SKIL - NYSE

Greetings and welcome to Skillsoft Second Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chad Lyne, Head of Investor Relations. Thank you. You may begin.

Thank you, operator. Good afternoon and thank you for joining us today for Skillsoft's earning call to discuss our results for the second quarter ended July 31st, 2023. Participating on today's call are Jeff Tarr, Skillsoft's Chief Executive Officer; and Rich Walker, Skillsoft's Chief Financial Officer. Today after market close, Skillsoft issued a press release announcing its financial results, which is available on our Investor Relations website. Before I hand the call over to Jeff, I want to remind you that today's call will contain forward-looking statements about the company's business outlook and expectations, including statements concerning financial and business trends, our expected future business and financial performance, financial condition, and market outlook. These forward-looking statements and all statements that are not historical facts reflect management's current beliefs and expectations as of today and therefore are subject to risks and uncertainties that could cause actual results to differ materially. For a discussion of the material risks and other important factors that could affect our actual results, we refer you to our most recent Form 10-K and 10-Q filings with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements or information which speak as of the respective dates. During the call, we will also discuss certain non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures included in today's commentary to the most directly comparable GAAP financial measures as well as how we define these metrics and other metrics is included in our earnings press release, which has been furnished to the SEC and is also available on our website at www.skillsoft.com. After our prepared remarks, Jeff and Rich will be available to take questions. With that it's my pleasure to turn the call over to Jeff.

Thanks, Chad. Good afternoon and thank you for joining us. Our team executed well in the second quarter. Bookings and revenue were both up for the total company, driven by high single-digit bookings growth and our high margin SaaS-based content and platform segment. Further, I'm pleased to report bookings and revenue were up sequentially in our instructor-led training or ILT segment, which we believe is now positioned for a return to growth on a year-over-year basis. On the bottom line, we continue to lead our industry peers in profitability with adjusted EBITDA up on both the dollars and margin basis compared to the first quarter. As I'll share today, Generative AI has emerged as a new catalyst for growth. This important technology has created a new critical re-skilling opportunity with customers and prospects that plays to our strengths and that we have been quick to seize as an organization. Our LTM dollar retention rate was 101%, up 300 basis points, and is a testament to the value we deliver to customers. We secured several seven-figure contract renewals in our federal government business, a multimillion-dollar renewal with an international logistics and package delivery company, an expanded relationship with an international food products distributor, among others. We continue to win new customers on the strength of our enterprise-grade solution. During the quarter, more than 140 new customers chose Skillsoft to support their enterprise learning and workforce transformation imperatives. New customer wins included six-figure contracts with a global specialty chemicals company, a leading provider of helicopter transportation solutions, a world leader in systems to lower carbon emissions, a global insurance claims settlement provider, and an international provider of products for sustainable mobility. New customers like these are telling us that our ability to deliver on their complex workforce transformation needs is unrivaled due to our unique integration of assessments, microvideos, hands-on learning, coaching, and instructor-led training all on our cutting-edge AI-driven learning experience platform. While industry peers focus primarily on catalogs of video content, we are increasingly winning based on our ability to deliver transformative learning experiences with measurable learning outcomes and tangible business