Information Services Group, Inc.

Good morning and welcome everyone to the Information Services Group Third Quarter 2024 Conference Call. This call is being recorded and a replay will be available on ISG's website within 24 hours. Now I'd like to turn the call over to Mr. Barry Holt for his opening remarks and introductions. Mr. Holt, please go ahead.

Thank you, Operator. Hello and good morning. My name is Barry Holt. I'm a Senior Communications Executive at ISG. I'd like to welcome everyone to ISG's Third Quarter Conference Call. I'm joined today by Michael Connors, Chairman and Chief Executive Officer, and Michael Sherrick, Executive Vice President and Chief Financial Officer. Before we begin, I'd like to read a forward-looking statement. It is important to note that this communication may contain forward-looking statements which represent the current expectations and beliefs of the management of ISG concerning future events and their potential effects. These statements are not guaranteed a future result and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. For a more detailed listing of the risks and other factors that could affect future results, please refer to the forward-looking statement contained in our Form 8K that was furnished last night to the SEC and the risk factors section in ISG's Form 10K covering full-year results. You should also read ISG's Annual Report on Form 10K and any other relevant documents, including any amendments or supplements to these documents filed with the SEC. You'll be able to obtain free copies of any of ISG's SEC filings on either ISG's website at -1.com or the SEC's website at .scc.gov. ISG undertakes no obligation to update or revise any forward-looking statements that reflect subsequent events or circumstances. During this call, we will discuss certain non-GAAP financial measures, which ISG believes improves the comparability of the company's financial results between periods and provides for greater transparency of key measures used to evaluate the company's performance. The non-GAAP measures, which we will touch on today, include adjusted EBITDA, adjusted net earnings, and the presentation of selected financial data on a constant currency basis. Non-GAAP measures are provided as additional information and should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. For the reconciliation of all non-GAAP measures presented to the most closely applicable GAAP measure, please refer to our current report on Form 8K, which was filed last night with the SEC. And now, I'd like to turn the call over to Michael Connors, who will be followed by Michael Sharrock. Mike?

Thank you, Barry, and good morning, everyone. Today we will review our Q3 results, including our strong close to the quarter, the recent sale of our automation unit and our planned use of proceeds, and our outlook for Q4 and the demand environment heading into 2025. ISG closed Q3 strong, delivering revenues of $61 million and EBITDA of $7 million, both at the top of our expectations. Our profitability improved sequentially over the second quarter, with our adjusted EBITDA margin up 50 basis points and operating income up 18%. Among the drivers of our improved profitability was our higher margin revenue mix, including our recurring revenues, which represent 45% of our firmwide total, up 175 basis points from the same period last year. Also contributing to our profitability increase was our record productivity, as measured by utilization, which reached a third quarter high of 77%, up 400 basis points over the prior year. With our disciplined operating approach, we have delivered record utilization two quarters in a row. Our focus is on operational excellence, also as reflected in our strong cash flow from operations in the quarter, nearly $9 million, compared with $3.2 million last year. In terms of demand, we are seeing both continued improvement in the U.S. market, along with momentum in our strategic investment areas, advisory platforms, AI and research. One aspect of improvement is highlighted by the deal flow in our ISG Tango digital sourcing platform.

