Q3 2022 Flywire Corp Earnings Call
Greetings and welcome to the fly Wire Corporation third quarter 2022 earnings call.
At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host a keel Hollis Vice President of Investor Relations and S. P N a.
You may begin.
Thank you and good afternoon.
On today's call are Mike Mcdonnell Chief Executive Officer, Bob Udell, President and Chief operating Officer, and Mike Ellis Chief Financial Officer.
Third quarter 2022 earnings press release supplemental presentation, and when filed associated quarterly report on Form 10-Q can be found at IR <unk> com.
During the call we will be discussing certain infill.
Information.
Actual results could differ materially from those contemplated by these forward looking statements.
I'll be discussing certain non-GAAP financial measures. Please refer to our press release SEC filings for more information on the risks regarding these forward looking statements.
Actual results to differ materially risk factors associated with our business and required disclosure related to non-GAAP financial measures.
This call is being webcast live and will be available for replay on our website I would now like to turn the call over to Mark Massaro.
Thank you keel and thank you to everyone that is joining us today, we are pleased to share. Our Q3 2022 results and strong performance across the business a bit the current macroeconomic environment.
In a few minutes, Rob Oracle, our president and COO as well as Mike Ellis, Our CFO will go into greater detail about our operating and financial performance during the quarter, but first I will start with a few financial highlights.
During the quarter, our revenue less ancillary services with $88 9 million, representing a year over year revenue growth of 43%.
This was an all time high for quarterly revenue and was delivered in the face of meaningful foreign exchange rate changes for context. This year over year growth rate would have been over 50%, but for the impact of FX rates.
Adjusted gross profit for the quarter was $61 3 million in Q3, an increase of 38% year over year.
Adjusted EBITDA was $18 2 million.
Payment volume growth for the quarter was 33% when compared to Q3 2021.
These results are attribute to the growing global distribution of our business with clients in over 30 countries and fly mates around the world something that will continue to benefit us for years to come.
We are pleased with yet another strong quarter of performance.
Now, let me share some of the trends we are seeing in our industries starting with education.
As many of you know the third quarter has historically been the strongest for our education business and consistent with this trend we posted record revenue alongside strong new customer signings growth within existing customers and expansion of our product capabilities.
We benefited from our geographically distributed business is international enrollments continued to normalize post pandemic.
New data from the U S Department of state shows that the total number of student visas awarded from May through August of 2022 was up from the same month last year fueled by increased demand from India.
According to the analysis from Chronicle of higher Ed more than 84000 student visas were issued to Indian students from May to August this year.
That represents nearly 45% more visas for Indian students than the same four months last year.
Third 48% more than during the same span of 2019.
We have a strong solution for Indian Payors and benefited from this trend.
While we saw strength in multiple aspects of our education business and delivered strong overall revenue growth, we experienced less revenue growth and expected from students originating from China. The.
The combination of decline in visa issuance and COVID-19 related travel obstacles as well as changes in destination may have impacted growth.
Even with these trends, we believe theres an opportunity to continue to grow in China in the China market as we have relatively low market penetration, we have multiple strategies focused on better serving Chinese students and families, including our agent strategy or pay any school capabilities that were just launched and our expanding roster of schools and.
Cities globally.
Broadly speaking, we remain optimistic about the future of international Education, and believe fly water is well positioned to support our clients as they continue to recruit students from around the world.
In a recent fly wide survey of admissions leaders at some U S institutions. Their overall view on international enrolment was positive and many are diversifying their recruitment efforts in new regions to grow their international students.
In fact, 87% noted increases in applications from India, while over 95% expect total international enrollments at their institutions to increase or stay the same for the next three years.
While we continue to monitor the shifting dynamics related to international students in a post pandemic world. Our education clients continued to remain resilient and our land and expand strategy positions fly wire to capture more of this market by providing additional solutions for clients and their payers.
Shifting to health care, we are seeing it play a greater role in the implementation process of our solutions as we continue to integrate with major health care platforms or ehr's like epic and Cerner.
In a recent survey we conducted of Cio's and other key decision makers in the health care space, we found that almost all health care leaders nine.
97% of those surveyed say tight integration with EHR is one of the most important considerations when choosing an outside technology vendor and it systems like Cerner and epic become more tightly integrated with all care based services, we expect our leaders will increasingly be measured against patient experience metrics.
Like satisfaction and patient collections, which are all outcomes our solutions help clients to achieve.
In travel we continue to see strong demand for our solutions all over the world. According to the U S. Travel Association travel spending improved considerably in September and is now at its highest mark since the pandemic started at 6% above 2019 levels. This is consistent.
With some of the trends we are seeing across our client base in particular, our clients are reporting an extension of their busy season driven.
Driven by pent up vacation demand as well as the continued reopening of many top tourist destinations such as Japan.
We continue to develop solutions that serve the specific needs of this industry and those capabilities are helping drive our growing footprint in the travel sector.
To highlight an example, we have enhanced our invoicing capabilities and payment acceptance to allow for scheduled payments, creating a streamline and flexible way for clients to set payment terms to capture a deposit today and schedule payments at future dates as part of one seamless payment experience.
To speak to the macroeconomic environment for travel we believe the clients. We see are still benefiting from the continued pent up demand for post COVID-19 travel, especially for experience focused trips like luxury travel bespoke tours adventure travel and more for our clients spanning across travel operators desk.
The nation management companies and accommodation providers, we continue to share their confidence that the demand for these experiences will be more resilient than the broader travel sector across a range of macroeconomic environments.
In <unk>, we continue to see demand for our solutions for businesses looking to enhance their incoming payment processes help free up cash trapped on the balance sheet treasurers and audience. We typically sell into are focused on inward facing task during inflationary periods like managing cash and liquidity.
This is according to <unk> strategic role of Treasury 2022 report and these are challenges that fly wire help solve.
Furthermore, fly wire solutions can help all clients achieve valuable operational efficiencies, we enable clients to streamline what would normally be manual processes with legacy systems and create better payment experiences for their customers and we expect our solutions to become even more valuable as clients navigate economic.
Yeah.
Finally, let me talk about investing in our future.
We believe our strength comes from our diversified model diversified verticals across diversified geographies.
<unk> best in class products through a mixture of organic and inorganic investments positions us to continue our growth navigate through periods of uncertainty maintain margins yet maintain focus on our strategic objectives.
Yeah.