results, all built on a scientifically validated approach designed and optimized for the way people learn online. Our unique competitive advantage is driving strong growth in usage and engagement across what we believe to be the largest community of enterprise learners. In the past year and a half, we've grown monthly active users nearly 60% and course launches more than 40%, as well as course completion rates that are well above industry averages at more than 80%. Our rich metadata combined with our AI enabled platform and our content creation capabilities, enables us to optimize the learner experience inside the enterprise. As mentioned earlier, one of the important contributors to our growth strategy has been our early move to position Skillsoft to benefit from Generative AI. This technology has created a new re-skilling imperative for our customers. As nearly all companies of scale grapple with the effect it is having on the nature of work. At Skillsoft, we believe that Generative AI will affect every knowledge worker job and the companies and individuals that ignore it will be left behind. We also believe that we have a solid first mover advantage in Generative AI, born out of the fact that we are both a platform developer and content creator that we have a long history in AI, and that we operate across a wide range of modalities and content categories. The strength of our position in this new domain is further enhanced by our acquisition of Codecademy with its hands-on learning platform. Further, preparing individuals and organizations for a world of Generative AI is about more than just the technology and the skills to use it. It is also about leadership and business skills and compliance. And here too, we have unique capabilities that position Skillsoft to lead. I'm pleased with the speed with which our organization has moved to seize the Generative AI opportunity with a shared belief that it changes what we teach, how we teach, and how we work. We now have several dozen AI offerings on Codecademy, and year-to-date have enrolled more than half a million learners in these AI courses. We also recently developed and released a plugin for OpenAI's ChatGPT that recommends personalized and relevant Codecademy courses to users, thus meeting and serving learners from within the ChatGPT interface and expanding the reach of the Codecademy platform. And we've rolled out a ChatGPT Aspire journey designed to equip organizations with the skills needed to use the technology productively and ethically across the enterprise. We've also leveraged Skillsoft's deep library of proprietary content and experience delivering coaching at scale with a beta version of our Conversation AI Simulator, trademarked CAISY, which provides experiential active learning through a Generative AI coaching tool. CAISY helps employees develop business and leadership skills by creating a safe place to practice crucial business conversations with real time personalized feedback. The initial market reaction to CAISY has been tremendous. Quoting the Chief Strategy Officer and Principal Analyst at Brandon Hall Group, a leading industry analyst “Skillsoft's CAISY is the breakthrough technology for leadership development that organizations have been waiting for. It's the most progressive advancement I've seen to date. Skillsoft has effectively combined the on-demand support of a virtual assistant with leadership and management training to create a transformational new way of building interpersonal skills.” CAISY has wide ranging applications and use cases far beyond our initial beta release and I'm excited to see this innovative solution continue to evolve and move into general availability this quarter. As these examples highlight, we are committed to leading the market with innovation that delivers enhanced customer value and outcomes, enables upskilling and reskilling across the enterprise, and develops and grows learners for the jobs of the future. I am proud of our team and the demonstrable progress we are making as an organization. Across the globe, the re-skilling revolution is unlocking new opportunities for Skillsoft and propelling us toward what we anticipate to be a future of accelerating profitable growth and value creation. With that, I'll now turn the call over to our CFO, Rich Walker, to review our financial results. Rich?

