Good afternoon to everyone. Welcome to Nagarro SE's Q3 2023 earnings call. You should have received a copy of the earnings release for Nagarro's third quarter 2023 results. If you have not received the press release, a copy of the release, as well as of this presentation, is available on nagarro.com in the Investor Relations section. Representing Nagarro on today's call are Manas Human, Co-founder and Custodian of Entrepreneurship in the organization, and Gagan Bakshi, Custodian of Strategic Finance. Before I pass you over to Manas Human, I would like to remind those listening that some of the comments made on today's call may contain forward-looking statements. These statements are subject to risk and uncertainties as described in the company's earnings release. Additionally, please also refer to the earnings release for the notice on reported results that are non-GAAP measures.
As you may have seen, Nagarro has changed the setup for asking questions. In today's earnings call, research analysts and institutional investors will have the chance to raise questions. There will be a separate call for retail investors later, where we will address questions from retail investors in particular. There are a number of channels today which will enable sell side analysts and institutional investors to ask questions, and we would encourage you to do this ahead of the Q&A session. To ask a question via video link, please click the Request to Speak button located at the top of the broadcast window. Please then follow the on-screen instructions. You may also choose to not activate your webcam and pose the question verbally. If you prefer, you can dial the telephone numbers listed on the homepage and follow the instructions when spoken to by the operator.
Alternatively, you can pose a written question by clicking the messaging icon in the navigation bar, typing your question into the Ask a Question box, and then clicking the Send button. Instructions for all question methods are detailed on the homepage. We would kindly ask you to stick to two questions. However, you may reenter the queue, and if there is time, we will come back to you. With that, it is my pleasure to hand you over to Manas Human.
Thank you, Dan, and thanks for the detailed and precise instructions. Hello, everyone, and welcome to this call. In the last earnings call that we had, I had alluded to Nagarro's vision for the Fluidic Enterprise. We have framed this vision as the human-centric use of technology, particularly AI, to make our clients and their businesses more responsive, more efficient, more intimate in how they interact with their customers and partners, more creative and more sustainable. As you may have noticed, in Q3, we have begun releasing AI platforms to enable this Fluidic Enterprise vision, one of which is Ginger AI. These AI platforms are yet to move the needle for Nagarro in terms of revenue, but we believe that eventually our best clients will leverage them to take their game to the next level.
For new clients, it's a great way to start to engage with Nagarro. For example, we have just won a small Ginger AI deal in Austria with the public sector, which is our first real project with that organization. In any case, these platforms establish Nagarro's thought leadership in the use of AI and other technology as well, across industries and around the globe. Moving on to the highlights of quarter three. In our opinion, this was another quarter of consistent performance from Nagarro. Despite tough comps from the corresponding quarter in 2022, our constant currency revenue growth was 6.6% year-on-year. Constant currency, organic revenue growth was 2.3% year-on-year. As much as the growth, we are excited that despite the challenging environment, we retain the trust and full engagement of our clients.
Accounts generating over EUR 1 million in revenue over the trailing twelve months were at a record high of 176 at the end of September, up from just 150 a year ago. We are very happy with that. Meanwhile, our Net Promoter Score in the Q3 customer satisfaction survey was at 67, which is an excellent number. Now, when we were growing very fast in 2021 and 2022, there was some commentary about our poor cash conversion. We had explained then that this was just a result of the fast growth. Anyhow, I hope we can now put that topic behind us. As expected, operating cash flows have improved greatly as growth has moderated. In the first nine months of 2023, operating cash flow adjusted for changes in factoring.
As we had said, we are drawing down factoring, so adjusting for these changes in factoring, including interest on factored amounts, the operating cash flow was nearly twice that from the previous year, namely EUR 61.7 million, as compared to EUR 32 million in the first nine months of 2022. We have continued to trim our costs, mainly by streamlining headcount. Some of the impact of that trimming of the cost base is seen already in Q3, while some will be seen in subsequent months. We've also had the changes in the salary structure that we talked about in Q2, in the earnings call. On ESG in August, EcoVadis awarded Nagarro a bronze medal and recognized us as advanced, based on data gathered from publicly available resources.
