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Earnings Call Analysis
Q4-2023 Analysis
SS&C Technologies Holdings Inc
SS&C Technologies wrapped up the fourth quarter of 2023 with a commendable financial performance, posting a record adjusted revenue of $1.412 billion, marking a solid 5.5% increase. The company also experienced an impressive 8.6% increase in adjusted diluted earnings per share, reaching $1.26.
The firm's earnings before interest, taxes, depreciation, and amortization (EBITDA) reached the highest level in its history at $563 million for the quarter, with EBITDA margin climbing sharply to 39.8%.
SS&C witnessed notable fourth-quarter revenue acceleration due to robust performance in its Alternatives, Retirement, and Intralinks segments. GIDS and Advent units also contributed to this upward trend.
The recurring revenue growth rate for Financial Services stood at 6.9%, encompassing software-enabled services and maintenance revenue, marking an increase from the 5.9% seen in the third quarter.
In 2023, the company generated $1.215 billion in net cash from operating activities and reduced debt by $150 million in the fourth quarter, which brought down the net leverage ratio to 3.05x and the net secured leverage ratio to a comfortable 2.1x.
The company repurchased 2.4 million shares for $131 million, showcasing a strong commitment to shareholder value and an intention to maintain a focus on share repurchases going forward into 2024.
DomaniRx, SS&C's new pharmacy benefits platform, has gone live and is performing well, processing over 15 million claims in January—exceeding initial projections. This positive start indicates a promising outlook for the platform.
Within the broader surge in revenues, key segments reported exceptional growth: Alternatives grew by 7.8%, Intralinks by 18.6%, and Retirement by 12.8%.
Through digital worker productivity, the company is on track to achieve annual savings of $100 million, underscoring the effectiveness of its automation strategies.
SS&C foresees numerous opportunities within the financial services industry to provide comprehensive solutions to large firms seeking cost reductions and technology enhancements, which has led to new client acquisitions and the potential for market share expansion.
The company's GAAP results were robust, with revenues at $1.412 billion and a diluted earnings per share of $0.77. Additionally, share repurchase initiatives helped reduce the diluted share count to $252.1 million.
Organic revenue growth on a constant currency basis stood at 4.5%, bolstered by a favorable foreign exchange impact and contributions from recent acquisitions.
Despite facing inflationary pressures and increased professional fees, SS&C successfully managed its core expenses, which rose by just 2%, and capitalized on digital worker usage to expand its adjusted EBITDA margin to 39.8%.
The company's net interest expense in the fourth quarter increased by $14 million due to higher interest rates, which led to an average interest rate of 6.93% on its credit facilities.
SS&C Technologies achieved an adjusted net income of $317 million with an adjusted diluted EPS of $1.26, maintaining an effective tax rate of 26%. In spite of a slight decline in annual earnings per share, the company is well-positioned for the future.
With $432 million in cash and cash equivalents and a gross debt of $6.8 billion by the end of the fourth quarter, SS&C exhibits solid financial positioning for future activities and potential refinancing of existing debts.
Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to the SS&C Q4 and Full Year 2023 Earnings Call. [Operator Instructions]. I would now like to turn the call over to Justine Stone, Investor Relations with SS&C. And with that, Justin, -- excuse me, Justine, you have the floor.
Welcome, and thank you for joining us for our Q4 2023 earnings call. I'm Justine Stone, Investor Relations for SS&C. With me today is Bill Stone, Chairman and Chief Executive Officer; Rahul Kanwar, President and Chief Operating Officer; and Brian Schell, our Chief Financial Officer.
Before we get started, we need to review the safe harbor statement. Please note that various remarks we make today about future expectations, plans and prospects, including the financial outlook we provide, constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, which is on file with the SEC and can also be accessed on our website.
These forward-looking statements represent our expectations only as of today, February 13, 2024. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so.
During today's call, we will be referring to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to comparable GAAP financial measures is included in today's earnings release which is located in the Investor Relations section of our website at www.ssctech.com.
I will now turn the call over to Bill.
Thanks, Justine, and welcome, everyone, to our fourth quarter results which are record adjusted revenue of $1.412 billion, up 5.5% and our adjusted diluted earnings per share were $1.26, up 8.6%. Adjusted consolidated EBITDA was $563 million for the quarter, the highest in our history, and our EBITDA margin was up to 39.8%. This is a 300 basis point increase from the second quarter of 2023.
