Next session, I'm Ryan Potter, an analyst from Citi's Payments Processors and IT Services team. I'm glad to have Kyndryl here for the next session, and from Kyndryl, we have CFO David Wyshner. Thanks for being here.
Well, Ryan, thanks very much for having us, and thanks very much for having us at the conference. We've been able to have a number of really good meetings with investors here.
That's great. I guess starting off for anyone that's maybe newer to the name, could you give maybe a 2-minute background on who Kyndryl is, your story, how you've evolved in recent years, and then also how you're differentiated in the market?
Sure. Kyndryl is the industry leader in IT infrastructure services. We provide services around the world, you know, to large enterprises, and do so phenomenally well. Oh, shut off.
Sorry about that. There you go.
All right-
Thank you.
Maybe start over that question.
Sorry about that.
No worries.
Yeah, so Kyndryl, Kyndryl is the industry leader in IT infrastructure services operating around the world. We generate in the neighborhood of $16 billion of annual revenue, and we offer services along a number of different practices, meeting a number of different customer needs. Some of it's core enterprise, but a third of our business is cloud related, and we also provide a network, and security, and resiliency, and digital workplace, and apps, data, and AI services to our customers, really helping them operate the infrastructures that are core to their business.
I would say one of the ways we differentiate ourselves, and one of the reasons we're really important to the customers we serve, is because of our expertise in mission-critical work, providing absolutely essential systems for travel services companies, for financial services companies, and large, complex organizations around the world.
Got it. Great overview there. I guess you've been undergoing a large transformation since your spin-off from IBM, so maybe you could give an update on where you are with that spin-off. What have been some larger successes? What has been... maybe stuff that's taken a little bit longer to achieve than you thought it would take?
Yeah, we're thrilled with the progress we're making in our transformation. We were spun off as an independent company almost two years ago from IBM, and that was a game changer for us. Being independent, no longer being an IBM captive, allowed us to adopt a different mission and significantly increase the addressable market we're going after. And a key element of that was expanding the technology alliances that we have, signing partnerships with all three of the hyperscalers, Microsoft, Google, and AWS. Expanding our relationships with other leading technology providers, VMware, SAP, Nokia, Cisco, and so forth, and really positioning ourselves to be a provider of multi-vendor solutions, again, in mission-critical settings.
By having these new alliances and having the, the, you know, larger addressable market and, and new freedom to act differently, we've been able to start transforming our business. The progress we've made over the last 22 months, I think is really significant. We're moving our margins to a different, a different place, we're showing up differently for customers, and, you know, I think the, the enthusiasm that, you know, that we've been able or the progress we've been able to demonstrate is coming across, both in our results and the enthusiasm that we have.
You know, we're coming off a quarter where we had a beat and a raise, and, you know, a raise following our first fiscal quarter really highlights the enthusiasm that we have around the year and about our prospects going forward, and I think that's resonating with investors, it's resonating among our employees, and it really reflects a lot of execution progress in our organization. If I may, the execution has been driven by three strategies that we announced and have been deploying, our Three A's, as we refer to them. It started with Alliances, as I mentioned, and we're driving progress and cost savings and even better services to customers through our second A, which is Advanced Delivery.
And then the third piece for us is our accounts. The portion of our business where coming out of our spin, we had revenue streams, we had relationships that just aren't profitable for us. And one of the great opportunities for us is the opportunity to turn those around and make those more profitable. And all of those strategies are driving our transformation, driving our turnaround, and I think the progress over the last two years has really been tremendous. We're really excited about it.
... Got it. And we'll get more into the Three A's, but I guess what inning would you say you're in the transformation? What are the larger steps left to complete, and what are some of the KPIs, I guess, investors should look at to kind of gauge your progress?
Sure. I think we're, you know, still in the early to middle innings. You know, we finished last year having delivered $200 million of annualized savings from Advanced Delivery, $200 million of annualized savings from the Accounts initiative. Growing the hyperscaler signings to more than $1 billion. And those were major proof points for us in year one of our fiscal 2023 that ended in March. And we're continuing to drive progress there as we move from the, call it, early innings toward the middle innings.
