Session, and we're really pleased to have ICON here with us today, and presenting for the company is Brendan Brennan, a Chief Financial Officer, and Kate Haven, Vice President, Investor Relations. Guys, thanks for being with us.
Pleasure. Absolute pleasure. Yeah.
So, you know, maybe jumping in right away, right? Obviously, one of the big topics has been the funding environment for biotech. You guys have generally been pretty resilient through all of this, right? And I think despite the concerns, and, you know, perhaps that's sort of a testament to your relationship with, you know, particularly a lot of the large pharma companies. You know, maybe talk about sort of how that relationships, those have changed or evolved, particularly with the acquisition of PRA.
Yeah, it's been on, and well, it's actually nearly three years, as we sit here today, since we announced the deal. Obviously, you know, we'll be by the 1st of July of this year. It'll be three years when we, you know, consummated the marriage, if you like. So, you know, it's been an interesting period. We've certainly come through it, I think, pretty well. I'm very happy with the integration process and how it's run. We've had relatively good retention of staff, which has been very important, and good customer retention, obviously, during that period as well, which has been extremely important. It's not been without challenges. Of course it hasn't. You know, it's two 20,000-people organizations coming together. Different processes, different systems. Putting all of those things together has certainly been challenging at times. No question about that.
But I feel like we definitely have, and I really felt, actually, over the last six months or so, you know, very much a culture of one company now. And I think we've, we've crossed that particular Rubicon. We're now actually going to the market. We're going to have a new voice as the new ICON, right across the different market groups. And I think, you know, some of the things, the thesis is that we started off with, are, are still, you know, fundamentally there in terms of, you know, really that focus and dedication towards biotech. We have a group, biotech group, that has an excess of 7,000 people working in it, and they are dedicated and focused on that, on that customer group. Likewise, we have a large pharma group, but likewise we have an FSP group.
So I think that, you know, that focus towards customer segments has really, really worked well. Obviously, you know, I think probably, you know, in terms of how they've evolved. I think, you know, in the large and midsize pharmas, it's, it's worked well over the last couple of years. We've seen good traction. We've seen the evolution of existing relationships and development of new relationships in that space. I would say the biotech, our biotech business has been a bit more challenged over that period of time. That said, the market for, obviously, the biotech funding. But we see good, good positive signs as we come into this year. Obviously, sequentially, RFP flow is up well, from Q4, or sorry, Q3 to Q4. We see a positive start from a funding environment as we come into, into 2024.
We've seen decent traction from all of our business units and all of our customer segments, even in the first couple of months of the year from a business development perspective. It's been a really good story in terms of getting, you know, really getting stabilized, getting the message out there. I think really what we want to do now as we focus into 2024 is making sure that we can also progress right across with all of our different customer segments really, really productively in 2024, and really show that face of that new ICON and being very much one company.
Yeah. And I know on the call you mentioned sort of this uptick in sort of activity. You know, it's a good RFP flow starts for the start of 2024 here, and continued strength in the large pharma segment. At the same time, right, we've all seen the news of pharma kind of retrenching, cost cutting, and concern of the large customers. Maybe kind of reconcile those two a little bit. Yeah, I guess some people are worried. Maybe does that flow into then the R&D budgets? Or maybe those two are a little distinct from each other.
I think what we saw last year in 2023 was, I think there was a lot of folks looking at their development model, looking at their R&D spends in the large pharma groups, particularly. I think they went and they had a hard look at the blend of how they deliver their research and development, whether it be full service outsourcing or FSP, or the quantum, in fact, that they did in-house. And so what I think you saw was a lot of people, and also I think people were looking at have I got the right CROs fit for the job over the next five years, as opposed to maybe when we put them in place three or four years ago. And I think the market has been quite dynamic and moved quite a lot in that, obviously, intervening period.
Ourselves and PRA have come together and represent a very large player in the space. And obviously there's been other challenges in the CRO marketplace in that period of time as well. So I did think that pharma really took 2023 to get their ducks in a row. And I think what we feel now in 2024 is a bit more traction, like, you know, the thinking around what the model should look like has been done. Even some of the new selections of partners have been done. And I think what I'd like to see now is more of a traction.
They are all saying that they're going to increase spending, even, some of the, you know, I think, you know, some of the, companies that have been more troubled over the last period have even said in their own press releases over the last while that Q4 was probably a later point, and they want to continue to increase R&D spend as they go forward. So I do think we see good traction there. I think it was really about them getting their structure right with an idea to be able to really jump off and have a better 2024.