Thanks, Jeff. Welcome, everyone, and thanks for joining today. Our teams performed at a high level as we delivered a strong second quarter and achieved an inflection to growth in both bookings and revenue for the total company. We continued making targeted investments to accelerate growth and drive the innovation agenda that Jeff spoke to, while also generating higher profitability compared to the first quarter. Moving now to our financial results. Let's turn first to bookings. Total bookings were $129 million in the quarter, reflecting growth of 4% year-over-year. Content & platform segment bookings of $83 million were up 7% year-over-year and 2% on an LTM basis, with a quarterly expansion led by double-digit growth in our tech and dev offering, which includes Codecademy B2B. In our ILT segment, bookings were $46 million, down less than 1% year-over -year, and a significant improvement over prior quarters. Our Content & Platform dollar retention rate or DRR was approximately 101% on an LTM basis, up approximately 300 basis points from the year ago period. For the quarter, DRR was approximately 99%, up approximately 100 basis points from the prior year, highlighting the ongoing progress the team has made to bring greater value and growth to our customer relationships. As a reminder, given the quarterly seasonality in our renewal base, Content & Platform bookings and DRR should primarily be viewed and assessed on an LTM basis. Moving to the P&L. Total revenue, which lags bookings was $141 million in the quarter, up approximately 0.4% year-over-year and marking an important return to growth for the total company. Consistent with last quarter, approximately 73% of the revenue was in our Content & platform segment and approximately 27% was in our ILT segment. Content & platform segment revenue, which is primarily subscription-based and recurring in nature, grew 4% year-over-year to $103 million with growth across all content and platform areas, including Codecademy. ILT segment revenue declined 9% year –over-year to $38 million as we continued to lap the partner subsidy program change from the prior year period. We are pleased with the progress we are seeing in the ILT business with bookings and revenue growth on a sequential basis compared to Q1 and an expectation that ILT will become a net contributor to total company year-over-year growth as we move into the second half of the year. Shifting to profitability. As we outlined at the start of the year, we are making targeted and strategic investments throughout the business that we believe will drive competitive differentiation, an accelerated growth rate, greater scale, and an industry-leading margin profile over the long-term. And we will always continue to identify areas to simplify our operating model and to enhance our cost structure. I am pleased with our progress on both fronts as we double down in high priority growth areas like Generative AI while dialing back from areas where we aren't seeing appropriate returns. Walking through our expenses, all of my references will be on a non-GAAP basis, with the GAAP to non-GAAP reconciliations included in our earnings press release. Cost of revenue of $40 million or 28% of revenue was up 15% year-over-year, primarily due to courseware and mixed changes in our ILT segment and employee related costs to support the revenue growth in our Content & Platform segment. Content and software development expense of $16 million or 11% of revenue were up 1% year-over-year. Selling and marketing expense of $41 million or 29% of revenue were up 2% year-over-year, with growth in bookings and investments in our go-to-market transformation and in sales enablement activities, being partially offset by facility savings. General and administrative expenses of $20 million, or 14% of revenue, were up 9% year-over-year, primarily due to the timing of a corporate bonus reversal tied to our performance in fiscal 2023. Total operating expenses were $116 million, or 82% of revenue. On a year-over-year basis, operating expenses were up $8 million, or 7%, due primarily to the aforementioned bonus reversal last year. On a sequential basis compared to Q1 total operating expenses were up less than 2%. At the bottom line adjusted EBITDA was $25 million or 18% of revenue compared to $33 million or 23% of revenue in the prior year, which as I noted earlier was primarily due to last year's bonus reversal. We are pleased with the sequential progression and incremental profitability we are driving, with adjusted EBITDA up approximately $4 million and margins up approximately 200 basis points compared to the first quarter of this year. Our gap net loss was $32 million, or $0.20 cents, on a per share basis. Our adjusted net loss was $29 million, or $0.18 per share. Moving to cash flow and balance sheet highlights. On a year-to-date basis, cash flow from operations was $2 million and we invested $9 million in capital expenditures and capitalized internally developed software. As a result, year-to-date free cash flow was negative $7 million, compared to negative $22 million in the prior year period. As a reminder, given the seasonality in our Content & Platform bookings, the second and third quarter are generally cash-consuming quarters, while the first and fourth quarters are generally cash-generative. We ended the second quarter with a solid cash position and ample liquidity, with cash and cash equivalents of $148 million and restricted cash of $5 million. We did not repurchase any shares during the quarter under our share repurchase authorization. Turning to debt and leverage, we had $40 million drawn against our $75 million accounts receivable facility and $586 million outstanding on our term loan facility, which matures in July of 2028. Recall the term loan facility amount on the balance sheet is net of original issue discount and deferred financing costs. Total net debt was approximately $473 million, resulting in net leverage of approximately 4.9 times our LTM-adjusted EBITDA. Wrapping up, I would summarize the quarter as one in which we are proud of how our teams performed. We continued to innovate across the organization and brought differentiated capabilities to market as Jeff shared with you. We delivered year-over-year growth in both bookings and revenue for the total company. Our Content & Platform segment had a solid growth quarter with exciting new customer wins and an LTM dollar retention rate of 101%. We feel our ILT segment has turned a corner with bookings and revenue up compared to the first quarter and an expectation that ILT will return to year-over-year growth in the second half. And we successfully invested for growth while also driving higher adjusted EBITDA sequentially. We are of course mindful that the broader macro remains fluid and dynamic, particularly given the typical fourth quarter seasonality that remains in front of us. That said, given our strong execution year-to-date and our current views for the balance of the year, we are reaffirming our core outlook metrics and our expectations to be free cash flow positive for the full year. As a reminder, our outlook calls for total bookings of $610 million to $640 million, revenue of $555 million to $585 million and adjusted EBITDA of $100 million to $105 million. With that, I'll hand the call back to Jeff.

