Ladies and gentlemen, good day, and welcome to TeamLease Services Q2 FY24 earnings conference call, hosted by ICICI Securities. We have with us today Mr. Ashok Reddy, MD and CEO, Mr. Sunil Chemmankotil, CEO, Specialized Staffing, Mr. Kartik Narayan, CEO, Staffing, Ms. Ramani Dathi, Chief Financial Officer, and Mr. Kunal Tharad, Head of Investor Relations. We will start off with the remarks from the management, after which we will open the floor for Q&A session. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to the TeamLease management. Thank you, and over to you, Mr. Reddy.
Thank you very much. Good evening. Just to highlight that we have been maintaining a steady growth rate, and that has kind of played out into this quarter also. With the associate number additions in the quarter, we have now crossed overall numbers of INR 3 lakh across the cluster of businesses that we have. At the group level, the revenue has grown 5% quarter-on-quarter and EBITDA by 21%. Part of this has also been on account of the seasonality that the EdTech business has. The year-on-year revenue grew 16%. The element of the headwinds in DA and the specialized staffing continued to play out. Overall, we've added over 122 new logos during the quarter.
While the specifics of general staffing and specialized staffing will be covered by Kartik and Sunil, in the degree apprenticeship side, I think the trainee headcount growth has become positive in the last two months, while for the quarter we still stay negative. The traction of being able to get the numbers in on the National Apprenticeship Promotion Scheme and the Work Integrated Learning Program have started to play out, and we are able to compensate the NEEM losses by onboardings on these fronts. I think we still have about 8,000-9,000 NEEM apprentices who would probably exit by end of Q4, and that's really what we're looking at. On the HR services front, the seasonality where Q1 is low on revenues did play out.
Q2 onwards, we've started seeing an uptick in the revenue front, where revenues have grown 26%, quarter-on-quarter and 20% year-on-year. The EdTech business also is looking at more partnerships with universities, premier educational institutions and other product avenues, that will drive their future growth. I think we stay positive to the element of the demand, that is there in the market. We are seeing good demand coming in for the staffing side from industry verticals, primarily driven by BFSI and consumer. Specialized staffing still has the headwinds, largely from an element of the macros of the industry segment, but we've been signing up new GCC customers that have been giving us some volume, at a lower level, but giving us open positions and volumes.
I think as we go forward, sustaining the element of growth with productivity is, will be the key focus. Before we dive into the questions, I'll call Kartik to give an update on staffing, and then we take it on.
Yeah, thanks, Ashok, and, good evening, everyone. I'm pleased to share the highlights from our Q2 FY 2024 performance. During this quarter, we witnessed notable progress in general staffing with a net addition of nearly 14,200 associates, marking the highest number reported in the last seven quarters. We experienced a 6% quarter-on-quarter sequential growth in headcount and an 18% year-on-year. In terms of revenue, we had a 20% revenue growth quarter-on-quarter last year to this financial year, and a 21% for the entire H1 last year, reflecting the positive momentum in our business and the market.
Our growth is advancing in tandem with that of our major clients, leading them to pursue cost effectiveness for their increasing volumes, which in turn affects our average revenue, you know, per unit, known as PAPM. Some of you do recall that, you know, we have spoken about initiatives around cross-selling and upselling into our base. We are seeing some initial results coming through, with which PAPM has registered a marginal improvement of 2% quarter-over-quarter. We are beginning to observe initial positive indicators, yet the comprehensive impact on revenue and the tangible realization of these efforts will necessitate a longer timeframe to fully materialize. As we navigate through the evolving landscape of the BFSI and consumer sectors, we are greeted with a robust pattern of growth that speaks volumes to the potential lying ahead.
The drive towards formalization within the leading players in the consumer space promises a strong undercurrent for the sustained growth. In Q2, hiring has increased by 20% in Tier 2 and Tier 3 cities over the same period last year. In this era of fierce competition that choices abound for our customers, our company has witnessed a reformation of trust. Customers we see are gravitating back towards our brand, recognizing the distinct advantages we offer. Commitment to compliance, our cutting-edge hiring and technological solutions stand out as key differentiators. Financial services and consumer goods are, you know, top two segments in terms of absolute growth and associate base, closely followed by retail and telecom. Consumer good and telco achieved growth rates of over 40% and 90% respectively, in terms of associate growth compared to the previous quarter.
