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spk05: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Houlihan-Loki Second Quarter Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, October 27, 2022. I would now like to hand the call over to Christopher Crane, Houlihan Loki's General Counsel. Please go ahead.
spk10: Thank you, Operator, and hello, everyone. By now, everyone should have access to our second quarter fiscal year 2023 earnings release, which can be found on the Houlihan Loki website at www.hl.com in the investor relations section. Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements. These forward-looking statements, which are usually identified by use of words such as will, expect, anticipate, should, or other similar phrases, are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. And therefore, you should exercise caution when interpreting and relying on them. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. We encourage investors to review our regulatory filings, including the Form 10-Q for the quarter ended September 30, 2022, when it is filed with the SEC. During today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings release and our investor presentation on the HL.com website. Hosting the call today, we have Scott Beiser, Houlihan Loki's chief executive officer, and Lindsey Alley, chief financial officer of the company. They will provide some opening remarks, and then we will open the call to questions. With that, I'll turn the call over to Scott.
spk09: Welcome, everyone, to our second quarter fiscal year 2023 earnings call. We ended the quarter with revenues of $490 million, and adjusted earnings per share of $1.19. Revenues were down 9% versus the same quarter last year and down over 25% pro forma if we had included GCA's revenues for the quarter end of September 30, 2021. However, we achieved some positive momentum this quarter with revenues improving 17% versus last quarter. Corporate finances quarterly revenues of $315 million were down year over year but we're 19% higher than last quarter as we continue to see small improvements in market conditions heading into the second half of our fiscal year. For instance, we've started to see a nearing in the bid-ask spread between sellers and buyers. Nevertheless, middle market financing remains constrained as capital is more expensive, although selective leverage transactions are still getting done. These transactions involve higher quality companies, which are more resilient or recession resistant, and in most cases are getting done with less leverage. As mentioned in previous quarters, new business activity remains healthy. Still, the average time to close transactions remains elongated, and we continue to see elevated number of transactions being put on hold. Overall, I would characterize our corporate finance business today to be slightly improved from last quarter, but still operating in a challenging market environment. Financial valuation and advisory recorded $77 million of revenues, its second-best quarter ever, and 17 percent higher than the same period last year. We continue to grow our FEA business across all service lines, driven by an expansion of our employee base and several years of investing in senior hires. A portion of our FEA business is tied to the M&A markets and is facing many of the same headwinds as our corporate finance business. Partly offsetting those headwinds, we believe we continue to take market share in a few areas where we would typically see pressure in a market environment like the one we're in. Also, a portion of FEA operates in service lines and for clients that are not as correlated to the M&A markets and market conditions in general, and that portion of FEA generally operates well in most market environments. Financial restructuring produced 98 million of revenues, up 17% when compared to the same quarter last year. The quarter benefited from a very sizable fee, which periodically occurs in this business segment, and market conditions for financial restructuring continue to improve, and we continue to see elevated levels of restructuring work in fiscal 2024 as a result of new business activity over the last couple of quarters. The number of distressed companies and amount of distressed debt in the marketplace is meaningfully up versus earlier this year. Generally, the market opportunities are growing faster outside the US and there are fewer mega sized restructurings than in past downturns. However, in the last couple of months we've seen a significant increase in activity levels in the US. Furthermore, market current market conditions do not represent the same crisis environment that existed in the financial crisis or early days of the pandemic. However, it is quite possible that this environment may produce an elevated level of restructuring revenues over a longer period of time. As we step back and assess our business model, we are pleased by how all three product lines are performing in this environment. We believe our balanced business and our well-diversified footprint continue to give us a leg up versus our competitors. With the addition of GCA, we are more geographically diversified than at any time in our history, and our industry depth and breadth continues to improve as we add unique industry subsectors. Finally, we believe we benefit greatly from our mix of both strategic and financial sponsor transactions. Our focus on growth continues despite current market conditions. As we hired four managing directors this quarter, we added new subsector industry coverage this quarter, We are actively engaged with a few acquisition targets, and we are greatly expanding our presence in India and expect to add new offices across the globe in the next few quarters. Overall, the current business environment is more challenging than the last few years, but our brand reputation continues to grow, and we believe our long-term prospects are quite positive. And with that, I'll turn the call over to Lindsay.
