Perficient, Inc.

Good day and thank you for standing by. Welcome to the Q1 2022 Perficient Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. I would now like to turn the conference over to your host, Chairman and CEO Jeff Davis. Please go ahead, sir.

Thank you, and good morning, everyone. With me on the call today is Paul Martin, our CFO, and Tom Hogan, our president and COO. We've got, as typical, about 10 to 15 minutes of prepared comments, after which we will open up the call for questions. But before we proceed, Paul, would you please read the safe harbor statement?

Thanks, Jeff, and good morning, everyone. Some of the things we will discuss in today's call concerning future company performance will be forward-looking statements within the meaning of the security laws. Actual results may materially differ from those discussed in these forward-looking statements, and we encourage you to refer to the additional information contained in our SEC filings concerning factors that could cause those results to be different than contemplated in today's discussions. At times during this call, we will refer to adjusted EPS and adjusted EBITDA Our earnings press release, including a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles are GAAP, is posted on our website at www.proficient.com. We have also posted a slide deck, which includes a reconciliation of certain non-GAAP guidance to the most directly comparable financial measures prepared in accordance with GAAP on our website under investor relations. Jeff?

Thanks, Paul. Well, once again, good morning. We're excited to be with you this morning to discuss our first quarter performance and provide some thoughts on the second quarter and beyond. 2022 has begun as 2021 ended strongly. Revenue was up 31% and adjusted earnings were up 38% during the period. North American average bill rates reached an all-time high. Utilization was strong and on the heels of setting a quarterly large wind bookings record in Q4, we again set a record in Q1. In fact, the overall bookings were substantially sequentially as well as annually. And the success extends beyond sales. Our delivery teams are doing amazing work, and customer satisfaction remains very high. In fact, just two weeks ago, a customer I had not previously interacted with much reached out to me directly to share how wonderful our team was performing on behalf of her organization. We routinely receive positive feedback through our Client Insights Program, which solicits real-time feedback at various stages throughout the project life cycle. But when a CEO proactively reaches out directly to compliment our team and offer to serve as a reference, it really underscores the value we're delivering. So as our brand grows and word spreads within accounts and between accounts and within markets and between markets, current customers are offering us more opportunities and new clients are asking us to propose on more work than ever before. Organic offshore revenue grew 49% in the quarter and offshore revenue overall grew 111%. Our fully integrated global delivery model continues to resonate with clients who value the combination of our local and global approach. In fact, it's that fully integrated global delivery model that is the primary catalyst behind our performance. You may recall a few years back we began to articulate our intentions to transform Proficient into a truly global entity. to bring the world's best technology talent to the strong client relationships we've forged via a long-standing and ubiquitous domestic presence. We've done just that, and it's paying real dividends. Our clients now benefit from a seamless, blended experience where skilled colleagues a world away support them collaboratively with other proficient experts who are just down the street. It's driving portfolio expansion of current accounts enabling us to land new clients. And our customers are increasingly willing to pay more for both our domestic and our global resources. I mentioned the record North American bill rates earlier. Offshore ABR gains were impressive as well, up 3% sequentially and 13% versus the prior year period. We believe we've built a true competitive advantage and one that's sustainable because it's difficult to replicate. Remarkably, even in the midst of tremendous booking success, our pipeline continues to replenish. In fact, right now, we're pursuing nearly 200 seven-figure deals. Our talent acquisition function continues to shine, rapidly hiring talent into new roles to support our aggressive growth. And our scale, coupled with increasing ADR, is enabling us to offset wage increases despite the tight labor market. So on all fronts, a great quarter and a great start to 2022. And with that, I'll turn things over to Paul.

