Q1 2022 StepStone Group Inc Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the steps towards fiscal 2022 first quarter earnings Conference call.
As a reminder, all participants are in listen only mode and the conference is being recorded.
After the presentation there'll be an opportunity to ask questions. During the question queue. You May Press Star then 1 of your telephone keypad.
Should you need assistance during the conference call. He may signal of the operator progressing and there are.
And I'd like to turn the conference over to Seth twice of the steps towards head of Investor Relations. Please go ahead.
Thank you and good afternoon, everyone. Joining me on the call today are Scott Hartz Co Chief Executive Officer, Jason Mann, President and co Chief Operating Officer, Mike Mccabe head of strategy, and Johnny Randall Chief Financial Officer.
During our prepared remarks, we will be referring to a presentation, which is available on our investor relations website at share holders that steps down group dotcom.
Before we begin I'd like to remind everyone that this conference call as well as the presentation contains certain forward looking statements regarding the company's expected operating and financial performance for future periods.
Forward looking statements reflect management's current plans estimates and expectations and are.
Inherently uncertain and are subject to various risks uncertainties and assumptions actual.
Actual results for future periods and may differ materially from those expressed or implied by these forward looking statements due to a number of risks or other factors and are described in the risk factors section of the step stones. Most recent 10-K.
Turning to our financial results on slide 3 for the first quarter of fiscal 2020.2.
We reported GAAP net income of $126.5 million for the quarter ended June 30th 2021GAAP.
GAAP net income attributable to stop some group was $41.7 million day.
Fee related earnings for the quarter was $23.1 million and increase of 27% as compared to the first fiscal quarter of the previous year.
Adjusted net income for the quarter was $45 million up 162 per cent from the first quarter of fiscal 2020.1.
And finally, we reported adjusted net income per share of 41 cents.
The quarter reflected retroactive fees, resulting from additional closes of step stones gross equity fund and that contributed <unk> 9 million for revenue and 0.8 million to fee related earnings and pre tax adjusted net income.
And comparison, there were no retroactive fees reflected and the first quarter of fiscal 'twenty 'twenty 1.
I'd now like to turn the call over to step stones co Chief Executive Officer, Scott Hart.
Thank you Seth and good afternoon, everyone.
And the first fiscal quarter of 2022, we posted our strongest quarter ever for fee related revenues and adjusted net income we.
We continue to grow assets under management, and a robust pace, which helps drive a predictable and recurring stream of fee related revenue.
Additionally, our strong investment performance, coupled with a very healthy realization environment led to exceptional realized performance fees and investment income.
Moving to slide 4 we managed $90 billion of investment and advise on an additional $375 billion of assets with a leading market presence and private equity real estate infrastructure and private debt.
We had a wide global reach with offices in 19 cities across 13 countries.
It's global and local approach and a deliberate strategy our global scale creates a substantial competitive advantage as it yields unparalleled data insights and deal flow, while our localized presence allows us to provide the personalized attention needed to deliver customized solutions designed specifically for each client's needs.
We are very excited to enhance our capabilities with the acquisition of Green Spring Associates, which we announced last month and which we expect to close by the end of this calendar year.
We believe the combination of steps down and Green spring will create the clear market leader in venture and growth equity, which will be a sector focus within our private equity asset class.
Mike Mccabe will speak about green spring and more detail and a few minutes moving to slide 5 as Jeff mentioned, we generated $45 million and adjusted net income for the quarter or <unk> 41 per share.
162% from the prior year's first quarter.
We generated fee related earnings of $23.1 million, representing 27% year over year growth as our fee, earning AUM grew to approximately $53 billion up 27% from a year ago.
We also expanded FRE margins by 100 basis points year over year and by 200 basis points from the fourth quarter of fiscal 2021, which positively contributed to the growth and fee related earnings.
Net realized performance related fees, which include incentive fees ray combined $33 million and the quarter, our highest ever up more than fourfold versus the first quarter of fiscal 2021, and double the previous peak of $16 million and the third quarter of fiscal 2021.
We also benefited from strong realized investment income of over $2 million.
Well the sources of income tend to be less predictable than fee related earnings are performance fees of trended steadily up over the last 2 years and our accrued carry balance of $1.1 billion is more than 3 times. The size of it was a year ago, a positive signal for future performance fees.
Johnny Randall will discuss the financials in more detail.
