TSSI - NASDAQ

Thank you for standing by, and welcome to the TSS Fourth Quarter and Fiscal 2023 Earnings Call. I would now like to welcome John K. Penver, Chief Financial Officer, to begin the call. John, over to you.

Thank you, Mandeep. Good afternoon, everyone. Thank you for joining us on TSS' conference call to discuss our fourth quarter and our fiscal 2023 financial results. I'm John Penver, the Chief Financial Officer of TSS. And joining me today on the call is Darryll Dewan, the President and Chief Executive Officer of TSS. As we begin the call, I would like to remind everyone to take note of the cautionary language regarding forward-looking statements that's contained in the press release we issued today. That same language applies to comments and statements made on this conference call. This call will contain time-sensitive information as well as forward-looking statements, which are accurate as of today, March 28, 2024. TSS expressly disclaims any obligations to update, amend, supplement or otherwise review any information or forward-looking statements made on this conference call or the replay to reflect events or circumstances that may arise after today's date, except as otherwise required by applicable law. For a list of the risks and uncertainties which may affect future performance, please refer to the company's periodic filings with the Securities and Exchange Commission. In addition, we will be referring to non-GAAP financial measures. A reconciliation of the differences between those measures with the most directly comparable financial measures calculated in accordance with GAAP is included in today's press release. Darryll will kick off today's call with an overview, and then I will provide more of a review of our fourth quarter and fiscal '23 results and then turn I will turn the call back over to Darryll to discuss our strategy and direction. Darryll?

Great. Thanks, John. Earlier today, we released a press release announcing our financial results for the fourth quarter and for the full year of 2023. A copy of that release will be made available on our website at www.tssiusa.com. On behalf of the entire TSS team, I'm very pleased to report that we achieved very strong financial results in Q4 and fiscal year that contributed to a strong 2023 as well. As I forecasted in our last earnings call, we anticipated a strong fourth quarter in revenues, operating income, net income, and EBITDA, and we delivered. We achieved our plan and recorded 24.4 million in revenue in our fourth quarter, our highest quarter revenue ever, which helped drive our full year 2023 revenues to 54.4 million. This was a 78% increase compared to our 2022 revenues of 30.6 million. This increase in revenue drove year-over-year improvements in our gross profits, which were up 68% compared to the fourth quarter of 2022, and 1.4 million increase in our operating profits compared to the fourth quarter of 2022 as well as a $1.5 million improvement in our net income compared to the fourth quarter of 2022. For the year, we increased our operating profits by 91% compared to 2022, and we increased our adjusted EBITDA by 60% compared to 2022. We achieved these strong results while making operational and go-to-market strategic investments in the business throughout the year. Our results convinced me that we are taking the right steps to enable TSS to aggressively scale and serve the growing demand for our configuration services business. We have introduced several new services since our last call, including in-field rack integration and cabling services where, based on customer requirements, we can build and integrate rack's and systems on-site at customer locations. We are excited about this growth opportunity as it will leverage our in-house expertise and extend to a more broad market for delivering that quality service on-site at a customer facility. We also introduced a formalized data center move service to enable enterprise customers to outsource the management of data center facility relocation or consolidation. We can arrange the physical movement of sophisticated IT equipment from one location to another using our specialized project management personnel. As we listen to the challenges of our customers having optimizing their investment or IT infrastructure, we will continue to identify additional ways in which we can profitably help our customers. We are witnessing an increase in demand for generative AI-based computing technology from a variety of technology providers, and we are prepared to scale our capacity and increase in this demand. We have modeled plans to scale our data center rack integration business up to 10x over our 2023 rack integration results, and we are positioned to implement them in 60 days. We expect to benefit from this growth beginning in the second half of this year, 2024. So, with that, let me turn it back over to John to provide additional financial info. I appreciate you listening.