But given the nature of our business, where we have longstanding customer relationships and really often quite lengthy three-, four-, or five- or longer-year contracts with our customers, it takes a while to work through those. As a result, our transformation, our progress on these initiatives is a multi-year plan. That's actually really exciting because it means if we can continue executing, you know, continue the blocking and tackling on these initiatives that we were able to demonstrate last year, you know, we can again add another $200 million of annual savings from Advanced Delivery. We can continue to grow our Alliances and hyperscaler business.
We can continue to significantly increase the margins we're generating from Focus Accounts, and having a great set of executable strategies that can provide, you know, significant benefits in year one, and then more in year two, and even more in year three, is, you know, it's kind of a fun place to be from, you know, from our perspective. And we're just very focused on executing against that.
Got it. Maybe, maybe diving a little bit more into the alliances initiative, how would you kind of rate progress there? Uh, has it been a benefit from becoming a, your own standalone public company? And I guess on the hyperscaler front, what have you kind of done on, on that front to increase those partnerships and bring in more sales from them?
Yeah, absolutely. It has been a real opportunity for us to show up differently for customers. And you know, that ability to help them help customers where there may be a system of record on legacy system and systems of engagement that are being built or migrated to the cloud. Being able to be a one-stop shop for the infrastructure needs for our customers is really resonating with them. It's helping them improve their infrastructure, their security, their resiliency, you know, the efficiency with which they operate, and creating new revenue streams for us.
And so some of the key proof points were the, you know, as I mentioned, the, you know, taking that business from essentially a standing start to more than $1 billion of signings last year. That's gonna translate into more than $300 million of revenue this year, and is a significant growth vector for us going forward. In many cases, with existing customers of ours, where we just weren't prior to our spin, prior to being independent, we weren't able to participate in these needs that they have, and now we are. And so we're taking advantage of that. I see it as a growth opportunity as our large enterprise customers take advantage of all the opportunities available, you know, in hybrid environments.
This, as I mentioned, will be a continuing growth opportunity for us and really help us, you know, round out our offerings to customers.
Maybe taking a step back on the overall demand environment, kind of how would you characterize it in terms of across verticals, geos, service lines? Are there some areas that are seeing more macro pressure, some areas that are even more resilient overall?
Yeah, we, you know, we're hearing what other folks are saying about the macro environment, and it's hard for us to see those challenges. Obviously, we operate in the same macro environment that everyone else does, but the Kyndryl specific opportunities are essentially overwhelming what's probably a challenging macro environment. And our Consult signings, which tend to be our, you know, higher margin and probably are a little bit more discretionary than other things. Those are up. Our signings are up 20, you know, our revenues were up 20%, last quarter, year-over-year. And so we're seeing significant growth opportunities associated with our new freedom that sort of make it a little bit hard for us to see the, you know, the macro challenges that other folks are talking about.
The other issue, even more core to our business, is the nature of what we do. Providing mission-critical work focused on infrastructure, what we do isn't discretionary, and as a result, you know, I think is going, you know, over time, you know, good environments, bad environments, it's just gonna tend to be more stable than, you know, than folks who provide, you know, more discretionary-oriented services. So I, you know, I think there, you know, I'm sure what other people are seeing, you know, suggests that the macro environment's a little bit more challenging. But the opportunities for us as a newly independent company are so much more significant that, you know, we're seeing opportunities for, you know, Consult revenues to be up-...
Our aggregate signings in the first four months of our fiscal year are up year-over-year as well. So, you know, we're in a really, you know, I think, a strong spot to be going through the environment that we're in.
Got it. Longer term, you have a, I believe, a goal to grow revenue in calendar 2025, fiscal 2026. Correct me if I'm wrong on that.
Mm-hmm.
What gives you confidence in your ability to return to growth on that timeline? I guess, what needs to happen for you to get to return to growth?
Yeah, it's a great question, and I mentioned the multi-year nature of a lot of the contracts that we have. As a result of the multi-year contracts, you know, this year, our second fiscal year as an independent company, about two-thirds of our revenue is coming from pre-spin signings. Next fiscal year, fiscal 2025, that drops down to around half, and then as we move into calendar 2025 and really fiscal 2026, it's an inflection point for us. The majority of our revenue is coming from what we've done as Kyndryl signings that have occurred post-spin.
In that inflection point, combined with how we're showing up differently for customers, combined with the alliances we have, puts us in a position where, you know, where that inflection point returns us to growth in fiscal 2026, because most of our PNL, most of our top line at that point, is being driven by who we are as independent Kyndryl, not the constrained business that we, you know, that we began with, you know, coming out of having been IBM captive. And that's really exciting for us because we'll, you know, as our margins strengthen and we return to revenue growth, the financial model really starts humming at that point. And we're excited about the progress we're making toward that.