More

than $5 billion of contract value is now flowing through this platform, up 25% from Q2. Innovations like ISG Tango and our recurring revenue streams, along with the sale of our automation unit, will be key to driving our EBITDA margins in 2025. We anticipate further acceleration in our pipeline beginning in early 2025 in the U.S. as the economy continues to improve and as our strategic bets on advisory AI and software continue to pay off. Leveraging our strong cash flow generation in the quarter, we paid down $8 million, or about 10% of our debt. Right after the end of Q3, on October 1, we completed the all cash sale of our automation unit to UST for $27 million. The sale of this business further strengthened our balance sheet, giving us deeper pockets to continue investing in our core growth initiatives and greater flexibility to enhance shareholder returns over time. Over the next few quarters, we expect to reduce our debt to the lower end of our debt ratio targets, and we expect to accelerate our share repurchases. Meanwhile, we will continue to invest in our business to tap into market growth waves, foremost among them AI. One need look no further than our recent first ever AI Summit held in London to see the high level of interest in AI. The event was oversubscribed in our best attended conference of the year. We see AI lifting client demand across multiple fronts, but none more immediately than helping our clients take advantage of modernized AI-driven technology services that have the potential to reduce costs by 30 to 60%. With ISG's leadership in sourcing and contracting, the surge in AI demand is moving the market exactly into our sweet spot. An additional growth lever is our more holistic approach to addressing the large software economy through a combination of research, advisory, and training as a service. This effort opens up a broader lane of revenue as we engage our clients and as a natural path to deepen our market influence. Overall, with a solid pipeline, higher productivity, and seizing new opportunities being driven by AI, along with our expansion into the mid-market made possible by our groundbreaking ISG Tango platform and our growing research capability, we are optimistic about our prospects heading into 2025. With that, let me turn to our regions. Revenues were relatively stable quarter over quarter in the Americas, a good sign. On a reported basis, we did face a difficult compare with a record Q3 last year. Reported revenues in the Americas were $40 million, up slightly sequentially, down 5% versus the prior year. During the quarter, we saw double-digit growth in our consumer services and manufacturing industry verticals and in research. Key client engagements during the third quarter included Carnival, Agco, Lockheed Martin, and McDonald's. During the quarter, ISG expanded its relationship with a large U.S. equipment manufacturer. Our engagement began with cost optimization and moved into a large-scale technology and HR sourcing, driving nearly $2 million in revenue from this client.

We are also

advising a major U.S. healthcare provider on an engagement to modernize their supplier ecosystem,

which drove nearly $1

million of additional revenue in the quarter. ISG also is advising a leading travel and leisure company on a multimillion-dollar long-term infrastructure strategy and sourcing engagement. In the third quarter, we added nearly $1 million in additional revenue here to support an important sustainability initiative. In the area of AI, ISG is engaged with a very large CPG manufacturer to bring to market the largest AI and data sourcing agreement in the Americas this year, one that we believe will set the standard for all future AI sourcing deals. And this is a seven-figure engagement for ISG. Turning to Europe, the European market remains challenging for discretionary tech spending. Q3 revenues of $16 million were led by double-digit growth in our energy and utilities industry verticals. Key client engagements in Europe in the third quarter included BASF, Excite, and KCOM. During the quarter, ISG worked with two European clients on separate engagements worth more than $1.2 million. One was with a leading chemical company to provide sourcing advisory for their network, data center, and workplace services, including the implementation of an industrial 5G ecosystem. And the other was a cost optimization initiative with a PEO UK telecom company to radically transform its cost base ahead of a potential sale. In AI-specific sourcing, we are working with one of the world's leading energy companies to develop new AI and data governance structures that will be used to train large language models and create the company's long-term data strategies. We expect this early work to grow into a multimillion-dollar engagement over time. Now, turning to Asia Pacific, we had Q3 revenues of $5 million, down 2.3 million from last year, as our Australian government work still has not returned to previous levels. During the quarter, Asia Pacific delivered double-digit revenue growth in our consumer services, energy, utilities, and health sciences industry verticals. Key clients in the quarter included the Australian utilities company AGL Energy, Dreexton Hospitality Company Endeavor Group, and life sciences company Cogstate. Now, let me turn to guidance. As I mentioned earlier, we are seeing positive signs of recovery and demand for technology services in the United States, and at the same time, we're clearly well positioned to leverage the key market growth drivers of AI software and mid-market expansion. For the fourth quarter, we are targeting revenues of between $57 and $58 million, and adjusted EBITDA between $6 and $7 million. Our guidance reflects the expectation that growth will return to the Americas in Q4, with Europe's return to growth following in a few quarters. We remain confident in our long-term strategy, and we're ready to capitalize on new business opportunities as growth returns in 2025. So with that, let me turn the call over to Michael Sherrick, who will summarize our financial results. Michael? Thank you, Mike, and good morning, everyone.