Thanks, Rich. Before we turn the call to Q&A, I'd like to say a word of appreciation to all of our team members around the globe for their strong performance and their tireless commitment to delivering transformative learning experiences to our customers and their learners. And to our stockholders, we appreciate your support as we continue to make important forward strides in executing our strategy in a way that we believe will generate profitable growth and long-term value creation. Operator, you may now open the call for questions.

Thank you. And ladies and gentlemen, at this time, we'll conduct our question-and-answer session. [Operator Instructions] Thank you. And our first question comes from Robert Simmons with D.A. Davidson. Please state your question.

Hey, thanks for taking the question. So I guess first on CAISY, just to clarify, is it in GA now or is it planned to be between now and quarter-end?

It's in beta today with dozens of customers. It is available on our site for those who would like to add themselves to the beta list. And it will be in general availability within a matter of weeks. Feedback's Terrific.

Got it. Great. All right, cool. And then any color on your churn rate specifically the gross churn. And then can you remind us kind of the -- have a various pieces of churn and upsell pricing kind of fit together for your feed into your net retention number?

Well, we share our dollar retention rate, which is up 300 basis points year-over-year. We don't typically provide more granularity than that. Rich is there anything additional you want to share?

The only point I'd make, it's important to look on an LTM basis because there is a lot of fluctuations in some of the quarters.

In terms of just general color, how to think about it. Our large enterprise accounts have much higher retention. Our SMB accounts have lower retention. So that would be one place where we see a differentiation between different customer categories.

Got it. And maybe can you talk about what you're seeing in terms of pricing at the market? Are you, I think, before you were targeting kind of a bifurcation of the market, are you still seeing that kind of general trends?

And when it comes to pricing, our price increase this year generally was about 6%. But keep in mind, that is on bookings that it's heavily weighted to the fourth quarter that a significant and that our average customer contract length is north of two years. So it does take quite some time for pricing to flow through to revenue and EBITDA.

Got it. Okay. That makes sense. And can you talk a little bit about the Salesforce? You've been ramping up some relatively newer reps. How has that been going and any other color you'd like to share?

Terrific. I'll tell you, what we've been seeing is, first of all, our competitive advantage is strongest with those customers who have the most complex workforce transformation needs and where the skills gaps are most acute. And the reason for that is our blended offering that cuts across microvideos, assessments, instructor-led training, coaching and mentoring and all the hands-on learning tools that we have in our portfolio really lends itself to tackling those significant challenges. To sell that kind of offering, by the way, we also have a professional services arm to sell that requires a Salesforce that is equipped to engage in a consultative sales process that is able to engage at more senior levels in the organization. And so we've been on a multi-year journey to build that capability within our organization. We've made good progress. There's more progress to be made to realize the full potential of what we have in front of us.

Got it. Great. I'll hop back in the queue in case anyone else wants to ask some questions.

Thanks, Robert.

Thank you. Our next question comes from Raimo Lenschow with Barclays. Please state your question.

Hi. This is Sheldon on for Raimo. Thanks for taking our question. First, I wanted to ask generally what you're seeing in the quarter that's underpinning the continued strength in content bookings and particularly how would you balance potential tailwinds from more engagement from things like Gen AI with kind of a consolidation trend? That's something that we've seen from other HCM players kind of consolidating a bunch of point solutions. So given the breadth of your offering, not sure if that's something you're seeing from your customers.

Well, we certainly do benefit from consolidation of point solutions. We benefit from significant win backs from customers that may have made a decision based on price in the past and are coming back to us because they have significant workforce transformation challenges and are focused on outcomes and results. We win when the customer is focused on outcomes and results. We win when the customer has more complex workforce transformation needs that can't just be met with videos or recordings of lectures, but requires deeply understanding the customer's workforce transformation and learning priorities and tailoring the solution to those priorities using the breadth of content that we have and the breadth of modalities. That's where we win. That's where we're winning more and more customers like Kyndryl that we talked about last quarter, customers like the ones that we cited on the call today. And from my perspective, we're really just getting started with that. Now, you also mentioned Generative AI, and what we see with Generative AI is it is opening up a new skills gap within our customer base. Almost every conversation we have with customers these days, AI comes up and the fact that we can address those needs with very complex, complete workforce transformation solutions that combine leadership and business skills, the technology compliance and deliver that at scale, that's an advantage that I believe we have.

Great. And quick follow up. I wanted to ask on the federal pipeline this year compared to last. There's some incremental things that you have. I know FedRAMP on Percipio was last year, but is that leading to better retention of those customers? And then the FedRAMP around the coaching offering. Is that leading to larger deal sizes for the federal pipeline? Any color there going into the big Q3 would be helpful?

