Hi, my name is Richard Cho. I cover communications infrastructure for JP Morgan. I'd like to welcome Steve Vondran, President and CEO of American Tower. Thank you for being with us today.
Happy to be here, Richard. Thanks.
Steve, it's been a little bit over a year since you took over as President and CEO. What were your biggest goals that you set out to accomplish last year, and what are your top priorities for this year?
Sure. Well, I grew up in a family-owned business, so I know that sales are the lifeblood of any business. So you're always going to hear the first thing out of my mouth is going to be sales. It's a focus on organic growth in the portfolio and making sure that we're doing everything we can to maximize that organic growth. The second priority for me and my team is to complement that growth with selective investments that we're going to make in terms of capital priorities. And what we've done over the past year or so is become very focused on where that capital is going to go. And so you've heard us talk publicly about redirecting some of our capital to our developed markets.
And that's a deliberate structural change of what we're doing to decrease some of the investments in emerging markets, increase the investments in developed markets, to improve our quality of earnings, and to make sure that we lower some of the volatility that we've seen from the emerging markets. Now, we think they're a good part of our portfolio, and it's going to give us some outsized growth, but they've become a little bit bigger portion of the portfolio than we thought was appropriate. So we're rebalancing that partially by exiting India and partially by redirecting our incremental investments for developed markets. So you take those revenue growth drivers and you pair that with good cost controls and focus on margin expansion. And we've had a concerted effort to bring down SG&A for the past couple of years. We've been very successful at doing that.
We just named Bud Noel as Chief Operating Officer for the globe as we're going to globalize a lot of our operations and start focusing on our direct costs and other areas of spend to see what types of progress we can make there as well. We think that when you look at that revenue growth coupled with some margin expansion, that's a great recipe for us. The final thing that I would say that we've been focused on is our balance sheet and making sure that we have a fortress balance sheet. That's come in a couple of different flavors. The first is we had made a commitment to get down under our 3x-5x leverage range under five when we bought CoreSite and had taken that leverage up a bit.
Getting under five was really important for us to get full capital flexibility in terms of where we can allocate our capital. So we made some hard choices. We paused our dividend growth last year. We cut back on some of our capital expenditures and really focused on getting that leverage ratio down. And we were successful at doing that. We're at about 5x at the end of Q1. So getting that balance sheet in order and also taking some risk out of the balance sheet by terming out some of our short-term debt. And so we were very concerned at doing that. So if you look at kind of what we did last year and what we've been focused on this year, it's really those four priorities. It's growing the revenue as much as we can organically, investing wisely, cutting expenses, working on the balance sheet.
Now, the reason for doing all that is to restore capital flexibility for us so that we look toward the future, we're in a position to be able to take advantage of whatever market conditions prevail, and so we'll look at that capital allocation priority going forward to say, what's going to create the most long-term shareholder value? Is it incremental investment in our CapEx program? Is it M&A? Is it share buybacks? Those are all on the table for us going forward.
No, that's great. In terms of the capital priorities, we'll come back to that. But I just wanted to stick with the organic growth portion. We've been through a couple of, call it, next G cycles, 4G, now 5G. And it seems to follow a pattern where you get this initial outlay of upgrading and coverage and getting to the new kind of generation technology rolled out. But then there's a bit of a lull and then a densification wave. And it seems like that wave is starting. Can you talk a little bit about what you've seen in the past and what you're seeing now and how long, I guess, this densification wave could go on?
Sure. So we've seen every G be consistently about a decade long. And we're exactly where we thought we'd be in terms of the cadence of 5G. So you have that initial push for coverage, like you mentioned, and that's going to get to the certain number of covered POPs that people are trying to get to. And then there's a little bit of a pullback. And what they're doing in that pullback is a couple of things. One is they're looking at what they've already built and saying, are there holes in my network? Is there quality issues I need to address? And the second phase, I would still say, is coverage. Because if you look at our portfolio, one of our major carriers has mid-band 5G on about 85%, one's at about 70%, and one's still a little bit under half.
There's still a long way to go to get to that ubiquitous coverage for mid-band 5G. At the same time, though, you're starting to see some capacity constraints appear on the network because more people have handsets, more people are using the network. Think dense urban and then suburban, near urban areas where that traffic picks up first. You're seeing some need for densification there already. We're also hearing from our carrier customers a lot of interest in network planning for the future where they're asking questions like, what heights are available on these towers? And are there any barriers for zoning? Do we need more ground space? What's the structural capacity? Those are all the conversations that precede an RF plan for that next phase, which is densification.