Our sales effort resulted in 33 new logo signups, primarily in the consumer, manufacturing, and BFSI segments. We hired around 20,000+ individuals during Q2 through all sources, with a 6% increase from previous quarter. Our full-time equivalent, FTE, improved by 2%, driven by a 6% increase in associate headcount. Our investments in digitization initiatives have shown positive efficiency gain, allowing us to cater to a larger client base while maintaining our core employee strength. As we move forward, we see positive signs around hiring in telecom, financial services, in the services sector, as well as the consumer space. There are specific opportunities around manufacturing, led by PLI schemes. These open positions are field recruitment in non-metro locations, and we're working on improving our execution capability in hiring in this sector.
Looking ahead to Q3, we have a healthy pipeline and see emerging demand across most of our customers. While the challenges in certain sectors persist, we believe in the opportunities presented by continued formalization, along with anticipated capacity to be positive for us. Our focus remains steadfast on building a high quality business anchored on strong commercial focus and exceptional customer service. We are also investing to build our hiring engine. The benefits of digitalization and process improvements are starting to manifest, and we are optimistic about the impact they will have in the future. Thank you so much, and with this, I will hand it over to Sunil.
Thanks, Kartik. Good evening, everyone. I'm pleased to share the Q2 performance of Specialized Staffing. We witnessed a marginal improvement in hiring with the global capability centers, while the hiring in IT services companies continued to be subdued, leading to an overall drop of 60% in the hiring requirements. The macroeconomic situation is forcing our clients to go very slow on fresh as well as replacement hiring, and focus on improving utilization rate, as you all know. On the positive side, we see a lot of new GCCs being set up in India, and the existing ones are expanding. Hence, we see a great opportunity to improve our wallet and market share in this space. We have added 10 new logos in this quarter, and six out of them are large and strategic accounts, obviously GCCs.
Our sales pipeline continues to be strong, and we expect this strong sales momentum to continue for the rest of the fiscal year. Now, coming to commercials, sorry, financials, our revenue grew marginally by 3% sequentially, and 2% on a year-over-year basis. Our headcount grew 1% sequentially and de-grew 6% on a year-over-year basis. This de-growth in headcount is primarily driven by headcount reduction from services clients, although we could replace this with additions in GCCs to some extent. Our EBITDA grew nominally by 2% sequentially, while on a year-over-year basis, we have a substantial dip of 25%. Across the board, we are pivoting our business towards high quality, high potential, and high margin accounts, and reviewing our strategy for the relatively low margin accounts.
Looking ahead, we believe that the headwind will continue in the IT services companies for the rest of this fiscal year. This, coupled with macroeconomic situation, inflation, and geopolitical situation, might put additional pressure on adding new headcount. We expect Q3 will be muted for us on the back of furloughs and above-stated challenges. We will continue to focus on adding new strategic clients across the industries, fast-track our digitization efforts, and focus on cost optimization and productivity improvement. These actions are intended to help us weather the current storm and position the company for future growth. Thank you.
Thank you, Sunil. Good evening, everyone. We have received income tax refund of INR 48 crore, including INR 3.5 crore of interest income during the quarter. The refund pertains to assessment year 2023. Total outstanding income tax receivable as of September 30th 2023 stands at INR 220 crore. Our total cash balance as of Q2 is INR 323 crore, including INR 240 crore. EBITDA to operating cash flow conversion is maintained above 70%, excluding the one-time TDS impact in Q1. Core employee headcount has remained almost flat between March 2023 to September 2023. Core cost has been rationalized by about INR 50 lakh per quarter compared to March 2023 run rate. The staffing vertical is impacted by DA, NEEM headcount loss over the last four quarters, mainly at EBITDA level.
DA has now turned net positive on headcount addition, and absolute EBITDA growth continues on a sequential basis. We still have about 10,000 NEEM trainees expected to attrite by Q4 FY 2024. EdTech business has launched a new revenue line offering called Digivarsity, which is a multi-employer, multi-university platform that helps students make informed career decisions. Group level margins continue under pressure because of headwinds in IT staffing. However, absolute profits will improve sequentially, led by growth and operating leverage in staffing business. Thank you.
