Q4 2023 Holding Inc Earnings Call

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Operator: Good morning and welcome to the Emerald Expositions. Let me remind everyone that this call is [inaudible] and those indicated are Mungo. Thank you, Julie, and good morning everyone.

Good morning, and welcome.

Inc.

In full gear 20 twenty-three earnings conference call.

Before we begin let me remind everyone that this call will include certain statements that constitute forward looking statements.

Herve Sedky: It's great to be with all of you today to discuss our fourth quarter and four year results. I'll start with a high-level overview of our accomplishments, review our 2023 performance, and then give an overview of our strategy. David Doft, our CFO, will then provide more detail on our financials and outlook for 2024. I joined Emerald three years ago, and I'm incredibly proud of the work our team has delivered to date. Remember when we were, Well, remember where we were three years ago? I joined Emerald in January of 2021, in the middle of a global pandemic that brought our business to a screeching halt. I knew then that this was a marathon, not a sprint.

Of the private Securitas Litigation Reform Act of 1995.

These include remarks about future expectations beliefs estimates and.

And prospects.

In particular the companies statements about projected results for 2020 for iPhone forward looking statements.

Such statements are subject to a variety.

Uncertainties and other factors.

That could cause actual results differ materially from those indicated are implied by such statements.

Such risks and other factors are set forth in the company's most recently filed the periodic reports on from 10-K and 10-Q and filings.

Herve Sedky: We needed to manage through the storm, one day at a time, thoughtfully and strategically, and we did. Since then, we've accomplished remarkable miles, posting moments of success that are paving the way for an exciting journey ahead. In 2023, we once again stayed true to our core, drove growth across the business, and remained committed to our strategic pillars of customer centricity, 365-day engagement, and portfolio optimization. Some of this past year's highlights include We saw the vast majority of our connections brands return to pre-pandemic levels of revenue performance and, most importantly, higher levels of impact and growth in the communities we serve. In fact, just yesterday, I returned from CABIS, the kitchen and bath industry show where attendance has far surpassed any event in its history.

The company does not undertake any duty such forward looking statements.

Additionally, during today's call management will discuss non-GAAP measures, which it's beliefs can be useful in evaluating that company's performance.

The presentation of this additional information should not be comforter and.

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As a substitute for result.

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Comparable gap measure can be found in the companies earn.

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As a reminder, this conference is being recorded and a replay of this call will be available on the investors section of the company's website through elephant 59 P. M. Eastern time on March 7th.

I like to learn to call over to Mister Arvey said key President and Chief Executive Officer, Sir. Please go ahead.

Julie and good morning, everyone.

Great to be with all of you today to discuss our fourth quarter and for your results.

Herve Sedky: Across our portfolio, our growth was meaningful, and we believe we are on a path for continued growth. Our efforts spanned various fronts, from introducing on-site rebooking and launching our first-time exhibitor program to expanding into the B2C event landscape with initiatives like NBA Con and Outdoor Adventure Action. We implemented important strategic initiatives and investments that are crucial for our ongoing success, with the expansion of our Emerald Resource Hub in Manila, investments in new tools and resources, and the addition of Lodestone events to the Emerald family. We launched several new events, co-locations, and strategic partnerships while we expanded our international sales reach and welcomed meaningfully higher levels of exhibitors and attendees from outside of the United States. Our content business underwent a significant incremental digital transformation since we made the decision to run it as a standalone business unit through resource investment in editorial, advertising, lead generation, and other media-related services. As part of this effort, we launched our first pan-Emerald media property servicing small businesses called Small Business Exchange, which already has 400,000 newsletter subscribers. I urge you to check it out, actually, at www.smallbusinessxchange.com. Simultaneously, please.

With a high level overview of our accomplishments review our twenties twenty-three performance.

W. A R strategy David Garcia.

More detail on our front April and outlook for 2024.

Three years ago.

Credibly proud of the work our team is delivered today remembered when we were.

Remember, where we were three years ago I joined the Emerald in January of 2021 in the middle of a global pandemic that brought our business to our screeching halt.

Then that this was a marathon not a springs, we needed to manage through the storm.

Day at a time thoughtfully.

Typically than we did.

Since then we've accomplished remarkable milestones fostering moments of success.

The way for an exciting journey ahead.

2023, we once again see truth.

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Some of this past year's highlights include.

So the vast majority of our Connection's brains return to pre pandemic levels of revenue performance and most importantly, higher levels of impact and grow.

The communities research and.

In fact, just yesterday I returned from the kitchen, and Bath industry, So where attendance has far surpassed any event and its history.

Across our portfolio our growth was meaningful and we believe we are on a path for continued growth.

Our efforts spend various funds fronts from introducing onsite rebooking and launching our first time exhibitor program to expanding into the beta C event landscape with initiatives like M. B Acorn.

Door Adventure X.

We implemented important strategic initiatives and investments that are crucial for ongoing success with expansion of our Emerald resource hub in Manila.

Investments in new tools and resources and the addition of lodestone events to the Emerald family.

We launched several new events co locations.

Partnerships, while we expanded our international sales reached and welcomed meaningfully higher levels of exhibitors and attendees from outside of the United States.

Herve Sedky: Our Commerce Businesses expansion into the kitchen and bath home market, adding brands like LG, LG Builders, and Signature Kitchen Suite Divisions, as well as Z-Line, provides a substantial new opportunity for growth, which we believe doubles our total addressable market opportunity for our B2B commerce software. Overall, the Elastic business sustained 20% plus growth in a subscription software revenue base with a net revenue retention of 110%. The progress made on the Emerald platform underscores our commitment to transformation. We have also made progress in supporting our commitment to strengthen diversity, equity, and inclusion (DEI) at Emerald.

Art contents business underwent significant incremental digital transformation since we made the decision to run it as a standalone business unit through.

Resource investment in editorial advertising regeneration in other media related services as part of this effort, we launched our first Pan am old media property servicing small businesses called small business exchange, which already has 400000 news.

Letter subscribers.

Or did you check it out actually at Www Dot small business X change dot com.

Simultaneously.

Our commerce businesses expansion into the kitchen, and Bath home market, adding brands like L. G's algae builders in signature kitchen, sweet divisions as well as D line.

Herve Sedky: This progress stems from the work of our dedicated DEI committee, as well as the efforts of our teams and brands, which supported over 100 successful social programs, partnerships, and initiatives last year. Our commitment to sustainability and Emerald's Net Zero Priorities continue to drive forward. We anticipate even greater transformation in 2024, propelling us closer to achieving our sustainability goals. We believe this effort is good for business, and many of our customers look to us here for our leadership. With all this, we've enjoyed strong, double-digit growth in both revenue and adjusted EBITDA, and I'm confident in our ability to continue to deliver high levels of growth given our razor-sharp focus and investments in long-term growth initiatives, which include, one, freeing up our sales force to hunt for new customers with the implementation of on-site rebooking across our events and enhancing our sales support and lead generation efforts through our Emerald Resource

Provides a subsidy.