spk11: Thank you, Scott. Revenues and corporate demands were $315 million for the quarter, down 19% when compared to the same quarter last year. We closed 114 transactions this quarter compared to 134 in the same period last year, and the average transaction fee on closed deals was down slightly. As a reminder, for comparative purposes, since we did not complete the acquisition of GCA until October 2021, Wilhelm Loki's revenues for the quarter ended September 30th, 2021 did not include revenues for GCA. Financial restructuring revenues were 98 million for the quarter, a 17% increase from the same period last year. We closed 24 transactions in the quarter compared to 20 in the same quarter last year, and our average transaction fee on closed deals increased slightly. As Scott mentioned, financial restructuring benefits from a significant fee event during the quarter. In financial and valuation advisory, revenues were $77 million for the quarter, a 17% increase from the same period last year. We had 890 fee events during the quarter, compared to 806 in the same period last year. FDA saw growth across all service lines and continues to maintain good momentum as we enter our third fiscal quarter. Turning to expenses, our adjusted compensation expenses were $300 million for the second quarter, versus 330 million for the same period last year. Our only adjustment was 8.8 million for deferred retention payments related to certain acquisitions. Our adjusted compensation expense ratio for the second quarter was 61.5%, the same as last year. Our adjusted non-compensation expenses were 72 million for the quarter, an increase of 29 million over the same quarter last year. Last year's second quarter ended September 30th, 2021, does not include non-compensation expenses for GCA of approximately $11 million, which offsets a portion of the increase when comparing this year's second quarter to last year's second quarter. Non-compensation expenses also increased as a result of an increase in headcount, an increase in travel, meals, and entertainment expenses. Bankers have significantly increased work-related travel, an increase in both rent and information technology, as we continue to invest in both of these areas, along with the growth of the firm, and an increase in other operating expenses related to such things as placement fees, outsourced personnel, events and trade shows, and charitable contributions. This resulted in an adjusted non-compensation expense ratio of 14.8% for the quarter versus 8.1% in the same quarter last year. We believe that our long-term target for our non-compensation ratio will be lower than what it was pre-COVID, given the increased size of our business and certain efficiencies that we believe will occur, especially in the areas of KM&E. For the quarter, we adjusted out of our non-compensation expenses $16 million in non-cash acquisition-related amortization, the vast majority of which was amortization related to the GCA transaction. We do expect significantly elevated levels of amortization relating to this acquisition through the remainder of fiscal year 2023. In addition, we adjusted out of our non-competition expenses 2.3 million in integration costs related to the GCA transaction, which includes the back office integration of Asia, the last piece of our corporate integration. Our adjusted other income and expense increased for the quarter to an expense of approximately 1.2 million versus an expense of approximately 900,000 in the same period last year. We adjusted out of our other income and expense $1 million related to a non-cash revaluation of a warrant that was assumed as part of the GCA transaction, and $2.8 million related to an earn-out for one of our previous acquisitions. Our adjusted effective tax rate for the quarter was 27.9%, flat when compared to the same quarter last year. Our long-term range for our effective tax rate is between 27% and 28%. turning to the balance sheet and uses of cash. As of the quarter end, we had approximately $540 million of unrestricted cash and equivalents and investment securities. As a reminder, during November, we will be paying our deferred cash bonuses for fiscal year 2022. In this past quarter, we repurchased approximately 100,000 shares at an average price of $81.56 per share as part of our share repurchase program. We continue to be disciplined regarding share repurchases, as we look to maintain balance sheet flexibility. And with that, operator, we can open the line for questions.
spk05: Of course, thank you. And if you'd like to ask a question, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, press star 2. Again, it is star 1 if you would like to ask a question. And we'll go ahead and take our first question from Brennan Hawken with UBS. Please go ahead.
spk08: Hello, can you hear me? Yes, Brennan. Hi, this is Ben Rubin filling in for Brennan. Thank you for taking my question. My first question is on restructuring. Definitely a nice quarter for you guys. Definitely higher than what we were expecting. And given your commentary on an extended period of time and elevated level of activity, How should we impact those comments? How long are you guys kind of seeing that period of time extend to for restructuring? And how should we be thinking about the opportunity in the back half of your fiscal year 23?