Thanks, Jeff. Services revenue, excluding reimbursed expenses, were $219.5 million for the first quarter of 2022, a 31.8% increase over the prior year. Services gross margin, excluding reimbursable expenses and stock compensation, remained constant at 38.9%. SG&A expense was $42.3 million for the first quarter of of 22 compared to 34 million in the prior year. SG&A expenses and percent of revenues decreased to 19% from 20.1% in the first quarter of 21. Adjusted EBITDA for the first quarter of 2022 was 47.2 million or 21.3% of revenues compared to 34.6 million or 20.4% of revenues in the first quarter of 2021. The first quarter of 2022 includes amortization of 6 million compared to 7.1 million in the prior year period. The decrease in amortization is primarily due to certain intangibles from our acquisitions becoming fully amortized. Net interest expense for the first quarter of 2022 decreased to 0.9 million from 3.3 million in the prior year, primarily as a result of adopting the new accounting standard for convertible debt in the first quarter of 2022. Ned income nearly doubled to 27.1 million for the first quarter of 2022 from 13.6 million in the first quarter of 2021 primarily as a result of the higher revenues and gross margin. diluted gap earnings per share increased to 75 cents a share for the first quarter of 2022. compared to 41 cents a share in the first quarter of 2021. Adjusted earnings per share increased to 98 cents a share for the first quarter of 2022 from 75 cents in the first quarter of 2021. And please see our press release for a full reconciliation to GAAP earnings. Our ending billable headcount at March 31, 2022 was 5,833, including 5,420 billable consultants and 413 subcontractors. Ending SG&A headcount was 984. Our outstanding debt net of deferred issuance cost as of March 31, 2022 was 392.9 million. We also had 24.2 million in cash and cash equivalents as of March 31, and 199.8 million of availability on our credit facility. Our balance sheet continues to leave us very well positioned to execute against our strategic plans. Day sales outstanding on accounts receivable increased to 68 days at the end of the first quarter of 2022 compared to 66 days at the end of the first quarter of 2021. I'll now turn the call over to Tom Hogan for a little more commentary behind the metrics. Tom?

Thank you, Paul. Good morning, everybody. As Jeff mentioned, after a record-setting quarter of bookings to close 2021, our large deal wind volume grew again and substantially. We booked 124 deals greater than $500,000 during the first quarter of 2022, which compares to the prior record, 98, set in the fourth quarter of 2021, and 92 from the year-ago period. I just want to take a minute and highlight some of the type of work we're winning. We continue to be a proven leader in the healthcare vertical. As an example, this past quarter, we closed one of the largest deals in company history with a large private health insurance company. We've had a 12-year relationship with this client, and our team has demonstrated true partnership as we digitally transform their product offerings. This two-year extension of services includes agile, rapid development, fully digital teams. Our structure enables projects to efficiently scale up and down based on business needs. Our US-based industry leaders, coupled with multi-shore engineering teams, will support digital development, testing, and support for the company's member experience and mobile applications. As you know, we're a proven digital partner within many industries, not just healthcare, obviously. As an example, we also recently secured a three-year agreement to provide website and content support for an international holding company that operates as the owner of a leading brand of trucks and diesel engines. Through this agreement, our multi-shore delivery teams will support the company's 30 public-facing web properties and work closely with their digital marketing team to provide content updates across the organization's portfolio. Our US-based DevOps teams will also conduct extensive integration work to ensure operations are keeping up with their customers' evolving needs. We continue to remain well-diversified from a customer, industry, and platform perspective. And excitingly, our colleagues have recently begun returning to our offices. We're always going to ensure we're providing the flexibility and work-life balance we all need But it's really been invigorating to see our teams return collaborate in person and see smiles replacing masks. I'm also excited that during the quarter we launched two more of our bright past programs in key markets. We've already fully trained and hired 67 colleagues to this innovative program, which is providing new feet new futures for deserving and ambitious members of underrepresented of constituencies and communities. As we scale and continue to increase our influence and impact on behalf of the world's biggest enterprises, we also remain focused on growing the positive change we can make in the world around us. And with that, turn things over to Jeff to discuss the second quarter and the remainder of 2022. Jeff? Thanks, Tom.

Perficient expects its second quarter 2022 revenue to be in the range of $224 to $230 million. Second quarter gap earnings per share is expected to be in the range of $0.71 to $0.74. And second quarter adjusted earnings per share is expected to be in the range of $1.04 to $1.07. Proficient is raising its full year 2022 revenue guidance to the range of $917 to $942 million, raising 2022 gap earnings per share guidance to the range of $3.08 to $3.19, and raising 2022 adjusted earnings per share guidance to the range of $4.24 to $4.36. So with that, operator, we can open up the call for questions.

Thank you. And if you have a question at this time, please press the star and then the number one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. We have your first question coming from the line of Mayan Tandon from Needham. Your line is open.

Thank you. Good morning. Congrats, Jeff, on a strong start to 2022. I wanted to first start with just a housekeeping item in terms of organic growth. Could you give us a sense of what the organic growth was in the first quarter and what's embedded in your expectations for 2Q and the full year?

