Well, thanks, everyone, for joining us today. My name is Dan Perlin, and I head up the Payments Processing and IT Services practice here at RBC. I'm delighted to have back to the stage Bill Stone, who's the founder and CEO of SS&C, and has been a friend of of this firm for a very long time. Thank you so much. It's great to see you.
Thanks, Dan.
Yeah. So what we've been doing, you know, Bill, is, for most of the companies, we're starting kind of at a high level, just talking about the demand environment, and then we're gonna kind of work our way down to some of the more interesting parts of the story right now. But as you sit here today, maybe you sounded pretty optimistic, I would say, on the last earnings call. So maybe just talk a little bit about what you're seeing and maybe the deal pipeline relative to, I don't know, the past 6, 9, 12 months, whatever timeline you want to talk about.
Yeah, I think, you know, it's a pretty strange world out there that all of you realize too, right? So, you know, besides a couple of wars, we have some inflation. We have, you know, a macro environment that, you know, in capital procurement, large-scale licenses is a pretty tough game. Services is easier, you know, and I also think the cost pressures on financial institutions of all sizes and shapes are pretty high. So our ability to offer outsourcing services that gives them some operating leverage has been pretty strong, and we think it will continue to be pretty strong. And that's true U.S., Europe, and Asia.
Yep. So in the past, we've talked a little bit about sales cycles and conversion cycles remaining pretty elongated, still a little more challenging. Are you seeing any of that kind of thaw at this point? Are some of the conversations at least, that you're having with clients, making it such that you feel more confident, like there's a little more visibility potentially coming down the pipe?
Well, you know, we have a whole bunch of stuff we've sold over the last couple of years that we're now implementing, you know, and-
Mm-hmm.
As you implement, it's amazing what happens to your revenue. So, so, you know, we get a few 100,000 a month, you know, when we're in implementation phase, so with this one client. So, you know, that's still a nice contract. It's $3.5 million, or maybe you get $400,000, maybe $5 million. But once they go live, it's $3.5 million a month. So $3.5 million a month, if you multiply that by 12-
Yeah
... you get to 42, you know, which kind of makes 3.5 and 5 look small.
Understood.
So we have a few of those in our pipeline, but these are enormous institutions with, you know, millions of accounts, and you're moving off an old system, and they can't believe it, but they have some bad data. You know, so it's always your fault. "You know, we weren't here in 1947 when you did this." But that doesn't matter. So we have to get through that, and we are getting through that, and we have a bunch of brand-new clients that we've signed that also need to be, you know, implemented.
Yep, yep. Okay, so that sounds pretty encouraging.
It's pretty encouraging.
Which is why I think you sounded a little more optimistic on the call.
Yeah.
So let's do a one-liner on, on a couple of the bigger lines of business. I call them one-liners. You can do it a little bit longer, however you want. But, like... So alternatives, pretty good quarter.
Pretty strong business. Has been a pretty strong business. You know, there are certain parts of the alternatives that are really booming, like private, private credit, private equity, you know, distressed.
Mm-hmm.
You know, looks like there might be a lot more distressed in the US in the next couple of quarters, but that's a strong business for us, and, you know, we're kind of number one, and we think that we're ahead, and we're running faster, which means they ain't catching us.
Yep. Private Credit, can you just elaborate on that a little bit? I mean, it seems like that's proving out to be a much, much bigger opportunity for a lot of players in the space. And as you point out, you're kind of one of few, if not, you know, you can count them on one hand, probably, that would be able to do that kind of work. So is that a fair set of assumptions, or...?
It is. You know, private credit is kind of what it says, right? So, you know, where you go out in the public markets, and everything's in, you know, kind of in black and white, and everybody can see. You know, in private credit, you know, it's the deals are structured, you know, and there's lots of different nuance that you can put in the deals, which creates challenge for most systems. And being able to accommodate the wrinkles that they put in their private credit agreements is something that we spent a lot of time and a lot of money in. And I wouldn't tell you we're perfect by any stretch of the imagination, but we're the best at it, so that-
Yeah
... that gives us a leg up.
All right. What about Advent? A little bit of a tougher quarter, but still seems like a good trajectory.
Yeah, and, you know, Advent, we bought in 2015, and, you know, that year we did about $1 billion in revenue. And, you know, Advent did about $300 million and almost $400 million in revenue. This year, they'll do about $600 million in revenue. When we bought them in 2015, they weren't growing at all.
Yep. Okay. What you're calling GIDS, I guess, is the global investor and distribution solutions business. That seems to be holding pretty steady. Is that a-
It, it-
-pretty fair?
It is, and I usually say a prayer on my GIDS business - but it has worked out this past year, and we have some optimism. You know, we've put some new technology in, and put in a ton of customer relationship management, and as I tell our development teams, "Look, you gotta give them some new stuff. You know, you can't keep selling the old stuff. You gotta give them some new stuff, you know? Wendy wants a new dress. Just go. Come on.
... All right, so that one's got an investment backdrop to it relative to maybe some of the other ones?
Yeah, it does, but almost all of them, you know, if you wanna be a large-scale player in what we do, you have to have technology.
Yeah.
You know, you can't do it with green eye shades and armbands. It doesn't work that way anymore, right? You have to have stuff that people can get access to, can slice and dice the data they want, and be able to drill down the way they wanna drill down, and that's... We're good at it, you know, and I think, you know, you have to constantly get better at it.
Yep. Yep. All right, healthcare, dare we say flat? That's the first time we said that in a long time.
Yeah, but most of the attrition really happened in 2018, 2019, and 2020. You know, so it's not really that we're losing... We didn't lose any this year.
Yep.
Right? So that will run off in, I think, in the third quarter of this year, we did $68.5. In the third quarter of last year, we did $70.1.
Yep.
I think those are pretty close. But the margin, third quarter 2023 was 35%, and third quarter of 2022 was 24%. So we did almost the same amount of revenue as we did in 2022, but we did it with 1,100 people instead of 1,700.
Yep, yep. All right, I'll hit you with this last one just on Intralinks. How are you thinking about that?
Been a great acquisition. They grew about 11% in the third quarter.
Yep.
This year ought to be about a $500 million in revenue business. It ought to make something in excess of $250 million. You know, we paid, I think, $1.5 billion.
Yep. All right. So we talked a little bit about the demand environment, and you briefly touched about the, the macro. I was thinking around UK, Europe, and, and APAC in particular, anything to call out, distinguishing kind of nuances about those businesses, where they are in certain cycles, or is it just very consistent across, countries?