Also, just after the end of the quarter, on the early first week of October, the automotive industry's supplier assurance platform revised its sustainability score for Nagarro up to 70, placing Nagarro higher than the industry average of 62. We at Nagarro have always been keen on being good citizens of this planet. Of late, we have been stepping up our more formal ESG efforts and also our engagement with ESG rating agencies, and this will continue. Revenue for Q3 2023 was EUR 234 million. Gross margin was a shade below 24%. This gross margin reflects persisting excess capacity, but also another effect related to the evolution of how we sell at Nagarro. In recent times, our method of selling has become more and more consultative.
Our sales spend has therefore shifted from the specialist salespeople in S&M to more consultative selling from within our global business units. In our current reporting, this consultative selling expense falls into our cost of revenues and reduces gross margin. We are starting an initiative now to benchmark our definitions of cost of revenue and gross margins against industry practice. We will keep you updated as this gross margin topic develops. Adjusted EBITDA was EUR 32.0 million. Our top performing industry was Life Sciences and Healthcare. Our worst performing industry remained, yet again, Horizontal Tech. The Rest of the World grew fastest year-on-year, while North America was affected by its exposure to Horizontal Tech and other slower industries. We ended the quarter with a cash balance of EUR 92 million.
We are not changing our guidance from August for 2023, which you may remember, was based on the current, exchange, rates at that point in time and does not include the effect of any later acquisitions. This guidance was for EUR 915 million revenue, 26% gross margin and 13% Adjusted EBITDA margin. We remain committed to our diversification across industries since we believe in the ultimate convergence of technologies and user experiences and ecosystems, which will break down the traditional industry silos. Still, we do measure revenue KPIs by industry. As mentioned in the previous slide, the best performing industry on a year-on-year basis was life sciences and healthcare, which was followed by Automotive, Manufacturing and Industrial. The weakest performance, on the other hand, was in Horizontal Tech and then in Management Consulting and Business Information.
We have remained low in terms of client concentration as always. Our top 5 clients account for only 14% of our revenues for the quarter, and clients numbered 6 to 10 account for only 9% of our revenues. We are a highly diversified machine. The year-over-year, the year-over-year development of the different client regions has, for us, been more or less driven by the dynamics along the industry dimension. North America has shrunk primarily because of its exposure to the poorly performing industries, horizontal tech and management consulting and business information. North America accounted for 34% of revenue in quarter three. On the other hand, the rest of the world has been a steady performer for some years now. In 2020, when we listed, this was our smallest segment. In Q3 2023, it accounted for fully 26% of our revenue.
In terms of people, in terms of Nagarians, our headcount reduced by 500 this quarter to 19,182, of which 17,728 are professionals in engineering. We are very proud of our colleagues, who have remained loyal and steadfast despite all that's going on in the external environment and in the capital markets. Now over to Gagan to say a few words on the balance sheet and cash.
Thank you, Manas. Hello, everyone. As always, let's first review the balance sheet. The left chart, if you could move to the next slide, please. Thank you. The left chart shows the balance sheet position on September 30, 2023. We reported financial liabilities of EUR 264.9 million, which consists of our syndicated credit facility, various working capital facilities, bank loans and liabilities from factoring. Our lease liabilities stood at EUR 50.5 million, and with a positive cash balance of EUR 91.6 million, our net leverage came out at EUR 223.7 million. Given our LTM Adjusted EBITDA of EUR 123.3 million, our net leverage ratio at September 30 was 1.8x. The company's liquidity position at the end of Q3 was comfortable, with a working capital of EUR 168 million.
Days Sales Outstanding, calculated based on the quarterly revenue and including both contract assets and trade receivables, were at 79 days at the end of September, and this is versus 69 days at the end of Q4 2022, clearly reflecting a reduction in factoring volumes. Now on to our cash flows, which are shown in the right-hand chart. For the nine-month period ended September 2023, our total cash flow was EUR -15.8 million as against EUR -7.3 million for the comparable period last year, and this is primarily attributed to purchase of treasury shares. Let's take a deeper look into the cash flows. Operating cash flow for the nine-month period ending September was EUR 41.4 million, as against EUR 45.5 million for the comparable period last year.
As discussed before, adjusted for changes in factoring, the operating cash flows were EUR 61.7 million for these nine months, versus EUR 32 million for the comparable nine-month period last year. Cash flow conversion has improved as growth has moderated. Cash outflow from investing activities for the nine-month period was EUR 52.8 million, and this was mainly due to payment of net acquisition obligations of EUR 48.5 million. For the comparable period last year, the cash outflow was EUR 42 million. We also reported a CapEx of approximately EUR 4.8 million for this nine months, which is only about 0.7% of our nine-month revenues for the year.