Yeah, it was 23% in the first quarter and for the second quarter, The midpoint, I want to say, is around 17. So the high end is just below 20. And then the same for the year. It's about 17 at the mid and just below 20 at the high.

Got it. And then I know demand sounds really good. So I'm going to ask a supply side question. Could you just give us a sense of your ability to recruit to be able to meet the strong demand climate? And are you exploring other delivery hubs? You've done a great job of scaling in Latin America and India. Just curious on your supply-side initiatives to be able to meet the strong demand curve.

Yeah, actually, and I'm going to ask Tom to add some color to this, but the team's done a remarkable job, our talent acquisition team. They've scaled that team itself. And they've done a great job of recruiting against really this kind of unprecedented demand and what obviously is a pretty tight market as our ABR increases sort of reflect. In terms of kind of hedging, if you will, we're really focused on still Latin America as well as South Asia, primarily India. But within India, we have a decent presence, but very little, nothing close to saturation. So we're actually looking at expanding more within India and within Latin America. We're still exploring acquisitions also that might be able to contribute in that regard. Europe is a possibility, but given the uncertainty there right now, we're kind of holding on that. But Tom, do you want to add some color to that?

Mike, we definitely have increased the capacity of our talent acquisition team globally, not just in the United States, but in Latin America and in India, as Jeff mentioned. We're looking at additional cities. We were pretty strategic the last couple of years of hiring individuals in cities outside of where we are and building more of a presence beyond the three major hubs we have in India. So we see a lot of organic growth potential in India, as Jeff mentioned, where still relatively small in the big scheme of things in the India marketplace. So plenty of room for growth. And our team continues to differentiate ourselves in the marketplace and become that employer of choice. So we've been able to continue to meet demand and practically higher along the way as well, which is really exciting.

Got it. And then just finally, given the strong demand, is the pricing leverage strong enough to be able to offset the wage inflation impact? just any comments around that, that would be helpful. Thanks, Jeff.

Um, yeah, we have actually, uh, you know, I mentioned that, uh, uh, North American ABR is at an all time record. Um, and the increase reflects, uh, is actually higher more than, um, uh, than the wage increase. Actually the, the differential there is about 90 bits. So we actually, uh, have rates up about 90 bits, uh, uh, more than, uh, than average wages that's in the U S uh, and it's even better offshore. I mentioned, uh, 13% increase offshore, that's certainly outpacing wage increases. And so we're pretty optimistic we're going to be able to maintain that. Again, as the market is contracted on the supply side, you know, customers see that and our competitors see that. So I think we're going to be able to at least offset our cost increases.

That's great to hear. Thank you so much.

Thank you.

And we have your next question from the line of Brian King-Stillinger from Alliance Global Partners. Your line is open.

Hi, guys. Great quarter. Can you talk about the two verticals? We don't hear as much about automotive and business services. While these aren't your largest verticals, they've enjoyed some of the strongest growth rates back in the envelope from what you provide in the presentation. So if you can provide some details there, whether it's a large client addition or two, if those industries are late to digital transformation or something else you're able to call out. And then I have one followup.

Yeah. Automotive, um, you know, we've got a couple of, um, you know, phenomenal anchor accounts there. And one, um, is actually one of our largest, uh, might be currently running as our largest account at the moment. So, you know, we've been able to, um, to move up the ladder there. It's a longstanding client that we've had for gosh, I think it's been 20 years. And, uh, We're now one of, I want to say, five or six global suppliers there. So that continues to grow. But we have a lot of other clients beyond that within automotive. Manufacturing, similar story, big, big anchor account there, longstanding relationship is going very, very well and expanding. And then actually, you know, we talk about this some, but it's worth mentioning again, really starting to see some great, traction in tech within FinServ. You know, we've always had a great strategy practice, business consulting practice, but always have been really underrepresented on the tech side, and that's changing. The team's really worked hard on that, and we're seeing some real dividends there as well.

Great. And then maybe one for Paul, just to dig into the numbers. The gross margin you mentioned was flat at 38.9% on services. You have about 9% more work being delivered offshore than which obviously is fantastic, but generally we think of those as higher margin delivery, and you talked about a 90-point improvement on the spreads for labor. So is that lower utilization that's offsetting that potential margin improvement, or if not, can you help us bridge that gap?

