All right, good morning, everyone. Welcome to the Goldman Sachs Healthcare Conference. I'm Jamie Perse, the healthcare provider analyst here. Our next session is with LifeStance Health, and we have, Dave Bourdon, the CFO, and Monica Prokocki, VP of Finance and IR. Thank you both for joining.
Hey, thanks for having us.
Pleasure.
So I wanted to start just with a big picture question on where we are. We've been through kind of several phases of the company, very rapid growth as you guys scaled. New management team has come in and really focused on operations and building a longer-term foundation, and then you've talked about longer-term acceleration. So where are we in that transition, you know, specifically on the focus on building the foundation and what that's gonna set up going forward?
Yeah, we're. I mean, we're in the midst of it, right? So we've talked about the company as having two chapters, as you referenced. The first chapter was about explosive growth, getting to scale, and that's what the founders, the original leadership team, did, and they did a great job. And that got us to about a couple of years ago. And then what Ken and I, the CEO, talked about is we're in that second chapter, and for us right now, it's fortifying the foundation, simplifying, standardization, and that, you know, getting to that operational excellence. And we're in the middle of that second chapter. We talked about 2023 and 2024 as invest years and again, fortifying that foundation. You know, here we're halfway through the second year, and we're, you know, we're still plugging away.
We've had some really great successes. We've from a people, process, and tools perspective, we've made great strides in people. So we've strengthened the leadership team, which especially our practice operations. So the team that runs the business, all the vice president, senior vice president levels, all new leaders in the last couple of years. We brought them in from healthcare places like DaVita, you know, places that where they're used to running a multi-site healthcare company, and they replaced what were previously founders who were used to really being entrepreneur or small sites. So we've done a lot with people. Process, I would say we're early stages, depends on where, what parts of the business. I'm sure we'll get into that more.
And then on the tool side, two big things that we discussed previously were an HRIS system, which I know it's not very sexy, but to be a company of almost, you know, 9 to 10 thousand employees and not have an HRIS system was causing all kinds of issues. We just delivered that on April first of this year. And then the second big investment is our credentialing onboarding platform that is in pilot phase in a few markets, and it's rolling out this summer.
Okay, great. I guess, where is this all leading to in terms of, you know, you've talked about once you have the operational infrastructure in place, then you could maybe go back on offense, you know, maybe M&A,
Yeah
more sustainable margin expansion.
Yeah.
So where is all this leading in terms of what it's setting up in 2025 and beyond? And is 2025 the year to think about that next stage starting?
Yeah. Well, there's a couple things there. There's margin expansion, and then there's the growth aspect, the M&A. So first of all, from a margin perspective, 2023 and 2024 being invest years, but we said 2023, we actually stepped back from a margin perspective. We had the opposite of operating leverage, and we said that will be the last time that our expenses will grow at a rate faster than revenue. So we've said as we get into 2024 and beyond, we expect to deliver operating leverage, and you saw that in the first quarter, which we exceeded our even our expectations.
But this was the year where it was the first time where we were gonna prove it, that we could grow margins, and we did that in the first quarter, and I think we've put a pretty attractive guide out there for the, for the full year. So overall, Adjusted EBITDA margins will grow over 200 basis points year-over-year. So that's that first deposit in margin expansion. We expect that to continue, and that as we get into 2025, where we're able to reap even more benefits from the investments that we've been making. So that's, that's on the margin side. On the growth side, what we had talked about last year when we were giving guidance for 2023, 2024, 2025, we expected to be able to do mid-teens organic growth.
So we turned off the M&A engine because we wanted to fortify the foundation, and acquisitions were introducing a lot of disruption, and we wanted to really get the foundation strong before we considered those again, number one. And then number two is we said we'd be free cash flow positive in 2025, and once we were free cash flow positive, we would become more acquisitive. We've now accelerated that to where we believe we'll be free cash flow positive this year. So as we get into next year, what are we gonna do around deployment of capital? Which is, I think, really the heart of your question is, you know, I think of it in priorities.
It's fund internal growth, it's inorganic, and then the last would be, if we can't find a higher ROI opportunity, then, you know, do we return that to shareholders, return excess cash to shareholders? So I think next year is the year where we will become acquisitive. And, one thing I would highlight is, it will not look like it did in the early days of LifeStance. It's not going to be scaled, practice scaled buys. This is gonna be, it'll be much more strategic. We already feel like we have the scale that we need, where, it's now about growing density in the places, the 33 states that we're in.
