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spk05: Good afternoon, everyone, and welcome to Evertech's fourth quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please sit to a conference specialist for pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To address your question, please press star, then two. Today's conference call is being recorded. At this time, I'd like to turn the call over to Beatriz Brown-Signs of Investor Relations. Please go ahead.
spk00: Thank you and good afternoon. With me today are Max Schuessler, our President and Chief Executive Officer, and Joaquin Castrillo, our Chief Financial Officer. Before we begin, I would like to remind everyone that this call may contain forward-looking statements and should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent periodic SEC reports. During today's call, management will provide certain information that will constitute non-GAAP financial measures under SEC rules, such as adjusted EBITDA, adjusted net income, and adjusted earnings per common share. Reconciliations to GAAP measures and certain additional information are also included in today's earnings release and related supplemental slides, which are available in the investor relations section of our company website at www.evertechinc.com. I will now hand the call over to Matt.
spk01: Thanks, Beatrice, and good afternoon, everyone. We're pleased to announce another record year of results as revenue continues to benefit from strong organic growth across most markets, complemented by the contribution from acquisitions, including the CINCIA deal that closed during the fourth quarter. I'll begin today's call with a brief summary of our 2023 financial results, followed by a discussion on the Puerto Rico environment, an update on Brazil, and finally, some comments about our focus for CINCIA in 2024. I will then turn the call over to Joaquin, who will provide some additional details on our Q4 and full year results, as well as our outlook for 2024. Beginning on slide four, let's start with some highlights from our full year 2023 results. We delivered a record $695 million in revenue, a 12% increase over the prior year. And while some of the growth was driven by the closing of Syncia, revenue excluding the acquisition also exceeded our expectations. Our lifetime revenue was up nearly 45% with growth in the high teens, excluding M&A. Increased sales and transaction volumes benefited both our Payments Puerto Rico and Caribbean segment and our Merchant Acquiring segment. Payments Puerto Rico revenue grew approximately 14% year-over-year, reflecting continued strong digital payments growth, primarily from ATH mobile business, while Merchant Acquiring grew approximately 7% on a year-over-year basis, benefiting from sales volume growth and pricing initiatives. The business solution segment was down modestly year over year, as expected, mainly due to the impact in the first half of 2023 from the popular transaction completed in 2022. Adjusted EBITDA for the year was $292 million, up approximately 6% when compared with the prior year. Driven by the revenue increase, partially offset by the full year effect of the popular transaction, and an increase in operating expenses. Adjusted EPS for the year was $2.82, up 11% year-over-year and in line with our expectations. In 2023, we continued to generate significant operating cash flow, $224 million for the year, and we returned significant cash to our shareholders, approximately $13 million through dividends and $36 million through share repurchases, including approximately $12.5 million in the fourth quarter. Additionally, our liquidity remains strong at $490 million as of December 31st. Turning to slide five, the Puerto Rico macro environment continues to be supportive for Evertech as we look to 2024. Overall conditions in Puerto Rico remain stable with the economic activity index increasing 6% over the past two years, reaching its highest level in a decade. The labor participation rate is at the highest rate since 2010, well above the average of the past seven years, and the number of employed is at the highest level since 2009. Additionally, arrivals to the International Airport in San Juan are above pre-COVID-19 levels, positively impacting tourism on the island. Commercial and individual bank deposits remain elevated, similar to pandemic levels, as the higher labor participation has contributed to offset the lack of incremental stimulus funds. On prior calls, we have spoken about the various sources of federal stimulus coming into Puerto Rico. Turning to slide six, the latest data we have seen indicates that COVID stimulus was approximately 49% of Puerto Rico's GDP, the highest ratio when compared to any individual state in the US. Additionally, there's still a significant amount of reconstruction funds that have yet to be received. Of the $33.7 billion pledge, only about $8.6 billion, or approximately 26%, has been received. with the electric grid reconstruction funds being the largest portion pending to be dispersed. As we can see on slide seven, in 2024, approximately $8 billion in