Well, I think, you know, we have a very large presence in the UK, and that drives a pretty nice presence in South Africa, for instance.
Hmm.
You know, 'cause there's a lot of connection between those countries and the financial institutions. So that's helped us a lot. You know, we've gotten a lot of business. We also do pretty well in, you know, in Ireland and Scotland and those places. You know, on the Continent, we're doing more on the Continent, a little tougher, you know, and we're a little more reticent about getting too much employment-
Hmm
... in places like France and Germany, where we feel like we might not have much, much say in being able to manage our-
Hmm
... our resources. So, we're a little reticent, but we have opportunities, and people want us to come, and so, you know, if we can get the right opportunities, the right kind of contracts, then, you know, we'd like to move towards more of it.
Okay. What about APAC?
APAC has been kind of a bright star for us.
Yeah.
Particularly Hong Kong, Singapore, Australia have been pretty strong. We found some acquisitions in Australia, and we're pretty bullish. You know, they have the superannuation funds, which is basically our Social Security, but it's in your name. You know, you don't have the government helping you invest your money-
Hmm
... you know, so that you get invested in Australia, and they call it the wall of money. It just keeps coming, you know, so that, that's pretty attractive to us. You know, we have made bids on any number of places in the U.K.- in, Australia. You know, we, we almost bought Link.
Yep.
Bullet dodged, you know, so-
Yeah.
You know those... But so, but we just bid on Iress . You know, it's a big business, has AUD 900 billion in assets, but it's not really priced right. We can do a lot of things with that, that we think will drive some earnings.
Okay. All right. I wanted to spend a minute on retention rates, which I think I might have asked you on the conference call. But, like, when we look at the numbers, in the quarter, I think it's as high as it's ever been. If not, it's pretty daggone close to the highest levels of retention that I've seen in covering this stock for a long time. So I'm trying to understand what has changed, you know, in that because it wasn't a huge jump, but it was material when you look at over the past, I don't know, two, three years, even on a quarterly basis. So what are you doing different?
I think we made a pretty strong commitment to having relationship managers on the different accounts and making sure that they understood that their compensation is gonna be tied to retention of our clients, and so that's worked out pretty well for us, and we're also driving more revenue opportunities through that.
Mm-hmm.
I think, you know, you do better when you go see your clients. So that's worked out well for us.
Yeah. Do you feel like in the past, I don't know, the past couple of years, in terms of your, how you've spent more of your time within the organization, has it changed dramatically, or are you still doing the same thing that you would've been doing 2, 3 years ago? Like, are you finding that there's maybe more of your fingerprint along some of these things that are happening today?
Probably. Most people don't particularly appreciate my fingerprints-
Yeah
... but, you know, it's, they get a relative dose of intensity-
Yeah
... you know, when, you know, recognizing that, you know, we're not here to lose, we're here to win, you know, and, and getting people to understand what that takes. You know, so I think we've improved that process with us. We've put in, you know, some corporate sales, you know, so the head of sales or global head, co-heads of sales are now across all the business units, not just... Now, the business units don't always embrace it with love and kisses, but they're learning.
Okay.
You know, and that allows us to sell bundles, right? So we can sell a trading system, you know, and then include fund administration and hosting and a whole number of other things. So a contract that might have been $175,000 too is; it's now worth $1.2 million to SS&C as an entity. You know, but people have to recognize that, and they have to understand that we're not afraid to pay you more commission.
Yeah.
You know? You know, and they think, "Oh, yeah, but you were gonna screw it up. I'm not gonna get my $175,000 deal." I tell you what, I'm gonna help you sell that $1.2 million deal, and I will bet you however much you want, we'll sell more of those than we would of your $175,000s. But you know, they gotta believe it, and then it's gotta happen. So sometimes I gotta buy the damn thing. No, I've never bought or but, but it is about executing and making sure people understand that the whole organization's behind you.
Yeah.
You know, and that's sometimes pretty difficult for these places that are a lot smaller, aren't used to growth. It's like looking at acquisitions. You know, somebody show me an acquisition and tell me how great it is. It's $12 million in revenue. They've been around for 14 years. How great can this be?
Right.
You know, and why do you think we're gonna be able to... You know, the bankers, right? And then we buy it.
Exactly.
How's that gonna happen? How's that happen?
Yeah.
I want the bankers to sell it, you know, but you got the founder. I'm not gonna know as much as the founder. Just like if someone bought us, they wouldn't know as much as me.
Yep.
You know, so it's understanding that how long have they been around, and how big are they, and why aren't they bigger?
Yeah.
You know what I mean? It's-
Yeah.
It's pretty clear, but people are afraid that, "Oh, I don't want... No, no, no. I've gotta ask.
Yeah. You know, this bundled concept is a little bit new. That sounds a little new to the story, and so I'm wondering: when, when did that start to kind of evolve into being? It sounds like we're very early in maybe the uptake of that, but it's, it's starting to resonate a little bit.
Yeah, probably, you know, the global head, co-heads of sales happened about two years ago.
Mm-hmm.
This was one of the initiatives that really started to catch on maybe, you know, 14, 15, 16 months ago. So we won this bank in Muncie, Indiana, which none of you have ever heard of, but that's where Ball State is.
Okay.
I mean, I know that's something you really want, you wanted to know, but so we win this deal in Muncie, Indiana, that is our Black Diamond wealth platform-
Yeah
... attached to Innovest, which came to us with Innovest.
Okay. Yep.
So it's this small bank in Muncie, Indiana. We're getting $1 million a year for 5 years. I'm sitting there going: "How many small banks are there in the United States?" You know what I mean?
Yeah.
Because it's like the first wealth trust system that's, you know, relatively new.
Mm.
You know, most of these trust systems, whether it's OmniTrust or all these other ones at FIS or Fiserv or others, you know, are 40, 50 years old. You know, so this is newer technology, easier to use. You know, our Black Diamond has got 2,200-2,300 registered investment advisors, over $2 trillion in assets on it.
Mm-hmm.
You know, so we have a real opportunity to go garner. But, you know, you gotta figure out who, who's ready to jump on the gas pedal. You know?
Yeah.
Like, I always say: "Look, I'm not in charge of the brake. I'm in charge of the gas pedal," you know? Brian's in charge of the brake or somebody else, not me.