Stanfill, new opportunity for growth, which we believe doubles are total addressable market opportunity for our <unk> Commerce software.

Overall, the elastic business sustained 20 per cent plus growth and a subscription software revenue base with a net revenue retention of 110%.

The progress made on the Emerald platform underscores our commitment to transformation.

We have also made progress in supporting our commitment to strengthen diversity equity and inclusion.

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This progress stems from the work of our dedicated D I Committee.

As well as the efforts of our teams and brands supporting over 100 successful social programs partnerships and it's and initiatives last year.

Commitment to sustainability and.

And emeralds net zero priorities continue to drive forward, we anticipate even greater transformation in 2024, propelling us closer to achieving our sustainability goals wiebe.

We believe this effort is good for business and many of our customers look to adhere for our leadership.

With all this we've enjoyed strong double digit growth in both revenue and adjusted EBITDA and I'm confident in our ability to continue to deliver high levels of growth given our razor sharp focus and investments and longterm growth initiatives and these include one freeing up our sales force.

To hunt for new customers with the implementation of onsite Rebooking, a crossword events and enhancing our sales support and lead generation efforts.

Who are Emerald resource hub.

Herve Sedky: Second, expectation that each brand in their annual three-year brand operating plan will identify adjacencies and sub-expos, supported by our accelerator team that was created to purely focus on launching new brands, thereby catalyzing growth in the exhibitor phase at our event. Third, driving matchmaking adoption, which we are now testing with elements of AI to drive even more relevant matches to our clients, directly benefiting their ROI from attending our events.

Second expectation that each branch in their annual three your brain operating plan will identify adjacencies in sub expose supporting buyer accelerated team that was created to purely focused on launching new brands, thereby catalyzing growth in the exhibitor fees at our events 30, driving matchmaking adoption.

That we're now testing with elements of AI to drive even more relevant matches to our clients directly benefitting there are wide from attending our events and fourth transforming how we market to further grow qualified attendants at our events, including enhance focus on growing our databases.

Herve Sedky: And fourth, transforming how we market to further grow qualified attendance at our events, including an enhanced focus on growing our databases and broadening our reach into industries via collaboration, being our connections and content team. We also created new centralized departments within the company that not only gives us tremendous operating leverage but also ensures the implementation of best practices across the business. These include one, an international sales group to drive growth by curating and expanding our overseas agent network and working with trade commissions, agencies, and governments to drive sales at Emerald's events. As part of this, we developed and executed a plan to set up country pavilions across our events to highlight these markets and sellers.

And broadening our reach into industries vehicle arbitration being our connections and content cheese.

We also created new centralized departments within the company that not only gives us tremendous operating leverage but also ensures the implementation of best practices across the business. These include won an international sales group to drive growth.

You're reading and expanding our overseas agent network and working with trade commissions agencies and governments to drive sales that emeralds events.

As part of this we developed and executed a plan to set up country pavilions across our events to highlight these markets and sellers and total we believe we can double the percent of revenue from international exhibitors from 11% in 2023% to 20% over the next few.

Herve Sedky: In total, we believe we can double the percent of revenue from international exhibitors from 11% in 2023 to 20% over the next few years, second to the pricing group and strategy to capture the value we create for exhibitors and attendees. We have standardized our pricing processes, implemented reporting with visibility into trending and forecasting, allowing for continuous improvement and improved yield through rate mix changes, removing dilutionary products. Reducing discretionary discounting, rate tier reductions, and the introduction of late rates.

Here's second to pricing group and strategy keep capture value, we create for exhibitors in attendance.

We have standardized our pricing processes implemented reporting with visibility into trending in horse forecasting, allowing for continuous improvement and improved yields true right mix changes.

Removing did loose Mary products.

Reducing discretionary discounted rate reductions the introduction of late rates.

Herve Sedky: Inventory Controls, and Location-Based Pricing. In total, this has allowed Emerald to improve the overall yield on its products and deliver increases well in excess of inflation. And third, we created a customer experience group, which included the launch of exhibitor onboarding and first-timer programs to help exhibitors leverage best practices to maximize their return on investment at our events. We believe that this program should directly translate into increased customer retention for Emeralds, and with it, higher growth. Now, let's turn to our results.

Inventory controls and location based pricing in total this is allowed <unk> to improve the overall yield on its products and deliver increases well in excess of inflation.

And third we created a customer experience group, which includes the launch of exhibitor Onboarding and first timer programs to help exhibitors leverage best practices to maximize the return on investment at our events. We believe that this program should directly translate into.

Increase customer retention for Emerald and with it higher growth.

Now, let's turn to our results.

Herve Sedky: Starting with live events in 2023, we saw another significant step forward in both revenue and profitability driven by increases in exhibitors, attendees, and prizes. Emerald continues to benefit from post-COVID tailwinds, including the removal of international travel restrictions, which persisted into early 2023 in some countries, as well as improvements in our customers' supply chain. Square footage at our trade shows grew 11% year-on-year, while exhibitor counts also grew 11% as compared to 2022. As I noted, we've implemented onsite rebooking at most of our trade shows, which means we are already selling visitor space for events up to 12 months out.

Starting with live events in 2023, we saw another significant step forward in both revenue and profitability driven by increases in exhibitors attempt.

Attendees and pricing.

Emerald continues to benefit from post Covid tailwinds, including the removal of international travel restrictions.

Which persisted into early twenties twenty-three in some countries as well as improvements in our customers supply chains.

Square footage at our trade shows grew 11% year on year, while exhibitor count also grew 11% as compared to 2022.

As I noted wisdom, we've implemented onsite revoking at most of our trade shows which means we are already selling space for events up to 12 months out.

Herve Sedky: Our sales pacing data gives us a great deal of confidence in our growth trajectory for 2024, with three quarters of targeted booth revenue already under contract and where we project continued increases in our revenue above our industry's historical run rate. The strength of our business comes from the unique and measurable value we bring to our customers, who are themselves business owners looking to maximize the value they get out of their marketing budgets. Trade shows provide a tangible ROI to exhibitors in the form of new customers and purchase orders. For nearly half of the small businesses in the U.S. that participate in at least one trade show per year, trade shows are their number one selling event of the year.

Our sales piecing things gives us a great deal of confidence in our growth trajectory for 2024 with three quarters of targeted booth revenue already under contract and where we project continued increases in our revenue above our industry's historical run rates.

The strength of our business comes from the unique and measurable value, we bring to our customers who are themselves business owners looking to maximize the value they get out of their marketing budgets tradeshows provide a tangible R. O Y two exhibitors in the form of new customers and purchase orders for nearly.

Half of the small businesses in the U S or participate in at least one trade show per year trade shows are there are a number one selling event of the year a big part of our ongoing effort has been to clarify the value proposition to make the wrong more transparent by developing value added tools and metrics, which we believe will deliver an even better too.