federal funds are expected, consistent with what was received in 2023. Disaster relief remains the biggest anticipated source of funds. This fund inflow should largely benefit the construction sector. Lastly, on slide eight, I would like to highlight the manufacturing sector in Puerto Rico. as this segment has seen a boost in recent years. On the slide, we highlight some major investments coming from international companies based in Germany, India, and the US. These companies have either expanded operations or moved entire operations into Puerto Rico, and these investments should strengthen and broaden the economic base on the island going forward. To summarize, given what we've discussed, we believe economic conditions should continue to be supportive for Evertech in Puerto Rico as we move through 2024. Turning to Brazil on slide nine. As in Puerto Rico, we expect the macro environment in Brazil to be supportive of Evertech in 2024. The Brazilian economy was expected to slow substantially entering 2023, but instead exceeded the expectations of economists. GDP growth of 2.9% was well above expectations entering the year. Both inflation and interest rates moderated more than expected, and the unemployment rate also came down. Looking forward to 2024, the Brazilian unemployment rate is expected to remain steady at around 8%, with continued moderation in interest rates from 11.8% to 9%, and inflation from 4.5% to 3.8%. On slide 10, let me make some brief comments about PIX. PIX was launched by Brazil's central government in 2020, and today, over 85% of the bank population have registered for PIX. Given no transaction costs for consumers, PIX has a lower average ticket, making it very attractive for P2P use. Since launch, PIX has been the fastest growing payment method in Brazil. Today, PIX transactions exceed both credit and debit transactions. Syncia and PaySmart have been involved in PIX via partner relationships. The combination of Evertech and Syncia provides a more competitive offering where, with a PaySmart upgraded license, we can rely less on partners to deliver a better commercial offering. This is a good example of the scale benefits and synergy we can achieve with our increased presence in LATAM. Turning to slide 11. On November 1st, we closed on the acquisition of Syncia in Brazil. We have now been working for the past four months as an official part of Evertech, and we remain confident that Syncia will be a big part of Evertech's success going forward. I would like to start by highlighting five areas that will be a focus for us in 2024 as we continue to integrate Syncia into Evertech. The first area of focus is increasing our engagement level with our customers by prioritizing their needs and building deeper relationships. We work hard at Evertech to make sure that all our customers are satisfied with the service we provide and feel a high level of engagement with us. And we're committed to getting to know every single customer to make sure we are meeting their expectations and providing the highest level of service at every level. The second area will be technology modernization. Syncy has completed a number of acquisitions in recent years, which have added a significant number of platforms in each of the verticals with different levels of advancement. We're committed to building a strong product roadmap by modernizing product offerings while also consulting platforms over time to meet our customer needs. The third area of focus is revenue synergies, leveraging increased engagement with our customers and our product portfolio to cross sales. We highlighted this as a major opportunity when we announced the deal, and we remain committed to finding ways to export Stinkia products to other parts of LATAM while bringing Evertech products to Brazil. Our fourth area of focus is M&A. Stinkia has a distinct team with unique knowledge of the Brazilian market, which we will leverage to continue exploring inorganic growth opportunities. Finally, we will focus on margin optimization. Some of our client contracts have not been revisited in years, providing the opportunity for us to pursue pricing initiatives. At the same time, we will look for cost efficiencies. We believe these are areas that will provide benefits on a multi-year basis. Finally, on slide 12, we continue to sign new wins and extensions that should keep our strong organic momentum going in 2024 and beyond. We were able to renew our GetNet Chile acquiring relationship through 2027 and expanded our business with them to now include ATMs in Chile. We also renewed our relationship with Compensar, our largest customer in Bogota, and we brought on Sears as a new client in Mexico to our issuing platform. Let me conclude by highlighting capital allocation as a continued area of focus in 2024, as we continue to strive to provide the best returns to shareholders. With that in mind, We announced an accelerated repurchase program by which we aim to repurchase $70 million in shares, demonstrating our commitment to a balanced capital allocation approach. With that, I will now turn the call over to Joaquin.