You can raise your hand, by the way. There's a new CFO who's in charge of the brake, though. Got it. I did wanna go back to healthcare because it has kind of been your Achilles heel for just enabling you to have growth. There's been kind of, like, the growth of SS&C with it, and then, you know, been breaking it out without it. But those two numbers now have pretty much collided on top of each other, you know, maybe 20 basis points different or something like that. But, do you feel like there is enough investment and focus on that asset today, such that we should start to maybe put in, you know, the growth model a little bit, as opposed to the model where it's just been... Again, these are things that have rolled off.
You haven't lost clients as of late, but it does seem to now, having passed this comp period where it could grow again, I think.
Well, I think we expect it to grow in 2024.
Yep.
You know, and, you know, maybe, you know, upwards 10%, you know, and I, I don't think I'm sticking my neck out. You know, probably four of our top 15 opportunities are in healthcare, and, and they're, they're big. You know, you gotta win, and you gotta implement all that kind of stuff. But, you know, when we started Domani, that's with Humana and Anthem, and, you know, we pledged to, to, spend up to $800 million.
Mm-hmm.
They pledged to spend up to about $100 million each. So that was a $1 billion commitment. We haven't spent anywhere near that, but it looks like Domani's on track to go live one to one, and we'll probably put on our drug discount card business first, which is about 35 million lives in on January 1, and probably 80 million lives by the end of into the first quarter. So that'll be a lot of credibility with the marketplace, and then we'll start converting Humana, and then hopefully later in 2024, we start converting Anthem.
Yep.
You know, hopefully, which we think is happening, is that it's new technology. It's the first new one in 30, 40 years, and, you know, there are some other nascent, but I've looked at every one of them, and they're more pipe dream, I think, than they are a real player. Healthcare is a little bit different, but, you know, primarily it's a third-party payer, which means it's not their money, which means it's a great place to go sell software and services, 'cause they pay you with other people's money. You know, they hold it tight, but not nearly as tight as some of the people that hold George so hard, Martha cries, you know. So we think we have a real opportunity, and we intend on taking advantage of it.
Yeah, okay. So that's good on an update on Domani. So, you think that's where most of the opportunities are gonna be coming from when we think about that JV versus maybe just the healthcare business you have today, separate and distinct, or they're gonna blur a little bit, is what it sounds like?
They're gonna blur a little bit. You know, we have another product called Amisys-
Mm-hmm.
That does entire medical claims. So, like, we think Humana is a great big opportunity because we do more, we do want to do all their pharmacy claims, and, you know, that's about an $80 million business, but their medical claims are twice as big as their pharmacy claims. So we have great relationships. We have some commitments from them. You know, if we can execute, and Amisys would be, like, a direct competitor to Epic.
Mm.
You know, and Epic is kind of the 800-pound gorilla. But like any 800-pound gorilla, a lot of the market can't stand them. You know, just like in the Big Three, which whether it's Optum, UnitedHealthcare, Aetna, CVS, or Cigna ESI, you know, they own about 80% of the market.
Mm-hmm.
But a lot of the market can't stand them. So that's an opportunity, and 20% is huge. So, you know, we don't have to-
Right.
We're not, we're not gonna run out of headroom for a long time.
Okay, cool. Let's pivot to Blue Prism for a second. You know, you've owned it for several quarters now, and I guess I have, I guess, a couple of questions. One is, when you sit here today and you think about the opportunities, having owned it for a little bit, are you thinking there's more consumer-facing opportunities outside, just direct Blue Prism? Or, you know, what you've been able to achieve in terms of turning it on internally, so to speak, and cost savings. Like, maybe there's an interplay actually between those two.
Well, when we bought Blue Prism in April of 2022, they had about a 3%-5% negative EBITDA margin.
Yep.
We think fourth quarter, they'll be 35% positive. So that's about 40% improvement in margin in, say, 20 months. So we think that's a great accomplishment. We had a great team that did that, and we're still growing at... I think the last quarter, we grew between 10%-11%.
Yep.
We think it will continue to grow in that space, maybe a little faster. It's still in Gartner's Magic Quadrant, right, upper right, and we get great feedback. And, you know, some of the things we did, like for the New Mexico , we took Medicaid enrollments from between 3 and 30 days for them to get someone into Medicaid. It now takes 15 minutes, right? So, you know, it's a big improvement. We do some really large platform hedge funds. A couple of the general partners are really maniacal that there's no mistakes in any limited partner statement.
Mm.
So we put... We used to take two or three people, two days to go through every statement, you know, proofreading them. You know, you're humans; you get bored. You make mistakes. Put a couple of digital workers on it, they didn't get bored, they didn't make any mistakes, they didn't take any time off. You know, they got through all of them in about three hours. You know, so the quality's better, the speed's better, the productivity's obviously way better, and so we make a lot more money, and, and, you know, we don't have to pay contractors or somebody to do some of the stuff. We, we've done a number of those kind of case studies, and we're getting smarter and better and faster with, with Blue Prism.
Yep. What about turning it on inside of the organization? I think a big part of the $100 million run rates. I think you've talked about that number as being a key part to it, 72,000 or something like that. I forget the number, but-
So we have deployed about 1,000 digital workers so far. We expect to deploy another 1,000 by the end of this year. We're gonna deploy between 1,500 and 3,000 next year, and we think over the next three or five years, we're gonna deploy 10,000-15,000. So we're not gonna get the incremental benefit that we got with the first 1,000 we put in. We're not gonna get $100 million in run rate.
Yep.
But we might get that next year, and then it'll probably tail to, you know, maybe you get 80, then maybe you get 60, and then hopefully you're figuring out ways to make it more and more sophisticated so they do things. Like, you can have a break. Like, we did a trade, you put it in $1,000, I put in $10,000, so there's $9,000-
Yeah
... share break. Blue Prism can spot it. Blue Prism can create an email, send it to you, ask for you to check a box if you agree. If you agree, it will fix the break and post it to both of our, both of our accounts. Now, we have humans that review all of this, but the digital workers do it, and now we're figuring out how digital workers can review digital workers.
Mm-hmm.
You know, so it just becomes increasingly sophisticated and increasingly—in my opinion, you know, this is the most exciting stuff that's happened in technology since, like, the Novell Network. You know, the Novell Network is what started smart client-
Mm-hmm.
Going out to servers, full, full of data going out, and that's all we did for the last, whatever, it's 15 and 20, about 40 years. But now, this stuff, this AI, this RPA, this machine learning, this natural language processing, changing everything. And so all this hype you read about it, it ain't all hype, you know, and, and we haven't had anything like this before.
Mm.