First on the organic side, we've been squarely focused on solving major pain points for our clients and we will continue to accelerate our ability to build sell and deploy solutions. We believe the significant market opportunity will be realized over the next decade, and our product technology roadmap, it's critical to our future success.
As discussed during our 2022 analyst day, we continue to focus on key investment areas within the business one of those areas is around enhancing our go to market and we are pleased with the progress we continue to make on our sales ramp time delivery capacity and then our powerful digital acquisition strategies.
For example, in our travel vertical where we invested significantly in digital marketing and have more than 60% year over year increase in marketing source pipeline and a 70% year over year increase in marketing source deals.
We are also making good progress on our vision to continue to expand the fly wire advantage to truly power the vertical ecosystems that we support we.
We are making progress on strategic payables, which is being successfully piloted and educate in the education vertical for both domestic and international payouts.
As a reminder, our approach to payables is one of focus and precision.
We have discovered pinpoints that we believe fly wire is uniquely positioned to solve we are applying our existing framework of using software and our global payment network to drive value and payments to solve specific payables use cases for our clients.
As for our inorganic investments over the past 12 months, we are very pleased with the muscle that we have developed and identifying negotiating and successfully integrating acquisitions over the past 12 months, specifically WPM in cohort <unk> businesses.
W. P. M. As you know enabled us to accelerate expansion in the U K market Q3 marked our first major new student enrollment period in the U K following the acquisition and we have over 20 schools live with our initial version of the integrated solution and roughly as many more signed and still to be deployed.
Cohort go had an agent footprint in multiple important markets, including India and China.
And the agent technology platform payment capabilities into peer oriented solution for marketing student health insurance. This acquisition extends our footprint with education agents and accelerates our investment in product and payment innovation for international students.
We now have successfully integrated their full pay any school capability into the fly wire platform offering an expanded universe of over 5000 institutions to our agent partners.
We've also begun to migrate these partners onto a single platform, while continuing to work on additional operational and feature improvements to the solution.
In closing after recently returning from traveling to see many fly mates clients and partners around the world I remain more excited than ever about the future of fly wire seeing our teams inaction is always an incredible experience and I'm proud of the relationships that our fly mates build with our clients and partners some spanning over.
For a decade.
Growing and strengthening our fly made community is critical to <unk> future success I am extremely proud of the culture and team. We've built with now more than 950 <unk> around the world who represent more than 40 nationalities speak over 30 languages. They truly operate as one team and are the cornerstone of how we continue to deliver.
Our exceptional value to our clients partners and Payors.
We are committed to providing our clients the opportunity to pursue their careers a lifetime. Once again <unk> has been recognized as one of the leading workplaces in the United States. According to the employee experience platform great place to work.
With 95% of <unk> recommending fly wire compared to just 57% of employees at a typical U S. Based company. The opportunity ahead of US is large and I could not be more excited about the future I would now like to turn the call over to Rob <unk>, Our president and CFO to review some operational highlights from the quarter.
<unk>.
Thanks, Mike and good afternoon, everyone.
Our strong results this quarter reflect continued execution of our growth strategies, we saw strength in bringing on new clients with the addition of over 145, new clients in the quarter. This brings our client count to over 3000 and consistent with our recent quarters. We also had success in getting more payments and payments share by expanding.
With existing clients.
I'd like to highlight some of our successes across the verticals and in a few minutes mentioned some other operational achievements that are important to our overall efficiency and scalability.
Starting today with education, we continue to see strength in both our U S and internationally based clients for both domestic and cross border payments as one indication the trailing 12 month average net revenue retention and education was over 130% demonstrating the resilience of the education business and the continued.
Fusion of our land and expand and other strategies that support our NRI, we signed education clients in all regions. We also saw a more than doubling of our domestic education revenue in Q3 compared to the prior year.
In the U S. We signed San Diego State University, which is part of the California State University system for our cross border payments offering.
San Diego State was founded in 2018, 97% is the third largest university in the state of California with over 35000 undergraduate and graduate students.
The University welcomes over 2300 international students each year from a variety of regions, including China, Saudi Arabia in Europe . We are excited to offer best in class software and payment solutions to San Diego State.
We also continue to make good progress with our domestic education business in the U S. Our existing client Columbia University, a globally renowned institution with three undergraduate schools in 13 graduate and professional schools for 31000, plus students is currently using our cross border and past due collections payment.
<unk>.
Columbia is now, adding <unk> full crs system offering to process all student tuition payments, we're excited to expand our relationship with Columbia.
Finally in partnership with the centers, we continue to make progress with our 529 disbursement planned processing solution, which helps universities reduce time and resources spent on paper check processing with a census fly wires able to digitize distributions to more than 500 connected schools with funds.
<unk> for more than 40 college savings plans spread across 20, plus states and territories.
Purdue University with a student population of over 49000 undergraduate and graduate students piloted our solution to electronically processed nearly 2529 disbursement payments.
Once the 529 planned disbursement request is made by the account owner <unk> facilitates the payment and promptly credits the student account reducing delivery time.
That's just one school and we are deploying this solution broadly the solution is a win for families schools and our planned partner Sensus. We are encouraged by the early results of this innovative solution and remained focused on growing our network of 529 plans and digitally connected schools.
Moving onto our health care vertical we continue to help our clients improve payments on their patient receivables in this period of heightened financial stress for the industry and for families are solutions that address both affordability and yield on billable are critically important.
To illustrate we help to months in healthcare part of northern Michigan's largest and leading healthcare system achieved the highest percentage of collections and their history.
About 53% of payments were generated digitally during the third quarter.
Chronic payment collections increased over 80% versus any prior quarter.
During the quarter, we saw the go live of <unk> Memorial, which is part of the <unk> system and we expect other hospitals within the system to follow over the coming months and quarters.
During the quarter, we also extended our relationship with common spirit health or <unk> with our first go live with the dignity health facility.
GSA is the largest Catholic health system, and second largest nonprofit hospital system in the United States formed through the merger of dignity health and Catholic health initiatives CACI.
Spirit operates 140 hospitals and more than 1500 care sites across 21 States wildfire has worked with <unk> since 2018 and provides the hospital system with <unk> full suite of services across all at CACI hospitals, including digital engagement billing consolidation and automate.
Payment plans, we look forward to continuing our efforts with TSH.
It also helped our existing client Edward almost health or <unk> improved collection of its patient receivables.
