Welcome to the 25th annual Needham Growth Conference. My name is Joshua Reilly, and I'm an analyst on the enterprise software team here. This afternoon we have Brian Miller, CFO of Tyler Technologies. Thanks, Brian, for attending.
Yeah. Happy to be here.
Investors are, you know, broadly familiar with Tyler, I think, at this point. The business mix has changed over the last couple of years with a much bigger mix of payments. Maybe you can provide a brief overview and then touch on the strategy which now includes this bigger mix of payments following the NIC and some other smaller payments acquisitions.
Yeah. Definitely our focus on the payments and payments, specifically transactions broadly, has increased, particularly since the acquisition of NIC in April of 2021. We already had a payments initiative at Tyler, like a lot of software companies whose software interacts with payments. Our pre-NIC, our strategy was mostly around being a reseller of payment processing services and getting a small revenue share of the payments. NIC, for those of you that aren't familiar with the NIC acquisition, was a public company focused on the public sector, but mostly on a transactional type business around providing digital access to government and processing transactions with government.
Think of things like renewing your driver's license or your motor vehicle registration or getting a fishing license and doing that digitally and then making a payment with that. NIC would build the systems that facilitate access to that information, facilitate that transaction, and then process the payments associated with that. They have a very sophisticated platform for payments and specifically government payments, most of that done at the state level. with NIC, Tyler and NIC combined have about $600 million a year today of transaction-based revenues, most of that around payments. we're really accelerating, you know, the increase in payments, driving that from using NIC's platform, which is very active at the state level.
Taking that platform and driving it down into the local government space, where Tyler has a huge customer base of thousands of local government customers, and being able to not only provide payments associated with a Tyler back-end system, like a utility billing system, so processing your utility bill payment or traffic tickets, those sorts of things, but to do enterprise-wide payments associated with any payment that a city or a county might take. Where NIC has a very deep, sophisticated platform for payments, we've got the relationships and the back-end software at the local level.
There's a big cross-sell opportunity there to continue to expand that, even while NIC continues to expand their state-level payment business, by either adding new states or federal agencies or, increasing the volumes, as people look to do more things digitally with the government.
Great. The macro, everybody's favorite topic, has impacted a lot of your software peers, as we know. While your business has generally been unaffected thus far, what can you tell investors about prior cycles?
Mm-hmm
... how they impacted Tyler and any potential timing or differences in the cycle impacting local government budgets, possibly how things could be different in this cycle as well from real estate valuations?
Yeah. Get that question a lot and, fortunately, I guess, a lot of our senior management team has been around for a while. Most of us were here in 2008, 2009, 2010, and again back at 2000, early 2000s. We've seen some down cycles. Each one's a little bit different, but we really can draw on our experiences and how the company performed then. Yeah, your initial observation is correct. Tyler is pretty recession-resistant. Not totally immune, but pretty resistant. Generally, our customers on the software side are acquiring new software from us because their old software is at end of life. Governments tend to use systems much longer than the private sector, really until they die.
Generally when they do reach that point where, for whatever reason, they've decided that now they have to replace the system, it's a fairly non-discretionary decision. They may move the timing a bit. They may say, "Well, this is a bad year from a budget perspective. I can do it next year." It's not that they can generally say, "I'm never gonna replace the public safety system," or, "I'm gonna just not have a court system." Pretty resistant demand. I think when we think back about, say, the last recession and what's similar or different, back then, we were mostly a licensed business. Today, we're mostly a SaaS business. 2008, 2009, we were about 50% recurring revenues. Today, we're north of 80%.
We believe that the recurring revenues are pretty much rock solid. They're things like maintenance and subscriptions for mission-critical systems. Again, payments around things that are fairly non-discretionary, utility bills, renewing your auto registration, those kinds of things. The much higher percentage of recurring revenues, and we believe those are pretty rock solid. In the new business market, people acquiring new software systems. Again, back then, we were mostly a license business, so acquiring a new system required a big upfront capital outlay. Today, in the SaaS model, it requires a much smaller initial payment. You're just starting a new subscription, so there's less of a barrier to moving into a new system because of the capital requirement.