So I think we're entering into that, but we still have a pretty good ways to go on coverage as well.
Would you say we're kind of mid-cycle at this point or still early cycle of that 10-year?
I'd say we're in between early and mid. I'd say that we're, call it maybe the second or third inning, so you've still got a lot of coverage to do, but that capacity is coming.
No. And it seems like those weren't conversations we were having about a year ago or nine months ago.
No, we were definitely in kind of that pullback period where they're looking at the network and figuring out what next steps are.
Got it. You reaffirmed your guidance in terms of new activity of $65 million-$170 million, but the year is starting off a little bit slow, and it seems like there'll be a pretty big ramp in the back half. Are you still confident that this ramp is coming? And what gives you that confidence?
Yeah. So we reiterated our guidance there. And we do think it's a little bit back-end loaded. So kind of think of like $75 million in the front half of the year, kind of $90 million in the back half of the year is what we're thinking. And there's a reason for that cadence. So a couple of years ago, we had all of our major carriers under our comprehensive MLAs, and that has a certain cadence and timing and very predictable. We knew what those quarters are going to be. We have one of our carriers that's off the comprehensive, but we also have activity going on with other carriers that's outside of the comprehensive agreements. So that's more of an a la carte type situation. And so the commencement timing of those is more staggered and a little bit more variable.
But if we look at the pipeline that we have in place and the applications in house, plus the stuff that's already been signed, plus the comprehensive agreements, that gives us a lot of confidence that as long as the carriers finish doing what they say they're going to do, that we should be able to hit that guidance that we put out there.
Do you feel like you have pretty good visibility out over the next six to 12 months? Or where do you feel like your level of confidence is in terms of visibility?
So when you look at kind of the long-term guidance that we put out several years ago where we said we're going to be at least 5% on average organic tenant billings growth in the U.S. from 2023 through 2027, what we said at the time is we have a lot more visibility into the pipeline early. It gets a little bit less over time. And that continues to be true. So we have less pre-contracted revenue for the next couple of years, but we do have a lot of visibility into what the carriers need to do on their network. I referenced how far along they are in the coverage before. We also know what the cadence of mobile data growth is. And so we know where the stress points on the networks will be based on what happened in 4G and 3G.
And so when we did that long-term guide, we looked at that total amount of business that needed to happen in that multi-year period to figure out what do our carrier customers need to do, where do they need to do it, what spectrum's available, what equipment's available. And we feel very confident over that long period of time and what they need to get done over that. So that's what gives us the visibility is just knowing what our customers need to do to make their networks run efficiently. And so, again, as long as they pursue that consistent with how they have in the past and what they need to do to meet the demand of their customers, we feel confident in that over the period of time. But there is less pre-contracted revenue looking out than there was in the early part of the guidance.
Can we talk a little bit about how AMT approaches these MLAs? It's interesting that you mention it, but because maybe you have less pre-contracted revenue, it doesn't mean you really don't have pretty good visibility in what they're going to do. Just because it's not contracted doesn't mean they're not going to do it.
No, absolutely. We feel very confident. And so the way we approach these MLAs is if you think about it, I've only got a few big customers, so we can put a lot of effort into figuring out what they're going to do. So what my teams will do in whatever relevant timeframe we're looking at is they'll look at what the carrier capacity is today, the spectrum that they have available that we think will become available, the equipment that they have available, and the projections of mobile data growth. And that gives us an idea about what they need to do. And then we can look back at 4G and 3G to get an idea of where that activity is going to fall. And so we have a really good idea about what they need to do over a defined period of time to meet that demand curve.
That's what we do before we ever sit down with a customer to talk about one of these agreements is figure out what are we going to get anyway? What's the baseline that we're going to get? The customer is doing the same thing on their side, by the way. They know what they think they're going to do, etc. The way we've looked at these agreements is it's a way to capture what you're going to do anyway and make it administratively easier between the parties. We've proven over the last two decades that we can be successful either on an a la carte basis or on a comprehensive agreement basis. We're very comfortable in either world because we know what the demand is.
