Q3 2022 Certara Inc Earnings Call
Okay.
Good day and thank you for standing by welcome to the <unk> third quarter 2022 earnings Conference call.
At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session.
I ask a question during the session you will need to press star one one on your telephone. Please be advised that today's conference is being recorded I would now.
I would now like to hand, the conference over to your Speaker today, David <unk> Investor Relations. Please go ahead. Thank you all for participating in today's conference call on the Coffers chart. We are willing theory, Chief Executive Officer, and <unk> Chief Financial Officer.
Earlier today sitar released financial results for the third quarter ended September 32022 copy of the press release is available on the company's website before.
Before we begin I would like to remind you that management will make statements. During this call may include forward looking statements and actual results may differ materially from those expressed or implied in the forward looking statements.
Please refer to slide two and the accompanying materials for additional information.
You can find on the company's Investor Relations site.
In our remarks or responses to your questions management made mentioned some non-GAAP financial measures.
Conciliations.
non-GAAP financial measures to the most directly comparable GAAP measures are available on the recent earnings release.
Available on the company's web site for additional information please refer to slide 11, and the accompanying materials.
The conference call contains time sensitive information and is accurate only as of the live broadcast today November seven 2022.
Surcharges sequence any obligation, except as required by law to update or revise any financial projections or forward looking statements.
Whether because of new information future events or otherwise with that I will turn the call over to William.
Thank you David good afternoon, everyone.
Thank you for joining <unk> third quarter earnings call, Andrew and I will start with prepared remarks, and then we'll take questions.
In the third quarter.
<unk> delivered growth in revenue and bookings consistent with our plan.
Our core bio stimulant business in software and services continue to see nice momentum with high teens reported revenue growth.
<unk> ongoing headwinds from foreign exchange.
Demand for Biosimilars in software and services remains robust with particular strength in services, where productivity increased in the third quarter compared with the first half of the year.
As companies look to approve.
The efficiency and effectiveness of their drug development plan.
We are encouraged by the expanded use of Biosimilars <unk> across customers working in biologics.
On gene therapy, and small molecules.
We reported third quarter revenue of $84 7 million.
Growing 15% year over year on a reported basis and 18% on a constant currency basis.
As you know <unk> operates a global business with employees and customers located in many different countries around the world.
This global footprint has many advantages, but during periods of foreign currency volatility our reported revenue growth figures may be impacted however, the currency effect on our EBITDA and our net income is much less due to our mix of foreign currency revenue and expenses.
Reported software revenue was $28 4 million growing 54% year over year on a constant currency basis with a 93% aggregate renewal rate.
These results were in line with our expectations and driven by mid teens constant currency growth in our core <unk> and Phoenix Biosimilar <unk> software businesses as well as the contribution from fiscal 'twenty one.
We are committed to expanding the role of Biosimilar <unk> to meet the needs of researchers with innovation and expansion of our software offerings.
As we discussed on our prior call, we launched our new Thinset discovery simulator in June the <unk>.
Later, Wi Fi accumulation earlier in discovery and development and advances lead optimization first in human dose prediction and early formulation development.
While it's still early days for this product we have been encouraged with the interest in this launch and we are excited about its prospects in 2023.
In addition, we introduced the new Pinnacle 21 data exchange module, which leverages key functionality and compliance Differentiators of critical 'twenty, one but allows for customers to leverage the technology more broadly in their data organization and management.
Since the discovery the clinical 21 data exchange module has seen a lot of interest from customers. The cadence of new product introduction accelerated this year, but the investment to build these products started a couple of years ago.
We are encouraged by the reception of new <unk> software products into the market and continue to receive positive feedback from customers.
So tarek continues to support regulators and the growing demand for Biosimilars <unk> and.
In October the Japanese pharmaceuticals, and medical devices agency or <unk>.
Renewed licenses for <unk> since its been the later Phoenix Biosimilars <unk> software and clinical 21 enterprise software.
<unk> now entered it enters its ninth consecutive year of using <unk> software as the adoption of Biosimilars and technology to advance novel drug development continues to grow in Japan.
