Perfect. Hi, everyone. This is Rachel Vatnsdal from the JPMorgan Tools and Diagnostics team. Today with me, I have Amir Aghdaei from the Envista team, along with Howard. First, we're gonna start off the presentation with a presentation from management and then followed by Q&A. During the Q&A session, you either can submit questions online through the portal for those of you watching the webcast, or if you're here in person, feel free to raise your hand. We do have mic runners with mics. Just make sure to raise your hands. Awesome.
Thank you so much.
Thanks for having us in here. Good to be back again, and Happy New Year to all of you. Wanted to give you a little bit of a perspective of Envista. We have been in public market for over three years now. We came out of Danaher as a spin-out, and I'll give you a little bit of a feel for the company itself, the performance and what we see happening in the market, and then we'll open it up for any kind of question and answer. In the, in the long run, we remain pretty confident that the outlook of industry as a whole remains intact.
Yeah, we've got a little bit of volatility in the short run. The reason that we have that level of confidence is because we have radically changed our portfolio in the past three years and really positioned ourself in a high margin, high growth area, and there is significant opportunity for all the work that we have done to see the benefit of it as we go forward. We made a commitment last year around March timeframe that we are gonna build a business that is high- single- digit growth over time and have 22.5% margin. Despite whatever we are seeing in short term, our view of the long run hasn't changed at all, and we can tell you a little bit about why we feel confident about it.
Macro environment in the short term remains really volatile. It is driven by a few factors. China is about a 10% of our business. Combination of a COVID, VBP, macroeconomics around, you know, potentially a property bubble as well as others, really has an impact in the consumer weakness. In Europe, the impact of Russia invasion of COVID, Ukraine, as well as the energy crisis, has an impact in ability to really average European family of four, have about EUR 10,000 of energy expenses. That is really radically different than only three, five years ago. Around the world, the interest rate, specifically in North America, wage inflation, kinda creating a little bit of uncertainty, more of a pause more than anything else, and it's impacting access to the capital market.
Our full year guidance remains intact and we feel confident in the long run we're gonna be able to work through some of these challenges and get ourself in a better place as we go forward. For those of you who may not be familiar with our company, we came about as a outcome of 28 acquisition over a 10-year time period as part of Danaher. From 2004/2005 to about 2015, we put all of that together. We created about a $2.5 billion company that it is in four key areas. It's in implant, ortho, diagnostic, as well as what we call everyday dental, which is restorative, endo and infection prevention. About 53% of our business is in North America. We have been able to radically change this portfolio.
Over 60% of it is direct now. If we go back only three years ago, that number would have been less than 50%. Over 85% of the products that we sell are consumable. Less than $10,000, people buy it in ongoing basis. About 25% of our business is on what we call emerging market. 10% of that is China, the other 15%, other geographies. Some of our brands have been around for over a century. Kerr has been around for 120 some years. We are everywhere, in many different geographies, over 12,000 employees, 140 different countries.
If you look at the number of patents that we have, some of the industries that we have been in, like Ormco, to a large degree, you can give it credit for creation of the ortho business bracket and wire, Nobel as a foundation of the titanium screw and so on and so forth. Really proud of our heritage, the issue is: How do you transform or transition this business going forward? When we came out of Danaher, one of the key things that we put in place was creating a culture, a culture that is stand on its own.
We brought a lot of good thing out of Danaher, we put a lot of energy around customer and customer centricity, innovation that matters, innovation that make a difference, around, you know, diversity, inclusion, really radically change our management structure and go-to-market activities around respect, and obviously the core of our operational excellence around continuous improvement and last but not least, around empowerment, leadership, accountability. These five values that we call a CIRCLE has been at the core of creation of this company as we have stand it up, as we build a heritage of the outcome of this acquisition that have come together. I wanted to give you a little bit of a perspective pre-IPO, the last three years, and what is ahead.
We used to be flat to declining about 15%, mid-teen EBITDA, and, our business was, you know, as I said, about almost 55% indirect. What we did, we started consolidating a whole lot of activities, put it together. Between 2019 and 2021, we radically changed this business through portfolio management. We had about a 500 basis point of a margin improvement. We started taking about $125 million of structural cost. These aren't one-time costs, the costs that completely came out. We consolidated a whole to the site. We moved away from some of the businesses, and we really put ourself in a very different format. Over 60%, as I said, our business is direct today, in line with what we have said on the guidance.
