Q3 2022 Stagwell Inc Earnings Call
On January one 2021.
For your reference we've posted an investor presentation to our website at stag low global Dot Com. We also refer you to this morning's press release and slide presentation for definitions explanations and reconciliations of non-GAAP financial data and now to get started I'd like to turn it over to our chairman and chief.
Executive Officer, Mark Penn.
Thank you Mikael and thank you for joining us to discuss <unk> growth third quarter 2022 results.
<unk> delivered another quarter of double digit organic growth strong margin expansion reduced net debt and record net new business. We continue to outgrow most of the large technology companies and are taking share from global marketing service incumbents <unk>.
<unk> revenue was $664 million of pro forma increase of 17% over the prior year with 16% organic growth year to date revenue was 198 billion up 23% on both a reported and organic basis.
Net revenue, which excludes pass through costs grew 12% to <unk>.
$556 million and was driven by 11% organic growth year to date net revenue increased 16% to 164 billion, 17% organic growth. In addition to top line growth third quarter margins and profitability were strong adjusted EBITDA increased 15% year over year.
<unk> to $115 million and margins expanded 60 basis points to 27% of net revenue.
Year to date, EBITDA is up 19% to $328 million.
With margins expanding 50 basis points to 20%, we continue to manage labor costs, effectively while making investments to support our rapid growth and new business generation.
Our margin remains strong even as our operating expenses include an incremental roughly $5 million in investments and stack LOE marketing cloud, which we'll discuss in greater length in a few minutes and investments in technology services overall, our comp to revenue ratio remained consistent at 63%.
Third quarter net new business was $86 million, our highest on record and pitch activity has remained healthy giving us confidence going into 2023, our top 25 clients contributed an average of.
$6 1 million and net revenue per client also a new record.
Our strong growth and margins led to even more significant bottom line growth net income was $35 million in the third quarter and GAAP earnings per share were <unk> <unk> and 'twenty one on an adjusted basis year to date, we have generated $93 million and net income with GAAP earnings per share of <unk>.
<unk> 27 68.
Adjusted EPS, we are on track for an estimated 90 per share of adjusted EPS by any measure related to adjusted EPS. We believe our stock remains significantly undervalued in the marketplace, but I believe our story is beginning to get wider traction.
And looking at stag grow some key facts and trends are emerging one sag mill is positioned to gain share in the marketplace to <unk> has achieved far greater relative scale in the digital service later than competitors, while combining it with a full service creative offering.
Three <unk> is effective at managing costs on both the upside.
And the downside.
Alright, <unk> and notable expansions with Microsoft Salesforce, three M and general Mills.
<unk>, we are increasingly and pitches against the big five holding companies and winning a proportionate share of uhm eight major pitches and fight now against these competitors and we'll have a record of over $1 billion a pitch opportunities. This year as a result of our increase scale in the market.
Last month, we officially rebranded the Stagwell medium network to the brand performance network to reflect its integrated offering a creative immediate and connected <unk>.
We can put it recently the move means quote stagwell clients and potential clients will view the network as a holistic marketing partner as opposed to a media exclusive offering and quote.
Our digital layers digital transformation performance media data and consumer inside some strategy continue their impressive performance combined.
Combine they grew net revenue 21 per cent in the corner on top of 38 per cent growth in three Q21, and have grown 30 per cent here today are digital transformation businesses led the network.
With 30 per cent net revenue growth driven by triple digit growth at are fully integrated digital agency, Gail and our advocacy fundraising business targeted victory <unk>.
Creative Technology code in theory network delivered another quarter of double digit growth and has grown 130% since three June 20th <unk> targeted victories growth was driven by online fundraising for political clients bleeding into the midterm elections next week, the fundraising season, which ramped up in late September .
Cut off her somewhat muted start relative to the presidential 2020 cycle Poeschel growing Republican leaders in fewer hotly contested market's leading to lower engagement with low dollar.
Low dollar donors, especially at a persistent inflationary environment.