The answer to that question is yes and yes. We have a strong lead in the federal government with our offerings, including with coaching. The fact that we're FedRAMP certified with our coaching offering has been a real advantage, as has being FedRAMP certified with our platform and content offering, but an advantage over the last couple of years. So we believe that the federal government business is a strength of the company and we expect to get more and generate more opportunity. In fact later this week I'm going to be in Washington D.C. We have our big perspectives customer event and we have really strong participation from the federal government.

Great. Thank you.

Thank you. Our next question comes from Raj Sharma with B. Riley. Please state your question.

Hi. Thank you for taking my question. Just going back to the Generative AI coursework and how that relates to the upskilling. Firstly, is it a part of the programs and the coursework are part of Codecademy integrated into Percipio or are they the ILT part of the business? And how do they impact retention and business and sort of growth in your customers.

So the answer that's all of the above. We have Codecademy courses that are focused on Generative AI. We have content within the core of our platform and content business that is focused on Generative AI, including very complete learning journeys focused on Generative AI. And also we have ILT courses, a large suite of ILT courses that has been generating growth at contributing to growth in sales in the ILT business. So we're still early and seeing the P&L impact, but we are seeing results and we're seeing uptick and growth and customer conversations and conversions and usage and that's all very encouraging.

Got it. So not a material impact on revenues yet or profits, obviously, but where do you how do you see the impact is in terms of new customers or a greater engagement on the platform and a better retention?

All of the above. We have new customer conversations where a Generative AI offering is a differentiator and a conversation starter. Our ILT business has won some significant new accounts because of the breadth of our ILT offering and Generative AI. We're very excited about CAISY. CAISY isn't about teaching Generative AI, but it's about leveraging the technology to do something new and important in the learning space. So we're very excited about what we see. We see this as a significant tailwind. Rich has something to add.

Yeah, quick one, Raj, building on Jeff's comments in terms of what we anticipate, it isn't only about the technology, it will also benefit our leadership from business skills, CAISY being one example, but it will also become an important compliance area for companies going forward and they're going to look to us to ensure safe, responsible ethical use of the technology through our compliance offerings.

Got it. That's very helpful. Thank you. And then just finally can you give more color on certain customers or groups of customers and certain areas that are getting impacted by any sort of slowdown you see versus areas that are stronger because of the upskilling? So are there are parts of your customer base that are particularly strong or where you can see upskilling a lot and parts where the any slowdown in the economy or geographically so are impacting the business?

The way we look at our customer base is two broad categories. We have the category of customers who have acute workforce transformation challenges and very real skills gaps. For them, our offering is critical to their business. And then there's another category of customers for whom online learning is something that's an employee benefit that it's a nice to have. And that's a smaller and slower growing part of our business. So where we see the opportunity is with those customers who have the most complex workforce transformation needs. That's the largest portion of our customer base. It's the largest portion of our market. It's growing the fastest and that's where we're pointing the vast majority of our resources.

Got it. Thank you. Thank you for taking my questions and good job. Congratulations on reporting steady eddy results.

Thank you.

Thank you. [Operator Instructions] Our next question comes from Ken Wong with Oppenheimer and Company. Please state your question.

Fantastic. Thanks for taking my question. The first one for you, Jeff. I think in the past you guys had touched on how new business perhaps has seen a little lengthening of the sales cycle. I realize total business doesn't depend too much on that, but just wondering if you started to see that that stabilize or improve at all?

You know I would say that new business has been pretty consistent where we've been seeing a big step up and improvement is on the growth of our existing customer base. I'd say on new business, which for us is a smaller part of our business, you know, still is seeing a lengthening of sales cycles and it's a little slower, but it's such a small contributor to the business overall that it's less of an impact on our business than perhaps elsewhere. I do see opportunity to improve our new business growth and we are investing in our sales force and a thoughtful way to, as I mentioned before, move up higher in sales inside our customer organizations and also engaged in a more consultative sales process. And I think that will yield results on the new business side over time.

Got it. Got it. Super helpful. And then, Rich, just on the -- on EBITDA, any anything we should be thinking about in terms of back half seasonality of EBITDA? Just so we kind of make sure we have our models properly tuned.

