Good morning, everyone. Welcome to Tecsys' Q2 fiscal year 2024 results conference call. Please note that the complete Q2 report, including MD&A and financial statements, were filed on SEDAR+ after market close yesterday. All dollar amounts are expressed in Canadian currency and are prepared in accordance with International Financial Reporting Standards. The company has added a companion presentation to today's call, which is available on their website at www.tecsys.com/investor. Some of the statements in this conference call, including the question and answer period, may include forward-looking statements that are based on management's beliefs and assumptions. Actual results may differ materially from such statements. I would like to remind everyone that this call is being recorded on Friday, December 1st, 2023, at 8:30 A.M. Eastern Time. I would now like to turn the conference over to Mr. Peter Brereton, Chief Executive Officer at Tecsys.
Please go ahead, sir.
Thank you, and good morning, everyone. Joining me today is Mark Bentler, our Chief Financial Officer. We appreciate you joining us for today's call. As many of you saw in our results posted yesterday, our company closed our Q2 with continued overall revenue growth, underpinned by 37% SaaS revenue growth. Our SaaS bookings for the quarter were up 34%, and we have a healthy RPO, also up 34% over the same time last year. Our customer count continues to grow, and we've added new logos in both Canada and the U.S., spanning commercial and government entities. I wanted to take a moment to highlight some key accomplishments in Q2 and how we see them laying the foundation for value creation. If you're following along on our company presentation or companion presentation, I'll be speaking to slide three. Our market position and presence continues to strengthen.
Our history of positive recognition from Gartner remains solid, and our status as a leader in the healthcare industry is well established. Recently, we were included in the inaugural Value Matrix for Warehouse Management System Technology by Nucleus Research, earning a spot in their expert quadrant. This independent analysis is yet another validation that the solutions we are bringing to market are valuable to the audiences we serve. When it comes to an enthusiastic customer base, we saw this on full display at our user conference in September. It was our first since the pandemic, and the enthusiasm for its return was clear. We had a record turnout, 40% higher turnout than in 2019, and the number of partner organizations represented at the conference more than doubled, highlighting that the investment we have made in growing our partner ecosystem is bearing fruit.
A key highlight was our remarkable lineup of customers and partners. We heard from supply chain leaders at Mayo Clinic, Nissan North America, and Intermountain Healthcare, among many others. We shared the stage with AWS, ServiceNow, Zebra Technologies, and more, and we had the opportunity to celebrate some remarkable milestones during our awards ceremony, where we recognized McLeod Health, Warner Electric, and Texas Children's Hospital. Every session, panel, and keynote at the conference was an opportunity to showcase best practices and innovations. In fact, we formalized our focus on innovation at the user conference with our announcement of the Tecsys Innovation Lab. R&D has always been a key investment for Tecsys, representing more than 15% of our annual revenue. We are building on that past investment.
With a focus on AI, machine learning, data science, process modeling, and other advanced technologies, this research-driven group is committed to addressing real-world business challenges through co-innovation and rapid prototyping. We are already seeing some interesting use cases emerge in both the general distribution and healthcare sectors. Regarding the healthcare sector, those who've been following our story for some time will know that we are the market leader in North America for health systems and hospital supply chain solutions, with an end-to-end value proposition that is second to none. At the heart of our offering is the Consolidated Service Center, an industry best practice that Tecsys largely established with projects in several of the top healthcare organizations in the U.S. The depth of our portfolio in the healthcare vertical means that one new logo carries years, if not decades, of expansion opportunity into base account white space.
We are particularly excited by one new white space initiative that is certainly heating up. You may have noticed our recent announcement on Baptist Health. It's a great new logo for Tecsys and an important new entry for our healthcare offer. Baptist Health is amongst an early tranche of customers who have turned to Tecsys to transform their pharmacy supply chain. This emerging market has a demonstrated problem in managing their inventory, and Tecsys is uniquely positioned to serve them. Our history has been not to just enter these spaces, but to redefine them, and we believe that the Consolidated Pharmacy Service Center carries that potential. With Baptist Health, Parkview Health, St. Luke's Health, and others, we have early momentum in the market, a trusted position in the healthcare sector, and a solid customer base to mine.