Now, all things being equal, those comprehensive agreements make it much easier for both parties because you're not going to have the back and forth of a site-by-site negotiation. And it's like an easy button for both people. It's cheaper for both people to process. It's quicker to deploy. It's overall beneficial for both parties. So when we're not in one of those agreements, it's not because we don't see the benefits of the contract. It's because there's a mismatch between what we feel confident we're going to get and what they think they're going to spend. And what you've seen us do in the past is we may go out of one of those agreements for a period of time as we continue to iterate on the negotiation, and the interests become more aligned, and sometimes we get back into them. Sometimes we don't, and that's okay.
I think in the past, there's been times where people thought that it was a more adversarial relationship. But from what you're saying, it seems like sometimes priorities are just not meshing up or whatnot. But in the end, you're trying to help each other kind of do the best you can for what needs to get done. Is that the right way to think about the one carrier that's not in alignment?
These are my customers. My job is to support them any way I can. No one loves paying their landlord more, right? That's just a dynamic that's always out there. Having said that, our goal is to charge the right amount for what they're doing that's a fair price, but then give them the absolute best customer service that's out there, and we win a large share of our business because we are the easy button. We do get them on air fast. We do meet their network needs, and so while you may have tension in a negotiation like you do with any negotiation that's out there, that's a situational thing that happens for a moment, and then you earn back all of their trust and loyalty by giving great customer service, and we've proven that we can do that time and time again.
So you shouldn't read anything negative into the fact that we don't have a comprehensive MLA. It just means there's not a meeting of the minds in terms of what that cadence of that revenue is going to be for a short period of time. And like I said, you may see us do it. You may not see us do it. We'll be successful either way and so will our customers.
No, that makes sense. One of the other things I wanted to touch on was your services business. It's been a little bit stronger to start and will be, it looks like, for the first half. One, can you recap a little bit of what you're doing for your carrier customers and why has it been a little bit stronger than we had expected to start?
Yes. Well, I caveat every discussion of services with, it's hard to predict. It's not as predictable as bread. So what we do for our customers, it comes in a couple of different flavors. Our primary services business is what we call AZP, acquisition, zoning, and permitting, and also engineering, and we pretty much do that nationwide, and we try to do it for all of our customers because we know our assets better than anybody else. We can do it cheaper and better than anybody else. The other piece of it is construction management, and that's briefcase management. We don't have people climbing towers, but we manage the process. That's not something we do everywhere, and we don't do it for everyone. It's more of a niche business for us.
It's where we've got some really good teams, and our customers really want us to do it because it eases their deployment. And so that's a little bit different business. In terms of the activity levels we're seeing this year, we've had four sequential quarters or maybe five now of increased application volume. And that supports our services business growing because we do a lot of that business for most of our customers. We have a very high percentage, what we call an attachment rate on that. And so that's indicative of the activity levels on our towers to see that services number go up. Now, again, there's a construction piece of that that's not necessarily related to that. It's a little bit bigger piece of it this year than it was last year, and that's more of a niche thing.
But in terms of that overall services business, what we guide to is what we have visibility in terms of what our customers told us they want to do in that defined period of time. And so we have more visibility earlier in the year. And so we do see it tapering off toward the back of the year. That's what we're seeing in terms of our visibility. Now, is it possible that it won't taper off? It's possible, but we don't have visibility into that, so we don't guide to a higher number than we have kind of in our pipeline.
It doesn't really impact your leasing number as much.
Well, not as much. So if you look at our, because those comprehensive MLAs, there's a little bit of a disconnect between pure levels of activity and the property volumes. However, we do have one customer that's not in a comprehensive agreement. So in that situation, activity levels do influence kind of the revenue a bit. It also influences the timing because instead of having a fixed cadence on which those leases are commencing, it depends on how quickly we get them processed, how quickly we get them on air, etc. So there's a little bit more variability. Again, over a long term, not so much variability. Quarter to quarter, there's more variability.
One last question on the U.S. business before going to international. Late yesterday, there were some headlines regarding DISH, SATS, EchoStar in terms of the SEC reviewing thing. I don't think anyone has any idea what's going to end up happening. But in terms of them reviewing their network build-out, what's AMT's exposure, and how do you approach a situation where DISH has been under some pressure in terms of capital markets and whatnot? So.
Sure. So I'll let them talk about their network, and I don't know anything more about the SEC review than what you guys have all read in the news. But what I'll say about DISH is this: if you look at our long-term guide, the only thing we have underwritten in there for DISH is the minimum contractual requirements under our comprehensive agreement with them. So there's no upside built into our guide for that. So whether they continue to build, don't continue to build, that's consistent with what we have in our guide. We do expect to get paid, and so that is what we expect to have happen going forward. If something did happen there, our exposure is relatively modest. They're about 2% of our global revenues and just under 4% of our U.S. revenues. So they're an important customer. They've done a good job building their network.