You know, we'll be much more disciplined in what we buy if we're buying a practice. I could see us doing things like some acquisitions around the adjacencies, so your neuropsych testing, TMS, ketamine Spravato, things that are those higher revenue, higher margin services that are adjacencies that kind of round out what we're able to deliver to the patient. I could see us doing things in those spaces to accelerate growth.
Okay, great. Let's talk about the clinician piece for a minute. That's obviously the core of the company
Yeah
Clinicians. It's a very competitive market for these folks. They have a lot of alternatives in terms of where they could work, how they can, you know, generate an income. One of the early challenges coming out of the IPO was turnover, and the early pitch was the value proposition to clinicians. And I guess with a high rate of turnover of clinicians, it's not obvious, you know, that that's super differentiated versus the market. So where do you think you are in terms of delivering on that promise of a value proposition to clinicians, and how do you measure that internally?
All right, I'm happy to take that. So we do expect to see improvements eventually from the efforts and the investments that we've been making. And totally agree with you that while turnover hasn't gotten better, it has been what we would describe as stubbornly stable. So there are several key elements to the value proposition that we provide for clinicians. One of those is flexibility for clinicians to determine their hours working remotely versus in one of our centers. Additionally, we provide administrative support, acquiring patients for our clinicians, billing, scheduling. They can really focus on patient care. Additionally, we also have the multidisciplinary model, where clinicians can refer internally to one of our other thousands of clinicians, and the unique benefits that we offer, including health benefits, 401(k) match, and long-term incentive program. And our benefits are really focused towards our full-time clinicians.
So our value proposition has resonated, and that's been demonstrated through our continued clinician growth, but we still have more work to do. And so, for example, on the administrative support side of things, we continue to invest in billing. We're making major investments in our front office staff. And, one thing that we would also want to note is that there are some things that we are doing that clinicians may not love. So, for example, on the health benefits, enforcing that the hours for that need to be full-time or raising the bar in terms of our long-term incentive program, those are things that can kind of offset some of the areas that we're actually enhancing the clinician experience.
So in the long run, we really want to focus on being the employer of choice, and we'd like to see retention continue to improve over time, but that's a bit of a long game. And again, within the market, I don't know that our retention is any worse than other players, potentially better.
I guess if we were to break it down into two buckets, there's
Mm-hmm
sort of just day-to-day, and then there's a financial component.
Yeah.
Is the right way to think about it that clinicians can make a, you know, competitive compensation? No, no real differentiation versus the market long term, but competitive, and then all the clinician benefits are on the, you know, operational day-to-day side, administrative support, you know, a network of clinicians they can refer to internally, that sort of thing. Is that the right way to think about it, or any more color on the financial side?
Yeah, that's, that's a good way to think about it. So our model is unique in terms of our clinicians being W-2 employed, paid on a fee-for-service basis, and for the full-time clinicians being offered the benefits as well. So compared to salaried models, one of the advantages that we offer is greater flexibility. Compared to clinicians who are in private practice, we provide that additional administrative support so they can focus on the clinician care and, and then also provide insurance coverage. So as you know, much of the market is still cash pay. We don't view that as sustainable in the long term. I think more and more patients are going to demand that they be able to pay for their mental health care the way, same way they pay for the rest of their healthcare with, through insurance.
So those are some of the things that we offer clinicians, but we really focus on being market competitive when it comes to compensation overall.
Okay. And I guess where are we in the... There were a couple buckets of focusing on improving clinician productivity, their capacity, the pipeline. What's the status of the strategy in terms of recruiting clinicians, you know, building the pipeline, bringing them on internally, and then, you know, supporting kind of steady capacity growth, you know, in terms of the hours they're able to offer?
Yeah. So first of all, the recruiting engine remains strong, right? So we grew, you know, our clinician base over 1,000 clinicians last year. And with turnover being stable, you can think of that as, you know, that's new starts and really being the strength there. Stepping into the first quarter of this year, same thing, 220-ish clinicians added. Again, not because of higher retention, but because of stronger recruiting. So that pipeline, you know, and that engine is still going really well, which again, validates that our value proposition is strong in regards to the recruiting of clinicians. In regards to capacity, first of all, as we're recruiting new clinicians, we are recruiting full-time clinicians.