Now, I don't know how it plays out at the end and all the ethical things about AI not telling you the truth and everything. What the hell? We got politicians. Why, why are we acting so nervous?
Right.
You know?
Understood. Understood. So, layering on the margin expansion with Blue Prism, there's other things it seems like that are happening kinda under the hood, in terms of optimization and just the way you're managing cost structure. Maybe you could talk about some of those other attributes that are not maybe necessarily directly driven by Blue Prism, but other aspects of the business.
Well, you know, as you pointed out, Brian, Brian Schell came to work for us. He was at Cboe, CFO at Cboe, prior to that at H&R Block. You know, Brian brings a lot of energy and some new ideas, and, you know, Patrick was my long-term CFO, 20 years, and loved Patrick. But, you know, we get new ideas, we get new energy, we get new ways to look at things.
Mm-hmm.
He's in a hurry like the rest of us. So I think that's something that will drive better metrics. You know, with better metrics and faster data, you know, you get an opportunity to get a little more synthesized. Like, you know, you're not getting, you know, four pounds of steak tartare.
Mm-hmm.
You know, you're getting, getting bite-size, you know, so that you can kinda really process what you have and, and, and make better decisions because the information you have is better. And, and then also, our capital allocation process, our cash flow, forecasting process, you know, we're a far-flung place. We have 100 offices in 40 countries, and, and we have 200 products or services, and we generate $5.5 billion-$5.6 billion in revenue. We're probably gonna do about $2.1 billion in EBITDA-
Mm
... in 2023. So there's a lot going on, and the more control we have of it, without stifling all innovation, without stifling all decision-making, the better off we are.
Yep. I wanna talk about leverage just for a moment, and then what that could ultimately free up in terms of the way you're thinking about future M&A. So, you're just over 3.1, I think, turns as of the last quarter, somewhere thereabouts. What's the kind of comfort zone for you? Is it in the threes, or is it a little bit lower than that? And then, if it is close to 3, does that mean that you're more comfortable in terms of looking at potential M&A opportunities from these levels, or are you more interested in other areas for capital redeployment?
Yeah, I, I would say that our acquisition strategy hasn't changed. We're methodically opportunistic, right? Now, what has changed is the interest rate environment, and then sellers are still have illusions of grandeur of what their, what their assets are worth. So you gotta be careful about, you know, not overpaying for an asset using leverage. You know, we have any number of our competitors that are... You know, one I just read is 9.6 times levered.
Mm-hmm.
You know, and I have investment bankers that tell me I might be able to go private and put on 10 times leverage. I said, "How about without my equity underneath?
Exactly.
You know, and so it's a little bit of, you know, what's prudent and, and then also, you know, what's the optimum? And it's art rather than it's science, and you know, everyone will tell you what interest rates are gonna do, and, so you really know what interest rates are gonna do, I can show you how to make a lot of money.
Yeah.
Just don't be wrong, you know?
Yeah.
And so it is a little bit about, you know, who do you believe? You know, every investment bank on Wall Street has a forward curve. I think it's tilted in favor of the investment bank, but I'm not sure.
Right.
You know, so you do have to be cognizant of what's going on, you know, in the debt markets and in interest rate markets, whether it's Term Loan A, Term Loan B-
Mm-hmm
... you know, some fixed debt. You know, it's a mix and trying to... Again, you're trying to be wise, you know, and, you know, when you're not, it's expensive.
Yeah. No, completely understood. You have been a little more, I think, open to buy back stock, and you did some recently. So is that still kind of, I guess, a big part of the target capital allocation? Again, like, you're not terming out debt at these levels, right? Like, we're probably moving in a better direction for you this year than last year, so.
We're buying as much stock as we can, so we're allocating probably two-thirds of our cash flow to stock buybacks and one-third to debt paydown. And, you know, with the stock buybacks, we also pay a $0.96 dividend, so we probably have, you know, close to 75% going back to the shareholders. But that's how we operate, and, you know, we're not... We would allocate to acquisition if we-
If you found it.
... if we found one, but right now, we're much more about driving stock buybacks and paying down debt.
Cool. Well, we're out of time, but it does feel like next year's setup looks and feels better than how it kind of transpired this year as we look through the rearview mirror, as opposed to maybe how we set it up in the beginning of the year. So we're looking forward to, to seeing how that plays out, though.... Me too. Awesome! Well, thank you so much. It's always a pleasure.
Thanks, buddy.
Thank you.
Thanks, everybody.
Thank you.
... Thank you for joining us. I've always... I've really enjoyed covering PowerSchool for lots of reasons. It's a chance to get acquainted with-
I think your kids are used to PowerSchool, too, right?
These are users. I'm a user. I get acquainted with old friends. This is a small world, and Eric, I've known Eric from Red Hat a long time.
Yeah.
So it's fun to follow careers over time. And so, yeah, this is... I really look forward to this one. So yeah, this is my last one of the day, so I'm gonna have my lunch after this one. So yeah, PowerSchool, we've got Eric Shander, Shane down here in the front, in IR. Thank you for joining us, guys.
Sure, yeah.
You guys, did you report last week? I forget. Was it two weeks ago-
We did
... or last week?
Yeah.
Okay.
Last week.
So, fresh off numbers.
Yeah.
By the way, what I'll say is, we'll go through about 20 minutes. If you have questions, store 'em up, happy to get to them. So queue 'em up now, and we'll get a chance to raise hands there.
Sounds good.
So, you know, I guess, you know, Eric, when kind of thinking about the broader ed tech market, it's always struck me this is one of the most non-digitally native markets that are out there, period.
Yep.
It feels like there's this massive, massive digital transformation opportunity within ed tech, and you guys are delivering some really important technology to drive that. Talk about, like, I guess... We're just scratching the surface-
Mm-hmm
... on this whole journey, correct?
Yep.
So level set us now on when you sit here, and we'll dig down into some products, but how do you feel about the overall trajectory of the business coming out of a Q3, you know, as we think towards Q4 next year? Just level set us on kind of overall view of the end markets, the demand.
Yeah
... that sort of thing.
Yeah, so it's a good question, Matt. So, well, first, good afternoon, everybody. Appreciate the interest in PowerSchool. So, for those of you who don't know the company, we are a vertical SaaS company supporting the education industry. You know, as Matt alluded to, we, you know, we serve a market that's probably, you know, 10 or so years behind in terms of adopting technology. COVID definitely put a bright, shiny light on some of the challenges within the school systems and the lack of technology. And I think it's gotten a lot of the superintendents. It's interesting, pre-COVID, if you were to ask a customer your top three priorities, technology wasn't always one of them. If you ask a customer now, technology is one of the top three priorities.