Which recently merged with Northshore University health system to form the third largest healthcare delivery system in Illinois with.
With the usage of our full suite solution for health systems, Edward Allenhurst was able to convert 91% of patient payments to self service and reduce its payment plan default rate by over 50%.
Year to date as of September 2022, EHS collections increased 10% on a year over year basis, Our hospital system clients continue to benefit our higher collection rates and lower patient default rates by adopting our self service payment solutions.
Next we continue to see strength in our travel vertical following the strength in EMEA. We've mentioned on prior earnings calls the APAC region has seen a rebound a bit loosely can travel restrictions as more countries in the region are now open for travel or.
Our sales and client teams continued to work with Japanese prospects in advance with Japan September announcement, allowing the resumption of visa free tourism effective in early October by being proactive Japan accounted for 20% of our new travel client signings for the quarter and is also contributing to a return to bookings growth in the region.
For example, we signed <unk> a luxury accommodation provider located at the base of the world renowned <unk> ski resort in Hokkaido, Japan.
<unk>, replacing another large payments provider given our ability to reduce transaction fees for our client as well as our deepening integration with <unk> property management system, which simplifies reconciliation workflows for Ya <unk>.
We continued to see volume from our European Dmc's through the shoulder season of August through October .
Many of our European clients are seeing more inquiries about 2023 travel and receiving a higher number of prepayments than expected.
Tempo VIP specializes in tailoring unique travel experiences and towards in Portugal, and is rolling out a new partnership with one of the largest and leading travel agencies in the United States.
<unk> is proud to serve as the exclusive software enabled payments provider for this partnership.
Finally, we completed our integration of Spi software that preferred software partner for the timeshare vacation owner club and resort industry, serving clients across five continents.
A timeshare accommodations provider sought to replace its paper based billing process with a digital invoicing international payment solution to quickly and securely invoice members and collect payments from multiple countries, while streamlining back office operations.
Client chose to implement Spi software's integrated flyway or payment experience and global payment processing solution to send invoices and reconcile payments and over 120 currencies via a variety of payment methods that includes local bank transfer and credit card.
<unk> software enabled payments solution significantly reduced international wire in merchant fees for the client we look forward to continuing to build on the integration with Spi software and build our presence in this corner of the broader travel sector.
Turning to <unk>, we continue to be very optimistic about our potential to grow our emerging BW verticals business. Two key points are the foundation for our belief first we're getting clients live effectively and delivering great results for them.
During the quarter, we signed the best doctors insurance or BVI are leading Miami headquartered health insurance company, serving individuals agents in groups with operations in Latin America, the Caribbean and Canada PD.
PDI went live earlier this quarter, the <unk> commercial product and process seven figures and cross border and domestic volume within 24 hours of going live.
<unk> has integrated multiple payment methods, including card bank transfer and alternative payment methods to automatically post back into their finance system of record. So not only are they seeing cost savings. They are also seeing significant operational efficiency gains as well.
Second our partnerships are increasingly affected our keybank and channel partners are finding working with <unk> to be complementary to their business. We are seeing increasing lead in referral activity from our partners that is helping drive activity for our growing <unk> sales and client service teams.
We are dedicating more of our own attention to supporting our channel development efforts and are optimistic that we'll continue to pay off for us.
We also continue to enhance our platform to drive operational efficiency, we launched a client self service portal that will lead to more efficient access to self help solutions as well as faster and more accurate routing to our client services team. We also significantly improved our customer support system for our payer experienced team.
All of our efforts around Sarbanes Oxley compliance has also had an ancillary benefit of improving our process focus.
We also drive efficiency in our network, we continuously negotiate with our banking and card partners around the world. So that we can offer reasonable terms to our payers, while increasing our gross profit spread on transaction volumes, we get at that in the current economic climate, we havent imperative to deliver on these kinds of efficiency opportunities.
Overall, you can see we had another very active quarter with <unk> global team of <unk> doing great work across our verticals and across the company to get us through our biggest quarter of the year.
I would now like to turn the call over to Mike Ellis, Our CFO to review our results for the third quarter and guidance for the remainder of the year Mike.
Thank you Rob good afternoon, everyone. Today, I will provide an overview of our third quarter financial results and discuss our outlook for Q4 and full year 2022. As a reminder, today's discussion includes non-GAAP financial measures. Please refer to the tables in our earnings press release for a reconciliation from non-GAAP to the most directly comparable.
GAAP financial measure.
Revenue like the ancillary services for Q3, 2022 was $88 9 million, representing a 43% increase compared to the Q3 2021 our.
Our revenue growth rate was driven by an increase in total payment volume, particularly due to strong growth from our international cross border payment volumes in our education and travel verticals.
We processed 7.0 billion and total payment volume during Q3, 2022, which was an increase of 33% from the $5 3 billion, we processed during Q3 2021.
Q3, 2022 was our largest quarter in the history of <unk> in terms of both revenue and payment volumes.
Specifically transaction revenue increased 46% compared to Q3 2021, driven by 37% increase in transaction payment volume.
Roaming usage based fee revenue increased 29% compared to Q3 2021, driven by a 23% increase in platform usage based payment volume.
We achieved these strong revenue results in spite of an unfavorable FX environment as the U S dollar strengthened during the quarter against several currencies, including GBP.
GBP in Europe , when compared to FX rates during Q3 2021, the impact of the strong U S. Dollar on this quarter's reported revenue was over five points here $1 million.
Meaning that the services, we provided and fees generated would have shown 5 million more of additional reported revenue in Q3, but for the increase in foreign exchange impacts from converting those overseas revenues into U S dollars for financial reporting purposes, as Mike mentioned, our revenue growth rate if FX rates in Q3 2012.
Two were consistent with Q3 2021 would have been over 50%.
Furthermore, we estimate that the impact on our Q3 2020 to reported revenue due to the stronger U S. Dollar was between one five to 2.0 million compared to what was implied in the revenue guidance. We provided for Q3 2022 during our Q2 earnings call, which was based on FX rates at the end of Q2 2020.
Two.
Overall, we were pleased with our revenue performance and client growth and the resiliency of our business considering the overall environment.
Moving on to adjusted gross profit, we generated $61 3 million and adjusted gross profit representing a 38% increase compared to the $44 6 million earned during Q3 2021.
