Q3 2021 DHI Group Inc Earnings Call

Good afternoon, and welcome to the D. H I Group, Inc. Third quarter 2021 financial results Conference call.

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Please note this event is being recorded.

I would now like to turn the conference over to Todd Curly with M. K R. Investor Relations. Please go ahead.

Thank you operator, good afternoon, and welcome to the HCI group's fiscal 2021 third quarter earnings conference call.

With me on today's call are D. H I C E O Arts daily and Chief Financial Officer, Kevin Barker.

Before I turn the call over to art I'd like to cover a few quick items. This afternoon D. H I issued a press release announcing its fiscal 2021 third quarter financial results were.

The release is available on the company's website at D. H I Group, Inc. Dot com.

This call is being broadcast live over the Internet for all interested parties and the webcast will be archived on the Investor Relations page of the company's website.

I wanted to remind everyone that during today's call management will make forward looking statements that involve risks and uncertainties.

Please note that except for the historical information statements on today's call may constitute forward looking statements within the meaning of section 21 E of the Securities Exchange Act of 1934 when.

When used the words anticipate believe expect intend future and other similar expressions identify forward looking statements. These forward looking statements reflect management's current views concerning future events and financial performance and are subject to risks and uncertainties and actual results may differ materially from the other.

It comes contained in any forward looking statements.

Factors that could cause these forward looking statements to differ from actual results include delays in development marketing or sales the adverse impact of uncertainties surrounding the COVID-19 pandemic and other risk factors and uncertainties described in the company's periodic reports on Form 10-K, and 10-Q and other filings with the Securities Exchange Commission.

D H I undertakes no obligation to update or revise any forward looking statements.

Lastly, during today's call management will be referring to specific financial measures, including adjusted EBITDA adjusted EBITDA margin adjusted earnings per share and net debt that are not prepared in accordance with U S. GAAP.

Information about and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release and on our website at D. H I Group, Inc. Dot com in the Investor Relations section.

With that I'll now turn the conference over to Art Daily C. E O D H I group.

Thank you Todd good afternoon, everyone and welcome to our fiscal 2021 third quarter earnings conference call. Thank.

Thank you for joining us today.

Before we begin I want to remind everyone that we completed the spin off of a majority of our E financial careers business on June 30 to the ESC management team.

Ehi is now solely focused on the technology career marketplace in the United States through our two brands dice in clearance jobs.

This focus has allowed us to accelerate our bookings and revenue growth and further drive product excellence on both platforms.

Let's start today by quickly touching on the markets dice and T. J <unk> and then we'll review their solid performance during the third quarter and confirm our expectations for increased revenue growth going forward.

Today, the unemployment rate for technologists is still within range of its 2018 to 2019 lows.

At the same time, Microsoft forecast, approximately a 140 million new digital jobs will be created by 2025 across the world as companies rely on tech talent to advance innovation.

With these millions of new tech job openings and the unemployment rate for technologists at an all time low.

Employers now more than ever need sophisticated tools to attract qualified candidates.

And C J all of those tools.

They enable companies and government agencies.

Tapping and recruiting firms that service them.

Find attract and hire the highest quality tech professionals.

With these industry, leading tools and our increased investment in sales and marketing we are delivering double digit subscription software revenue growth as we further penetrate the large and growing technology career marketplace.

In the third quarter, we again grew year over year bookings across all sales teams and ended the period with total bookings growth of 40% year over year.

And as a result of our strong bookings performance DH I posted total revenue growth of 7% sequentially and 13% year over year.

Now, let me dig into both of our brand's performance during the quarter and where we see them heading.

Let's start with dose, which is our largest opportunity for total revenue growth.

We saw our dice bookings and revenue renewal rates increased substantially in the third quarter.

Our bookings for dice increased 46% year over year, and our revenue renewal rate increased to 92% up from 89% in the second quarter and up significantly from the third quarter of the prior year.

All of this resulted in our dice revenue for the quarter, increasing 8% sequentially and 12% year over year.

As I said before we spent 2019 and 2020 building a better product and now in 2021, we're capitalizing on that product innovation to accelerated sales and marketing efforts.

During the third quarter, we continue to grow our sales team further increasing our full quota bearing sales team capacity.