spk09: So no one, of course, knows if we're in some downturn, how long it might last and what the impact will be in our business. I think what we wanted to describe is the last two downturns. I'll call it the pandemic issue and the great financial crisis. were rather deep and lasted, especially in the pandemic one, relatively a short period of time. This feels like if we're entering some form of a slowdown in the business environment, you probably won't see restructuring revenues from a year-over-year basis grow at the same pace that maybe we saw in previous downturns. But on the other hand, we think it'll probably last longer. There's just more still debt out there, more companies with some level of trouble and ultimately it just feels like it will be a longer-lasting potential restructuring cycle, but not as deep, and therefore we're not necessarily expecting the doubling of revenues like we've seen in the past from a trough to peak. And as far as your question in fiscal 23, what we've pointed out is we still think fiscal 23 looks more like, if you might, a normal restructuring year, and all of the new business that we've been hired on It's going to have much more of a financial impact in fiscal 24 or even fiscal 25.
spk08: Great. That's very helpful for framing the duration. My follow-up is on FEA. And as you mentioned, second best quarter ever, but $77 million. I did see that MD headcount did drop a little from last quarter. Just trying to understand, you know, what is your expectations to continue to grow and take market share in the space given the challenging environment?
spk09: We still think the market is huge. We're only touching still a very small fraction of it. Our total headcount and in the FBA business, as well as maybe all of them, I mean, we are focused not only on managing directors, but all the way down to analysts as well. We've continued to add quite a few new officers, quite a few new analysts and associates. There's always some level of turnover, but we clearly think the totality of our bench, the strength of it, the skills of it will allow us to continue to do well And at this moment, and we've said it, I think, in the last quarter or two, that we think, you know, the positive internal tailwinds are doing a pretty good job against the external headwinds, which are still enabling the business to do quite well. And otherwise, you know, what you typically find is not necessarily a healthy M&A marketplace.
spk08: Great. Thank you for the color. Thanks for taking my questions.
spk05: We'll go ahead and move on to our next question from Steven Chuback with the Wolf Research. Please go ahead.
spk01: Hey, good evening. This is Brendan O'Brien filling in for Steven. So I guess to start on the corporate finance business, it sounds like you noted that conditions there have improved at least somewhat. In the past, you've seen some pretty strong seasonality in the December quarter, but you know, given the ongoing challenges in the financing markets that you noted and the elongation of deals, I want to get a sense as to whether you believe that seasonal dynamics still holds or if it's maybe a bit more modest and then kind of thinking through the trajectory into, you know, your fiscal year 4Q as well.
spk09: So two comments I'd like to start out and Lindsay can add to it is sometimes taxes or potential changes in the tax code drive reasons why people want to close prior to December 31 or after. There isn't really at this moment any meaningful tax changes that are driving it. And then what it comes down to is buyers and sellers and lenders and borrowers sometimes have motivations to want to for their own booking purposes, bonus purposes. And while we're a March 31 company, our clients and their private equity firms and the lending institutions are generally December 31. Unclear in today's environment, will people really try to race to get things done by December 31 so they at least have something to pat themselves on the back for in terms of getting things done in this calendar year? Or will they go the other direction and feel like, well, this year isn't going to be great anyways, so why push it and we'll move it into a calendar 2023? We're not in control of whatever that outcome might be. And so that's my hesitation. Otherwise, you're correct. You've always seen that our second half of our fiscal year is better than our first half. And there's usually some seasonality for some of the reasons I mentioned, not clear whether there'll be some unique dynamics this year that might change that.
spk13: Great.
spk01: Great color. So I guess just taking a step back, it sounds like restructuring revenues going to be continuing to build here into next year and beyond. And at the same time, you're discussing an improvement in the overall M&A environment. Historically speaking, we haven't really seen those two businesses on an industry level kind of move in the same direction. I guess every crisis is a bit unique, and this one's not yet a crisis but no different. Um, I just wanted to get a sense as to whether you really think like both of those businesses could be actually accelerating like in lockstep.
spk09: In a crisis downturn, it is hard when that turns around to see restructuring grow and corporate finance grow. Um, but we've seen actually many years that I wouldn't say you're in crisis mode. So the markets are generally healthy. Corporate finance is growing. And the total amount of global indebtedness in a variety of companies, which always have a litany of issues, maybe it's too much debt, maybe it's technology disruptors, maybe it's some fraud issue, maybe it's some natural disasters, maybe it's some regulatory issue. There are always a constant component of restructuring out there. And so we've seen, I think in many years of the last probably 10 years, in fact, all three of our business segments have grown. And so while instinctively you're correct, You generally think corporate finance goes up when restructuring goes down and vice versa. But if you actually look at our historical financials, there's been many of those years, in fact, all three of the businesses have grown.