We believe if we, again, look back at 2008, 2009, we saw over sort of an eight quarter period, a decline in licenses, and at the bottom, they were off about 20%. That translated to a year where our revenues were flat because the recurring revenues were pretty much unaffected. Today, with a much higher percentage of recurring revenues and smaller license component, we believe that the impact of delayed deals, should there be more of that, around a tougher economic environment, would be much less impactful and we would tend to see a more stable business than we saw even, you know, 10 or 15 years ago.
Right. Yeah. The business mix has changed-
Yeah.
quite a bit there. With the MicroPact acquisition several years ago and now the NIC acquisition, you've really moved beyond just serving local government, and now state and federal are, you know, important growing portions of your business. How do you think about the strategy with serving these customers, and do partners become more important to the process with this group?
Yeah, Tyler, we've always been a company that's solely focused on public sector. We view public sector pretty broadly. In the past, again, pre-NIC and pre-MicroPact, we were mostly local. That's just kinda how we grew up. That's where our initial focus was. That's where most of our initial acquisitions were, we built out a very broad portfolio and a very clear leader and the largest company serving the local government needs. We always viewed other levels of government as part of our market. MicroPact, as you said, was an acquisition four or five years ago that got us more into the federal space. Their business is roughly 65% federal and 35% state.
They have a low-code development platform that is used for a variety of uses in state and federal agencies, things like background checks or licensing processes or EEOC claims. They have a platform that is sold and implemented both through our internal teams and through a pretty wide partner network. We've also built off of that platform a number of sort of pre-built products that we sell directly into state and federal agencies. That really kind of was our kickstart into the federal space. NIC was almost all state space. That got us into the transaction and payment space, mostly at the state level.
As I just talked about, we're looking to take that payment platform and drive it down into the local level because we have the relationships and the sales organizations that they didn't have there. There's a big cross-selling effort going the other direction, where NIC has these very deep relationships with 31 state enterprise contracts. These contracts are very broad and provide them the ability to provide digital government services. We have dozens of software products that have applicability at the state level, but we haven't historically had the sales organizations or the relationships there. We're able now to leverage the NIC relationships, the way they're very deeply embedded with CIOs and agency heads and governors, you know, very deeply embedded with their initiatives and where their pain points are.
We're able to leverage that to sell Tyler software products into the state government agencies through the NIC relationships. That's really how we're primarily looking to continue to grow at the state level. I don't know that partners become more important there. The federal space is really where we've seen partners become more important. As we continue to grow there, we'll continue to work through that network.
Got it. If you look at the ERP business, it's historically you've been successful with Tier 2 and Tier 3 cities. Now with that product set moving fully to the cloud, do you think some Tier 1 cities that before who maybe thought they needed a lot of customization in their software would be more willing to accept Tyler's cloud ERP, or how do you kind of see this market evolving?
Yeah. ERP is our biggest sorta single product category, on the software side. You know, it's accounting, human resources, payroll. It's the one area where we do see frequent competition from horizontal companies, like Oracle, SAP, Workday, Infor. In most of our other product areas, we compete with narrower sort of niche companies that just do things like public safety or property taxes or courts. We do have a different set of competition. As I said, it's our biggest product or single biggest revenue generating suites of products. We have a couple of different products for one for smaller and midsize governments, one for midsize and larger governments. We're pretty broad there, where we've been and we have a lot of success.
We're pretty much the clear leader in public sector ERP. We have win rates in excess of 50%, so we're winning more business than our competitors put together in the public sector space. Tier 1 , or in some cases, they call it Tier 0, so the very biggest cities and counties, the New Yorks and Chicagos and L.A.s, have not typically been our market because they've typically looked for, as you said, a really high level of customization, maybe based on an Oracle platform or SAP, but years-long implementations, massive customization, that's not really our model. Our model in that space is much more off-the-shelf.
We're really strong from just below that all the way down almost to the bottom, and then the very lowest Tier that kind of is a QuickBooks market, and we don't really have a presence there. Everywhere in between, we're really strong. I think in general, we don't see big changes coming in that desire for customization and that appetite for those massive projects at the highest Tier. Where we're very successful in it is that we not only have the ERP solution, but we have dozens of other applications that the horizontal companies don't have that are integrated with that. Things like a utility billing system or a licensing and permitting system, or even down to something like a cemetery management system.
