Q1 2025 Emerald Holding Inc Earnings Call
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Speaker Change: Turn the call over to Erica Bartsch EVP of strategy and communications at Emerald.
Speaker Change: Good morning, welcome to the Emerald first quarter 'twenty earnings call before we begin let me remind everyone that this call will include certain statements that constitute forward looking statements within the meaning of private Securities Litigation Reform Act of 1995.
Speaker Change: This includes remarks about future expectations beliefs estimates plans and prospects in particular, the company's statements about projected results for 2025 are forward looking statements.
Speaker Change: Such statements are subject to a variety of risks uncertainties and other factors that could cause actual results to differ materially from those indicated or implied by such statements.
For a discussion of these risks uncertainties and other factors. Please refer to the Companys SEC filings included including its most recently filed periodic reports on Form 10-K, and Form 10-Q as well as the Companys earnings release, all of which can be found on the company's Investor Relations Web site. The company does not undertake any.
Speaker Change: Duty to update such forward looking statements.
Speaker Change: Additionally, during today's call management will discuss non-GAAP measures, which it believes can be useful in evaluating the company's performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U S. GAAP.
Speaker Change: The reconciliation of these non-GAAP measures to their most comparable GAAP measures can be found in the company's earnings release, which is available on the company's Investor Relations website. As a reminder, this conference is being recorded and a replay of this call will be available on the company's Investor Relations website through 11 59 P. M. Eastern time on May.
Speaker Change: <unk> 2025.
Speaker Change: I would now like to turn the call over to Mr. Arrive said key President and Chief Executive Officer. Please go ahead.
Speaker Change: Thank you Erika good morning, everyone and thank you very much for joining us today.
Speaker Change: I'll begin the call with an overview of our first quarter results.
David: Key strategic initiatives, then I'll turn things over to our CFO, David <unk> for a more detailed review of the financials.
David: We began 2025 with strong momentum our first quarter performance reflects meaningful progress in executing our strategy with strong traction across key initiatives that deliver value for our customers and for our shareholders. We reported double digit growth in revenue and adjusted EBITDA building on the strong.
David: Yo optimization initiatives, we accelerated in 2024.
David: <unk> refined portfolio now spans an increasingly broad range of high growth sectors, reducing reliance on slower growth verticals and enhancing resilience across market cycles.
David: Our success this quarter was supported by some of the standout events across our portfolio that reflect the breadth and depth of our industry reach these include <unk> a cornerstone in the design and construction vertical the prosper show a leading in ecommerce seller engagements and the international Pizza Expo.
David: Critical events in the foodservice space.
David: Positive feedback from attendees consistently reinforced the high quality and value that these events deliver affirming their role as key opportunities for industry leaders to connect to engage and transact.
David: Given our performance in the first quarter and current sales pacing.
David: We remain on track to achieve our full year 2025 guidance, while remaining vigilant in monitoring external factors that could influence our trajectory from here.
David: Building on this momentum, we're seeing increasing rebook rates for Q1, 2026, clearly, reflecting the trust our customers place in our platforms and the ongoing ROI delivered by our events.
David: Early commitments not only enhances our forward visibility, but also underscores the resilience of our business model.
David: Even as we maintained strong.
David: Strong forward progress, we are mindful of navigating nuance challenges from shifting consumer sentiment to global economic pressures, we are proactively monitoring pacing data and customer behavior, both domestically and internationally to ensure we're well prepared to meet potential sure.
David: <unk> in market dynamics.
David: Date, we have sold over 90% of our full year target for revenue from international exhibitors, while we're seeing some pressure on sales efforts with customers in China and Canada. We're also seeing strength from countries like Turkey, Brazil, and the United Arab Emirates.
David: Companies in these markets are actively stepping in to capture opportunities created by the current tariff environment, helping to drive sales growth. This is particularly meaningful as it reflects early returns from the expanded global sales agent network. We built over the last 18 months, our belief is that once the.
David: Global trade environment becomes more normalized Emerald is well positioned to benefit from this increased presence.
As we've shared previously our international exposure remains limited at present.
David: 10% of our total revenue is generated from international exhibitors, specifically exhibitors from China account for approximately 2%, Canada contributes another approximately 2% and Mexico represents less than 1% of our revenue from companies offering products or services.