spk13: Great. Thanks for taking my questions.
spk05: And we'll move on to our next question from James Yarrow with Goldman Sachs. Please go ahead.
spk00: Good afternoon, and thanks for taking my questions, Scott and Lindsay. Maybe I could just start with the private credit markets. That's obviously where I think most of your clients finance, given your mid-cap skew. Maybe you could just talk about how these markets are performing. Are they open and functioning, or have any of the stresses in the capital markets begun to trickle down? And then just sort of as the corollary, what has that meant for the sponsor ecosystem and their willingness to deploy capital?
spk09: So tied in the comments that we gave earlier, we do see and believe that the private financing marketplace is open, is functioning. It has levels of strain. We've noted that in some regards, the financing marketplace today is probably a little tighter than it was even a quarter ago. But there is a difference in our mind between the public finance deals and private finance deals and types of size of deals. And we have to remember there are literally hundreds and hundreds of potential financiers who will provide financing for a particular company. So that enables us to still find opportunities out there. But, yes, it is more difficult, and I think it is putting some constraints on the volume and ability for private equity firms to do deals. But they're still doing them. As we've noted, sometimes they're doing them with a different capital structure, i.e. maybe potentially more equity, and you're focused on different kinds of companies that tend to have a better business plan for this kind of a business environment than others. But we are nowhere near kind of the closed environment that we experienced in calendar 08-09 in the Great Financial Recession.
spk00: Okay, that's very clear. Maybe you could just touch on the ongoing strength in Europe in corporate finance as that part of the market certainly continues to outperform. What do you think is driving that? And do you think it really can persist at this elevated level versus other geographies given the magnitude of economic stress there?
spk09: If you read or understand what potentially is existing and might be forthcoming in Europe versus the U.S., Europe does feel like it's going to have more economic issues, at least short-term, than the U.S. Having said that, part of our problem in answering your question is the size and importance and brand and reputation that we have in Europe today is so much greater than it was one, two, three, four years ago. It's not as easy for us when we look at what we're doing. Is it because of the marketplace, or is it because of Houlihan Loki? And in many regards, I think it's much more probably hooligan loki and it has to do with the acquisitions we've made the hirings that we've made i mean instead of being a just an average also ran player we are a meaningful uh substantive player uh in m a in the capital markets um in in europe so i you know try not to dodge your question i think others are probably better able to answer it on a comparison basis We struggle a bit with that question because we're so much different and stronger and better than we were relatively even just a year or two ago.
spk13: Okay, totally understand. Thanks for taking my question.
spk05: And we'll move on to our next question from Manon Gosalia with Morgan Stanley. Please go ahead.
spk06: Hi, good afternoon. I wanted to clarify some of your comments on M&A. In the release, you mentioned that you're seeing an increase in deal closings for the next two quarters. And in your remarks earlier on the call, you suggested that the environment is only slightly improved from last quarter, but it's still challenging. So were you making a distinction between, say, what you're uniquely seeing in your geographies and in your focus areas versus the broader industry? Or Were you just qualifying the comments that there is a slight improvement that is taking place in the industry?
spk09: A couple points. We do feel slightly better about our corporate finance business and opportunities today than 90 days ago. I guess it's point one. Point two, as we mentioned, as we are now close to nine months, if you might, from declines in asset value, stock market, etc., We think this gap, which was much greater between seller perspective and buyer perspective, is closed, which helps do deals. So what I think always buyers and sellers or lenders and borrowers want is as much certainty as they can, even if it's, whether it's good certainty or bad certainty, just there appears to be a bit more certainty, at least in what we're experiencing. There is always some expectation we have in the seasonality aspect The other gentleman asked that typically we do see better results in the second half versus the first half, whether that will continue or not, but that's at least been what our history is. And the other comment is, well, Lindsay mentioned the actual number of deals we've closed were less this quarter than it was a year ago, but a lot of those deals that we keep talking about are put on hold or elongated. they're not dying. So we're, you know, some of the stuff that we really thought or hope would have closed one, two, three, four months ago, they are, you know, finally closing. So that gives us some level of confidence as well that eventually a lot what we have in our backlog potentially will still close. It still may just take a little longer than we'd like, but there's not things that are completely disappearing like we've seen in other down cycles. So I think those are some of the points that I would, you know, mention.