We also saw a sizeable what time impact from Hurricane Ian Pausing, our operations in Florida, a T market during the important quarter and push and well into October .
At the same time, a potential runoff in Georgia could provide a boost which would be even larger if it decides control of the Senate. We expect engagement to normalize next year as primaries kickoff of what will undoubtedly be a record presidential cycle in 2024.
Our performance medium data businesses increased 13% versus the prior year driven by 60 per cent growth in our travel media business is travel volumes returned after the pandemic as well as strong demand for connected T V and digital out of home offerings.
Our third digital layer consumer insights and strategy also increased 13% with continued strong demand at the Harris poll, where fortune 500 C level executives are leading into larger brand strategy assignments.
A critical part of the <unk> structure is that we are organized challenge discrete divisions by dedicated experienced leaders.
Some others in the industry have let their labor costs get out of control, we have balanced productivity with labor costs. So their account to revenue ratio has remained level. This quarter. Our core services team is rapidly putting to standardize accounts you then HR systems on schedule.
April lower cost accounting services and capture synergies, we expect to be substantially done with this process by the middle of 2023 strong free cash flow during the quarter allowed us to reduce our debt debt by $125 million on our net leverage ratio to 2.7 X towards our long term goal of 2.5.
The third quarter also marked substantial progress for the Stagwell marketing clout or suite of proprietary <unk> solutions for in-house marketers.
In September we expanded upon our senior cloud leadership by welcoming Chief Technology Officer, <unk>, who joins us from Accentor supplied intelligence practice.
Accenture Monster advise fortune 500 companies on data transformation and applied artificial intelligence. He is leading smc's technology roadmap, including cloud integration and develop a unified data architecture to connect the wealth of data generated across our cloud offerings.
C as being structured around four divisions, each serving a specific type of market or in executing against multibillion dollar addressable markets. These include first the research data, which will empower and enhance research professionals with convenient real time tools for data analysis. We believe this is a 6 billion dollar marketplace.
Second cloud division as the contact center, which empowers and enhances communications professionals through artificial intelligence.
Those will be sold into the 55000 P. R firms in the U S. Nearly 3.5 million P. R professionals worldwide.
<unk> the media studio Division will empower self service media buyers with comprehensive capabilities to build the audience is planted by media across channels and analyze the resulting campaigns on a do it yourself basis, which we estimate to be nearly 20 billion dollar Mark finally, a specialty immediate division will empower and enhance.
Media buyers with innovative ways to reach engage in Palatize key consumer segments.
This will take the form of new media channels across travel sports news and dining in August we launched around shared augmented reality experience for stadiums that was rolled out with the Minnesota twins around it's rolling down the N F. L. And we are in late stage planning with a major soccer league team as well.
Numerous others, but around France will soon be able to sponsor experiences and advertise the fan basis.
Three major sports.
More than 2100 large scale stadiums globally. We are just getting started over the coming quarters with more formally trends be transitioning select products that businesses to the stagwell marketing cloud as we execute against this roadmap will be deploying these products across our own networks as well and leverage our 4000 plus clients to bring them to the <unk>.
Place, including the acquisitions. We've made this year, we now expect the Stagwell marketing power as we have defined it here to generate a roughly $140 million in revenue in 2023, we believe it is the opportunity to grow to a profitable 500 million dollar run right over the next five years learn more at www.
Dot Stagwell marketing cloud Dot com.
Of course, the most frequently asked question is is there a slow down and what will you do if there is one <unk>.
Frank will discuss our balance sheet improved cash position and reduce back payments, we will tread responsibly and cautiously within the next year watching closely as we always have our expenses, but they focus on maximising cashflow I believe we can use the next year to drive our debt ratio down further launching the stagwell marketing cloud and gaining sure.
Uhm competitors.
Moving to our outlook, we're reaffirming our guidance for 13 to 17 per cent net revenue growth, excluding advocacy and $450 million to $480 million of adjusted EBITDA with additional visibility to the contribution from advocacy fundraising. We expect consolidated net revenue growth of 16 to 20 per cent for the full year. We also expect to.