Revenues for the third quarter were $61.3 million, down 15% on a difficult compare with the third quarter last year. Currency had a modest $300,000 positive impact on recorded revenues. In the Americas, recorded revenues were $40.1 million, down 5% versus the prior year. In Europe, revenues were $16.2 million, down 27%, and in Asia Pacific, revenues were $4.9 million, down 32% versus the prior year. Third quarter adjusted EBITDA with $7.1 million, down from $10.6 million in the year-ago period, resulting in an EBITDA margin of 11.6%, as compared with .8% in the year-ago quarter. Importantly, EBITDA margin continued to improve up 50 basis points quarter on quarter. The ISG had a third quarter operating income of $4.3 million, as compared with operating income of $6.2 million in the prior year period. Our reported net income for the quarter was $1.1 million, or $0.02 per fully diluted share, compared with net income of $3.2 million, or $0.06 per fully diluted share in the prior year. Third quarter adjusted net income was $2.5 million, or $0.05 per share, on a fully diluted basis, compared with adjusted net income of $5.7 million, or $0.11 per fully diluted share in the prior year's third quarter. I would note in the quarter both our gap and adjusted tax rates were higher than expected as a result of the tax treatment of certain transaction-related expenses associated with the automation divestiture. Our headcount as of September 30, 2024, was 1,467, down 83 positions compared with the prior year, and down 30 positions compared with the second quarter. For the quarter, consulting utilization was a record 77% of 400 basis points as compared to 73% in the prior year. Net cash provided by operations for the quarter was a very strong $8.8 million, as compared to $3.2 million a year ago. We ended the quarter with cash of $9.7 million, down from $11.8 million at the end of the second quarter. During the third quarter, we reduced debt by 8 million, paid dividends of $2.3 million, and repurchased $800,000 of stock. Our next quarterly dividend will be paid on December 20, to shareholders of record, as of December 3, and at quarter end we had approximately $20 million remaining on our share purchase authorization. We ended the third quarter with a debt balance of $66.2 million, down $13 million from the end of last year, and down $8 million from the second quarter. Our average borrowing rate for the quarter was 7.3%, up from .8% last year, and our fully diluted shares outstanding for 3,224 were $50.3 million. Overall, our balance sheet continues to provide us with the flexibility to support our business over the long term. With that, I will now turn it back to Mike, who will share his concluding remarks before we go to

Q&A. Mike? Thank you, Michael. To summarize, we delivered revenue and adjusted EBITDA's high end of our expectations. Our profitability improved sequentially, and our productivity reached a record Q3 high. We delivered strong operating cash flow, nearly three times higher than last year, and we reduced our debt by 10%. We successfully executed on our strategy to divest our automation unit, monetizing this asset and strengthening our balance sheet to improve shareholder returns over time. With an improving demand environment, we are confident our operating model and product and service portfolio, including ISG Tango, AI, cost optimization, and our recurring revenue streams

positions

us well for success in 2025 and beyond. As always, we are focused on creating shareholder value for the long term, and we are steadfast in our mission to deliver operational excellence to each of our clients. So thank you very much for calling in this morning, and now let me turn this session over to our operator for your questions.

Thank you. Today's question and answer session will be conducted electronically. If you'd like to ask a question, you can do so by pressing star and 1 on your telephone keypad. If you find that your question has been answered and you would like to remove yourself from the queue, you may do so by pressing the pound sign. And again, if you would like to ask a question, you can do so by pressing the star and number 1 on your touchtone keypad. We'll pause a moment to allow any questions into the queue. Our first question comes from the line of Joe Gomes with Noble Capital Markets. Your line is open.

Good morning. Morning, Joe.

So,

my

question is, if you could just kind of square a circle for me a little bit here. You talk about, you know, you're seeing improving demand, utilization at record levels, but the revenue is looking at going down sequentially, 3rd quarter to 4th quarter. So, just trying to get a better handle of why that's occurring.

Okay, so Joe, it's not going down. You have to take into consideration the 4th quarter. You may recall we will have no automation in that quarter. So, that number is, think about it, is around between 7 and 8 million dollars. So, that comes out of the equation in the 4th quarter. So, when you think about it that way, we are not going down. We are actually moving up the stream there. So, don't forget about that.

Okay, thank you for that. I appreciate

that.

Sorry about that. It just caught my eye here. No worries. I'm sorry about that. Part of that. So, you talked about, you know, Tango, and you get some nice increase in the revenue under that, you know, the contract revenue under that. And one of the things you talked about in the past was attracting, you know, the middle market companies, and you mentioned on the call, I think last time you said it was about 25% of the ZEN, 4 billion. Is that continuing to grow, the midsize percentage there?

Yes, well, the midsize is continuing to grow. The percentage is around the same at the moment, but it's off of 5 billion now instead of 4. We're up 25%. And I think what you will see is 2025 is where we think the big thrust will be in the mid market for us because the mid market, we're just getting started with that. So, we see a good acceleration next year on that. So, the mid market is definitely there for us. It's for the most part white space. And we plan to be very aggressive in that in 2025 and 26. So, it's a good start with about 25% coming from mid market, which we really didn't have before.

