Yahoo Finance

Dave Guilmette

Thanks, Jeremy, and good morning. Let me begin by saying how honored I am to guide Alight as it enters its next chapter as a simplified and focused employee benefits and well-being services company enabled by market-leading technology. I spent the past 40-plus years in this industry, supporting large employer health care and employee benefit programs at Aon, Cigna and Willis Towers Watson. And most recently as CEO of Aon's Global Health Solutions business. My past experience informs my familiarity with Alight, the market we serve and the exciting opportunity ahead. This is what compelled me to want to lead this great company.
In my first 60 days as CEO, I have spent most of my time in the market on a listening tour that has been a complete absorption of what our colleagues, clients and their advisers and the investor community are saying about Alight and better understanding what they need from us. Consistently, I am hearing that we have a great opportunity to entrench our position as the leader in the market. That's what clients and the advisory community expect from us.
They want us to lead, innovate, and set the standard for our industry. They want us as a partner doing the hard day-to-day work supporting them on their journey. When I consider our winning combination of the Alight Worklife platform and our talented team with deep domain expertise serving over half the Fortune 500. My take is that Alight is uniquely positioned to lead clients in their people journey, building upon decades of experience, and we'll continue to do so by improving benefit-related health and financial outcomes for their people.
Building the Alight Worklife platform and modernizing our technology was a four-year journey that I credit our team for delivering on, and we are now more streamlined, more agile and better prepared to address the needs of our clients as the market leader. We've made progress to integrate our solutions across the Alight Worklife platform and have a differentiated value proposition today as an employee benefits and well-being services company.
I am focused every day on our markets, deepening our relationships with clients, brokers and third-party evaluators, and finally, on our execution. We are firmly committed to our strategy to drive profitable growth and stronger cash flow. The completion of our cloud migration and the sale of payroll and professional services has created an opportunity for Alight to have a leaner and simpler operating model.
A key focus for me is the process redesign initiatives that are underway to bring more efficiency across the company while delivering an even better client experience, leveraging technology and how our teams operate.
I've also been impressed with the changes made to our go-to-market structure last year. We are continuing to see momentum with our focus on growing the breadth and depth of our client base and increasing ARR or annual recurring revenue, which is derived from long-term contracts with high retention. We see ARR as a key metric in understanding our top line growth.
I believe we have the right enterprise sales team integrated with deep domain expertise that is necessary to drive sustainable ARR growth. This team recently launched new go-to-market messaging, the Alight Benefits Advantage, which is already being positively received in the marketplace. This helps our colleagues be more consistent in describing who we are what we do and how and why we do it for clients and prospects alike.
With that as a backdrop, I'm pleased to announce key wins in the third quarter with Hewlett Packard Enterprise, Nokia and Siemens. We still expect double-digit ARR bookings growth in the second half and feel equally good about our forward view on renewal activity. We're currently in renewal season and overall are in solid standing with our large enterprise relationships.
I've also seen examples of clients who have left Alight return to us. Why? Because we are the best in the industry at all facets of this business from digital through managing benefits complexity. The commercial momentum is driven by a number of factors. Better field coverage is driving a deeper pipeline, larger deal sizes and improving win rates. The pipeline itself is up over 60% and win rates are up double-digits. The focus on ARR is driving a greater mix of long-term contracts being signed.
Our double-digit ARR bookings guidance is a reflection of this momentum and continued improvement in our execution through the fourth quarter. At its core, what is resonating with clients and prospects is that we consistently nailed the basics as a technology-enabled services company.
We are excellent at serving clients who need a trusted adviser to manage the day-to-day fundamentals. We are in an enviable position to meet those needs. And through our integrated benefits platform, we can help clients unlock additional value by improving the engagement and utilization of comprehensive benefits programs that improve physical, behavioral and financial well-being.
I am pleased with the progress we are making. Third quarter results, excluding hosted, were better than we expected. Recurring revenue growth improved sequentially and the solutions we categorize as BPaaS revenue were up 19% from the prior year. Our non-recurring project business benefited from the timing of certain projects and outperformed during the quarter. Though our view is unchanged as we still expect softer short-term project revenue during the fourth quarter.
Overall, for the balance of the year, I am encouraged that broad signs for the entire business are pointing in the right direction. And as a result, we are raising our full year revenue guidance. Operationally, the cloud migration is enabling ongoing savings while also driving an improved user experience.
Our adjusted EBITDA margin was 21.3%, which is up 90 basis points from the prior year and ahead of our guidance, and there remains a significant opportunity in front of us to operate even more efficiently. With the cloud migration complete, it allows us to shift our focus to annual enrollment.
This year, we are operating in an enhanced environment with more speed, more stability and a better experience. As of November 7, we are over 50% through the process and continue to see an increasing utilization of the digital channel for enrollment. Mobile enrollments are up 35% compared to the prior year, and this, in turn, reduces the higher-cost call center enrollments.
While the results are highly encouraging, we also know this is only one quarter, and it will take time. Between our pipeline, win rates and revenue under contract, we are on the path back to sustainable profitable growth, and our go-to-market strategy is already beginning to pay off.
With confidence in our return to growth alongside strong cash flow and a healthy balance sheet, I'm pleased to announce that we are initiating a dividend program commencing with a quarterly dividend of $0.04 per share beginning in the fourth quarter. This reflects our commitment and shareholder feedback to consistently return capital via dividends and share repurchases over the long term.
Our plan is to host an Investor Day in the first quarter of 2025. This timing will allow us to have a clear picture of our momentum and the macro environment as we close out the year, which will enable us to share more of the operational detail in our long-range plan. While we continue to focus on closing out a successful annual enrollment, we are also well underway on our work with [AlixPartners] to simplify our operating model and drive more efficiency and a better client experience.
We're excited by the work completed to date and the future of Alight. We look forward to sharing more details on these initiatives at the upcoming Investor Day.
Jeremy, over to you.