We are now open for the questions.
Thank you very much.
... We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants, to ask a question you may press star and one. Ladies and gentlemen, to enter into the question queue, you may press star and one. Anyone who wishes to ask a question may press star and one. First question is from the line of Mukul Garg from Motilal Oswal Financial Services. Please go ahead.
Thank you. I hope I'm audible. Yeah, thanks. So, I just wanted to start with, you know, what, what's, you know, kind of the current view on the margin profile in the general staffing business. How much of impact there was because of the DA, you know, kind of ramp down this quarter? How should we look at it? As, you know, you are mentioning that the new schemes, NAPS and NEEM will kind of changing now. So should that now start kind of acting as a tailwind to your margins, or will that still remain a headwind? If you can just kind of give a sense on that, on how, how to look at it.
So while we have another 10,000 NEEM headcount to fall off, and sunset over the coming few months, the realization on the NEEM front is higher than the realization in the NAPS and WILP programs. Obviously, under the NEEM program, we had 100% of the trainees, assigned to learning, and in the element of NAPS and WILP, we are at about 15%-20%. So I think we have kind of addressed the volume side of the challenge, where we are now getting into a net positive front on the numbers front. I think the second element to address will be the value side, where we are able to sell a larger percentage of the new onboards, to the education linkage that will improve the realization.
So I think at least for the coming two quarters, there will be some more pressure from a net revenue perspective on the DA front, while it won't be a pressure from the headcount perspective.
Yeah. So, you know, again, I should just, because I know why our forms will be tough. So, you know, if we focus on QQ comparison, there is going to be Q1, where you guys are, you know, kind of crossing three. But, how much of tailwind should this start now, having as, you know, the-
Mukul, your voice isn't coming through clearly. There's a kind of a echo.
Give me one second. Sorry. Yeah, I hope I'm audible now.
Yeah, better.
And, I was saying, you know, year- on- year, YoY comparison, you know, this is tough, given the macro impact. But on a QoQ basis, how should we think about the, you know, impact, from the scale-up, you know, as net adds kind of ramp up, margins will obviously be higher than your general staffing business. So on an overall basis, how should we think about the staffing margin profile? And, again, I guess you can just, also blend in the, you know, the movement on PAPM and how productivity gains are kind of translating into higher margins. How should we look at profitability going forward?
So, Mukul, in terms of staffing vertical, including DA business. So we should be able to maintain EBITDA growth of 5%, 5%-6% sequentially going forward. Converting that into a margin basis points would be difficult, as you know, since we don't have control on the top line. Depending on the associates' salary range, that margin and expansion can change. But on absolute profits, we are confident that will expand 5%-6% on a sequential basis.
Sorry, you know, sorry about pushing back on this, but when you are saying that sequentially you can expand the margins by 5%-6%, that is something which is independent of any operating leverage gain, or, you know, can that really add to that? Just trying to understand, you know, how the numbers will move given the whatever revenue base will be there, given the high seasonality in H2.
We don't have that kind of unusual seasonality in H2, Mukul. So this 5%-6% that I'm indicating on a quarter-on-quarter profit improvement is with volume, operating leverage, as well as marginal improvement in PAPM.
Understood. Got it. And, you know, can you just share the PAPM number?
... It's about 680 in the staffing business. Little over 680, so 684.
Understood. And, is it fair to assume that you are on track to, you know, kind of, improve margins, you know, sequentially, over the next few quarters?
Mukul, let me correct again. We are confident of improving absolute profits sequentially. Margins as a percentage, yes.
Is dependent on the salary levels that are paid out, so that's what Ramani is calling out. We don't have a control on that, but absolute profits will go up.
Okay. But, on the salary level, is there some supply side inflation, which is kind of reducing your confidence to talk about margins or, you know, what's going on there? The sense which we had earlier, in the previous calls was that, that the staff cost will remain, you know, under our control, given the environment. Is there a change to that?