Okay, and then one more for me if I may.

Given where the stock is today and the proceeds from the automation sale, would it make sense to be a little more aggressive in the stock repurchase program?

Hey, Joe. It's Michael Scherich. So, look, I think a couple things. One, I think in his remarks, Mike outlined how we will use the cash proceeds, get investments in the business and share buyback. I think he also mentioned that we would expect to be more aggressive on the buyback. So, I'm not going to share our plan and what we plan to do, but obviously we see where the stock is. And we know that we've had a nice reset to our capital and balance sheet position. I would also note that obviously as a result of the transaction, we were not in the market active in the third quarter. And so, we would

clearly expect that that would change as we move forward. Okay, great. Thanks for taking my questions. I'll get back in queue. Thanks, Joe.

Our next question comes from the line of Vincent Colicchio with Barrington Research. Your line is open.

Yeah. Good morning, Mike. Good morning. Good morning. So, with the expectation that America improves in early 2025, I assume sales cycles will need to improve as well. Any signs of that happening as of yet?

Yes, I think we'll see it starting in the fourth quarter, Vince, in the US. We see, I think also with the uncertainty of the elections being kind of lifted when there's more certainty, regardless of what the outcome of the election was, there's more clarity. And our sense is that will be a good thing as we move into 2025, as companies will be able to take that uncertainty off the table. They'll have clarity about where things are moving. And we're hoping that that also drives a bit more business confidence. We see it in our pipeline and we see it with some loosening up and we're going to see it starting in the US. And I think you'll see it starting in the fourth quarter.

Okay. Thanks for that. And then when demand returns, do you see it as more of a wave or a steady flow for the Americas and then later for Europe?

I think what we'll see, and I don't want to predict percentages, but I, you know, we have a guidance that we always give, which is target over time high single digit growth. I think we'll be able to see something beyond that in the Americas for 2025. And I think Europe will be following. I think Europe's going to be a few quarters behind because that environment is much different than the US in terms of the buying environment with all of the issues in the European theater. But I definitely believe that the US is going to, you're going to see a big uptick in the US business as we move through 2025,

Vince. And with all the issues around AI, do you feel that there's been sufficient alleviation of that that we'll see, you know, you'll see decent revenue from AI next year?

Yes. I mean, again, AI is going to move and evolve and it's going to, you know, accelerate over time. But we have a number of AI engagements. But again, I would say even the largest companies, we're dealing with one of the largest energy companies in the world. And even they are moving at a pace that you might say is slow, but I think it's slow because everyone is still kind of experimenting on what all this means. What are the governance guidelines and guardrails and so forth. But yes, we definitely see our AI revenue accelerating in 2025. But likely 2026 would be the bigger number just because of the momentum in different enterprise companies and how fast they move. There's a lot of talk on it. There's a lot of, you know, noise on it. But we were working inside a large of the largest companies in the world and the pace is what you'd expect. It's measured, it's thoughtful, and they want to see how this evolves. I will say one other thing on almost all now of our sourcing engagements that are running through Tango. AI is a component at each transaction that our clients want us to help them with when they're thinking about technology companies to source to the Accenture, the IBM, the Capgemini. So it is a component at the moment. It's a smaller piece, but it's going to gain momentum over the next couple of years because we think that the savings that can happen for our clients will be significant, just like labor arbitrage was 10, 15 years ago with the India operations going there. So it'll evolve like that is our expectation,

Vince. Okay. Thank

you. Thank you. Our next question comes from the line of Mark Riddick with Fedoti. Your line is open. Good morning, Mike. Good morning,

Mike.

Good morning, Mark.

So I wonder if you actually, why don't we start with, where do we end on headcount for the quarter? I might have missed that. Yeah,

you might have missed it. Hold on. I've got it right here. 1,467.

And is that before or after the asset sale?

That is before. So the asset sale will reduce that by about 115 in the fourth quarter.

Because that was, yeah, that was October 1st, right? Yes, I think. Okay. Perfect. I want to shift gears so we see the debt reduction there already as well. Is there any sort of general sort of target that you're looking at given the industry and environment and the rate cuts that we've just gotten and the like? Is there sort of a target leverage that you're looking at going forward?