As a SaaS based business, our revenue follows bookings and with our solid bookings growth over the past several quarters. We are announcing our total revenue growth and we expect this growth to increase in the fourth quarter and beyond as we continue to execute on our plan.

We have two large growth opportunities in front of us with dice.

Dice commercial accounts is our largest white space opportunity with tens of thousands of companies in the United States looking to hire high quality Tech professionals.

These are companies like bank of America.

United Health Group, and 711 that are using our tool internally to find and engage the right technologists to fuel their digital strategies.

Today, there are tens of thousands of companies in the United States that have multiple tech job postings and each of these companies as a target for our commercial accounts sales team.

The staffing and recruiting industry is the second large growth opportunity for dice with over 18000 staffing and recruiting firms operating in the United States.

Today, we service approximately 4000 of them, leaving us with a significant opportunity to expand our reach into many of these accounts.

To capitalize on these growth opportunities, we continue to focus on marketing spend on generating qualified leads to fuel our new business teams and we've seen great results from this investment over the past several quarters.

In the third quarter, we exceeded our targets for marketing qualified leads and our new business teams were successful in converting leads to new clients.

As a result, our dice customer base grew sequentially for the third consecutive quarter, adding over 300 net new clients.

This quarter, we also initiated a new dice branding awareness campaign focused on reintroducing, our dice brand to the 12 million technologists in the United States with the goal of driving new registrations and profile creations.

We are already seeing higher reach and engagement metrics, increasing the value of our platforms.

Now, let's talk about clearance jobs.

Bj's third quarter revenue grew 16% year over year and their sales team also performed extremely well during the quarter with bookings growth of 29% over the prior year.

CGS revenue renewal rate remains very healthy at 94%.

P. J also reached a new milestone peaks for new candidate registrations and job postings during the quarter.

As with dice, we have two large growth opportunities with CJ <unk>.

First is the government contractor market for technologists.

We currently have approximately 1800 contractor clients, but know that over 10000 more can use our services.

P. J a second major growth opportunity is selling its subscription software directly to the hundreds of U S. Government agencies that are in need of highly qualified technologists and are competing against the private sector for these candidates.

We continue to sign several new U S government agency clients during the quarter, including the New U S space Force.

C J sales and marketing teams continue to execute on their growth plans to further penetrate these two markets as evidenced by our solid bookings growth during the quarter.

We have created the industry, leading tools for matching companies with the highest quality tech professionals and we believe we can capitalize on the millions of new technologists jobs being created over the next several years by selling our subscription software to the companies government agencies and staffing and recruiting firms.

That will be looking to fill these jobs.

The success, we've had to date with our increased sales and marketing initiatives gives us confidence in our ability to continue to grow revenue at a double digit growth rate going forward as we further penetrate this large and growing market.

With that let me turn the call over to Kevin who will take you through our financials and then we'll take any questions you may have Kevin.

Thank you art and good afternoon, everyone.

Let me start with our reporting addition, we made last quarter.

As you recall during our Q2 earnings call and again on our Investor Day in September we discussed bookings as a key metric for our business and began reporting bookings for both dice and C. J in the second quarter.

When we referenced bookings it is the total value of contracts with our service start date within that period that will be recognized as revenue over the next 12 months from the start date of the contract.

If a contract is a multiyear contract bookings will include only that portion of the contract that will be recognized as revenue for those next 12 months as such bookings include new contracts as well as multi year contracts rolling from year, one tier two.

Two to year, three et cetera.

With that reminder, let me turn to our results for the third quarter.

We reported total revenue of $38 million, which was up 13% year over year.

Total bookings for the quarter was $30 8 million up 40% year over year.

Dice revenue was $22 3 million in the third quarter up 8% sequentially and 12% year over year.

Dice bookings were $21 4 million up 46% year over year.

We ended the third quarter with 5770 dice recruitment package customers, which is up 6% sequentially and up 9% year over year.

Our average monthly revenue producer dice recruitment package customer was up slightly both sequentially and year over year to $1138 or $13656 on an annual basis.

Over 90% of dice revenue is recurring and comes from annual contracts.

Our dice revenue renewal rate was 92% for the third quarter up three percentage points from 89% last quarter and up 26 percentage points year over year.