So they're giving us, by contract, they're supposed to be giving us 35-40 hours, depends on the market, but about 35-40 hours. We define for benefit purposes that they have to give us at least 30 hours. But that's that is who we're targeting. So unlike many of our competitors, that they're willing to take a couple hours a month or, you know, a couple hours a week, we're focused on getting those full-time clinicians. And then where the new work is for us, from an operational perspective, is then working with that clinician to make sure that we're effectively ramping their calendar when they join, and that they continue to give us those hours. And so that's the, y ou know, that's it from an operational perspective.
Sure, we're doing things like, for the first time in the history of the company, enforcing the full-time requirement to be able to get benefits. So previously, if you were, you were part-time, you got a 401(k) match. Didn't matter how many hours you did, and you were supposed to work full-time to be able to get health benefits. But we didn't really define that for the clinicians, and we didn't enforce it. So those are examples of things we're doing, to really get to driving increased capacity. Once we have that increased capacity, then we have to match the patient demand into that to be able to get the improvement in productivity.
Okay. Let's talk about just the recent financial performance or broader operational performance. Just reported 1Q, 19% top-line growth. I think that's the sixth quarter of, you know, upside from, from revenue, since the new management team took over, really. I guess, talk about the sustainability of that, especially in the context of how you've talked about the cadence for the year. It sounds like we should be modeling a slowdown in the back half of the year, and then you've guided to the mid-teens organic growth or above that. Just talk about the drivers of the pressure you expect for the rest of the year and sustainability of, you know, the top-line cadence.
Sure. So I'll kick off with just the drivers for the first quarter, and then maybe Dave can kind of add in terms of how that plays out for the rest of the year and some of the dynamics there. But in the first quarter, we grew revenue 19%. One component of that was 15% year-over-year visit growth, which was primarily the result of 15% growth in net clinician adds. The remainder of that was driven by a 4% rate increase from payer negotiations. Dave, do you want to?
Yeah, we can talk, I mean, so for first of all, as we think about the year, Jamie, what we usually talk about roughly is revenue being 50/50, first half, second half, all other things being equal. And the reason for that is, our model is unique. Again, we're W-2, our clinicians are W-2, but they're a fee-for-service, so they get paid for the visits they do. So what you end up happening in the back half of the year, you have the summer vacation season, which straddles a little bit of Q2, but it's mostly a Q3 dynamic, and then you have Thanksgiving through New Year's holidays. And so while we're continuing to grow our clinicians throughout the year, the productivity will dip in the back half of the year naturally because of the vacation season.
So that's, so that's the first thing, is when you start with the kind of the revenue at 50/50, all things being equal. Then the other dynamic that we have this year that's unique, that we talked about on the earnings call, is we do have a large national payer whose reimbursement level is going to go down. They're at a very high premium to their peer group today, and they'll be coming down to, you know, at par with their peers, and that really kicks in at the beginning of the third quarter. So that's, that's a dynamic. It puts a little bit of revenue pressure, obviously, but that revenue is also dollar for dollar hit to the bottom line.
That's why the margins in the back half of the year, while again at 7%, is consistent with our initial guide for the year. It's not as attractive as what we saw in the first quarter.
I'm gonna come back to the payer thing in one second, but just on the cadence in Q2, you guys talked about lower clinician adds, and I think the average has been right around 220 the last four quarters or so. I can already imagine the calls when it's 150 or whatever in the second quarter. Talk about the seasonality dynamic with lower clinician adds in Q2. What should we be expecting in your level of confidence that would reaccelerate in the second half?
Sure. So this is a bit of a similar dynamic that we saw last year, where Q1 stepped down to Q2 in terms of the net clinician adds. And one of the drivers of that is that, while new grads aren't, you know, the majority of our clinician base, there is a seasonality to when they join, so they're one of our sources of clinicians. So they'll typically finish their programs in Q4 and then start in the first quarter, or they'll sign with us in the first quarter, finish their programs in Q2, and then start in Q3. And so we see a little bit of a dip in terms of some of the clinicians who are starting in Q1 or Q3, that are coming out of their programs.
We did see that reverse last year, and we expect similar this year in terms of those
new grads who are finishing in Q2, starting in Q3.
So would looking at last year's cadence give us a good indication of
Directionally
Okay.
It should, it provides a lot.