spk06: Thank you, Mac, and good afternoon, everyone. Turning to slide 14, I'll first review the fourth quarter and full year results for Evertech. Total revenue for the quarter was $194.6 million, up approximately 20% compared to the prior year. reflecting strong growth in our Latin America segment that benefited in the last two months of the year from the Sinque acquisition, as well as continued strong organic growth. In Puerto Rico, we also benefited from higher POS transaction volumes and continued growth from ATH mobile business. Adjusted EBITDA for the quarter was 71.7 million, an increase of approximately 4% from the prior year. An adjusted EBITDA margin was 36.8%, down approximately 590 basis points from the prior year, partially as a result of the SINCIA acquisition, which, as expected, is coming in at lower overall margins. The quarter also reflected an overall increase in operating expenses, including specific corporate initiatives that were expected to impact Q4. Adjusted net income was $40.8 million, a decrease of approximately 6% year-over-year. driven by higher interest expense resulting from the increased debt raised to finance the CINCIA acquisition, higher operating depreciation and amortization, partially offset by a lower adjusted effective tax rate. The adjusted effective tax rate for the quarter was approximately 7.2%. Adjusted EPS was 62 cents, a decrease of approximately 6% from the prior year. for the same reasons pointed out impacting adjusted net income, and to a lesser extent, the impact from the incremental shares issued to complete the CINQIA acquisition. For the full year, total revenue was $694.7 million, an increase of approximately 12% from the prior year and above our initial expectations. Throughout the year, we benefited in Puerto Rico from overall strong volumes, higher spread pricing initiatives, and continued growth of ATH mobile business, partially offset by the impact from the popular transaction during the first half of the year. In Latin America, we saw strong organic growth from new and existing customers, as well as revenue contribution from the acquisitions completed in 2022 and 2023. Adjusted EBITDA was $292 million, an increase of approximately 6%, with an EBITDA margin of 42%, an approximate 260 basis point decrease from the prior year. The decrease in margin primarily reflects the expected impact from the popular transaction due to the sale of higher margin assets in prior year and the effect of a full year of the revenue sharing agreement, as well as the effect of the thinking acquisition which is contributing at a lower margin. Adjusted net income was $185.5 million, an increase of approximately 6% from the prior year. And adjusted EPS of $2.82 increased approximately 11%. Adjusted EPS benefited from the lower share count that reflects the impact from share repurchases and the share received as part of the popular transaction. Moving to slide 15, I will now cover our fourth quarter results by segment, beginning with merchant acquiring. Net revenue increased by approximately 1% year-over-year to $40.2 million, in part due to a tough comparable period last year, which was very strong. The quarter saw sales volume growth in the low single digits, with deterioration in the overall spread as we anniversary pricing initiatives implemented last year managed through a lower average ticket and a card mix that led to a lower overall spread. As we look at January results, these reflect sales volume growth and spread that align more to what we saw in previous quarters. Adjusted EBITDA for this segment was $14.4 million, and adjusted EBITDA margin was 35.9%, down approximately 190 basis points from the prior year. The margin decrease was primarily due to higher operating expenses, namely higher processing costs driven by lower average ticket. On slide 16 are the results for the Payment Services Puerto Rico and Caribbean segment. Revenue in the quarter was $52.4 million, an increase of approximately 10% from the prior year. The revenue increase was driven by approximately 7% growth in overall transactions processed and at the HMOBIL business, which continues to drive growth in the segment. The quarter also benefited from an increase in revenue for services provided to the LATAM segment, mainly due to a higher volume of transactions processed. Adjusted EBITDA was $30.9 million, up approximately 10% from the prior year, and adjusted EBITDA margin was 58.9%, up approximately 40 basis points over the prior year. The increase in margin was due primarily to the increase in revenue and the scalability of this segment. On slide 17 are the results for the Latin America payments and solutions segment. Revenue in the quarter was 66 million, up approximately 89% year-over-year. The biggest driver of the increase was the addition of Sinqia beginning on November 1st. Recall that we had not included any contribution from Sinqia in our guidance, and we are pleased with the performance of Sinqia in the quarter. The basement acquisition in Brazil completed during the first quarter also contributed to growth. Organic growth remained strong across the region, with contributions from existing customers like GetNet Chile and others still driving double-digit organic growth for the quarter. Adjusted EBITDA was $18.3 million, up approximately 55% from the prior year, with adjusted EBITDA margin of 27.7%, down approximately 620 basis points from the prior year primarily due to the inclusion of Sinqia, which contributes at a lower margin compared to the segment average. Margin was also negatively impacted by the Paysmart acquisition, which, similar to Sinqia, came in at lower margins and an increase in operating expenses. Turning to slide 18, you will see results for our business solutions