In that sense, right, because I know one of the big words at last year was like, you know, reprioritization of pipelines. It sounds like you're, you can think of that that's been done at this point. Is that?
I think a lot, yeah, I think the hard work has been done. Yes, I think the hard work has been done. I think people have got a better view, both in terms of their own pharma, you know, their own environments, of their own, you know, careers and where they're going, as well as actually the relationship with their CRO partners. So I think, yes, a lot of the hard lifting has been done there. Yeah, I think there's inevitably, there's, you know, there's always outliers. There's always be companies that are going through different things at different points in time. Generally speaking, as a marketplace, I feel like we're in a better position coming into 2024.
No, that's helpful. And we think about the biotech side of it, right? I mean, this was also one where, you know, I think early in the year you kind of highlighted some more muted activity, client closing at the year. But again, here also, it seems like we've seen a pickup. And obviously in the capital markets, we've all noticed more activity as well. You know, this is, I think, particularly emerging biopharma. You've talked about it only being about 15% of your overall mix. How should we think about this as a potential tailwind for you, though, during periods of improving funding, I guess?
Yeah, I mean, it's, that's exactly the way we see it. As I mentioned, we've a very, very good, dedicated biotech team. They really want to, you know, take any and every benefit that they can from an improving marketplace as we go through 2024. I think they've got a, you know, it's actually a really robust organization. They've got a good ability to actually be able to go out, to be able to pitch that work, to show their medical depth, to show their, you know, really advanced talent pools in terms of, you know, being able to design projects and, and, you know, really go out and be very compelling to customers, as well as being pretty cost conscious as well. Like we're a big organization. We can get the leverage, which means we can deliver that value back to our customer.
So I think, you know, we have that combination of, you know, good medical design, good infrastructure, keen pricing. That really should put them into a very good place and a very, very, you know, comprehensive organization there. It should put them in a really good place to be able to really out and hard to compete in, in that organ, in that part of the world as we come into a better funding environment in 2024. I'd really like to see that business particularly kind of shine in 2024. It's been a tough couple of years for them, both from an integration perspective and obviously from a biotech funding perspective. But I think they're, they're a great part of the organization. They've got a really good mindset, and I think they've, they've got it all to do in 2024.
Do you see that becoming a bigger part of your mix? Because, you know, I think by some estimates, you know, emerging biopharma, that pipeline is going to be a bigger part of the overall global pipeline of R&D. You know, at 15%, I mean, you know, how do you look at this space and becoming a bigger presence in it, or is that, I mean, is there kind of a risk management like you want to keep it at a certain level?
Oh, no. I mean, I think we'll work in that marketplace as we see appropriate in terms of, you know, good organizations that, you know, want to have long-term partner relationships. We're certainly there to win business. There's no question about that. And we want to see that develop and continue to grow. I mean, I think it'll take time to shift. And that's the emerging biotech is the 15%. So we have biotech customers obviously beyond that 15%. So it is a, it's a robust business unit. And I think, you know, I think they're, yeah, they have it all to do. And I think, you know, hopefully we've seen, as I said, come through the later point. And they've got an opportunity to grow. So yeah, I really would like to see that grow as a proportion of our overall business.
I mean, we broadly, I would say, reflect obviously sort of market trends, right? As we see more dollars flowing in from a biotech perspective, I think we would expect our, you know, our mix to certainly reflect that over time, given the scale of the company. There are some offsets, obviously, given the scale of FSP that's generally, you know, obviously more of a large pharma model. So, so that helps, you know, sort of skew the mix more toward large pharma overall from a company perspective.
Yeah, and I guess I'll skip ahead a little to M&A because I wanted to come back to FSP, but since we're kind of talking about emerging biotech, you know, because, you know, obviously M&A has been a key part of your strategy over the years. PRA obviously has changed complexity, made you a much bigger company, and we've taken a pause just to kind of reset, right? But your leverage is now at a point. Your debt is now at a good point, right? Everything is in a perfect place to kind of resume M&A again. Would we think about the targets maybe more towards biotech in that sense? Because if that's, to get more exposure, A, because, maybe it's more full service outsourcing kind of model. You know, maybe higher margins overall or higher margin dollars overall.
Maybe just help us think about sort of how you think of M&A, like what, what is more attractive to you? Like, does mix matter? Things like that.