January roughly 90 cents and adjusted earnings per share.
At S. Stagwell continues to outpace rivals I think more coming to understand how our unique combination of talent and technology is transforming marketing and achieving high value growth <unk>.
We're gaining share with a record new business wins.
Rapidly growing our digital services.
Managing and even increase your margin and a fast developing do offerings in high tech products that can take us to the next level.
Now here is what I call earnings the movie short film in capsule aiding the quarter, followed by Franklin at all of our CFO , who will delve into more of the numbers.
[noise] stagwell achieved another quarter of double digit growth.
Take a look at how the Challenger network performed in Q3, 2022, we delivered industry, leading growth and margins, including $556 million in net revenue in 150 million and adjusted EBITDA.
Our growth was driven by continued strength across digital transformation integrated media and consumer insight.
Stagwell remains the only full service marketing network with a digital majority revenue mix.
With 57% of our net revenue from digital services.
New clients are joining us globally with record new business wins setting yourself for future success.
In the stable marketing clout is accelerating with new acquisitions new.
New technology new.
Challenge and new solutions for marketers we.
We remain fiscally disciplined and expanded margin. We also generated strong free cash flow reduced net definitely $125 million return capital to shareholders.
Sharpening our 20 twenty-two guidance.
Q3, 2022, another strong step forward learn more it's Jaguar global Dot com.
Thanks, Mark Good morning, everyone. We're pleased to have you join us today to discuss our queue three and nine month results.
<unk> has been the case with a recent post merger results. My comments today will include a limited discussion of a cap results, which will be supplemented with pro forma combined results.
This combination occurred on January 120, 21.
Starting with a reporter results revenue for two three was $664 million versus 467 million, but the same period in the prior year or an increase of 42 per cent net revenue excluding pass through cost was $556 million versus $409 million in the prior period or.
An increase of 36%.
For the nine months revenue was $1.98 billion, plus 857 million at the same period in the prior year or an increase of 131%.
Net revenue, excluding pass through cost $1.64 billion versus $749 million and the prior period or an increase of 119% net.
<unk> available to Stagwell common shareholders was $10.6 million at $33.7 million Q3, and the nine months ended higher by $12.7 million and $13.5 million over the respective prior periods.
<unk> earnings per share available to Stagwell tommen shareholders was eight cents and 27 cents, a Q3 and the nine months ended respectively pyre by 14, and 33 cents over the prior period.
In Q3, the company introduced adjusted net income and adjusted EPS as additional performance measures. We believe adjusted net income and adjusted EPS are useful metrics to investors to evaluate the performance of the company more fully.
Justin net income is defined as net income available to stack rose common shareholders, plus net income attributable to class C shareholders.
Excluding amortization expense impairment and other losses stock based compensation differed acquisition consideration of adjustments to speak tax items and other.
Adjusted EPS is defined as adjusted net income per diluted weighted share outstanding and is subject to the anti dilution rules of U S gap.
Adjusted earnings per share or 21 cents and 68 cents, a Q3 and the nine months ended respectively.
Moving to our balance sheet during the corner accompany completed the acquisition acquisitions of Pet Group Holdings, and Omnichannel content creation and adaptation production company and Apollo a real time artificial intelligence powered software platform.
During October the company acquired Maroon limited Ah, leading software experience and insight data plan for our company.
<unk> experience and enterprise software company that Leverages mobile and location data <unk> complex consumer behavior patterns.
And the remaining 80 per cent equity interest it did not already own and Wolfgang Creative agency combined with consultancy strategy and technology experience.
As of September 30th the company's differed acquisition consideration obligations, where $160 million compared with 197 million in Q2, and 222 million at <unk>.
The company has now substantially completed its M&A activities for the year.
For 2000, twenty-three, we expect to make approximately $60 million and cashback payments compared to $72 million in 2022.