Staffing typically is the number one, as you can imagine, with the teacher shortage. But as Matt mentioned, you know, what we are doing is really providing mission-critical systems that are running the backbone of schools.
Yep.
You know, we continue to not only provide that, but, you know, there's a lot of things we're doing with data, with-
Yeah
... analytics, and, you know, the learning management system when COVID happened in terms of providing remote education was, it was in huge demand. You know, as we've gotten out of COVID, you know, now school districts are really kind of looking at what is that multi-year digitalization happening?
Yep, yep.
The one thing I would tell you all is you get familiar with the company, and as you kind of study it, we're a low double-digit grower, and the reason we are is because the number one thing from stopping schools from digitizing everything is change management, right? Change is disruptive, especially when you're dealing with, you know, teachers, and, you know, students, and administrators, so-
And parents.
And parents, yeah, and parents. But I think parents are probably-
Yeah
... more tech-savvy, kind of-
I think totally.
...wanting to push more, more technology. But that's the biggest thing that we see. But, you know, we also have a long, you know, trajectory of what's gonna happen over the next several years, which gives us confidence around the business, but again, it's a, it's a long journey. It's not gonna happen overnight.
Yeah. So yeah, I agree. I mean, as a, as a parent, we've talked, we've had this conversation many, many times. It's like we want our district to move faster.
Mm
... and a lot of times it's, you know, it's change management or it's funding, right?
Yeah.
So talk about, you know, kind of the overall where... You know, level set us from a funding perspective.
Sure.
Obviously, there was a lot of initiatives coming out of COVID. There's a lot of dollars to be spent.
Mm-hmm.
Talk to us about kind of the funding environment.
Sure. So the funding is, as you all probably know, so, funding for schools actually, you know, comes from both federal and state. Funding over the last 30 years, and we've, you know, we've done the trending, the only time funding has not grown was in the 2008, 2009 timeframe when the housing crisis happened. But every year, it typically grows a couple percentage points.
Yeah.
But the funding actually is quite stable. You know, we see investment in it, and I think it's important to understand how schools are funded. So the average school gets about 12,500-
Yep
... per student.
Yep.
2% of that, so 2% of that is spent on IT, so $250.
Staggering.
It's a very small number, and our RPU, so revenue per student or revenue per user, is only $12-$13. So we're a real small piece of that. In addition to that, and Matt was alluding to this, you some of you may have heard what they were referring to as the ESSER funding.
Yes.
So this was the emergency funding that happened as a result of COVID. It was about $180 billion that was really focused on schools and the improvement in the infrastructure as well as student outcomes. Where we're at with that, so we're a few years into it. There's about 35% or about $60+ billion left of the original $180 billion that has to either be spent or earmarked by September of next year. So there's still a fair bit of funding to go. Now, one of the things that we always get asked is, you know, "Is this a catalyst for your growth?" and, you know, "How does this impact you? Are you gonna see this big flush through in next year?
Yep.
What I would just offer up is, you know, we really ESSER funding for us, when we do see it being part of a deal, it's typically a small part, 5%-10%, usually focused on the implementation services. I would be worried if we saw deals that were funding 100% of the subscriptions-
Yeah, not at all.
... right?
Yeah.
So, it has helped us to de-risk the growth profile, but it hasn't been this massive uptick. Now, there could be a flush through next year, but again, too early for us to tell.
the conservative CFO that we all appreciate, you're not... That's upside to a-
Yeah, that's upside. It's... We, we're not depending on it.
Yeah.
So it's anything that flushes through next year, that's up and above. It's absolute upside to the model.
So I wanna talk. Well, obviously, we're gonna talk about a couple product things, but from a geo perspective, you guys have been investing internationally, and I'm gonna get to that, but 'cause I think that's an interesting growth catalyst. But talk about the level of penetration in the North America market, 'cause you have right now, your coverage of the North America student population is very high.
Yep.
Talk about that opportunity to take $12-$13 to even double it.
Yeah.
What does that upsell in North America mean to you?
Yep. So it's a good question, and, and we... And I appreciate that question 'cause it always gives us the ability to be able to kinda clarify coverage and penetration. Sometimes people kind of group those together.
Yep.
You know, so we're covering 50+ million of the 60+ million in the U.S. and Canada. So 50 million of the 60 million students in the U.S. and Canada are using at least one or more parts of the platform.
Yep.
So that's the 80% coverage. But when you start to dig into the various elements of the platform, the penetration is still very. It's mid-single digits.
Yep.
We're obviously... Well, we are the market leader in the student information system, so this is the heart of any school. We've got about a third of the market there. But there's still ample opportunity as we look at, you know, average customer using two of our now 20 products-
Yeah
... about 75%-85% of our business in any given quarter is cross-sell. So it's just a continued motion. It's an efficient motion, continue to sell into the exact same customers, one more product, one more feature, one more, you know, capability that the, that, that they're using in terms of their digitalization.
Mm-hmm.
We do have very good line of sight to, you know, what's coming over the next, you know, call it 12-18 months.
Yeah, I guess on that pipeline visibility, I mean, that was really where I was gonna go, Eric. You know, 'cause a lot of this, again, is driven by funding decisions.
Yeah.
But, nonetheless, when you think about that, kind of that pipeline coverage to get to kind of that low double-digit growth-
Yeah
... there's a lot of predictability in this cross-sell, too, right?
Yeah. There is. And look, a lot of these larger deals, they don't just happen in a quarter or two.
Yeah.
You're working on them sometimes for a couple years.
Sure.
Right? So, you know, this year, we'll close, and for us, a large deal is anything over $1 million. You know, last year we closed 7. This year, we'll close at least 9. And we have, you know, several that are in the pipeline that we've been working on for some time now. It's just a matter of what quarter will they close, next year.
Yeah. Well, and, and I guess to the point of it, you've had some really big deals this year.
We have.
Talk about, yeah, how... I mean, like, talk about Puerto Rico, how long was Puerto Rico in the pipeline for you guys?
Yeah.
Was that, like, years and years?
Yeah, it was well over a year that it was in the making. And for Puerto Rico, it's over 270,000 students. It's a massive modernization of their student information system, which is the backbone of the school system. You know, that was in the making for well over 18 months. We signed it at the beginning of this year. We did the deployment in 8 months, and, you know, we rolled it out, went live in August of this year. So again, you know, what I tell the team, and again, that's gonna be a nice cross-sell opportunity for us, but I always tell the team, "Look, it's a great deal, big deal.