I mean, I think, you know, certainly, when we think about M&A, we're thinking about what strategically can move the dial for all parts of the organization and where do we need to put it in. So when we think about, you know, moving the dial in terms of our full service offering, whether it's large or small or mid, it doesn't actually matter to us in terms of they, you know, most organizations have the same nut to crack. They want to get their patients onto trials faster. You know, that's what they want to do. They want to have their, you know, studies recruited, patients on trial. And how do you do that? So we, we've all, and we've spoken about this a lot over the last number of years, have a very sophisticated site and patient network in our organization.
It's been an area where, particularly in general medicine and vaccines, it's been really productive in terms of helping us speed up the time to patient recruitment. And that's an embedded network of, you know, of our staff working at hospital sites and doctor sites to basically take the pain out of clinical research, to take the contracting pain out and the payment pain out and all those other pieces where it can be just a pain for the doctors involved and actually be able to move that faster. That's certainly an area where I think it's, you know, regardless of customer size, that's an area we'd love to continue to invest in.
We see the pressure on hospital sites and on doctor sites in terms of, having enough staff to actually be able to deal with the amount of clinical research that's out there, particularly in North America and Western Europe. So that's an area where we want to continue to grow and we think is very strategic, to the business. But, you know, it's, again, it's that nut to crack that, you know, speed to patient recruitment.
What about retail pharmacies as a network to help recruit patients as well?
I think one of the things you have to be careful about, and we've seen it in our own networks, is, you know, therapeutic areas and therapeutic area splits. You know, I think the, you know, we've seen that, you know, even in our network, we have a, a more of a concentration around general medicine and vaccine, where you've got ambulatory patients coming in who have, you know, it's when you, you have to, you can never forget 40% of our marketplace is oncology. Yeah, and you just don't get those patients in those kind of environments. And, and likewise, it's, you know, probably the retail pharmacy would be a good environment where, again, they were very popular at the time of doing the vaccine trials, where the patient population was everybody and anyone.
But when you're talking about that much more niche patient populations, you really need to have the key opinion leaders, those, you know, those, you know, you need to be at those sites. So it is, I mean, I think it's, it's, it's an interesting part to have maybe a mix, and I think we've explored relationships with some of those folks in the past. But I think it's always going to be a mix, and it's always going to be therapeutically slanted.
So, staying on site networks, so then is that a good area for investors to think of as where you want to keep expanding and putting capital into?
Oh, I think that's, yeah, from an M&A perspective, yes. But it's not, it's not just there. We'd like to, we have a really good central lab and bioanalytical lab. We'd love to continue to build out that. It's been growing really well over the last couple of years. We're probably down the pecking order a bit in terms of where we sit from a, from a market perspective. We've got a great late-, late-phase business outcomes, you know, business that, again, has been growing really well over the last number of years. And again, we'd love to see that grow through, through further M&A. And then there's kind of, you know, kind of, you know, other areas where, you know, whether it be use of technology in our organization, the concepts of biosimulation and how that is evolving in the marketplace.
And of course, the concepts of how you use AI to improve, you know, design of clinical research. All of those areas, I think, are areas where we'll continue to keep a very open eye in terms of M&A.
What about on the other side by commercialization like real-world evidence, real-world data, sort of like phase IV kind of events? It hasn't been a big focus for you, I don't think.
It's been a growing part of our business, but yet traditionally probably we were smaller than some of our peers. Yeah, but it has been a very good, strong growing area of our business. And it is absolutely an area where we'd love to grow through M&A. And I think there are opportunities in the marketplace that we can avail of. Yeah.
Okay, let's jump back then to talk about FSP here. And, you know, it seems like what we've been learning over our time here is that this model has evolved, right? And I think definitionally it's become kind of a gobbledygook a little bit, right? It's like everyone seems to have a different definition of it. But, maybe talk about sort of your strategic position in, you know, FSP, both maybe sort of pure functional service versus what we're seeing as more of a hybrid model, kind of a mix of managed services. And, maybe just remind folks sort of what your mix looks like today. How do I think of this business?
Yeah, circa 20% of our business, just thereabouts, is that kind of FSP model. You know, for those, I mean, you know, unfortunately, to your point, people have been playing with terminology here a little bit. So sometimes large pharma call it insourcing. And that confuses the issue again, because people think insourcing means they're going to recruit hundreds of people and they're going to do it. Usually that actually is a reference to this type of functional service provision by CROs. We're number one in the marketplace. So we've got some very well-established long-term relationships with some of the biggest pharma companies in the world. Yeah, I think that model, it is an evolving model. It's been an interesting space to be in over the last number of years. As I said, we, I think we do it really well.
