Q3 2024 Cushman & Wakefield plc Earnings Call
The
Speaker Change: Good day and welcome to Cushman & Wakefields third quarter 2024 earnings conference call.
All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key, followed by zero.
After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone.
Speaker Change: To withdraw your question, please press star then too.
Please note this event is being recorded.
Speaker Change: I would now like to turn the conference over to Megan McGrath, Head of Investor Relations. Please go ahead.
Megan Mcgrath: Thank you, and welcome to Cushman & Wakefield's third quarter 2020-4 earnings conference call. Earlier today, we issued a press release announcing our financial results for the period. This release, along with today's presentation, can be found in our Investor Relations website at iR.cushmanwakeseal.com.
Speaker Change: Please turn to the page in our presentation labeled Cautionary Note on Forward-Looking Statements.
Speaker Change: Today's presentation contains forward-looking statements based on our current forecast and estimate of future events. These statements should be considered estimates only and actual results may differ materially.
Speaker Change: During today's call, we will refer to non-GAAP financial measures as outlined by SEC guidelines.
Speaker Change: Reconciliations of GAAP to non-GAAP financial measures, definitions of non-GAAP financial measures, and other related information are found within the financial tables of our earnings release and the appendix of today's presentation.
Speaker Change: Also, please note that throughout the presentation, comparisons and growth rates are to the comparable periods of 2023 and in local currency unless otherwise stated. And with that, I'd like to turn the call over to our CEO, Michelle MacKay.
Michelle Mackay: Thank you, Megan. This quarter, we continued our track record of successful execution against our goals, driving top-line growth in targeted investment areas, continuing to deliver strong free cash flow conversion, and focusing on value creation through deleveraging and seeding for growth.
This quarter also marks an inflection point across many areas of our business.
Over a year ago, we began to make strategic, targeted investments in leasing, informed by our view on the most promising opportunities across asset classes and geographies.
Speaker Change: These investments have translated into clear and measurable results.
The third quarter marks our fourth consecutive quarter of year-over-year leasing growth and our highest leasing growth since Q2 2022.
Speaker Change: We have also reported the first quarter of capital markets growth in the Americas since the second quarter of 2022.
Speaker Change: We are seeing a broadening of capital markets activities in the market and increased optimism amongst buyers and sellers.
Speaker Change: The Fed rate cut in September and actions by the central bank outside of the U.S. have been important first steps in the revitalization of the capital markets.
Speaker Change: The further easing of monetary policy should continue to catalyze growth in the coming quarters.
Speaker Change: This was made possible by the outstanding work of our global teams to drive free cash flow.
Speaker Change: Solidifying our balance sheet and improving our cash flow were key early priorities in our strategy to position the company to take full advantage of future growth opportunities and we executed on this priority six months ahead of plan.
Speaker Change: Looking forward, leverage reduction will continue to be an important part of our capital allocation strategy, but as we shared with you last quarter, we have already begun accelerating our growth investments as we pivot to more offense.
Speaker Change: Now I'll turn the call over to Neil for a review of the financials and then I'll come back to share a bit more about how we are positioning strategically for the future.
Neil: Thank You Michelle and good afternoon everyone. Our third quarter results highlight improved momentum in several areas of our brokerage business as well as our continued commitment to strengthening the balance sheet and protecting margins as we accelerate our growth investments.
Neil: Turning to our quarterly results, fee revenue for the third quarter increased by 3% year-over-year.
Speaker Change: Leasing revenue increased for the fourth consecutive quarter, and we experienced positive capital markets revenue growth in the Americas for the first time since the second quarter of 2022.
Speaker Change: Adjusted EBITDA of $143 million, declined 5%, driven primarily by the impact of our recent services divestiture, as well as roughly $20 million in higher compensation costs compared to the prior year.
Speaker Change: On a year-to-date basis, a just EBITDA of $360 million is up 1% versus last year.
Speaker Change: Adjusted EPS of $0.23 is $0.02 higher than last year, benefiting from interest and tax savings.
Speaker Change: Taking a closer look at our service line results, our leasing business continues to perform at a high level, with revenue growth of 13% in the quarter.
Speaker Change: Leasing strength remains largely global in nature. America's leasing was up 16% with double-digit growth in both office and industrial. APEC leasing grew 13%, driven primarily by strength in India and Japan.