Early pipeline indications are that there's certainly healthy demand for these solutions. That momentum continued this quarter with a seven-figure base account deal that expanded to include pharmacy. Additionally, with our white space opportunities and new business pipeline in our existing healthcare and distribution sectors continues to show positive momentum. We are seeing excellent activity in our base accounts around conversions, including a large Elite ERP SaaS migration deal this quarter. We believe our continued momentum is a testament to our clarity of vision and sustained investment in technology, as well as an obsession with customer success. We also launched a Normal Course Issuer Bid this quarter, which we continue to execute to buy back shares at an attractive value. We have confidence in our business outlook, and we believe that this initiative allows us to use excess cash effectively to enhance shareholder value.
As we continue to invest in the solutions we sell and the manner in which we sell them, Tecsys is proven to be among the best cloud-based solutions available in the markets we serve. We have the people, the partners, the products, and the plan to capitalize on these emerging market opportunities. We continue to add new hospital networks and global brands to our repertoire of customers. We are seeing an expanding pipeline of new SaaS opportunities, expansions, and conversions, and we see a very solid path for shareholder value creation. Before turning back to results, I wanted to take a moment to welcome Andrew Kirkwood to our board. Andrew's global leadership experience at high-growth supply chain organizations like Blue Yonder, RedPrairie, and Manhattan Associates, will be instrumental in developing our continuing growth strategy. Andrew is based in the U.K..
I will now hand it over to Mark to provide further details on our Q2 financial results, as well as financial guidance on several key metrics.
Thanks, Peter. We're pleased with the sustained performance in our Q2, ended October 31st, 2023. I'm gonna start with slide four and talk a bit more about SaaS. SaaS continues to be a key driver for our growth, and we believe the key driver for value creation. Reported SaaS revenue growth in Q2 of fiscal 2024 was 37%, reaching CAD 12.1 million in the quarter. At the end of Q2 of fiscal 2024, SaaS ARR represents 63% of our total ARR. Recurring revenue in Q2, so that's SaaS plus maintenance and support, represented just over 50% of total revenue for the first time ever. Q2 SaaS ARR growth was 35% year-on-year on a constant currency basis.
SaaS bookings were CAD 3.7 million in the quarter, which is up 34% compared to the Q2 of fiscal 2023. SaaS remaining performance obligation, or SaaS RPO, was CAD 146.7 million at the end of Q2 fiscal 2024, and that's up 34% from CAD 109.5 million the same time last year. On a constant currency basis, that growth was 32%. So yeah, we are excited about SaaS. Moving on to slide five. Total revenue for the quarter was CAD 41.5 million. That's 9% higher than the same period last year. On a constant currency basis, total revenue growth was 6%.
I'm gonna come back to professional services revenue on the next slide, but first, I want to point out the decline here in license revenue, down about CAD 0.8 million compared to Q2 of last year. This is really the back end of our transition to SaaS and is an important driver in our year-on-year adjusted EBITDA result comparison in Q2. For the Q2, total gross profit was up 10% compared to the same quarter last year. That's about CAD 1.7 million of additional contribution in the Q2, and SaaS was the key driver. As a percentage of revenue, gross margin was 44%. That was flat compared to the same period last year.
However, combined SaaS, maintenance, support, and professional services gross profit margin for the three months ended October 31st, 2023, was 47%, and that was up compared to 46% in the same period in fiscal 2023, and that was in spite of a lighter professional services margin. The main component of the increase in gross profit margin was SaaS margin expansion, and we're pleased to report that this is tracking as planned. Switching now to our expenses for the quarter, OpEx increased to CAD 18.7 million, higher by about CAD 3.1 million, or 20% compared to Q2 of fiscal 2023. The largest component of the increase was sales and marketing costs, which included ongoing investment as well as costs related to our user conference in the quarter.
Research and development costs were also higher on ongoing investment, despite having benefited from an increase in tax credits recognized in the quarter. Net loss, adjusted EBITDA and earnings per share in the Q2 of fiscal 2024 were impacted by higher operating expenses, which were partially offset by higher margin contribution. Net loss in the quarter was CAD 340,000, compared to CAD 715,000 net profit in the same quarter last year. Adjusted EBITDA was CAD 1.0 million in Q2 fiscal 2024. That compared to CAD 2.8 million in the same period last year. Relative to the Q2 of fiscal 2023, despite solid growth in our SaaS business, lower professional services and license revenue negatively impacted current quarter profitability, which is a good transition to slide six.