segment. Revenue was $57.8 million, a decrease of approximately 2% from the prior year. The revenue decline was primarily driven by a decrease in core banking services as the prior year included revenue generated from the transition service agreement with Popular post-closing the transaction. Adjusted EBITDA was $20 million, down approximately 19% from a year ago, and adjusted EBITDA margin was down approximately 770 basis points from the prior year to 34.6%, below our expectations for the quarter. The lower margin was due primarily to lower than expected revenue, higher operating expenses, and higher equipment costs. We expect margins to come back to more normalized levels as we move into 2024. Moving to slide 19, you will see a summary of our corporate and other expenses. Corporate and other expense was $11.8 million in the quarter, or 6.1% of total revenue, up $1.2 million from the prior year in part due to specific corporate initiatives executed throughout the quarter. Moving on to our cash flow overview for 2023 on slide 20. Net cash from operating activities was $224.3 million. Capital expenditures were $85 million for the year and above our original expectations as we took advantage of attractive offers in the fourth quarter to refresh key hardware and software and take care of regulatory investments. We spent $417.6 million on two acquisitions, PaySmart and Syncia, and took on $640.5 million of new net debt related to the Syncia deal. We paid down approximately $188 million in debt and returned approximately $49 million to shareholders through share repurchases and dividends. We repurchased approximately 345,000 shares for $12.5 million during the fourth quarter, and at year-end, we had approximately $137 million available for future use under the company's share repurchase program. Our ending cash balance for 2023 was $318.7 million, an increase of approximately $115 million from year-end 2022. Moving to slide 21, our net debt position at year end was $707 million, comprised of $1 billion in total long and short-term debt, offset by $296 million of unrestricted cash. Our weighted average interest rate was approximately 7.45%, an increase from prior year and prior quarter driven by our newly issued Term Loan B, which has a higher cost of debt at SOFR plus 350 basis points, and the increase in our term loan AA cost of debt, giving our move up the pricing grid as a result of a higher leverage ratio. Our net debt to trailing 12-month adjusted EBITDA was approximately 2.24 times, up from 0.99 times a year ago, but still well within our target range of 2 to 3 times. As of December 31st, Our total liquidity, which excludes restricted cash and includes borrowing capacity, was $489.6 million, up $118.4 million from a year ago. Now, I'll turn to slide 22 for commentary on our 2024 outlook. For 2024, we expect our revenue to be in a range of $844 to $854 million or growth of approximately 21.5% to 23% year over year. Adjusted EPS is expected to be in a range of $2.82 to $2.94, or flat to 4% growth compared to the $2.82 reported for 2023. This range assumes an adjusted EBITDA margin of 38.5% to 39.5% and an effective tax rate of 7% to 8%. I will now walk you through some key underlying assumptions that we considered in arriving at the outlook, beginning with revenue expectations for our business segments. For merchant acquiring, we expect low to mid single-digit growth in 2024, as we expect a stable Puerto Rico economy to contribute to sales volume growth. The revenue share with Popular to result in incremental referrals and the execution of strategic pricing actions in segments where we have pricing power. We, however, do expect these to be partially offset by a continued normalization of the average ticket. In payments Puerto Rico and the Caribbean, we expect mid-single-digit growth, also resulting from a stable Puerto Rico economy that will support continued strong transaction growth. in part resulting from a declining average ticket and continued growth contribution from ATH Mobile. For payments and solutions in Latin America, we expect growth to be in the low to mid-70s, driven primarily from a full year of synchia. I would also call out a couple of expected headwinds to consider, the first being the revenue adjustment from GetNet in Q3 of approximately $6.3 million, that will present a tough comparable for the third quarter of 2024. We are now also expecting MercadoLibre to begin migrating their issuing volume to their new internal platform, creating a headwind going into the second half of the year. MercadoLibre continues to leverage our Place to Pay and Sinqia products, and we will continue to work together on the development of new initiatives across the region. As it relates to margin, We expect margin to be in the mid-20s as CINCIA becomes a much larger piece of the segment at a lower contribution margin, and we don't benefit from the effect of the get-net adjustment in the third quarter of 2023, which was 100% margin accreted. Finally, in business solutions, we expect revenue growth of low single digits for the full year, including the impact of CPI for popular services at 1.5%. In general, considering the headwinds previously discussed, we still expect overall revenues to ramp up throughout the year. Now turning to overall margin, our expectations for adjusted EBITDA margin, including SINCIA, is 38.5% to 39.5%. We expect our Puerto Rico businesses will continue to drive margins relatively consistent with prior year. Latin America will now represent close to 40% of our total business. And as we have said previously, as we become more and more successful in Latin America at lower margins, this will put pressure on our Evertech consolidated margin. In terms of other items, we expect interest