And by Kyndryl taking advantage of the alliances that we have, and the inflection point, you know, the mathematical inflection point that's coming up, we're positioned to be in a really good spot going forward.
You touched on some of the success you've had in Consult recently, which is kinda contrary to what we've heard from other players in the space, given the market. So I guess, what is driving some of the success there, and I guess, how you, how you feel you're differentiated versus other players, and what, what you do there?
Yeah. I think the opportunity for us in Consult, in some ways is a bit of a catch-up opportunity. You know, as an IBM captive previously, there were needs our customers had, you know, customers for whom we were doing mission-critical work that we just previously weren't able to solve. We weren't partnered with AWS, and Microsoft, and Google, and, you know, the nature of the business was, you know, pre-spin, focused on IBM-centric solutions.
And the ability to show up with an objective, multi-vendor view allows us to not only get the managed work that we had, but to play the role we should have been playing and are now able to play in advising and implementing, and then running or managing infrastructures and technology stacks for our customers. So I think that's, you know, a big part of what's driving it. And I think how we're organized around our practices, how we're showing up in front of customers, the range of solutions we're able to provide, and just the know-how and intellectual property and capabilities that we're bringing to bear are really allowing us to win business that we weren't getting before.
Got it. I'm gonna get into the other two A's, but I believe we had a question in the audience. I don't know if we have a mic.
Yeah.
All right. Yeah.
Actually, the question I have is, is very much following on the conversation you're having here, and, and it goes to this Page 13 on this little slide, 'cause I probably, I'm not as familiar with Kyndryl. I remember IBM for years, but you're laying out a great story. And so when I think about it, can you spend a minute? If these Focus Accounts and Blueprint Accounts, and that's, that's your first, like, what exactly is the difference? And basically, is it getting-- Is, is the opportunity... It looks like you maintain margin, maybe spend a little bit in these Blueprint Accounts, but there's big margin opportunity. Can you talk about two things? One is growth, so the revenue growth that you could see in these types of accounts, and the other is: how do you get those focus?
Is it just saying, "Hey, look, you got to pay us more," or, "Look, we're gonna offer you all these other services?" So just being not familiar with your terminology, explain the journey you're on here?
Great. So the question, in case it didn't come through on the webcast, it's really about Focus Accounts and Blueprint Accounts, and the opportunities associated with those, and it's a great question. It actually wasn't a plant, but it could have been. You know, because this is such an important opportunity for us, when we became independent, we started out of the box, you know, with a zero or slightly negative pre-tax margin. And we looked at the business and said: Why is this happening? And within our business, 60% of our revenue is perfectly good revenue, generating gross margins in the mid-20s%, translating into pre-tax margins in the high single digits, 10% range. It was great business. And the challenge associated with our financials was-...
was essentially driven by 40% of the business that average 0% gross margin. So it's a cost recovery kind of contract that on a fully allocated or fully burdened basis was losing money, was losing 15-ish%. And this gave rise to one of our core strategies, which is our third A accounts or Focus Accounts, fixing the margins associated with 40% of our business. And when we looked at why was this business a challenge, the common theme was that these accounts were typically part of a broader IBM relationship, and you know, for one reason or another, the services element that we inherited had essentially been given away at cost. And that, you know, that doesn't make economic sense for us.
You know, it's a huge opportunity for us to be able to change that. We've sized that opportunity at $800 million of annual pre-tax income, moving the margins on, you know, what $6 billion-$8 billion of revenue up 10 or 12 points over time. The way we're going after that is with a variety of different patterns. Part of it is selling incremental services, you know, Consult services, hyperscaler-related services, and expanding our margins in that way. A second element is taking elements of these contracts that were underwater, particularly OEM pass-through types of activity, and stepping away from those.
A third element of it is driving efficiency in our operations, and a fourth one that you mentioned is, when a contract comes up for renewal or renegotiation, it's moving pricing up to a market level of margins. And so it's actually a range of different patterns that we're in place, that we're running in order to be able to drive this progress. And one of the things that I think is really exciting is we laid out this opportunity, this you know challenge, which is really an opportunity for us. We said it, you know, it's a multi-year one because, you know, it takes time to make progress in long-term relationships and with multi-year contracts.