Jeremy Heaton

Thank you, Dave, and good morning. Our third quarter results show improved revenue performance and stronger profitability, which outperformed our expectations. As a result of the positive trends we are seeing, we are raising our full year revenue guidance.
Turning to the results, which as a reminder, are just for the go-forward business and exclude the exited hosted business. Revenue was $555 million, down 0.5% from the prior year. The recurring revenue growth rate tied to our long-term contracts improved sequentially and was nearly flat from the prior year.
Recurring revenue comprised 91% of total revenue in the quarter. Non-recurring project revenues, which represent less than 10% of the total revenue were down $2 million or roughly 4%, which is better than anticipated and reflects some accelerated timing from our team's hard work to execute projects planned for the fourth quarter.
While we are pleased with this result, we have not seen a significant shift in overall client demand and estimate project revenues to be down approximately 20% in the fourth quarter. Our technology-enabled BPaaS solutions delivered growth of nearly 19% and represented 22% of total revenue.
Adjusted EBITDA was up 3.5% at $118 million, better than our guidance for the third quarter, which was to be slightly down. Adjusted EBITDA margin improved by 90 basis points from the prior year to 21.3%. Year-to-date operating cash flow, when adjusted for onetime transaction and separation costs, was nearly $200 million with an operating cash flow conversion rate on adjusted EBITDA of 53%.
Turning to our go-to-market momentum. We delivered meaningful new wins in the third quarter and continue to guide for strong double-digit ARR bookings growth in the second half. This is a key factor in building long-term revenue under contract and driving sustainable growth towards our target revenue growth rate of 4% to 6%.
At quarter end, we had 99% of 2024 revenue under contract. While revenue under contract for 2025 was $1.8 billion and for 2026 was $1.4 billion. As always, timing of renewals will play a factor in our quarterly view of revenue under contract reporting.
Turning to the balance sheet. Our quarter end cash and cash equivalents balance was $300 million and total debt was $2 billion. This reflects the $740 million of debt paydown we executed in July following our transaction. We also continue to actively manage our debt, which is 100% fixed through 2024 and 70% through 2025. Our net leverage ratio at quarter end was 2.9 times following the debt repayment and we expect to continually delever through ongoing profitable growth.
Turning to capital allocation. Returning capital to shareholders remains a priority and a stronger financial position has enabled us to make a substantial and continuous commitment to shareholders on this front. We have been active with share repurchases and settled our $75 million accelerated share repurchase program during the third quarter, which reduced total shares outstanding by over $10.5 million.
Year-to-date, we have returned $155 million to shareholders via share buybacks and have $93 million remaining of share buyback authorization. Today, we are also announcing the initiation of a quarterly dividend of $0.04 that will begin in the fourth quarter, which signifies our commitment to a consistent return of capital aligned with our lower leverage and recurring cash flow profile of the business.
Turning to the outlook. We like the trends we are seeing and continue to have a positive outlook for the business. We are raising our revenue guidance for the full year, which at the midpoint equates to a $10 million increase. We are continuing to monitor the cost consciousness of our clients and demand for our non-recurring solutions as we finish out the year.
And as a reminder, our Retiree business is heavily weighted to the fourth quarter, where we do not expect any one-time client impact similar to what we experienced last year. We expect total fourth quarter revenue of $665 million to $685 million and full year revenue of $2.338 billion to $2.358 billion. This includes our view of soft demand for non-recurring project revenue down approximately 20%.
As we said, this project work is exclusive to our client base and will return to growth as it has before. With more new clients from our double-digit ARR bookings growth, we will have an even larger base to drive project revenue from in the future.
We are reaffirming our adjusted EBITDA guidance for the full year, which includes our cautious view of high-margin project revenue and the continuing work to eliminate transaction dissynergies. Adjusted EBITDA is expected between $208 million and $233 million for the fourth quarter and $585 million to $610 million for the full year. This includes the initial benefits from our cloud migration of approximately $20 million with the incremental $55 million of cloud migration run rate savings expected to be achieved in 2025.
Finally, we continue to expect full year operating cash flow conversion of 55% to 65% when adjusted for transaction and separation costs. Overall, our third quarter results are a positive step forward. And while we remain cautious on the non-recurring project business that, as a reminder, is less than 10% of revenue, we feel confident in continuing to improve our results through double-digit ARR bookings growth in the second half and delivering on our profitability plan.
Though we are not specific guidance for 2025 at this time, we feel good about the trends we are seeing and expect stronger financial performance across our key metrics. We believe the changes made and those underway support our profitable growth over the long term. We look forward to providing you with a more detailed update at our upcoming Investor Day. This concludes our prepared remarks, and we will now move into the question-and-answer session.
Operator, would you please instruct participants on how to ask questions?