It is about being able to recruit and get really good staff into those business models quickly and efficiently. But it's also about value creation. So I think that some of the story, the paradigm has been shifting from just, you know, having, you know, the X number of heads that's been requested to actually being able to say, well, let's deliver value for you as a customer. What are your endpoints? What are you looking to get out of this head, you know, this workforce that effectively you're hiring into your organization? If we can manage that process, we can get you probably a better bang for your buck in terms of number of people you're using versus the outcomes that you're getting from that.
And that's, that's part of that evolution to that kind of blended model of having not only the, in some instances, the FSP, so they might have all the clinical monitors for it, but then you might also be doing project management more directly in a more full service modality, or you might be using the technology that you would have in your organization and the SOPs that you have in your organization, as opposed to the, company that the people are embedded in. So it's, it is about blending those pieces and how do you use, FSP really efficiently and how do you move that paradigm from just, you know, heads-on billing to something that's a much, much more sophisticated model to, you know, around value and value creation.
Got it. You know, one of the questions that we often get is the, is sort of the financial impact as you, as you mix between these two types of businesses. And I understand that when people ask, you know, sort of what is the margin contribution, you know, that between the two, they're roughly, they're pretty close to each other as a margin percentage. But my understanding is that FSP projects tend to be lower total dollars, and so.
Well, I mean, you know.
Or is that maybe not the case?
Well, I mean, usually there is a bit of a margin differential. There's probably about 200-300 basis points of contribution margin differential between the two. So, I think people think, you know, of full service from the perspective of obviously on a success, big success basis, including inclusive of pass-through. And generally that doesn't come along with an FSP type model. So that's probably the biggest, biggest difference. So you've got, yeah, sometimes you've got a slightly different, mix. But generally speaking, FSP models are huge, huge relationships. They're usually with very large firms. They're usually very big contracts. So they are very weighty as part of, you know, the overall mix of business in an organization. And certainly in a company of ICON size, we couldn't contemplate not having it as part of a significant part of our business.
As I said, we're very proud to be number one in the marketplace and be very efficient at delivering it. It's going to continue to be a very important part of our business.
And it's a great thing also from a contract structure standpoint, right? It's not like a, we're contracting for a single trial that has a sort of start and a finite date endpoint, right? Where this is like, hey, look, we are filling a certain function here, and this is for some.
And often it's a bit, I mean, it's one of the reasons why we only report into our business wins, you know, 12 months visibility forward in terms of our revenue forecast in that business. We'd never put in a three years relationship because they're predominantly, they don't talk about a certain dollar contract. They're talking about a relationship whereby you'll supply us with clinical monitors over a period of time. And that can ramp up or down depending on where that company is in that cycle. So it would be very difficult to put in, it'd be a big estimate you'd be putting into your business wins if you're putting something in on a one-time basis for a three years contract.
Yeah. I think a lot of people have been talking about it, and certainly we've been hearing as well, you know, this seemingly shift from, particularly most large pharma from full service more towards this FSP kind of model. You kind of highlighted on last call, right, that you're starting to see some more increased demand from large pharma back to FSO. Maybe talk about sort of these broader trends and how they generally, you've seen them generally move over the years and, and, you know, maybe what, what does this last quarter kind of signal to you that we might be seeing a shift back?
Yeah, I think it's interesting. You know, there definitely was a trend, there's no question about it, in 2023, where the FSP became a more prevalent modality that we were seeing more of during the course of that year, particularly with the large pharmas. And it is predominantly the large pharmas who employ that particular model. It's been interesting though, because what we've seen in the past is that you do have, you know, things coming in and out of vogue a little bit here in this FSP/non-FSP mix, in terms of trial delivery particularly. And so you do see, you know, whether it be various management teams moving around the industry, bringing the modality that they're more familiar with, sometimes that's what is the catalyst here.
Sometimes it's a consultant who has a really bright idea and is talking to all the pharma companies about, you know, the shape of what their organizations should look like. But we have seen it kind of, you know, move back and forth. And certainly I'm 18 years in clinical research now, and over my period of time here, I've definitely seen, you know, there have been periods where you'd get this kind of more of a move to full service, and then more of a retrenchment and more of a move back into FSP, and it has waxed and waned. It is interesting that I think people were talking about last year it being a paradigm shift, that things were never going back.