Turning to technology, driven services, we delivered revenue of $56 $3 million, representing 6% growth on a constant currency basis compared with the third quarter of last year.
Within technology, driven services via stimulation services revenue continues to show robust growth above 20% and we expect continued strength for the balance of the year and into 2023.
As we evaluate biosimilars <unk> bookings and revenue trends, we are pleased with the trajectory of the Biosimilars <unk> services business.
On the regulatory services side, so tire performed in line with our expectations laid out in the second quarter earnings call.
The performance in our regulatory services side of the business was a drag on reported results due to unforeseen delays in late stage clinical trial completions, which we discussed last quarter compounded by a difficult comparison versus the same quarter last year due to a large submission project in Q3 2021.
Regulatory services is a solid business for SOCAR, which generate healthy levels of profitability and offers a differentiated value proposition.
We've made some changes in management and our go to market strategy and I am encouraged by the progress the team is making towards improving performance.
Finally, as we announced this morning I am pleased to report that Arsenal investment partners will be substantially increasing their investment in <unk> by purchasing eqt's remaining stake in the company.
Steve Mclean with partner and co head of healthcare practice at Arsenal has been on <unk> Board for nine years and has been instrumental in helping the company involved.
And mature over the last decade.
Steve will remain on <unk> board and when the transaction closes we will be joined by David State and operating partner from Arsenal, who has impressive experience in the healthcare industry.
Arsenal has a strong appreciation for our position as global leader in Biosimilars <unk> and has agreed to a two year lockup for transaction and their shares without the approval of the company.
I will now turn this over to our CFO <unk> to discuss third quarter financial results in more detail.
Okay.
Thank you William Hello, everyone.
Total reported revenue for the three months ended September 32022 was $84 7 million representing year over year growth of 18% on a constant currency basis.
And 15% on a reported basis.
Leading clinical 21 constant currency third quarter revenue growth was 8%.
As a reminder, the largest non U S. Dollar currency exposures are the British pound euro and yen.
And the majority of the foreign currency translation impact Biosimilars <unk> software and services.
We remain well positioned with trailing 12 month bookings coming in at $401 million up 28% year over year on a reported basis and.
And excluding pinnacle 21 up 17%.
We continue to look at trailing 12 months bookings as the basis for forward 12 months revenue.
We reported software revenue was $28 4 million in the third quarter, which increased 54% over the prior year period on a constant currency basis and.
47% on a reported basis.
Excluding $7 $3 million in Pinnacle 'twenty, one software revenue contribution year over year growth was 16% on a constant currency basis.
The growth in the quarter, excluding pinnacle 'twenty, one was driven by our Biosimilars and software <unk> and Phoenix.
As a result of the strong performance of clinical 21, and some of our newer subscription software products. The software subscription revenue is recognized over time with 60% to 62% of total revenue up from 55% in Q3 last year.
Software bookings were $25 4 million in the third quarter, which increased 22% from the prior year period.
Clinical 21 contributed $6 5 million for software bookings in the third quarter. So <unk> <unk> year over year software bookings growth, excluding clinical 21 decreased 10%.
Trailing 12 months software bookings were $117 6 million up 41% year over year and up 6%, excluding pinnacle 'twenty one.
The year over year decrease in quarterly software bookings was due to the timing of renewals and FX headwinds.
Software aggregate renewal rate was 93% in the third quarter and net retention rate was 143% to 105% excluding clinical 'twenty one.
Our reported services revenue was $56 3 million in the third quarter, which increased 6% over the prior year period on a constant currency basis.
And 3% on a reported basis.
As we expected and discussed on our prior call Biosimilars <unk> services revenue growth remained strong and was above 20%.
While regulatory services was a drag on the overall growth rate, primarily due to a difficult comparison with last year.
Technology, driven services bookings in the third quarter were $54 4 million, which increased 6% from the prior year period.
Trailing 12 month services bookings.
We're $283 4 million, which increased 23% as compared to the prior year.