Herve Sedky: A big part of our ongoing effort has been to clarify the value proposition and make the ROI more transparent by developing value-added tools and metrics, which we believe will deliver an even better trade show experience to both exhibitors and attendees. The result is that our customers view our shows as an investment rather than a cost. They know we understand them, continuously adapt to their ever-changing needs, and that our objective is to help them achieve and even surpass the goals they have set for themselves.

Great show experience to both exhibitors and attendees. The result is that our customers view our shows as an investment rather than a cost. They know we understand them continuously adapt to their ever changing needs and that our objective is to help them achieve and even surpass the goal. They have set for themselves. This is what our brain to.

Herve Sedky: This is what our brand teams focus on each and every day. While our lab events business remains strong, the performance of our content business was somewhat muted in 2023. As I noted last quarter, our content business is more broadly exposed to the technology sector, where we saw a pullback in ad spend last year. This ultimately put downward pressure on our media business for the full year.

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While our lab events business remains strong the performance of our concept of our contents business was was somewhat muted in 2023.

I noted last quarter or content business is more broadly exposed to the technology sector, where we saw a pullback in AD spend last year.

This ultimately put downward pressure on our media business in the four year. However, our strategic growth initiatives combined with a recovery in the broader economy and with the tech sector approaching the end of its cost cutting cycle, we expect that the media business to return to growth in 2024.

Herve Sedky: However, our strategic growth initiatives, combined with the recovery in the broader economy and with the tech sector approaching the end of its cost-cutting cycle, we expect the media business to return to growth in 2024. In terms of our broader strategy for 2023, we continue to execute on the three pillars of value creation. Customer Centricity, 365-Day Engagement, and Portfolio Optimization. Customer centricity means delivering greater value to customers in the form of add-on services, actionable data and insights, and a clearer picture of the return on investment customers receive from the marketing dollars they put to work across Emerald's platform.

In terms of our broader strategy in 2023, we continue to execute on the three pillars of value creation customer Centricity 365 day engagement and portfolio optimization and.

In customer Centricity, we're focused on delivering greater value to customers in the form of an add on services actionable data and insight and a clearer picture of the return on Investor and bad investments customers receive from the marketing dollars he put to work across emeralds platform.

Herve Sedky: This improves our stickiness with customers, incentivizes them to deploy more marketing dollars with Emerald, and ultimately, we expect, will help drive higher revenue per customer. Our second pillar, 365-day engagements, is about providing multiple entry points into the customer engagement cycle through trade shows, conferences, webinars, media content, and our e-commerce platforms, which give buyers and sellers a digital platform for year-round transactions. Our third pillar is portfolio optimization, which includes both acquisitions and new event launches. Over time, we expect that new launches through the Emerald Accelerator Unit will contribute one to two percentage points of annual revenue growth. On the acquisition side, we continue to evaluate a large pool of potential acquisitions with the ability to bring Emerald's scale and operational efficiencies to shows within a highly fragmented industry.

This improves our stickiness with customers incentivize and staff to deplore more marketing dollars with Emerald and ultimately we expect will help drive higher revenue per customer.

Our second pillar 365, the engagement is about providing multiple entry points to the customer engagements cycle through tradeshows conferences, Webinars media content and R e-commerce platforms.

That gives buyers and sellers a digital platform for year round transactions.

Our third pillar is portfolio optimization, which includes both acquisitions and new event launches overtime. We expect we expect that new launches through Emerald accelerator unit to contribute one to two percentage points of annual revenue growth.

On the acquisition signs, we continue to evaluate a large pool of potential acquisitions with the ability to bring emeralds scale and operational efficiencies too.

Two shows within a highly fragmented industry.

Herve Sedky: This includes some smaller near-term opportunities in the active pipeline that we're working hard to get over the finish line. We took a patient approach to M&A in 2023, walking away from some acquisition opportunities that did not meet our criteria. In January 2024, we expanded our hosted buyer event offering by acquiring Hotel Interactive and its series of biotech and health tech events. Combined with our existing CPMG unit, we now have 29 hosted buyer events on our annual calendar. While smaller in size than the traditional trade show, we like hosted buyer events given the high quality new business leads they provide our customers.

This includes some smaller near term opportunities in the active pipeline that we're working hard to get over the finish line. We took a patient approach to M&A and 20 twenty-three walking away from some acquisition opportunities that did not meet our criteria.

In January 2024, we expanded our posted buyer event offered by acquiring hotel interactive and it series of Bipack tack events combined with our existing C. P. M. G unit. We now have 29 hosted by her events on our.

Annual calendar, while smaller in size than the traditional trade show, we'd like the hosted buyer events given the high quality new business leads it provides our customers.

David B. Doft: Looking ahead, we continue to expand our opportunity set, building a proprietary pipeline of potential deals, which we expect to pay off with future potential acquisitions to scale and diversify our portfolio. Between organic growth, acquisitions, and new show launches, we believe we've positioned the company as an engine for double-digit long-term growth. With the benefits of operating leverage, we expect to be at 35% EBITDA margins in the coming years with strong continued growth prospects ahead of us. To conclude, although 2023 came in slightly below our original revenue expectations, it remained a year of powerful growth as we grew revenue more than 17% and adjusted EBITDA by 67%. We're especially excited as we look ahead to 2024 and beyond, where we expect to continue to demonstrate our free cash flow generation and compounding abilities as we look to grow attendance and revenues, expand margins, and continue to realize the benefits of our recent investments in our technology and data systems that deliver greater and greater value to our customers every year that they return to us. And with that, I'm going to turn the call over to David. Thank you, Herve, and good morning.

Looking ahead, we continue to expand our opportunities set building a proprietary pipeline of potential deals, which we expect to pay off with future potential acquisitions to scale and diversify our portfolio.

Between organic growth acquisitions and neutral launches, we believe we physician the company as an engine for double digit longterm growth.

With the benefits of operating leverage we expect to be at 35% EBITDA margins in the coming years with strong continued growth prospects ahead of us.

To conclude although 2023 came in slightly below our original revenue expectations eerie made a year of powerful grow as we grew revenue more than 17% and adjusted EBITDA by 67% were especially excited as we look ahead to 2024 and beyond where we <unk>.

Specter continued to demonstrate are free cash flow generation and compounding abilities as we look to grow attendance and revenues expand margins and continued to realize the benefits of our recent investments into our technology and data systems that deliver greater and greater value to.

Our customers every year, so to return to our shows and with that I mean.

Over to David.

Thank you Herve and good morning Star.

David B. Doft: Starting this quarter, we have realigned our reporting segments to better reflect how our business is organized and managed. Our Connections segment includes all of our live events, while the All Other grouping includes our media content assets as well as our software e-commerce assets. This follows the completion of a reorganization executed during the year where we focused leadership around the products and services we provide as opposed to the industries we serve. We expect this will allow us to better share best practices and increase the speed of innovation within Emerald. This has also had the added benefit of enabling us to streamline our executive team to become less top heavy.

Starting this quarter, we have realigned hour reporting segments to better reflect how our business is organized and managed.