Thanks, Darryll. As Darryll said, looking at fourth quarter, the results were very strong with year-over-year growth in revenue, gross profits, operating and net income compared to the fourth quarter of 2022. Our Q4 revenue of 24.4 million is the highest quarterly revenue we've ever recorded and was driven by strong growth in our procurement services business. We also saw improved performance in our system integration business as well. For the financial year, we increased annual revenues to 54.4 million, improving gross and operating profits and EBITDA, and turning our net loss into a small net profit for the year. So, let me go into some of the details. Our revenue for the fourth quarter of 2023 was 24.4 million. This represented growth of 13.5 million, or 123%, compared to revenue of 10.9 million in the fourth quarter of 2022. This was also up substantially from the 8.9 million of revenue we had in the third quarter of 2023. The growth compared to the fourth quarter of '22 was primarily from the $13.2 million increase in our procurement business compared to 2022 and small increases in both our facilities and our system integration businesses compared to the fourth quarter of 2022. We are changing how we describe our procurement service business to make the results more clear for investors, given the revenue volatility that we experience. The total contract value we process in this segment every quarter may be relatively consistent, but our GAAP revenue is heavily impacted by the revenue recognition methodology. It should be noted, while our revenue and cost of sales are impacted by accounting methods, our profit is not. Because we have limited discretion in selecting accounting methods, we will focus for reporting purposes on the total contract value each quarter in procurement services. So the gross value of all the procurement transactions we processed during the fourth quarter of 2023 was $32.6 million compared to $33.8 million in the fourth quarter of 2022. Our recorded revenue increased from 7.6 million in 2022 to 20.8 million in the fourth quarter of 2023. Our systems integration revenue of $2.2 million in the fourth quarter of 2023 were up by 0.5 million or 31% from the prior quarter, as we undertook several AI-related rack integration projects in this last quarter, including infield integration services for an AI customer. The systems integration revenues were up 3% compared to the fourth quarter of 2022 by way of comparison. Our facilities business recorded 1.5 million in revenue during the fourth quarter of 2023. This was up 240,000 or 20% compared to the fourth quarter of 2022, but was down by 19% or 340,000 compared to the third quarter of 2023. This business is materially impacted by the timing and number of modular data centers that we implement or deploy. And 2023 has been characterized by low levels of new MDC deployments and lower levels of refresh activity. Building backlog and increasing sales of new MDC units is a sales priority for the company in 2024. For the year ended December 31, 2023, our revenues were 54.4 million. This was 23.8 million or 78% higher than the 30.6 million in revenue we had in fiscal 2022. Similarly to our fourth quarter results, the majority of this increase in 2023 was attributable to a 25.3 million or 191% increase in procurement revenues compared to 2022, a 1.6 million or 23% increase in systems integration revenues compared to '22, and it was offset by a decline of 3.1 million or 31% in our facilities business compared to '22 due to a decline in the number of MDC deployments that we completed in '23 compared to '22. The gross value of transactions processed in our procurement business was $123.2 million in 2023. This included 188 transactions processed. In 2022, we processed $72.8 million in transactions, which was 98 transactions. We recorded full year revenues of $38.5 million in 2023 compared to revenue of $13.2 million in 2022. Our systems integration revenues were $8.8 million in 2023, increasing by 1.6 million or 23% from the $7.2 million that we had in 2022. The majority of this increase was due to improved pricing and due to an increase in demand during the fourth quarter of the year. Our facilities business recorded revenues of 7.1 million in 2023. This was down 31% or 3.1 million from the 10.2 million that we'd recorded in 2022 and it's comparable to the levels that we'd had back in 2021. Our recurring revenues from maintenance contracts have increased by 24% since 2022 due to a higher number of modular data centers under annual maintenance contracts, and this has helped offset the $3.7 million decrease in one-time deployment project revenue as the number of new deployments has fallen compared to 2022. We anticipate that our level of system integration services, particularly rack integration, will continue to improve in 2024, driven by an increase in AI-based systems and hyperscale computing centers based on forecasts we're getting from our customers. Our production schedule is still impacted by the availability of components needed in production, particularly with regard to chipsets and GPUs and the service for AI applications, as well as fiber optic cables for these projects. Our gross profit margin of 13% during the fourth quarter of 2023 was down from 18% in the fourth quarter of 2022 and down from 32% in