spk06: got it and in terms of buy and sell expectations coming closer together um what side are you seeing more of that on is it seller expectations capitulating going into your end and potentially higher recession risk in the next year or um is it buyers just willing to put more money to work um given that we're close to the urn and there's so much right out out there yeah i would not at all use the word capitulation i just think it it's consistent we're talking about home prices
spk09: business or other kinds of assets, buyers typically move to new fair market value much quicker than sellers. And the longer something continues, eventually both sides get a little closer. Probably, I'd say sellers have moved a little more towards whatever that midpoint is than buyers. But it's not a capitulation concept and don't necessarily think we've entered a period where buyers have said enough, enough, let's just go out and start really buying things. You know, that was a commentary you might have said in summer or fall of 2020. There's still deals getting done. And just like I said, we kind of smell test what people are thinking and what they're willing to do deals at. And they're getting closer in their perspectives of each other.
spk11: And I think just as a reminder, Manan, you know, 80% or more of our transactions are private. So there is a lot more factors that go into that. why are you selling, why are you buying, than simply value. And whether it's end of life for financial sponsors or succession planning for family-held businesses, the longer we're in this stable but choppy market, the more likely they're going to take steps towards the middle because of timing. And that's essentially what Scott's saying. And what we're seeing is as long as the capital markets kind of hold up for us, you're going to see them march towards the middle because there's just a lot more factors going into this than just maximizing value or economic terms for both.
spk13: Okay, that's really helpful. Thank you.
spk05: We'll move on to our next question from Mike Brown with KBW. Please go ahead.
spk02: Hi, good afternoon Scott and Lindsey. Hey Mike. So corporate finance had a strong result in a tough environment, so I was just hoping to get a little more color about the key drivers of the result this quarter and if you could touch on any of the contribution from the non-traditional M&A businesses such as HLI Finance. Thanks.
spk13: Go ahead, Lindsey.
spk11: I mean, I think the corporate finance's success this quarter was pretty broad-based. We had... Quite a strong quarter, as did some of our peers in our Europe and UK business. But from an industry standpoint, fairly broad-based. I'd say the capital markets business and the M&A business, which is the second largest component to corporate finance, both did about the same. So no distinction between either of them. in terms of performance. And, you know, pretty broad-based resolve for corporate finance with really no theme other than maybe, you know, Europe performing better than the U.S., which we've also heard from some of our peers as well.
spk13: Okay, and then just a follow-up on corporate finance.
spk02: It looks like the MD headcount there declined by about seven, I guess, seven quarter over quarter, which seems like a pretty large move. Can you expand on that change? Is that simply just normal attrition, or is there maybe a purposeful reduction in force or something else at play there?
spk09: Absolutely no reduction in force, layoffs, whatever you want to call it. I think this is just normal turnover. Some of it is retirements. Some of it is people getting out of the business and want to do something else. Some are going to competitors. Some For the same reason we successfully hire people because we have a better platform for what they do. There's other bankers statistically are going to feel that there's a different platform that they might go to. Part of it's also a little bit of digesting of whenever we hire people or acquire businesses, there's always going to be some small amount of churn. But at this point, I don't really think the total number of MDs, you know, net departure is anything significant. And along those lines, I think our attitude and process towards hiring people has been very consistent. We're really not looking at trying to pull back any of our expectations. And I would say both what we hired and have announced for the September quarter and what we've hired and have in place and will announce when they officially come in and get to the December quarter and March quarter I think looks very normal for the size of our business at this point.
spk13: Okay. Thanks for the call, Scott.
spk05: As another reminder, it is star one. If you'd like to ask a question, we'll move on to our next question from Devin Ryan with JMP Securities. Please go ahead.
spk07: Hi, this is actually Michael Falco standing in for Devin Ryan. Thanks for taking my question. I wanted to ask about M&A opportunities. You noted that you're actively engaged with a few acquisition targets. Just curious if there was any more color you could provide there or areas across the business or white spaces across the platform that might benefit from an acquisition. So I'd appreciate any additional color you might have on that.
spk13: Go ahead, Lindsey.
spk09: You've been closer to a few that we've been tracking recently.