Finally, the cash outflow from financing activities for this nine-month period was EUR 4.4 million, as against a cash outflow of EUR 10.8 million in the comparable period last year. Major items of cash inflow were net proceeds from bank loans of EUR 51.6 million, and these were offset by cash outflow of EUR 18.8 million for the lease payments, EUR 8.5 million for interest payments, and EUR 29.7 million for share buybacks. We also have two key items to report. The first one, during this quarter, we successfully concluded our ongoing share buyback program, under which we purchased 350,000 shares for a total of EUR 29.7 million.
Second, as a subsequent event to the close of the quarter, on November 1, we reported the acquisition of U.S.-based Telesis 7. This transaction strengthens our capabilities in the telecom sector, as well as our footprint in the U.S. market. Telesis 7 is being consolidated from November 1. Further acquisition details are available on page 26 of the Q3 earnings report. With this, I hand over back to Manas. Thank you all.
Thank you, Gagan. Moving on to the outlook, this here is our guidance again from August, and we've already referred to it earlier. By Nagarro standards, this has definitely been a slow year. Further, there's still no clarity about when things will get better. Despite that, we continue to believe that in the medium term, Nagarro can deliver 20% organic revenue growth in a typical year, and we have committed to push towards 18% adjusted EBITDA margin by 2026. So at this time, we are all deeply analyzing everything that we can do at our end, and need to do, in fact, to ensure this sort of medium-term outcome, even as the macro environment remains challenging for a while. So we have a lot of work to do. Anyway, this brings us to the end of the report for the quarter.
In our eyes, it's another consistent quarter from Nagarro. Let me hand the mic back to the moderator to run the Q&A.
Thank you. As a reminder, you may press the Request to Speak button to ask a video question or verbally. There are also telephone numbers listed on the home page, or you can press the messaging icon to send a written question. Today's first question is via the phone line from Nicolas David at ODDO BHF. Nicolas, your line is unmuted. Please go ahead.
Yes. Hi. Hi, Manas. Hi again, nice talking to you. Thank you for the presentation. I have a few questions, two questions from my side, so respect process. The first one would be on the, I would say, cost adjustment process. It looked like you centered the first wave, I would say, on the non-billable cost. So are you planning to do a bit more on billable headcount as well? Or is there something in your mind that would prevent that? And on the -500 people, could you give us detail between billable and non-billable? And also attached to that, what has been the, h ow should we see the cost cutting in Q3?
It was a full quarter impact, or it was you just processed that during the quarter, and we should expect a larger impact on a full quarter basis in Q4? And my second question is regarding Q4 and not only on the banking sector. I mean, you suffered from a significant slowdown on the banking sector in Q3. Do you think that it was the worst is behind you now, and the budget of the client are already on the bones? Or do you are you worried that it could be worse in Q4, not only because of the some fellow mechanism at some global banks? And any color also again in the geo mix on the sectors too, it would be helpful.
Thank you.
Thank you very much, Nicolas. Good to hear these questions from you. Quick answers. You know, on the cost adjustment process, it is not true that we had most of the reduction in headcount from non-billable resources. Of course, they were resources that were not being billed at this moment, but a lot of them are professionals in engineering who have left us by attrition or in some other way. So, we don't have the spread or the split between the folks in engineering and outside engineering, but we do have the process ongoing to trim our headcount and not hire back for attrition and things like that. And some of the impact was felt in Q3. More of the impact will be felt in Q4.
Of course, Q4 remains also a slightly slower quarter because of more holidays and fewer working days. But yes, we are expecting more of that impact of the cost cutting to be in Q4. When it comes to the banking sector and the outlook on the banking sector, we don't have any, you know, large worries in that topic on that particular domain. But you know, it's still early days in forecasting how next year will look like across different sectors. And we do see, you know, a lot of activity in the rest of the world, as you can see by our numbers. We see a lot of activity in the Middle East, not just in terms of quantity of projects, but quality of projects, also.
Some very interesting AI projects in the Middle East, for example. But, yeah, it's too early to predict how different verticals will do in 2024, I think. Thank you, Nicolas.