Let's first satisfy the customer, do a great job on the implementation, make sure that they're super happy, and then start showing incremental value." Which, again, that's what the team is executing on.
You know, it feels like... I don't know. You know, when I think about the big deal cadence, you know, you've also been talking about the state of Florida-
Yeah
... and L.A. School District. To me, it feels like these are accelerating, but maybe, maybe it's kind of a consistent cadence of these big deals.
I think they're becoming more prominent, Matt. And, you know, for us, again, this is as the company's getting bigger, as you're getting more strategic, as you're, you know, you're seeing larger deals, whether it's a statewide deal or it's a deal with a large district. You know, and they will cause some variability from quarter to quarter, right, in terms of some of the metrics. And this is why we really encourage, you know, the sell side, and obviously our owners and prospective owners, to really look at the full year and look at our guidance on are we on track with the full year?
Yeah.
Right? 'Cause any one quarter could have a plus or a minus to any one of the metrics that could be big deal-related.
Yep. In terms of the cross-sell, obviously SIS, I always have viewed SIS as a kind of a high ground to sell, to cross-sell. It almost gives you the right-
Yeah
... to sell other modules into that, as opposed to maybe, you know, a core LMS product, where it's like, well, it's strategic, but, like... So how do you think about, like, is SIS kind of the, the hub to a spoke that can, you know, kind of get to these 20 products?
Yeah.
How strategic is that?
So SIS absolutely is strategic. I mean, it's the heart of any school system, and certainly since it houses most of the critical data, what you will see is the other parts of the platform will naturally work much better with that. That's not to say, though, that let's say somebody's using PowerSchool SIS and one of our competitor's LMS products-
Yeah
... there will still be the ability to be able to have APIs going back and forth so the data can work. But it, you know, admittedly, it's a more clunky-
Yeah, sure
... integration.
Yeah.
We get royalties for things like that, so it's, from a profit standpoint, that's good. But, we love to start with a SIS, but we don't always have to start with a SIS. You know, since we have a third of the market, that's a big part of what our customer base has, but also a lot of the customers have all kinds of different products. I mean, you brought up LAUSD, you know, one of the largest, you know, school districts. They actually have their own student information system, but they've got a tremendous amount of our data analytics platform and, you know, a lot of the other capabilities excluding the SIS. So it doesn't have to be just with the SIS. And the way the, a lot of the modules work is they can be very independent of the SIS-
Mm-hmm
... if they need to be.
Yeah, that's a helpful perspective. When you think about the products that have the highest cross-sell likelihood, I always... I have thought for years data and empowering all the constituents-
Yeah
... with more data is a huge, huge opportunity for you guys. Where does that sit in terms of, like, the opportunities? How quickly are you starting to see some of these data, you know, kind of cross-sell opportunities?
Actually, quite large, and it's accelerating at a pretty rapid pace. If you think about just stepping back, so the average school system, and this is part of what we're addressing in terms of the problems in schools, is the average school district will use 19+ systems, okay? All of these systems, it's no different than corporations when you're using all, you know, myriad of different systems. The data doesn't talk to each other. It's not integrated, and, you know, trying to get data from one system and trying to figure out what it does to another system. We have a platform called Connected Intelligence, which, you know, in partnership with Snowflake, we've built...
You can take all of this disparate data for a school system, whether it's systems within a school, it's external data, put it into this big data lake, and we've got a lot of algorithms that will connect the data and actually bring insights for the administrators to be able to do a lot of, you know, the correlation with the data and bringing that together versus trying to do it manually. In fact, we do something very similar to that inside our company, ourselves, so-
Yeah, it feels like I mean, if you're not leveraging that as a school district, what are people doing if they're just not, they're just-
They're not.
Yeah.
And that's the issue. And that's one of the most exciting parts, is when we show the opportunity and we show what the system can do to schools, like, a light bulb clicks on.
Yeah.
It's like, "Wow, this is pretty powerful.
Yeah.
And they don't have to go back and, you know, reorient all their systems and migrate to different systems, right? A lot of that data can be brought forward into this massive data lake. So it's a pretty exciting opportunity. This is an area that's growing way faster than the company average.
Yeah.
As we look at the pipeline, the deals just keep coming in.
beyond data, and we can talk about Gen AI, 'cause that's been-
Mm
... sort of a newer development.
Yep.
But what are some of the other things that you guys are really excited from a cross-sell perspective?
Yeah, so we continue to be really bullish around several areas, and, you know, some of this is what's happening in the industry, right? So, as many of you probably know, if you have kids, right, and you hear in the news about the teacher shortage, right?
Yep.
So there's a massive teacher shortage that's happening. So we have a talent platform, which is, think of this as hire to retire, plus professional development. You know, we've got a great platform there that's actually done quite well.
Mm.
It's growing faster than the company average. Again, it solves a lot of the manual nature of, you know, onboarding, hiring, you know, developing teachers, right? But I think the other thing that's important, too, that we get excited about, is just thinking about where schools are at. You know, one of the industry challenges is, you know, there is a large teacher shortage. Our point of view is it's not gonna just be solved by adding more people into the ecosystem, because unfortunately, as fast as teachers are entering the sales force, or entering the workforce, they're also leaving. Reason we know this is because a lot of ex-teachers, former educators, they. A lot of them are working for our company, a lot of them wanna work for our company.
So we see a lot of that, and what's actually interesting that's happening is, and I can tell you, I’ve got two girls that are 23 and 26 that are very tech-enabled, and if I were to say to either one of them, "Hey, you're gonna go work for this particular school district, and guess what? The enrollment process is still done with pen and paper-
Yeah.
... I don't think either one of them would know how to work a pen, nor how to write something on a piece of paper. So it's like, "Oh, you don't have an iPad for this?" So I think what's happening on this, Matt, is a lot of superintendents we're hearing. They're also getting a lot of pressure from the next generation of teachers that, you know, they don't wanna just spend half of their time in the classroom, right? The whole reason that they wanna teach is they wanna be in the classroom 80%-90% of the time.
Yeah.
Today, the average teacher is spending half their time in the classroom, the other half of the time in administrative things, which candidly, like, that's what we can solve-
Yeah
... and that's what we're addressing.
Yeah.
So that piece, while it's not, like, the super, super exciting stuff, it does get us super excited because it is helping the industry, it is helping teachers really, you know, realize their value, and you're getting a lot more capacity out of the same number of teachers. So again, that's just our perspective on what's happening in the industry.