As we mentioned last quarter, we have reopened our offices on a voluntary basis and resumed in person and business development and due diligence and of measured way.
We're eager to see our existing clients face to face and of resumed travel to foster new relationships.
We recognize the return to normalcy will not be of straight line and we are closely monitoring the evolution of travel restrictions and how COVID-19 variance may impact the health and safety of our employees and clients.
We remain optimistic about the future and our ability to adapt to changing circumstances.
With that and we'll turn the call over to Mike Mccabe, our head of strategy.
Thanks, Scott now turning to slide 7 and I will briefly summarize the green spring acquisition and highlight the financial and the strategic merits of the transaction.
Green Spring is 1 of the largest venture capital and growth equity the specialists and serves as a value added lifecycle partner for fund managers and the entrepreneurs investing across all stages of venture capital through a combination of primary secondary and direct investments.
As of March 31st Green Spring had approximately $9 billion of fee, earning AUM $17 billion of day U N and trailing 12 month fee related earnings of $28 million.
For more details of the transaction. Please reference the presentation, we gave on July 7th and our public filings.
Alright, and several strategic and financial benefits I would like to highlight.
Beginning on the financial side first the acquisition will be immediately accretive and we anticipate that the transaction will increase adjusted net income per share by the high single digits. During the 12 months following the close of the transaction and buy more and the future.
To be clear.
We do not assume any revenue or operating synergies to achieve this target, but we do anticipate benefiting from synergies over time.
And second the initial revenue stream is all fee related providing a highly predictable and recurring source of earnings for.
Furthermore, since we are buying full ownership of Green spring 100 per cent of the fee related earnings will flow to pretax adjusted net income.
Third the.
And the addition of Green spring will be additive to our FRE margin, even before accounting for any efficiencies or of benefits from operating leverage which may develop over time.
As of March 31, Green spring generated and FRE margin of 40 per cent over the last 12 months above our trailing 12 month FRE margin of 31 per cent.
And for Green spring should enhance our pace of revenue growth.
Over the last 3 years Green Spring has increased management and advisory fees and a 34% compounded annual growth rate.
Moving to the strategic merits.
First the addition of Green spring makes us the best in class player and 1 of the fastest growing and best performing segments within private equity.
Over the last decade venture capital fund raising and appointment have grown out of 15 to 20 per cent pace.
While the venture capital of internal rates of return of outpaced the broader private equity buyout of Irr's by approximately 500 basis points.
Second the combination of the 2 firms provides the green spring team with the resources reach and scale the deepened relationships with fund managers and further accelerate growth, including and expanded data and technology advantage and greater geographic reach and access to our global marketing.
The development and shared services support.
Third the.
Capstone and Green spring have limited overlap between existing clients, that's provides bold steps to and and green spring and opportunity to leverage each others relationships to expand our collective footprint.
Finally, the acquisition will expand our assets under management to well over $100 billion for.
Other enhancing the positive network effects, we enjoy from being a large diversified and global participants and the private markets.
And Scott mentioned, we continue to expect the transaction to close by the end of the calendar year the <unk>.
And then process the Green Springs L. P is progressing well.
Expect to finance the upfront cash portion with the mixture of debt and cash on hand.
Turning to slide 8.
We generated nearly $13 billion of grocery of U M and the last 12 months with approximately $2 billion coming from our commingled funds and roughly 11 billion and separately managed accounts.
Among our estimate of approximately 90 per cent of assets were raised from existing relationships.
International continues to be a significant source of flows with over 90 per cent of our gross AUM additions coming from outside of North America.
International Lps are still in the early stages of investing and private markets. So we anticipate that this will be a source of outsized growth for the considerable future.
Slide 9 shows our fee, earning AUM by structure and asset class.
For the quarter, we grew fee, earning AUM by just under a $1 billion with half of the growth coming and a private equity asset class.
Growth in assets is inherently lumpy. So we think it is the most productive to look at our fee, earning growth on a longer term basis.
Over the last year, we have grown and fee, earning AUM by 27 per cent.
And when looking over the last 3 years, we have grown fee, earning assets by 30% compounded annual growth rate.
And as of quarter, and we had $13.6 billion of unemployed fee, earning capital, which we anticipate will generate management fees as capital is deployed into the coming years.
We continue to make strong progress and see prime our private markets fun for individual investors.