Thank you. The next question also comes via the phone line from Andreas Wolf at Warburg Research. Andreas, your line is unmuted. Please go ahead.
Yeah. Hi, everyone. Congratulations on solid cash conversion in Q3. My question is on the number of employees that Nagarro expects after all the measures that you have carried out have materialized. So, I would assume we will see them, as you've just pointed out, Manas, by the end of Q4. So what is the number that we should expect towards the end of Q4? And linked to that is my question: when would Nagarro start hiring again? I guess that is basically linked to client demand. What is your current assumption when the number of employees might be growing again? And then the second question is related to M&A. Nagarro has been acquisitive this year as well. Is it also the strategy for next year to continue acquiring?
I'm just looking, apparently at somewhat higher financial debt levels. As Gagan has already pointed out, it's still comfortable, but maybe, maybe you could, share your view on that with us. Thank you.
Thank you, Andreas. Thanks for your questions. So when it comes to the number of employees and what we are doing with respect to hiring, we continue to hire. We have never really stopped hiring. The mix of employees is changing, and there are some areas where we don't need as many people. There are some areas where we need more people. So hiring continues, and I think that, you know, we will, we don't project where this will bottom out, but we do expect that at some point soon we will be bottoming out, and the hiring will sort of be faster than the rate at which our headcount is decreasing, or at least we'll end, we'll hit the bottom and not continue to fall. I can't give you a precise number.
It is, it's all a very dynamic sort of, system, taking inputs from every project and, b ut I can just say that all through this process, we've been hiring, and even today, we have positions open, lots of positions open. When it comes to, M&A, you know, we are always looking at smaller, deals that might be interesting for us, where we can get synergies, from them, from the deals, and the acquisition and the integration. We have had some, success already with the, with the deals that we have had this, earlier this year. We're very excited by how we have been able to use the, the case studies and the stories and the connections of the companies that we have acquired to, to open new doors in other places.
For example, in the Middle East, through the Turkey acquisition. But, you know, we don't, w e will take each acquisition candidate as it comes, and we continue to look at different candidates, and we continue to keep an eye on our, you know, on our debt. So I would not like to put any sort of projection down in terms of our strategy, but I would say that we continue to look at smaller acquisitions like we always have. Thank you, Andreas. Thanks for those questions.
Thank you. The next question is a written question from Friedrich Meltzer at Stifel.
Would you please be so kind to elaborate on the developments in the US versus Europe? Your peers were rather talking about the US to turn anytime soon, while Europe has been weaker and lagging for them. It appears that Europe and Germany, in particular, are supporting your development quite well. When is the US most likely returning to growth for Nagarro?
Thank you, Friedrich. I wish I had a crystal ball. We do think that our exposure to the Horizontal Tech in the U.S. has led to that, you know, a significant drop. And you remember the case that we mentioned in Q2 about a particular company that for one special reason had to quit working with us. But we do expect, we do see green shoots. I mean, in the U.S., we also see challenges still related to industries that are linked to the buildings and housings sector. We do see those challenges persisting, but and spots of weakness. But in general, I think that the mood is improving. But again, it's very difficult to predict when things will completely turn.
I think in general, we have a lot of positive engagement across all our clients, whether they're in the U.S., whether they're in Europe or the rest of the world. And the conversations we are having, the client visits that we are having, you know, either us visiting clients or clients visiting us in our different offices, all of these, you know, keep us with a spring in our steps still, even though the overall growth is slow. We see this kind of as expanding the base from which we hope to jump when things eventually turn. Just when they will turn is difficult to predict. Friedrich, thank you for your question.
Thank you. Friedrich Meltzer has returned with a number of additional questions. How successful have you been linking wages to the EBITDA development? What other cost measures planned with respect to the existing staff? The next question, headcount development. You started to take out staff this quarter, but maybe this was just a function of normal attrition. Could you please describe how staff acquisition is running at the moment, i.e., in which areas is it more selective, and do you prepare for more bold staff cost reductions in the fourth quarter? Headcount development has obviously the greatest influence on the gross margin. Would you now consider your gross profit margin forecast of 26%, the most ambitious element of your guidance KPIs for the full year?
His final question: How has interest in API topics recently developed for you relative to all other projects that you are about to serve? Are there any other tech topics where you see growth returning already more pronounced?