expense for the year to increase significantly when compared to 2023 as a result of the new debt raised to finance the Cinqia transaction. As a reminder, we continue to have an interest rate swap agreement in place, which fixes $250 million, or approximately 25% of our outstanding debt. Operating depreciation and amortization is also expected to increase consistent with recent trends as we have continued to invest in our business through CAPEX and also with the addition of Syncia. We expect an adjusted tax rate of 7% to 8%, which is lower than prior years as we benefit from a tax shield created by the incremental debt and also benefit from the effect of goodwill amortization at the Sinqia level, which is helping us drive a lower adjusted effective tax rate locally and at a consolidated level. From a capital deployment perspective, our priority continues to be deploying capital for growth through M&A. However, we'll continue to invest in our business and products and have a capex target of approximately $80 million for 2024, including Sinqia. Additionally, Given our leverage ratio, liquidity position, and our expectation to buy back the shares we issued as part of the CINCIA acquisition, as Mac already mentioned, we will be entering into a $70 million ASR in the coming weeks, the impact of which has already been included as part of our guidance. In summary, we are pleased with our fourth quarter and full year results in 2023. especially as we executed on the closing of the largest acquisition in Evertech's history and are focused on delivering on the five areas marked walkthrough. We believe Evertech is well positioned for growth in 2024 and beyond. We look forward to updating you on our progress in the coming year and hope to see some of you at conferences over the next few months. With that, operator, please open the line for questions.
spk05: Yes, thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star then 2. At this time, we will pause momentarily to assemble the roster. And the first question comes from Nate Svensson with Deutsche Bank.
spk04: Hi, guys. Thanks for the question. Wanted to ask a couple on Syncia. So I know when you announced the deal, Sinkia had been growing at a mid-teens CAGR and looking at some of their filings, it looks like that growth had decelerated to something like high single digits the last time they reported. So maybe you can give an update on how Sinkia growth ended up in the back half of the year and then what growth you have embedded into your 2024 guidance. And then if that growth is below the historical 15% CAGR, what do you need to do to return to that historical level of growth and sort of what's the timeline there?
spk06: So this is Joaquin. So I start saying we're not going to break out Zinca specifically. We certainly have an expectation that our Latam segment as a whole continues to grow double digits. Zinca has certainly been growing at that pace historically. And as Max said, we have certain initiatives that we're focusing on throughout 2024, some of which include revenue synergies that should continue to put us in the same pace that we were before.
spk02: Good afternoon. Thanks for taking the question. Just an update on Syncia. Can you talk about the expected accretion of that business in year one and as you think about year two and three going forward?
spk01: Hey, Chris, this is Mac. Thanks for joining. So what I would say is this year in 2024, it's probably more neutral than accretive as we've gotten into the business. We're incredibly optimistic and excited as I've spent a lot of time there spending time with customers. I've met some of the largest customers of the business. They're an important partner for most of the Brazilian institutions because they have, you know, they're a large enough company to be able to invest in some of the best products in the market, but they also adapt to local regulations, which is important. to the banks and to the consortiums and to the pension plans. We're very focused this year on, as Joaquin was saying, ensuring that we focus on getting closer to the customers. They've spent a lot of time rolling up assets. They were dealing with a transaction with Evertech. I've spent a lot of time there, really pushed the team there to get close to the customers and make sure we're cross-selling the existing Syncia products into the customers, looking at new payments products. We've already started talking to them about our payments products. but making sure we're getting close to the customers so we get the growth rate that we want and that we can get the business to continue to grow. Secondly is we're focused on margin optimization, as I said. So we're taking a look at a lot of these contracts are very old, and they haven't gone through a repricing initiative, making sure they're more marketed, that they're charging for all the services that they now deliver. And we're also looking at cost optimization as it looks at efficiencies, like can this organization be more efficient now that they have all these acquisitions. So, like I said, we're very, very excited about the acquisition. We're very close now to the operation doing for Syncio what we've done for Avertac so that we can grow the LATAM segment double digits and so that we can, as you've noticed in the past, we've been very focused on our margins as we've acquired new assets. Most of the assets we've acquired in the past had a lower margin than the segment, and then we brought those to the segment margin over some period of time. So that's the focus now. this year around those five different areas.
spk02: Great. Thank you for that. And then just to follow up, any update on the size of ATH Mobile, if you could talk about that? Thanks for taking the question. Yeah, Chris.