We do really well when someone's looking for a whole suite of products from one vendor. If they're looking for just, a very high level, you know, maybe best in class HR system, they might, in a, in the top Tier, they might, be focused elsewhere. We do believe that as more and more bigger governments figure out that customization isn't necessarily a great thing, and that their needs aren't necessarily that different from everyone else, that our model becomes more attractive at the highest Tier. We're really happy, dominating those middle Tiers in that space. We have other products where we're the big player in Tier 1. Courts, we have eight of the top 10 counties in the country. We do have L.A., Chicago, Dallas, Atlanta, Miami.
Property tax, similar, we have a New York City's property tax system, for example, the biggest taxing jurisdiction in the country. Also I'd say the other thing that's helping drive us to be more competitive at the upper end of the market are some of the things that we have that are, again, unique. With our data and analytics platform that came from the acquisition of Socrata a few years ago, we now have really advanced data and analytics sort of business intelligence capabilities that layer on top of all of our core products that are proving to be a real competitive distinction for us.
That actually leads into my next question. Socrata, now known as Data & Insights, you know, if you go and speak to the different Tyler reps, which I get to do, it's kind of interesting. They get pretty excited about it. I don't know if it's there's some type of compensation bump they get there.
There's always compensation as a sales rep.
Yeah. If you look at the different, you know, product lines, it seems like, you know, there's a bunch of them. Which are you most excited about in terms of like actually driving material growth in the near- term? Maybe which are a little more in development and might be coming in a few years?
Yeah. you know, we have taken the technology that we got through the Socrata acquisition and built really products on top of each of our major core products to take advantage of the Data & Insights capabilities and to help further our Connected Communities initiatives. Being able to pull data out of these siloed systems and let internal government decision makers and managers have better access to better information to make better decisions, but also to enable them to share data and information across jurisdictions in a region, and to make that information more transparent to the public. It's an exciting topic for governments at a lot of different from a lot of different perspectives.
I think we've had a lot of success with our financial insights, so the layer that sits on top of our ERP systems. Public safety has proven to be a real competitive advantage for us, where we compete with companies like Motorola or Axon, or CentralSquare in that space. We have really advanced capabilities there around insights into things like crime mapping, helping the command center determine where to send resources and allocate resources. Public safety has been a big competitive edge there. Tax and assessment is sort of one of those areas that it's newer but is really growing. We had a really, and this kinda ties back with NIC as well, and the cross-sell opportunity there.
We had a great win recently in the state of Kansas with our assessment insights. Tyler already has a statewide property tax system in the state of Kansas, but it's used at the county level, so each of the counties in the state has their own sort of siloed tax system. NIC has a state relationship, enterprise relationship in the state of Kansas and provides a lot of digital government services there. The state Department of Revenue wanted to have better insight into all of the tax information that sits in these county silos. The counties wanted to be able to share information with each other, understand information about how properties were valued and assessed, and the public wanted better access to information.
Through the NIC contract and their relationship, we were able to introduce our assessment, analytics tool and sell it to the state, to sit on top of all of these systems. It was really sort of a three-way arrangement that NIC was really the key to putting it together and us winning that. It provided a solution that really makes a difference to a bunch of different constituents in the state.
I think that's a great example of how the acquisitions you've made have been integrated successfully, and the cross-sell is flowing nicely, and everything is fitting together really well it seems.
The exciting thing is with NIC, where there's really sort of cross-sell going in two directions, selling NIC payments into Tyler customers and Tyler software into NIC customers. They were just in the very early stages. We spent the first, you know, better part of the first year after the acquisition, really getting to understand what each side had and, you know, what those needs were and what we could cross-sell, and building those relationships to facilitate the cross-selling. Now we're starting to see really a nicely growing pipeline, seeing nice wins like the Kansas win, across a number of different Tyler products. I think we've had something like 16 wins in the last year that we're cross-selling Tyler into NIC relationships. More importantly, the pipeline is growing much quicker than that.
I'd say we thought there was a significant opportunity when we made the acquisition, but as we sit here today, I think we're more excited about the number of opportunities and how the companies are able to work together to take advantage of those.
That's great. Moving on to one of my favorite topics, the competitive landscape and public safety, has been shifting quite a bit here. We've got some new startups not doing as well. We've got some other new startups emerging, and then some of the legacy vendors losing market share. All while we know from the Q3 call for you guys that public safety is finally beginning to take cloud deployments. How do you see this market evolving in this year, I guess now 2023, and how should investors think about the number of RFPs relative to the last couple of years?