Professional services revenue for the Q2 was CAD 12.9 million. That was down 5% from the CAD 13.5 million we've reported for the same quarter last year. Despite a sequential temporary dip in professional services revenue this quarter due to project scheduling and swift growth of our partner ecosystem, we maintain a strong backlog. In fact, professional services backlog was a robust CAD 40.3 million at October 31st, 2023, and that's up 27% from CAD 31.9 million at the same time last year. We are adequately staffed to drive CAD 15 million plus of professional services revenue per quarter, and our intention is to maintain current staffing levels as we grow into that level of revenue. Turning now briefly to our results for the first half of fiscal 2024.
Our total revenue was CAD 83.5 million. That was up 15% compared to CAD 72.3 million in the same period last year, and that's 11% growth on a constant currency basis. SaaS revenue for the first half of fiscal 2024 was CAD 23.6 million. That's up 40% from CAD 16.8 million in the same period last year, and that's 36% growth on a constant currency basis. Our adjusted EBITDA for the first half of fiscal 2024 was CAD 4.2 million, compared to CAD 4.3 million in the same period last year. Basic and fully diluted earnings per share were CAD 0.06 in the first half of fiscal 2024, compared to CAD 0.05 same period last year. We ended fiscal 2024 with a solid balance sheet position.
We had cash and short-term investments of CAD 33.6 million and no debt. Q2 net cash provided by operating activities was CAD 4.2 million, and during the quarter, we used CAD 673,000 to repurchase shares under our NCIB. Additionally, the board yesterday approved an increase in our quarterly dividend to CAD 0.08 a share. Only with respect to financial guidance, and I'm moving on now to slide number seven. As a result of the temporary slowdown in professional services revenue, we are adjusting our short-term adjusted EBITDA margin outlook to provide a range between 4% to 6%, while affirming our adjusted EBITDA margin guidance for fiscal 2025 in a range between 8% to 9%.
We are also affirming our guidance for SaaS revenue growth in a range between 35% and 37% for fiscal 2024, and we are affirming our guidance for total revenue growth in a range between 10% and 15% for fiscal 2024. Please note that it is our confidence in our rising revenue and margins that is supporting our confidence in rising profit and free cash flow, and that, in turn, is supporting our decision to fund the NCIB and the dividend increase. I will now turn the call back to Peter to provide some outlook comments.
Thanks, Mark. Tecsys stable growth continues through the Q2 of fiscal 2024, with a strong balance sheet and a robust backlog in sales pipeline. We're seeing widespread buyer intent across our target markets, solid opportunity cycles, and a highly capable sales team with the tools and the talent to capitalize on a market that's ready to invest. Our expanded healthcare sector offering and growing footprint gives us confidence that the healthcare sector will continue to serve as an important growth engine for us. Our converging distribution business presents a significant market opportunity amidst shifting supply chain dynamics, driven by factors like aging legacy systems, digital adoption, and a realization that heightened consumer expectations are here to stay. And so, after an impressive fiscal 2023, we are pleased that the first half of fiscal 2024 continues the trend.
We are demonstrating dominance in our key markets and seizing on emerging opportunities in growth markets. As we continue to celebrate Tecsys' 40th year in business, we continue to invest strategically so that we remain at the cutting edge of our industry. Based on these principles and a clear vision of our market opportunity, we believe the remainder of fiscal 2024 is on track to continue growing shareholder value. In summary, I want to remind analysts and investors some key themes for fiscal 2024 and beyond. First, a sustained commitment to our expanding SaaS revenue model, which will drive changes in the way we deploy solutions and delight customers. Secondly, a continued strategic partnership approach characterized by deeper and stronger alliances. This helps us tap into new opportunities and fuels our scalability around the world.
Third, an emphasis on advancing and deepening our healthcare vertical, covering both Med- Surg and pharma. We continue to solidify our position as the go-to provider for healthcare supply chain solutions. Lastly, a continuous evolution of our distribution and omni-channel business platform that takes advantage of innovative technologies and the power of data, now with the support of our new Innovation Lab. As a final point, I'd just like to stress across our markets, we, we will place emphasis on customer success. We have long stood by the philosophy of customers for life, and a big part of that formula is to deliver value quickly, stay connected, and then expand on the value delivered. With that, we'll open the call up for questions. Thank you.