Speaker Change: EMEA leasing, while down 8% in the quarter, remains up 5% for the year, which we believe is indicative of a relatively stable market.
Speaker Change: In capital markets, we saw a return to growth in the Americas for the first time in nine quarters, with revenue up 2%. We experienced growth in office, industrial, and retail transactions during the quarter.
Speaker Change: Overall, sentiment has improved in the past several months, and while some market uncertainty persists, we feel confident that we've passed the floor in U.S. capital markets activity.
Speaker Change: Looking internationally, EMEA Capital Markets revenue declined 5% as the market continues to experience some lumpiness on the road to recovery. Yet to date, EMEA Capital Markets revenue has grown 3% as fundamentals continue to improve gradually.
Speaker Change: APAC capital markets revenue declined 44% principally due to the deal timing and strong third quarter in the prior year.
Speaker Change: Our pipelines in this region remain strong, supported by positive secular trends, and we expect a rebound in activity for the region in Q4.
Speaker Change: Turning to services, revenue growth was up 1%, excluding the impact of the divestiture, or down 2% as reported, in line with our expectations.
Speaker Change: In APAC, services revenue increased by 6% as facility services and project management in India and Australia continued their momentum, spurred by investment into the region.
Speaker Change: In EMEA, we've continued to focus on margin by restructuring our fixed price design and build business. Our transitional work on that business is essentially complete, and we expect to return to growth in the fourth quarter.
Speaker Change: In the Americas, services revenue was up 3%, excluding the divestiture, or flat as reported.
Speaker Change: Facility services and property management grew, while project management declined, as office expansion and renovations continued to be delayed. We remain highly focused on re-accelerating growth in our services platform in 2025.
Speaker Change: Turning to cash flow, free cash flow for the quarter was $187 million versus $174 million in the third quarter of last year.
Speaker Change: Our year-to-day free cash flow continues to compare favorably to 2023, improving by $146 million, and our trailing 12-month free cash flow has grown by approximately $100 million.
Speaker Change: Our three cash flow improvements this year have enabled us to execute on our deleveraging plan well ahead of schedule, as well as begin incremental investments to accelerate growth for 2025 and beyond.
Speaker Change: During the quarter, we repaid $50 million of terminal debt due in 2025, and subsequent to quarter end, we repaid the remaining $48 million, fully extinguishing our 2025 maturities.
Speaker Change: We also completed another successful repricing of $1 billion of terminal debt due in 2030, lowering the applicable interest rate by 50 basis points.
Speaker Change: Lastly, moving to our folio outlook.
Speaker Change: On the revenue side, we're raising our 2024 leasing revenue growth expectation to mid-single-digit growth from low to mid-single-digit growth, primarily based on the third quarter's strong performance.
Speaker Change: We continue to expect capital market revenue to improve sequentially and expect fourth quarter revenue growth of approximately 20%
Speaker Change: In services, we continue to forecast flat organic revenue growth in 2024, with a target of returning to mid-single-digit growth in 2025.
Speaker Change: On cash flow, we expect to finish the year within our previously stated 30 to 40 percent free cash flow to EBITDA conversion target. For reference, that translates to roughly 80 percent free cash flow to adjusted net income conversion.
Speaker Change: In conclusion, we are extremely pleased with our continued execution against our strategic priorities. At the beginning of the year, we outlined our 2024 financial strategy to reinvest cost savings into the business, protect margins, and position the company for growth.
Speaker Change: Year-to-date, adjusted EBITDA margins are up slightly, brokerage revenue is up 3%, and free cash flow has expanded by over $145 million.
Speaker Change: We completed three debt repricings this year and fully prepaid our 2025 debt maturities, solidifying our balance sheet as we focus the company on growth.
Speaker Change: With that, I'll turn the call back over to Michelle.
Michelle: Thanks Neil. Many of you have asked for more detail on the outcomes of the strategic work we have engaged in over the past year.
Michelle: I thought I'd give a few examples to help demonstrate the drivers of our recent success as well as where we see opportunity.
Speaker Change: What you'll hear is that the themes of our work have been interconnectivity and rigor.
Speaker Change: And when we combine investment dollars with analytics, accountability, focus, and an empowered team, we are winning.