I feel good about the assistance we've given them in that, but overall, it's a much more modest exposure than what the other major carriers represent to us.
Great. Moving to their international business, you talked earlier about having a different capital allocation now that India has been sold and the portfolio you have today in Latin America and Africa. Can you talk a little bit about where you're focusing, I guess, more attention and capital? And then you talked a little bit also about the global operations and maybe streamlining that. So as an overall international business, can you give us a little bit of an update on the strategy there?
Sure. So when we did a really thorough internal review of our international businesses, we looked at what we expected to happen, what actually happened, the returns that we're generating, and the volatility it was putting in terms of our earnings with FX volatility. And a couple of decisions that we made. The first is we made the decision to exit India. And we made that decision for a variety of reasons we've talked about before. I'm not going to go into a lot of that because I want to stop talking about India, but we're out of India. That was part of that. And then if you look at where we are after India's divestiture, about 25% of our AFFO comes from our emerging markets today. And as we look at our portfolio, we think that having some exposure to those markets is good.
They do provide healthy opportunities for sales. In fact, if you look at our Africa business, we're seeing some near-record sales happening there. But the volatility that we've gotten because of FX and those markets decreases the quality of earnings. We want high-quality of earnings. People invest in us because they want that predictable long-term cash flow growth, and they want it to be more steady. So we think that we should have less exposure than what we had today even. Now, that doesn't mean we're going to run out and divest something else. We're just reallocating our capital. And where we were aggressively growing and building thousands of sites in the emerging markets, we've pulled that back some. And we've also invested more in our developed markets. So what we've tried to telegraph very clearly is that's the plan going forward.
We'll direct more capital toward developed markets, less toward emerging markets. So over time, those developed markets will become a larger proportion of the portfolio than the emerging markets.
In terms of your international kind of developed versus emerging, what kind of growth profile are you looking for in those two on a relative basis to maybe the U.S.?
So if you look at our kind of long-term growth algorithm that we laid out, I think it was at the end of Q1 last year is when we did it. What we said is that we expect our developed markets to grow mid-single digits in terms of kind of the organic revenue growth. And then we expect those emerging markets to grow a couple hundred basis points faster than that. Now, let me give a caveat there. Right now in Latin America, we're having carrier consolidation churn that's weighing on that business, and they've been a little bit slow to get spectrum out for 5G. So we've also guided very clearly that Latin America for the next three years, 2025, 2026, and 2027, is likely to be low single-digit growth. So it won't have that growth profile the next three years.
But over time, those markets should grow a couple hundred basis points faster than our developed markets.
I was going to ask this later, but since you brought it up, it seems like the Latin America markets, to your point, is going through a little bit of a consolidation period. It's going to last a little bit. But overall, the long-term track record, both in, well, relatively in FX and growth, has been a pretty good market. Do you feel like that's still a long-term priority in Latin America?
Again, we think that FX, it goes through cycles. And what we're not going to do is get enamored of it when it's in a good cycle. So we're just looking at that and saying it's an appropriate part of the portfolio. It should be smaller as a percentage, and you're going to get some good, healthy growth in there. What we think will happen in the Latin American market is you're seeing some rationalization in countries that just had too many carriers. And much like you saw in the U.S., much like you've seen in other parts of the world, when you get to fewer carriers, but they're economically healthier, they can invest more in the networks over time.
And so it's painful to go through the churn that we're going through right now in Brazil, but that Brazil market is going to have healthier carriers who are going to invest more. And that's what gives us a lot of confidence that once we get through this cycle of churn, it's going to rebound and be the accretive growth engine that we want it to be. And so again, it's one of those things that the cycles affect those countries more than they do the developed world. And we just have to appropriately balance the portfolio to make it a smaller percentage.
Got it. When you entered Europe, I think there was some kind of questions around what could European growth look like. I think people overall were maybe skewed a little bit negative, but Europe has really turned out well for American Tower. Can you kind of recap a little bit on, I guess, the decision to enter and how has that turned out relative to those initial expectations?