Since launching in October of last year, we have grown this fun to approximately $150 million of net asset value and the debt.
Delivered an exceptional of 45% net return for investors.
The 10 shows the evolution of our management and advisory fees.
Using fiscal 2018 as the base year, our management fees have grown at a 32% compounded annual rate.
This is the similar pace as our growth and fee, earning a O N.
The blended fee rate of 52 basis points of stayed relatively steady throughout the last 3 years.
While the blended fee rate may fluctuate slightly due to the mix of asset class and accounts I the pricing trends of the underlying services remained very stable.
And with that I'd like to turn the call over to our Chief Financial Officer, John Randall to discuss our financials in more detail.
Thank you Mike I'd now like to turn your attention to slide 12 to touch on a few of our financial highlights for.
For the quarter, we generated fee related earnings of $23.1 million pre tax adjusted net income of $52.3 million adjusted net income of $40.9 million and Eni per share of <unk> 41.
Our FRE margin for the quarter was 30% of 100 basis points year over year, and net more than 200 basis points and the prior fiscal quarter.
The receipt of a retroactive fee payments benefited both the current and the previous quarter by roughly 70 basis points each of the first quarter of the prior fiscal year benefited from the absence of the public company expenses.
Normalized for these items year over year margins improved by over 300 basis points.
Backing out of non core items for you related expenses were down from the prior quarter driven by the timing of bonus accruals, which were elevated in the fourth quarter of fiscal 2020, 1 and due to slightly lower general and administrative expenses.
Gross realized performance fees for $58.2 million for the quarter, our strongest period ever the environment and it's been very supportive for performance ease of positive market performance and robust capital market conditions and the elevated realizations.
Furthermore, incentive fees paid by certain accounts are tied to the first fiscal quarter, each year, which provided the seasonal boost our results as a reminder, realized performance fees can fluctuate fluctuate significantly in any given quarter. So we believe the longer term view on the performance fees is more appropriate.
Slide 26, and the appendix provides quarterly and last 12 months trends and the net performance fees.
Turning to slide 13, and I will speak to the core revenue trends on a year over year basis for the quarter and none of them.
Longer term basis the basis looking at the trailing 12 months compared to the base year of fiscal 2018.
Chart with management and advisory fees at the top.
Total management and advisory fees were up 23% year over year, although longer term trend shows the seeds of grown at a compounded annual growth range of 26%.
The detailed breakdown of the fee revenue is provided on slides 27, and 28 and appendix.
Gross realized performance fees for 440 per cent compared to the first quarter of fiscal 2021, all of the longer term trend shows that such fees have grown at a CAGR of 47% and fiscal 2018.
The bottom chart shows adjusted revenue, which is a sum of the top 2 figures adjusted revenues increased 83% as compared to the first quarter of fiscal 2020, 1, but the longer term CAGR of 31 per cent for free.
All of them and sees as a percentage of adjusted revenues of 43 per cent for the quarter, 29% for the last 12 months. This day.
The buzz our historic ratio of around 20%.
And may continue to benefit from strong performance fees and the near term if the exit environment remained favorable I would highlight that we generally do not control of the exit of these investments there will be variability in any given quarter.
Turning to our core profitability metrics on slide 14 fee related earnings of $23 million for the quarter were up 27% relative to the same quarter a year ago for the last 12 months, we generated fee related earnings of 94 million, representing a CAGR of 53% relative to fiscal 2000 and G C.
Weighted earnings growth has been driven by higher fee, earning AUM and lower travel and entertainment expenses and positive operating leverage and margins have been offset somewhat by the layering in of the comes.
And the expenses.
Adjusted net income of $41 million grew by 162% as compared to the same quarter last year for the trailing 12 months, we generated eni of $110 million, representing a longer term CAGR of 42% driven by FRE growth and strong net performance fees.
On slide 15, we highlight a couple of key balance sheet items gross accrued carry continued to increase driven by strong underlying investment performance and in the quarter and nearly $1.1 billion. This is up 20% and the prior quarter and up over 225% over the last 12 months.
As a reminder, changes and our accrued carry balance reflect our share of the unrealized gains or losses, our client portfolios on a 1 quarter of lax.
On the bottom chart, our own investment portfolio ended the quarter at $83 million up 11% from the prior quarter and up 64% over the prior year, reflecting both market appreciation and net contribution.