Public safety is an interesting market. You know, we got into it in a big way five or six years ago through a large acquisition. It was a big gap in our portfolio. Because we're the dominant player in the court space, public safety's sort of immediately adjacent to it. It made a ton of sense for us to be in that space in a big way. We've made a lot of investments in that product since we acquired it. We've made a number of other acquisitions that have been sort of tuck-ins or supplemented our core public safety product. Public safety, for those that aren't familiar, is things like computer-aided dispatch, a 911 system, and then police, fire, and ambulance records management systems are the major functions there.
It's a really competitive space. As I said, there are people like Motorola, Intrado, Axon, there's some startups that have been sort of cloud-based startups in the last few years. A wide range of competition. A company called CentralSquare, which is a PE-backed company that's pretty big in that space as well. We think our big advantage in that space is because we do have this complete integration, this end-to-end solution from a 911 call through an incident, an arrest, and then over into the justice side, a jailing, a trial, all the way through probation. We're the only company that has that whole breadth of product. Other competitors come at it with different strengths, like Motorola on their-- the hardware, the radio side, Axon with the body cams.
We all have different ways we come at it, but we think ours is pretty compelling. Now as I said, we've added the really advanced capabilities around data and insights on top of that. The funding's really good in public safety. Despite conversation around defunding the police, there's a lot of funding for public safety and. It's a well-funded market. They, they like technology a lot, so it's really active. There's obviously, you know, it's an important function. We like where we sit there. We're making a lot of investments and have made investments around it.
In terms of moving to the cloud, it's been the product area that's been the laggard, or really in some cases even resistant to the cloud, where they haven't really been comfortable putting a 911 system in the cloud. That's changing, and it seems to be changing fairly rapidly. We've said, you know, that business for us has been mostly license-based, and even up through this year, just a handful of cloud deals. We now think that next year, maybe as much as 25% or so of our business in public safety will come to us through the cloud. Yeah, we're excited about our opportunities there, and it feels like it's a business that we've got a lot of upside for.
Got it. That's great. Moving on to the SaaS transition, maybe we can just review, you know, in terms of net new business in 2022, I see you run through this a lot with investors, but maybe the broader audience here. Which divisions are furthest along in selling SaaS? Who is catching up in terms of SaaS, and how is it evolving versus kind of your expectations?
Yeah. We've, you know, just to reset a little bit, we've sort of had a hybrid model for a number of years, where we offered most of our products in both an on-prem license model and in a subscription generally hosted in our private cloud model. We were kind of neutral. We let customers decide which way they wanted to acquire the software. We didn't really try to push them one way or another. Starting in 2019, we really shifted to a cloud-first approach and said we want our customers to come to us in the cloud. We think it's a better business for us. We think it's a better experience and for the customers. It wasn't revolutionary. That's the way the market was going, certainly in the private sector.
Public sector, like with most things, lags behind the private sector in adopting new technologies or new ways of doing things. Since 2019 to now, we've gone from 50% of our new business coming to us in the cloud to now north of 80%. I think last quarter it was north of 90%. We had a really big deal at the federal level that was cloud that skewed it a bit. You know, consistently kinda 80%+ of our new business coming in the cloud. We've done some changes in our business, things like changing sales compensation to encourage sales reps to push people to the cloud.
We have a number of products, including our ERP product, our enterprise ERP product that starting in 2022, we no longer made available on-premises, and there'll be more of those products in 2023 and beyond that we'll no longer offer on-prem. We've acquired or built a lot of products that are cloud-native, so only offered in the cloud. Definitely we've had a major shift there. The market has moved along with us.
The market has said, "Yes, we increasingly want to come to you through the cloud." I think the big drivers there are just their general struggles with managing infrastructure, just like private sector companies, but multiplied in the public sector, the issues they have with retaining, replacing, aging workforce in the IT space, you know, paying market rates, just attracting people to come work for the county government as opposed to going to work in the private sector is a real challenge. Cybersecurity has been, you know, increasingly an issue for governments just like for private sector, and I think their confidence in their abilities to manage those concerns are generally lacking. The cloud's becoming much more attractive.