Our fourth quarter adjusted organic revenue growth was 4.5%. The fourth quarter revenue acceleration was driven by strength in our Alternatives, Retirement and Intralinks businesses. We also saw acceleration in GIDS, Advent and businesses. Our recurring revenue growth rate for Financial Services was 6.9%, which includes all software-enabled services and maintenance revenue. This is a sequential increase from 5.9% in Q3.
For the year, total organic growth was 2.8%, and Financial Services recurring revenue growth was 4.9%. Our Financial Services revenue retention remains over 97% on a last 12-month basis. In 2023, SS&C generated net cash from operating activities of $1.215 billion. We paid down $150 million in debt in Q4 2023, bringing our net leverage ratio to 3.05x, and our net secured leverage ratio to 2.1x. We bought back 2.4 million shares for $131 million at an average price of $54.74 per share.
For the year, we have allocated $375 million towards debt paydown and $472 million towards stock buybacks. We anticipate a similar higher focus on share repurchase in 2024. On January 1, DomaniRx, our brand new pharmacy benefits platform went live with our Phase I drug discount clients. We have processed 15 million claims in January, over 10% more than what we had originally anticipated for the month of January and our response time of under 1 second is quite better than industry standards.
We project we will process 45 million claims by the end of the first quarter. Customers who have migrated have [indiscernible] a cutover to DomaniRx was frictionless. Our second release of DomaniRx is scheduled for June 1, 2024 and will include full commercial, Medicare and Medicaid functionality. We are pleased with the successful launch of DomaniRx, and we look forward to adding new clients in the second half of 2024. We also completed a major retirement system implementation with 1 of the world's largest insurance companies.
Regulatory change has driven a lot of activity around our retirement income solution and rollovers. We look forward to capitalizing on this opportunity.
I'll now turn the call over to Rahul to discuss the quarter in more detail.
Thanks, Bill. In Q4, we saw acceleration in revenue and healthy margin expansion. Notably, Alternatives grew 7.8%, Intralinks grew 18.6%, and Retirement grew 12.8%. Our EBITDA margin exit rate was 39.8%, a result of higher revenue growth, cost controls and our digital worker initiative. For the year, we obtained approximately 2,000 full-time equivalents in digital worker productivity, which we expect to yield $100 million savings annually. We are optimistic about our ability to continue to drive additional benefit from digital workers and other automation strategies.
We're seeing a lot of opportunities across the financial services industry as large firms look for ways to drive down costs within their back-office operations while improving their front-end technology. These market dynamics can be beneficial for our GIDS, Retirement and Alternative Fund Services businesses. Across the company, we have focused on offering comprehensive solutions to our customers comprised of multiple products and services in an integrated and holistic way.
As one example, in 2023, we signed 12 Trust Suite clients, a new platform for banks and trust companies combining back office and regulatory reporting from Innovest the front office experience of Black Diamond and our CRM capabilities through Salentica. Similarly, the integration Edge and Eclipse and Advent, Geneva has been positively received. We've also signed over 70 new goods clients in 2023 and bringing the total number of clients on as Eclipse to over 250. We are gaining momentum and have an opportunity to increase market share from here.
I will now turn it over to Brian to run through the financials.
Thanks, Rahul. As noted in our press release, our Q4 2023 GAAP results reflect revenues of $1.412 billion, net income of $194 million and diluted earnings per share of $0.77. And as Bill noted earlier in the call, our adjusted revenues hit a record level at $1.412 billion, up 5.5%. Adjusted EBITDA also hit a record at $563 million, up 8.5% or $44 million, and adjusted diluted EPS was $1.26, an 8.6% increase over Q4 '22. The adjusted revenue increase of $73 million over Q4 '22 was primarily driven by the incremental revenue contributions from Alternative, Intralinks and GIDS.
Our acquisitions contributed $4.1 million or approximately 30 basis points. Foreign exchange had a favorable impact of $11 million or 80 basis points. As a result, adjusted organic revenue growth on a constant currency basis was 4.5%. Our cost structure has been impacted by general inflation, higher personnel costs and increased professional fees compared to 2022. However, by maintaining a cost and disciplined approach, and the use of digital workers, our core expenses only increased 2% or $17 million, excluding acquisitions and on a constant currency basis.