Okay, and then on the payer step down in rates, I guess first, big picture, are there any other rates that are out of proportion with others, either positively or negatively? And then on this specific payer, I don't imagine you wanna talk in too much detail about very specific payers, but what can you say in terms of the magnitude of the step down or, you know, how this sort of developed in terms of them identifying this opportunity and
Yeah
the negotiation process?
Yeah, so you're right. So we won't use any payer names, but think of it as a big national payer. I mean, I think everybody who follows that space knows that the majority of them that have large MA books are under a lot of pressure right now with loss ratio. And so I think that they were reviewing all of their provider contracts and realized that we were out of market, you know, relative to their reimbursement level to other mental health providers by a significant amount. And so they exercised the contractual right they had and, you know, we negotiated. And again, but they're coming down to be on par with their peers.
It's from a magnitude perspective, I would say it's significant, because if it wasn't, we wouldn't be talking about it, right? And so you will see a step down in our rate per visit in the back half of the year, and it's the result of this payer contract. Otherwise, you wouldn't expect our total rate per visit, TRPV, to have a step down from first half to second half. And it's also why we were saying that the margin performance in the first quarter isn't enduring through the remainder of the year. So it's significant, and, you know, it is what it is. Now, in regards to overall payer contracting, our batting average has been really good.
So this is the only payer that, whose rates have gone down or will go down in my year and a half as CFO. You know, we just say this is a bit of a unicorn scenario, to have a large national payer whose rate reimbursement level is so out of whack with everybody, all of their payer group. I mean, that just doesn't happen that often. So that's, so it is a bit of a unicorn. I would say there's no other national payer whose situation, you know, is like that. Now, your other part of your question was kind of the variability of rates. So is there, are there others that are out there that are really good or really bad?
I talked about the, you know, there's not others that are have a dislocation from a really good perspective. There are low-paying providers, so or low-paying payers. And, you know, at, at our market level, so if you look at it from a state perspective, we still have a tremendous amount of variability, more variability than we would like. And, obviously, our goal is, is to bring the ones that are low up, and improve the average. And so that's what we've been focused on, and we've been, we've been successful, in large part, doing that. And again, we've only been at this for a year and a half, so we didn't have a payer contracting or engagement team.
That was one of the investments we made last year, and so it's still early days on payer, but we have a lot of successes, which are partially mitigating this one situation, but obviously not enough to be able to fully cover it.
Okay, and I, you know, Ken talked about meaningful upside opportunity in rates
Yeah
longer term. Is what he was talking about this, you know, narrowing the variability, bringing the low, low end up, or just talk to us about, you know, the broader market dynamics. I, I think
Yeah
Most people appreciate the supply and demand dynamics and that there's a lot of demand for mental health. How does that, just along with your scale as well, how do those dynamics factor into the kind of long-term negotiating power you'll have and how that translates to date?
Yeah. Yeah, so this year we'll do, you know... Well, maybe go back to last year. Last year was low single-digit rate increase. Okay, and that was really, you know, we had some benefit from our payer team, especially as we got into the end of the year, where we saw some lift in rate per visit. The, but, but it was, you know, we just started doing it, so that was we had low single-digit rate increase last year. We come into this year, first quarter, it was up, our rate per visit was up 4% year-over-year. So we're starting to get into that mid single digits. Now, it's gonna come back down for the full year to low single digits because of this one, this one payer that we've talked about.
But, but, but before that, we would've been into the mid single digits, and that's where Ken and I think we'll be long term. We're gonna have a bit of a hangover on this one contract negotiation into 2025. Next year, I would expect, again, like, low single digits, but as we get into 2026 and beyond, we do expect that we'd be up into that, mid single digits, and that will give us, you know, opportunities for margin expansion.
Okay. Let's go to profitability, the performance in 1 Q. You guys beat by $8 million, you raised guidance by $8 million, so the rest of the trajectory is unchanged. I guess there's two pieces of it. I think maybe you can fill in some of the gaps. You've got this payer issue we've talked about, that's pretty obvious. And then you said you had some delayed expenses that, my understanding is they're run rate expenses. They didn't happen in 1 Q, they're coming online in 2 Q, so you just got a quarter extra of benefit from, you know, this delay.
Are those the two pieces in terms of the margin guidance being down for the balance of the year relative to the, And just any help on kind of sizing those two pieces?