Unfunded commitments to these programs for $54 million as of quarter and.
Moving to slide 16, we manage a large pool of over $43 billion of performance fee eligible capital Importantly, this capital is widely diversified across approximately 130 programs with about 90 of these programs, reflecting and accrued carry position as of June 30.
Nearly 70% of our unrealized carry it was trying to programs and vintages of 2016 of our earlier, which means that these programs have entered harvesting mode and <unk>.
5% of this unrealized carry of sourcing vehicles with deal of idea of waterfall, meaning realized carry maybe payable at the time of investment exit this.
This concludes our prepared remarks, I'll now turn it back over to the operator to open the line for any questions.
We will now begin the question and answer session.
To join the question queue. You May Press Star then 1 of your telephone keypad, you'll hear of Tony and knowledge of your request.
And the speaker phone please pickup your handset before pressing any case.
2 of core of your question. Please press Star then 2.
We will pause for a moment as quarters during the Q.
Yeah.
The first question comes from Alex and close time for Goldman Sachs. Please go ahead.
Thanks, and good afternoon, hi, Thanks for taking the question I wanted to start with the you know the performance fee dynamic, obviously, very strong and a quarter and accrued carry balances continue to improve here and not not surprisingly I guess, giving given the backdrop of the market. How are you guys thinking about the cash flow utilization of the business you know forgive it given the pick up in <unk>.
<unk> fees, and which which is likely going to continue here.
Sure. Thanks, Thanks, Alex for the question and this is Scott and I'll, probably start with just a quick comment on the the continued trend and performance related earnings that you referenced and then I'll, maybe ask Johnny to comment on the cash flow dynamics that you referenced but look we would agree and I think that that Trey.
And that you referenced is 1 that we've talked about over the last couple of quarters I think it really reflects a few different things and 1 is the market activity and and as we've talked about in the past. The the fact that all exit routes really have been open and available to us here and you too. It's just the continued.
And the maturation of our of our carry programs and and we chose or the breakout by by vintage year of of some of those those programs and how they've developed over time and theories.
For them is that we've experienced both in terms of the the realized performance fees, but also as you mentioned the the crude carry balances, but with that Johnny maybe I'll turn it to you to comment briefly on the the cash flow about utilization there.
Yeah, sure Scott and I think.
And as Mike mentioned with the.
Closing of the Green Spring transaction, we do anticipate using some cash on the balance sheet.
And as we've talked about for and we'll continue to look at and dividend levels, and just making sure where we're using the cash into the strategic way but.
And the near term it will be and some of that will be used for green spring and just continue to make sure we're prepared to support the growth of the business and.
Anything else and the media per cent.
I think we've talked before and we do have.
And a fair amount of GP commitment that will need to be funded over time. So we're conscious of making sure we of the right liquidity profile as well.
Got it that's helpful. Thanks, and then secondly, I was hoping we could just get an update on sort of conversations you guys have with the partners and principals of your all the subs were stepson doesn't 100% of of the economics, obviously, it's great to see Green spring coming in and you know with no NCI you guys would want of 100% of of that cash flow stream.
You know given that steps down the share price had a nice move here does that at all accelerate the equity swap, perhaps with some of the partners from the subs and.
So maybe just a rough sort of understanding and kind of how those conversations are going and the the timing of anything sort of potentially happening.
Yes.
Sure My Mike do you want to take that 1.
Yeah. Thanks, Scott.
And thanks for the question as we've discussed in the past we remain actively in dialogue with the with the various teams infrastructure private credit and real estate and.
And as we've discussed in the past they are all experiencing significant growth and various levels and I think you know as the passage of time.
And it continues that conversation will continue and when the time is right. I think you can expect to see our integration conversations picking up you raised the good point about the value of our of our stock and certainly it is of very attractive currency. The ULA utilize something like that at the moment.
The teams are still growing their businesses and we'll keep you posted as of when the timing should change there, but at the moment there is nothing really to report.
That's actually a box.
Got it thank you very much.
The next question comes from Ken Worthington with JP Morgan. Please go ahead.
Hi, good afternoon.
And with your yeah. Thank you for the additional comments on Green spring and maybe some additional color there since the deal was announced what have been the incoming L. P communication spend like since the deal was announced and then if you could remind US again I think the VC community is it's pretty small and.
And many of the highest regarded managers are closed so how many of those there was top managers does the screen spring really have access to them as their new new products come out.