It was really interesting from that perspective to see in 2024, actually the early indications are that there is more interest in full service outsourcing in the first couple of months of the year. Obviously we were, you know, very, very happy to announce a new relationship, a new full service relationship in Q4, as when we did our results as well with a large pharma company. So it isn't one-way traffic. I think that's the first thing to understand. I think there is that element that we've seen this in the past. I don't know if this was particularly different in 2023, albeit there was more noise around it because of things like the Inflation Reduction Act and other pieces that were going on in some specific pharma companies.
Yeah. Maybe just to clarify, the new Full Service Outsourcing relationship, was this a client that had been doing more FSP previously, has come back to say, hey, let's, we want to do more?
Yeah, when I talked at the outset, I was talking about the fact that a lot of pharma companies took 2023 as a year to decide not only on their model, on how they outsourced, what they insourced, how much they're going to spend on R&D, but also to assess their CRO partners. This was one where we hadn't been doing full service outsource work with this particular customer. They do both. They do have an element of FSP and an element of full service outsourcing. And actually I think they had two CRO partners that they put in place numerous years ago. And it was a reassessment in that point of time. And, you know, as I said, because there's been a lot of evolution of CROs over the last number of years, and obviously we're a much bigger player now.
We felt that we just, you know, went in, represented ourselves really well from a medical perspective, from a design perspective, from a team perspective, and were able to win that business off another industry participant. It was a good competitive win from our perspective.
That's interesting. I guess maybe from in a large pharma company, when they're making these decisions between full service and maybe FSP, how much does therapeutic area also factor into it? Like, you know, maybe in some area, in one therapeutic category, they might feel, hey, we have enough expertise in-house, at least from a project management standpoint, to do more FSP because then we can kind of oversee it. But maybe another therapeutic area, we want to lean on, you know, ICON's expertise here to manage that process. Does that factor in or is it more of a corporate kind of stance like, hey, this is sort of our overall strategy that we want to do more?
Yeah, no, I think that's not a bad one. I mean, I do think people will, you know, have a mix. I mean, I don't know if there's a consistent answer, to be absolutely honest. I don't know if it, like, yeah, that's always the case. I'm not sure that's the case. But there certainly is, you know, obviously where, as you'd expect, where people have, you know, where they feel that they need the additional therapeutic expertise of the CRO. Yes, I think full service is the more obvious of the two modalities that you would use in that instance. But it's not, I wouldn't say it was a ubiquitous approach.
Okay. Yeah, I was just curious. Want to jump in the last few minutes here, talk about sort of long-term targets. You know, you've kind of reached your 21% Adjusted EBITDA margin target, you know, certainly well in advance of, you know, 2025. And your 2024 guide, implying another 50 basis points of margin expansion. How should we think about long-term margins from here?
Take that one.
Yeah, I mean, we obviously set that in March 2022 in terms of that, the 21% EBITDA target. We haven't gotten there on a full year basis yet, although obviously we're very close in terms of the full year 2023. I mean, the way we thought about the likely makeup of that 21% was gross margin at 29%-30% in SG&A, somewhere between 8%-9% of revenue. Obviously, we've closed in on the 30% of GM a bit faster, I would say, than maybe we anticipated. And obviously we've been slowly working on working down the SG&A cost as well. So certainly, obviously we're not ready to set a new target yet. Obviously we'll consider that for, we have an Investor Day coming up in May of this year where that's sort of the natural time we would revisit the midterm targets.
But obviously there's still some room to run, I think, on SG&A is sort of the short answer there. Obviously we expect to make continue progress on that from a leverage perspective this year. But there's still, I think, some incremental leverage even we see beyond, you know, 2024 in terms of SG&A in particular. I would say from a mixed perspective, we certainly feel like gross margin is more of a maintenance, you know, sort of story for at least, you know, sort of the full year 2024, staying consistent on a year-over-year basis.
If we think beyond that though, particularly if we think about use of AI, generative AI, would that be more of a potential benefit to SG&A or would that be more in cost of goods?
Well, the way we think about this at the moment is, you know, it's for us, how we want to use AI in the first instance is very much around value creation for our customers. So we want to be able to help them using AI to develop better design trials. We want to help them, you know, to be able to process, you know, large quantities of clinical data to get better insights into how to run, you know, structure those trials as we go forward. We talked about it, we have a specific tool called Cassandra that will tell you before you ever get to that point if you're going to need to run an outcomes trial on the basis of all of the outcomes trials that have ever been run in terms of what have been the indicating factors.