We have put a lot of energy around implant, ortho, diagnostics, software, and we are really positioning ourselves to be a change agent and a leader in this industry going forward. Obviously, we can't look back and say what a great job I have done in the past. Trust me, for us, this is the beginning of a transformation and a beginning of a road ahead. Wanted to give you a little bit of a perspective of what makes us different. We operationally have a proven track record of continuous improvement. Majority of our management team come with that kind of a background, that kind of pedigree out of the Danaher. Myself, Howard, we have been around it for almost eight years on the dental side. We took, as I said, about a $125 million cost out in a two-year time period.
Real estate, workforce consolidation, offices. We had over 190 offices when we started this process. We have about 40 of them, over 40 manufacturing site. We got about 20 of them now. We started consolidating. Outside ortho, between 2020 and 2021, we reduced our headcount by almost 20%, and we doubled the size of our ortho business. We built a factory in the middle of COVID in nine months. We hired 2,200 people and really ramped up our clear aligners significantly moving forward. Spent over $30 million CapEx building that capabilities, and we think that there is significant opportunity outcome of work that we have done, but now further expanding that while getting this balance of a growth and margin in line as we go forward.
I thought it would be good to take a step back and take a look at the market as a whole. Dental market, if you look at out-of-pocket, insurance, all of that, it's about a $350 billion are spent worldwide. About half of the population, they have missing tooth. About 5 billion people, they have malocclusion. As you see, a whole lot of significant opportunity for aesthetic, older population, increasing focus that you see in some of the emerging market. There are, give or take, about 2 million clinicians worldwide. This is not changing radically. The shift is taking place, a lot more female. Over 55%, 60% of the dentists that they're coming out of schools are female now. A good way to look at it is dentists per capita. Germany got 85, China got 45.
Just give you a little bit of a feel, about 65% American as a whole, they have access to dental care. Doesn't necessarily they use it, less than 7% in Latin America. This is, to a large degree, a more of a elite industry that hasn't yet democratized. The reason for it, what it stops it is skills. You know, it takes about 10 years, half a million dollar to get a degree in this space. Cost. It's really costly, it's very expensive. That combination of pain and time that it takes is not something that people get up all excited about going to a dentist. That combination really hasn't allowed this industry to rapidly change over time. Out of that $350 billion , doctors spend $75 billion on equipment, consumable, labs, and variety of different areas.
That $75 billion, a good way to look at it is a combination of services, what they pay in lab, and what they spend in offices. This industry as a whole is attracting a lot of new investment. You have seen the DSOs, number of IPOs. If you only go back three, four years ago, there were only three or four major categories, major stock in the place. Just take a look at it now, it's almost 12 or 15 companies that have gone IPOs, and you're seeing rounds of A and B and more and more of a consolidation. The spinoff is taking place. There is a lot of investment is coming, and the industry is bifurcating toward a specialized ortho, endo, implant, high margin, really specialized and more of a day-to-day stuff, hygiene, breath-fix type of a stuff, pain management, proactive management and preventative.
That is really changing the nature of the industry and where the money is going to be spent. We are focused on about $25 billion out of that $75 billion. We are set up at equipment and consumable business, and if you look at it, we're number one in imaging side. At $2 billion, that is growing low- single- digit. About, give or take, about $7 billion-$8 billion of consumable. We have a whole set of product categories in there. We're new into the IOS. We just bought Carestream IOS less than nine months ago. Gives us an opportunity to open a new front. On the specialty side, there are $2 billion of bracket and wire. That business has been $2 billion for quite some time.
Not growing that much, but we have been taking share, and we are growing mid-single- digit continuously due to innovation and the format that we're going. About $4 billion clear aligner. We're opening new front. We start growing very rapidly. The way we look at the implant is end-to-end. We call it more of an implant-based tooth replacement. Why we call it $11 billion is not because you only get a titanium screw. You go in first for diagnostics, then they develop a plan for you, then you do the surgery, then you get some biomaterial, bone graft, regenerative, then you get a temporary, and eventually you get a crown, you get a permanent. That end-to-end is about $11 billion. We are going to be the number one player in that space.