the third quarter of 2023.Our gross profit margin is directly influenced by several factors, including the percentage of our total revenue that comes from procurement services. There's an inverse relationship such that an increase in the percentage of our total revenue coming from procurement services will cause a decrease in our overall gross profit margin as the margins on procurement are approximately one-third that as the margins from our integration and facilities businesses. So in the fourth quarter our procurement revenues were 85% of our total revenue compared to being 70% of our total revenue in the fourth quarter of 2022. The gross profit on our integration and facilities businesses was 42% in the fourth quarter of 2023 and this compared to 16% in the fourth quarter of 2022 when we had much higher operating costs in our integration business. As reported earlier our team is focused on increasing our integration and facilities business in 2024 and we expect margins to improve in 2024. Overall in dollar terms our actual gross profit increased by 68% or $1.3 million compared to the fourth quarter of '22 to a level of 3.3. For the year our gross profit margin was 20% compared to 29% in '22 and again this was because of the proportion of revenues that we earned from procurement activities in '23 where procurement revenues were 71% of our total revenues compared to 43% back in 2022. In dollar terms our gross profit improved by $2 million in '23 to $11 million up from $9 million in 2022. Our selling, general and administrative expenses during the fourth quarter of '23 were 2.5 million this was down 57000 or 2% from the 2.5 million we had in the fourth quarter of 2022. On an each date basis, our selling general and administrative costs were $8.9 million up $1.2 million from the $7.7 million we'd had in 2022. These increases were primarily in higher headcount costs, including higher variable compensation costs as our revenue increased. There was also approximately a $1 million in cost and investments made by us during 2023 as we've expanded our sales and leadership teams during the last year to help strategically position the company for future growth. After consideration of all the above, we recorded an operating income of 724000 in the fourth quarter of '23 compared to an operating loss of 723000 in the fourth quarter of 2022. So this was an improvement of $1.447 million compared to the fourth quarter of last year. For the year ended December 31,'23 our operating profit of 1.750 million compared to an operating profit of 914000 in 2022.So this was a 61% increase in operating profit compared to our 2022 results. We had a substantial increase in our level of interest expenses compared to the prior year. Nearly all of our interest expense relates to the procurement business where large transaction receivables are financed for a short period. So the higher volume of business transacted through the procurement business is the main reason for the increase in interest expense. So our interest expense in the fourth quarter was 498 000 compared to 410 000 a year before and for the year, our total interest expense was almost 2 million it was 1.971 million and this was a $1 million higher than what we had the year before. After interest and tax costs we had a net income of 335000 or $0.02 per share in the fourth quarter of 2023.This compared to a net loss of 1.141 million or $0.05 a share in the fourth quarter of 2022. This represents an improvement of 1.476 million in net income compared to the fourth quarter of 2022. And for the year ended December 31, 2023 we had net income of 74000 or $0.00 a share this compared to a net loss of 73000 or $0.00 a share in 2022. Our adjusted EBITDA which excludes interest taxes depreciation, amortization and stock-based compensation was a profit of 923000 in the fourth quarter of 2023 compared to an adjusted EBITDA profit of 90,000 in the fourth quarter of 2022.For the year, our adjusted EBITDA was a profit of 2.651 million, this compared to an adjusted EBITDA profit of 1.662 million in 2022 and represents growth of 989000 or 60%compared to 2022. Now turning to the balance sheet, our overall balance sheet position remains healthy. The timing of events around the procurement transactions has had a material impact on the balance sheet. The changes in our cash and increases in receivables, inventory payables and deferred revenue since the prior year are primarily due to the timing of cash receipts and payments relating to procurement transactions. So the volume of procurement activity was higher at the end of '23 compared to the end of 2022. At the end of 2022 we actually were able to be paid for multiple large procurement projects, but had yet to pay vendors for these same projects and this resulted in an increase of approximately $14 million in our cash and our accounts payable at the end of 2022.So during the first quarter of this year we paid those vendors and our cash and accounts receivable accounts payable balances decreased by the same amount. The increase in inventory and receivables in 2023 compared to last year is really attributable to the timing of in progress procurement projects. With that, I will hand the call back to Darryll for some comments on the fourth quarter and how we see the business evolving in 2024? Thanks, Darryll.