Sure. Yeah, so utilization is modestly lower year over year, but certainly in line with our expectations and see that strengthening in Q2. And I don't know, Tom Hogan, if you want to add. You know, anything from that perspective?

A couple of things that Brian contributed there as well. We also, as I mentioned, the Bright Pass program. So we had 67 people join through there. We had a big college program come on, and all of those individuals start coming online here as we go into Q2. So hiring head, training, building out the bottom of the pyramid, you know, great utilization here in Q1, but also adding capacity for the second quarter and beyond.

So essentially, just to make sure I understand, utilization is only down modestly, but some of the people you've hired are not yet counted in utilization as you're preparing for growth. So maybe that's why the margin is flat despite other metrics suggesting it would be otherwise. Is that right?

Yeah, they're mostly actually included in utilization. That would be a very small differentiator. Yeah, utilization was about 81% last year. And by the way, you might recall that Q1 and Q4 typically are kind of lower seasonally. So it was actually 81, which was quite good. But last year was about 83. So on a year-over-year basis, you know, it's down, as Paul mentioned, slightly. We still had gross margin expansion of about 30 bps, I think. So of that 90, we're seeing about 30 of it. And, yeah, the rest – probably got absorbed in that differential.

Great. Nice job, guys.

Thanks, Brian.

And your next question comes from the line of Jonathan Lee from Morgan Stanley. Your line is open.

Hey, guys. Congrats on the quarter. Thanks for taking my question. It looks like sequential headcount growth saw slight deceleration. Can you provide some color around that and how you're thinking about headcount growth over the remainder of the year? You know, what do you see as the appropriate number of net billable headcount additions that you'd be able to add on a quarterly basis?

Oh, gosh, it's well into the hundreds. And actually, we have added, you'll see in Q2, we've had kind of a surge here. So that was by design. We sort of held back a little bit. Again, we're going to let that utilization rise. But then also we had a large influx from both bright pads as well as campus recruits that you'll see revealed in the numbers when we report Q2. So, you know, I'd hesitate to put a fixed number on how many people we can recruit in a given quarter. And actually, Tom, I'd have a comment on that, but it's well into the high hundreds that we've done in the past, actually. Tom, do you want to add anything to that?

So you hit it off in the hundreds every month.

Got it. That's helpful. And then follow up on acquisition. How are you thinking about your acquisition strategy for the remainder of the year? What's the pipeline like? And have you seen private market valuations compress in the same way that we're seeing public market valuations compress? And if so, does that make things a little more palatable?

You know, it's a good question. So we're still very, very active. We've got some deals in the hopper now. We had some deals we were close on and didn't get done. Actually, what we're seeing is the opposite in terms of valuation, at least right now. I'd love to see it come down, but if anything, it's gone up. As I mentioned, there's a lot of competition out there at the moment, and valuations remain pretty high. We're undeterred based on that. That's not really the issue, with a couple of exceptions, by the way, that really just kind of got nutty. from my perspective. But we're still on the hunt. We've got a good pipeline. There's still a lot of opportunities. But directly on the valuation question, I would say we're not seeing it come down to your point like we've seen in the public market.

Really good color. Thanks, guys. Thank you.

And your next question comes from the line of Maggie Nolan from William Blair. Your line is open.

Thank you. Am I interpreting your commentary right, that maybe you're seeing more in the way of unsolicited client inbounds? And then if that's the case, when did you kind of start noting this inflection? And do you think there are, you know, beyond just kind of the pandemic effects that we've seen for the last couple of years, any specific recent drivers of any kind of uptick in inbounds?

Yeah, I think so. I wasn't specifically alluding to more inbound. We are seeing more of that than we have in the past. And I think that the reason for that is simply brand awareness. As we continue to build the brand, word of mouth, et cetera, that does happen. But a lot of that is really a result of the increased capacity that we've driven in sales. So it's not so much unsolicited as much as it is, you know, getting those otherwise cold relationships and getting a foot in the door, it's difficult to do where clients are sort of entrenched in existing relationships and kind of prying your way in there is hard to do. We're having really, really good success with that. Our win rates, it's interesting, our win rates against our competition, the typical household names, have not gone down. It's still in the kind of mid-60s, around 60% to 65%. And we expected, as we increased capacity in sales, that you would naturally expect it to come down as we've got more at bats. But the reality is once we get our incredible talent out in front of clients in that sales process, the win rates stay high, which again is an encouraging sign about the sustainability of our current growth rates, if not acceleration.