Speaker Change: For example, our multi-market account team has seen incredible success this year, partnering with our internal data analytics and services teams to provide unmatched integrated services to mid-sized companies that are looking for advisory solutions and brokerage execution.
Michelle: Our RFPs are up over 50% in this year.
Speaker Change: Internally, part of our roughly $145 million improvement in free cash flow this year came from identifying opportunities to improve receivables collections.
Speaker Change: We created cross-functional brokerage and finance teams, which broke down internal silos to get the work done.
Speaker Change: Additionally, we are making targeted investments to connect talent, data, and technology across our platform to drive both efficiencies and revenue opportunities.
Speaker Change: Strengthening these capabilities allows us not only to better manage cost but also enhance our global platform offerings.
Speaker Change: With a focus on talent, we have already achieved a 260 basis point improvement in top talent retention over the past year.
Speaker Change: Looking forward, our capital allocation priorities will be focused on three main categories.
Speaker Change: One, funding and fueling our brokerage business while leaning into the capital market's recovery.
Speaker Change: Two, reaccelerating services revenue and profitability through organic investments and tuck-in acquisitions.
Speaker Change: And three, we will continue to leverage opportunistically in balance with our growth objectives.
Speaker Change: As a company, we continue to mature. And with a more diligent and focused operational mindset, we are uncovering opportunities to fully optimize our operations and go-to-market strategies.
Speaker Change: This, in turn, is creating optionality for growth, and we are more energized than ever about where we can drive this business in the future.
Speaker Change: Now I'll turn the call over to the operator for your questions. Operator?
Speaker Change: We will now begin the question and answer session.
Speaker Change: To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: To withdraw your question, please press star then 2.
Speaker Change: Please limit your questions to one and one follow-up. If you have additional questions, you may rejoin the queue.
Speaker Change: Our first question today is from Stephen Sheldon with William Blair. Please go ahead.
Stephen Sheldon: Hey, thanks and really nice results here. I wanted to start with a clarification question. On 20% growth for capital markets in the fourth quarter, is that year-over-year growth or sequential?
Speaker Change: Yeah, that's a year-over-year growth, Stephen.
Speaker Change: Okay, great, just wanted to make sure. And then in services, you know, I think you talked the last quarter about confidence about getting back to mid-single-digit organic growth next year in 2025. So just curious, what's your level of confidence now? How has that changed? And what are some of the factors that investors should be thinking about that will help you get to drive that acceleration?
Speaker Change: Sure, I'm happy to take that, Stephen.
Speaker Change: Look, we continue to feel very good about re-accelerating coronavirus based on what we've seen in each of our businesses. The best way to think about it is to break it up into each of the pieces.
Speaker Change: and that hopefully will help you understand exactly where you're working. So, one of the key components is facilities management.
Speaker Change: This is our largest business.
Speaker Change: in the APAC region, and is very strongly on a year-to-date basis, that's up 7%.
Speaker Change: and that the business continues to perform very well.
Speaker Change: We're expanding our client base there in all the regions, and as an example, we are the largest facilities management provider in Singapore, which is one of our key markets.
Speaker Change: If you look at our facility services business, that too is growing. It's growing in the low single digits, but we feel very confident we can grow that organically as we look forward. We've done a lot of work on establishing healthier contracts in that business, and we've started to feel the impact now.
Speaker Change: and our business development pipeline there is strong.
Speaker Change: The other business that we are most excited about is our global occupier services business.
Speaker Change: That's had some really nice wins recently, and we see a lot of potential in fully integrating our...
Speaker Change: our businesses with the GOS business. That business is more longer term, so that will take longer to translate the earnings into the positive revenue growth.
Speaker Change: but certainly an area that we are very, very focused on and we see a nice path, a nice growth path there. And then property management or project management, those have slowed a little bit more than expected this year.
Speaker Change: It's primarily in multifamily, and it relates also to project management. The project management side of the business tends to be short-term in nature, and so that will give us a lift as we start seeing stronger leasing and capital markets.
Speaker Change: And then our property management business is a business that has just done exceptionally well in the pipelines, they're also good. So overall, we see tremendous opportunity in the services business, and as we look at pipelines, 2025 will be a key year for that growth to start happening.
Speaker Change: The next question is from Ronald Camden with Morgan Stanley. Please go ahead.