As expected regulatory services booking growth was down in the quarter.
And <unk>.
We are forecasting a longer conversion of bookings to revenue in this business due to be elongated customer cycles.
Total cost of revenue for the third quarter of 2022 was $32 8 million an increase from $28 8 million in the third quarter of 2021.
Primarily due to a $1 6 million increase in intangible asset amortization.
$1 million increase in stock based compensation.
<unk> 4 million increase in employee related costs.
<unk> nine increase in other cost of revenues such as equipment travel and software licenses.
Total operating expenses for the third quarter of 2022 were $41 million a decrease from $45 9 million in the third quarter of 2021.
The components of operating expenses are as follows.
Sales and marketing expenses were $6 4 million compared to $5 1 million for the third quarter of 2021.
This increase is primarily due to a $1 1 million in employee expenses due to the expansion of the sales force <unk> 5 million increase in marketing and travel costs.
Offset by $4 million decrease in stock based compensation.
R&D expenses were $6 3 million compared to $4 5 billion for the third quarter of 2021.
The increase in R&D expenses was primarily due to R&D expense from acquisitions and R&D software head count investments.
G&A expenses were $17 3 million compared to $26 2 million for the third quarter of 2021.
The decrease was primarily due to $7 5 million decrease in transaction and M&A costs $2 $4 million decrease in stock based compensation.
Offset by <unk> 5 billion of employee related and $4 million in outside services spend.
Intangible asset amortization was $10 6 million compared to $9 6 million in the third quarter of 2021, increasing due to amortization costs from acquired intangible assets relating to clinical 'twenty one.
Depreciation and amortization expense was <unk> 4 million compared to <unk> $5 million last year due to a decrease in depreciation for furniture and equipment.
Continuing down the P&L interest expense was $5 2 million compared to $3 3 million for the third quarter of 2021 due to higher interest expense relating to our term loan.
Miscellaneous income was $2 8 million.
Compared to <unk> 7 million for the third quarter of 2021.
Due primarily to a $2 million increase in a remeasurement gains related to the fluctuation in foreign currency exchange rates.
Income tax expense was $4 6 million as compared to a benefit of $1 6 million in the prior year as a result of a 54% effective tax rate impact impacted by a change in Portuguese tax law, which required the company to record additional tax expense.
Net income for the third quarter of 2022 was $3 9 million compared to a net loss of $1 8 million in the third quarter of 2021.
Diluted earnings per share for the third quarter 2022 was <unk> <unk> as compared to a loss of <unk> in the third quarter of 2021.
Reported adjusted EBITDA for the third quarter of 2022 was $32 7 million compared to $26 1 million for the third quarter of 2021, representing 25% growth.
Adjusted EBITDA margin was 38, 6% in the third quarter of 2022.
As expected and discussed on our previous calls we pulled forward some expenses to the first half of the year that resulted in lower adjusted EBITDA margin.
In the first half and higher adjusted EBITDA margin in the third quarter.
The expense timing.
Highly productive quarter on the services side and a positive impact to margins from FX fluctuations all contributed to the strong margin.
We expect the fourth quarter adjusted EBITDA margin to be relatively in line with our full year adjusted EBITDA margin guidance.
Reported adjusted net income for the third quarter of 2022 was $16 6 million compared to $17 2 million for the third quarter of 2021.
Adjusted diluted earnings per share for the third quarter 2022 was <unk> <unk> compared to <unk> 11 for the third quarter of 2021.
Now moving to the balance sheet, we ended the quarter with approximately $210 million of cash and cash equivalents.
As of September 32022, we.
We had $298 million of outstanding borrowings on our term loan and full availability under our revolving credit facility.
Turning to the guidance, we are reiterating our full year 2022 guidance.
And the strong third quarter results and customer engagement gives me confidence in high visibility towards achieving the goals set forth during the second quarter.
Revenue in the range of $325 million to $335 million adjusted EBITDA in the range of $1 12 to $1 $17 million.
Adjusted EPS in the range of 43 to <unk> 48 per share.