No, no. Staff cost at our end is under control, the core employee cost. The wages and salaries paid, typically is a function of the industry that is growing and the kind of competitive pressures there. So we don't have, I mean, broadly, we'll have some element of change that happens, but we don't know the exact. We don't call that number out.
Understood. Thank you a lot. I think that was, you know, quite detailed answer. I'll get back into the queue.
Thank you. Before we move to the next question, reminder to the participant, anyone who wishes to ask a question may press star then one. Next question is from the line of Amit Chandra from HDFC Securities. Please proceed.
Thanks for the opportunity. Hope I'm clear?
Yes.
Yeah. So, my first question is on the improvement that we have seen in the PAPM. So, you know, we have been seeing improvement after, like, many quarters. And, you know, if you can explain what is driving this improvement in PAPM, is it existing contracts that are being repriced or, the, like, newer contracts that we're getting into, are seeing, you know, higher PAPM? So this is the first question. And also, if you can, throw some light on the PAPM in the, in the like, you know, in the apprenticeship, you know, segment, how that has moved over the last few quarters.
So I think on the staffing side, while we've been going back for holding price, with the existing customers, a lot of it is not necessarily getting repriced up. At least we are not repricing it down. The second element is obviously new contracts that we are signing up, which are, you know, not necessarily large volume mandates, but the longer tail has a better realization, overall. And I think the third element is also what we've been focusing on, which Kartik called out, of upselling the various other modules around, learning and the DWS services and all of that, has seen some traction play out. So I think a combination of all of that has kind of held the price and given a marginal improvement in the on the PAPM front.
On the, I think largely the element of, the PAPM, for NEEM used to be around INR 1,100 . It's about INR 500-INR 600 in the WLP/ the NAPS side. Obviously, like I called out, while we had 100% of the NEEM trainees in learning, we need to have a larger percentage of the NAPS trainees, kind of being sold the learning, and that is something that the team is consciously going to be working on.
Okay. And so on the apprenticeships segment, so we have the you know a flattish number this quarter. But you know, this is like despite the drop that we're seeing in the NEEM program. So rest of that, what was the addition in the DA? And the additional 10,000 you know like NEEM that we are having like will it move out of the system over the next two quarters? And rest of that, how we are seeing the DA business over the next two or three years, because we are investing into that business. We have got a new like leader also, who will be heading the DA. So what is the strategy out there?
Because, after that, we'll be left with around like 30,000 associates on the DA side. So how do we see this segment growing over the next two, three years?
So while we lost about 7,000 to 8,000 NEEM numbers for the quarter, the balance kind of about 6,000 has been added in the non-NEEM segment, 6,000-10,000. That's why we were at about a minus short of 1,000 on the trainees front for the quarter. I think going forward, we see the 10,000 kind of exiting probably over the next two quarters, and net of that, we should be positive from the non-NEEM additions front. I think we have now a healthy number of clients signed up with open positions and transition pipeline built. And that is something that would consciously be driven to ensure that over the coming two quarters, we have a net positive in headcounts on the apprenticeship side.
... And so my last question is on the, on the core cost, core, employee cost. So, you know, we have not added, the core employees over the last like three quarters, and we have done cost, you know, like rationalization there. So if you can share the core, cost, for the quarter and how it has moved, sequentially and YoY.
Yeah. So, core costs on a sequential basis, we have rationalized another INR 50 lakhs for this quarter. And, we are taking measures to kind of maintain at this run rate. There can be some marginal growth, but that's not anything that would impact our margins and growth rates. So on an annual basis, we have brought down the core cost by almost 8%. So this is net of the salary inflation, I think, that we have taken in the month of April, Amit.
Okay. Okay, thanks, and all the best for the coming quarters.
Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Next question is from the line of Aasim from DAM Capital. Please proceed.
Yeah, I had a question on this, NAPS learning element, that you just mentioned, 15%-20% on NAPS, over 100% that used to be in NEEM. So what exactly is this? If you would help me understand.