Acquisitions added $5 million and foreign currency added an additional $8 million of expenses. With the combination of our revenue growth outpacing our expense growth, adjusted EBITDA margin of 39.8% reflects both a sequential and year-over-year expansion of 70 and 110 basis points, respectively.
Net interest expense for the fourth quarter of '23 was $119 million, an increase of $14 million from Q4 '22. The average interest rate in the quarter for the amended credit facility, including the senior notes, was 6.93% compared to 5.64% in the fourth quarter of last year. Adjusted net income was $317 million and adjusted diluted EPS was $1.26. The effective tax rate used for adjusted net income was 26%. Share repurchases of $2.4 million helped to drive the diluted share count down to $252.1 million from $253.9 million in Q3. While Q4 reflects strong results, our 2023 annual earnings per share reflects a slight decline of $0.04 per share compared to last year. The single biggest contributor to this decline was the impact of the rise in short-term interest rates increasing interest expense on our debt by approximately $164 million or nearly $0.47 per share on an after-tax basis, assuming a 26% tax rate.
SS&C ended the fourth quarter with $432 million in cash and cash equivalents and $6.8 billion in gross debt. SS&C's net debt, as defined in our credit agreement, which excludes cash and cash equivalents of $100 million held at DomaniRx was $6.4 billion as of December 31 . Our year-end total leverage ratio was 3.05x and our secured leverage ratio was 2.1x. As our term loans be 3, 4 and 5, totaling approximately $3.5 billion, approach maturity in April of 2025, we anticipate refinancing them in the near term.
Also, as previously noted, SS&C generated net cash from operating activities of $1.215 billion, an increase of 7.1%. The increase reflects the incremental earnings as well as improved working capital management.
As we move into 2024 establishing our guidance, Note that we will continue to focus on product innovation and enhancements as well as client service. We assume that retention rates will continue to be in the range of our most recent results. We will also continue to manage our expenses with a cost disciplined approach by controlling and aligning variable expenses to ensure efficiency, rationalizing our real estate footprint, increasing productivity to improve our operating margins to leverage our scale, and effectively investing in the business through marketing, sales and R&D to take advantage of future growth opportunities.
For the full year 2024, we have assumed adjusted organic revenue growth in the range of 2.7% to 6.3%. Foreign currency exchange rates to be consistent with 2023 levels. Short-term interest rates to remain flat through the first half of the year with small declines in the second half of the year. GAAP tax rate of approximately 26% on an adjusted basis, which is unchanged from the prior year. Capital expenditure to be consistent with 2023 at 4.3% to 4.7% of revenues and continued slight overemphasis to share repurchases, similar to how we allocated capital in 2023. As a result, for the full year 2024, we expect revenue to be in the range of $5.668 billion to $5.868 billion; adjusted net income in the range of $1.221 billion to $1.321 billion.
Interest expense, excluding amortization of deferred financing costs and original issue discount in the range of $438 million to $448 million, diluted shares in the range of $252.7 million to $255.7 million, adjusted diluted EPS in the range of $4.85 to $5.15 and cash from operating activities to be in the range of $1.292 billion to $1.392 billion.
For the first quarter of 2024, we expect revenue to be in the range of $1.397 billion to $1.437 billion. adjusted net income in the range of $300 million to $316 million. Interest expense, excluding amortization of deferred financing costs and [indiscernible] discount in the range of $113 million to $115 million, diluted shares in the range of $253.2 million to 254.2 million shares and adjusted diluted EPS in the range of $1.19 to $1.25.
Now I'd like to turn it back over to Bill for final comments.
Thanks, Brian. I'd also like to welcome Walton-Ruskin, Debra as the newest Director on our Board. Ms. Walton Ruskin has had an impressive career at the London Stock Exchange Group, Refinitiv, Thomson Reuters and Thompson Financial. Her expertise in fintech, global market executive sales leadership and financial data fit well with SS&C's strengths and focus. We look forward to collaborating with Debra.