That resulted in an adjusted gross margin of 69.0% for Q3 2022 down two 9% from the 71, 9% reported for Q3 2021 due to continued shifts in revenue and payment method mix as discussed during our Q1 and Q2 2022 earnings calls as well as <unk>.
During our analyst day in May of this year.
Moving onto operating expenses technology and development expenses were $13 4 million for Q3 2022, an increase of 73% over the $7 8 million incurred during Q3 2021.
The increase was primarily the result of adding 130 fly makes to our engineering and technology teams since Q3, 2021, which drove increases in employee related costs, including stock based compensation consistent with our plans going into the year that we would be investing in this area.
Selling and marketing expenses were $21 7 million for Q3 2022, an increase of 73% over the $12 5 million incurred during Q3 2021.
This increase was driven by adding 148 fly mates via direct hiring and our two acquisitions since Q3, 2021, and two our sales and marketing teams, which drove increases in employee related costs, including stock based compensation. In addition, we incurred more costs associated with third party commissions as a result of our revenue growth during Q3.
2022, compared to Q3 2021.
General and administrative expenses were $24 2 million during Q3 2022, an increase of 65% over the $14 7 million incurred during Q3 2021.
The increase was driven by adding 118 fly mates across these functions, resulting in an increase in employee related cost, including stock based compensation. In addition, we incurred more costs associated with Sox compliance as well as other costs associated with operating as a public company.
Adjusted EBITDA for the quarter was $18 2 million, an increase of 3% over the $17 6 million reported for Q3 2021 adjust.
Adjusted EBITDA increased due to strong adjusted gross profit growth offset by increased salaries and other operating expenses as discussed previously the.
The revenue impacts from FX were partially offset by FX benefits for our international expenses, resulting in a net headwind to our reported adjusted EBITDA of approximately two points here.
We wanted to note that our GAAP net loss per share of <unk> was impacted by the re measurement of intercompany loans related to the acquisitions of WPM cohort go the loss on the Remeasurement resulted from the FX impacts noted above what these notes receivable being denominated in GBP and <unk> under our U S entity, which reports in you.
Dollars.
Moving onto the balance sheet with respect to capitalization as of September 32022, we had $349 2 million in cash and cash equivalents and $25 9 million in long term debt as of <unk>.
September 32022, we had $108 9 million shares of common stock outstanding which was slightly different than the weighted average shares outstanding used to calculate net income and loss per share due to the timing of shares issued during the quarter.
Moving onto guidance.
We have raised and narrowed our guidance for revenue to be in the range of $263 5 million to $266 5 million for full year 2022, which results in an annual revenue less ancillary services growth rate of approximately 46, 5% at the midpoint.
Our full year 2022 expectations reflect an increase in our organic revenue expectations offset by stronger FX headwinds.
With respect to adjusted EBITDA, we are maintaining our full year 2022 guidance to be in the range of 14 million to $16 million, reflecting our current view about continued growth and execution in the business alongside continuation of our previously announced growth in investment plans and taking into account the FX impacts discussed above.
With respect to guidance for Q4, 2022 revenue less ancillary services is expected to be in the range of 64 million to $67 million, which represents a year over year revenue growth rate of 43% at the midpoint, we estimate the FX headwind to Q4 revenue to be in the mid single digit millions in dollar terms based on FX rates at the.
Winning a Q4 2022, approximately double what was expected coming out of Q2.
In conclusion, we are pleased with our Q3 2022 financial results and the resiliency of our business and we continue to look forward to the rest of 2022 with that I'd like to turn the call over to the operator for questions operator.
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Our first question comes from the line of Bob Napoli with William Blair. Please proceed with your question.
Thank you and good afternoon.
So.
Mike I was wondering if you could maybe give a little bit color on 2023 on your thoughts.
As to whether your long term targets are.
If you would expect to be as far as revenue growth and EBITDA.
EBITDA margin expansion as that.
Still.
Trickier economic environment.
Still valid.
Hey, Bob Thanks for the question Great to hear your voice, obviously, we're not sharing the FY 'twenty three guidance on this call, but I would encourage people to remember what we've said that we continue to standby I think apply whereas at 30 plus percent.
Organic compounding grower, we believe we've shown the penetration of our total addressable market is that room for that growth. Our continued execution. The pipeline building we've spoken about on multiple calls.
We obviously havent finalized 2023 plans yet.
<unk>.
But I'd also encourage people to look at just what we've done to show that we can grow and grow profitably.
And so we've got excellent unit economics, we've shown leverage in the business you can look at last year's adjusted EBITDA strength you can look at this quarter's adjusted EBIT strength of approximately 20%.
And I would say we continue to have a desire to expand EBITDA margins as mentioned in our analyst day in May.
I will note that that expansion had a range in it in May and obviously it was a very different FX climate at that time than it is today and so that's something we'll take into account in planning, but you can expect us to be that 30 plus percent grower as I mentioned before you can expect us to continue to show profitable growth with EBIT margin expansion.
Great. Thank you I appreciate that you gave out a statistic you said net revenue retention on education.
Yes, 30%, maybe if you could just give us maybe a little bit color on broadly on net revenue retention in that 130% on education.
It is pretty impressive.
Is that what are your thoughts around net revenue retention for the company as a whole and the longer term outlook.
Sure I'll, let Rob cover that one cohort yes.
Bob.
Youre right, calling out the strength in that NR number for education that was broad based for US we saw strength in the domestic that supported that we saw strength in our international growth.
FX business as well as our clients located abroad, so that education NRI very strong across the board. The other part of your question was just more.
More broadly.
Didn't share a specific number but I will share that NRI for the company for the trailing 12 months was also above our three year average so we are essentially.
Helping support the growth of the business through various wrong NR across the whole business.
Great. Thank you good to see the strong results appreciate it.
Thanks, Bob.
Our next question comes from the line of Andrew Baum with Nikko Securities. Please proceed with your question.
Hey, guys. Thanks for taking my question, particularly in light of the site.
Everyone's yet just wanted to talk about the employee ramp you guys have really invested in over the last year. I mean 925 five minutes, if I saw that correctly, 58% growth year over year, I mean pretty pretty impressive investment there I'm just trying to get a sense of where are those.
New associate you brought on in terms of contributing to your overall sales motion go to market motion and how that kind of sets up for 2023 as they really start to flex that sales muscle.
Sure.
Yeah, I'll start I'm sure Rob will jump in.
So firstly, obviously, we set out the year.
Really highlighting that we thought it was the right time to have an investment year.