David: This limited exposure provides a layer of insulation from global trade disruptions and shifting geopolitical dynamics. Additionally, software services and travel are not currently subject to tariffs. So our events associated with those exhibitors and sponsors should be less impacted if at all.
David: More importantly in today's environment defined by policy shifts digital fatigue.
David: And economic uncertainty, we believe the value of face to face interaction remains more critical than ever business and professional events offer trusted environments for decision, making connection and commerce.
According to Mckinsey three quarters of <unk> se in person events deliver stronger brand recall than digital campaigns underscoring their strategic role in today's marketing mix.
David: We also view periods of economic complexity as windows of opportunity times, when face to face events become even more essential given the return on investment that they deliver.
David: In high Stakes environments, where decisions must be made with confidence in person events offer a critical platform for real time collaboration and in depth discussions, enabling companies to align and adapt quickly to market changes.
David: Our strategic focus on face to face engagement aligns with our ongoing portfolio optimization efforts, which have helped to reduce our exposure to more economically sensitive factor sectors. This insurers greater insulation from volatility positioning emerald as a more resilient business at the same time.
David: We've deepened our presence in higher growth durable industries, such as design and construction food technology and luxury travel positioning us for more stable and sustainable performance across cycles.
David: Speaking of portfolio diversity, we received a regulatory approval yesterday to move forward with our previously announced acquisition of this is beyond <unk> and we plan to close the acquisition in the coming days.
David: This is beyond is a collection of high end experiential events that complements our portfolio and align with consumer trends around premium purpose driven experiences.
David: It's first two events of the year stage in May with we our Africa and Miami, We expect both events to exhibit strong growth year over year.
David: We're also in early days of the integration of insure Tech insights, which we also acquired and closed this past March the team recently hosted its European event in London in March with strong attendee and sponsor turnout.
David: We are pleased with the addition of both ensure tech insights and this is beyond and continue to actively evaluate strategic M&A opportunities that align with our focus on high growth future oriented sectors. Our M&A strategy is centered on expanding into high growth resilient sectors, while diversifying our portfolio to drive long term.
David: Term shareholder value.
David: This strategy complements our broader goals of optimizing our event offerings and entering new markets with strong demand potential as we look ahead. Our strategy remains focused on our three pillars of value creation customer Centricity 365 day engagements and portfolio optimization, we see opportunity.
David: These to build upon our diverse portfolio and our confidence in our strategy.
David: In closing the strength and diversity of Emerald's portfolio continue to be key drivers of our success with a broad range of events across high growth industries. We believe we are well positioned to capitalize on both established and emerging market opportunities, while we're confident in our strategy and the strength.
David: Of our portfolio, we remain focused on staying adaptable in this dynamic environment by balancing flexibility with precision we are committed to delivering sustainable growth and long term success for Emerald with that let me turn things over to David for a review of our financials David.
David: Thank you Herve and good morning.
David: Turning to our results for the first quarter, which is our seasonally largest quarter of the year total revenue was $147 7 million.
David: Compared to $133 4 million in the prior year quarter.
David: Organic revenue in the first quarter increased five 6% year over year to $139 $2 million driven by strong growth in organic revenues from our connection business, which improved six 6% versus the prior year.
David: First quarter adjusted EBITDA, excluding insurance proceeds was $53 6 million compared to $39 8 million in the prior year period, an increase of 34, 7% the.
David: The increase is attributed to continued cost management and operational efficiencies in the quarter and the benefit of the insured Tech insights acquisition and its London event. This equates to an adjusted EBITDA margin of approximately 36, 3% for the quarter.
David: <unk>.
David: Turning to expenses on a reported basis SG&A was $54 1 million versus $55 5 million in the prior year quarter the.
David: The year over year decline is largely due to lower compensation and travel expenses in both our content and commerce businesses offset by incremental expenses from acquisitions.
David: In the first quarter, we generated $10 8 million in free cash flow, excluding event cancellation insurance as compared to $3 8 million in the prior year period due to the higher adjusted EBITDA in the quarter.
David: Underlying free cash flow was even stronger than reported as some onetime fees related to our January refinancing where expense through the P&L in the quarter, reducing reported free cash flow by $5 5 million.