But we sized it as an $800 million opportunity, and last year, we were able to report that we were, you know, that we delivered more than $200 million of it. So we got more than a quarter of the way through it in our first year doing it. As the most recent quarter, we're running at $275 million, and so we're fundamentally changing the margins on this, you know, on this key element of our business. At the same time, we sort of, you know, the Blueprint Accounts, we'd like to move margin up a little bit there, as well, and I think we're well positioned.
But the opportunity to change our mix of business, where 60% just fine and 40% really challenged, you know, we've moved that to, you know, pretty close to 70/30 already. And then over time, you know, we're gonna get that to a position where, you know, ideally everything's earning the sort of margins that it should, which fundamentally changes our aggregate margin profile. And you know, I'm thrilled with the progress that we're making in this area. And then the other element associated with it, going back to the first part of your question, is that this is gonna give rise to growth opportunities for us as well.
So it's about, you know, adding Consult services, adding higher margin services, being able to provide a, you know, broader range of solutions, meeting even more of our customers' infrastructure needs. So, you know, the immediate focus has been on margin and call it growth and profitability. Over time, that's going to, you know, translate and even now is translating into what we refer to internally as operating ambidextrously. And, you know, we're part of the focus on margins and growth, but is on margins and profitability, but at the same time, we're increasingly focused on the growth opportunities, you know, again, helping us return to revenue growth in calendar 2025 and fiscal 2026, as we planned all along.
Great timing of that question because I was getting into the accounts initiative next. On the pricing element, what has client feedback been to that? Has there been any pushback in terms of your ability to push prices on them, or they realize that you're delivering a higher quality work and they're willing to pay more for that?
Yeah, there's always a negotiation and higher pricing is seldom met with the, you know, the warmest response. But there's a you know, as we work through it with customers, they realize that the issue is that their services contracts were a really good deal previously, but the pricing that we need to to generate a normal margin is a movement of the services portion of the contract to a market level. And as a result, you know, we've been able to work through scores of those conversations and you know, the commonality is typically retaining the customer. And there may be elements of what we're doing that we step away from, but the customer relationship remains intact. You know, we continue to provide the mission-critical services.
We continue to operate the hearts and lungs of their IT stacks. Third-party business, you know, third-party or pass-through elements where we were underwater, you know, we're happier taking those out of our contracts and letting our customers go direct to the third-party providers for that, and really ending up with a services contract that makes a fair amount of sense. And I think there are two, you know, there are three reasons why this is working. One, you know, the pricing increases we're looking for are typically a movement to market, not that we're we need something above market. But the other two things that are really important is that our customers, generally speaking, are very happy with us.
Our Net Promoter Scores, our customer satisfaction scores are really strong. We start these discussions usually with a really strong base of, you know, Kyndryl doing a very good job for our customers. Then the second element is our leadership position in the industry. We're double the size of anyone else in infrastructure services. We've got great intellectual property and know-how, and I hope we can talk about Kyndryl Bridge, which is a key part of that. But we're, you know, the capabilities that we offer, the innovation that we bring, the level of service that we're offering to customers puts us in a really good spot to have even, you know, to have conversations even about pricing.
Yeah, you mentioned Kyndryl Bridge, so I guess getting into the third A, Advanced Delivery, maybe tying in AI into that too, I guess. Could you kinda talk about how you're helping your clients embrace AI and some of your AI capabilities, and also the capabilities that Kyndryl Bridge, your automation platform, helps clients on that journey?
Absolutely. So let me start with Kyndryl Bridge, and then I'll talk about AI more generally. But Kyndryl Bridge is the operating platform that we're increasingly using to serve our customers, to allow us and to allow them to manage their infrastructures. And it's an AI-enabled platform. It's not generative AI, it's called old-fashioned AI and machine learning that you know identifies problems and risks in an infrastructure even before there are problems or risks that materialize. It runs automations and it operates in an automated fashion in ways that further increase the quality of service that we provide, at the same time that allows us to operate more efficiently.