Yes, the range, and I think we may have mentioned this during our early October call with the sale, our kind of guided range is that our debt to EBITDA ratio will be somewhere between two and two and a half times. Historically, over our 17 years, we've averaged 2.7. And I think we talked about our view is that as we move kind of toward the end of the first quarter, we'll be at the low end of that range. And of course, that will free up a lot of other cash. And that's why we're talking about the acceleration of our share buybacks. So that's how we think about it.

Okay, great. And that leads me to another area. Do you have any updated thoughts as to what you're seeing in the potential acquisition pipeline? Are there some things that you might want to target to sort of add to the service offerings? Or how should we think about maybe what's out there and what valuation looks like at this point? Yeah.

So yes, we are active as we always have been. We are aggressively looking at ways that we can accelerate growth in a smart way. We look for things that will drive our recurring revenues or will drive our digital or AI capabilities. That's kind of the focus area for us. And there are assets in the market that are looking for potential homes. And we are in those kind of look and see and discussions that always take time. So, yeah, there are assets there. And I think there are deals that can be made at a reasonable level that we're very disciplined in what we pay. And we do it, as you know, in a combination of some cash and stock and some earn out. And so that model has worked extremely well for us. And we'll continue to look for things that make sense for us, Mark. But I think the market out there is not too bad at the moment.

Okay, great. And then I know in the past we've talked about some activities from clients that are, you know, offensive versus defensive, cost savings driven versus growth driven, things of the like. I was wondering if you could sort of with what you're seeing in the pipeline and what you're positive on for the beginning of next year, do you get the sense that we're shifting toward more of a growth driven offensive nature in the projects and the things in the pipeline that you're hearing and dealing with the clients?

Yeah, I think at the moment I would say it hasn't shifted. But I think it's still very heavy on cost optimization. But I think with the whole situation with the election being settled, so that creates clarity, our sense is with our pipeline, we have a lot of transformation things in the pipeline. And as we kind of move into 25 and business confidence improves, our sense is that that will be unleashed. At what pace? Not sure. Certainly the U.S. is going to be unleashed faster. And that's why we're quite bullish on the U.S. market right now as we think the momentum will begin in the fourth quarter and move through 2025. So I think it will get to be a more balanced between transformation and optimization as we move to the second half of next year. But I think you're going to begin to see some of that in the U.S. in the next couple of quarters.

Okay, great. Thank you very much. Yep. Thank you, Mark. Our next question comes from the line of Dave Storms with Stonegate.

Your line is open. Good morning. Good morning. Just wanted to kind of start with the pipeline. Are there any segments that you're seeing that you would expect to monetize as quick as maybe just because N markets moved the fastest or furthest along in maybe a recovery, anything like that?

I'm sorry. I'm sorry. We lost you for a second. Can you just say it one more time?

Yes, just with regards to the pipeline, are there any segments that you would expect to monetize the quickest just with them being, you know, maybe a little more recovered? Maybe they move further N markets and anything like that.

Yeah, okay. Maybe I'll take it by industry for a second. I think, Dave, both the consumer and the manufacturing segment is moving pipeline-wise at a very aggressive pace. Both of those are double digits or near double digits in terms of growing. I think we will see one of the areas that has been stagnated really all during this kind of slowdown in the tech sector has been the VFFI segment. So the banking and the, you know, insurance segments, if you will, have been slow. Both of those have been, you know, almost double digit down for a number of quarters in the industry and certainly with us. But manufacturing is hot, consumers hot. We think the whole energy and utility sector is about ready to explode. We've got lots going on there, as you know. AI is driving the utilities business into a whole different stratosphere in terms of what will be needed in terms of those capabilities. So we're getting a lot more work in the energy and utilities areas as well. And then I think with private equity having sat on the sidelines quite a bit with this uncertainty beginning to clear, with interest rates beginning to come down, there's a lot of money on the sidelines. So our private equity channel, we would expect in 2025 to also accelerate with some speed as PE begins to take and use their, put their money to work at maybe a faster clip than they have in the last year or so.

Does that help? Yeah, absolutely. Thank you. And then my second question, just with the utilization being high, you know, the pipeline being strong, how do you see headcount moving forward?