Think of those those flight investments really being around two areas product and tech innovation that scaling our platform teams. Our tech teams. So that we can deliver great new solutions, new capabilities to clients and then our go to market as we've talked at length in the past about.
The great pipeline.
Pipeline generation, we have as well as R. R.
Our ability to get customers signed to get them live and generating revenue and we saw opportunities to expand that that go to market team across industries across geographies and so that's where the vast majority of that probably made investment went.
But more detail, Rob well I can talk a little bit just about this past year, but I'll also talk just a little bit about the year ahead.
In terms of this past year, we're really pleased with the investments we made I mean, we.
Really strengthened that go to market team and if you could talk about the sales organization, adding almost 80 people into our sales organization, which allows us really to cover more territory to go after more accounts. We added a significant number in relationship management, we added marketing and ramp ups, all of which sort of grilling our ability to capitalize on our market opportunity.
It was a year of significant growth and investment as we called out coming into the year.
But just to be clear.
Our view heading into 2023, as we're focused on profitable growth and we're focused on making sure that we are delivering on that EBITDA margin expansion you can expect us to see sorry, you can expect to see from us.
We don't.
Planning and deliberation in terms of how we add those hires where we add those hires and essentially a more moderate pace in the year ahead.
And once again committing to the 30% organic growth that you called out and margin expansion in this type of market environment is definitely not lost on investors and maybe if you could speak to some of the opportunities that you have in education in the year ahead, I mean, another update on WPM as always.
It's always helpful. With the 20 that have gone live in any kind of sense on how that progresses now.
And under the Hood for call. It 910 months at this point.
Yeah sure I'll take that one I think.
We see an opportunity to just keep adding new clients and education, we mentioned different geographies before for expansion the land and expand strategy in the United States.
Called it out Rob talked about Colombia is a major new win as well right. So that land and expand strategy is yet further.
Uh huh.
Allowing us to kind of maintain a growth.
Right like that and then when you look at not only W. Dan, but the cohort deals right. We think those put us in a really good position.
Since you asked specifically about WPM, we'd mentioned the 20 or so clients live.
About a similar number yet to go live that have signed.
And that for US is really great number.
Well over 100 clients that we mentioned at the time of that deal and we're marching through that list of clients.
Communicating the value I think appropriately getting the solutions up and live with a lot of work. Our team is working real hard to do that both on the tech side and on the.
On the relationship management and account side.
And if we're going to continue to do that we'd always told everybody to think of that as a $23 24 to 25 growth lever for the business.
We really stand by that.
That's great to hear.
Our next question comes from the line of will Nance with Goldman Sachs. Please proceed with your question.
Hey, guys. Good evening I wanted to maybe hit on like the topic de jour recently, which spend the fewer students Chinese student basis, you guys called it out in the prepared remarks, and I guess on one hand, it sounds like youre, saying that fewer Chinese student basis of a headwind to growth this quarter.
On the other you are talking about total visa as being up on the year with particular strength coming out of India. So maybe I guess can you talk around just how the geographical exposure sort of hedging the business internally and what kind of cushion does your university client base has have in terms of.
Waitlists.
So kind of a cushion or maintain the amount of international student enrollments.
From a single geography, ticks down I guess, what would need to happen in other words for the Chinese student visa issue to actually start impacting <unk>.
Total results.
Yeah, Hey, thanks for the question so.
As I mentioned in my remarks, we grew in China.
In Q3.
Relative to even the prior year. Some countries, we have a globally diverse business some countries youll see growth some countries youll see.
Decreases right like that's a natural behavior that exists in the in the cross border education market.
If you go ahead and look there are markets I can tell you that we did see growth in Chinese students, notably the UK and Asia Pacific.
So again.
The overall fly wire market penetration when it comes to Chinese players is still relatively low right. So through our current strategies that we've talked about we feel really good about being able to grow that.
China penetration over time, you can look at the agent strategy, we talked about.
As well as the cohort go deal that's a core component to it.
The non client receivables, which we talked about it at the analyst day, which allows.
So process payments for.
Nearly 5000 schools around the world now and.
And then also just in general when you look at.
You're adding more clients.
In all these geographies, including places like the UK to the WPM deal that helps us really.
Our solution in front of more and more Chinese students now obviously, there are macro conditions happening right, whether it's travel obstacles, whether it's the visa approvals.
Even just economic related.
Impacts and student is going to change where they go right. We called out the growth in India is a big area. That's obviously a net positive.
And our belief is over the medium and long term youre going to see continued growth in international student numbers right. If you look over the last two decades, you've seen single digit growth consistently in the international students over time on an annualized basis right and so again, that's our belief that's where we think it's going to go.
You asked how our schools are impacted our schools are looking to diversify you talked to any of our clients and education.
This is this is a if.
If they are heavily concentrated in one market.
They're looking for ways to diversify and ensure they are positioned properly for students.
In many countries around the world.
Remember, we touch students coming from over 100 countries and territories every year.
And schools need to really continue to monitor where is their student population coming from is it diversified many of our clients have multiple campuses in different parts of the world as well, which have different populations of students coming to them and I think all of that is what you have to look at when you're when you're an educational institution with.
In this macroeconomic environment for fly why are we think we're well positioned because of that geographic distribution of our business.
It makes a ton of sense I appreciate all the color on that and then.
As a follow up I was wondering if maybe you can touch on a few of the details on the AWP on acquisition I guess.
I know you talked about 'twenty previously that had already signed up and it sounds like you've got 20 more in the pipeline.
What contribution if any did that have to the current quarters results I know there was.
Some talk of maybe being able to get them to go live in time for tuition season. This year.
So Rob here, obviously, you have seen that there is a contribution from WPM thats based on their sort of steady ongoing business relatively flat.
Platform, a usage fee revenue you've seen that relatively consistently.
And now with the go live in the first major period of enrollment for the U K, we're starting to see some of the benefit of that.
Tuition flow transactional based revenue.
For this quarter is still low single digit millions, but very optimistic that that will grow into a meaningful part of our business for next year.
Got it that's very helpful. I appreciate you taking my questions.
Thanks, Paul.
Our next question comes from Natasha comes from Tyson Huang from Jpmorgan. Please proceed with your question.
Yes.
Hi, Thanks, guys just.
I wanted to ask just looking at sales activity pipeline that kind of thing any any change in.