So it's a, you know, it's really a win-win in terms of, you know, higher, even higher quality service that costs us less to provide. So we're thrilled with the innovation that has produced this. We're rolling it out through our customer base, and they're taking advantage of it. And it is a key part of our second A, Advanced Delivery, driving automation and efficiency in how we meet customer needs in a way that reduces our costs. And again, it's one that really is warmly embraced by our customers because they're seeing the benefits in terms of, you know, fewer issues, fewer risks, reduced planned downtime, reduced unplanned downtime, and real tangible benefits associated with that.
This Kyndryl Bridge is a great example of us already employing and having deployed AI in our business. And if you think about our P&L, it's deploying AI in a way that reduces our cost of services and is helpful from that perspective. You know, as we look at AI and generative AI, we see that as a revenue opportunity to help serve our customers.
One of my colleagues is really fond of saying, "Your AI is only as good as your data." One of the key areas I, you know, I see as an opportunity for us and that we're talking to a lot of customers about is data architecture, data availability, data security, in order for our customers to be able to take advantage of generative AI and how they want to use AI in their business. So the infrastructure needs, the data architecture, data security, networking needs, even in some cases, the compute power needs associated with deploying AI ends up being part of the customer needs that we're helping to meet and will continue to help to meet going forward.
So that, you know, that in some ways becomes a, you know, sort of a revenue—going back to the P&L, a revenue and a growth opportunity for us as an infrastructure services provider. And then the third element that we're just in the early stages of is thinking about us as a corporation. You know, how in our you know, call it in our enterprise function, so there's finance or HR or our operations, and marketing and IT, how do we take advantage of various AI tools that are out there to drive efficiencies in our operations? And we're you know, we're actively looking at those now.
I think we've got some use cases that we're enthusiastic about, but I view that as early stage. And we're also gonna be looking to see and hear and figure out what wins other people have as corporations to take advantage of those. So we see ourselves as already being a beneficiary of AI because of how we've deployed it in Bridge, but it also represents a, you know, important part of how we go to market and meet customers' needs, because this is, you know, as you know, a, you know, at the center of almost every discussion about information technology and about those sorts of services that we provide as companies look to drive efficiencies from AI.
Are there any risks to consider to the business model or financial model from AI in terms of maybe cannibalization of revenue as more stuff gets automated, or is more automation and greater efficiencies, is all that a net positive? It's gonna bring in more clients for you, it's gonna increase potentially your TAM?
Yeah, I think the opportunities for us to take advantage of this and the, you know, AI is going to increase the already huge role that IT plays in the operation of organizations, and how they go to market, and how they operate in the global economy. And as a result, you know, I think the, you know, the trend, you know, the now multi-generational trend of investing more in technology is going, you know, the next layer of that, the next step in that evolution, is going to be investment to take advantage of these technologies. And as a result, I see our customer base, broadly defined, continuing to invest more in technology. And the, you know, the infrastructure needs associated with doing that are going to continue to grow over time.
Yeah, there'll be parts of that, you know, that are automated and will drive efficiencies from that. But the core needs to run business, and, you know, for our customers to do what they're doing for their customers, with technology, I think is gonna continue to create significant opportunities for us. And, you know, from a big picture perspective, part of the way we go to market is, you know, in talking to CIOs and CTOs about their needs, there's, you know... I like to break them into two buckets. One is all the stuff that they have to do to keep things running, and the other piece is how they're supporting the growth and profitability of their own business.
CIOs and technologists want to spend more and more time on that second piece, helping the business grow and become more profitable. We're really darn good at that first piece, taking care of all the things that have to absolutely have to run, that are at the center of things operating smoothly, that they want to optimize, where resiliency and security are important. We're phenomenally good at that. This element of their chores, our core, ends up creating, I think over time, more and more opportunities for us. The fact that we're a leader in this space means that with AI, we learn faster than everyone else.
And so I think the scale advantages we have as a leader in this space are going to continue to grow over time.
That's great. I guess shifting a little bit to margins. I mean, you talked about how a lot of these initiatives are margin drivers, and longer term, you have a 6%-9% pre-tax margin target. So I guess if you could kind of tier or rank the things we talked about between Focus Accounts, advanced delivery, improving revenue mix, general efficiencies. So where are the largest drivers for margins to get to that 6%-9%?
Yeah. So, the two key drivers of margin improvement are the Focus Accounts initiative and Advanced Delivery. And where that's playing out, how we're seeing it is in a metric we report on each quarter, which is the margins, the projected margins at which we're signing business. And one of the key wins for us last fiscal year and into this fiscal year is that we've fundamentally changed the margins at which we're signing business, compared to where we were operating at day one following our spin. So we, you know, over the last 12 months, we've, on average, signed business with a mid-20s gross margin, a high single-digit projected adjusted pre-tax margin.