Ronald Camden: Hey, I had the same question on the capital markets, 20% growth, maybe asking it a different way.
Ronald Camden: because I think it does imply some sort of re-acceleration here just what is it is it the pipeline is there a larger deal in there is there a geography just
Speaker Change: sort of any color on how, you know, one month into the quarter that 20% sort of came about would be helpful.
Speaker Change: Yes, so as we look at capital markets, you know, we're looking at the pipeline, we're looking at basically the deals that are starting to come through. As you know, it takes sort of two to three months just for that business to really develop and as we look at the building momentum there, we feel very good about what we're seeing in all regions.
Speaker Change: And I would say, as we've said in the past, we're expecting this to be a long, multi-year recovery in capital markets. In our last earnings call, I referred to it as waterfall effects, with the market producing more and more velocity and volume over time.
Speaker Change: Okay great and then my my second question was just going to be on sort of just looking for high-level commentary on the margins you know you talked about sort of mid single-digit services growth and the capital markets recovery just high-level are you guys thinking about margins impact sort of any differently as those businesses sort of perform? Thanks.
Speaker Change: Yeah, sure. So, you know, this year we've been very focused on protecting our margins as we sort of move through the recession. So as we came through the beginning of the year, we guided, what we said was basically we were going to offset any inflation with with cost out. We've now progressed from that. We started to see the business turn. We really are, feel like we're at the bottom of the cycle.
Speaker Change: And so we are, at this point, not giving any guidance on 25. But the way to think about the business is, as the brokerage business comes back,
Speaker Change: the incremental fare
Speaker Change: are very strong, but those incrementals, certainly in the near term, will be slightly below what we've seen before as we reinvest in the business.
Speaker Change: And so once again, as we go into next year, certainly early on in the year, we'll defend our margins, but we'll also be looking to invest some of that opportunity to make sure that we are well positioned for growth. We think the cycle is going to be a long one, and so we want to be very, very well prepared for it as we go through the year.
Speaker Change: The next question is from Anthony Paylone with J.P. Morgan. Please go ahead.
Anthony Paylone: Thank you. Maybe, Neil, staying with you on the margin item, I have in my notes from last quarter that the third quarter numbers would be negatively impacted by some comp expenses on the margin side, I think to the tune of over 150 basis points.
Anthony Paylone: Can you maybe help us just update, like, what the impact ended up being and how to think about 4Q in the full year at this point?
Speaker Change: Yeah, good question Tony. So we guided to roughly 20 to 30 million dollars of headwind and we actually saw the low end of that 20 million dollars and the teams did an excellent job of basically
Speaker Change: matching costs to ensure that we held margin. We'll probably see a little bit more in Q4, not at the same level, probably in the five to ten million dollar range, so not nearly as material for Q4.
Tony: Okay, great.
Tony: I guess on the leasing side, going to like mid-single digits, if I just do some of the math there, it suggests that 4Q leasing revenue would be up.
Speaker Change: outsized and that that number comes down now or you know is there is there more room to go just trying to put some brackets around that
Speaker Change: Yes, so, you know...
Speaker Change: Leasing, as you know, is a big part of our revenue. It's something which we feel, which we've been saying now, we've got five quarters of strength in leasing.
Speaker Change: So it really drove great performance. The Americas alone were up 61%. We did have some big deals in the quarter.
Speaker Change: which also helped and contributed, and there is lumpiness as we go through the quarters. We've always said to look at an individual quarter is probably not the way to look at it, or to really look over the longer run. And so, you know, certainly feel good about how our leasing revenue grew.
Speaker Change: Thank you.
Speaker Change: The next question is from Michael Griffin with Citi. Please go ahead.
Michael Griffin: Great, thanks. I just wanted to go back and get some more color kind of on the transaction activity and the market and what you're seeing.
Michael Griffin: Can you give us a sense if maybe buyer and seller expectations are converging or if a lot of these deals are mainly kind of debt maturity and distress driven? And then I note that you noted in the release kind of about the Greystone joint venture
Michael Griffin: the volume's declining as a result of the tighter lending conditions. I would think that, you know, debt capital availability would be important if you're going to see increased transaction activity. So how do you kind of marry the expectation for a transaction activity pickup with what seems like, you know, some tightness in the debt markets?