Sure. The other... You know, Hardeep spent some time on this earnings call talking about generative AI, which, you know, we waited 17 minutes to talk about that. You, I think, you talked about the monetization of it, too.
Yeah.
So maybe level set us for what does generative AI mean for PowerSchool?
Yep
... and how do you think about monetizing that?
Yeah. So let me just, So AI is not new for us. You know, I, I like to talk about AI in two pieces, right? What I'm gonna call mainstream AI, which, you know, we've had large language models, we've had AI algorithms in, in our assessments platform and our data analytics platform for years.
Yep. Yep.
That's not new to us-
Yep
... so we're very comfortable with that. Generative AI, obviously being a little bit more of an emerging technology, is actually a very promising and exciting area for us, and the reason for it, if you think about PowerSchool, so we are the infrastructure for schools. We don't do content. We're not in that business. We're not getting in that business. But we do rely on content.
Yeah.
Right? So, like, our assessments platform, as an example, when we, you know, have the item banks for questions and answers, we have to buy that, right? And our platform uses that. But, you know, part of one of our newer technologies is in our assessment business, is how do we leverage generative AI? So based on how you're doing an assessment, can it actually be tailored based off how long it's taking you to answer questions, how many are you getting right, and then actually generating content and questions to either make it more advanced or a little bit more foundational based off how you're-
Hmm
... actually, you know-
Yeah
... performing. So we actually see a lot of applicability to it, and, you know, we've really been embracing it. You know, we have another one, which is, it's gonna be out next year. It's called personalized homework, which is more around, you know, if all of us were in class, we'd all be getting the same homework. We'd be getting taught to the mean. But the reality is, across all of you, some of you might need some foundational work, probably me.
Many of you are probably gonna be accelerated, and you're so just to think about instead of getting the exact same homework assignment, again, based on how you're answering the questions, do you get more fundamental, you know, remedial questions, such to get you up at least to the mean, whereas some of the students that are actually more advanced, getting higher, more, you know, complex problems? And again, this is about tailoring the experience to the, to the children needs. Because today, look, the reality is, the only way that happens is if the student and the teacher take the proactive actions to kinda really do something, you know? And given the fact that teachers are overloaded, it's not happening with the frequency that we would like for it to.
Yeah.
So, I mean, in terms of the monetization, it's still early. I mean, a lot of the, the products, we've been beta testing a lot of the products with customers as we speak. A lot of this will come to market, you know, probably late Q1, Q2, Q3 timeframe. So we will start to see that pick-up but, you know, probably in the mid-part of next year onwards.
And then, therefore, then more of, like, a maybe a 2025 driver?
Yeah, I would say a 2025. And, you know, for us, I think the exciting thing is, and, you know, in our Investor Day that we did a couple of months ago-
Yeah
... which you were at, you know, we've said, "Hey, look, we're gonna, you know, be $1 billion in revenue in three years." The majority of that comes from the core business.
Yeah.
The contribution from our international business as well as personalized education is rather small.
Yeah.
So and again, a lot of those really pay off in the out years.
One last question, then we'll see if there's some from the audience. You know, international, Hardeep and the team have been really focused on international a lot. I would say, feels to me anyway, like, over the last year-
Yeah
... it's really kind of taken a step up. Now, a skeptic to me would say, "Well, gee, does that mean that the North America market isn't as robust as we think it is? And, like, if it is, if the cross-sell opportunity is so high, like, why are we spending time and resources internationally? Give us sort of the company's perspective-
Yeah
... on why now internationally, when the U.S. and North American market, it still has, is very under-penetrated.
Yeah, so, yeah, to my last comment, the North American market is the major contributor to getting to the billion-
Yep
- plus in the next three years. Look, we are taking... We're talking about international a lot more, but we're taking a very measured approach. So in the business now, it's only about $10 million in revenue, so it's a rather small number. However, the opportunity, think about this, 1.3 billion students internationally that are not being served by PowerSchool.
Yeah.
Even if we can get a small percentage of that, right, several dollars per student, it becomes pretty material-
Yeah.
Right?
Yeah.
So our international approach and strategy has actually been... You know, if you were to ask me this time last year, it was more what was coming inbound. We had half a dozen people sitting in California taking inbound RFPs, and we were responding to them. Because of the nature of some of that activity, we've set out a path of three basic tenets of our international growth. One which is certain areas we're gonna put people on the ground, so we chose the Middle East because of the inbound activity that was coming in. This is a region that's taking technology and education to kinda differentiate-
Sure
... the region.
Yeah.
We wanna be part of that 'cause we see some big opportunities there. Second one is the channel partner ecosystem, so we now have a dozen partners that are gonna help us scale and grow. And again, just keeping in mind, you know, my view on the revenue contribution from those won't really start happening until the latter part of next year because you've gotta get these partners up, enabled, build the book of business, and then obviously start, you know, generating revenue. And then the last piece is in the inorganic. So, I would just say, look, we're focused on it because we believe it will be a contributor, meaningful contributor in the out years to the business. It's not required for the next three years, but, you know, it's too big of an opportunity for us to not-
To ignore.
Yeah, we've just... We've been talking a lot about it-
Yeah
... but as you really look at the contribution, it's still rather small, but we're super bullish on where it's gonna be in the future.
planting the seeds today-
Yep
... to yield fruit tomorrow.
Yep.
I'm gonna take a pause here for a second. If there's a question from the group here, fire away. Otherwise, I can keep rolling. No, no, no, no, no, going once-
No questions
... going twice. All right, well, raise your hand if they come. We'll, we'll keep an eye on it. We'll keep an eye out there. You guys had, you know, you talked about the, the, the path towards $1 billion, and a 36% EBITDA margin?
Yeah, 36%.
Thirty-six.
Yep.
You know, that's still a little bit of ways off. When we think about the bridge between today and there, what would you tell us about sort of... You know, you have it guided to 2024, but, like, when we think about some of the guardrails to-
Mm
... that move from today to 1 billion, how should we think about this kind of as the steady progression, and what are some of the-
Yep
... Are there guardrails that you would help us with to think about 2024?
Yeah.
Both growth and margin.
Yeah, so I think it's important, and look, as a CFO of the company, I think, you know, especially for prospective investors, as well as current shareholders, I think it's important for you to understand the framework from a financial perspective. And, you know, I've tried to make it very straightforward. If you think about just on an annual basis, low double-digit growth that you'll see from the core business, and expect on that, again, for all the reasons we talked about earlier, every year you're gonna see 100 basis points of margin expansion. You know, what gives me confidence around that?