Question and Answer Session

Operator

(Operator Instructions)
Kevin McVeigh, UBS.

Kevin Mcveigh

Dave. Congratulations on the really, really nice results. I wonder -- can you remind us -- I don't know if this is for Dave or for Jeremy, but the But the pacing of the COBRA, does that run off and I should know this, I just -- I don't remember. Is it Q3 or do you still have that impact in Q4 and then it starts to run off in 2025, just the COBRA headwind that you had?

Dave Guilmette

Kevin, it's Dave. First of all, thank you for the question, and I look forward to working with you. Jeremy, I know you're going to comment on the COBRA.

Jeremy Heaton

Sure. It was a 3Q runoff. So it was with us through the end of the third quarter. There's a small tail end of the fourth quarter, but largely behind us at this point, Kevin.

Kevin Mcveigh

Great. No, no, that's very helpful. And then Dave, the wins that you announced at Siemens, Nokia and HP, was that as a result of the list tour that you went out on? Because I know, obviously, you've got a ton of industry expertise. Did that help drive that? And is that all new logo or some of that add-on work?

Dave Guilmette

Thanks, Kevin. So I wish I could take the credit for those three wins coming across in my first 60 days. But as you probably know, these are things that have a fairly long process associated with them. So it's a continuation of the great work that our commercial team and our account executives have been doing over the last several months. And these are new logos that are coming on board.

Operator

Scott Schoenhaus, KeyBanc Capital Markets.

Scott Schoenhaus

Team, congrats on the quarter, really, really solid results here. Dave, obviously, the new logos you just talked about, the double-digit ARR bookings growth, guidance that's maintained. You mentioned also that there's a 60% increase in the pipeline, I think you said, and you're seeing strength from large clients. How should we think about the growth from here? You mentioned your enterprise sales team more focused here. Are they leaning into more new logos, customer expansions or equal mix of both?

Dave Guilmette

Scott, thank you for the question. So we're focused on the ARR, or annual recurring revenue bookings. Those are important. Those really -- those relationships establish a foundation for us from which to build, which would include doing project work for them, in particular when you see a little bit more of a normal pattern that would emerge around that.
We're after new logos. We're also looking to add and expand on our existing client base, right? We have over 250 of the Fortune 500 relationships, and those are significant for us, and those represent growth opportunities. So it's a combination of working with our existing clients and seeking to attract new ones.