Sure. That's a fair way to think about it. So as you said, in the first quarter, we achieved Adjusted EBITDA of $28 million versus our guidance of $20 million. That was primarily driven by our center margin beat, which was primarily driven by spend savings. There are a few elements there, but I would say the biggest thing that I would point to is the front office investment, kicking in more in the second quarter versus Q1. And when you think about Q1 to Q2 and how you bridge between those, it's really a combination of that front office investment kicking in in the second quarter, as well as the annual pay increases that we provide to our clinicians and team members, where the full effect is in that second quarter.
So the way that I would think about it, and I think as Dave has communicated, the remainder of the year is just still very on track with what we originally guided, and we're flowing through that Q1 benefit.
Okay. And I guess just to make sure I understand, the step down embedded in guidance is about 170 basis points from 1Q to 2Q. Sounds like the payer rate is more of a 3Q-
Mm-hmm. Yeah.
Timing. So the investments, the center level spending, that's what's driving the-
Yes, center level spending.
All of it.
So it's a combination
Okay
of the annual pay increases as well as the front office investment.
Okay. Okay, that's helpful. And then implied margins are, I think, 8.5% for the second half of the year. I guess, is that the right run rate to think about stepping into, you know, 2025? Or how should we think about the trajectory as you, you know, get to this exiting 2025 with a 10% margin?
Yeah. So I have a little different number. I would think of the back half of the year at around 7%.
Sorry, 8, 8.5 for first half, 7%.
Yeah. Yeah. Okay. You're getting ahead of me on the margin level there.
Mm-hmm.
So, 8.5 in the front half, 7 in the back half, and we talked about earlier was that a lot of that is the payer rate impact that we've discussed. It's also that you just had this outperformance in the first quarter that's not gonna repeat. So that gets us to the 7%, which is consistent with our original guidance for the year. So again, we're playing out as we expected. And so I think of that as that's yes, that's our stepping off into next year. Again, we're very comfortable with our guidance or multi-year guidance of saying we'll exit next year with double-digit margins.
That's not a peak, that's you'll continue to expand margins beyond that, exiting 10% at 10%?
That's right. So what all we've done is given 3-year, 3 years. So when Ken... It was my first earnings call, it was the fourth quarter call last year, and we wanted to give a little bit of a view into the multiyear because, you know, the last time we had done anything was the IPO, and, and that math, you know, Ken and I didn't agree with that, that, that picture. So we wanted to at least set the stage for 2023 through 2025. 2025 exiting double-digit margins coming from, like, 5.5% last year, so meaningful step up.
A lot of the drivers of the margin expansion, whether that's payer rate increases, operating leverage, or a growth in these higher revenue, higher-margin specialty services, those that are, you know, driving this through 2025, those remain and will continue into 2026 and for years, years after that. So we feel, you know, we feel really good about the opportunity to expand margins for the future.
Okay. And what's your assessment of just the real estate footprint and how it fits into the broader strategy of telehealth versus in-person? Are there still centers you think you can identify that, or you can consolidate around a, a
Yeah
couple in a market, and then the longer term kind of, you know, forward view on opening new centers? How does that all kind of fit together?
Yeah. So last year, we did a big initiative around rationalizing our real estate footprint. So we started with over 600 centers for the year. We added 35, but closed over 80, and that was the first we had done anything like that. For the most part, footprint, so almost all the other centers necessary based on our view of clinician and patient needs. Now, we still have a lot of opportunity, 'cause we're at roughly 70%, a little over 70% virtual right now, that is we still have the opportunity at centers to add more clinicians without having to add more real estate footprint, right? So days pre-COVID, every clinician had an office because they were at almost 100% in person. So if you wanted to add a clinician, you had to add real estate.
That's no longer the case anymore. So we are being very measured in our adding of new centers. We'll add less than 20 this year, whereas if you go back to, you know, pre-COVID and early COVID, we were doing, like, say, 100, over 100 a year. So we'll be below 20 this year, and, again, we're only adding when we're running out of space.
Is that mix of in-person versus telehealth, is that what you expect to persist long term, or is there any benefit to trying to shift it in one direction or the other? You know, how are you thinking about, you know, the long term?