spk11: Sure. Look, I think our strategy for years has been to maintain a pretty healthy pipeline in M&A. These transactions, as we've mentioned, often take months or years to form before we actually come together so that hasn't changed and I think if anything probably as the markets have become a bit more choppy and in M&A you've seen a decline we tend to see that pipeline improve not necessarily by volume but by quality of discussion and I think that's where Scott was alluding is that you know we had a we are happy with the pipeline we have we're happy with the discussions and And one of the reasons why we've been more conservative with respect to our balance sheet is that when we go through downturns or situations like this, oftentimes M&A tends to become more active. And that's consistent with what we've seen in the past and we're experiencing it now.
spk07: Great. That's very helpful. And then I did see that you announced a new senior hire this week that's going to expand your capital markets business in the Middle East and Africa. Could you talk a little bit about the growing opportunity in that region and then also just globally for the business more broadly?
spk09: If you look at the map where Houlihan Loki operates, we've got a very sizable presence in the United States, very sizable presence in Europe, a growing presence in Asia Pacific area. Still relatively small in the Middle East. So that's one of the areas that we see business opportunities and we are looking and want to expand it. We've always said at some juncture, you know, we'll probably get to Latin America, other parts of Southeast Asia. So there's by no means have we stopped where we think we can go geographically. And we've been in our Dubai office for several years and we have continued to add personnel there. from the original beginnings, and we think that there's more business for us out there. So the person that was announced a couple days ago is just an ongoing addition in terms of, once again, I call it bench strike to provide even more services than what we currently do in our Dubai office and what we'll hopefully be able to do across the Middle East in total.
spk11: Yeah, and I think just to add to that, we have been quite successful in the Middle East with respect to our restructuring practice. with a handful of fairly notable engagements in that region. And, you know, there is a symbiotic relationship between restructuring and capital markets. And so it is a natural to, in a healthy restructuring environment for Hula and Loki, kind of add that type of senior experience higher to our service offerings over there.
spk13: Thank you. Really appreciate it.
spk05: And we'll take our next question from Ken Worthington with JP Morgan. Please go ahead.
spk03: Hi. Thanks for taking my question. So you mentioned that the different parts of middle markets M&A was holding up better than others with sort of the high quality deals much more apt to get funding while the lower quality deals I think, you know, struggled or really struggled this quarter. Um, and so I don't want you to insult any of your, your, your clients, but, and I'm sure all your companies are high quality, but as we think about the mix of your middle market clients, what portion do you think. We'll be, you know, still likely to get funding, even if the financing markets get much more challenging, like how, how durable, um, you know, are the clients that you serve.
spk04: That makes sense.
spk09: Yeah, I understand the question. I don't think there's an easy answer because you can't quite pull that kind of question. I mean, what we've said, it's not high-quality or lower-quality companies. Certain companies and what they do can and will perform okay or not so bad or even very good in a business environment that we're in, and therefore that's what we're saying. Those companies are in a better position to be buyers or sellers or raise money or continue to grow. and other companies that are going to have more difficulties in an economy that might be slowing down, that they will just maybe have to wait until things turn. So it really is all over the board, and probably what that company does for a living, geographically where they are, maybe the management team, their particular business plan, and I don't think we have really an answer that says, oh, X percent of our clients can get financing today and Y percent can't, and here's what might happen. a quarter or two quarters from now. Okay.
spk03: Okay. I tried. And then maybe in terms of FX moves this quarter, you know, clearly we have GCA. We had, you know, the yen, euro, pound move a lot. To what extent did currency weigh on revenue and income in the September quarter?
spk04: Any sort of magnitude you can help us with?
spk11: Ken, we haven't done an analysis that compares sort of what pro forma revenues would look like had currency not changed. So we just don't have those numbers. I will tell you that we have a pretty significant business in Japan, which obviously was meaningfully impacted by currency. And we have an increasingly significant business in the UK and Europe. but haven't gone through the process of saying, you know, here's the tens of millions of dollars that revenues would have been higher had currency not changed.
spk04: Okay. Okay. I'm zero for two. But thank you anyway.
spk12: Thanks, Ken.
spk05: And with that, we have no further questions. I would now like to hand the call back over to our speakers for any additional or closing remarks.
spk09: I want to thank you all for participating in our second quarter fiscal year 2023 earnings call and we look forward to updating everyone on our progress when we discuss our third quarter results for fiscal 2023 this coming winter, thank you everyone.
spk05: With that that does conclude today's call, thank you for your participation, you may now disconnect.
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