Our Connection's segment includes all of our live events, while the all other grouping includes our media content assets as well as our software E Commerce assets.

This follows the completion of a reorganization executed during the year, where we focused leadership around the products and services, we provide as opposed to the industries we serve.

We expect this will allow us to better share best practices and increased the speed of innovation with enameled.

This has also had the added benefit of enabling us to streamline our executive team to become less top heavy.

David B. Doft: For 2023, our connections segment accounted for 89% of total revenue and 97% of adjusted EBITDA pre-corporate expenses. A full breakdown of segment performance is available in our earnings release, and our investor presentation posted this morning to our website provides some historical trending data for your models. Turning to our results, for the fourth quarter, total revenue was $101.5 million, compared to $93.6 million in the prior year quarter. The increase was driven primarily by organic revenue growth and less so from revenue from acquisitions.

For 2023, our connection segment accounted for 89% of total revenue and 97% of adjusted EBITDA pre corporate expenses.

A four breakout of segment performance is available in our earnings release, and our Investor presentation posted this morning to our website provides some historical trending data for your models.

Turning to our results for the fourth quarter total revenue was $101.5 million compared to $93.6 million in the prior year quarter. The increase was driven primarily by organic revenue growth and less so from revenue from acquisitions for.

David B. Doft: For the full year 2023, total revenue was $382.8 million compared to $325.9 million in 2022, representing an increase of 17%. Organic revenue for the Connections segment, which takes into account the impact of acquisitions and scheduling adjustments, was $87.5 million for the fourth quarter 2023, an increase of $5.7 million or 7% versus the fourth quarter of 2022. For the full year 2023, organic revenue for connections was $327.5 million, an increase of $47.7 million, or 17% versus the full year 2022.

For the full year 2023, total revenue was $382.8 million compared to $325.9 million in 2022, representing an increase of 17%.

Organic revenue for the connection segment, which takes into account the impact of acquisitions and scheduling adjustments. It was $87.5 million for the fourth quarter 2023, an increase of $5.7 million or 7% versus the fourth quarter of 2022.

For the full year 2023 organic revenue for connections was $327.5 million, an increase of $47.7 million or 17% versus the full year 2022 given.

David B. Doft: Given the decline in our content business, organic growth in total was an increase of 14.5% for the year. During the full year 2023, we recorded $2.8 million of other income, which hit in Q3, reflecting the remaining insurance proceeds paid to us under our event cancellation insurance as a result of the disruptions during COVID. Recall that in 2022, we recorded $182.8 million of other income representing a large portion of those insurance proceeds. At this point, we have no remaining COVID-related event cancellation claims outstanding.

Given the decline in our content business organic growth in total was an increase of 14.5% for the year.

During the full year 2023, we recorded $2.8 million of other income, which hidden Q3, reflecting the remaining insurance proceeds pay to us under our van cancellation insurance as a result of the disruptions during COVID-19 recall that in 2022, we recorded $182.8 million of other income.

Representing a large portion of those insurance proceeds at this point, we have no remaining COVID-19 related event cancellation claims outstanding.

David B. Doft: Fourth quarter adjusted EBITDA increased 43% to $35.8 million compared to $25.0 million for the same quarter last year. Full year 2023 adjusted EBITDA excluding insurance proceeds was $95.0 million compared to $56.8 million for the full year 2022, an increase of 67%. This also equated to an over 700 basis point improvement in adjusted EBITDA margin excluding insurance proceeds as our recovering revenue base leveraged our overhead as planned. One important item to note is the level of investment we have been making in the business, which we believe should pay off with higher, more profitable growth in the future. These include launching new events and building out our scaled e-commerce software solution. While these initiatives contribute revenue to the company, in aggregate, they dragged the reported adjusted EBITDA margin by 4 percentage points in 2023. Fourth quarter free cash flow was $13.5 million compared to an outflow of $1.4 million in the prior year and the prior year quarter, excluding the impact of the $25 million in taxes paid in 2022 related to last year's insurance settlement recovery.

Fourth quarter, adjusted EBITDA increased 43% to $35.8 million compared to $25.0 million for the same quarter last year.

Full year 2023, adjusted EBITDA, excluding insurance proceeds was $95.0 million compared to $56.8 million and the full year 2022, an increase of 67%. There's also equated to an over 700 basis point improvement and adjusted EBITDA margin Xcode.

Insurance proceeds as a recovering revenue base leveraged our overhead as planned.

One important item to note is the level of investment we have been making in the business, which we believe should payoff would hire more profitable growth in the future.

These include launching new events and building out are scaled ecommerce software solution. While these initiatives contribute revenue to the company and aggregate. They dragged reported adjusted EBITDA margin by four percentage points in 2023.

Fourth quarter free cash flow was $13.5 million compared to an outflow of $1.4 million in the prior year.

Prior year quarter, excluding the impact of the $25 million in taxes paid in 2022 related to last year's insurance settlement recovery.

David B. Doft: Full year 2023 free cash flow excluding insurance was $26 million compared to $6.9 million for 2022, as our increase in adjusted EBITDA was somewhat offset by higher interest expense and timing of payables. Turning to expenses, on a reported basis, fourth-quarter SG&A was $36.1 million versus $17.4 million in the prior year quarter. The year-over-year increase is due largely to 4Q2022's $24 million benefit from a reduction in estimated deferred acquisition consideration from historical acquisitions, which flowed through the P&L as a credit to SG&A, as well as other one-time items that are described in Schedule 3 of our earnings release. For the full year 2023, SG&A was $168.3 million compared to $145.0 million for 2022, largely due to the same dynamic.

Full year 2023 free cash flow executing insurance was $26 million compared to $6.9 million for 2022 is our increase in adjusted EBITDA was somewhat offset by higher interest expense and timing of payables.

Turning to expenses and reported basis, Fourthquarter, SG&A was $36.1 million versus $17.4 million in the prior year quarter. The year over year increase is due largely to four Q2 thousand 20, twos 24 million dollar benefit from a reduction in estimated deferred acquisition consideration.

From historical acquisitions, which flowed through the piano as a credit to SG&A as well as other one time items as described in scheduled three of our earnings release.

For the full year 2000, twenty-three SG&A was $168.3 million compared to $145.0 million for 2022, largely due to the same dynamic.

Turning to the balance sheet, we had $204.2 million in cash as of December 31st 2023 versus $200.3 million as of September 30th after funding the $8.6 million dividend on our convertible preferred stock are total liquidity is stranger $14.2 million, including <unk>.

David B. Doft: Turning to the balance sheet, we had $204.2 million in cash as of December 31st, 2023, versus $200.3 million as of September 30th, after funding the $8.6 million dividend on our convertible preferred stock. Our total liquidity is $314.2 million, including full availability on our $110 million credit facility. We believe our balance sheet strength and cash flow generation support our ability to opportunistically invest in and grow our business, as well as optimize the per share value of our stock. We expect to continue to balance capital allocation between acquisitions, investments in our own business, managing debt leverage, and opportunistic share buyback. While we did not repurchase any common shares in the fourth quarter, for the full year 2023, we repurchased a total of 5.1 million shares at an average price of $3.34 per share. At year-end, we had $25 million remaining on our existing buyback authorization, which was reloaded by our board in November. In lieu of buybacks of common stock, we fund the quarterly dividend on our convertible preferred stock in cash, as opposed to in-kind, now that we have the option to do so.