Okay, great. And then years ago you used to kind of talk in the context of your solution area. Can you give us some insight into what you feel are some of your largest solution areas currently or maybe the fastest-growing solution areas for the business, the most important things like analytics consulting, custom product development, kind of those types of buckets?

Yeah, it's interesting. The mix has stayed fairly stable, so there's not any particular sort of runaway or even necessarily decline. Far and away, custom app dev remains number one. Keep in mind that the vast majority of the time when we're delivering for a client, it's really a multitude of solutions. So when we're doing custom app development, in almost every engagement, there's analytics involved, there's integration involved, and we sort of measure those as separate services, but in reality, they all fit together. So the mix has stayed pretty similar, again, on a relative basis. Custom app dev, again, continues to remain very, very strong. We are seeing more opportunities with some newer technologies, maybe what would have been considered a little more niche in the past, and newer platforms. But I still think custom app dev remains kind of our bread and butter. And like I said, the things around that are more complementary probably to that than anything. Some of them stand alone, but it all really fits together like a puzzle.

Okay, thank you. Nice quarter.

Thank you.

And we have a question from the line of from JP Morgan. Your line is open.

Hey, thanks for taking my question. A nice quarter. So you talked about signing a lot of clients, 100-plus clients this quarter. Then bookings are, or sorry, pipeline is strong. You're seeing price increases. You raised your guidance. Is it fair to say that you are not seeing any adverse impact from potential macro slowdown in your business at all, maybe in the sales cycle or anywhere, any vertical? Are you seeing any signs of slowdown at all in the business?

You know, I would say no, not at the moment. And obviously we're aware of the macro environment and always nervous about that. Um, but gosh, if you look at our metrics and you look at our pipeline, it's, uh, it's, uh, there's no indication there that year over year weighted pipeline deals at 50% and above, um, is phenomenal. I mean, it's, uh, it's the best it's ever been. And I'm talking about the year over year comp, um, is probably the best it's ever been both obviously in absolute dollars, but also as a percentage. So, um, you know, at the moment we're not seeing that, um, You know, clients have been flow in terms of their budgets. Some clients, you know, and I don't think it's a broad macro thing. I think it's more, again, on an individual client-by-client basis. But on a broad sense, you know, knock on wood, we're not seeing that, at least not yet.

Understood. No, that's good to hear. That's very good, actually. And then your subcontractor mix slowed on a sequential basis a little bit. Ending headcount was about the same as average headcount. Am I reading too much into it, or should we expect some sort of slowdown in subcontractor mix over the near term, and what does that mean for margins?

Yeah, we would like to drive the sub number down. By design, we prefer to have full-time employees, and we leverage subcontractors, very valuable assets, but we leverage them You know, when when we have a unique skill set that we don't necessarily have a long term need for or as flexible capacity. But, yeah, I mean, we feel very confident right now. So our preference would be to hire full time employees and reduce the number of subcontractors. But, you know, absolutely on a relative basis.

But is market environment, hiring environment at a point that you can achieve that, reduce that subcontractor mix, hire more people on your own instead of relying on subcontractors?

Yes, I think you'll see that. And as I mentioned earlier, what's not showing up in those numbers is the large groups that we're bringing in in Q2, particularly the May graduates that we'll be bringing in. So, yes, I feel... confident that the market will allow us to do that. We're having really, really good success differentiating the business beyond compensation and benefits. We're an attractive employer. Employees like it. It's a good culture. I think we're very collegial, and there's a greatest free decor at Perficient.

I appreciate it. Thank you.

Thank you.

And your next question comes from the line of Vincent Colicchio from Barrington Research. Your line is open.

Yes, Jeff, you had mentioned in your prepared remarks some large deals you're going after. And I missed the size, if you could clarify that. And also, I'm curious if the average deal size is increasing in your pipeline.

The answer to the second question is yes, definitely. You know, it's not like dramatic quarter over quarter, but we definitely add a few percent, if not maybe 10 plus, to that number pretty much every quarter. And yeah, what I said was that we have 200 deals, over 200 deals that are seven figures plus. So, you know, a million dollars plus.

That's in the pipeline or business you're working on? Yeah, in pursuit, you know, fairly evolved. Okay. And if we take out the relatively large health care deal that Tom had spoken about, I'm curious, how's the overall health of the health care business? The mix has declined, and I've heard from some that – Due to burnout of employees, some health care providers are looking to minimize change. I'm wondering if that's impacting you at all.