Scott Schoenhaus

And as a follow-up to margins, you guys mentioned you have the opportunity to operate even more efficiently. Gross margins were really nice in the quarter and talked about productivity improvements. And then you mentioned on your opening remarks that open enrollment season was supported -- enrollment set up versus the call center. Just kind of wanted to get more color on this opportunity that you see with even more efficiency from here on out.

Jeremy Heaton

Scott, it's Jeremy. I think from a margin perspective, it's in line with how we think about really the next two years is the midterm for us and the expansion to the 28% EBITDA margin. I think what we're seeing right now going through annual enrollment only makes us feel stronger in terms of that conviction around the technology, mobile enrollment is up 35% so far during annual enrollment season. As Dave mentioned, we've got AlixPartners here working through, right, post the transaction, streamlining this business and really driving a different operating model, both that delivers a better experience for our clients, but also just drive more efficiency for us. So I think we feel really good in terms of the performance for the quarter, but what's in front of us over the next two years.

Operator

Tien-Tsin Huang, JPMorgan.

Tien-Tsin Huang

Just on the revenue raise of $10 million. Can you just unpack that for us. What drove you to the range -- to increase the range? And then just the factors to put you at the high and low end? It sounds like it's enrollment, but I didn't hear a change in the project view versus before unless I wrote that down wrong.

Jeremy Heaton

Sure, Tien-Tsin. So on revenue, certainly, the overperformance beyond our expectations in the third quarter is a factor. I think -- we had -- we did see both on the project and on the recurring revenue side was ahead of where we thought the third quarter would come in. So on what drives on the recurring side is a bit better performance in some of the wealth side of the business with the advisory work that we have as well as the mid-market and the health space and project work, as I said, our teams -- they understand this is a very specific pipeline build. This work is exclusive to our clients. And so our teams worked really hard to accelerate the timing and work through and continue to expand on project work available to us in the quarter.
And so as we think about the fourth quarter, it's recurring revenue, I would expect relatively in line sequentially. Project revenue, we still remain cautious. And so as you think about the book ends of the range that we've currently got on revenue, the driver is really project work. Our teams will continue to work just as hard to accelerate anything that's out there and build new pipe. That pipeline can build very quickly. But that's really the biggest driver in terms of the revenue range.

Tien-Tsin Huang

Understood. That's good. Just my follow-up then, just Dave or Jeremy. Just thinking about '25, I know you're not going to give specifics, but just thinking of the path to return to the 4% to 6% midterm growth, I know you've given us that walk where you go into volume and then, of course, wins expansions, products, pricing, retention, that kind of thing. What elements still have more work to do in order to get to that 4% to 6% as we're evaluating the business as it builds and progresses through the year next year.

Dave Guilmette

Sure. Tien-Tsin, it's Dave. I'll start and then Jeremy can add on. So we feel really strongly about 2025 being a better year, right? We've got COBRA behind us as an example. We continue to monitor our bookings and the bookings mix through the rest of the year. We're working through the renewal process. We feel very good run solid footing with A number of our large enterprise clients now. We still have some work to do to close that out in the fourth quarter. And I would remind you that our margins are expected to improve irrespective of the growth profile as we continue to streamline the company. So I feel like a lot of the pieces are in place to start moving us in the positive direction as we've indicated previously. Jeremy?

Jeremy Heaton

Maybe the only thing I'd add, Tien-Tsin, is just the time that will allow us between now and putting out guidance for the year, it gives us a little bit more time in terms of what we're seeing in the environment, the cost consciousness of any of our clients. Post election, the project revenue can be driven by regulatory changes and expectations around that. So it really allows us with that time to get a better view on what we see in that path going forward. But to Dave's point, we feel really good about the trends we're seeing so far.

Operator

Kyle Peterson, Needham & Company.

Kyle Peterson

Great. Nice results. Wanted to start off on capital allocation. Obviously, the dividend announcement is new and good to see. How does this change, if at all, your thoughts on potential buybacks, I know that was something post divestiture, you guys have been pretty active on. So how should we think about the balance between dividends and buybacks moving forward?