Our dice customer count renewal rate was 83% up two percentage points from last quarter and up 20 percentage points when compared to the same period last year.

These metrics continue to demonstrate the strength of the tech job market and the value of the dice product in recruiting technology professionals.

Clearance jobs third quarter revenue was $8 5 million.

Which was up 4% sequentially and up 16% year over year.

Bookings for C J for $9 4 million up 29% year over year.

We ended the third quarter with 1816, CJ recruitment package customers, which is up 2% sequentially and up 8% year over year.

Our average monthly revenue per CJ recruitment package customer was up 2% sequentially and up 5% year over year to $1421 were $17052 on an annual basis.

Similar to dice over 90% of CJ revenue is recurring and comes from annual contracts.

Our CJ revenue renewal rate was 94% for the third quarter down three percentage points from 97% last quarter and up four percentage points year over year, our CJ customer count renewal rate was 87% up three percentage points from last quarter and up.

13 percentage points when compared to the same period last year.

These positive metrics demonstrate the continued value CJ deliveries and the recruitment of cleared professionals.

Turning to operating expenses.

Third quarter operating expenses were $33 million, which included $1 9 million of impairment.

<unk> to $55 6 million in the year ago quarter, which included $30 6 million of impairment charges.

Excluding impairments total operating expenses were $31 1 million for the quarter compared to $25 million in the year ago quarter.

<unk> with previous quarters, we are continuing to invest in the sales team and are increasing our marketing spend with.

With the strong year to date bookings and revenue performance were also seeing higher performance based compensation.

Lastly in the quarter. The company recorded a one time expense of approximately $800000 related to a change in our vacation policy as a result of changes in Colorado employment law.

During the quarter the company sold its equity investment in a company that completed an IPO in the first quarter of 2021, which is reflected as a gain of $1 $2 million in the year to date period for.

For the quarter, there was an unreal loss unrealized loss of $600000 as the securities traded down during the quarter prior to the sale.

The company recorded an income tax benefit from continuing operations for the quarter of approximately $600000 on a loss from continuing operations before taxes of $3 million or.

Our effective tax rate of 19% was lower than our expected corporate tax rate of 25% due to a change in the valuation allowance for our capital loss carryforward.

We recorded a loss from continuing operations for the third quarter of $2 4 million.

Or a loss of <unk> <unk> per diluted share compared to a loss from continuing operations of $27 million or <unk> 56 per diluted share a year ago.

This quarter's loss from continuing operations was negatively impacted by $2 2 million.

Which includes an impairment of an office sublease the loss on the trading value of the equity investment just mentioned and discrete tax items.

Last year's loss from continuing operations was negatively impacted by $28 4 million from the impairment of goodwill and intangible assets.

Adjusted diluted loss per share for the current year was one.

Compared to earnings of <unk> <unk> for the prior year quarter.

Adjusted EBITDA for the third quarter was $6 4 million a margin of 21% compared to $5 9 million and a margin of 22% in the third quarter of last year.

We generated $6 3 million of operating cash flow in the third quarter compared to $4 4 million in the prior year quarter.

Movement was driven by both more billings and more timely payments from customers in the current year.

From a liquidity perspective at the end of the quarter, we had $3 $5 million in cash with total debt outstanding of $18 million under our $90 million revolving credit facility.

Deferred revenue at the end of the quarter was $43 4 million up 22% from the third quarter of last year.

When we add the unbilled portion of our contracts to deferred revenue. Our total committed contract backlog at the end of the quarter was $79 9 million, which was up 48% from the end of the third quarter last year.

Short term contracted backlog that is revenue to be recognized over the next 12 months is 67 $8 million, an increase of $16 8 million or 33%.

Long term backlog that is revenue to be recognized in 13 or more months is $12 1 million, an increase of $9 2 million or over 300% from the prior year.

During the quarter, we repurchased approximately one 8 million shares for $6 8 million in average.

<unk> price of $3 72 per share.

As a reminder, our current share buyback program includes a $20 million authorization through June of 2022 nine.

$9 million has been used to date, leaving $11 million available under the program.

We continue to believe the buyback is a recognition of the long term prospects of our business and the undervalued price of our stock.

Consistent with our previous programs, we will continue to evaluate investment opportunities in the business against buying back shares while also using the buyback program as an opportunity to offset the impacts of our equity incentive program.