Thank you, sir. If you'd like to register a question, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request.
If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. Once again, it's one four if you would like to register for a question. Our first question comes from Amr Ezzat with Echelon Partners. You may proceed with your question.
Peter, Mark, good morning. Thanks for taking my questions. Just looking to get color on the services gross margin, 47.5 is pretty healthy, but it's lower than last quarter's 49.6. Is the read-through for us, is this purely on professional services?
Yeah, absolutely, Amr, you know that.
You mentioned that
SaaS, yeah, SaaS, as I, as indicated in my prepared remarks, our, our SaaS margin expansion is, is really on track with our, with our plan.
Fantastic. Then, you know, like, is there like any color you could give us on the slightly lower, like, professional services? You're sort of running close to that CAD 50 million capacity, then a bit of a dip this quarter. Is there anything for us to sort of think about for the next couple of quarters?
Yeah, I think, I mean, it was a temporary, Go ahead, Peter.
I was just gonna say, Amr, we see it as a temporary dip. I mean, this happens to us every few years. Like most quarters, you've got, you know, I mean, typically we're running 50 to 60 projects at a time, right? And typically five or six of them are kind of the big ones. And usually, you know, every quarter you have one or two ending, and one or two starting, and you don't even sort of see the transition down and the transition up. It seems like every two or three years, we end up with one quarter where, like, a bunch of big projects all end at once, and new projects are just starting up, and you end up actually seeing that dip between these projects. And that's what happened this quarter.
Like, we have a number of very large projects starting up. We had a number of large projects that ended, and you end up with this sort of transition that all landed in the quarter. So it will happen from time to time, creates a bit of lumpiness. But our view is that those projects will be winding up again in the Q3, and be at full strength in the Q4.
Fantastic. So no real read-through like that. Then just on Mark's comments, I mean, year-to-date, SaaS, you're at 40% year-on-year. You continue to guide 35% to 37% growth for the full year. So is that a case of you guys building some buffer into your numbers, or are you expecting a deceleration in the second half of the year, or how do you sort of think about that?
Well, I mean, I think if you see our expanding SaaS revenue line, you know, it takes more and more bookings to grow that, you know, to grow that to increase that growth number. We see some really solid opportunity and, you know, in the coming quarter, we've got really, really strong pipelines. So we're, you know, we're feeling good about—we're definitely feeling good about bookings in the quarters ahead. But the impact, if you just kind of model it out, you know, you'll see a significant, you know, significant increase in SaaS revenue and landing in that 35% to 37% range is, I mean, we think that's the likely outcome.
Okay, do you guys have an updated number for us on the cost of the user conference?
I mean, we don't really, we don't really, you know, disclose that, that number. But if you look at the increase of our overall, of our overall, marketing, spend in the quarter, you know, there's, there's, there's, you know, rough order of magnitude. There's CAD 500,000 of costs in that line. There's also quite a bit of travel related to that event, you know, that's sort of peppered in throughout the rest of the, of the P&L, but that's sort of the order of magnitude
That added up to the CAD 500,000 that you're talking about?
Yeah. Yeah.
Okay, got it. Because, because sales and marketing is higher by CAD 1 million, like quarter-on-quarter, and I recall last quarter you said it was CAD 500,000. So on, on the EBITDA margin, outlook for the year moving to 4% to 6% instead of the 6%, if I were to think about the different items that prompted that move, so obviously, the professional services that you spoke to, is there anything else that we should be thinking about, outside of that?
No. No, that's it. That's the number, Amr. I mean, you know, if we had, you know, we had CAD 14 million for over almost 15 million, CAD 14.9 million of professional services in Q1. And the timing, you know, dip that we had, that we saw in this quarter, you know, that's like CAD 2 million lower than that, you know, than what we're staffed for, essentially. Right? So as Peter indicated, now we expect that, yeah, it's definitely a temporary dip, so we're gonna be getting, you know, that level is gonna be going up in the coming quarters. But, you know, we're not gonna do CAD 17 million to make up for the dip. You know what I mean? So that's coming through the margin.
Great. Thanks, and congrats on fantastic, like, SaaS growth numbers. Up next slide.
Thanks, Amir.
Our next question comes from the line of John Shao with National Bank. You may proceed with your question.