Yeah. We're letting it naturally take its course, so we are not trying to push it. What we are seeing is patients, the demand from patients, is increasing for in-person, especially for that first appointment. So the first appointments in-person level is, it's about 10, 10% higher than our overall book, virtual versus in-person. So we're seeing that demand for in-person, for that first appointment to be really strong. And again, and it's just continuing to gradually creep up. We don't know where it lands. You know, is it like, is it 50/50? Is it... You know, we'll see. But we have the flexibility, with our current footprint and with our continued clinician growth to kind of, you know, see where it goes.
It's a big differentiator for us with hiring of clinicians, and it's a big differentiator with patients, too.
Okay. Last few minutes here, I wanna, you know, touch on some of these financial commitments and then just the capital allocation discussion. So we, we've talked about the mid-teens revenue trajectory that you've committed to through 2025. The back half guidance is low double digits and then, you know, an implied acceleration. Just give us the mid-teen growth trajectory, and then, you know, we've been kind of discussing what things look like beyond that.
Yeah.
Where do you go beyond 2025 when you're starting some of the, you know, deliberate M&A, not like the early days of LifeStance, but it gives us a sense of how to think about that?
We feel good organic engine can deliver mid-teens growth. Now, last 23% organic was above our expectations. But but we feel good that that our engine can deliver mid-teens organic. Remember, we're, we're in the scheme of things, of all, all, you know, all the clinicians that are out there, we're still in the single digit from single digits from a, a mark a market share perspective, so we have a lot of room for growth. So we feel good about that from an organic engine perspective, and then obviously M&A, then on top of that.
Okay. If you're growing mid-teens, I mean, what do components of expense need to grow to support that longer term? You know, thinking about the 10% exit point of 2025-
Yeah.
What does G&A need to grow? Obviously, you've got a lot of variable expenses with the clinician side of things, but how do we think about just, you know, starting from 10% and what operating leverage looks like?
You're talking about, like, 10% margins? Is that
Yeah.
Yeah.
Yeah.
So I think about, so I'll flip your question a little bit. So talking about margin expansion after, after we get through 2025, and we touched on it a little earlier, that, you know, payer rates, operating leverage, and the specialty services, those will continue to drive higher margins. That will show up. A lot of that will show up in center margin, right? So it's actually gonna... So you'll see center margins, which are right now in the, you know, 30, 30%ish, low 30s. You'll see that will actually improve, which will obviously improve EBITDA margins. And then, yes, we will see operating leverage with G&A.
We haven't, like, said, "All right, well, is it, is G&A growth gonna be half of revenue growth or three-quarters of revenue growth?" It'll depend on the year and rate and pace of investments, but, but what we have pledged is that we will deliver operating leverage every year.
Okay. One very quick one, just the Change Health dynamic.
Yeah.
How is recovery of the AR days build
Yeah
from Q?
Yeah. So, we talked about in the last earnings call that we expected it to be primarily a Q2 recovery, bleeding it a little bit into Q3. And to be clear, we view it as a timing issue. It's not a. Other than some additional administrative expense, we expect to fully recover the revenue that's due to us. We had a strong start to the quarter as far as recovering that cash, but it's taking time. I mean, there are still payers today that are not fully connected back to Change. So that obviously impacts whether it creates an administrative burden, because there's extra steps, or we have to find a different mechanism other than Change to get the reimbursement.
We feel, we feel good that it, you know, it is a timing thing, and it'll play out over the, you know, the coming months.
Okay. Last question I'll sneak in. You've reiterated the free cash flow positive this year, and 2.5 times leverage. That's a pretty good position to be in. How should we think about use of, you know, free cash flow, you know, and as you get into the longer term with a clean balance sheet and
Yeah
and free cash flow positive?
Yeah, I mean, it's the, you know, again, you're, you're back to is, first we'll fund internal growth. I mean, I think of the things like the de novo, the new center builds, but we'll fund internal growth, then we'll, we'll look for M&A opportunities, and, we expect that they'll be out there. But if, if there's not high-returning ones that meet, that meet our bar, then we'll, we'll look at other, you know, sources or other ways to deploy the capital. Normally, you'd think of, returning it to shareholders. We have had some investors suggest our, you know, interest rates on our debt right now are pretty high. You do something there, even though the leverage ratios are, are healthy or will be healthy as we get to the end of the year. But we're, you know, we're still working through that.
But I think of the first two, funding internal growth and M&A, is like, like, likely where we're gonna be going in deploying of capital.
Okay, great. I think we can leave it there. Thank you both for, for joining.
Thank you.
Thank you.