We have all the capabilities to do that organically and inorganically, and we're gonna be the number two player on the ortho side. Some of the work that we have done is gonna really position us to be a major player. We already have over 25% or so market share on the bracket and wire side, and the clear aligner is a new category for us that we are opening a new front growing that. Let's talk about industry as a whole. What is the past, today, and the future? In the past, this industry was mostly analog. It was a lot of impressions and stone model, creating, replicating that, very inefficient. You know, a lot of implant that they were placed without any CBCT. Basically, with touch and look and feel, how what you have done in the past. When people talk about digital dentistry, it's already here.
Everybody's using, to a large degree, CBCTs. They're using some of the practice management system. AI is becoming a norm in this industry. The problem is multiple system. None of them work together. You end up going from one system to the next, taking the data from one place, taking it to the other place, and it's really complex, very confusing. A good way to look at this is you look at the manufacturing and other places. IT came to this industry and really simplified it, consolidated, and big players as SAP, Oracle, really standardized it. In dental industry, because it's so fragmented, every system, every product has its own set of operating model, and none of them work together. None of them have any kind of. You gotta build a whole lot of API to connect from one piece to the next.
What's in the future? An integrated workflow. The word that I constantly think about is waste, productivity. You walk to a dental office, what is the first thing that they would do for you? You just sit there and fill a bunch of paperwork. 270 million clinical record in this country is in one system, Epic Systems. Why am I filling up this paperwork continuously? They take a 2D, 3D, IOS, then you go to the next office, they do the same thing again. None of these work together. This is cost. It's lack of productivity, a whole lot of dependency on a staff. As an outcome, rather than really simplifying this process, you have a lot of handover and handoff from one place to another. You spend two hours to go just get a cleaning.
It just doesn't make any sense the way it is being managed today. The self-service in dental industry is something that it is at in infancy stage. Predictability. You go from one place to another, you get a different type of treatment over time. What is it that we wanna do? We wanna digitize it, we wanna personalize it, and we wanna democratize it. How do you digitize it? You say, whatever modality that you're using, pictures, IOS, 2D, 3D, I wanna collect all that information, all that anatomy, put it in one place, use AI, read through all of that information in order to give you, clinician, a personalized treatment plan. You don't have to spend your time reading and doing all of that.
We wanna present that to you in front of you so you can spend your time with the patient, because that's where your time should be spent, rather than playing with various tools and capabilities. If you do that, if you do it well, then we can democratize it. We can really give global access to as many people as possible. You can use your asset more effectively. You can see more patient. If you come to a more of a self-service model, why do I need to have somebody to check me in when I can check in on my cell phone? Why can I not have my invoice in a record sitting in there like any other industry? That's what we are after. We're trying to create this digital capability to give dentists a personalized relationship with the patient so we can democratize it. Great.
How would that look like? You take all these modalities in an open architecture. You collect all that information, you create a repository, cloud-based, put all that data in there. By the way, that exists today with all your MRI. You can get it, radiology, it does it. You know, a lot of that already exists in various industry. We wanna bring it to the dental industry. Not as a piece solution, as a complete solution. Bring it in, try to consolidate it, use assisted intelligence, sort through all that data. There are millions of images that they're being taken every day. You can go back and analyze anomalies, detect the challenges that you have. It's sort of giving you planning, ortho planning, endo planning, implant, prosthetic, and then build a plan for you.
Just think about this, that you have all that information available. Even if you don't wanna use robotic, it gives you opportunity to do assisted surgery, guided surgery. That capability exists today. We are selling some of that capabilities, and others have it, in order to be able to have consistent performance, consistent treatment, in order to really democratize this industry. I think in the last two or three years, we have already beginning to see the outcome of it. Average orthodontist before COVID, they see about 30, 40 patient per day. Today, that number is 80 because of some of remote monitoring capabilities. The value that they see in being able to provide that remotely, rather than having somebody sitting in their office for two hours for a simple checkup.
That's the grand vision of what we wanna do, and we wanna do it piece by piece through portfolio management, through innovation, and through the level of service and support that we give to everybody in the industry. Let's take it one level deeper. How are you gonna do that? It starts with diagnostics. It start with these images. We have over 165,000 install base today. Think about these as sensors collecting information. When you collect that information, you can put it in that central database that we talked about. 2D, 3D, IOS, sensors, even just simple pictures. You're collecting all that information, put it in one place. We're the number-one player in the diagnostics area. We have a significant infrastructure with sales people. We sell through distributors. We answer, in the United States, we answer 1,500 calls per day.