Yeah, we're happy with how it's performing so far. When we entered Europe, we were very patient, and we let a lot of deals go by that other people traded on because they didn't meet our long-term criteria, and when we think about entering a new market, there's a few things that we look at. The first is the market dynamics. Do you have a healthy carrier environment that has competition where you're going to get some co-locations out of people? The second criteria in the market is we've learned from India, you don't want captive tower cos that dominate a market, but the other thing that we look at is what are the terms and conditions of the portfolio that's being offered? and for us, it's critically important that we get CPI-linked escalators, even in Europe, to protect us against disproportionate inflation between the two economies.
It's important to be able to monetize amendments with the anchor tenant, and it's important to not have it be a financing transaction. A lot of these portfolios had the right for the carrier to buy it back at certain terms, etc., and so as we looked at Europe, we saw a lot of portfolios that didn't have all those dynamics, or they were just too expensive, so we were very disciplined in waiting for the Telxius deal. We knew when we bought Telxius it was going to perform differently than other portfolios in Europe, and we're seeing that play out just the way we thought it would, and we're seeing some healthy growth in terms of new leases and amendments, and we're getting better at operating there. One of the things that we pride ourselves on as being the best operator anywhere in the globe.
When we first started out, we struggled a little bit in Germany in particular. Our teams are doing a really good job there now. We've kind of fixed a lot of the operational challenges there. You're seeing that reflected in our new business numbers as we continue to put new tenants on sites and upgrade the existing ones.
I'll ask you, do you feel like you're comfortable in increasing that developed market through organic means, or are you seeing more inorganic opportunities in Europe?
Today, we haven't seen anything compelling that met all the criteria that we need to see to make. We look at every deal that's out there. I've got M&A people. They like to buy stuff, so they're going to look at everything that's out there. But at the end of the day, we're going to be just as disciplined about any expansions as we were about entering it initially, and that may mean that we don't have the opportunity to do that, but we'll keep looking, and hopefully, we'll find a portfolio that meets our needs.
Kind of going back to, I guess, your build guidance 2,000 to about 2,500, can you break out where that's supposed to be for people that might not know, and what are commitments going to look like post this year?
Sure, so we're going to build, call it around 1,400 towers in Africa, call it 600 towers in Europe, and a couple hundred towers in Latin America. Some of those are a result of prior commitments that we have in place, and some of those are opportunistic because we've been able to source deals that met our underwriting criteria. What we've messaged over time is you'll see fewer builds in Africa and Latin America, and hopefully more in Europe, and if people ever get serious about terms and conditions in the U.S., I'd love to build some in the U.S., but not on economic terms.
Moving on to data centers, because when you acquired CoreSite, I think people were like, why is a tower company acquiring a data center company? But that acquisition has turned out very well. Can you give us a little update on what's driven the strong growth? How are you approaching the capital investment in CoreSite, and where do you see that going over the next year or two?
Sure. Well, just to remind everybody, the reason we bought CoreSite is because we think it's important to have ownership of an interconnection hub because we think it'll give us an advantage when the edge computing does come to tower sites. And we were wrong on the timing of that. We thought that was going to happen 2026 and 2027. I think that's pushed out a bit. But we still believe that that's going to give us a strategic advantage to drive more revenue toward our towers over time. So that's the strategic reason to own it. Now, in terms of the asset itself, it's performing phenomenally well. I'll tell you that our initial underwriting was very good on that. And the core business that they had that we knew we were going to grow was going to happen regardless of AI.
Did we get a little bit lucky with timing on AI and some of the pricing dynamics? Yes. And so what's happened with CoreSite is we're still focused on our bread and butter customer. And those are enterprises that need to be connected to multiple cloud on-ramps. That's really who should be in CoreSite. And we balance cloud presence, network presence, and enterprise presence in a way that creates an ecosystem there. And the reason we do that is we're creating an environment where people can talk to each other and the machines talk to each other. And that gives us a very sticky business. And so we're able to keep underwriting those mid-teens development yields at stabilization that CoreSite had before we bought them. And we've been able to increase sales by sticking with that core customer.
Now, we could sell out every kilowatt tomorrow if we wanted to, but they wouldn't be use cases that need to be in our CoreSite environment. And we want to keep low churn, high returns for the long term there. And there's a huge long-term demand for just what we provide. So that business has got a lot of durability. It won't be subject to some of the ebbs and flows that may happen in other segments of the data center business. And we're very confident in that. We are seeing some AI demand for inferencing. So that's another use case that's coming in. It's very similar to the enterprises that are in there. And we feel good about that as well. In terms of the CapEx spend, what you're seeing us do is replace the capacity we're selling. We've had a couple of years of record sales.