<unk> availability on our 110 million dollar credit facility.

We believe our balance sheet strength in cash flow generation support our ability to opportunistically invest in and grow our business as well as the optimize per share value of our stock. We expect to continue to balance capital allocation between acquisitions investments in our own business managing that leverage and opportunistic share buybacks.

While we did not repurchase any common shares in the fourth quarter for the full year 2023, we repurchase a total of 5.1 million shares at an average price of $3.34 per share at yearend, we had $25 million remaining on our existing buyback authorization, which was.

Which was reloaded by our board in November.

And little of buybacks of common stock, we did find the quarterly dividend on a convertible preferred stock and cash as opposed to in-kind now that we have the option to do so we spend approximately $17.2 million on this in the second half of the year, thereby avoiding the issuance of incremental convertible preferred stock.

Talk that could have converted into 4.9 million common shares at issuance given the $3.52 conversion price.

As of December 31st we had net debt of $209.1 million, leading to a net leverage ratio as defined in our credit agreement of 2.13 times are trailing 12 months consolidated EBITDA based on the definition and or a credit agreement of $98.3 million.

The terms of the convertible preferred stock also allow us to forest mandatory conversion of all preferred shares if the price of emeralds common stock closes at $6.17 or higher for 20 consecutive trading days.

David B. Doft: We spend approximately $17.2 million on this in the second half of the year, thereby avoiding the issuance of incremental convertible preferred stock that could have converted into 4.9 million common shares at issuance, given the $3.52 conversion price. As of December 31st, we had net debt of $209.1 million, leading to a net leverage ratio as defined in our credit agreement of 2.13 times our trailing 12-month consolidated EBITDA, based on the definition in our credit agreement of $98.3 million. The terms of the convertible preferred stock also allow us to force mandatory conversion of all preferred shares if the price of Emerald's common stock closes at $6.17 or higher for 20 consecutive trading days.

If we achieved the closing price requirement, we intend to immediately affect the conversion of the preferred shares in our independent directors have already approved this yeah.

Yesterday's clothes represented the 14th Street day, our stock is closed above the threshold should we close at $6.17 or higher for each of the six upcoming trading days through March 7th we would be able to execute the mandatory conversion turn off the 7% dividend.

Pay to the convertible preferred stock holders and save over $34 million per year.

We believe that the conversion of the preferred shares would substantially simplify our capital structure and moderately improve our trading liquidity, making emerald more attractive to potential investors. Additionally, as some data providers have been treating the convertible preferred stock is that in their market cap calculations that <unk>.

David B. Doft: If we achieve the closing price requirement, we intend to immediately effect the conversion of the preferred shares, and our independent directors have already approved this. Yesterday's close represented the 14th straight day our stock has closed above the threshold. Should we close at $6.17 or higher for each of the six upcoming trading days through March 7th, we would be able to execute the mandatory conversion, turn off the 7% dividend paid to the convertible preferred stockholders, and save over $34 million per year. We believe that the conversion of the preferred shares would substantially simplify our capital structure and moderately improve our trading liquidity, making Emerald more attractive to potential investors. Additionally, as some data providers have been treating the convertible preferred stock as debt in their market cap calculations, the conversion into common shares will make it easier for investors to calculate our market cap, which at current prices is approximately $1.3 billion on an as-converted basis.

Conversion into common shares will make it easier for investors to calculate our market cap, which at current prices is approximately $1.3 billion on an as converted basis.

An overview of our capital structure and the effects of the potential conversion of the preferred shares can be found on site 12 of our earnings presentation in tact.

Factoring in 62.9 million of common shares outstanding at December 31, and an additional 139.9 million common shares represented by the convertible preferred shares as of December 31, or total share count on as converted basis basis would be 202.8 million.

As just noted based on yesterday's closing price dissipates to a market cap of $1.3 billion on ads converted basis, adding in our net debt estimated contingent consideration of $7 million on our balance sheet for prior acquisitions and a deferred tax asset worth approximately $70 billion. This.

Leads to an enterprise value of approximately $1.5 billion <unk>.

Turning to guidance, we are initiating full year guidance for 2024 in the range of $415 million to $425 million of revenue.

David B. Doft: An overview of our capital structure and the effects of the potential conversion of the preferred shares can be found on slide 12 of our earnings presentation deck. Factoring in 62.9 million common shares outstanding at December 31, and an additional 139.9 million common shares represented by the convertible preferred shares as of December 31, our total share count on an as-converted basis would be 202.8 million.

And $110 million to $115 million of adjusted EBITDA.

This guidance implies an adjusted EBITDA margin of approximately 27% and includes and over 300 basis point dragged from continued investment in the growth initiatives I noted previously.

We believe as our business continues to scale and we leveraged the investments we have made that we are runway to improve this number as we work our way back over time to the margins we saw prior to Covid.

Thank you very much for your time and with that will now open the line for questions.

Thank you, ladies and gentlemen should you had a question.

Question, Please fastest star followed by.

And you touched.

It should actually which I your question. Please.

David B. Doft: As just noted, based on yesterday's closing price, this equates to a market cap of $1.3 billion on an as-converted basis. Adding in our net debt, estimated contingent consideration of $7 million on our balance sheet for prior acquisitions, and a deferred tax asset worth approximately $70 million, this leads to an enterprise value of approximately $1.5 billion. Turning to guidance, we are initiating full-year guidance for 2024 in the range of $415 million to $425 million of revenue and $110 million to $115 million of adjusted EBITDA. This guidance implies an adjusted EBITDA margin of approximately 27 percent and includes an over 300 basis point drag from continued investment in the growth initiatives I noted previously. We believe as our business continues to scale and we leverage the investments we have made, we have runway to improve this number as we work our way back over time to the margins we saw prior to COVID. Thank you very much for your time. And with that, we'll now open the line for questions. Thank you. Ladies and gentlemen, should you have a question, please press the star followed by the number on your touchtone. If you would like to withdraw your question, please press the star followed by the X.

I did too.

Using a speakerphone, please 50 handset before pressing.

One moment. Please for your first question.

Yeah first question.

Crockett.

Please go ahead.

Okay. Thanks for taking the question and good morning.

I guess.

I just wanted to have a little bit more granularity if I could on the.

The variance here versus what you guys have been expecting her and.

Gave a revenue guidance range for the year and repeated.

Repeat it up Mr quarter, and we came in a little bit below that for the year you gave up EBITDA guided ranch guidance arrangement kind of came in at the bottom and and I assume you're expecting.