Thanks, Friedrich. That's a lot of questions. Maybe I'll try to answer them as best I can. So, you know, our linking of wages to EBITDA has gone up very well. We have actually rolled it out across some other geographies as well. And I think that it's a bit of a testament to the compact that we have as an employer between Nagarro and Nagarians, that when it comes to making these sorts of adjustments, we have a fairly easy job of it because of the relationship that we have internally. In terms of, you know, how our headcount will sort of change in the fourth quarter and what staff acquisition is going on, what areas, et cetera, it's a very dynamic process, you know? So I think that it's very
It would be foolhardy for me to sort of estimate what is going on. There are always some large conversations going on with clients, and depending on how these turn out, we may be, you know, hiring more or less. So I think that this is very difficult to predict. We would rather be a fast follower in an agile sense than try to predict what's happening next quarter. So I would just, if you will permit, you know, sidestep that question. The part about the 26% margin being the most ambitious part of the guidance, I think I would agree with you. And again, this is not so much because of excess headcount alone.
As I said, it's also because that our entire investment in practices and COEs and everyone who ever talks to a client about a solution is all within our business units, and it all counts as cost of revenues. I think that this kind of investment, depending on how we classify it, could account for a few percentage points of gross margin. We are currently working with some consultants to sort of benchmark this with our peer group and trying to figure out if there is any change needed in how we report gross margin. Needless to say, if we make any changes, we will also report the existing, use the existing methodology to report side-by-side numbers for a year or two, so that there is no room for any confusion.
In terms of tech topics, API Management, I mean, definitely remains a topic of interest. Across other types of topics, so there's just a lot going on. I would hesitate to call out any particular trend because you would probably miss out on some other trend that may be equally important or even more. But in general, as you know, you know, the entire, you know, cloud topics, data topics, AI topics, they're all top of mind for our clients. And whether or not the clients are ready to sign up for large projects, they definitely want to discuss them.
And I also think that there, there's a lot of discussion around how you would, in a, in a complex enterprise situation with multiple divisions, multiple countries, multiple functions, how would you use this data and AI opportunity to really bring, change to the way organizations have traditionally worked, which we call the Fluidic Enterprise topic, right? So, at least all the conversations that I'm personally seeing, all end up, in, in, with that, at least as a, major topic of discussion. Thanks very much, Friedrich, for your questions.
Thank you. The next question comes via video link from Joaquin Heredia Lasso from Momentum Financial Asset Management. Joaquin, please go ahead.
Hello, Manas. First of all, I would like to, I would like to congratulate you on this result, considering the difficult environment for the digital engineering sector. We have two question. The first is, what are the reasons for the declining revenues in the North America segment? But I think you already explained the relations with the industries by. I would like to know if it's related to a specific customer or to all customer in general. And then, the second one is, how is the M&A environment in general terms? I mean, in all over the world. But then I would like you to describe if you are seeing any opportunities, within India, your origin country. Thank you.
Thank you, Joaquin. Thank you for your questions. So, you know, as regards to the declining revenue in the U.S., it is largely coming from our vertical dimension, as you mentioned. And it is maybe pronounced in a couple of clients, but it's more or less, you know, an industry phenomenon. And I think what is good, though, I must underline, is that even when clients are cutting back, they're doing so very gracefully and making sure that from their top leadership, they're sending the signal that they value Nagarro's partnership. They wanna be back as, you know, as close partners. I mean, we continue to be close partners. They wanna be back at higher levels of engagement.
It is just that the reality of their business is such that they are using this flexibility that we have, as a being a vendor, that they have been having a vendor like us to actually cut back for the short term. So that's kind of what's happening in the US. And again, I think it seems as though the worst is over, but you never know. So, let's wait and see. When it comes to the M&A environment, it is, it's an interesting time for M&A. There are targets out there, and I think valuation expectations are more realistic, except, again, when it comes to the hot topics of the day, when it comes to data and AI and topics like that, the valuation expectations are very, very high.