David: Additionally, because of the timing of the insured tech insights acquisition and its London event.
Cash for the event with collected prior to the close of the deal while the associated revenue was recognized post close the cash value was received by Emerald through a working capital adjustment in the purchase price rather than through typical deferred revenue how.
David: How do we only event throughout the wholesale cycle cash collections would have been $3 $5 million higher.
David: In total free cash flow would have been $9 million higher if not for the financing fees and the timing of the insured Tech acquisition.
Note that the timing of that this is beyond acquisition is expected to have the same impact with the majority of the cashless upcoming events collected prior to the transaction closing and the value flowing to emerald through the purchase price adjustments rather than through the collection of receivables.
David: Turning to the balance sheet, we had a healthy $276 8 million in cash as of March 31.
$194 8 million as of December 31, 2024.
David: This is after funding the insured tech insights acquisition, but before funding that this is beyond deal.
David: $139 million of this cash will be used for the anticipated closing of the business beyond acquisition in may offset by working capital that comes with the business.
David: Our total liquidity is $386 $8 million, including full availability on our $110 million.
David: That facility.
David: Balance sheet strength and cash flow generation support our ability to opportunistically invest in and grow our business and optimize the per share value of our stock.
David: We expect to continue to balanced capital allocation between acquisitions and investments in the business managing that leverage and returns of capital.
During the first quarter, we bought back roughly 2 million shares for $8 8 million at an average price of $4 33 per share under our existing buyback authorization.
David: Since the end of the quarter, we acquired a further 0.8 million shares for $2 8 million.
David: With that we have successfully utilized the majority of our $25 million share repurchase authorization, reflecting management and the board's confidence in the long term value of Emerald stock in recognition of our continued financial strength. Our board recently approved a reauthorization of our share buyback program with an additional 25 million.
David: Allocated.
David: The board also authorized the payment of our quarterly dividend of $1 five per share.
David: This decision underscores our commitment to returning value to shareholders, while maintaining a balanced approach to capital allocation.
David: As we continue to execute on our strategic initiatives, we remain disciplined in managing our capital structure.
David: Which is key to supporting our long term objectives and navigating the current macro environment.
David: First it's important to highlight the strength and flexibility of our capital position in January 2025, we executed a highly successful refinancing of our existing debt, which has significantly enhanced our financial flexibility the timing of our January refinancing has set us up well that.
David: Debt maturities are well staggered with no significant maturities due until our revolving credit facility in 2030, providing ample runway to support our operations and growth strategies without immediate refinancing pressure.
David: Refinancing was not only well timed that demonstrates our proactive approach to managing financial risk, we effectively extended our maturities and secured favorable term positioning us to navigate future opportunities with confidence.
David: We also continue to operate well within our debt covenants, providing room to invest while maintaining a solid balance sheet with proactive approach position positions us for long term success and supports our strategic initiatives.
David: Turning to our outlook as Kevin mentioned, we remain on track to deliver our full year 2025 guidance of a range of $450 million to $460 million in revenue and $120 million to $125 million.
David: And adjusted EBITDA as a reminder, our outlook includes consideration of the potential impact of tariff components and threatened by the U S government.
David: Although we recognize there remain many unknowns and how this will fully play out we continue to proactively manage the situation both with aggressive sales efforts and new markets as well as by maintaining a nimble organization that can adapt based on changes in the landscape.
David: Now, let me open the call for questions operator.
Speaker Change: At this time I would like to remind everyone in order to ask a question press star.
David: Then the number one on your telephone keypad.
Speaker Change: And your first question comes from the line of Barton Crockett with Rosenblatt. Please go ahead.
Barton Crockett: Okay. Good morning, Thanks for taking the question.
Speaker Change: I wish.
Barton Crockett: I guess, a couple of things I was interested in one.
Barton Crockett: Wanted to drill down a little bit more on the comments you made there at the end about your guidance assuming.
Barton Crockett: Some of the kind of trade war potential impacts.
I think if I recall I think you guys were talking last quarter about assuming.
A reduction in international visitation.
Barton Crockett: That was somewhat at odds with kind of the early training, which was not showing that I was just wondering if you could give us an update in terms of.