We have recently recruited a senior executive as [indiscernible], who will head up mergers and acquisitions. [indiscernible] has the experience and expertise to guide us in our M&A pursuits. Q4 was a good quarter, and we look forward to reporting throughout 2024. I now will open it up for questions.
[Operator Instructions]It looks like our first question today comes from the line of Dan Perlin with RBC Capital Markets.
Bill, I wanted to ask you a question kind of what's embedded in guidance as you think about jumping off point for organic growth at 3.5% in the first quarter, but then for the full year, clearly ramping to 4.5%. So I'm just wondering what kind of connect the dots to that acceleration as you think about your line of sight going into the back half of the year?
Dan, we got a lot of stuff accomplished in the fourth quarter of 2023, and that gives us a lot of confidence going into '24. We kind of said in our remarks about a large insurance company going live on our track system, and that's going to drive a lot of revenue. We also completed another large retirement system in 2023 and we've been winning an awful lot of the major hedge fund launches and conversions. So we have a lot of stuff that we think are in our pipeline. And we think as that rolls through, that we will accelerate throughout the year to increase organic revenue growth.
That's great. Just a quick follow-up on alternatives. Again, another strong quarter, and you called out private markets continuing to be a key contributor to that. I guess a couple of things, is there a way to kind of contextualize how big that has become embedded in alternatives? And then in that same vein as private equity continues to move down in private credit. Are you having -- are you seeing more success potentially as we think about this year in terms of signing up more within the PE side of the equation?
Dan, I think the whole fund business, hedge funds and private equity funds on the funds is about close to $1 billion in revenue and the private market side, private equity and private credit and now is probably pushing $350 million. So you're getting close to 35%, 40% of our revenue in the funds business coming from private and as you've seen as well as everyone else has seen, there's tremendous amount of money going into private debt, private credit, everything private. And they get better returns. So I mean I don't think that's going to change, and we think we're very well positioned.
Our next question comes from the line of Surinder Thind with Jefferies.
For the first question, just -- in terms of -- as you think about DomaniRx and as you look ahead through the rest of the year, is there anything within guidance that you've included there? And how should we think about the progression or the uptake of the business as you think about this year versus next year?
Well, I think the rollout was as close to flawless of any of the rollouts we've had, which bodes well for word of mouth going across the health industry is pretty vibrant and an awful lot of people talk. And so we have great relationships across all kinds of health care organizations. And as we said in my earlier remarks that the 15 million claims that we processed in January, were 10% more than we anticipated, which would be $1.5 million claims.
So we think there's some embedded growth in there, and then we think we're going to add clients throughout the year. And as we roll out commercial and then Medicaid and then Medicare, it is increasingly going to be imperative on all kinds of claims processors and other healthcare companies to get into new technology, right? You can't run this on spreadsheets and you really can't run this on technologies that are not flexible enough. There's an awful lot of stuff coming out in 2025 on HIPAA and other regulation, and I don't think any inflation Reduction Act and all this stuff.
And I don't think that 40-year-old, 50-year-old, 60-year-old technology is going to save the day. And I think that the brightest mines that are running these big places are going to come to us and recognize that we can streamline their operations, save them a lot of money, and we can make a lot of money in the process.
Got it. It sounds like you're obviously a positive outlook. But was any of that included within the guidance? Or is that all upside at this point?
Well, I think as far as healthcare is concerned, we were measured. And we think that if anything, we have upside to that, and we think that we're so young as a management team, we have a lot of time in order to really execute on our strategy so that we can really reap the benefit.
Got it. And then just as a follow-up here. Just on the [indiscernible] part of the story, obviously, great execution -- have you thought about the target for digital workers as the year progresses and ultimately, where you might be able to get to? Obviously, there's always going to be some level that you can do in any given year, but is there another ramp coming at some point? Or is it more of a smooth -- I'll call it, curve in terms of the adoption of the number of digital workers from here on outwards?
Well, I would just say that the digital worker initiative, at SS&C is a very focused, very managed process and everybody understands that they need to get on board -- and then they understand that they don't get on board pretty quick, then you don't have to worry about it. So we're pretty blunt about those kinds of things. And it's been effective for us. And as they embrace it, they kind of go, "Wow, I should have done this sooner." but those kinds of things are -- lead the horses to water, right? And I think that's what we've done, and we've got a lot of opportunities going forward. The technology keeps getting better, it is capable of more things. And as we integrate large language models into the process, it will even get better.