So the NEEM scheme, which was basically the National Employability Enhancement Mission, permitted the onboarding of trainees, and they had to have a learning connect. One element of the markup was to administer the trainee, the life cycle of the trainee, like we do in the staffing business. The second element was the alignment to a university program, for learning, and that was an additional charge. In, under the apprenticeship scheme, the element of the degree linkage is not compulsory. We do the life cycle management of the apprentices, and we charge for that. But ideally, from a retention and a productivity performance perspective, selling education linkage is an over and above, variable.
So I think, there are corporates that are saying, "First, let's just get the apprentices on board and let's get the number play in place, and then we will look at the element of the education linkage as addressing attrition or productivity." So, you know, we've kind of been able to sell and onboard customers for the apprenticeship program, so the numbers are starting to come in. The element of the education linkage would have to be an additional sale over and above that.
Okay. So just to increase this proportion, I mean, is it more to do with, you know, working with corporates who end up taking these apprentices, or is there a government angle also involved?
No, there's no government angle on the education side. So this is working with the corporates. They pay this fee over and above the administration fee, and this is primarily a hook for the apprentices, to stay on for a longer period of time because there is an education linkage and, degree connectivity that they can walk out with.
Understood. Okay, second question is on the associate additions on general staffing, X of the NEEM that happened. So in H1, would many of the NEEM dropouts have moved to general staffing as well, and would that as, you know, like, show such a, such a strong growth in additions, associate additions?
Yeah, hi. No, I think these two are completely, you know, separate. All the headcount addition, which has happened in general staffing, has happened... is organic and, you know, new opportunities that we have brought in, you know, into the field.
And also just sectorally, a large element of growth in the staffing business has come from BFSI and consumer. And a large element of the loss that has happened on the NEEM front has been in the manufacturing and has been in the services sector. So it's not a transition that has happened, from a NEEM per se into the staffing side.
Understood. Okay, thanks for answering my questions, and also great to see that you are giving a breakup on the other HR services front as well. Much appreciated. Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Next question is from the line of Miss Aditi Patil from ICICI Securities. Please proceed.
Yeah. So my first question is on specialized staffing. So over here, revenue has grown more sequentially, like 3.3% versus headcount growth of 0.7%. So are we seeing any benefit of pricing in this business?
Not really. It's not the pricing. There is some timing difference, as well as, you know, some of the numbers which have come in have come in at a higher bill rates.
Just to address that, Aditi, I think this is a function of the kind of profiles that are coming in. They are at a higher bill rate and higher salary levels, which kind of drives the element of the revenue growth. But it doesn't necessarily translate down to the bottom line, because we are losing the headcount from other areas.
Okay, got it. Is the, like, higher billing rates linked to the GCC segment?
Yeah. Yes.
Okay.
And just to add to that, while there have been additions at a higher bill rate, the total impact of the margin will be seen in the subsequent quarters, because these two quarters we have more holidays coming in.
Okay, got it.
There, there'll be what they call the furloughs to be provided for in this quarter. Typically, most of the IT sector companies are kind of closing down on additional headcount in the third quarter. That will play out going forward.
Okay, got it. And my next question is on, like, general staffing. So you mentioned that financial BFSI and consumer segment are driving demand over here. So like, which sub-segment or which profile, profiles are having high demand, and like, how sustainable it is? And like, can you give some outlook for next two quarters and next year?
Yeah. So Aditi, the largest expansion which is taking place with respect to sales profiles as far as banking finance is concerned, so these are, you know, individual sales folks, you know, selling asset and liability products. So that is one large area of expansion. We are expecting that to, you know, sustain over the next several quarters. On the consumer space, it's as much organic growth, as much as we are able to get, what I mentioned during my initial comments. Customers who are coming to us for reasons of compliance, hiring, technology, et cetera, and all that.
So might not necessarily, at least in this Q1 and Q2 be, you know, growth, which is because of market expansion, but largely about customers who are coming to us, you know, for what we bring them, for what we bring to them on the table, right? So that's exactly, what's happening on the consumer space. So profiles out there is largely around, again, sales, service technicians and so on and so forth.
I think, Aditi, on this front, it's a combination of domestic, consumption-driven, demand at our client side, and an element of formalization of the workforce that was there with the customer base. We believe this will play out into the coming quarters. At least as of now, the feedback that we have from the customers is still quite positive around the element of the demand outlook and, I think hiring outlook. So I think this will play out into the coming quarters.