Fully diluted shares in the range of 159% to $161 million.
Our GAAP <unk>.
Tax rate in the range of 40% to 45% and a cash tax rate in the range of 20% to 25%.
I will now turn the call back over to our CEO William theory for closing remarks.
Thank you Andrew.
In summary, we remain focused on our commitments to customers and delivering strong results for our shareholders. As we continue to grow as a global leader in Biosimilars <unk>.
We will now open the line for questions. Operator can you. Please open up the line.
Thank you.
As a reminder to ask a question you will need to press star one one on your telephone.
Please standby, while we compile the Q&A roster.
Our first question comes from Dave Windley with Jefferies. Your line is open.
Hi, Thanks for taking my questions and good afternoon, you guys had a nice quarter.
Our revenue and it sounds like Biosimilars continues to be.
Really strong I wonder if you could give us an update on the breakdown in the revenue mix between.
<unk>.
Rig services and market access I haven't heard you really talk about market access in a while but if you could help us to understand what that mix looks like today.
I can take that bill.
That works.
It's still around.
Sorry specific specifically in the third quarter.
26%, we expect it to be about 24% for the fourth quarter. When we talk about that we run the railroad market access as one group. So thats included in that number.
Got it Okay and then.
On the bookings front after the first three quarters of 'twenty, one more little flat you really have a nice breakout.
Bookings quarter in the fourth quarter, and then Thats continued above a $100 million for three quarters in a row.
Dropped back down again this quarter I'm wondering if you could you talked about some timing renewals on the software front, yes.
But I wondered if you could you could talk about.
<unk>.
The Delta from.
100, 108 in the first couple of quarters of this year down to below 80 in the third quarter and what.
Kind of what the bridge is there where the shortfall came from beyond that software comment.
We had if you recall from Q4 last year, we had our two largest customers push from 2021 into 2022, which gave us.
Boost to the Q1 and the Q2 bookings numbers as.
As we moved into the third quarter.
July and August were.
Slow I would put it more towards the seasonality factor.
Saw an uplift.
Bookings in September .
Kind of north of $30 million and a continuation of that.
October .
And the.
That pipeline.
This has grown.
15% since the end of the third quarter.
Most of the factor I would I would attribute to some seasonality in July and August .
Okay, great. Thank you.
Thank you Amit.
Our next question comes from Michael <unk> with Bank of America. Your line is open.
Hi, it's Ralph on for Mike. Thanks for taking the question. So I was wondering if you could provide a little bit more commentary on what you've been seeing in regulatory services as the market has begun to stabilize or are you still seeing volatility from the headwinds.
Discussed since last quarter.
Okay.
Yes. Thanks. This is bill I'll take this one.
So the I would say that the market has been pretty much in line with what we told everybody in at the end of the second quarter, we executed.
According to the plan we laid out then.
We have seen a bit of the uptick in our pipeline.
So.
As you know we've made some changes in management and some of the other operations of that business. So.
We've.
We are cautiously optimistic I believe that we will.
Achieved the plan, we laid out and then we will continue to grow as we move into 2023.
Got it okay. Thank you then.
A slightly different note we've heard from some others in the field that larger pharma as they are starting to take longer or even elect not to sign contract renewals just given the broader macroeconomic uncertainty are you seeing this among your customer base and if not can you talk to what recent customer renewal trends have looked like at a higher level. Thanks.
Yes.
I can I can start bill.
So from a from a metrics perspective, we did have a 93% renewal rate, which was which was solid in line with our expectations.
The net retention rate was also what we would expect for the third quarter. So no real change there in terms of renewals.
Did see.
<unk>.
Similar trends in terms of new logo additions so we were actually.
I think we averaged about 108 per quarter last year.
And we had about 123, new logos in the third quarter. This year. So on that front, we're still seeing activity there.
On the kind of split between.
Top 50 tier one and the smid.
We saw pretty healthy growth in both both segments. There so really no no no differentiation in the client base, we havent seen.
Any impact on renewals.
Much appreciate it thanks.