So, you know, I think one of the things, and I've been in the business for a while, when you get any business beyond $500 million, if you do the right things from both a process and systems perspective, you actually start to get a decent amount of operational leverage out of the company. When I joined, you know, almost four years ago, we spent a lot of time on systems, a lot of time on process work. It wasn't the stuff that, you know, everybody thought was super, you know, exciting, but it was super important, and what it's enabled us to do is, as the business continues to grow, we don't have to make the same investments, and, you know, in, in certainly, like, the general-
Sure
... and administrative areas. We are investing in sales and marketing, right? We're gonna continue to invest in international. But the other lever, too, is you look at our financials, you'll see our R&D spend. So between our core expense for R&D, as well as the capitalized R&D associated with all of our personalized education products, we're in the low 20s, and that's more than double of our closest competitor. What will happen over the next few years is, as our personalized education products come to market, you won't see that expense continue in research and development. So you will start to see the capitalized software come down.
Mm.
You will see R&D continue to get efficient, and for those who are looking at this quarter, you'll see that CapEx was down as a percent of revenue, as was the R&D. You're gonna continue to see those efficiencies. We've got, you know, a third of our employees in our India center that we're continuing to leverage. So there's a lot of leverage we're driving in the business such that we are still able to invest in international. We're still investing in personalized education. So I want, you know, investors to know that not only, you know, are we driving efficiencies, but we're still investing in these areas that, as you look in the longer term, you know, my view is they do become step changes to the growth profile in the company in the out years-
Sure
... which is why we're doing this.
So a low double-digit growth with several interesting catalysts, but that kind of 100 basis points of margin,
Yeah, I mean, look, this year we're gonna have 200 basis points almost from where we ended 2022, right? 2022, we were at 31%; we'll be at 33% this year.
Yeah.
So we guided 140, and we, you know, we're gonna deliver, you know, basically 2 full percentage points.
Yeah.
So...
Longer term, I forget, did you guys offer a long-term model at your IPO beyond 20-36, or was that... I forget. Was the-
So, when we originally had low 30s when we IPO'd. We exceeded all of the metrics from 2021, which is why we did the reset with our Investor Day.
Yeah.
So I would encourage any of you, the information's still available, so our Investor Day has a ton of information around, you know, the updated metrics that we have. The other one that I'm super proud of is free cash flow.
Yeah.
So free cash flow will be in the mid, and this is conservative. We'll be in the mid-20s, from a free cash flow perspective, by 2026.
Mm.
Everybody inside the company, and Shane knows this, everyone is tired of hearing me talk about cash flow, but I'm super focused on it. Every single thing we spend, you know, anything on, we're laser focused.
Well, then it comes to capital allocation of that, of that free cash flow. How do you think about... I mean, tuck-in M&As, I'm sure have been part of the cadence, will continue to be part of the cadence.
Yep, yep.
Broader uses of cash?
Yeah, I mean, look, so with interest rates, and we have a floating debt, which we actually just redid, we did an amend and extend on our first liens, $840 million. It's SOFR plus 3.25, so it's 8.3%. Reason I go through these numbers is, look, capital's no longer free. So part of the calculus is any of the acquisitions that we make, they have to be accretive to the margin profile as well. If they're not, then we have to find synergies within the PowerSchool business to make it such that what you're not gonna see us do is buy acquisitions and then dilute the margins. The most recent one, which we just did, we're making a multimillion-dollar investment in SchoolMessenger -
Yeah
... to integrate it into MyPowerSchool, but we're offsetting that with leverage elsewhere in the model. So that's the one thing, you know, that I think is important, too. That, you know, we've got a lot of discipline around the model, and I think it is fairly predictable. The one thing I would just encourage everybody, and Matt knows this 'cause I keep saying, is like, focus on the full year. As big deals continue to happen, right, I don't want, I don't wanna create a culture inside the company where we have to close a big deal in a particular quarter to hit a particular metric, because usually, the only way you can do that with any level of precision is offer discounting. And in this business, I'm not interested in, you know, offering any kind of unusual discounting-
Yeah
... just to get a big deal in to hit a particular metric.
The, I think the, the other thing that I hear from investors is, we'd love, and this is something I don't, you know it's not really your, you know, place to answer, but in terms of, like, added float, you know, I think everybody kinda wants to see that. 'Cause I think, you know, some of these stories like yourselves, it just gets more interesting when the float changes.
Yeah.
How do you—I mean, as a management team, the board, how do you think about, you know, kind of increasing float?
Yeah. So look, the biggest piece of advice, and this is my second time as a public company officer, the biggest thing, advice I give to the management team is, we gotta focus on delivering. We're gonna continue to meet Wall Street's expectations. We need time as a public company just to, you know, to be known for a company that's gonna deliver-
Yeah
... on what we say. That's the first important thing. Just in terms of our, you know, private equity ownership, so we still have 70% of private, privately held, so it's Vista and Onex. They both see a lot of value in the company, so we're not unlike any other, you know, company that went public in 2021 or even, you know, before then, where you know... I mean, the stock has actually done quite well-
Yeah
... since the IPO share price.
Yeah.
But the owners, you know, those two large shareholders, still see a decent amount of value in the company. So we just have to deliver. The share price will do what it's gonna do, and then over time-
Well, it takes-
... they'll start to monetize itself.
Yeah.
But again, yeah, I mean, the deal is, sometimes it's the catch-22, and we talked to... I will tell you, part of my job and what I do with Shane, we were just in Europe a couple, you know, several weeks ago. We've got a huge amount of investor interest. We've got a lot of great-
Mm, that's great.
... potential shareholders that are waiting.
Yeah.
It's just-
Yeah
... we need to get the shares available.
So you keep doing what you're doing, and the float will take care of itself.
It has to at some point.
Yeah.
Yeah.
Great. Well, we're out of time. You know, and that was a quick 30 minutes. If any of you have any questions, Shane's up in the front, Eric's here.
Yeah.
But really do appreciate you, you guys coming, your support.
Yeah.
Best of luck from all of us at RBC.
Yep, thanks so much, and again, appreciate all the interest from all of you. So thanks again. And we're available, so if you have any other follow-up questions, Shane or myself, we'd be more than happy to answer anything that you all may have.
Excellent.
Thanks, sir.
Thanks again.
Sure.
Thanks, Matt.