So we're optimistic about where we go from here. And so we from, I think, about 36.8% in the second quarter to 39.8% in EBITDA margin in the fourth quarter. So we're looking forward to continue to be able to expand our margins and improve our customer service and satisfy more customers.
And our next question comes from the line of Andrew Schmidt with Citi.
Bill, Brian, I can speak with you. Actually, a good segue from that last question to my question. You mentioned, I think, build the 39.8% EBITDA margin in the fourth quarter, which is a good jumping off point into 2024. Historically, I think the target margin had been 40% I guess the question is with the efficiencies that you're seeing, digital workers and other areas, is that long-term target now is the ceiling now higher? And what might that look like over the longer term?
Yes, Andrew, I think we need to define the longer term. So if you look out over the next couple of years, that we probably have opportunities to increase our margins through the digital worker process, 100 to 200 basis points. Look, we're going to spend money on a lot of things, too. So the margin is not just driven by Blue Prism deployment. We're spending money on sales. We're spending money on marketing. We're spending money on a lot of R&D initiatives. And we are quite focused on defending our IP and that's not a cheap process, but it's also -- that's our lifeblood as a company, and we want people to understand that we don't take it with anything, except extreme defense.
And then it becomes extreme offense. So we're very focused. We're very protective of our customers and our employees and our communities. And that means that we have to be very protective of our IP.
Got it. And then if I could ask just on license revenues for 2024. Obviously, it's not a huge part of the business, but it can create some volatility as we saw in 2023. What's the expectation for 2024? And I guess, there's a broader question about just outlook philosophy and whether that's changed at all in terms of taking a finer point to -- let's call it, sales cycles and bookings assumptions like that. I guess kind of a 2-part question, license revenues and then just broader kind of outlook philosophy when it comes to organic growth.
Sure. So I think similar to what Bill said a second ago about health care. We're trying to be measured in terms of what's in our guidance on license revenue. So clearly, there was some softness in 2023. But at the same time, the pipelines that we have and the deals that we have that are in fairly advanced stages give us a little bit more cheer about 2024 going into '24. So we actually think license ought to do better in '24 than it did in '23. And I think to your second comment or question on the forecasting process, not so much a change in philosophy. I just think that as we continue to do this, we just get better information, and we can make kind of better guesses on what's happening, and that's a continuous and ongoing process.
[Operator Instructions] Our next question comes from Alexei Gogolev with JPMorgan.
Bill, I was wondering if you could maybe elaborate a little bit more on the comments you made around winning major hedge fund launches, some conversions. Any additional feedback there? And also if you're sensing any acceleration in hedge fund and market consolidation that's been going on for some time now, but it sounds like it's been accelerating lately.
Yes. Alexei, I think if you go back through our press releases and our client wins and stuff, you'll see that an awful lot of the major macro hedge funds are our clients. And for the last several years, and also a lot of the new funds and the hedge funds went into these macro funds. So we have a concentration on the largest and most complex funds because what that does is make sure that we have the expertise and technology to really support them as they grow and then also as they expand their geographic and asset selection reaches. So -- that's what we do. So when you -- I think we had a press release just recently on Hudson Bay, that's a $20 billion hedge fund that we just added to our to our lineup. And we've got a number of those throughout the world, and we are marching both in EMEA and Asia Pac as well as North America. And we spend more money at this than anyone else, but we think that we're spending it wisely and that will continue to increase our win rates.
Perfect. And a quick question to Brian. Have you been able to assess the potential implications to your free cash flow from the tax relief for families and Workers Act of 2024, Bill. Do you have any visibility of where this could take your tax from this bonus depreciation change?
Yes. So we haven't done a full assessment at this point. So it would be preliminary to give any direction as to any changes. But obviously, working through any tax law changes, making sure we have the appropriate positioning if there's a strategy that we need to take a look at, we'll continue to implement that obviously is not too aggressive, but we think it complies with obviously the appropriate tax laws and tax jurisdictions. So at this point, too early to assess an impact to us.