Okay, sure. Okay. And in the DA business, the incremental headcount you are seeing from new programs, so, like, are they linked to any way linked to the government schemes, or it is largely you selling to corporates? And, like, how sustainable it is?
No. So all these apprentices are under the various schemes that the government has. So it is regulated from the environment of how we can get them on board. But finally, it is a sale to a corporate to deploy these apprentices under the various schemes that the government has. So yes, we are working within the ambit of the schemes that the government has, but there is an element of the corporate sale that we need to do.
Okay. But, like, do you see any risk of the newer programs also getting discontinued sometime in future or?
These are... None of them are new schemes, Aditi. These are under the old Apprenticeship Act, which has been there for 60+ years, and the element of tweaks that the government has been doing. So I really don't see them shutting this down. Actually, the government authorities have actually been trying to expand the element of the adoption and implementation of the apprenticeships, apprenticeship scheme with corporates. So a lot of corporates, I mean, all of corporates have to have a certain percentage of the workforce as apprentices, and many don't. The government has actually been sending out notices and asking for compliance under the Apprenticeship Act. So I don't, at least in the foreseeable future, see a challenge to the manner in which the deployment of apprentices is happening.
Okay, sure. Got it. Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star, then one. Next, we have our next question from the line of Aasim from Dam Capital. Please proceed.
Is this a seasonality thing?
Aasim, your line was unmuted, but you are not audible, so you can please.
Sorry, can you hear me?
... Yes, sure. You can go ahead, please.
Okay, I'll just repeat my question. So the unbilled revenue in six months, FY 2023 has jumped to INR 230 crore versus INR 156 crore. So is there something to call out here, or is this just a timing issue?
It's just a timing issue, I think. There is no call-out or unusual activity here.
Okay, great. Thanks.
Thank you. We have our next question from the line of Dhanisha from Investec Capital Services India. Please proceed.
Thank you for giving me this opportunity. Just one question. Could you give me the PAPM for NEEM? And the existing, like, the total one for DA?
I'm sorry. Can you just call the question out again, Dhanisha?
Sorry. I just want the PAPM for degree apprenticeships.
Yeah.
It's about 600.
Currently it is at about 600.
Got it. And the new programs that are coming at a lower, at 500. Is that what you called out earlier? Is that correct?
Yes.
500-550.
That's correct.
Okay, understood. Just on the core employee headcount, that's up 3.2%. Is this also a function of the demand you're expecting for the festive season?
Sorry, what is that?
What is the 3.2%? Sorry, can you please repeat?
The increase in core employee number, QoQ.
Okay, so that's just refilling at very low end of core employees. On a half year basis, it has actually remained flat between Q1 and Q2. If you take as a consolidated number, it is flat. As cost, it has actually come down. While there is a marginal increase in headcount, at core cost level, it has come down.
Understood. Is this also... If you can give some outlook on how much may be the additions in the associate number for the festive season, that would be helpful?
So there isn't too much of seasonality in this. While the demand has been steady, the outlook from most of this onboarding is that they will stay for the longer haul.
Okay. Thank you so much.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and one. As there are no further questions, I would now like to hand the conference over to the management for the closing comments.
Thank you. So as we have been driving on growth, I think we will continue to take measures towards cost optimization, improving our hiring delivery for customers, and the focus on sales through team build and team restructuring should help us to accelerate the revenues and the absolute profits. Clearly, the headwinds in the IT staffing business continue to play out. We are trying to mitigate that with the element of signing up more new customers, expanding the base of clients in the product and in the GCC front, to drive the number growth into the future. On the DA front also, I think the element of shift from the LEAN scheme into the other schemes is playing out on the volume front.
Key focus is going to drive volume coupled with the aspect of value as we go forward. I think that's something that we will continue to look at. But overall, I think with the leadership teams now built across all business units, we are looking to continue to maintain and maintain the growth momentum as we go forward. I think the market outlook, from a demand perspective, is healthy other than in the IT staffing front, and we will play to that with the competencies that have been built internally. Thank you, and we look forward to being in touch.
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.