During the quarter, we acquired approximately 2 million shares, but $13.9 million under our stock repurchase program returning capital to our shareholders of the year. We have acquired a total of approximately 4 million shares of $28.7 million and have approximately 96 million.
Remaining under the hundred and 25 million dollar authorization.
Net capex with a quarter and the nine months was $11 million and 25.5 million respectively for approximately 1.2% a year to date revenue.
The lines with our previous estimates moving.
Moving to liquidity as we anticipated strong operating cash flows during the quarter reduce our net debt in the quarter by $125 million as we ended the quarter with $165 million in cash and 245 million drawn against our 500 million dollar revolver.
September 30th or net leverage ratio declined to 2.7 times down from 3.1 times last quarter and 3.1 times at your at your <unk> excuse me as we use a portion of our free cash flow to reduce our net debt level.
We expect strong cyclical cash flows to further reduce our net debt and leverage ratio in Q4.
S&P Global recently increased our credit rating two double b minus from the plus fighting operating performance exceeding expectations and the anticipated material Klein decline and leverage.
<unk> increased followed Moody's increase in our family credit rating to be one from me too.
The remainder of my comments will focus on a deeper discussion of the pro forma results of the company's operations for the third quarter and the nine months ended September 30th.
Revenue for Q3 with $664 million or $568 million in the prior year or an increase of 17%.
Net revenue for the quarter, excluding pass through costs increased 12% to $556 million from $498 million in the prior year.
Advocacy revenue and that revenue increased 10% and 7% respectively.
And for the nine months revenue increased to $1.98 billion from 1.61 billion in the prior year or an increase of 23% <unk>.
<unk> revenue excluding pass through costs increased to $1.64 billion from 1.41 billion in the prior year or an increase of 16 per cent.
X advocacy revenue at net revenue increased 19% at 14% respectively.
On an organic basis net revenue increased by 11% and 17% for a quarter at nine months respectively.
Turning to our principal capabilities, we have grouped our business into four areas, including digital transformation performance media and data consumer insight some strategy and creativity and communications.
Digital transformation continued to deliver strong growth in 2022 up 20.
28% in Q3, and 38% year to date on an organic basis fueled by exceptional growth a gale election cycle growth at target of victory and steady client wins and expansion instrument and cold in theory.
Performance media and data was up five per cent in Q3, and 13% year to date organically driven by strong growth at Inc. Our travel media business ongoing expanding new business as well as steady contributions from multi Vu and assembly.
<unk> strategy was up 11 per cent in Q3, and 29% year to date on an organic basis, driven by strong Grove at Harris poll and continued contributions from NRG following very strong 2021 <unk>.
Creativity and communications grew five per cent in the quarter and 6% year to date organically we.
We experienced strong growth across the portfolio all set by some reductions that agencies repositioning that branch.
The growth was driven by strong growth at our advocacy business S. K D. Knickerbocker ahead of midterm election cycle high growth in our experiential business team rebounding from the pandemic.
Continued demand and public relations Alison and Hunter.
Double digit growth at Donna combining main street, and modern and steady growth at anomaly led by continued new business wins across the year [laughter] turn it costs adjusted EBITDA increased in Q3, two $115 million or 15% from 100, <unk> 100 million in the prior period with.
EBIT margin of nearly 21% higher from the prior period by approximately 60 basis points for.
For the nine months adjusted EBITDA increased to $328 million or approximately 19 per cent growth for 274 billion in the prior period with an EBIT margin of 20 per cent higher from the prior period by approximately 50 basis points.
We continue to manage efficient compensation to revenue ratios at 63% for Q3, and just under 64% year to date, while delivering approximately 25 per cent of our incremental net revenue to EBITDA in Q3 and your date.
I'm finally, moving to our guidance. The company is reaffirming it's guidance for 13% to 17% net revenue growth, excluding advocacy and $450 million to $480 million of adjusted EBITDA and adjusted earnings per share of 86 to 94 cents.