Yeah, it's a good question. I actually think our health care business is really, really healthy. You know, keep in mind that we've had a longstanding large relationship there that we're still in the process of winding down. So that's having a little bit of an impact on that. But we're actually seeing it sort of turn around now if you look at bookings. In Q1, the bookings were substantially higher than revenue growth in Q1. So I think we're going to see that trend reverse. And, yeah, I can understand on the provider side the challenge, but these folks, both provider and payer, are still so far behind the curve in terms of technology that, you know, I still think there's kind of a must-spend situation. and maybe even more pressure on the provider side than on the payer. And we're seeing certainly digital transformation in most industries, and health care is no exception, as being a top priority. So even where they may be reducing budgets elsewhere, they're still spending on that. And in some cases, it's interesting, your observation about the employee burnout or employee health, mental health maybe, A lot of the digital transformation work that we're doing is actually designed to make their lives better. So I feel pretty good that there's going to be a good stable base of demand there for at least the foreseeable future.

Okay. Thank you, and good quarter.

Thanks, Vince.

And again, as a reminder, to ask a question, please press star 1 on your telephone keypad. Again, that's star 1 on your telephone keypad. Your next question comes from the line of Jack Van Der Aarde from Maxine Group. Your line is open.

Great. Good morning, gents. Congrats on the continued execution. Maybe a question for Jeff and Paul. You touched on gross margin and ABR, both onshore and offshore, are increasing. Do you see a similar gross margin and ABR profile across all your various onshore, offshore teams? Are there differences? And then are these recent increases linear across the groups or are any growing faster than the others for whatever reasons?

Yeah, good question. In terms of the margins, yes, the rates and associated costs are lower in India and than in Latin America, but the margins are fairly consistent within 5%, 5 points, so maybe it's somewhere around the 50 to 55 range. We are seeing an increase in ABR, particularly standing out in some of the more recent acquisitions that we've done in Latin America, where we've been able to introduce different types of accounts there with different kinds of relationships, I would say, and have actually driven. So a lot of that, you know, some of that 13% is skewed, and some of it's not even really in our organic number yet because a couple of these haven't anniversary yet. But we've managed to drive rates there up in the kind of 15% to 20% range. So I would say, you know, as Latin America is leading the way, they were probably a little bit underpricing when we did those acquisitions, and that's rapidly changing.

That's great color. Appreciate that. And then I'm sorry, this has been mentioned like twice, but here remind me of the number of seven figure deals you're pursuing currently.

It's over 200, seven figure plus.

Yeah. Okay. And then just one last question is on, on the win rates, you mentioned those are remaining strong around 60, 65% overall. Can you maybe just talk about the win rates across the size of deals? So, you know, whether it's a, not considered a large deal, and then there are deals over 500K, and now these seven-figure deals. Is there any sort of variance across win rates and what your expectations for win rates are?

Yeah, we do look at that. I don't have it in front of me now, but when we do sales analysis, that's one of the metrics we look at. I would say there's a lot of variability there, right? And a lot of our relationships, particularly those new ones that I was alluding to where we're actually able to open up doors, a lot of them do start small. Um, uh, you know, again, an opportunity to get a foot in the door and shine, um, is, is what we do at the same time. We have, uh, more and more these days, uh, than ever before. Um, we do, we are able to get in, uh, to deals that are, you know, sometimes multiple seven figures. You know, we talk about, you know, back during, I think it was 2020, we initiated with a client at around 25 million. So, um, so there are those occasionally, but, uh, It still is a good mix. You know, I would say there's not – I can't sit here and say, gosh, you know, a $750,000 deal closes 80% of the time, you know, or our win rates are 80% versus, you know, 40 somewhere else.

Got it. Very helpful. Well, I appreciate the color. I'll hop back in the queue.

Thank you.

I am showing no further questions at this time. I would like to turn the call back to Jeff Davis for further comments.

All right. Well, that obviously concludes our call. I really appreciate everybody's time today as always. And as you can see, more momentum than ever. Really, really great quarter. Great start to the year. And super optimistic about not just the rest of this year, but the outlook beyond that. Appreciate your time and look forward to seeing you all again in 90 days. Thank you.

Thank you. And this concludes today's conference call. Thank you all for joining. You may now disconnect.