spk06: I mean, ATH Mobile continues to grow very well. It continues to be a very important source of growth for us in the payments Puerto Rico segment. I think in the past we've said it's been in the low single digits. That continues to be the case. Now we think coming in and our top line being a much bigger number going forward, that will obviously impact what ATH mode represents to overall everything. Great.
spk02: Thank you. Thanks, Chris.
spk05: Thank you. And once again, please press star, then 1 if you would like to ask a question. And the next question comes from John Davis with Raymond James.
spk03: Hey, good afternoon, guys. I just want to follow up on Chris's question there a little bit. Mac, you went from neutral to accretive to neutral. So I'm just curious kind of what caused that modest downtick. Is it slower, you know, just more investment needed, you know, slower revenue growth than you expected? Just curious, again, I know it's slight, but I'm just curious kind of what that downtick is driven by.
spk01: Yeah, no, sure. So, I mean, look, when we announced the deal, we said this was neutral to accretive year one. It's closer to neutral. I'll tell you a couple of things. One is they did as – Deutsche mentioned they did decelerate a bit towards the back half of last year because they were focused on the transaction and different things. So now we're trying to get them to re-accelerate and that's sort of in our guidance for this year. Secondly is we do believe there's some opportunity to sort of improve some of the margins, but we didn't want to do that out of the gate, right? So we do think that there's some opportunity to reprice part of the business. We do think that there's some opportunity to be more cost efficient. But we don't want to go into a new part of the company and announce that to employees and customers and make that our first focus because that will alienate both of those constituencies. So we're really focused initially on getting to know customers, where they want us to invest. We do need to modernize some of the platforms, so we'll build a multi-year plan to do that. But that's sort of the reason for it's more neutral this year. But what I can tell you is having met with the customers, I'm incredibly excited about their desire to do more business with Syncia as we invest, and our ability to sell our payments products to their nearly 1,000 customers.
spk03: Okay, I know that's helpful. And then, Joaquin, I understand you guys don't want to give too many details on the Syncia contribution, but we're a public company, so just running some quick math, it looks like if you exclude the GetNet contribution in 23, the midpoint of the REV guide is about 2%. organic growth and you know i think mac he talked about earlier the the economy and the picture in puerto rico is kind of it's kind of looking up so just curious kind of how we square you know two percent organic revenue growth with you know healthy um kind of puerto rico macro and you know you guys have historically been conservative and i appreciate it's february um you're giving a four-year guide but just Anything else to kind of call out as you kind of thought about the top line outlook on an organic basis in 24?
spk06: Hey, John. I mean, I'm trying to follow some of the math that you're doing, but in theory, if you were to exclude the get net impact from the prior year, we should be in the low to mid single digit range, right? Okay.
spk05: Okay.
spk06: I'd like to kind of understand that a little bit better from you, but that's a little bit different from what we're seeing.
spk03: Okay, maybe my synchia contribution embedded in the guide is just a little bit higher. Max just commented that it decelerated a little bit. So maybe that's the delta between 2% and kind of closer to mid-singles. That's super helpful, Joaquin. And then finally, just on the tax rate, nice positive surprise there. Taxes are being lowered. Is that sustainable? Like, how should we think about the tax rate going forward? You're not looking necessarily for 25 guidance by any means, but just is it something that, you know, is kind of one time in nature this year or something, you know, like how do we just think about the tax rate going forward, I guess?
spk06: No, I mean, look, I think that obviously we're not going to give multi-year guidance here. Some of the factors that are driving this, we understand, we can sustain, but that's something that as the year goes on, we'll be in a much better position to kind of discuss. For this year, we've given, obviously, a guidance that's significantly lower than what we've done in the past, and that's for very specific reasons that we tried to convey as part of the prepared remarks, one being, obviously, part of the tax shield that we're getting from some of the interest expense, and then some of the benefits that we're getting at the SINCIA level.
spk03: Okay. No, appreciate it. Thanks for calling out.
spk05: Thank you. And this concludes our question and answer session. I will let you turn the conference back over to Max Schuessler for any closing comments.
spk01: Again, we want to thank you for joining the call today. We want to thank our colleagues for a successful year in 2023 and look forward to reporting our results in 2024 and seeing many of you at upcoming conferences. Thanks and good night.
spk05: Thank you. The conference has all concluded. Thank you for attending today's presentation and you may now disconnect.
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