With additional visibility into the contribution from advocacy fund raising we expect consolidated net revenue of 16 to 20 per cent for the full year.
It reflects a more modest contribution from advocacy fund raising relative to the 2020th presidential cycle due to a decline in closely contested races <unk>.
Persistent inflation and hurricane impact and locked Marcus.
That concludes our prepared remarks for this morning.
We will now turn to Q&A.
We're going to start with some questions from Laura Martin managing director and senior Internet and.
[noise] media analyst at Needham and company.
<unk> is joining us live here at one World Trade Center, and we're delighted and she could be here with us. If you have questions on the lifestream. Please submit them by the chat button at the top of your screen now, let's turn to some questions.
Great. Okay. So uhm just to listening to the call one of the things you guys Sattler as you guys have a billion dollars a pitch opportunities and it looks like you have $86 million in your business, which is a record from three Q could you tell us how they flow through the income statement, what's the lag in time between pitches to get new business.
When does it start flowing into the PNM sure.
I think just to put some context in when I started a C. E O of what was the all of them to see if there was a thousand a year about 300 million of switches now we expect this year to give your contact with the combined company get about $1 billion of pitches that we monitor the scrapes central marketing team that we have we usually don't participate.
Eight in about 20 per cent of them and then we're going to win a fair share of the 800 million remaining.
You know these pictures will take somewhere between two and six months generally to be executed depending upon their size.
They will then kind of go in almost immediately from from the day of award they will make an immediate transition and then they'll ramp up over the first 30 to 60 days, but generally you've seen the pattern, where we came into this year with a really with a 75 million dollar new business in queue for and you could really see that flowed through her to the following quarter and you can.
See that our our new business.
As I reported on the previous call was little life going into into Con and you can see.
We were then I think we're a lighter coming into that you see coming out of this a very strong new business number. If you look at the chart. It goes like this and boom and I really think that a con we showed the kind of scale that we have and really our pitch opportunities of sizably increased as a result of that and I also think there was a little cause in the marketplace.
Where people waited a little bit and then there seems to be a lot of pitch activity out there continuing unabated. So.
So let's stay on that appointment yesterday on the <unk>. This morning, they said that they are.
Some cancellations in telecom insurance and toys in the fourth quarter AD campaigns I'm talking about uncertainty. So tell us cause you guys have a much broader view of both marketing services and advertising tell us what you're seeing in the marketplace for Q4 in terms of the AD campaign cancellations, putting up pushing off lower.
Tell us what's happening in the marketplace right now what we've seen some clients push off projects, but nothing nothing.
Nothing.
At a level that would've given us extraordinary concern compared to compared to say the pandemic or when I managed other properties in 2009, I don't see anything like that right now.
C do business being being quite strong.
I see some push officer coxswain in the marketplace, but nothing nothing that I could consider remember the <unk> problem is that the economy that we work in is considered too hot and they haven't came back yet so maybe someday we're going to see if maybe next year, we're gonna see it but that we are right at the sweet spot.
They keep raising interest rates.
But you haven't seen slowdowns and keeps forever, which is not what we're hearing from <unk>, Google <unk> Paramount all of them.
It was horrible a lot of issues that were on a shared gaining physician. So when you look at our digital if you look at the services that are growing and you look at people turning to.
Or any combination of marketing like I don't know what <unk>, what those numbers would be in our <unk> economy as opposed to an obvious market place where the switch back I do also think that when we did an analysis recently in the marketplace. There is more fragmentation of the digital dollar the Ticktock has come in that the amateur.
And Walmart market place and so you know there are a lot of competitors out there and there are only so many eyeballs and and part of this I think is is fragmentation or necessarily overdress slogan.
Okay, let's stay on video you brought a tick tock, which is a digital video and it does seem to be taking sheriff or maybe some of the text based on other mobile you had a C. T V. You HDTV list included in in the corner of 13% growth rate for that was <unk> to include C. T. V. Can you talk about the shift towards connected television can you.