Yes. And we're quite focused on our taxes. And we've been able to keep a constant 26% tax rate for the last 5 or 10 years, and we'd like to see if we can't have that start sloping downward and that might mean that we do different things than we do now. we might move some more of our people to lower tax states as our clients have moved to places like Florida and North Carolina, Georgia, we might start following with groups that have specific expertise.
We already have a large office in Jacksonville, and we have some people down in the Miami area. So we're optimistic that if we get some focus and and have some ideas that we'll be able to hopefully move our tax rate down.
And our next question comes from Kevin McVay with UBS.
I want to my congratulations as well. If you think about the organic growth guidance for '24, it looks like the range is 2.7% to 6.3%. Any thoughts as to what would get you to the lower end of the range as opposed to the higher end?
Well, that's pretty sizable range, Kevin. And I think that we're certainly hoping to beat the low end, we'd love to beat the high end. We'd also love to beat the midpoint. So I don't think that we think that that's the low end, the 2.8%. I think it is a high hurdle -- but it's also when you're $5.5 billion in revenue and you want 3% growth, and you have about 3% attrition that means you need 6% on $5.5 billion, which might early math tells me that's $330 million worth of sales that we have to do. So it's not a walk in the park, but we got a talented sales team. We've got talented implementers. We've got talented developers and we have a talented support organization. So we're cautiously optimistic that we're going to have a really good 2024.
Sounds like it. And then -- can you remind us your would be best just the philosophy on the incremental margin you get from Blue Prism and just the deployment of the bots, how much of that goes to maybe margin as opposed to reinvestment? as we think about that going forward.
I think we feel pretty good about the investment levels that we already have in our business, whether that's spending on R&D or other things. So really, the productivity enhancements do a couple of things for us. We think they make the customer experience better. We think it gives the employees better jobs. And then it does -- most of it does go straight to the bottom line.
[Operator Instructions] And our next question comes from the line of James Faucette with Morgan Stanley.
It's Michael Infante on for James. Bill, I just wanted to ask on M&A. Clearly, there's capacity here from a leverage perspective, and you called out a senior hire to assist with M&A earlier in the call. what does the deal pipeline look like right now? And what types of assets and geographies are you targeting?
Well, right now, we're only targeting earth. So we're going to try to get wherever we can on the planet. And as far as the types of organizations that we would acquire, we're very interested in expanding fund administration if we can buy by existing businesses and figure out ways to help current clients maybe improve their businesses by collaborating with us on a lift out or something along those lines.
Secondly, we like technology. We think that's the seed corn of our business. That's why you hear me get somewhat passionate about protecting our IP. So I think our key things on this stuff is to find pockets. So we just had some seminars and some people out in the Far East. We were in Macao, we were in Hong Kong and pitching a bunch of clients, and we have a really nice business in Australia. And I think that there's opportunity. We have a pretty nice business in China, too. That's somewhat of a crapshoot as to whether or not it's going to grow really fast or it's going to stop -- but I think it's -- we have a lot of great clients and we think we provide some good services.
So we think there's opportunity. We think there's a lot of opportunity throughout Europe. We think that we have a number of initiatives that we're executing on. And then we're pretty much -- a pretty big powerhouse here in North America.
Got it. That's helpful. And then maybe just on pricing, in terms of the incremental revenue contemplated in '24, how much of it do you expect to come from price increases? And how does that compare to what you're able to sort of enact in '23?
I think that the -- we feel really good that we have a much more predictable view on this. We've been through a couple of rounds of this over the last couple of years. So we expect a sort of a similar amount of price lift in '24 as we actually achieved in '23. And the process for getting it is a lot more laid out now. So -- and then that ought to be just a continuous uplift for us in future years as well.
All right -- thank you for your patience, everyone. And it looks like there are no further questions. So I'd now like to turn the call back over to Bill Stone for closing remarks. Bill, the floor is yours.
Thanks, and thanks, everybody. We appreciate you coming to this call. I know in New York City, it was a little snowy for you and -- some of you might have forgot your glasses and all that. So we really appreciate that you came out and we look forward to seeing you sometime in April and talking about where we're going from here. So thanks again, and we're working hard for you.
Thanks, Bill. And ladies and gentlemen, that does conclude today's call. Thank you all for joining, and you may now disconnect. Have a great day, everyone.