Dave Guilmette

Kyle, it's Dave. I'll start, and thank you for the question. So look, our position with respect to capital allocation hasn't changed, right? Our commitment is to return the capital to our shareholders through a combination of both the new dividend that we've announced today and the share buyback. And so we've got now the capacity to be able to drive both of those. The dividend is a further commitment and we think an expectation for a consistent approach to delivering that capital to our shareholders. So it's really -- based on our confidence in our free cash flow profile and the forward expectations for the business, we feel really good about returning that capital in a variety of ways.
Jeremy, what would you add?

Jeremy Heaton

I think that's right. We still got the $93 million of capacity, Kyle, which is important. But I think to Dave's point, the commitment here, and this was the, I think, the strongest way from our perspective to really commit to that consistency for us moving forward.

Kyle Peterson

Great. That's really helpful. And Dave, maybe if I could just to ask you a high-level question. I know you've been in the seat a few months now. I'm sure you've been spending a lot of time with clients. But maybe any conversations or takeaways or anything you've had kind of in your first a few months here, both with new clients and existing clients, I know like we're through open enrollment and renewal cycles, all that, but how have some of those conversations gone? And what have been some of your key takeaways over the first few months?

Dave Guilmette

Sure, Kyle. Thank you for the question. I would start by just reiterating that we are a technology-enabled professional services company, right? We deliver employee benefit services and while being consistently for some of the largest companies in the world. And that goes beyond just supporting somebody, for example, in an annual enrollment decision, it's throughout the year, and there are levels of complexity that oftentimes accompany these benefit portfolios.
So just sitting with our clients and talking through what does that mean? We've got to nail the basics, right? And there's always room for improvement there, but we do a pretty darn good job of nailing the basics, and that allows us to have an opportunity to help employees and their families better understand the programs that they have and better utilize the programs that they have, right, so they can appreciate the benefits more, which is a great outcome for our large enterprise clients. And all of that gives us an opportunity to help those individuals engage and improve their well-being, whether that be physical or behavioral or financial. And that's resonating with our clients, right?
So the time that I've spent with existing clients with new clients who are looking to come to Alight and their advisers is really all about that level of focus. And I really like the Benefits Advantage positioning, and you'll see more of that as we go through. So we've recaptured our narrative about really the core business that we're in and the market leadership position that we have.

Operator

Pete Christiansen, Citi.

Peter Christiansen

And certainly nice trends here. Dave, I'd like to a little bit more specifically about some of the conversations you've had with your channel partners, with your ATM integrators trying to oppose more on what's the direction for it? What are some of the changes that you think need to take place to hopefully accelerate the sales pipeline?

Dave Guilmette

Sure, Peter. It's Dave. Thank you for the question. I have spent a lot of time in the market, the first 60 or so days that I've been in the sea, not only with our clients, but with third-party evaluators in there. And the advisers on the employee benefit side. And just being able to walk them through a lot of the changes that we've made and what that means in terms of how we're going to be able to serve their clients going forward has been really important so that they can help in the positioning of Alight.
For example, right, the move to the cloud. That was a massive investment and a massive effort on the part of my predecessor and others in this organization. And we need to really pull that all the way through to, so what does that mean now for these enterprise clients, right? So we started to talk about a little bit of that in the call with our enrollments being up in terms of the digital use, the releases that we're going to be able to push out into the marketplace for product enhancements will be more quick. We'll be more agile because of the way we standardize a lot of the underlying operations to be able to utilize teams across purpose and across clients, so we should see greater efficiencies. So those are the key messages that we're looking to push through. right, why we did what we did and what does it mean now? So that would be one.
And then the second really is around our Alight Worklife platform. We are uniquely positioned because of that platform to be able to make the connections that I referenced in the prior conversation with Kyle about what really sets us apart, right? Being able to be that integrator and connect employees and families with the full benefit portfolio that they have, helping them to understand it, but more importantly, how to use those programs. Employers invest pretty significantly in the programs. And historically, they've been underutilized across the board. So being able to help with that delivers a better value as far as depreciation with enterprise clients, but also the impact that it has on individuals' lives. So our integrated platform, right -- our shift in our technology are super important, and that's getting pulled through in a lot of the key value proposition messages.

Peter Christiansen

That sounds promising. And then I wanted to follow up a little bit on pipeline conversion. Any noticeable changes in decision delay implementation delay any of those kind of issues or perhaps if you're seeing any acceleration there?