Barton Crockett: Are you seeing international attendance falloff.
Barton Crockett: And.
Barton Crockett: And how is that kind of.
Speaker Change: Consistent with our different and what's embedded in your guidance.
Barton Crockett: To answer that question directly Barton and thank you for the question.
Speaker Change: As we said we're reiterating our guidance based on what we're seeing we're watching things very closely.
Speaker Change: As I mentioned and as you know our platform offers a really strong ROI in these times customers are looking for.
Speaker Change: Alternatives that where they can increase their sales where they can meet their customers. They can get more leads and so are our platform.
Speaker Change: And the industry's platform is is really efficient and effective for that so the diversity of our portfolio the strength of the platform and what we offer our customers.
Speaker Change: Allow us and what we're seeing in terms of the pacing that we're seeing for balance of year and into next year.
Speaker Change: Allows us to choose to remain to remain confidence having said that we have to watch things very closely because things are constantly changing and it's.
Speaker Change: Have a responsibility to stay on top of of what's going on from a trade war perspective, and and other factors that can impact our business.
Speaker Change: And one thing to be clear about what our initial budget and guidance.
Speaker Change: Did imply international revenues revenues from international inhibitor to be down.
Speaker Change: We had that in our initial plan.
Speaker Change: As a buffer against the unknown that bigger.
Speaker Change: Began to emerge as we move through January and February.
Speaker Change: This year, we had our revenue from China, and Canada to be down.
And the forecast that we had and that we continue to have.
Speaker Change: And at the same time.
Speaker Change: As we mentioned in the script there are countries.
Speaker Change: That on a relative basis are better positioned.
Speaker Change: <unk>.
Speaker Change: The noise around Paris, and we are seeing increased sales from those countries now there are smaller as a percent versus China, and Canada, which are two largest country exposures, but it helps offset.
Speaker Change: Some of the impact and is one of the things that allows us to continue to pace towards our plan for the year.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yes, I guess, what I was wondering is are you actually seeing.
Speaker Change: The decline do you expect this from China, and Canadians and Canadian exhibitors.
Speaker Change: Yes, we are.
Speaker Change: We are seeing the declines we expected from Canada and from China.
Speaker Change: And.
Speaker Change: And that's that's the.
Speaker Change: The reality, both in terms of exhibitors and visitors.
We are seeing that impact.
Speaker Change: As I mentioned in my opening remarks, the international team is hunting, where tariffs are less of an issue and and.
Speaker Change: And so we are increasing it.
Speaker Change: Tenants as well as sales from countries like Turkey.
Speaker Change: E.
Speaker Change: And Brazil as an as three notable examples.
Speaker Change: I think the other thing to reinforce.
Speaker Change: While we've talked about it ad.
A long term opportunity.
Speaker Change: Because of our underweight international relative to others and it is at times like this it's a bit of a benefit right.
Speaker Change: And.
Speaker Change: The reality is is that.
Speaker Change: The vast vast majority of our portfolio, our domestic tradeshows and the vast vast majority of our exhibitors domestic exhibitor and the vast vast majority of our attendees are domestic attendee.
Speaker Change: And so we're talking about what.
Speaker Change: About 10% of the exhibitors and its equivalent.
Speaker Change: Broader attendees at our shows as a percent.
Speaker Change: And so the volatility there has had smaller impact on us than it might be on other companies that have more exposure to the international market.
Speaker Change: Yeah.
Speaker Change: Okay. That's helpful and then.
Speaker Change: Another thing I was just kind of curious about.
Speaker Change: What's the EBITDA that you guys just put up in the first quarter, but retaining guidance.
Speaker Change: That would have the first quarter as a percentage of full year EBITDA above 40% I believe and that would be higher than it has been for the past couple of years as a percent of the year.
Speaker Change: Is there anything that is just seasonally made the first quarters bigger as a percent of the year and the mix of shows maybe the acquisition of its share Tac.
Speaker Change: Or would that suggest maybe youre pacing a little better than your guidance. This early part of the year.
Speaker Change: So the insured tech deal surely helped it did add a show but between <unk> and this is beyond.
Speaker Change: We are adding shows.