Yeah, great, John, thank you. The end of 2023 marked my 14 months and a very exciting first year with TSS and in the industry. It really was a transformational year for the company. We set the table for growth by investing in the efficiency and scalability of our integration services business as we sometimes refer to as the factory here in Round Rock and our company-wide go-to-market selling capacity. We are proud of our financial results and increases in year-over-year revenue net income in EBITDA but we're not done we're not completely where we want to be yet. I like to say amongst our team our job number one is execution. We will continue to focus our attention on meeting our financial goals and becoming a more recognized and relevant provider of integration services in the marketplace. Resulting of opportunities and markets identified with our OEM partner we have added new service offerings with multiple ways to provide integration services to our customers including our on-site rack integration and our now new data center moves solution. We're very proud of our existing OEM relationship and we're working very hard to grow this relationship in business. Improved brand awareness of TSS and a digital presence in a broader market are on top of our list and are important and so we recently completed a modernization of our website. We published a white paper on friends and data centers. Expect more news and informational updates from TSS. Growth potential in 2024 will be driven by high demand mostly impacting our rack integration business. Our goal will be to see the beginnings of revenue contribution from the data center move offering in its first full year. The pipeline of MDC business is growing but lead times remain long. This is a pipeline to impact the next one to three years. The data center world is scrambling to keep up with the adoption of advanced technology and we still believe our modular data center business is uniquely positioned for growth. The data center market is entering a fascinating phase. The continued growth of the hyper-scale data center market is staggering despite all the investments over the years and analysts forecasting that all the existing capacity will be consumed shortly is inevitable and incredible. However the AI push is demonstrating that the complexity of implementing new technologies is far-reaching. AI infrastructure will likely be different than much of the existing infrastructure. Not will be, it is. The reliance on high-powered GPUs will impact rack design, power, and cooling solutions. Our systems integration business is so well positioned as we are not the cheapest but we are the fastest and the most flexible to support customer solutions. So much of our AI as an example is custom in these early stages. Further existing data centers may be repositioned, reorganized, or moved so our service offering will continue to grow based on the needs of these key customers. We fully expect to accelerate growth in 2024 and beyond to meet the intense demands of this market. So let me hand this call back to the operator who may take any questions you may have. Thank you everybody for your support. We all appreciate your attention on this call and your continued support. Thank you.