So it's for us really, it's about being smart around using AI, it's about being into the front end of what we do, and about really turning the customer's head, I suppose, with our use of AI and its ability to actually give them insights in terms of trial design and other elements that are going to make a difference for them. We think that in the back office and in other elements of cost control, there is still plenty of room to run from a robotics and automation perspective.
You know, when I think about, you know, specific projects that we need to do over the next number of years, I could get, you know, we could still have a significant impact upon our cost base just by better utilization of existing systems, better automation between systems, and better use of robotics to do the kind of, you know, the connections, if you will, between systems.
The process, right? Yeah.
Exactly. And so, and so, and that still gives us plenty of road to run. So that's why we're seeing it at the moment from an automation versus AI perspective. We think AI is super important, but we want to really deploy it in the areas where we think we're going to get the biggest bang for the buck, where we think that is actually value creation for customers.
So if I just combine it together, right, if we think of the application of automation and potentially AI down the road, obviously you feel very good about where your targets here, but it does seem like there is still room for improvement down the road.
Yeah, I think we'll always continue to challenge ourselves. Yeah, that's not going away. I mean, as an organization from a margin standpoint, we've always been a company that, you know, every ceiling becomes a floor, you know, so we're always going to get to that point, set a new target, and then really be very visible about how we identify that. I would also say we also don't have our set targets so we don't have good visibility of how to get there. And so I suppose part of my, you know, conversation here and part of what Kate was saying was that we feel that we have that good trajectory around that SG&A getting to about 8%, gross margin is about 30% over the next couple of years. That obviously gives us runway from where we are at the moment.
Beyond that point, we'll do the work, we'll come up with a plan, and we'll come back to you guys.
Great. Maybe just to finish off here, as we think about sort of the longer term, where this market is going, and I think a lot of simplistic kind of thoughts was like, oh, you take R&D budget growth, you take, you know, mix shift from, you know, more additional outsourcing, but obviously that mix is, you know, kind of a hodgepodge of different types of models now. You know, long-term, like, you know, I guess it depends on what estimate you're looking at, like, you know, how much of the market has kind of outsourced. You know, I think it's what, over 50%?
Yeah, low 50%, 50%, 30%, yeah.
Where do you think that can get to? You know, is that something that can get to, let's say, 70%? I mean, obviously you come from 30%, you know, 10, 15 years ago.
Yeah, yeah. Yeah, I'm about, as I said, I'm about trying to come up with 18 years now, 18+ years in the industry, and I was about 30% when I came in. So yes, in that period of time, it's kind of about, I mean, on average, about 1% a year, right? I mean, I think where the question is like, well, where's the ceiling on that, right? So if you're at 53% or in the low 50s%, is there 20%? Another 20% to run? Can it get to, you know, something like 70%? I mean, we've always thought that theoretically 65%-70% should be very doable. And there's good reason for that. Like, if you look at biotech companies, that's what they do, you know, just routinely.
Also in terms of where you look really see where pharma companies are going to get the return on their investment in the future, it's probably not in, you know, the, you know, in the kind of services that we offer as standard. So I do think there is more road to be run. I think it's anybody's guess between, I think certainly it's revised up to 60%, 65% should be doable. I think beyond that, maybe it becomes a bit like, you know, more of a question mark. There's always going to be companies that will want to do more in-house. But I think that's probably where we would like to see it go in the next while. There is more road to be run. I think it's anybody's guess between, I think certainly it's revised up to 60%, 65% should be doable.
I think beyond that, maybe it becomes a bit like, you know, more of a question mark. There's always going to be companies that will want to do more in-house. But I think that's probably where we would like to see it go in the next while.
Okay, great. Well, I think we'll stop it here. And thank you very much. Great to have you.
Thank you, Charles. Thank you very much for being here.
Thank you.
Future is probably not in, you know, the, you know, in the kind of services that we offer as standard. So I do think there is more road to be run. I think it's anybody's guess between, I think certainly it's revised up to 60%. 65% should be doable. I think beyond that, maybe it becomes a bit like, you know, more of a question mark. There's always going to be companies that will want to do more in-house. But I think that's probably where we would like to see it go in the next while.
Okay, great. Well, I think we'll stop it here. Thank you very much. Great to have you.
Thank you, Charles.
Thank you very much for being here.
Thank you.