Speaker Change: Okay, so I'm going to start with this and then I'll hand it over to Neil. In terms of market and market fundamentals, we continue to be optimistic about recovery.
Michael Griffin: The Fed move in September was a really important first step for us.
Michael Griffin: There is an enormous amount of pent-up demand waiting, and we believe we are positioned exactly where we need to be to handle that. And future Fed rate cuts, which we know we probably have one coming this week, mean that floating rate debt is going to continue to get cheaper.
Michael Griffin: with all else equal that should help some deals across the finish line, especially as we go into year-end and year-end pressure and may help alleviate some others of debt service challenges that they've been having.
Michael Griffin: And I think most importantly, at least symbolically, the rate cut signals that better days are ahead for commercial real estate, because it means that policies become slightly less restrictive, which is a step forward to more supportive financial conditions for the economy.
Michael Griffin: and by extension more supportive conditions for leasing and capital markets. And lastly, you know, these incremental rate cuts, which we anticipate one in November and one in December,
Michael Griffin: is going to help move some of this drive powder off the sidelines because, again, it signals that the commercial real estate sector is likely at the cusp of the next growth cycle. And what we've seen is a real step forward in the investor mindset from risk-off to risk-on.
Speaker Change: And then, Neil, did you want to talk a little bit about Corystone?
Speaker Change: Greystone, as a result of the change in lending policies at the GSEs, we have seen some tightness in lending in that space.
Michael Griffin: but we're seeing opportunity in multi-families.
Michael Griffin: We basically had a very strong month of mortgage origination in September. Greystone saw that, and so it signals...
Speaker Change: that certainly there may be opportunity coming. At the same time, it's one month and that's not a trend. So multifamily remains an area we're watching closely. We feel very good about it in the long run. It's a key strategic space for us.
Speaker Change: but certainly we do expect a little bit of lumpiness as we move through the back of the year and into next year.
Speaker Change: Thanks, I really appreciate the context there. And then, Michelle, just going to those three priorities you laid out kind of at the end of your prepared remarks, I appreciated kind of the additional insights there. But as you think about those three, you know, I know you've done work on the leverage side, really improving the balance sheet and cash flow, but if the first two priorities in terms of pivoting to growth, you know, are really what's going to be a catalyst, could you see leverage maybe stay elevated relative to the historical levels if it makes sense to grow the enterprise?
Michelle Mackay: Yeah, I don't anticipate increasing leverage. I would say that, just to give you a little more context around the capital allocation, and I know that you all have been asking for more context for quite some time.
Michelle Mackay: I want to speak a bit about how we're changing the way that we're approaching investments here Because it's not just about how we're allocating. It's about the way we're making decisions So we spent the last year allocating our capital with what I'll call surgical precision, a practice that we're going to continue
Speaker Change: And I've changed three components surrounding making investments here. I've changed the actual investment process, I've changed the criteria for investments, and I've changed the post-close management of made investments.
Speaker Change: and now we're high on our list on our capital allocation is growth in global capital markets and advisory on whole and that's going to come in the form of adding to our talent pool and our systems with an eye to what the future holds for the industry not what the past represents.
Speaker Change: Second, in capital allocation, we're going to be making, as you've seen us make, the right long-term choices for our services business to ensure continued growth, and we're not going to be patching things with a band-aid to fix them. So I'm talking about some basic blocking and tackling here.
Speaker Change: labor management systems, instilling great operating practices, cross-pollinating best practices across services business.
Speaker Change: And what you can see is that employing this very rigorous approach, the implications were very positive for our free cash flow already.
Speaker Change: And the third area, which is what's been the focus of this year, which you know well, is reducing leverage. And frankly, I think we hit it out of the park, starting that virtuous cycle of right-sizing our leverage and, as important, reducing that cost.
Speaker Change: We were priced three times this year and the great thing about having this as a target of our capital is that every time we execute here
Speaker Change: You accomplish your goal with 100% certainty and you know exactly what the financial impact is going to be. But in no case do we foresee increasing our leverage as we're growing.
Speaker Change: Again, if you have a question, please press star then 1.
Speaker Change: The next question is from Alex Cram with UBS. Please go ahead.