Looking forward with the strong bookings performance over the past four quarters, we expect total revenue growth in the fourth quarter approaching 20% year over year.

With dice, we are seeing strength, both in our staffing and recruiting business and with our commercial accounts as customers realize the value of our platform and meeting their hiring needs for clearance jobs. The strong bookings performance CJ had in the third quarter along with the opportunity we see in the direct government agency market gives us.

That its revenue growth will be consistent with previous periods.

From a profitability perspective, we will continue to operate the business to adjusted EBITDA margins at or near 20% as we balance our delivery of strong financial performance with sales and marketing investments to drive long term revenue growth.

We are excited by the positive momentum we are seeing in bookings and believe our investment in product innovation marketing and our sales team will continue to drive sustainable double digit revenue growth going forward and with that let me turn the call back to art.

Thank you Kevin.

I'd like to close by once again thanking all of our team members for their hard work over the past several quarters your determination and dedication to executing our growth plan is unmatched. It is a pleasure to be part of such a great team and with that we're happy to take your questions.

Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys.

To withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

And the first question today will come from Zach Cummins from B Riley Securities. Please go ahead.

Yes, hi, good afternoon. Thanks.

Thanks.

Yes, thanks for taking my questions and congrats on the really strong results here in Q3.

I mean, just starting off.

Can you talk about I guess, some areas in dice, where youre seeing a lot of strength to drive this type of requirements here that we saw in Q3, I'm curious if you're seeing more of that strength driven on kind of the commercial account side or where exactly are you seeing the outsized performance here.

I would say.

All of our sales teams are outperforming our plan.

And notably we are hiring a lot more new business sales reps and so we're putting them I would say in kind of a proportion of two thirds towards commercial accounts, one third towards staffing and recruiting.

In terms of the team composition and that reflects the fact that we do believe that we have an enormous total addressable market for commercial accounts, we still have a lot of runway with staffing and recruiting agencies, but.

I would say the majority of the total addressable market really isn't that commercial accounts arena.

Understood and just talking about the investment here in sales and marketing and it sounds like you're ramping up on the head count side of it but can you speak to the productivity that you're seeing within your existing reps I mean, I know you brought on quite a few ads to start the year.

Just curious of how you are seeing them ramp up and start to become productive.

So thats a great question. So just in general if I look across the entirety of the sales team and I just made a categorization of account management those folks that are working on renewals versus new business in terms of.

Folks that are essentially establishing new business relationships roughly 50% of the sales reps in each one of those two categories are above their quota year to date and I would say.

80% or above 90% of their quota so we're seeing really great productivity.

I believe that 90% of the new business ramping reps are above their quota. So it's been a great year everybody is in contention for what we call President's club, which is a very special felt.

Celebration next year, and we're seeing a really effective ramping and training cycle for these these new reps.

Yes.

Understood Thats great to hear.

And can you talk a little bit more about kind of the.

I guess the compensation packages for the sales reps are you compensating them to focus on one area over another.

Curious if there is other focus areas here that youre trying to accomplish.

That's a fantastic question I can tell you that if.

If you think about our revenue to date, roughly 90% comes from subscription contracts.

So this particular year for our commercial accounts team, we basically said that 80% of their quota is tied to subscription renewals or new subscriptions themselves. The other 20% are tied to ancillary services, including virtual career events.

What we call sourcing services.

And our branding and advertising so we tried to essentially <unk>.

Give a little bit more attention to those ancillary services and we're seeing really good success with those ancillary services right now.

And I think it's directly attributable in many respects to the fact that the comprehensive had been changed that way.

Understood. That's helpful and final question for me is really can you just speak to some of the investment youre, making in lead generation programs. It seems like thats exceeding even your internal expectations. There. So just talk about some of the actions that you've taken on that front end and kind of the expected investment.

On lead generation going forward.

So I would say that the marketing team has done an extraordinary job and perfecting the ability to deliver the right amount of leads for new business to succeed and what we've done is we've essentially set a target of having 40% of new business bookings.

Come directly from leads that are generated by the marketing team.

Seeing in reality in actuality over 50% being generated by marketing qualified leads the other bookings are associated with outbound activities, meaning we're trying to essentially reach out to target <unk>.