ERP has always been the leader, so we've had more and more, more of our customers in the ERP space adopt the cloud earlier, and we have more of our flips or our on-prem customers that move to the cloud coming out of ERP. Now we're seeing, you know, courts and justice, property tax and appraisal, those suites of products, moving to, you know, 80%, 85%, 90% of the new business coming in the cloud. As I said, there's two areas, really two areas that lag public safety and then our case management development platform, the MicroPact platform, which has a lot of state and federal business that still has been the majority of that business and license. It's shifting more rapidly as well.
Both of those, we expect to see pretty good progress in the next couple of years in terms of moving closer to more of their business coming in the cloud. We really expect that over the next couple of years, other than in those two areas, that almost all of our new business will be cloud, and it will start to have an accelerated process to migrate the thousands of on-prem customers we have to get those migrated over to the cloud. I think that process will really accelerate after 2023.
Got it. One of the key issues investors have been watching are the bubble costs or duplicate costs as AWS ramps. You still have two data centers open. You've spoken about with investors that one is probably gonna close at the end of 2023. Can you maybe just review the timelines here and the impact to fiscal 2023 non-GAAP operating margin?
Yeah. Historically, we've hosted our subscription or our cloud customers in a entirely private cloud with those clients hosted in one of our two proprietary data centers. When we made the decision to really go cloud first and accelerate that transition, we also decided we wanna get out of the data center business because we weren't able to scale the way we'd like to, keep up with increasing security demands, continue to add more and more CapEx. As we kind of were making that decision, the public cloud market getting much more competitive with AWS and Microsoft and Google and IBM, and all kinds of providers there. Became much more cost-effective for us to move to the public cloud.
We started on that transition in 2019, and it really accelerated in the last year or so. We've said that, as you said, we expect to get out of one of our data centers by the end of 2023 or beginning of 2024, and the second one, around a year after that. In the meanwhile, we've got a cost impact or margin impact because there's a certain amount of fixed costs around operating our data centers, our proprietary data centers, that doesn't go away until we get completely out of it. As we put. Today, most of our new customers are going directly into AWS, which is our primary public cloud partner. We're shifting existing on-prem customers into AWS, and we have a process to lift and shift our customers that are hosted in our data centers into AWS.
Until we kinda get a whole data center closed, there's a bunch of fixed costs around that. The bubble costs, which really are mostly these data center costs, will peak in 2023 and then start to go down as we get out of one data center at the end of the year, and then go down further as we get out of that second data center. As a result, we've said that, from a margin perspective, we believe sort of the trough of our operating margin is in 2023. After that, we'll see relief from some of the bubble costs. We also expect to see pretty significant decline in license revenues because of the shift in the mix in 2023 that'll impact margins.
We believe after 2023, we're out of sort of around that inflection point, and then we'll start to be on a trajectory of margin improvement after that.
Got it. I believe you'll end up having, roughly $49 million in COVID-related revenues from NIC in 2022, which should be ending now in Q4, hopefully. We know these are lower-margin revenues. How do these exiting the model impact margins in 2023, and maybe any comparative issues we should be aware of?
Certainly from a revenue comparison, we've talked about it quite a bit to make sure people know it's coming, and really since we acquired NIC, we've been talking about this. NIC was talking about it as a public company before we acquired them. NIC during COVID, had a couple of initiatives that were specifically related to COVID, that they had a couple of revenue streams that were solving problems that state clients had around COVID. One was providing partnering with a healthcare company to provide these big COVID testing facilities. One, the more recent one was around providing management of a rent relief program for the state of Virginia. Disbursing rent relief funds and helping manage processes those applications.
Those were always revenues that we didn't believe were permanent. We thought they were really indicative of NIC's ability to come up with innovative solutions to address challenges that their state customers had, even if they were a little bit sort of outside of their lane. They were typically lower margins than our normal revenues. Again, we always expected them to end. As it turned out, they went on longer than we thought they would, but they are actually done now. Those revenues were about $49 million or $50 million this year, mostly through the third quarter, a little bit in the fourth quarter. They won't be there next year. It should have a slightly positive impact on margins as a result of those going away. You know, pretty significant amount of revenues.
Right
...that won't be replaced. We've always taken those out of organic revenue growth as we report it. We take them out of every year when we talk about organic growth. In terms of sort of the headline, top-line revenue growth number, that'll be a big challenge next year.
Yeah.
From a margin perspective, it's positive and it's, you know, it's in that mix of things that are both positive and negative to our margins. Net, we expect margins to be lower in 2023, because of the stuff I talked about before. Going forward, having the COVID revenues, out of our mix, will be a positive for us.