Thank you.
One moment for our next question.
We have a question from Max Max Smock with William Blair. Your line is open.
Alright. Thank you for taking our questions just wanted to follow up on one of Dave's questions earlier around bookings shopping ask you. After a few next quarters.
Coming to the end of the year here. So wondering if you have any comments around what level of growth. You think is achievable in 2023 based on where we're at with the macro environment as well as kind of currently what you're currently what you have in your backlog.
Yes.
But basically based on the <unk>.
Backlog has grown it remains healthy driven by.
The uptick in demand we've seen on the on the <unk> side.
And we're looking for the Reg too.
Okay.
Pick up more towards the second quarter third quarter of next year.
Yes.
Based on the year to date bookings and the.
Kind of October results in the fourth quarter of pipeline.
Thing to have.
And the year with a book to Bill North of $1, two which is kind of pretty supportive of.
Kind of teens growth that we.
We've delivered in the past.
Got it okay.
Okay.
We report our bookings on an annual on a 12 month basis.
So.
One two should be pretty indicative of growth within the range.
In the mid teens growth that we've been talking about for some time.
Okay makes sense, maybe just one more from me here, so on the regulatory business and Alex talked about it quite a bit already but I wanted to follow up on some of your comments from last quarter around some of your tier two and tier three clients that have slowed down to conserve cash just to make sure that I'm understanding. This dynamic right. So these are companies with late stage programs that aren't <unk>.
Helane the programs, but also not moving them forward.
Our Q tier.
Tier two and tier three biotechs I need to conserve cash I mean is it fair to assume they don't have many programs in the pipeline because I guess, if that's the case I'm not really sure why its holiday would be why they would be simply keeping programs. So can you just maybe help me understand what's the rationale behind these delays and whether or not we should continue to think about these <unk>.
Delayed as opposed to last year.
Yes. Thanks for the question. So there are a couple of things going on one is there's been a delay in <unk>.
Trial completion, which appears to have hit tier two and tier three.
More than tier one.
That may have been because they're conserving cash or because they are.
They have a lower priority in.
In their clinical trial operations hard to say the other thing was that we were anticipating and.
Seeing.
An interesting growth profile from.
Customers outside of the U S and specifically in China.
And that.
There are a number of reasons, we talked about last quarter.
Pretty much dried up and we're not expecting it to return for some time.
Got it okay. Thank you very much I'll leave at that.
Our next question comes from Luke <unk> with Barclays. Your line is open.
Hey, guys just a real quick follow up on that one so.
When you guys talk about that mid teens historical growth rate and confident youre going to hit that but then you have.
The China piece is going to be an accelerator to that I'm just trying to figure out what is going to what you guys are envisioning coming back next year that could offset that or if or if that was just viewed as all upside.
And we're expecting that mid teens growth for the company.
Our Biosimilar <unk>.
Bookings growth is quite strong actually.
Higher than mid teens and then.
<unk> by our regulatory business, which is now.
Just around a quarter of the company, which is growing slower than that so net net we expect to come out mid teens is supported by the trailing 12 month bookings.
Which we reported and just.
Generally we're seeing pretty strong demand on the software and the Biosimilar <unk>.
I don't know if you have anything to add.
No.
Coming off of our.
Adjusted guidance from last quarter anything that would come out of China in terms of regulatory would be upside. So so so we're building our.
Our kind of point of view on things for next year based on the.
The trends, we're seeing in terms of the increased demand for the Biosimilars <unk> services.
The strength of the performance of clinical <unk> 41.
The new products that we've launched which are mostly in evaluation stage, but we're pleased with the level of client.
Engagement and the pipelines are growing which is a positive sign.
So that could provide a lift for us.
Okay.
And then can you talk about the implied <unk> guide for the EBITDA margin that step down is that more of.
Seasonality can you just talk about some of the dynamics going on there.
Yes, we had.
59% kind of bookings.
Bookings growth on the biotech side in Q1, Q2, so with that level of bookings, we had an extremely productive quarter in the third quarter.