Better than that so could you kind of breakdown what the biggest drivers of the variance where that would be question number one and then kind of related question number to.

You know you had five per cent kind of organic growth in the fourth quarter.

Your guidance would have your growth up 8% to 11% revenues. So Ah Reacceleration and can you talk about how much visibility you have an advantage that reacceleration, what you see in the first quarter.

And you know what gives you confidence that the acceleration will happen.

Okay.

Sure Barton. Thank you for the question I'll I'll I'll take the first question in terms of.

Your question on on on.

On our on our performance in the order so.

So I would say there are three things first the content business, while it's a small part of our of our business.

You as you've seen.

We've talked about there are some declines in the corner and and it's been a difficult year for us and for the industry.

The good news is that we do think that budgets have stabilized and and we've made also some investments.

Operator: Using your speakerphone, please leave the handset before pressing any, One moment, please, for your first question. Your first question comes from Barton Crockett from Rosenblatt. Thanks for taking the question and good morning. I guess I just wanted to have a little bit of more granularity if I could on the variance here versus what you guys have been expecting on the you gave a revenue guidance range for the year and repeated that in the third quarter and we came in a little bit below that for the year you gave a EBITDA guidance range when it kind of came in at the bottom end and I assume you were expecting you know better than that so could you kind of break down what the biggest drivers of the variance were you know that would be question number one and then kind of related question number two you know you had five percent kind of organic growth in the fourth quarter your guidance would have your growth up eight to eleven percent revenues so a re-acceleration and can you talk about how much visibility you have into that is that re-acceleration what you see in the first quarter and you know what gives you confidence that acceleration will happen? Sure, Barton.

We we believe that.

Combined efforts that both in terms of what we've done in addition to some.

Some of the processes the product changes that.

That we've made as well as some hedges that.

Quite honestly that we've built in to to the business in 2004.

Will you risk that business for 24, but in terms of 23 performance that was one of the contributors. The second area is admittedly launched.

Launches are hard and the hard to forecast. So the initial revenue that comes from launches.

In the near term have some volatility and while on the hall and in the long run they're really exciting indeed create some real meaningful opportunity and as I mentioned overtime will create 1% to 2% organic growth.

Four emeralds.

They do on a short term basis create some variability and that was one of the impacts of course in the quarter and third there is some sector specific volunteer the utility for us on a quarter to quarter basis, and that's why our organic growth rates fluctuates quarter to <unk>.

<unk>. So we had 7% organic growth rate for instance, the scooter, but based on the sector.

Mix that we have as an example in the first quarter of 2024, we expect organic growth to accelerate beyond that so those would be the three areas that contributed contributed to.

To to that content business the impact of launches in the sector volatility.

David B. Doft: Thank you for the question. I'll take the first question in terms of the question on our performance in the quarter. So, I would say there are three things.

Yeah, and I I think I'm just building on that and go into your second question about the the Reacceleration anticipated in the guidance. We gave it is that that quarter to quarter sector specific performance.

David B. Doft: First, the content business. While it's a small part of our business, as you've seen and we've talked about, there were some declines in the quarter, and it's been a difficult year for us and for the industry as a whole. The good news is that we do think that budgets have stabilized and we've made some investments. We believe that the combined efforts, both in terms of what we've done, in addition to some of the processes, the product changes that we've made, as well as some hedges that, quite honestly, we've built into the business in twenty-four will de-risk that business for twenty-four. But in terms of twenty-three performance, that was one of the contributors.

Our business, it's not one business, it's an aggregation of events that serve specific industries and depending on the corner. We have an event in some industries and another quarter. We haven't we've event in other industries and it's really the sector specific aspect of it that may lead to the changes in growth rates quarter to quarter, where.

We sit right now one Q, we expect to have a nice reacceleration of revenue growth based on the industries, we serve and one Q I want to also happens to be typically the largest quarter of the year for Emerald, which gives us a tremendous amount of visibility into performance for the year as her.

David B. Doft: The second area is, admittedly, launches are hard, and they're hard to forecast. So the initial revenue that comes from launches in the near term has some volatility. And while on the whole and in the long run, they're really exciting, and they create some real meaningful opportunities. And as I mentioned, over time, we'll achieve one to 2% organic growth for emeralds. They do, on a short-term basis, create some variability.

They mentioned in his prepared remarks sitting here today, we've already booked.

Contract signed three quarters of the booth revenue at our banks now there are some other revenue streams around booth revenue, but boots revenue is a very strong proxy for us and highly predictive based on our analysis of the overall revenue performance of the year. So we're feeling really good where we sit right.

David B. Doft: And that was one of the impacts for us in the quarter. And third, there is some sector-specific volatility for us on a quarter to quarter basis. And that's why our organic growth rates fluctuate quarter to quarter. So we had 7% organic growth, for instance, this quarter, but based on the sector mix that we have, as an example, in the first quarter of 2024, we expect organic growth to accelerate beyond that. So those would be the three areas that contributed to that, the content business, the impact of launches, and sector volatility. Yeah, and I think just building on that and going to your second question about the reacceleration anticipated in the guidance we gave, it is that quarter-to-quarter sector specific performance. Our business is not one business. It's an aggregation of events that serve specific industries, and depending on the quarter, we have events in some industries, and another quarter, we have events in other industries.

Now and we're we're ahead.

Of where we were last year at this point relative to the guidance, we put forward to where we ended up an actual as last year. So there's lots of room for for potential voluntarily from here.

We hope we don't have it but we built into a plan that we have high confidence in.

Okay. Thank you for that and.

Again.

Outlook here so.

There's no guidance for free cash flow.

How should we think about the free cash flow conversion of us EBITDA that you expect to generate 24 and.

Any reason why it would be.

Meaningfully different twenty-three or any thoughts around that.

I think in 2024, I I hope, we have a better conversion of free cash flow than in twenty-three there was surely some volatility in twenty-three around working capital, particularly on the payable side.

With some one off dynamics that we think will reversed and stabilize or be more normalised in the 24 a year.

David B. Doft: And it's really the sector-specific aspect of it that may lead to the changes in growth rates quarter to quarter. Where we sit right now, in 1Q, we expect to have a nice reacceleration of revenue growth based on the industries we serve in 1Q. 1Q also happens to be typically the largest quarter of the year for Emerald, which gives us a tremendous amount of visibility into performance for the year. As Hervé mentioned in his prepared remarks, sitting here today, we've already booked.

And and then at least in the traditional reporting of free cash flow of cash flow from operations Might've Capex. The changes in deferred acquisition consideration that flow through cash flow from operations, but I really acquisition related we'd to volatility on that front. If you strip out the deferred acquisition consideration changes.

You actually would get a better free cash flow.

David B. Doft: Contracts signed: three-quarters of the booth revenue at our events. Now, there are some other revenue streams around booth revenue, but booth revenue is a very strong proxy for us and highly predictive based on our analysis of the overall revenue performance of the year. So we're feeling really good where we sit right now, and we're ahead of where we were last year at this point relative to the guidance we put forth to where we ended up in actuals last year. So there's lots of room for potential volatility from here. We hope we don't have it, but we've built a plan that we have high confidence in. Okay, thank you for that.