Prospects using E mail text.

Even phone calls so again the marketing generated leads marketing qualified leads are an important part of our success story.

The team is led by a woman named Vanessa <unk>.

We internalized our digital marketing team last year, we used to outsource it to an agency here in Denver, but I believe that as a result of taking all the tools internally building a team of roughly about seven eight people right now we've been able to successfully C.

Additional marketing qualified leads ever every quarter since.

<unk> right now.

I think for optimizing against a number of different channels, including leads that are coming from Google ads from Facebook ads from Linkedin ads, a number of different sources for us our marketing qualified lead is a form Phil on the dice or clearance jobs website, where the <unk>.

Individual prospect says please have your sales Rep contact me Here's my name My E Mail address and my telephone number so it's a very clear indication of interest by the prospect in engaging in a sales conversation.

Yes.

Understood well, thanks again for taking my questions and congrats on the strong results.

Thank you very much that really appreciate it.

Yourself a great day.

And the next question will come from Josh Vogel with Sidoti <unk> Company. Please go ahead.

Yes, Thank you art and Kevin and I Echo that congrats on the really impressive results.

Hope you guys are doing well.

I guess my first question I could build off kind of that last one with the success in the marketing spend and general generating qualified leads.

Turned into a great build of new clients can you talk about the.

The conversion ratio Youre seeing on those leads what you saw in Q3, and maybe how it compared to.

Two expectations, which you said was above expectations, but as well as what you were seeing earlier in the year.

Sure I would say that again, we have the set point of we have this target that 40% of our bookings across each one of our teams should come from marketing qualified leads we're actually seeing an excess of 50% of the bookings.

Being generated by those leads I would say that any particular lead has about a 20% probability of going to closed one so one in five leads the common actual contract assigned contract through the new business teams.

What I consider to be a successful ratio for a SaaS based business model.

Yes.

Thank you for that.

Switching to thinking about the pricing environment. Since you started giving us metrics or C. J, we've been seeing.

Fairly steady uptick in average monthly revenue per RPC and now the dice seems to be hitting its stride is there an opportunity to leverage our platform and raise pricing there.

Yes, I believe there is and in fact, starting in May of 2020, so last year.

During the height of the pandemic, we inserted an auto renewal clause and all of our contracts, sometimes I should say the customer objected. So we've been insert that clause, sometimes it's not allowed by the customer's legal team, but I would say the vast majority of the contracts today have this auto renewal clause.

<unk> says if you don't notify us within 90 days of the term and termination date of the contract.

Auto renew with a price escalation and the average price escalation for dice is 9% now that isn't what we're achieving and the reason for that is because generally speaking we use that as a opportunity to have a conversation with our customers and understand what their requirements there.

Needs are for the next 12 months or the next period of time, we're now selling more than 12 months contracts, where we're actually seeing a pretty good uptick in multiyear contracts as well, but again that's to answer the question directly do we believe that we can price escalate dice can we increase the price today.

Yes.

In the form of those.

Those price escalators that are now built into the contract.

Alright, great.

Maybe a little higher level can you discuss how wage inflation comes into play and effects your business or pricing metrics. Just curious if companies are willing to pay more to secure talent set increase their appetite to to use your platform and then just a little tangential to that what about wage inflation when we think about.

Your internal employees and a focus on retention there I'm just curious what youre seeing.

Sure those are great questions. So I think that wage inflation across the technology sector actually makes our value proposition is stronger and what I mean by that is that we generally say that if youre looking for 10 or more technology candidates.

In the next 12 months.

<unk> is a bargain and what I mean by that is you are paying $7 for an annual license.

It's equivalent to one recruiters user name and password and for that you have the opportunity to source. Those 10 candidates. If you were to <unk>.

Go to a recruiting firm to do the same thing.

Generally charge you, 20% to 30% of the total target comp of the engineer of the technologist in the United States and average software engineer has a salary of roughly $115000 if that goes to $130000 that value proposition of paying seven.

To avoid the fee of going to a recruiter is even more powerful in my opinion.

And so again I think that wage pressure helps us but to your second question.

The flip side of that which is roughly two thirds of our company our technologists themselves and so we are in a position where I'd say the expectation for what.