Hey, good morning, guys, and thanks for taking my questions. So Peter, could you just give us some additional colors on the demand for the pharmacy solution you mentioned in the press release? Like maybe how we should think about the nature of those customers, are they existing or new, their size and timing of, you know, their final implementation?
Yeah, it is still a developing market for us, so we're having a little bit of trouble precisely sizing it ourselves. What we've seen so far is if we look at sort of what's happened in the last 12 months, we've seen a couple of new accounts and a couple of base accounts adopt the full pharmacy supply chain. So we're seeing it coming from both sides. You know, when we look at the overall market TAM, we haven't yet adjusted our TAM slide to really reflect that. But, you know, it certainly looks as though overall it, you know, it probably adds another sort of CAD 300 million to 500 million to the TAM kind of thing. And the payback on it is nothing short of fantastic.
You know, it's, I mean, sometimes you, you know, when you look at these things, you have to look at sort of some hard payback, some soft payback. You know, it makes people's lives easier, it helps the clinicians, it frees up time for them to spend more time with patients, et cetera, you know, in addition to, you know, some hard savings. On the pharmacy side, there's just a massive amount of hard savings across, you know, 340B price management, you know, reduction in expired product, more astute buying.
The payoff is quite significant, and it's in an area of supply chain that a lot of these hospitals are wrestling with drug shortages and need the ability to know exactly what they have and where they have it, and, you know, be able to sort of utilize it, you know, sort of stretch it to the max kind of thing. So, we're still sort of getting our heads around how big it is, how fast it's gonna move, but we are very excited about the opportunity in that space. I don't. You know, we've been sort of working away at it for probably five years now, and I've got to tell you, by the end of the fourth year, I was starting to wonder if it was ever gonna take off.
Well, I think we finally connected all the right dots and have the right, you know, ROI backing to show that this thing really pays off, and it, we're pretty excited about what we're seeing.
Okay, got it. So, so much discussion has been around the healthcare side of the business, and we're just wondering if you could just comment on the complex distribution, you know, opportunities in 2024 and perhaps beyond.
Sure. That market, you know, I mean, interesting market. It's, you know, you know, it's a very large market. There's, you know, we estimate 12,000 companies in North America in that market for us. And that market was picking up speed in 2018 and 2019. You know, definitely hit the brakes through the pandemic. The pipelines began waking up about a year ago, at the very top end of the funnel, sort of quiet queries coming in and so on. It began moving into the main part of the pipeline in the spring, and if you look at our pipeline in that market today, it's, it's double, almost exactly double what it was a year ago. So it's, it has really picked up. We are just starting to see deals getting to final decision points.
So we're sort of waiting to see, you know, is this thing. You know, are boards actually going to approve the spend? There's still a lot of caution in the market. You know, people worried about recession and economic slowdowns and, you know, interest costs are still high and so on. So there are things that would be slowing down that market. On the other hand, most of them are running 25- to 25-year-old systems that were put in in time for Y2K, and a lot of them are feeling like they really can't wait anymore. So it looks like that sort of dam is about to burst. We're, you know, expecting that to hit sort of over the next couple of quarters. But honestly, the jury is still out on it.
Like, until we see boards of directors actually approving new investment in these areas, it's sort of hard to call it. You know, Gartner is predicting a 20% annual increase in this space, for the next 10 years, and I think they're right. The market is right for a massive technology renewal cycle, but we're sort of waiting to see. Our actual business in that market is growing quite nicely. You know, if we look at our SaaS revenue, for instance, it's up, you know, significant double digits over last year. But most of that still is coming out of our base. There's not that much new account activity actually coming through yet.
Okay, and my last question is, in terms of the outlook for the PS revenue, how much do you think the upcoming holiday season is going to be a factor whereas they're trying to project a rebound in professional services in the near term?
Yeah, clearly, it's a good question, John, and that is a, that is kind of a seasonal. I mean, there's definitely some seasonality in that quarter. But what we're seeing right now is, you know, we expect the number to certainly increase from these Q2 levels because of the, you know, the dynamics that Peter talked about earlier. So you know, it, it, it typically isn't our, you know, that quarter with those holiday seasons, and it isn't typically our biggest, you know, professional services quarter of the year. I mean, that, that tends to be, you know, Q4, broadly. But we expect, you know, we expect Q3 to be moving up from, from Q2 levels for sure.
Okay. Thank you. I'll hop off the line.