The floor is now open for your questions. [Operator Instructions]. Okay, so it does appear we did receive a question. If you could please state your name and your company please?

Hi, this is Maj Soueidan from GeoInvesting.

Thank you. Go ahead, sir.

Hi, Darryll. Thanks for giving us an honest overview of what's been going on here with the company. I have some questions. I think that as you dig into this company a little more and you dig into data centers and everything going on right now with AI, it can get a little kind of overwhelming like where this is all taking data centers and how you might play a role in what's going on here. I think it'd be kind of cool to hear you talk about the different types of data centers that are out there. You get the enterprise level, you got the modular, you have colocation, you have hyperscale. I was wondering if you could talk about what those all are and if you have a kind of a potential growth map. All of them are always specific or parts of that kind of the market segments.

Yeah. Hi, Maj, good to hear your voice. Thanks. And also great question or put plural on that. So let me see if I can break it down for you. I believe the company is uniquely positioned and we sit in the intersection of high-powered computing, high-performance computing and AI. The integration capacity that we have is ahead of us. I think we are in the middle of it. I can tell you that there's some very exciting things going on regarding our rack integration business and it relates to advanced technology, especially around direct liquid cooling and the new AI computers. To answer your question a little bit further on the data centers, we are in conversation with folks who are evaluating their alternatives. And I would say that in general, it's a time-to-market and a time-to-value equation to either expand an existing data center, which as you can imagine, takes time locally through building and extensions and just supply to build out a data center, extend the data center to a co-load, to hyperscale, to some kind of hybrid approach. And I see our potential in that market for the modular world being an alternative to some of the options I just mentioned because of time-to-market and the cost to deploy. So in spite of the fact that there are lead times we've referred to in this call that are longer than we all would like to get power units, to get containers built, the ultimate result is usually a cheaper, better, faster alternative than building out a data center. And that's where we think the opportunity is in the future. And we're working with our OEM partner to do the design work and help facilitate the design work of the solution. And we're focusing in on the deployment piece where we actually go on-site to deploy the modular data center and the sustaining maintenance over three to four or five years of that environment. So that's where our focus is right now. And as I mentioned earlier, we're learning as we go in some of the areas where customers are giving some feedback to us and asking for us to step up and do some things that we didn't do before. So we'll continue to evaluate ways to go expand our service offering. But I think for 2024, you'll see a focus and a result in our rack integration business, our systems integration business, our data center move business, and get that off the ground. We're really excited about the expansion potential of going on-site to do rack integration doing work in colos and other facilities that we formerly didn't do before. So I think the growth is ahead of us. Hopefully that answers your question a little bit.

Yeah. So basically, if you have a -- just to understand things more clearly, if you have now customers that have to make these data center decisions quicker than they had to before, if they don't want to expand their own data center like they have when they had a choice of maybe going to -- like doing a modular, potentially going to like a colocation situation, so you're able to help them in either of those situations is what I'm hearing here now, right?

I think so. Yes. The answer is yes. We're definitely experienced, and we've got -- I think we've deployed over 500 containers over the years, and we've got a little under 200 under existing maintenance support. And the change in the gap between the deployment amount and the existing is technology changed as people have moved things around. And we need to continue to focus on building a backlog in demand for the future, which is our – is really on top of our list. And I think that'll play out over the next couple of three years just because of the lead times involved, the way that our revenue flows for doing sustaining maintenance and deployment.

And what do you think the issue has been like with – I think a lot of your integration work now has been with just, I guess, traditional enterprise data centers. Now that you're there for as long as you've been there at the company now, and you've had a fresh look of eyes, what do you think is different now in terms of your ability to convince customers to go modular where maybe previously that wasn't happening with your sales pitch?

A couple of things. One is we have invested in a demand gen, if you will, it's a nice phrase around the sales capabilities. So, we've got – we've added a couple of folks that are in the selling cycles alongside our OEM customer partner to help facilitate that. We weren't doing that before. So, we have a better line of sight on opportunities, and we can manage the pipeline better. And we are looking for the ways to continue to grow the pipeline. We've, as you may know, published a couple of white papers. We published one white paper about data center trends, and we've got more coming around the modular data center environment. So, I'm excited about the fact that we're taking – that we're taking more action in the selling and being more active in the modular world. And I believe that what we're seeing from the white paper is that we're getting a direct interest from end users, which formerly we didn't – if you think about how we've gone to market in the past, we've aligned completely with a OEM partner, and now we're in a position where we can have direct conversation and then lead into what the right solution is, including the existing OEM partner or others, as the market demands. But hopefully that's answered your question.

Yeah, sure. So, it seems like you've strengthened your relationship maybe with your OEM customer as you've been there. What's your roadmap? Maybe you addressed it in your earlier comments, and I missed the first few seconds of the call. And I know you're obviously trying to get business now outside maybe your OEM relationship and some of these services you're doing by working more directly with customers maybe. But what is -- are there other OEM relationships that you could go after that you haven't gone after in the past? And what does that look like? And is that a – what kind of path do you take to kind of implement that strategy if that's part of the roadmap you have right now?