Our revenue.
Per consultant was up about 6% versus the average in the first and second quarter utilization was high.
Started pulling through that accelerated bookings growth.
False falls down to the EBITDA margin.
We also had some spending early in the year that wont repeat for the back half of the year on the G&A side and on the sales and the marketing side. So the fourth quarter, it's more of a reflection of.
Some conservatism given kind of the seasonality in the fourth quarter around the holidays and what we saw last year.
Alright, great. Thank you.
Thank you.
And our next question will come from.
Joe.
<unk> with Baird. Your line is open.
Okay.
Great. Thank you for taking my question.
Wanted to just focus in on regulatory services again.
Some of the commentary from the Crs this coronary seem to indicate that staffing challenges across the industry are maybe getting a bit worse and thats lengthens the whole chain of events until I imagine everything that leads us database lock in Latin sur Tara is broaden the fact that.
You seem to have had an in line quarter and maybe plans for some of these things is.
The second derivative here stabilizing so you're still facing these challenges, but it's maybe not the surprise that it has been earlier in the year.
Yes.
That was the intention of our guidance adjustment in the second quarter.
So.
Yes, I would say.
<unk>.
We're performing in accordance with the guidance adjustment, we gave in the second quarter.
We made a few changes and we're focused on building up our pipeline. So we move into 2023.
Stronger position.
There is a lot.
<unk>.
There's a lot of.
Disruption reported in some of the <unk> as well as probably a fed through to some of this but I would say in terms of our staffing.
We've been in pretty good shape.
And I would say in terms of the pipeline, we're seeing in the business, we're seeing some modest improvement from where we were.
Okay, that's great.
And then second question just on the performance of clinical 'twenty one.
The quarterly revenue build has been showing.
Good sequential improvement just as that business flips and becomes organic.
Forward has anything changed about kind of the growth profile new products offer.
<unk>, obviously talked about one earlier, whereas you think about now managing that business and contributing on an organic performance.
Has anything changed relative to some of the initial commentary.
Political is only one is performing at or above the expectations that we had when we acquired the company a year ago.
I would say to answer your question directly the two biggest changes we've had with theirs.
Theres been a number let's say this let's say there's a couple of changes right. So one has been that we.
<unk> invested heavily in software sales and introducing them to <unk>.
<unk> wider customer base.
The second one is what you referred to which is we've launched a new product and clinical 21 called data exchange it.
<unk>.
Gotten some good traction.
Alrighty.
See some significant.
New customers and we're expecting it to grow well as we go into 2023.
And the third piece is that we've integrated with clinical 21 team into our software team.
Which has been a good.
A good thing for I guess, our future pipeline since we're looking at product for both combined Pinnacle 'twenty one and we're also between the two teams we've come up with some interesting new ideas for the future. So I'd say the product we bought was good.
Think we brought it to a bigger stage and that helps and then.
It's a healthy business, that's got a great pipeline of products and we're starting to see that that takes shape right now.
Great. Thank you very much.
Thank you and we have a question from Gaurav <unk> from Bloomberg Your line is open.
Hey, Thanks for taking my question just one for me.
I was wondering if you guys had any color on the split of your solutions used by customers between different drug modalities. Like you mentioned for example, biologics for small molecule versus cell and gene therapy, just basically any insight on modality trends if possible would be would be great. Thanks.
Sure Andy do you want to take that one yes.
We've seen.
Generally speaking that the modality split mirrors.
The.
R&D budgets in the industry since we have such a broad based customer base.
What we're seeing is some growth in some of the newer modalities coming off of a small base and that's where we're seeing progress in our <unk>.
<unk> and around some of our kind of engagement platforms. We've put in place on the <unk> services side targeting those.
Newer modalities.
Great. Thanks, that's all from me.
Thank you and our next question comes from Looney from Credit Suisse. Your line is open.
Thank you for taking my questions.
A quick one on <unk>.
So back on the step up from Q2 level can you talk a little bit about Houghton saddle Horn, Bob how do you see.