Great. I'll ask one more question, and then we'll see if we have some audience questions here. With investors, you know, very focused on free cash flow, obviously, in the current environment, consensus has you at about $370 million this year in free cash flow. How should investors think about free cash flow growth versus revenue growth over the next few years and kind of that gap and, you know, what can the margin-.
Yeah.
What are we looking at margins?
I mean, if you think about the next few years, we expect free cash flow margin. We've always been a really solid cash flow generator. Relatively modest CapEx for a company our size and a lot of that around our data centers, so that's gonna go down. As we've moved more and more towards these recurring revenue streams, they have really positive cash flow characteristics because we're generally getting paid in advance with a subscription or a maintenance agreement or at the time of the transaction with our, you know, payments or another transaction-based revenue stream. Our cash flow characteristics have become and will continue to become more attractive, I think. I expect over the long run that cash flow margins can continue to improve.
In the very short- term, I think they're gonna be, you know, generally more stable because a lot of these puts and takes around licenses, you know, this push to get across the last steps from licenses to subscription, that'll have a.
It's a little bit of a headwind.
A little bit of a headwind.
You've talked about down 40%.
The bubble cost and those sort of things. Yeah.
Yeah.
And so-
Just the severity or not severity, but the magnitude of the decline.
Yeah. It's a good thing that that's happening faster. You know, we've talked about licenses being down next year, on the order of Or next year, this year, I guess now, 40% from last year. Going from $65 million or $70 million down to maybe the $40 million range. That's got an impact on cash flow as well as margins. But it's a good thing that we're kinda pulling that forward and getting over it. I think we've got a great long-term cash flow story. And, you know, in the short- term, I think it's kinda neutral, but in the long- term, I think it's really positive.
Great. All right. Let's see if there's the audience has any questions. Otherwise, I can keep going. Shy audience. All right, another one from me here. How should we think about priorities for capital given some of your debt from the NIC acquisition has a higher rate with interest rates increasing? I think there's a floating rate.
Yeah
...to some of the debt there.
We've typically maintained a really pretty conservative balance sheet, or a strong balance sheet. Part of that because we have really strong cash flow, generally, we've been able to fund acquisitions, fund internal investments, buy back stock, and do all those things with cash flow generated from operations. With the NIC acquisition, which was You know, by far the biggest acquisition in our history, $2.3 billion in early 2021. We did have some debt. We had sort of two different fundings there. We did a $600 million convert, which is due in 2026, that's at a quarter of a point interest. That is just at this point, really cheap debt. The conversion price is still pretty far ahead of where we are today.
We did term debt that was a total of about $900 million. We have paid down that debt to under $500 million now. We've paid down about $700 million of debt in total since the NIC acquisition. We're down really to under two times, about 1.7 times leverage at the end of the third quarter, again, with most of that being in the convert. We really feel pretty good about where the balance sheet is, and we'll continue to make it a priority to pay down that floating rate debt. You know, still have, you know, a lot of capacity in our balance sheet to continue to pursue acquisitions and to consider stock buybacks.
Clearly, the priority right now is on debt repayment. It kind of sort of works well because right now the bar for us on acquisitions is really pretty high. Not only did the large NIC acquisition, we did a couple other sort of pretty good-sized acquisitions, you know, $85 million-$100 million plus deals. A company called VendEngine in the correction space, more recently, Rapid Financial Solutions, which is another payments company with capabilities around issuing payments that broadened our payments capabilities. We're really focused on getting those integrations right and making sure we realize the benefits of those acquisitions that we expected. As I said, the bar is really kind of high on acquisitions right now.
Not to say we're not looking at things or won't do things. I think from a, you know, a big acquisition perspective, it's probably unlikely in the near- term. That kind of fits with what we're seeing in the market in general. Most of the companies we acquire are private companies, and the valuation expectations in private companies don't seem to have reset.
They haven't reset yet.
quite the same way that the public markets have reset, you know, our multiple or our valuations. There's a little bit of a disconnect there right now and, that will even out at some point. Right now, a lot of private companies seem to be holding to the idea that their company is worth what they thought it was worth a year or more ago. You know, it kind of works well for us right now while we're a little less focused on the M&A space.
Great. All right. With that, I think we're out of time. Thank you so much, Brian, for presenting today.
You bet. Thanks for having me.