Then the you know straight up a definition of it but we have to stick with that definition and so we do ultimately in 2024 I.

I think we'll were less likely to have surprises uninterest expense I think we we took a meaningful hit.

An interest expense this year, not just from rising rates, but when we extending the maturity of our dead from a widening spread.

On those rates, which cost us almost $10 million of interest expense in the year relative to our initial expectations coming into the year I think this year as can be I hope will be a bit more predictive on that front and hopefully we get surprised with better interest expense if the right environment improves.

David B. Doft: And, you know, again, on the outlook here, so there's no guidance for free cashflow. How should we think about the free cashflow conversion of this EBITDA that you expect to generate in 24? Any reason why it would be meaningfully different from 23 or any thoughts around that?

As many predict where our initial forecast is for moderately lower capex I in 2024 than 2023.

David B. Doft: I think in 2024, I hope we have a better conversion of free cash flow than in 2023. There was surely some volatility in 2023 around working capital, particularly on the payable side, with some one-off dynamics that we think will reverse and stabilize or be more normalized in the 2024 year. And then, at least in the traditional reporting of free cash flow, of cash flow from operations minus CapEx, the changes in deferred acquisition consideration that flow through cash flow from operations but are really acquisition related lead to volatility on that front. If you strip out the deferred acquisition consideration changes, you actually would get a better free cash flow than the straight-up definition of it. But we have to stick with that definition, and so we will.

We're talking low single digit millions, but it's Ah, it's shirley incremental to the.

Flow through of EBITDA to free cash flow going forward and as I said, we hope and believe the working capital dynamic will be more normalized in 24, but one of the reasons we didn't.

Give a formal guidance on it because that working capital volatility is admittedly not served as well by putting a number is that.

We've had a harder time, predicting but but I do think with that more normalised environment.

We're looking for working capital to to be at least neutral and hopefully additive to cash generation in New York.

Okay, Alright, thank you guys.

Thank you Martin.

Mmm.

As a reminder.

Next question comes from Allen.

Maximum group.

David B. Doft: Ultimately, in 2024, I think we're less likely to have surprises on interest expense. I think we took a meaningful hit on interest expense this year, not just from rising rates, but when we extended the maturity of our debt from a widening spread on those rates, which cost us almost $10 million in interest expense in the year relative to our initial expectations coming into the year. I think this year is going to be, I hope, a bit more predictive on that front, and hopefully, we get surprised with better interest expense if the rate environment improves as many predict, although our initial forecast is for moderately lower CapEx in 2024 than in 2023. We're talking low single-digit millions, but it's surely incremental to the flow through of EBITDA to free cash flow going forward.

Ahead.

Yes, good morning for your software business.

You talk a little about your plans to grow that and.

Your thoughts on.

This will be cash flow breakeven or.

Or one direction or the other 424.

Yes, as I mentioned in my remarks.

One of the exciting things about our software business is that we've been able to expand the total addressable market.

By entering a new category. So we have been.

Playing largely in the.

Outdoor apparel Ah sector for a long time, serving industries that are adjacent to some are events like outdoor retailer and surf and so forth now.

Have entered the kitchen, and Bath and and more of the indoor.

<unk> well and.

With a number of very large prominent signings, which which is really exciting. So the the opportunities for us to grow that business are really to enter a new categories, and we're doing that and they're very thoughtful disciplines way.

David B. Doft: And as I said, we hope and believe the working capital dynamic will be more normalized in 2024. But one of the reasons we didn't give a formal guidance on it is because that working capital volatility has really not served us well by putting out numbers that we've had a harder time predicting. But I do think with that more normalized environment, we're looking for working capital to be at least neutral and, hopefully, additive to cash generation in the year. Okay, alright, thank you guys.

By leveraging.

The relationships in the the contacts and customers that we have in in our business and and with that we we do foresee continued continued growth and and property property.

And think very real time in Hervey and I were at the kitchen and Bath show as you mentioned in his prepared remarks that that is the new industry that elastic has entered into with the wind that he mentioned.

But those wins were announced at the event.

Operator: Ladies and gentlemen, as a reminder, should you have a question... Allen Klee from Max, Yes, good morning. About your software. Yes, as I mentioned in my remarks, one of the exciting things about our software business is that we've been able to expand the total addressable market by entering a new category. So we have been playing largely in the outdoor apparel sector for a long time, serving industries that are adjacent to some of our events, like outdoor retailer and surf, and so forth, now have entered the kitchen and bath and more of the indoor categories, if you will. And with a number of very large, prominent signings, which is really exciting.

And it opened a lot of doors of potential new customer opportunities, especially with the brand names that we've been able to initially signed with their well known in the space and.

And it leads others to look up and.

Evaluate the efficiency opportunity they can get Ah by.

Adopting the elastic technology. So it's it's a really exciting time, it's a very large market.

Revenues, it's larger than the than the outdoor market at least in revenues for the products and we believe for the addressable market for the software. It's at least as large and may be larger than the categories. We've already served in so we think it only extends the opportunity for.

Herve Sedky: So the opportunities for us to grow that business are really to enter new categories, and we're doing that in a very thoughtful, disciplined way by leveraging the relationships, contacts, and customers that we have in our business. And with that, we do foresee continued growth and profitable growth. I think, in real time, Herve and I were at the Kitchen and Bath show, as he mentioned in his prepared remark, that that is the new industry that Elastic has entered into with the wins that he mentioned.

Very high growth.

At that business for for a long time to come.

Okay great.

Besides looked at your guidance or EBITA, you have margins growing up and running.

24 versus 23 could.

Could you talk about what's behind that and also you mentioned, there's there's a 4% drag from.

New events.

And scaling and your software and different things.

But.

When do you.

When do you see those I mean, you can always be investing in new things or is it something that you.

Where where do you see that that 4% dragged my my <unk> sure. Thanks.

So.

Both your questions actually play into each other so.

We're seeing continue leveraging of our cost based on our investments in 2024.

That is driving incremental margin as we grow.

I think you can break down the margin opportunity really in a in a couple of ways one.

One is as more and more of our events scale back to pre pandemic levels and many have but some still have a little bit to go we get very meaningful leverage of high gross margin revenue coming in that can leverage existing spend and.

David B. Doft: But those wins were announced at the event, and it opened a lot of doors to potential new customer opportunities, especially with the brand names that we've been able to initially sign with. They're well known in the space, leading others to look up and evaluate the efficiency opportunity they can get by adopting the Elastic technology. So it's a really exciting time. It's a very large market. In revenues, it's larger than the outdoor market, at least in revenues for the products, and we believe for the addressable market, for the software, it's at least as large and maybe larger than the categories we've already served.

And that's part of the natural cadence that we're looking at over the next couple of years as we walked to bring margins.

Back towards historical levels.

Second is.