Talk about where you're seeing strengths and weakness on different channels with big screen small screen.
Yeah, No I look I I think that we're seeing something of a shift I really think the big issue here is going to be Netflix I think that's gonna be you know, we we've been in kind of a mixture of a video and we are very very heavy Google shop over here. So so that so that in fact the increase in video I think is an <unk>.
<unk> kind of a mix of service I think really Netflix is going to be hugely disruptive in the marketplace and Disney too Disney has eyeballs, but then the number of hours again. So I was hoping for Facebook came before Facebook advertising T V came before television advertising Netflix on the number of hours of Iowa or just aspirin.
I think the ads will will really upset the marketplace and positive way.
Driving down C. P M. Yes, I I hope it will provide more competition you know our goal is to make it easier for marketers to get through their consumers on an efficient basis. So a more fragmented competitive advertising market place is good for us and good for our clients.
Okay great.
Targeting victory, what the heck, what's going on over there.
[laughter] well you know the <unk>, what's going on there in our nation. You know you have to understand that his political fund raising from 20th 40 dollar donations. So as gas prices went up available funds that people could could allocate to fundraising went out we think that's temporary you know from our cash position and actually it will be.
It will be B B B readjusted.
Next year given that it was given that it was related to and are not anyway. So.
So it won't have a really neck to your cash effect, but we don't think it has a long term impact on the business or the nature. We think this was a short term impact and we think that the presidential races is going to be the largest presidential race and history and and and that if anything I think donations will come back as the fed turns.
Turns back in place.
Okay do you want me to <unk>, Yeah, we have some questions from.
<unk> Masters and.
And the last <unk>.
I'm from <unk>.
Benchmark.
February marketing cloud, how would you characterize each of the four segments near first longer monetization and which segments phone require the most incremental.
Over the next two to three years.
You know there's already very substantial revenue in the media platforms.
And I think you see that because we are because we have the travel platform. There you know.
In there and so I think so show like the earliest.
Promise to generate a.
Ah revenue hockey stick and I do think the around thing, which really is a kind of <unk>.
You look at an a our experienced stadium and then you realize that that's really a new media platform, giving them the ability for people to have a new kind of sponsorship and engagement with fans.
Stadiums. So I think that has a lot of revenue a lotta immediate promise I think the the contact we've been out there in the marketplace. It's slowly snowballing I think those products are are largely built and require more sales than than tech investment you know at at this point we read.
Suddenly acquired my roof. So again, we've got substantial nearly $50 million in revenue as a starting point in the research bills and again I think the.
<unk> there are largely developed and we're moving to <unk> I think the biggest commitment to refining and making the technology use those in the media Studios I think that's where a lot of the technology commitment will be but of course that we hope will be the premier product and that will take longer time to roll out.
Perhaps staying on that topic from state, calling about Fargo how.
How much revenue are currently generating from the marketing.
The cumulative.
<unk>.
<unk>.
You know as we've defined the marketing cloud.
As I said, we expect to have about $140 million.
In that basket you know in in the coming year, I think where when you. When you figure that <unk> was just acquired right and so I think that's the way I would characterize it you know I think that the remarkable thing in one of the big advantages. We have is it because we have the client base cause we have the expertise.
<unk>, because we already by $5 billion of media and therefore have the proving ground for our technologies that I'm really able to cheap.
We're investing 5 million of Opex, maybe we will invest $10 million a opex next year, we're able to keep the level of investments and Opex here you know quite low.
And also you know where we are developing this in a way in an eye towards profit. So we're not looking to make the mistakes of companies out there that put huge sums of money into things.
October future, we're very cautious in the way you would do this we're.
We're getting a lot of power you take a look on the stadium thing you know, we we invested you know, maybe one or $2 million and we'd be every competitor out there to the marketplace within in stadium experience and there was some big competitors out there remember I was prescribed you officer Microsoft.