Yeah, so David, it's Michael. I think as I said to Mark, one in Q4, we'll see the automation resources come out. Which is about a hundred, call it 15 people. And then I think, you know, from that point forward, where, you know, our additions, right, will be, you know, again, opportunistic based on those opportunities. And, you know, everything obviously will have a, from a skill set standpoint, a large focus on, you know, folks with the AI skill set and so forth. But I think that you'll see us be opportunistic so that we can manage growth and the utilization, which I think will be important for us as we get back to a growth position in 2025.

Understood. Thank you. And then just one more for me, if I could. Now that you're a month past automation sales, you're looking at your portfolio. Are there any other parts of the portfolio that you think could be candidates by being additive by subtraction?

No. I mean, I think as we have discussed really over a number of quarters that the automation unit, when we formed it, we built it and we built it purposefully into a box so that it could be lifted out and monetized. And of course, that's what we ended up doing. But we like our assets and we like the growth prospects of those assets. And we like all of the organic innovations that we have done with things like Tango and GovRNX and a lot of our research areas and our pro benchmark capabilities, which is the high price subscription for benchmarking that we have on subscriptions. So we like all of that. So we feel pretty good about the portfolio and where it's headed for 2025,

Dave.

Understood. Thanks for taking my questions and good luck in the fourth quarter.

Thank you. Our

next question comes from Chris Sakai

with Singular. Your line is open.

Yes, good morning. I'm in for a Gaussi. You mentioned that the American, America's region is performing better than other geographies, particularly Europe. Could you provide more insight into the specific challenges you're facing in Europe and Asia Pacific?

Could we provide, I'm sorry I lost the last part of the provide more insight into what was that?

The specific challenges you're facing in Europe and Asia.

Yeah, let me take the Asia Pacific region first. That's really driven by the Australian government spending. There's an election coming up in the middle to early next year in Australia. That's normally a slowdown in government spending. We see that. As government spending goes, our growth goes. And as that begins to come back, I think we will see Asia Pacific back to its normal kind of double digit type growth. But that's likely not to happen until after the elections next year. So that's what is that's what the dynamic is in that region. And over in Europe, I mean Europe just continues to have a very difficult discretionary spending environment all around in France, Germany, UK. And we will just weather that discretionary spend kind of slowdown, I think for probably a couple more quarters. We're well positioned with the largest companies in Europe as our client base. But we will be working with them and are working with them with large automotive companies over there doing big cost optimization programs. We're involved in them, but we expect that to be a couple of quarters behind the return to growth from the from the U.S.

And how is the adoption of ISG Tango progressing in these regions?

Yeah, so it's going well. I mean, it's we don't break it down by region, but each region, everybody, all the sourcing is going through our ISG Tango. It's growing fast. As you know, we were up to a little over five billion dollars of value now on that on that asset up about 25 percent from the second quarter. So it's moving moving around rapidly. What we expect as we get more and more on the platform is that also will help our overall margin expansion that we're looking to do as an ISG firm. So that will be a contributor to the expansion of our margins in twenty five and twenty six. So, yes, it's it's it's all going through in each region through the Tango platform.

OK, thanks. And then considering the maturation of the sourcing advisory market, how do you plan to maintain or grow this segment?

Well, we grow it every year. We're number one in the world. We believe we have over 50 percent of the market share and by innovations such as ISG Tango, every large corporation in the world, you see them in our client base. We have 75 of the largest 100 firms in the world that are doing sourcing with us and they've done it on many generations. But they work with us because we have data. We know what we're we know what we're doing because we've done it for so many years. But importantly, we have the competitive intelligence, the pricing, the performance and the relationships with all of the provider ecosystem that we can bring great value to an enterprise on sourcing, whether they've done it once, none or four times. And that's our, if you will, our superpower. And we continue to have a great market position and lead the world in this area. And we we will continue

to

preserve and

grow that position. OK, great. Thanks for the answers. You bet. Thank you.

And I'm not showing no further questions at this time. I'll turn the call back over to Mike Connors for closing remarks.

Well, thank you. Let me close by saying thank you to all our professionals worldwide for our continuing progress and for their collaboration and unwavering dedication to our clients in driving our long term success. Our people all over the world have a passion for delivering the best advice and support to our clients as they continue their transformations in both uncertain times and in the better times ahead. And I could not be prouder of them. And thanks to all of you on the call for your continued support and confidence in our firm. Have a great rest of the day.

This does conclude today's teleconference. You may now disconnect at this time.