Alex Cram: Yes, hey, good evening everyone. Um, maybe you just touched upon this a little bit, but you made a comment earlier
Alex Cram: around on the servicing side, servicing side also being more focused on the margin if I heard you correctly. So can you just talk about what that entails, is it gaining more scale, is it maybe a little bit more focused on pricing, is it maybe a change in competitive dynamic, where do you think you can get...
Alex Cram: margin upside in that business, and how quickly do you think you can achieve that?
Speaker Change: Yes, sure, Alex. That's a great question. We've been very focused on that over the past six months, particularly in the area where we had a design and build business, which is essentially where we have a lot of fixed-price contracts.
Speaker Change: We've looked at that business, and we've said, if we're not making money, we shouldn't be doing the work. And so, in EMEA, you have seen services down, but I'll tell you, the EBITDA related to that revenue has actually been up. That work is essentially complete, so you'll see growth starting to happen in Europe, but that was the one area.
Speaker Change: And then within the U.S., in a number of our services businesses, we've looked at our contracts and we've said, you know,
Speaker Change: profitability on those contracts is really critical. Most of the work is now done. We feel very pleased with the work we've done and we're now starting to once again really focus on the top line and that will lead to more accretive growth as we go forward.
Speaker Change: Thank you.
Speaker Change: Okay, great, and then just maybe coming back to capital allocation
Speaker Change: I think in your preparatory remark, you mentioned M&A only in the context of the services business, small tokens I think, if I remember you correctly, Michelle, but like...
Speaker Change: You just also talked about the capital market advisory business, so is that also an area for M&A? Or how do you think about M&A generally in particular as you just said, leverage properly, stay at these levels?
Michelle: Yeah, the door is always open for M&A. It could be an advisory or services, but I think in particular with regard to advisory for us right now, we are doing a lot of investing in the data and analytics.
Michelle: in the capital markets business in particular. And we're also on the hunt for new talent in advisory as well.
Speaker Change: The next question is from Peter Abramowitz with Jeffreys, please go ahead.
Peter Abramowitz: Hi, thank you. I think in Neil's comments he mentioned just some delays and things on the project management side, which I know tends to be a little bit sensitive to the macro and kind of confidence from from customers there. So just want to ask is there anything thematic that we should take away and what's been causing?
Peter Abramowitz: customers to delay those projects and how to think about when that might ease.
Speaker Change: There's nothing really thematic there. We have just seen, particularly in the office space, some delays and build-outs. It really is essentially, we believe, just a function of...
Speaker Change: sort of a more secured
Speaker Change: market.
Speaker Change: We feel like the tide is turning there, we are focused in that area, but we've just seen some projects that have been cancelled that are sort of a dampener on that business. We feel confident going forward, and we're starting to see those pipelines build and projects get executed, but that really, it's not informatic, it really is just a function of the space we're in and some of the projects we're working on.
Speaker Change: Okay that's helpful and then I think Michelle the the term you've used is sort of a waterfall function in terms of the capital markets recovery so you already would
Speaker Change: seem to be indicating a significant acceleration, if you're expecting 20% in the fourth quarter.
Speaker Change: So I guess, you know, should we expect potentially further acceleration as we get into 2025? I know one of your peers mentioned a week or two ago that they're sort of thinking about it as a gradual recovery.
Speaker Change: Just curious in that context, you know, how you are thinking about 2025 from a capital markets perspective as you sort of fill out your budget and think about the year ahead.
Speaker Change: Yeah, I mean we've always talked about it as a gradual recovery. I've spoken quite often about how we invest in things over the long term and we expect a long-term recovery. So our base case as it relates to capital markets
Speaker Change: assumes the Fed's going to continue to cut rates by 25 basis points in November and December, followed by gradual rate reductions until they bring that rate back down to around the 3% range toward the end of 2025.
Speaker Change: We also believe the 10-year yield is going to hover in this 4% to 4.5% range for the foreseeable future, putting a more normalized interest rate curve into place, which is all positive for CRE, but when you think about that, we're talking about that process happening over the next year.
Speaker Change: This concludes our question and answer session. I would like to turn the conference back over to Michelle MacKay for any closing remarks.
Speaker Change: Thank you. Bye.
Michelle Mackay: Thank you, everyone, for participating in our call today, and we look forward to speaking with you next quarter.
Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.