dubai client, are they a financially distressed client? Just kind of characterize just how you feel about being able to ultimately collect from them.

Yeah, no. So we have no knowledge that the client has any financial issues or is unable to pay. The reserve was really a function of the aging of the receivables and the inability for us along with the client to agree upon a revised payment plan and really at that point we felt it was appropriate to take the reserve, but it has nothing to do with any knowledge or understanding of an inability to pay.

And then one last one, Mike. What verticals do you feel best about for the year, would you say?

Well, right now, manufacturing is very hot, for sure. I think utilities are also leading a bit of the pack. And interestingly, the public sector is moving. As you know, they tend to be the laggard. Everybody else moves at pace and the public sector usually is a slow, slow follower. But we're seeing some good growth in the public sector area, and that very much could be a double-digit grower this year, both in the US and outside the US. Those would be the three areas in particular. And maybe consumer services, I would probably add, Vince. So those would be the areas.

And is UK part of that? I know you used to do a lot of business with the UK government.

Yes. I would say the UK, the Italian government, Australia for sure. During the back half of the year, we have a number of things in the pipeline in Australia. And certainly at the state level, we just, I think, mentioned one of them. We just want a pretty good size deal in one of the states. And they're also wanting to understand how they can transform, how they might be able to use AI, how they can protect themselves so that there's guardrails. There's a lot more protections and compliance issues on the public sector, but they are now beginning to move around, if you will, at a little bit faster pace than they have over the years. That's why we're pretty bullish on what we're seeing on the public sector.

Thanks, Mike.

Thanks, Vince.

Your next question comes from a line of Joshua

Good morning, guys. I'm taking over for Joe today.

Yep, good morning.

Hey, so I kind of just want to start off just by looking at just America, obviously, down during the quarter. Was it just, as obviously you guys talked about the slow decision-making, was it just that? Do you kind of see any more things happening where it may be trending down first quarter bleeding into 2024? Just kind of a little color on that.

Yeah, no, look, I think all the regions have a bit of slower decision-making, and I don't -- they're not -- no region is immune to it at the moment. So I would say, though, if you took the Americas overall for the year, they're up 4%. And considering where the overall market was, which was down about 6%, we think the Americas had a strong performance. And frankly, Europe being flat for the full year in that kind of a market, it's not what we are used to, clearly, historically. But considering the market conditions, I wouldn't differentiate by region at the moment.

Okay. And just looking at the income statement, I saw SG&A expenses kind of went up pretty much over 25%. Can you kind of provide a little color as to why that could be?

Yeah, the biggest component to that is that the reserve that we took is in that number. So if you normalize for that, you'll see that SG&A was up probably a little under $1 million. And that was, as we had all discussed, I think post the call last time, we had our several internal events that take place in the fourth quarter that had not taken place pre-COVID. And so we had expected that sequential increase absent, again, the reserve.

Okay, perfect. And then the last one from me guys. Yeah, we talked about these ISG Tango, and all the [ASF] (ph). But I was wondering if you guys have any updates on the training as a service now?

Yes, good question. Training as a service, we just won a very large deal with one of our largest automotive clients. It's a multi-year, multi-million dollar deal. We're very bullish on what we call TAS, the training as a service. So yeah, that is moving along nicely and most of it is recurring multi-year type agreements. So that's the push on that. And that, of course, is helping our overall recurring revenues.

Yeah, thanks, guys, for taking my question.

Yep, thank you.

Your next question comes from a line of Marc Riddick from Sidoti & Company. Your line is open.

Good morning.

Morning, Marc.

So I wanted to circle back to Tango for a moment. Could you talk a little bit about sort of the -- sort of how you view that as rolling out as far as the fields that you're going to need to -- the type of investments you're going to need to make in the adding of headcount or any potential services or things that you see underneath that umbrella that you'll be investing in throughout the year?