Our products are known for quality, 60-day guarantee. You don't want it, you can send it back to us. We are building a digital ecosystem, open architecture, open platform, that we are trying to create that and give people opportunity to really see that. 200 million cases are being handled today. 10% of offices, they have our product. You go to the implant, we got about 1,300 salespeople. Last year alone, we trained 30,000 doctors in placing an implant. You start thinking about the number of innovation that we have done in this space, All-on-4, TiUltra, N1, gives us an opportunity to really democratize this industry moving forward. Over 1.5 million patients were treated in 2021 by us. On the ortho side, we have over 500 salespeople.
We have an opportunity to really completely give a different level of support. Bracket and wire, clear aligner. You can use it in combination with the same company. In 2021, we had 3,000 event, we trained 50,000 people on how to use our product to go forward. C lear aligner, in case you haven't seen it, the Spark, we really encourage you do your own homework, is the fastest-growing clear aligner on the professional side, and it's a product that is really stand on its own. It has the efficacy, the best in the market. 1.9 million people were treated by us in 2021. What do we wanna build in here? Focus on a attractive segment, ortho, implant, DSOs. Add a digital capabilities to that, digitize, personalize, democratize. Add M&A. M&A and portfolio management on top of it.
Use our culture and continuous improvement to accelerate the growth, to build a leadership position in the market, to improve the return, a compounding return going forward. We made a commitment last year. We said, "We're gonna be able to take this mid-single- digit to high- single- digit." That's not a ceiling. We think we can do that in the next three or four years. 22.5% margin, we improved it by 500 basis points in the past three years. We think there is significant opportunity to improve margin and get our EPS compounded annual growth of over 10% going forward.
That's the model we wanna build. We think we have the capabilities, the leadership, the relationship with customer to build that going forward. We really like this industry. It has decades of runway because of how under-penetrated it is. We are strategically differentiated, and we have a proven track record to build a growing, margin-oriented, and use M&A very thoughtfully to build a different company moving forward. With that, we wanted to open it up for any feedback, question that you have for us.
A question. What drove the increase of direct to direct customer mix? You said it was, like, less than 50%, now it's, like, around 60%.
Yeah. The more our implant and ortho business. The more that grows, and it's growing a lot faster, all of that is sold directly. Our consumable and our diagnostic is sold through distribution, so that's one. This is growing a lot faster, it's 60%. It's growing a lot faster. The second part, we changed the portfolio. In 2020, we exited about $150 million worth of business that was low growth, low margin. In 2021, we sold about $400 million of our treatment unit and instrument that was through distribution. Combination of a portfolio management, divestiture, acquisition, as well as the growth on our specialty, really shifting that very radically. Our direct business has 10% higher margin than our indirect.
Okay, got it. It's not a change in the way that these are sold, it's just the mix.
The mix is radically changing and portfolio is changing. We're not, simply answer your question, we're not anti-distributor in any way or shape. We wanna give people as many opportunity to buy our product. Specialty businesses, you really gotta train your customers on the protocol, on surgery, All-on-4. You have to do that yourself.
Okay. Let's wait for the mic, and then... There you go.
Thanks. What's driving the increase in acceleration in the implant business?
Yeah. I mentioned that there are about 4 billion people worldwide that they have missing tooth. In this country, 40 million people, they can't chew their food. They have gum diseases, they're missing tooth. To begin with, you got 4 billion people that they have missing tooth. You take a look at what is the traditional model of fixing that. Traditionally, about 200 million people, they go look for a solution, three-unit bridge, they call it. They basically take two tooth on each side, they grind it down, and they build a bridge on top of it. The average time that a bridge lasts is between five, seven years. Then you have to go redo it again. This time you have two other tooth, healthy tooth, that you have destroyed in the process.
You say, "Why people are not doing implant?" Because it's been a little bit scary. Think about it. You gotta take a Black & Decker inside somebody's mouth and drill a hole in it. Not a lot of people feel really comfortable doing that. The education, the training, being able to give them, show them how that protocol works under supervision is something that is really important. More and more people, also people are recognizing the connection between mouth to body. If you have issues in your mouth, it has impact diabetes, you know, overweight, obesity, heart attack, a lot of connection between the two, people are beginning to become a lot more aware of ability to be able to do that. A lot of people beginning to use technology to help them to be able to place implant.