Yeah. Thanks for the question. I think first I'd highlight that the EBITDA growth from sequentially from the first quarter was an important achievement finding and striking that balance of investing in the business and still giving some back to the results. As you think about the full year, we were obviously comfortable and reaffirming our outlook for the full year. The margin profile that we enjoyed in the second quarter is consistent with what we expect for the full year and I think the expense base will continue to grow to support some of that growth, but the margin profiles not going to materially change. We have about 40% of the bookings in the fourth quarter. It's probably not unreasonable to expect that our second half growth rate quarter-over-quarter will be in line what we enjoyed sequentially in the second quarter and sales and marketing, which we are continuing to invest in is going to drive some of that bookings growth. You won't see the impact of that in revenue, but you'll see it in the expense base.

Got it. Okay. That's all super, super helpful color. Really appreciate it guys.

Thanks, Ken.

Our next question comes from Tom Singlehurst with Citi. Please state your question.

Yeah. Good evening. I'm Tom here from Citi. Thanks so much for taking the question. In fact a couple of questions. I'm going to start with the clarification. I just really we're very clear about the last 12 months that is the quarterly dollar retention rates why we should focus on the former. But just to clarify, 2Q being under 100%, even if it's been approved, is that just a big narrative saying the second quarter is a high period of higher typically is that how you should think about.

Tom, it's a little mumbled, but I think the question that I got was quarterly retention rate compared to LTM retention rate. I'll let Rich share some thoughts. But the important point to keep in mind is Q1, Q2, Q3 are very small and so individual wins and losses or anomalies and how the timing of renewals and such can move that data around. That's why we point dollar retention rate and we've been doing that for quite some time. Rich, what can you say about that?

I just clarify the metrics. The LTM, while below 100%. The LTM was 101% excuse me up 300 basis points, but quarterly at 99% was still up year-over-year. And that trend is noticeable in both the quarter and the LTM, Tom, but I'd reiterate Jeff's comments. The LTM is the more accurate way to evaluate it.

I think I would just note you've seen us focus on LTM whether the quarter was good or the quarter was bad. We've focused everyone on LTM for the last couple of years and we encourage you to continue to use that in the models.

Sorry. Hopefully you can hear me better. The second question was about Codecademy. Some others have talked about dwindling demand for coding bootcamps given soft round markets in terms of employment. I was wondering whether that's something you've seen or whether it's just lost in the mix given the robust demand for AI content?

Yeah. So I got the question again. It's mumbled. So if I don't answer this exactly right, we'll get it afterwards. But I think the question is about Codecademy and how Codecademy is performing. I'll start and I know Rich has some things to share on it. First of all, Codecademy is strategic and critical to our business. We've integrated Codecademy's B2B business into our platform and content business within our B2B tech and dev offering. So it's now deeply integrated the hands on learning as part of what we saw customers alongside the videos and the coaching and mentoring and the other types of learning labs and hands-on learning. And it's all in one package. That was the fastest growing content category within our platform and content business. We've also rebranded out the entirety of our tech and dev offering as Codecademy. That's something we did last quarter and we did that because, well, frankly, Codecademy has taught more people to learn to code than any other organization on the planet. It's a very strong brand and leveraging that brand across the entirety of our tech and dev portfolio made a great deal of sense. Rich, anything you would like to share?

I double click Tom. I heard a portion of the question relating to Generative AI and initially I think that segment will benefit. Importantly, if you look at the total content platform bookings that grew 7% in the quarter, the tech and dev segment actually grew double-digit. And that segment is clearly and that segment includes both the code enterprise and the code B2C business. And that segment benefited certainly from the code attributes.

Very clear. Final question. I'll speak loudly. The cost of AI based tools, is that all embedded in guidance? There's no incremental AI sort of cost coming through.

It's all embedded.

Yeah.

Perfect. Thank you.

Thank you. There are no further questions at this time. I'll hand the floor back over to management for closing remarks.

Thank you, everyone, for joining us. I'd be remiss and not taking note of the fact that today is an anniversary of 9/11 and I do want to express our continuing sense of loss and our gratitude to the nation's first responders. I also want to thank our team members around the world for your hard work and profitably growing our business, seizing the AI opportunity and working together to build on our strong foundation as the global leader in enterprise learning. I also want to thank our customers and I'm looking forward to being together with many of you at Perspectives 2023 this week in Washington DC and of course many thanks to our stockholders. We're very grateful to you as well. Have a good rest of your day.