And some of your client priorities, especially in education I'm, just curious how the active opportunity and deal size.
And the pipeline, maybe how thats changed in the last 90 days.
Sure Tien tsin I can start with that.
It was another great quarter for client acquisition you heard in my comments 145 clients.
Look closely at the data it's spread across all the verticals that spread across all the geographies really strength and great client wins across each of them.
If you look at the pipeline values as opposed to the IRR signed and the client side.
Very nice growth in pipeline as well.
We're up over 50% for the quarter were up compared to the prior quarter.
Prior year quarter were up over 50% year to date in pipeline value. So we feel really good that as we have these good quarters in signings. We are also growing the pipeline.
He is very nicely.
Great. That's good to hear Bob just and I get this question and then I'll jump off I get this question from investors just with the strong dollar.
Curious I mean does that persist.
Asking about translation or anything just with the stronger does that have any impact on <unk>.
On demand whether it be for.
Students wanted to come to the U S or even <unk>.
Schools International schools, maybe doing some decision making is that something we need to consider that youre watching thank you.
I think I think that will play into just macro conditions of where students choose to go.
Maybe maybe.
They are coming from a certain type of demographic. They may be looking at more cost effective channels, just as someone would if they were potentially getting scholarship dollars or whatnot.
I think there is a bit of potential in that but I would just caution you to not think it's a huge trend right. Most of these families have been saving for.
Many many years, sometimes decades to send their kids abroad, and if they can get into.
Some of these top universities theyre likely to still figure out ways to make that happen right. They see this as a very long term investment.
And so I don't think it's a major thing, but you may see a minor impact based on short term thing.
Yes, no I figured that was the case you want to go to Columbia, you kind of go to Colombia, if you could thanks.
Our next.
<unk> comes from the line of Darrin Peller with Wolfe Research. Please proceed with your question.
Hey, guys.
When we look at the monetization.
<unk> right you guys put up this quarter. It did definitely had an expansion on a year over year basis that was more than I know, we and I think most people anticipated, even though the year over year basis. It was on a percentage terms I think it was up the most I've seen it up so was there something going on around mix or maybe the acquired revenues coming in or anything else or is that just.
The new sustainable rate for some reason could you just help us give us some insights there.
Hey, Darren this is Mike Ellis, Yes, sure sure will the monetization rate when you look at it in the aggregate certainly up as you've indicated if you look at it on a more granular basis look at the transactional revenue component in the transaction MLR. It's really the result of the card mix that you can kind of tell looking at adjusted gross margin you've also seen that decline so.
Obviously, it's the credit card mix, that's basically driving that transaction revenue monetization rate higher for this quarter. In addition to that on the platform side, you've got the acquisition of cohort go in WPM that basically adds revenue, but does not add any associated volumes to the platform. So therefore youre seeing.
The increase.
In that quarter.
Quarter as well.
Okay, and so thinking about the implications of that going forward.
Again, there's a mic there is a mixed dynamic obviously on there but from a gross margin standpoint, and kind of offsets I mean, correct me if I'm wrong. The seasonality is still from an education vertical standpoint, higher this quarter, which would impact gross margins also right.
And then just that is correct.
Okay. Just a quick follow up is just remind us and revisit for US again your thought process around.
Around the profitability of the business going forward in.
In terms of your emphasis on it and I know.
We heard you guys talk about a pathway of which led to about 300 bps of margin expansion potential for a year.
Three to 400 basis points is that still in your mind, the right way to think about things for us.
Yeah, So darrin.
And then Jay a little bit when he came into 2023 guidance.
I think people can expect from US I've said it before as we're looking we're not obviously given guidance in 'twenty, three but 30 plus percent organic grower right. We've shown we can grow profitably strong EBITDA margins last year as a percentage of strong EBITDA margins for this quarter as a percentage.
I would say people should continue to expect us to expand EBIT margins the $3 to 600% sure at an analyst day. The only thing I'd just highlight obviously didn't didn't see the FX wind coming as much as it has come here and so as we go through 2023 planning will take that into account, but you can expect us to continue to push for that 30 plus percent growth and do so.
With expanding EBITDA margins as.
Real quick any change versus besides the education vertical we talked about a lot was there any change versus what you expected and the other in the whether it's health care travel or BW verticals versus expectations. Thanks again guys.
Hey, Darren.
Just comment that we haven't talked a lot about the strength in travel yet on this call travel is continuing to be a very strong vertical for us we talked about the drivers that came out of Europe in our last call. Those continue to be true. This quarter. We are pleased to be able to say that we're seeing positive trends coming out of APAC as well.
We're investing and confident in that travel business, believing it can continue to grow for us and so that's a highlight.
You heard us call out <unk>. The example of beta BVI, our new client sign from the quarter that has just gone live in moving some significant volume from them right out of the gate. We continue to believe that that's a perfect example of what we can do for clients in the <unk> side of things, helping drive ROI for them and volume for us.
And the health care business has also been strong in terms of signings and we got a cadence of go lives that are happening now and going forward. So really good things going on across the other verticals as well that we haven't talked about much yet on this call and Wilson.
Thanks.
Our next question comes from the line of Ashwin <unk> with Citi. Please proceed with your question.
Eight.
Thank you.
Hey, I just wanted to follow up on the <unk>.
One of the announcements you've had in the quarter was it.
It has integrated payments solution.
For higher education institutions.
Thanks.
Seems to me that.
That kind of thing, maybe an opportunity going region by region across the world.
Just to pick up groups.
Sure.
Hi, education institutions, and and rolled it into your platform is that the is that the right.
The way to read that or.
Or am I over thinking on that.
I think youre exactly right Ashwin, So I mentioned in my comments.
We were continuing.
Continuing to focus on the channel strategy that we have as you apply it to the education vertical University is a good example, one of many impact what we really like about those is that they not only help us do a great job for the clients.
Make it way easier to get the introductions and start getting traction with those clients. So.
These are very mutually beneficial relationships with our software partners that we integrate with their great for the clients that we can integrate and get live faster and so we have a team that is working to build those kinds of relationships really in each of our verticals in each of our main geographies and so.
We've talked a lot in the past really we'd probably focused on direct more than we've talked about channel. I think you should understand that we also are increasingly effective on this channel relationship and integration side and continuing to work well there.
Good to know.
And then.
You've obviously interspersed a lot of macro commentary to the call but.
If I can go back to sort of.
Sure Rich.