Combination of all of that, plus middle class in some of the emerging market, aesthetically a lot more focused. I mentioned that in one of the group, some of the places that place more implant than any other places in the world compared to population, Brazil, Spain, Italy, they spend a lot of time and money on aesthetics. As a outcome, how you look, how you smile gives you confidence. That combination of all of that, why the implant market is growing 7%, 8% in ongoing basis.
Just maybe as it relates to you guys, it's been a good market for a while, so why is it increasing now for you guys specifically?
Why are we increasing?
Why is the growth for you guys within implants accelerating more meaningfully recently?
Oh. Yeah. Sorry. Sorry.
No, no problem.
Yeah. We bought a company called Implant Direct over ten years ago.
That's right.
That was, you know, maybe about $100 million on a $4.5 billion market, very specific on a geography. We bought Nobel in 2015. Nobel is, has about 25%-30% of the premium side. We have pooled all of that together. Commercial execution has been a really important part of this. EBS at work, we have improved the cadence of how we improve, deliver product. Operationally, we have improved it. Continuously improving a segment in the market in order to be able to differentiate ourself versus everybody else. We think that there is also, it's a beginning of a lot of opportunity. As I mentioned, about $11 billion market. We have about $1 billion in that segment, and we think that we can add to it significantly over time.
Okay.
Hey, can you comment on the competitive landscapes of your key businesses, and how would the competition impact on your growth outlook? Also, any possible downside risks to your, like, mid to high- single-digit growth outlook?
Yeah, absolutely. Simply put, ortho. Ortho on the $2 billion of bracket and wire, you have seen some companies exiting that space. We have stayed in that segment, continued to grow it over time. Key competitors in there is 3M, as well as, you know, Henry Schein has product in that category. We have about some 20% market share and continue to grow above market. Mid-single- digit in the past five years or so. Clear Aligner, $4 billion market. As you well know, there are plenty of SmileDirectClub, Invisalign, Angel, Smartee and many other players. We are a new entrance in there. We did about $70 million in 2021. We're committed to triple the size of that by 2024. We are well on our way.
We are purely focused on orthodontists, not on the GPs and direct-to-consumer. Let me take you to the implant part, that billion-dollar business. Two segment. On the premium segment, Straumann is in that space, and there are only three or four key players, Zimmer, us, Dentsply Sirona. When you go to the value, there are tens, if not hundreds of players, Korean, Italian, Brazilian, many players. In each geography, there are a bunch of different players in there. We are under index on the value side. Let me take you to the imaging. Imaging, we're the number one player in there. Other players, Dentsply Sirona, Planmeca. Vatech is a Korean company. We feel really good. I answered a question about dynamic. Consumable, depend on where you are in infection prevention, like wipes and all that.
You got Clorox, you got many players in that space. Resto, endo, restorative and endo, you got Dentsply Sirona, you got 3M has a lot of those product. Ivoclar has a lot of those product. We're one of the very unique company that has a really good portfolio. We're in almost 90% of every dental office worldwide. You said, what's the headwind? What should I be concerned about? China. China is a really difficult challenge, given combination of COVID, VBP, you know, uncertainty around consumer confidence. There is a large number of COVID cases today. Chinese New Year is happening in a couple of weeks. It's really volatile to see what we see in China. In Europe, I mentioned the energy costs and Ukraine. I'm talking macro.
We're not talking about our business. I wanna make sure that it's not interpreted that we are trying to... In a macro level, European energy prices, as well as the impact that Russia has in Europe is really important. Interest rate uncertainties a little bit around wage and resources in the U.S. These are some of the challenges that everybody is feeling. What we feel really confident, product innovation, our execution. We continue to gain share in Europe. Spark is one of the fastest-growing clear aligners. Our implant is doing extremely well. We are gaining share on the consumable side, but on equipment, we are, you know, dealing with some of these challenges around access to capital, interest rate issues, as well as de novo. DSOs opening new offices, they have difficulties getting resources, electrician, drywall, to be able to open new offices, which is impacting our capital equipment.
Maybe just as a follow-up there, can you just talk about how that macro environment has evolved since you gave us the latest update a few weeks ago? You know, on the macroeconomic environment coming from capital budget and spending, also just Europe and China, how have those been trending in recent weeks?