The fact that we have an infrastructure of a service business allows us for relatively small investments to get the cloud off the ground and that is our unique advantage compared to a lot of the startups to the other companies out there that don't have this full infrastructure or understanding of technology or ability to apply to this way.
From Steve could you clarify that remark about persisting inflation.
Guidance.
Is this related to the advocacy wrapping you or are you <unk> some natural reaction.
That was related specifically to the advocacy.
Into the impact of gas prices and food prices on low dollar contributors.
Mmm.
Market benchmark nice free cash flow results in the third quarter, how do you see the timeline in four to any <unk>.
<unk> to consider.
Frank.
Two four it is historically the strongest cyclical quarter for cash flow generation and it's a combination of factors. It's you know the the forecasted revenues, but more so it's the media dollars that you know customers intend to spend and production activities that take place. So you know.
If you have five superbowl spots, you're going to generate a lot more production dollars in the quarter that will result in some outflows in Q1 and similar patterns for the media spent so you know if if history is the indicator of the trend line says that you know things are stable, we should see and improve.
Q for over two three.
And on Friday.
From the any faster.
I'm free castling cheese for.
He's expected 14th free cashback from <unk>.
And carry cash on the balance sheet.
Down the revolver and it should.
It would be at zero drawn by year end.
We will we will generally use the excess cash in the U S to take down the revolver, we borrow under a couple of different arrangements. We have a daily borrowing facility. So to speak and then we have a sofa borrowing facility, which lead you to commit to 30 60 90 day borrowing periods. So sometimes you may find yourself.
Your your I'll get down to zero and your daily borrowing, but you still have a mandatory a physician and the 30 or 60 days and you may have to just take the cash and hold it on your balance sheet to that next window opens up we tried to ladder that based on how we see cashflow moving through the business. So that we never find ourselves with.
Too much extra cash that we can't use to offset the interest expense by paying down the revolver. So it's a bit of a timing and it's a bit of an exercise to plan that out and Frank were also making international cash more efficient.
Particularly in the UK, Yeah, we recently put together a cash pooling arrangement in the UK, which we believe novel April will allow us to aggregate all cash flows there and probably safely bring home to the space more cash that we can use again apply against the revolver, which is generally U S base.
From checking.
Right.
Just <unk> caution you're seeing in the marketplace is there anything interesting thinker organic growth.
Actually.
23, as a result of that cautionary swelling by marketing and advertisers.
Oh look I think we've been preparing you know X advocacy for 2023.
Ah doing a lot of the year in terms of structuring and restructuring kind of our units. So we're ready for a good 2023, I think when you look at our business.
Jump off the new business to a record level is really says that we're gonna be able to start out here.
Here, you know quite well I'm not gonna at this point gives you any guidance.
For the next year, but I'd be sitting here, probably with fewer smiles on my face. If we were sitting here with $20 million, a new business and I'd say, well, there's an obvious slowdown and we're sitting here with a record $86 million, what I'm, saying well obviously.
I keep emphasizing we are gaining share and so even if the as long as there are pictures and as long as clients rotate from one to two or another we will now get into an increasing share of pitches and have a growing opportunity to get the business in the marketplace sure it'd be better if it turns out that the market is.
Growing or the power does a soft landing, but we have a lot of Christians here in the sense that a weird been good managers up and down if you look at how we did in the pandemic.
<unk> very carefully planned out and keep blocks of you know.
<unk> lots of headroom you have a high you know variable cost business in terms of of how things go up or go down.
Most importantly here, we're gaining share against our competitors and we're more digital than than our competitors and those two factors should allow us to have a better growth curve and whatever the rest of the industry has and if you look at the comparisons to the rest of the industry on an organic basis, we're running about double what.
They are so we hope that investors will give us credit for that.
And that concludes our questions from the chat I'll turn it back tomorrow, let's.
Nothing comments thank.
Thank you I hope you're just a review.
Review everything carefully that this has been another strong quarter, a double digit growth and us moving in the right direction and <unk>. Thank you all.