Should be a cyclical should be benefiting from.
Sort of at least for a couple of more quarters, maybe maybe easier COVID-19 comp.
How are you thinking of sort of how.
Our decision, making and.
Cost takeout.
Scenario sort of evolved in there for your client.
As you as you look at the next six.
Six to nine months.
Yes, we just had a.
Our client Advisory Board type meeting and I got a chance to spend a bunch of time with clients of ours and it is very clear that what we're doing for these clients is increasingly important to them. If you look at the results that we shared in a couple of the case studies that I called out in my comments just a while ago. You can see we are delivering real bottom line results for the benefit of these clients you talk about the benefit from more.
Self service the benefit for more payment plans more collections against payment plans all of that is a real win for our clients by the way. It's also a win for those patients for whom we're providing an affordability solution. So I think of this as really being sort of a structural imperative in the health care business that they have to be good at this patient responsibility.
Portion of collections and Thats really what we do for them. So.
We're.
Very focused on just delivering great results for our clients more personalization and more optimization.
The delivery of our capabilities and like I mentioned in my comments, a couple of minutes ago feeling good about the team's signings and go lives that are happening as we speak.
Got it thank you.
Our next question comes from the line of Dan Perlin with RBC capital. Please proceed with your question.
Thanks, Good evening guys.
Just had a question around travel for a second.
Obviously, an incredibly strong and it sounds like Mike you've been talking about the extension of the seasons and things of that nature. The question that I have is you know travel is probably the most cyclical business that you know you kind of have to deal with and I'm wondering when you look at your pipeline of business and deals that are in that category and you feel like that deep enough and strong enough to.
To the extent that if travel were to slow.
Kind of more in the near term you have enough incremental net new business that would kind of be like this.
Our countercyclical overlay to that segment.
Hey, Dan how are you doing it's Mike So I would tell you a couple of things right. The pipeline acceleration travel has been really really good and strong.
Also remember the three sub sectors right, whether its tour operators destination management companies and accommodations.
They all have the similar profile.
To what we've talked about in our education business with having geographic diversity in sub segment diversity right, meaning you can for instance have traction in certain types of tours in Europe .
And then find those same types of tour is happening in other parts around the world as you kind of prove out a subset segment.
And then also we just proving the ability to expand into geographies right. So by hiring.
<unk> to target certain countries or geographies that are from those areas and have knowledge around the travel industry.
We've proven our ability to accelerate pipeline there. So we feel really good about not only the monthly.
Quarterly signed rates, but where we finished the year what that could mean for IRR.
And then I just also highlight Covid is probably.
Certain parts of education, but COVID-19 are still going through that rolling recovery that we've talked about right geographic travel markets like Japan have just opened right.
Actually flew through Japan regret I didn't get a chance to spend time with our <unk> in Japan because of the travel restrictions hadn't been lifted by a few days from when I went through on my way to Singapore, but that market is now open.
You've got a big winter season coming in you have the.
The first time.
Them being able to welcome back tourists from all over the world and so that's happening throughout Asia similar to how it happened in Europe over last summer. So I think that also provides us great confidence as we go into 2023, not only the signing the scaling of our go to market team I called out some great pipeline.
<unk>.
Work that our marketing team has done to help us target the sub sectors, new geographies and get to revenue very very quickly.
So feel really good about where we are we're going to finish the year in travel and really great about where we think it's going to go in 'twenty three.
Yes, that's awesome context.
Just another quick one you talked about domestic.
Domestic education payments volumes doubling.
And you talked about Colombia, as a new win.
Yes. My question there is really high.
Did you get them across the goal line I mean to me it seems like a pretty obvious sale.
But I'm sure that's a much a much more challenging proposition that I'm, probably giving a credit too, but that's a huge client for you guys to have that a win with I'm wondering what that process maybe what.
Went through how long it was and then when we think about kind of penetration rates within your kind of book of business is there a way for us to start to scale that over time or is it still a little too early to give that keep your eye out. Thank you.
So obviously, Colombia is a great win you heard us talk about some of the other great ones in education over the course of the past few calls where we talked about the Texas A&M, we've talked about Stanford and others.
And really for each of these where we tend to be replacing an incumbent providers certainly in the case of Colombia, Theres, a long standing solution. There that we're replacing so what I think is at the root of this as well.
It's not easy to replace an incumbent provider the value proposition, we have a very compelling and that's what's allowing us to be successful and move these major clients onto our platform.
As word gets out that.
The value that we're delivering and.
Some of the things we talked about in the past like for Texas, A&M that where does get out and it makes it easier to continue to get into these conversations with more and more schools.
We are working to accelerate the pace of that we've got more and more things coming that will be sharing and it's.
As a great market opportunity, it's a revenue multiplier for every one of these that we win.
We'll be focused on trying to grow that number.
Very very much the case for 2023.
Yeah.
Thank you so much.
Thanks, and our next question comes from the line of John Davis with Raymond James. Please proceed with your question.
Hey, good evening guys.
Mike Ehlers, just I appreciate all the color on FX, but if I look at it we basically I just want to check my math here, we went from like 500 basis points for the full year.
700 basis points kind of an incremental $2 million in <unk> and <unk>, so versus where in August we have incremental $4 million of FX headwind is that fair.
Hey, John Good to hear from you I would suggest that over the course of the quarter.
The aggregate for the three months and $5 million I don't im not going to break it down by monthly because I don't have that information in front of me, but that would be the number that I would be confident and Sharon.
Okay, and then just on monetization rate to follow up on Aaron's question.
Do you guys benefit at all or how material is FX volatility.
You have the ability to kind of increase spreads there was that part of the kind of better than expected monetization rate this quarter.
So in terms of FX rates, that's not really sort of part of the spread calculus right. When we when we talk about spreads the key point being that we have maintained steady spreads over the past couple of quarters continue to have good spreads again in the most recent quarter, but.
FX is not ultimately a pro or con.
In that evaluation and J D. If you are talking about more pricing leverage.
Just highlight that obviously there is that opportunity is there both on the transactional and on the platform side from a pricing lever perspective, it's not something that we pulled that lever very often there's always optimization happening but.
Obviously, it's a future lever, we could choose to pull but not something that.
Our current focus.
Okay and one last question for me, Mike have you guys help us size, China at all as a percentage of revenue.
Obviously lots of questions and focus on the on the China issues.
Understanding you, India and some other regions or are helping offset in schools will kind of flex.