Thank you.
Thanks. As a reminder, if you would like to register for a question, please press the one followed by the four.
Our next question comes from the line of Gavin Fairweather with Cormark Securities. You may proceed with your question.
Hi there. Thanks for taking my question. This is Graham on for Gavin. So just my first one is on, back on pharmacy. So can you remind us the competitive landscape, what that kind of looks like in pharmacy? And maybe if you have any statistics on early win rates, that'd be really helpful.
Yeah, I mean, it's interesting, right? It's very similar at this point to what we've seen across the sort of Med Surg and, you know, the whole Cath Lab, IR, you know, general supplies area of hospitals, in that we don't see any competitor that is providing a full end-to-end supply chain. There's, You know, we do see players that offer pharmacy buying solutions. So just, you know, once you know what you need to buy, you know, they provide a portal that allows you to go and purchase the drugs. We also see there are players that just offer forecasting and demand planning specific to pharmacy.
But in terms and, and then there's players that offer pharmacy automation, so, you know, dispensing machines and sort of pill counters and bottle fillers and, you know, all that kind of thing. But in terms of an end-to-end platform, that goes all the way from forecasting demand planning through into a central supply areas, you know, central distribution center with the ability to do sort of just-in-time delivery out to hospitals with patient-level doses, we don't see any direct competition at this point. So far, and it's early, like I would emphasize it's early, but if you look at the ones we've signed in the last 12 months, our win rate's been 100%. So obviously, we'd like to keep it there.
Well, that's really helpful. Thank you. Then again, it might be too early for this, but, if you have any color on kind of sales cycles in pharmacy, like are they also under one year, similar to overall healthcare? Any color would be helpful.
Yeah, they seem to be under a year. I think part of it is when you actually look at the ROI, you know, I mean, we've seen some of these situations where their five-year ROI looks like it's gonna be over CAD 100 million. So when you're looking at that level of ROI, you know, the project takes on some degree of urgency.
Yeah, that's helpful. And then just, I guess, the last one on complex distribution. Are there any sort of verticals where you're seeing the pipe strengthen specifically? And if you wanna call any of those out.
Yeah, probably the area that continues to look the most interesting, and, you know, and it makes sense in a way, 'cause it's a little bit adjacent to our hospital space, but it's drug distribution. The drug distribution market is looking like it may be one of the first ones to sort of really wake up and get moving. But there's other ones. I mean, consumer goods looks like it's gonna wake back up again. The whole, you know, electrical, you know, HVAC kind of market looks like it's gonna wake back up. 3PL, which is, I mean, 3PL is more of a horizontal than a vertical, but it's also looking like it's getting pretty active.
So, but I would say, it, you know, from what we're seeing today, it looks like pharmaceutical drug distribution is gonna be the, you know, the front runner.
Perfect. And, just one more from me before I pass the line. How many IDNs did you guys add in the quarter? And maybe what's some of the cadence that you guys are expecting for adding them in sort of the next couple quarters?
Yeah, hard, hard to call. We added two in the quarter. In terms of, you know, from here, we've, you know, we keep thinking the number's gonna rise, and what seems to happen instead is the average deal size rises, and the, you know, the base continues to, you know, expand pretty dramatically. I mean, if you look at our base today, I mean, we could literally stop selling new accounts and just go after the base and get to our, you know, probably get to our three- or four-year goal for SaaS. I mean, there's literally that much opportunity sitting there in the base. But it certainly, if I were to hazard a guess, I would say we're gonna continue for the, You know, in the near term, I think you'll continue to see two, two-three a quarter added.
you know, it may spike above that occasionally, but I think it's gonna be in that kind of range.
Perfect. Thanks so much.
As a reminder, if you would like to register for a question, please press the one followed by the four. It seems we have no further phone questions at this time, sir.
Great. Well, thank you everyone for joining us for today's call. And, in case you haven't picked it up, I'm not sure we've ever been more excited about the future of this business. You know, the last few years have certainly had their challenges, but as we look at what we see going forward here, I think we're in for a pretty exciting couple of years. So, thanks for taking the time to join us, and as always, if you have additional questions, please don't hesitate to reach out to Mark or I, and we will be in touch after the end of the next quarter. Thanks, and bye for now.
That does conclude the conference call for today. We thank you for your participation, and we ask that you please disconnect your lines.