Dave Guilmette

Yes. Thanks for the question, Pete, and I'll see if Jeremy has any additional thoughts on this. The patterns are the patterns. I haven't really seen those change very much, particularly when you look at enterprise-sized clients, thinking about core benefit administration and either retaining us or looking to come to Alight. Those have fairly long process tails to them. You'll see many months of work that goes into it, right? So decisions to stay or decisions to come are typically many months. And in many cases, a company may make that decision in 2024 and actually not utilize our services until the end of 2025 for annual enrollment, if they're more of a mid-market size, but if they're really large and complex, that might actually spill over into the subsequent calendar year.
So we haven't really seen any changes in those patterns. When you look at other services that we offer like navigation and leaves, those have smaller sort of sales cycles to them. And again, we're seeing similar patterns emerge, no real delays or anything of that nature. So we're feeling pretty good about what that pipeline is emerging to look like.

Jeremy Cohen

And I'd say, Peter, the only piece is just that as we close out this year, it is the mix of those bookings and the go-live timing, which, as you know, can impact in terms of what the profile and the cadence for us is in terms of revenue as those deals go live. So I think that's the only piece. But we've never had a capacity issue. I mean you go back to the Thrift deal with 6 million participants, right, and to get that -- a deal of that size and complexity to go live on time. So we don't look at capacity as a constraint for us in terms of the deals that are out there. It's just a matter of converting our pipeline. The win rates are up and continuing to do that and get the deals to close through the fourth quarter.

Operator

Joe Vafi, Canaccord Genuity.

Pallav Saini

This is Pallav Saini on for Joe. The first one is on the pipeline. Are you seeing an increasing mix of deals where the client is moving away from, call it, best-in-breed solutions to a more enterprise approach. Any updated thoughts on the mix of new deals in the pipeline? And I have a follow-up.

Dave Guilmette

David GuilPallav, thank you for the question. We, again, really think we're in a good position with our integrated platform and the value proposition that the team is taking forward around how we can connect up all those different benefit programs to help really create a more seamless experience for the user and a better level of engagement. And that's been resonating, right?
So we're seeing pretty strong demand in the pipeline for integrated solutions. We have many clients today that -- we're in the process of renewing who use our services across health and wealth, including defined benefit, 401(k) and the core health and welfare administration with leaves potentially included in that and our navigation support, right?
So the integrated value proposition, we believe, is resonating. That doesn't give us a pass on being good at any particular part of it. I want to emphasize, we have to be good at the point solution aspect, if you will, or the best in breed, and we are, and that combination of being good at that particular component and then connecting it up on the integrated platform is what sets us apart.

Pallav Saini

Great. And on the go-to-market front, it's good to see the momentum there. You mentioned the new messaging approach. Do you feel that your go-to-market operation is operating at or close to its optimal level now? Any other changes we could be seeing on this front going forward?

Dave Guilmette

Yes. Pallav, thanks for the question. It's Dave and Jeremy can certainly add into this. We've looked pretty hard at this, and we feel good about the repositioning of the commercial team. We've got enterprise sellers who are augmented with domain experts, people who really understand the benefit space. And that combination really puts us in a good position, right, to expand existing relationships, retain the ones that we have and to take market share. We have invested in that commercial capability over the last year or so, and we're starting to see that team mature. And so with that additional capacity and that expertise as we head into 2025, we feel like we've got the pieces we need to be able to be successful in growing our market share.

Jeremy Heaton

And the only thing I might add is just -- and we're seeing it with -- and Dave talked about the better coverage we're getting. I think having our teams in the current structure we are getting deeper with new clients and building new pipeline outside of maybe our traditional pathways we had in prior years. And so we're starting to see the benefits of that, which is why the pipeline is up 60%.
And as Dave mentioned earlier, the sales cycles can be long in a large enterprise benefits administration deal. And so what we would expect to see is, one, the maturity of the team, but as well as the maturity of the pipeline as it builds from early stages and continues to build. So that's part of the expectation for us and the growth profile.

Operator

Ladies and gentlemen, we have reached the end of question-and-answer session. I would now like to turn the floor over to Dave Guilmette for closing comments.

Dave Guilmette

DaviThank you, everyone, for joining us today. We look forward to building upon our momentum and finishing the year strong.

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.