What we pay our people is rising in this environment.

Luckily, we have not seen an elevated attrition rate.

The technology sector. The benchmark pre pandemic was about 18% annual turnover per year, and what we're seeing and what we saw in Q2 as well as Q3 was roughly 22% so a little bit over the benchmark entering the pandemic level.

And it's not something that we take for.

Granted in fact, a lot of our senior leadership team is.

As time is focused on how we can better engage our company in this hybrid workstyle this hybrid.

New work life.

Yes.

I appreciate those insights last one for me.

Kevin You mentioned the long term backlog was up over 300%.

It seems like obviously, a great uptick in clients wanting to ink multiyear contracts I'm. Just curious are you seeing.

The appetite for multi year contracts is that coming mostly from new clients or is it a mix of them in existing clients that are coming up for renewal.

So it is it is a mix its probably a little bit more heavily weighted to the new business because it's the first conversation, we're having with them really we start with the multi year contracts and so that is the default position for the sales organization.

As you would expect on a multi year contract they get a little bit more of a spiff as well. So they will always want to lead with that but we're seeing it we're seeing it with both renewals and new business, but I would say more more heavily weighted to the new business side, because that's part of the initial conversation, we're having with them.

Gotcha Gotcha, well Arden, Kevin Thanks for taking my questions. Congrats again on the strong quarter and the upbeat outlook look forward to chatting soon.

Really appreciate it Josh.

Thank you and the next question will come from Oman <unk> from B Riley Securities. Please go ahead.

Hey, guys. Thanks for taking my question.

Yes, congratulations on the strong results.

I guess I wanted to ask about clearance jobs.

Where are you seeing the strength coming from largely from the government contractor customers or is it more on the agency side.

I would say, it's still with military contractors, largely and we are signing those government agency contracts I identified the U S space Force as an example for this quarter, but I'd say that that's a much longer process the sales cycle for government agencies.

As.

Measured in months, if not years, whereas we're still seeing military contractor sales cycles, and roughly 30% to 45 day range. So we're seeing a good amount of military contractor activity, but that's not to diminish the importance of government agency activity over the long run.

We do believe in that part of the market as well.

Yes.

Got it Okay. That's helpful. And then I guess you mentioned your branding campaign for dice.

That's driving more candidates to the platform could you maybe elaborate on that.

What trends are you seeing in terms of coming to the platform.

Obviously, that's making the platform more valuable.

And then the second part of my question is is there any specific trends within the tech recruiting market that youre.

Youre seeing like are you seeing like maybe an uptick in cyber security or <unk>.

<unk> design.

Any color there would be helpful.

Absolutely so to answer the first question, we really rolled out these brand awareness campaigns in September they are focused on technologists that are relatively early in their career and we say that thats zero to 10 years of experience they're being.

Essentially issued against multiple platforms simultaneously.

Have video advertising on Youtube for example, but also Twitch we have.

Campaigns that are across Google 360.

Again, a number of different channels and we're trying to get in front of those technologists and influence them to come to the dice platform and think about their career. The results are that we're seeing.

Roughly speaking 33000, new dice members per month.

And we consider that to be a very good sign of health for our platform. Obviously is a two sided marketplace. We are trying to serve the clients as well as the candidates and the clients are there so that they can engage with candidates. So tomorrow candidates that we can bring to the platform the better off the value prop.

Physician is for both parties as it pertains to trends that we're seeing we do put out a jobs report every quarter, we're going to issue one for the third quarter very soon like within the next couple of weeks and I would say that the.

Jobs that have elevated interest continue to be cyber security and cloud engineering. We also see just the basic category of Java developer as one that continues to fundamentally grow over the course of time so.

There are little peaks associated with these things like cyber security as I indicated cloud engineering data science, but the mass amount of hiring thats going on right now in the United States is again the.

A typical positions of Java.

Developer PHP developer.

See sharp developer those basic programming languages.

Got it. Thank you that's helpful I'll pass it on.

Well. Thank you very much really appreciate that Oman.

And ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to art daily for any concluding remarks.

Well, thank you very much Chad and thanks, everyone for your interest in <unk> group. Thanks for joining our call today and have yourself a great fall.

And thank you Sir the conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Okay.

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Yes.

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