Consistent with what we have said before, we're not seeing anything radically different that causes us to think anything differently. We feel that when we put those guidance in the long run, we have contemplated a little bit of uncertainty, volatility in various places, and we feel pretty confident that the 2026, other years' guidance that we have given is intact. The result that we have seen in some of those areas is consistent with what we had said before.
Helpful. Maybe while the mic is going there, I'll ask one on Spark quickly. You mentioned that $70 million base for Spark, and you expect to triple that size. Can you just talk about how are you expecting Spark to really perform in this macro environment where consumer spend is getting pressured, especially given it's a newer brand?
Yeah.
You still are doing over 100% growth in recent quarters.
Yeah.
Talk about the expectations there.
Of course. Let me break down the clear aligner market for you. Three segment. Three equal segment for simplicity. 1/3 direct-to-consumer. SmileDirectClub and Candid and others. You saw what happened in 2020. They were growing really rapidly, $1,800-$2,000. The moment environment changed, the business model was challenged when you have to spend $1,000 to get somebody to commit to you. Second part of this is GPs. It's a new add-on business to them. You take your kid in there for cleaning, and they offer you a $4,000-$5,000 clear aligner. They do an IOS scan, send it, and they get you some aligner, you sign up for it. 1/3 of this is orthodontists. You don't go to orthodontist just to test the idea. There are 8,000 of those in the U.S. That's all they do.
When somebody walks to an orthodontist office, they are committed. That's where we are focused. That's where we are putting Spark. 99% of our bracket and wire business comes from orthodontists. Over some 90 % of our Spark business comes from orthodontists. These people understand the value of product, the service, the network effect, and they have been using clear aligner before. It's not like it's new product for them. We're giving them a product that is best in the market. Innovation, service and support, and a combination of a solution. $1.3 billion-$1.4 billion. We're not even scratching the surface in that segment, on orthodontist segment. Growing double-digit, $70 million out of $1.4 billion. We got plenty of opportunity to grow in that segment. That's where we are focused.
Thanks. Just to follow up on the prior question about what's changed since the last update. Just the comments on China. Previously, country was in lockdown, now it's impacting the market. It's opened up, but COVID cases have surged, and that's impacting the market. I just wanna understand kind of incrementally as we think about Q4 going to Q1. Is the situation in China worsening for the market and you guys, or is it, is it getting better with those?
It's not getting better. There are some hospitals, for those of you have been into Shanghai and Beijing, that they are dental hospital. They see 700,000 patient per year. Nobody's going today, "Let me go get a dental, go see my dentist." The rapid cases, COVID cases are increasing rapidly. Our own team, our team in China, over 50% of them, they have COVID. We have told them to stay home, don't come out. Access to basic medicine is really challenging. Yes, they have opened it up, but they're not testing anybody, and it is, you know, is anybody's guess what's gonna happen after the Chinese New Year.
Dental offices are not open. People are not going out unless it's absolutely necessary, at least in the major cities like Beijing and Shanghai. We think Q1, potentially first half is gonna be pretty challenging. We have contemplated that. We have assumed that this is what's gonna happen. Because of what we saw starting in Q4, combination of VBP, COVID, lockdown, and economic challenges. We're not expecting a radical reopening, a ramp in China anytime soon.
Okay. You have a question?
I have a question. Maybe a question here just on instrumentation. You've mentioned some of the capital budget constraints, you've also mentioned some of the DSOs as well. Can you talk to us about, are you seeing pressure based on the price point of an instrument? Is it mainly on that higher end? Is it kind of working down the value chain as well, though, getting into some of those lower priced instruments as well?
We don't have any instrument business. We had a $400 million of treatment unit and instrument hand pieces which we sold in 2021. About 15% of our business is capital equipment, imaging. Even that, one third of it is service. Repair, contract, service fees. That 10%, there is pressure on pricing. There is pressure as well as on new addition, you know, people opening new offices or new builds. We have also made a decision that we wanna exit in some geographies that doesn't have as much margin, it doesn't have a long-term potential.
Combination of pressure in the market, plus what we have done, has had an impact in that business. You saw it in Q3, our margin has improved significantly. This is what we have been doing in the past three years. Lowering focus and expectation on low margin, low growth, and doubling down in a high margin, high growth direct business. This is consistent with the work that we have done in the past three years.
Perfect. With that, we are unfortunately out of time. Thank you so much for joining us, you guys.
Thank you, Elizabeth. Thanks so much.