Their geographic mix depending on.
These type of issues, but just yes.
A lot of questions we get.
Anything you could help us with as far as like how big China is as a percentage of overall revenue.
Yeah sure. So what I would tell you is obviously, India, India has overtaken China. So obviously that dynamic has changed and that frankly is that varies even by country of destination right theres different countries that drive based on where the students are going to have students coming from different populations. What I can tell you about <unk>.
Even if you were to make the assumption that.
China stays flat, we still feel pretty confident about our growth trajectory that we talked about.
And maintaining that 30 plus percent growth growth so again.
Can't tell what the future holds lots of dynamics going on in that macroeconomic environment, but as I said, we continue to grow even in Q3 within that China corridor.
And.
Feel feel good and feel like we can navigate it going forward.
Okay I appreciate all the color thanks, guys.
Our next question comes from the line of Jason Kupferberg with Bank of America. Please proceed with your question.
Good afternoon, everyone. This is Tyler Dupont on for Jason Thanks for taking the question.
Just to start.
Can you maybe spend a minute or two just parsing out the different growth and volume trends across both the verticals and geographies that you've seen during the quarter I know education seasonally very strong, but just any additional insights there on on where both revenue growth and volumes are coming from both looking at Q3 and then also if you have any insight into next quarter that would be helpful. Thanks.
Yes, so as we've talked about we've seen growth both in education, and travel, which really kind of drove the great results that we can share for this quarter, we do not disclose growth rates or revenue numbers on a vertical by vertical basis as to how we run the business.
But we're happy to take another question as it relates to this.
Sure Yes.
Just building off that as well.
Regarding M&A can you provide an update on the success of integrating cohort go into the education business and.
And just how you think about incremental tuck in acquisitions more broadly.
Whether or not there was certain inorganic revenue contribution guidepost or thinking about or just kind of.
How cohort go is done and then just how are you thinking about acquisitions more broadly.
Sure I'll take that one thanks for the question so.
Yes.
We continue to have the three pillars that we've talked about before just broadly in M&A does it accelerate a geography or an industry that we're in does it add a new capability that can help drive that there are additional revenue streams and then the third and I've often said potential.
Potentially less likely as do we expand into new.
A new vertical market or geography through acquisition. So those pillars continue to gain strong frankly, we think our M&A muscle has is quite strong as a company if you will.
Not only the two deals we did here, but a deal as a private company that was quite sizable as well.
We feel like we're good at identifying we're good at negotiating we're good at executing on the integration and so we look at this market and continue to.
Be active as we have been the cohort the integration is going quite well not only from our people team perspective.
The decisions being made by the team.
<unk>.
The consolidation of both the great work our team has done around agent solution as well as what the cohort team brought to us.
As additional capabilities and really making great decisions on those and executing with urgency and with customers kind of in the forefront.
We feel really good about that frankly.
Sitting here only a few months from having done the deal.
Saying that I could see us being.
Being ready for another deal that's kind of how I feel it's going quite well.
I'd say the other part of your question was just what are we looking for in a deal. Obviously, we have a pretty solid growth rate and feel really good about our organic growth ability.
And so when we look at something we got to find something that we think can be accretive to that.
Lots of businesses out there that can't be accretive to that and so that's something we take into account and then obviously as well we have a good.
EBITA adjusted EBITDA profitability.
Series of numbers and a lot of companies out there in the market don't have those right and so we've got to look at both growth and we've got to look at profitability and economics and.
And most importantly, we get to look for team.
Culture fit so well.
We're a bit picky, we're disciplined but it's something that we're going to we're going to continue to do and feel like I said, we've proven we can do it well and.
And execute.
Great. Thanks, that's great to hear I appreciate the insight.
Our last question comes from the line of Joel <unk> with Truest. Please proceed with your question.
Hi, guys can you hear me okay.
Yep great.
Great. Yes. This is Joe <unk> on for Andrew Jeffrey and I know last August I think somebody mentioned that.
International student rates for something like 15% off the 29 levels and it sounds like starting to recover a bit in <unk>.
And going into 2023, and I guess, even the <unk> can you guys kind of help us understand how you view the cadence of recovery, there and how we should be thinking about a potential revenue lift I understand you did you say that you don't really feel comfortable giving any kind of vertical specific growth rates, but just any additional color. There for how we should be thinking about recovery would be really really helpful.
Yes.
Hey, Joel.
What I would tell you is again obviously.
I didn't know back around.
Around the IPO time, how true that statement would actually be but.
We expected a rolling recovery and I think youre seeing that to an extreme across all our industries and across geographies right where.
There are different origination markets, China being a good example, theres different destination markets, Australia being a good example, where they.
Things are opening up we're getting back to pre pandemic levels.
Various rates and then I think you have.
Lots of different.
Geopolitical macroeconomic reasons for <unk>.
Changes or shifts and movement and so again the best thing I can tell you is if you go back and look over the last 20 years of international student enrollments, they've consistently gone up you're going to neutralize obviously for the pandemic.
Some of the drop you've seen there.
But again I think it is.
Is unlikely youre going to see that number.
Go down over time, it's going to likely build it back up to a pre pandemic level.
Whether it does that in 'twenty, three or whether Thats 23, and 24, I think will vary in relation to.
Probably some of the more macroeconomic trends out there.
When we get all the way back there in 'twenty, three or will it be over 23 and 24 I think we're not we're not making any huge growth assumption that is baked into our 2023 planning process that we're in now so we're going to expect.
Steady returned to pre pandemic levels and then.
Our decade long increase similar to the past two decades for international student enrollment.
Great. Thank you so much super helpful. And then I guess, just one last final one and I apologize if I missed this but if I remember correctly you guys should be lapsing the loss in one health care client and finished onboarding about two additional ones. This year, which I think you said would be contributing in the second half of the year.
As the healthcare pipeline is still very robust still feeling good about that.
Yes, Rob here exactly right, so doing doing well in health care with both signings and go lives and.
That one will lap at the end of Q4, and so youll start to see more and more growth coming out of the out of the health care vertical for us.
Thank you guys and again congrats on the quarter.
I appreciate that thanks.
Yeah.
There are no further questions in the queue I'd like to hand, the call back to management for closing remarks.
I know we've run over I appreciate everybody staying on just really want to thank everybody for the continued support of the business and I appreciate everybody for their time today.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
Goodbye.
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