Hello, Paul.
Great.
Sure.
I think I heard that.
Global little bit soft, but in terms of interest expense.
We have.
76% of the outstanding term loan balance as it stands today is.
Subject to an interest rate swap that is.
<unk>.
Two 8%.
Plus the $3 50 spread.
So we kind of hit the ceiling on that at the end of the third quarter and then starting October we're starting to get the credit back on our end. So we think we're pretty.
Well protected in that swaps in place until August 2025.
Got it that's helpful and then.
Just a quick one on the on the more challenging.
On like any.
Thinking about bought like given the valuation coming down do you see more inches.
Part of that and whats your pipeline.
Yeah. Thanks, Thanks for the question.
Through a bit of this year, we did see sort of elevated valuations in the private markets relative to where the public markets with indicated and so we've been a little more.
Conservative in terms of some of those valuations.
As we go forward, we're seeing some signs that that might be normalizing, we have a healthy list of interesting companies that we keep track of and.
Talk to and.
As I said before we are.
We're in a good position, we've got a healthy market, we've got lots of interesting organic opportunities.
We don't feel any.
Obligation to do M&A, but.
When the time is right for these things and then we feel that we'll be in a good position there too.
To make a good one.
Got it thank you very much.
Thank you and I'm showing no other questions in the queue I would like to turn the call back to Mr. William theory for any closing remarks.
Yeah, Thanks very much.
Just in closing I'd like to just say that our third quarter performance demonstrated.
Continued strength in software and by simulation and really our revenue and our bookings grew well above historical averages and we're very pleased with them.
We're continuing to build stronger relationships with existing clients and develop relationships around the use of Biosimilars <unk>.
And we're prioritizing our organic investments in new products, so you've seen some of that.
And we remain committed to maintain and improve our reported adjusted EBITDA margins, our balance sheet remains very strong with over $200 million of cash on the balance sheet and just <unk> five.
Debt to adjusted EBITDA, and we are feeling.
Pretty good about our ability to meet our.
Meet the expectations that we put out in July for the full year and continue to continue to grow as we move into 2023.
Thank you.
Okay.
This concludes today's conference call. Thank you for participating you may now disconnect.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
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Thanks.
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Yes.
[music].
Yes.
Thanks.
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Okay.
Okay.
Thank you.
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[music].
Thanks.
Sure.
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Sure.
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Yes.
Sure.
Yes.
[music].
Yes.
[music].
Yes.
No.
Thank you.
Okay.
Okay.
Okay.
<unk>.
Okay.
Okay.
Okay.
[music].
Yes.
Yes.
Okay.
Sure.
Thank you.
Okay.
Okay.
[music].
Yes.
Yes.
[music].
Okay.
Yes.
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[music].
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[music].
Yes.
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[music].
Yes.
[music].
Okay.
[music].
Yes.
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Sure.
[music].
Okay.
Great.
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Yes.
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Great.
Great.
Yes.
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Yes.
[music].
Okay.
Sure.
[music].
Okay.
Thanks.
Okay.
Yes.
Yes.
Yes.
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Yes.
Sure.
[music].
Thank you.
Yes.
[music].
Yes.
Hum.
Great.
Yes.
Okay.
Okay.
Yes.
Okay.
19.
Okay.
Yes.
Okay.
Okay.
Great.
Okay.
[music].
Okay.
[music].
Sure.
Thanks.
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Yes.
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[music].
Yes.
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Yes.
Yes.
Yes.
Yes.
Yes.
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Thank you.
Yes.
Yes.
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[music].
Sure.
Okay.
Great.
Yes.
Okay.
Sure.
Two.
Yes.
Okay.
Okay.
Yes.
Sure.
Yes.
Okay.
Yes.
<unk>.
Sure.
Okay.
[music].
Sure.
[music].
Sure.
Yes.
Yes.
Okay.
Yes.
[music].
Okay.
Okay.
Okay.
Yes.
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Yes.
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Sure.
Sure.
[music].
Okay.
[music].
Yes.
[music].
Yes.