We're having really good sales this year. I keep saying we can't repeat the last year, but I think my team might be sandbagging me again. We'll see where we get on that. But we need to replenish that capacity. So you've seen the CapEx go up. So I think at the midpoint of our guidance this year, we're at about $600 million. If we have great demand, if we have opportunities, you could see us increase that a little bit over time. We also have capital flexibility with CoreSite. When we constructed our partnership with Stonepeak in that, one of the reasons we did that was to make sure that CoreSite can grow unfettered, and there's no limit to the amount of capital that they can deploy.
And if we as American Tower don't want to put the capital in, we have partners who are happy to do that for us. And you actually saw us take advantage of that with a separate joint venture for DE3. It's a data center we're building in Denver where we didn't want to pull the trigger on building that yet, but there was a strategic opportunity with the customer. Our partners did. So we set up a separate JV. They funded a larger proportion of that, and it's going to work out great for both parties on that. And that's the type of flexibility we built in when we constructed that. So we're excited about the way it's performing. We're going to fund it as much as it needs to grow and maximize the value of it.
We think that long-term strategic reason that we bought it will play out over time.
And it seems like with AI inferencing and call it higher-end cloud compute connectivity and latency and interconnection is becoming a lot more important. And I think part of the longer-term strategy with CoreSite was eventually this level of connectivity and low latency might actually get pushed to towers. Are you seeing some initial signs of that? And how long are you willing, or is American Tower going to kind of go down this road of owning a data center when you could probably sell it for a really high price? So where are you in that evaluation of that strategy?
My goal is long-term value creation. So I'm not looking to turn a quick buck. The reason we bought it is to drive value to the towers over time. And I haven't put sort of a stopwatch on how long we'll play this out. As we continue to have conversations with various parties, we've become more convicted than before that this is going to happen over time. And if you start looking at some of the public statements by the wireless carriers, you'll see them talking about edge and edge compute. That's part of the ecosystem that needs to develop to make this come to fruition. So we're feeling good about the progress that's being made. Again, we thought it was going to happen faster than it did.
I think it probably would have if we hadn't had some macroeconomic headwinds and we hadn't had AI start taking a lot of the investment. But everyone that we were talking to before is still working on it. We still have proofs- of- concept that we're working on with various parties. And we feel that it will continue to evolve over time. If at any point that progress stops where we look at it and say, you know what, this isn't going to work out the way we thought, then we'll look at the asset and say, are we the right owner? And would it create more value somewhere else? And we'll make that decision if and when it comes to that. But that's just part of our normal portfolio analysis. Richard, we look at everything in our portfolio on a recurring basis, the management team and the board.
The reason you've seen us take some actions like divesting our fiber in South Africa, like selling the land interests in New Zealand and Australia, is because we found parties that were willing to pay us more than the value we thought we were going to create ourselves because they could create more value than we could. That's the way we think about that portfolio optimization is for everything in the portfolio, are we the right owner? Are we going to continue to be the right owner going forward? We'll continue to make those decisions as we see that long-term value creation opportunity.
And last question for me. You talked about capital allocation as a key priority. As leverage comes down, as investment opportunities may be inorganically or builds might not be the right move, when do share buybacks really come into play?
Share buybacks are one of the tools for capital allocation, and I would say that everything that we do is going to be balanced with whatever's the best long-term value accretion, so whether it's our internal CapEx program, M&A, share buybacks, further deleveraging, increasing the dividend, we'll look at all those to see what's the right thing to drive that long-term shareholder value. When it comes to share buybacks, what I have said publicly a few times is I don't believe in programmatic buybacks. I think you should be opportunistic in buybacks, so you shouldn't expect to see us put a programmatic thing in place, and so if we have cash that's sitting on the sidelines when we see a dip in the stock price and we think it's the right thing to do and we're in a window, you might see us do that.
It's also every opportunity that we pursue, whether it's an internal project or an M&A deal, is balanced against a share buyback. That's sort of the benchmark everything has to beat because we have a lot of confidence in our business going forward. We think that is a good use of our capital.
No, that gives you a lot of options.
It does.
Thank you so much.
Flexibility is the name of the game in this environment, Richard.
Oh, it's great.
So thanks.
Thank you.