Yeah, another good question. Are you speaking specifically in the modular space or in general for our business?

I think in general, yeah.

Okay, a couple of things. One is we are – we're excited about opening up conversations with what I call the channel. You know, there's a variety of folks out there that are scrambling trying to do innovation work for their customers, their channel partners, and they don't do it as well as we do, point blank. We can facilitate doing that integration work for rack integration on a customer site. We haven't done that before. Well, recently. That's a broad market opportunity for us.

Okay.

And I think what we can do is leverage our experience. It's not an easy thing to do because when you think about the way all the equipment and componentry comes to our facility in Round Rock, it's – it seems kind of easy, but it's complex. You've got cables and racks coming and servers and technology and storage. And if you get into the security space where we're in now in cyber, you have cyber sensors. And putting that all together and doing it in a way that is with quality and speed and very cost effectively is what we do well. And we're going to take what we've learned in doing that on site. We've experienced on site that people who don't know what we know are challenged. It's complicated and it takes oftentimes longer than a customer wants. So, we're going to continue to focus on taking the expertise we have, leveraging it here in Round Rock in our facility, but where we take it on site is to leverage what we know from our experience here. So, the data center moves business is exciting. We're now getting a lot more attention. We're bidding on many more opportunities than we did a month ago. And I'm excited about that business catching on. The procurement business that John referred to is continuing. We're excited about that. And I would say that overall as a business, we have lines of business that give us multiple routes to market that we can leverage in the marketplace, namely the rack integration business, the modular data center deployment and sustaining business, the procurement business, our configuration and services business, and the new data center move business. You know, we don't want to bite off more than we can chew, but this is very, very exciting for us. We're digging into, you know, a little bit broader segment of the marketplace. So, in order for us, where we're heading is as the demand for AI increases, so does our potential growth. And I believe, and I think you know that from all indications, the AI demand is here for a while. And we're looking forward to fulfilling what we can.

Okay. And I have one more question, but I'll stop hogging the time over here and come back after some more questions.

Okay, cool. Good to talk.

Our next question comes from the line of Sean Marconi [ph]. Could you please state your company name and go ahead, please?

Yeah, I'm a private investor. Hi, Darryll. Nice to meet you.

You too, Sean. How you doing, bud?

Good. Really impressive year-over-year numbers. Hey, Darryll, I'm really interested to understand how you came across the opportunity of becoming the CEO at TSS?

Candidly, thank you for the question. I was introduced to Peter Woodward, who's our chairman, before the opportunity arise and came up and I was, we were talking about a board seat. And at that point in time, I was unable to do it because of the restrictions on the current employer or the former employer. And just, I call it serendipitously, we reconnected after I made a decision to move from my former employer onward and we focused in on the board seat and it turned into an opportunity to be an operating role as a CEO. And, I think maybe to answer your question, I am ecstatic about what we're doing. I think, a lot of the things that we've done in the last year plus to reset our foundation, to prepare for growth, get our quote unquote factory ready to grow capacity. And that's largely on the back of Todd Marrott, who's our Senior VP of Operations. He's a very experienced operating guy. And we've revamped the company. We've had to rebuild the team. We've implemented new programs and focusing on our people and execution and all the things that you want to do is like, is it building a team and providing leadership and support? And I think, so far so good. We're never satisfied. I'm one of those guys that's paranoid. I'm driving my high beams on all the time. We're looking for, the wild animals at night. You're going to drive and jump out in front of your car and you avoid them. So, take that same concept of what we do here, keep your high beams on and look downstream. I'm pleased that we've got good friends in the business that have been very successful that are offering their help. And I'm all ears to, do what we can to grow this company and become more relevant in the market. And I think we're poised in a good spot. The integration of what we do, especially in the AI world and complex technologies is our strength. And the team here is ready and capable of growing significantly. So, that's, how it all came about.