Yeah, good question. So the Tango platform version 1 is done. We developed it during the course of kind of under wraps on purpose for competitive reasons during 2023. So it is ready and it is going to be, it's being soft launched now. We have some beta clients that are using it. Keep in mind what this is, is that this takes our provider research, our market intelligence, what we call our candidate kind of provider qualification system. It's known in the industry as CPQs. And we load it all into the platform. It's fully integrated. And then it allows the enterprise, plus the bidders, if you will, on the service side, and ISG then, to be able to use a platform to be able to go from beginning to end and execute a transaction. That's the beauty of it. It's secure. It's got its own data room. It uses all of our data collection capabilities. You can team interact, et cetera. So that's kind of version 1. These things always have add-ons and you make changes. So we would expect, I would call it a small kind of capital spend each year and think about it in a $0.5 million range, not much greater than that. And in terms of people, no, we have the talent. We've taken one of our most senior partners to lead our global effort around ISG Tango. And our plan is that we will be easing it out here kind of during the first several months of this year and then our plan is that this will be the platform that we will use for every transaction, sourcing transaction that we have going forward. So that's the idea. That will eliminate Excel spreadsheets. It eliminates a lot of different conversations. It eliminates a lot of kind of off each unit or each party doing different things in a different way. So it will be much more productive. And frankly, we think it will speed for the enterprise to get real value out of the decision at a faster pace. So that's the beauty of this. And we will see it unfold here over the months ahead.

Great. And then in the prepared remarks, well the press release definitely I think and the prepared remarks as well, you mentioned as far as some of the client wins and around AI related engagements. I was wondering if you could talk a little bit about maybe some of the things that maybe drove some of those wins and maybe how you see sort of the competitive environment for winning those engagements at such an important and opportune timeframe?

Yeah, so look, I think first things that we did is we had to make sure that our clients understood that we were educating ourselves. We were getting access to all of our technology providers, understanding what they each were doing around the AI area. We began to -- we did some research. You may recall that we launched late in the third quarter last year around AI globally. And so I think that has helped us. So we were able to get into things like we're in a global hospitality and entertainment company. There they want us to be able to use AI to have the user interface be smarter and quicker with their customer base. A major kind of global oil and gas company down in Houston, Texas, wanted us to understand how they might be able to use AI as they think about their oil drilling capabilities. What would be the ecosystem? Who might be out there relative that could help them from an AI standpoint? Who are the providers, the upstarts, the new players? So creating an ecosystem, an AI ecosystem, is also part of the key to all of this. Just like we have an ecosystem to do ops, we have an ecosystem to do applications and HR and so forth. They're looking to ISG to create this ecosystem where they can tap into who are the players that can help me in my particular industry specifics. We have a European utility company, a Canadian bank. We have a railway company in Europe. These are the kinds of companies invoicing almost every industry that was wanting to understand how AI might be able to help them in their ops, in their applications, and in their customer experiences. Hopefully that helps a little bit more.

Yeah, absolutely. And then the last one for me is shifting over to use of cash. I mean, we had the purchase of Ventana late last year. Maybe you could talk a little bit about maybe what you're seeing as far as acquisition pipeline as to availability and valuation and whether or not there's opportunities in general and then maybe a little more specifically around your AI journey as well? Thanks.

Well, let me comment on the M&A and then I'll ask Michael just to comment about our use of cash in general. But right now, the M&A environment, we continue to look at areas that we think can add recurring revenue streams or in the area of digital, which includes AI for us. If you think about what we just did with Ventana Research, the reason is they have recurring revenues into the software industry, and it's a large industry. So we continue to look at that. We are always pretty disciplined around our pricing, and that's why we danced for quite some time. We're pretty balanced. We know what we want to do and at what levels we need to do it at. And so the pipeline is still quite good for us. We're continuing to look, but we also are very measured in our approach, and it is still part of our overall string of pearls strategy. Michael, do you want to just comment overall?

Yeah, no. I mean, overall, Marc, I mean, no change to our uses of cash. As you know, we really have four areas we can put it, dividend, M&A, debt pay down, and buy back. And I think as you've seen, we've been opportunistic across those just based on return and where we think the greatest value will be created. So really no change there.

Great. Thank you very much.

And I'm showing no further questions. I'll turn the call back to Mike Connors for his closing remarks.

Okay, well thank you. Let me close by saying thank you to all of our professionals worldwide for their dedication to our clients and for working together as a global team to deliver a largely successful year in 2023. Our people have a passion for delivering the best advice and support to our clients as they continue their digital and AI journeys in both good times and in more uncertain times. And I could not be more prouder of them and what they have all accomplished. And thanks to all of you on the call today for your continued support and confidence in our firm. Have a great rest of the day.