Is the investment areas now a business like elastic elastic is is already breakeven on an EBITDA basis at a moderate drag on free cash flow and.

David B. Doft: And so we think it only extends the opportunity for Elastic, very high growth at that business for a long time to come. If I look at your guidance for EBITDA, you have a... going up. [inaudible] I mean, you could always be investing. Sure.

And we expect it to become profitable.

Profitable as it grows from here and have a meaningful flow through again high gross margin revenue to leverage its existing overhead to get to.

David B. Doft: So both your questions actually play into each other. So we're seeing continual leveraging of our cost base and our investments in 2024 that is driving incremental margin as we grow. I think you can break down the margin opportunity really in a couple of ways. One is by looking at more and more of our events. Herve mentioned volatility in new event launches, and it's true, they don't all work. And the ones that don't work, we stop doing them, and so they stop losing money because we stop doing them.

Margins that are I think over time around where the rest of Emerald is but that that's gonna take some growth from here because there is some investment for us to go into new industries, but when we go into new industries, we open up meaningful new revenue opportunities on the one side.

The launch site again, they're they're they're largely events.

Events at certain scale.

Fairly consistent and predictable gross margin and so as we get into your 345 of the launch plan, we start to turn the corner from that effort, losing money to that effort, becoming self funding to that effort, making money I and.

David B. Doft: And then we go, and we focus on what does work, or we launch new opportunities to give us the optionality of growth. But in aggregate, it's a very high-return way to drive incremental growth. And we'd rather launch a self-funding event than go buy one at six, seven, eight times EBITDA, right? It's a better return on our dollars and a better value creation opportunity for our shareholders. So it makes sense to do that.

They mentioned volunteer.

Volatility on new event launches, it's true they don't all work and the ones that don't work, we stopped doing them and so they stopped losing money because we stopped doing them and then we go and we focus on what does work or we want new opportunities to give us the optionality of growth, but in aggregate. It's a very high return way to drive incremental growth.

We'd rather watch a self funding event then go buy one at 678 times EBITDA right. It's a it's a better return on our dollars and better <unk>.

Value creation opportunity for our shareholders. So it makes sense to do that and so the reason we broke out that that margin impacted because we want investors to understand.

David B. Doft: And so the reason we broke out that margin impact is because we want investors to understand where the margins are in the underlying business, let's call it the legacy Emerald business or the core Emerald business, relative to the investment areas. And so, you know, if you take the implied 27% adjusted EBITDA guidance that we have and you add in the 300 basis points that we mentioned as the drag, where the underlying business is at 30% in our plan for 2023, that's a lot closer to the historical margins than the reported numbers would otherwise indicate. And so we're trying to give that visibility to investors on that front. Ultimately, with launches, if none of them work, and none of them get to the point where they make money or raise funding, we can stop doing them. And it doesn't take away from the value of the rest of the portfolio because the contributing margin is at a very high level. Thank you. My last question... think of them as the factors.

Where the margins are on the underlying business the like what's called the legacy M real business or the core Emerald business relative to the investment areas and so you know a few you take the implied 27% adjusted EBITDA guidance that we have and you add in the 300 basis points that we mentioned as the drag.

Where the underlying business is that 30% and our plan for 2023, that's a lot closer to the historical margins than the reported numbers, what otherwise indicated and so we're trying to give that visibility.

Two two investors on that front ultimately with launches.

If none of them work.

And none of them get to the point, where they make money yourself funding.

We can stop doing them and it doesn't take away from the value of the rest of the portfolio that contributing margin at a very high level.

Oh. Thank you my last question, maybe it's going back to guidance could you give us what did you think of is the fact that I'm sorry.

To the high end.

Low N W guidance for 24.

David B. Doft: I think there's, As with a portfolio like ours, there are probably four or five different factors. I think, you know, we have built in a range of views around the media business given the volatility of that business last year. We surely don't want to overshoot our expectations again, and so we've put in appropriate hedges around a range on that front. Similarly, on the launch side of the business, which can be volatile, depending on, in a given period, how well launches do, we've put in some range of outcomes there. And then we've left some room and a range of outcomes in the core event business. There are different components there. The booth revenue side tends to be fairly predictable. However, there are some events that monetize attendees.

I think there is.

As with a portfolio like ours or theirs.

Probably four or five very.

Various factors I think you know we have we have built in.

A range of views around the the media business given the volatility of that business last year, we surely don't want to overshoot, our expectation again, I and and so we've put inappropriate ah hedges around a range on that front. Similarly on the launch side of the business, which can be volatile.

Depending on in a given period, how well launches do <unk>.

That we've put some a range of outcomes. There and then we've just we've left some some room in range of outcomes on the core event business. There are different components. There the booth revenue side tends to be a fairly predictable. The there are.

Some events that monetize attendees attendees.

David B. Doft: Attendees tend to sign up later, and so that's a little less visible, and so we like to leave ourselves some room on that front, just in case one industry versus another may have a different attendee performance at the end of the day. So those are really the things we think about when we think about revenue, ranges of revenue, and revenue hedges. On the EBITDA side or the expense side, you know, we then build a plan where we have different levels of spending and investment that's needed against different revenue levels.

Attendees tend to sign up later and so that's a little less visible and so we like to leave ourselves some room on that front just in case, one industry versus another may have different attendee.

<unk> performance at the end of the day. So those are really the things we think about when we.

When we think about revenue ranges of revenue in revenue hedges on the <unk> on the EBIT outside of the expense side. You know, we then build a plan where we have different levels of spending and investment that's needed against different revenue levels and so we we've become really good at managing.

David B. Doft: And so we've become really good at managing expenses in as real time as we can, so that we can make sure that we're delivering on our overall plan. That's great. Thank you. There are no further questions at this time. I will turn the call back over to Herve for his closing remarks. Well, thank you all very much. And in closing, I want to thank you all for your time and for your participation. And, as I said, 23 was a year of powerful growth as we grew revenue more than 17% and adjusted EBITDA by 67%. We're excited as we look ahead into 2024 and beyond to continue to realize the benefits of our strategy and investments, to deliver greater value to our customers, opportunities for our people, and expected strong growth for our shareholders. And with that, I wanted to thank you once again, and goodbye. Ladies and gentlemen, this concludes your conference call for today. We thank you for joining us, and you may now disconnect your line.

Expense.

In real time as as we can so that we could make sure that we're delivering on our overall plan.

That's great. Thank you so much.

Thank you.

There are no further questions at this time.

Closing remarks.

Well. Thank you all very much and in closing I want to thank you all for your time for your participation and as I said 23 was a year of powerful growth as we grew revenue more than 17% of adjusted EBITDA by 67%.

We're excited as we look ahead into 2024 and beyond to continue to realize the benefits of our strategy and investments to deliver greater value to our customers opportunities for people and expected strong growth to our shareholders and with that I wanted to thank you once again and goodbye.

Ladies and gentlemen, does conclude your conference call for today.

And you May now disconnect your lines. Thank you.

[music].