Sure. Thanks, and thanks, Ken on the L. P communication front look clearly there's been a tremendous amount of communication with both the existing steps down clients as well as the Green Spring L. P and I would say that our communication has been quite positive I think similar to the converse.
Patients debt that we've had with with the App with with many of you know the the strategic rationale for the combination is well understood I think it is viewed as being consistent with the the the track record of of M&A and really bringing on experienced sizable teams.
And to really build out or accelerate the build out of our capabilities. They certainly understand at the the fact that it creates a a market leader in the venture capital and growth equity solutions at space and and you know understand that this will allow us to do some things that that neither of us that would have necessarily been able to do individually prior to the combination.
And so that's that's sort of from from the from the steps down angle I think from the Green spring angle as well and again very well understood in terms of the.
And the rationale for the transaction and I think we're making good good progress and in conversations with the with Lps are there to.
The second part of your question just around the the V C community and the G. P relationships clearly 1 of the things that this that this combination does as it significantly expands the number of of G. P. A relationship as you can imagine that green spring having been in this business for the past 20 years and does have.
Our relationships with with many of the leading venture capital managers and similarly steps down has been able to build a number of of important relationships are really on behalf of of many of our clients over the last for 14 years here and when put together you know have multiples of of the number of relationships.
You know you've been at Green Spring had had out of zone here and so as we think about the growth in the venture opportunity you know again and in some ways. It has gone from purely being and access game too and you know a a much more sizable scalable opportunity given some of the trends we talked about during the announcement call around just companies.
And private for longer and as we think about the importance of having a sizable global platform. So on that front I think will be very well positioned given the the G P relationships across the combined business.
Okay, Great and then just on the sheet Prime I think you were at maybe $135 million of assets and March of 150, now so where we're growing nicely how is that pace of interest and fee Prime growing I think you were on maybe 50 platforms last quarter.
And how is that continuing to build out and how is that education process ramping and then lastly here I think the these products get to a certain size, where they can really start to take off you know merrell wouldn't want to be you know 50 per cent.
Of any any given the fund so there is there of size where the growth on this fund would you know might really start to inflect and just go completely.
Ballistic or vertical and Ah.
So what what what might that level of day. Thanks.
Sure, Jason Jason menu and take down.
Yeah, Ken. Thanks, This is Jason <unk>.
So in terms of the number of platforms, we're on including our A's and.
And the I V D's here and the U S. And then the non U S platforms, we're now pushing 60.
In terms of the education process and the ramp of the.
The number of meetings, we're getting with new platforms has continued apace with that education process as to why private markets, if private markets why steps down if the.
So and why I see prime the those conversations have continued to be.
Positive.
And as evidenced by the growth and the number of platforms that of approved us we.
We are now at a scale, where the I V. D's are generally kind of be onside from a size perspective, and so we've kind of reached that critical mass and we're excited about that and the the post period flows have been strong this past month as well.
Evidenced the beginnings of some.
And some inflection.
I'm, probably not going to use the word ballistic on any earnings call effort.
But we're certainly excited about where we are now and then.
In terms of the the wires as you note there is kind of a kind of.
2 fold.
For the matrix, 1 and you know how how big is the fund and then 2 what are the monthly flows.
And so I would say.
We're now thinking about that in terms of months rather than years in terms of when were.
Eligible for those for those platforms.
Outstanding Okay. Thank you so much.
Yeah.
Once again and if you have a question. Please press Star then 1 the.
The next question comes from Michael Cyprus for Morgan Stanley. Please go ahead.
Hey, good afternoon, and thanks for taking the question just as we look at your fee, earning capital that continues to grow nicely year on year, and if I recall correctly your fee, earning capital you get paid based on invested or deployed capital. If you wouldn't mind, just confirming that and it just in the context of looking across.
And the industry, we've seen a lot of G. P's put capital to work here in the AR and the June quarter, and I think there are some expectations for that to continue at a very strong pace and to the end of the year and so I guess when I look at your Bruce contributions 1 might have expected it to be perhaps a little bit higher than what you had put up so maybe you can help a little help unpack.
And some of the moving pieces within the contributions and your separate accounts this quarter and if looking back at the March quarter, where it was substantially higher was that and he sort of pull for it or anticipatory of large deployment expectations are into the June quarter, and how are things.