And we, we actually continue to look for targets that are really not just, you know, pie in the sky kind of valuations, but really genuine companies with synergies that we can see and drive towards, that we can fashion the earn-outs that we set up with them to achieve in a very realistic way. So there are still companies like that around, like the companies that we have acquired this year. India, you know, we do look at companies as I said earlier in some earlier calls, that we have a consistent stream of companies coming to us. Some of them have India-based delivery or sales units as well. But you know, it's, we are not
You know, in terms of our reach to customers and in terms of our ability to deliver out of India, I think we are very well-positioned. That's not to say that we may not do the occasional M&A here, but we do have a lot of coverage. I would, though, say that we're not really an India origin company, in the sense that the way we define our narrative, we have lots of different origins. Our earliest founder actually is Alexandra, sorry, Brigitte Stuckert, who actually was here in Gurgaon with me this last week, and she's now retired, and she founded SoftCon back in 1986. So we have lots and lots of different co-founders of Nagarro.
But yes, India is a very strong hub for us, and maybe the need for us to do M&A in India is a little less than it would be from other regions. Thank you very much, Joaquin.
Thank you.
Thank you. The next question is a written question from Salvador Rivas Cortes from JB Capital Markets. "Hello, I would like to know about the increase of days outstanding since there has been an increase from 69 to 79 days. What proportion belongs to the decrease of factoring?
Thank you for that question. I think the majority of it is just the decrease in factoring, but Gagan, I think you are the right person to address this question.
Like you said, Manas, it's from the net factoring utilization that has come down. There's a table within the earnings report which shows that, and it's to the order of EUR 23 million or a little bit over that for net factoring utilization.
Yeah, and if we adjust for that, there's not really any meaningful change. There's always some fluctuation around the mean, and that's what we've been seeing in the last several quarters. Thank you, Salvador. Thank you.
Thank you. The next question is a written question from Jonathan Art at Ascan Partners. "Can you please quantify the number of billable days you expect in the December quarter as compared to September? Also, can you quantify the utilization rates for the past few quarters and your expectation for the fourth quarter?
Thank you, Jonathan. Good to hear from you. Thanks for your questions. So, you know, we don't put out billable days by quarter because we also have different geographies and different people with different kinds of, you know, holiday patterns, and we are forecasting it all the time, but we don't actually share any of the billable days data. In terms of utilization rates, also, we don't share the data, and part of it, this is because our utilization, as I've mentioned before, a lot of our consultative selling is within our business units, and we believe that the utilization is not a one-to-one match. It's not an apples to apples comparison with our peer group.
We don't share this data, but we did say in June that we had at least 4% extra cost related to excess capacity, 4% of sales excess cost with respect to capacity. It may be a little bit lower, but still a significant number today. But we don't have a number in this quarterly statement. Thank you, Jonathan.
Thank you. The next question comes via the phone line from Andreas Wolf at Warburg Research. Andreas, your line is unmuted. Please go ahead.
Thank you. Manas, I'm looking at the sequential development of financial services and Horizontal Tech. We don't have the billable days, and we don't know what the impact of the acquisitions was, but just looking from outside, it appears like those two verticals have bottomed out. Is it something that you can confirm? And the second question is on personnel expenses. If my spreadsheet is correct, it seems like personnel expenses have increased sequentially, despite the lower number of employees. Is this due to severance payments, or is it a reflection of higher wages? Thank you.
Thanks. Thanks for the questions. So, on the bottoming out of the two industries, I always hesitate to predict what's going to happen in the future, and a bottoming out sort of means that there's going to be an inference on how the verticals will develop. But I do think that it does appear that the worst of the news is over. But, but let's see how it plays out, Andreas. I'd rather not predict how the next quarter would be. In terms of personnel expenses, I don't have a sharp answer for you. There may be multiple things going on.
We are continuing to hire, as I said, in potentially in higher, you know, higher salary areas to service the clients that we have and to continue to drive revenue growth. Whereas we might be letting go of or not backfilling people who may be at lower salary levels. But yeah, I don't have a clearer answer. We do have salaries wage increments continuing in some geographies, but not in some others. So it's a mixed situation right now.
Thank you.
Thanks for your questions, Andreas.
Thank you. We've now reached the time limit for the Q&A session. Manas, I pass over to you to conclude the call.
Okay, great. Thank you, Dan, again. Thanks for the questions and for moderating the conversation. And thank you everyone here for joining this earnings call. May I remind you that later this month, on the 27th, 28th, and 29th of November, Gagan and I will be at the German Equity Forum, and Marius will be at the German Equity Forum in Frankfurt. That's it for today. Thank you all, and have a great rest of the day. Thanks.
Thank you, everyone.