Great, Darryll. Yeah, I just found it really intriguing, on LinkedIn. You're with Dell for just under a decade. And, that's a long time to be with a company. And you were the vice president of global sales and field marketing. And I just find that role to be really interesting that TSS is a small, high growing company. And, I just find this intriguing.

Well, Sean. Yeah, thanks. It is. I'm, in many, many levels, although we've never talked before, maybe we'll get a chat to catch up on some stuff. But I'm a very blessed individual. I'm very grateful about all the things that have come across my way. And I've had an opportunity to lead a great team and to grow a business in this role. And, candidly, I walk around. You ever had one of those roles where you say, boy, if I was running this place, this is what I would do?

Absolutely.

Here we are.

That's awesome. Well, I'm going to jump back into the queue. And I look forward to speaking with you soon, Darryll.

All right, man. Thanks for the call and your comments.

Thank you.

As a reminder, the floor is now open for your questions. [Operator Instructions]. Okay. It does appear we do have a question. If you could please state your name and your company name, and please go ahead, please.

Hi, this is Maj Soueidan from GeoInvesting. Hey, Darryll. One last question, I'll let you go. On your maintenance part of this, your service part of this, which is recurring to some degree, I guess. Can you give us some kind of perspective into what that looks like over the next, few years and where you want it to be and want it to be a significant part of the business? Any new kind of areas you want to focus on to maybe accelerate that revenue? Are there opportunities there to do that?

Yeah, that's a good question, Maj. Because this is your last question, I'm not going to take any more questions from you.

All right.

Our maintenance business is a result of the sustaining contracts we put together over the last number of years with a handful of customers for the modular world, MDC world. Some of those customers and some of the technology is getting long and toothed. And those customers, us, ourselves, and our OEM partner are in conversations to either refresh the technology or to take it offline, meaning it'll be decommissioned. And our job, my job and the team's job is to do quality work and be creative in how long we can extend those agreements and also to backfill them with new agreements. So, I think there's, we know to the container what the renewal dates are, what the technology is, how long it is, how long it's been deployed, and we're working with our partner to go do the things that you would do to either upgrade or decommission. We're not sitting here fat, dumb, and happy going, oh, it's going to continue without a lot of work. The best thing we can do is make sure we provide the kind of support and service we provide to those customers and also backfill them with net new customers that can spread out new revenue, recurring revenue over the next three to five years. That's our game plan.

All right. Thanks, Darryll.

Hi, Maj. It's good talking to you, bud. Thanks for your questions.

There are no further questions at this time. I would now like to turn the call over to Darryll Dewan for closing remarks.

Yeah. Thank you, everybody, for joining. Thank you for your support. I do appreciate the calls that I get from many of you offering suggestions and help and asking questions that can clarify some of the things we talked about here. The industry we're in right now, like I said earlier, we're at the intersection of the computing technology change and the growing demand for AI. We're really excited about what we see coming down the pike in terms of technology and how we can help on the integration side. 2023 was a great year. As an ex-athlete, that's great. What are you doing for me now? So our focus has shifted to 2024 and beyond. We know that we've got an execution focus and a challenge ahead of us. We're investing in operating efficiencies to go meet that challenge to scale and to provide new services. While we're here and where we're heading is the demand, as the demand for AI increases, so does our potential for growth. We've spent a lot of time making sure that we're good with our existing OEM customer. As I mentioned earlier, we want to do more with that customer, doing everything we can to do more. And we're looking for new ways to find routes to market that expand beyond what we've got with our existing customer. So with that, I would say again, thank you. We're pleased with what happened last year. We've got a lot of work to do to grow on top of that this year, which we are planning to do. If anybody has any other questions, feel free to reach out to me. Otherwise, I think we're good for today. I appreciate everybody's attention.