And now we just need to continue that, because what signing business with those kind of margins does is it, you know, it fundamentally changes our the mix of business that's in our backlog and that produces our revenue and our earnings each year. And that's why, you know, I mentioned how, you know, this year, still two-thirds of our revenue is coming from pre-spin signings, from legacy business.
But as we're signing, frankly, better quality or higher margin business, and we move to a situation where next fiscal year, half of our, you know, half of our revenue, half of our P&L is coming from post-spin signings, and the year after that, when two-thirds of our revenue is coming from post-spin signings, the fact that we're now signing business with these better margins, we get the math just working in our favor. And that really is going to help us move our aggregate margins up to the mid, you know, mid, actually high single digits on an adjusted pre-tax basis. And that is, that's a key focus of ours.
You know, again, the way we get there is Advanced Delivery, it's Focus Accounts, and it's the pricing discipline that we've been able to report on and show people, and that I'm super enthusiastic about. Because it's not a, "Well, we're gonna need to do these things, and then we'll eventually get pricing and better margins." We are signing business and have been for over a year now, signing business, signing contracts with fundamentally different margins than what we started out with at the time of our spin.
... Is the margin expansion opportunity pretty ratable each year as you're signing these new deals? Or is there some benefits that are expected to come later, a few years out?
I think it's pretty even over the next several years. We're trying to front-end load it as much as we can by making progress, not just at the time of renewals and renegotiation, by, you know, by adding in content that, you know, that's higher margin and helps us. But when we look at the expiration of existing contracts, you know, those kind of play out 20-ish% a year over the, you know, first four years, and then the remaining 20% is over a tail beyond that. So that opportunity ends up being pretty ratable, pretty even over the first several years.
That's, you know, that's really why we viewed the Three A's and the progress on the Three A's as being a multi-year exercise. And again, it's just part and parcel of the nature of our business, where we operate under multi-year contracts. And then the corollary to that, by the way, is if, when and as we get this fixed, the annuity-like revenue stream, the annuity-like profit stream associated with the business, that flywheel starts working in our favor, and I think becomes incredibly valuable.
Because rather than having a, you know, a backlog that doesn't have much profit, embedded in it, you know, a couple of years from now, given where we're signing business, we're going to be operating with a backlog that has significant profitability, significant earnings, significantly, essentially contractually committed, revenues and the earnings power associated with that, you know, signed and, you know, in the, in the vault, if you will.
Got it. We're in our last couple of minutes here, but maybe just pushing the cash flow, capital allocation. You had a free cash flow outflow in the quarter. So I guess, what were some of the drivers of that, and what gives you confidence in getting free cash flow growth this year and, and going forward?
Sure. The first quarter cash outflow is driven primarily by seasonality associated with our business, and we expect our cash flow this year to be positive. When we look at last year, even though we had an adjusted pre-tax loss, we had positive adjusted free cash flow, and we're really able to drive that by reoptimizing our working capital and taking, you know, taking advantage of opportunities that were, you know, there to do that. And then going forward, I see more and more of our free cash flow and our free cash flow growth coming from our margin expansion. You know, as our pre-tax margins move up, our net margins move- will move up, and our conversion of adjusted net income to free cash flow should be very strong going forward.
So pre-tax income, we'll have some cash taxes, and then beyond that, I see a big drop-through from that, adjusted net income to, to the cash flow that we generate.
Got it. And probably tough to do in 30 seconds, but on capital allocation really quick, how... where would you put your priorities? I know you want to keep investment grade rating, eventually return cash to shareholders, and maybe how, how do you think M&A as well?
That's exactly right. So investment grade rating is a top priority for us. You know, we're rated in the triple B range by all three agencies, so we're in a good spot, but we want to retain that. But given the nature of our business, as our margins strengthen, our cash flow will strengthen, and we've got annuity-like revenue stream. So it, you know, we do think it at some point will be, you know, natural for us to be in a position and to want to return capital to shareholders in some form. We'll look at M&A, but it hasn't been a high priority for us in our first almost two years as an independent company.
All right. Perfect. Thanks again, David.
Thanks very much. Great to be here.