Looking as you look out to the September and December quarter of for gross contributions.
Great. Thanks, Thanks, Mike for the question and this is Scott. So so we had about $1 billion of additions in terms of fee, earning a U M for the the quarter and maybe first let me address your question around whether we paid on invested versus committed capital and just as a reminder, it's a mix of.
Of of both we certainly have a number of both commingled funds and separate accounts where were paid on committed capital, but the driver of the unemployed.
And deployed fee, earning capital that we talk about is commitments to accounts that that are going to pay on invested capital and will therefore.
Convert interfering of U M as that capital is invested but of the $1 billion of fee, earning AUM additions in the quarter that was a combination of about $700 million of of deployment and and a couple of hundred million dollars of additions on the Commingled fund side part of that was driven by our growth equity fund which closed.
And an incremental $130 million and and also our commitments to to see prime and deployment and from our private debt funds.
Certainly when you look at debt relative to the $5 billion of fee or any of you am additions and the prior quarter and is a bit more modest, but I think and in our view of a solid quarter on the back of that a very strong quarter at 1 quarter ago, and I think that highlight the bit of the the lumpiness that can take place from quarter to quarter, which is real.
1 of the reasons that we.
Yeah, we we often point to the longer term trends and whether youre looking at fee, earning of U M or management advisory fees or fee related earnings. When you look at it on a year over year basis continue to grow at mid 'twenty debt to high 20% right.
Right now all of that being said it for it from a deployment standpoint, you know the this quarter I would say private equity continued to be quite active really across all different strategies and although some of those strategies like like secondaries may make may have been more activity in in funds that pay on committed capital as.
The 2 invested private debt, which is another of our asset classes debt that tends to have account the power of invested capital had a slightly slower quarter relative to the prior quarter, where we had been quite active as we highlighted during our earnings call a lot last quarter and.
And we saw an uptick and activity across both real estate and infrastructure you know real estate and in particular was 1 we had highlighted in past calls and as having seen a slower recover we have now seen that recovery started to take place, but again not all of that activity takes place in accounts that pay on invested capital and.
So we do continue to think that there is.
And the opportunity to continue to be quite active on the investment on the investment front here, we feel very good about the pipeline of opportunities that we continue to work on here in fact, some of them have a you know we we expect will or in some cases already have you know close. So for example, our private equity co investment fund at.
And recently held its first close on approximately $500 million of capital and that happened subsequent to quarter and and will be activated as debt that funded started to be invested but again it does come down to timing and in certain cases and certain cases here.
Great and if I could just ask a follow up question on the fee related earnings margin that continues to come in ahead of expectations about 30% or so and the quarter. I guess the question here is how much of the new public company costs would you say are and the run rate at this point, what's left in terms of what might be cut.
And I imagine a with the eventual some normalization and T and E coming through maybe into the second half of or into calendar 'twenty..2 just how much pressure could we see from here on the operating margin how do you see that trending and maybe you could talk through some of the puts and takes.
Sure so sort of certainly at this point of the bulk of the price or the public company expenses are incorporated there, but I might just turned it to the Johnny to comment in more detail there.
Yeah sure. Thanks, Scott.
And we believe most of the public company expenses have made their way in.
We do expect some increases to come on from <unk>.
Sox compliance and other things you need to do and.
DNO insurance is still showing meaningful increases but for the most part that has worked its way in as you. As you mentioned, we do expect teenage the returns I think when we when we kind of normalize this year this quarter versus a year ago quarter. There was about a 300 basis point improvement that kind of gets masked and.
And it's hard to say when the G and it comes back but we do think there is pressure as we kind of get out into the back half of the year and.
Start traveling again, so I think we've said before kind of high Twenty's seems to be where we think we.
Like we are when things kind of get up and running but the timing of that is still unclear.
And the and the near term sorry high Twenty's and the near term.
Yeah.
Great. Thank you.
This concludes the question answer session.
I'd like to turn the conference back over to Scott Hart for any closing remarks.
Well, great well, thanks, and thanks, everyone for joining the call. We certainly appreciate the continued interest and and and the questions and we look forward to updating you and future quarters. Thank you.
This concludes today's conference call you may disconnect your lines. Thank you.
And you for participating and have a pleasant day.
[music].
Yeah.
And then.
And.
And then.
Okay.
Okay.
Okay.
Yeah.