Speaker Change: Throughout the year I think.
Speaker Change: And in this quarter in particular relative to the last year. We also benefited from.
Speaker Change: $3 million of shows coming in from the second quarter, Let's say second quarter last year that in <unk>, you can see that in the organic growth reconciliation.
Speaker Change: And obviously as you know.
Basically all of that to the bottom line because our underlying SG&A.
Speaker Change: Is set up to manage the whole portfolio throughout the year.
Speaker Change: Irrespective of the timing of revenue recognition for the quarter, so that helped as well, but we've also been managing our costs.
Speaker Change: Tightly.
Speaker Change: Through the environment through our last year.
Speaker Change: <unk> was slightly disappointing to us in the in.
Speaker Change: And the revenue outcome at the end and we've maintained that through this year.
Speaker Change: That has allowed us to.
Speaker Change: Have a very strong flow through of the revenue growth to the bottom line in the first quarter.
Speaker Change: But I want to be clear the first quarter came in as we expected.
Speaker Change: And and tracking to the guidance range that we talked about.
Speaker Change: And.
Speaker Change: Albeit to the higher end of the guidance range.
Speaker Change: But we built in.
Speaker Change: Having said now a couple of times, we've built in.
Speaker Change: Buffer and expectation around the current environment that captures the entire guidance range and so it's one of the things that allows us to say definitively that that we are on track to our guidance for the year.
Speaker Change: Okay.
Speaker Change: That's great. Thank you.
Speaker Change: Thanks Barton.
Speaker Change: Yes, Hi, just on something you just said somewhat recently on one of the benefits of.
Speaker Change: The first quarter was insure tech did in a couple of things on insurance or did it show up in EBITDA in the first quarter and then.
Speaker Change: They typically have three conferences I think.
Speaker Change: Third one is it reasonable to assume that the.
Speaker Change: The next two are similar size to the one that just happened.
Speaker Change: In the press release, you can see in the <unk>.
Speaker Change: A reconciliation of organic revenue growth, we had a $5 million benefit in the quarter from acquisition debt.
Speaker Change: Thats largely in <unk>.
Speaker Change: There's a couple of very small cadence that kind of rolled from last year, but that is the main event.
Speaker Change: On M&A in the quarter.
Speaker Change: There are two other events June as New York and in the fourth quarter. There is an event in Hong Kong.
Speaker Change: In Hong Kong.
Speaker Change: Hong Kong event is a much newer events and is still in kind of the scaling mode and is meaningfully smaller.
Speaker Change: Then London and New York.
Speaker Change: In terms of EBITDA, yes, it was an EBITDA.
Speaker Change: So we recognize the revenue we recognize the expenses and we got the EBITDA benefit for the period that we owned the event, but in the script and I'll just repeat it because it's an important topic.
Speaker Change: The script I was trying to highlight the impact on free cash flow and.
Speaker Change: <unk> acquisition accounting works.
Speaker Change: It is.
Speaker Change: For for the revenue that still needs to be delivered in the future.
Speaker Change: If contracts are signed and deposits are made that that those deposit go towards the future revenue they come to us.
Speaker Change: Although working capital adjustment and so we true up the purchase price for the ongoing needs in deferred revenue of the business. So that everyone is equal.
Speaker Change: And because the deal closed so soon before the event the vast majority of the.
Speaker Change: Cash collections.
Speaker Change: Happened before we closed the deal so it doesn't flow through cash flow from operations for Emerald.
Speaker Change: But we still have the cash because the cash was given to us.
Speaker Change: At the close of the deal as part of a adjustment to purchase price and so it shows up in cash flow from investing and throws off just in the first year of acquisition at <unk>.
As off the free cash flow calculation.
Speaker Change: It stands on the financial statements cash flow from operations minus capex, because it's not in cash flow from operations. It didnt capsule of investing but on a pro forma basis, we had owned it the whole period and in 2026, when we will own it for the whole period, we would have had the full benefit of that so we're trying to give some incremental <unk>.
Speaker Change: Insight and the real underlying cash generating power of the business.
Speaker Change: Okay.
Speaker Change: That's helpful. Thank you and then this is beyond I think they do around seven events globally.
Speaker Change: All seven of them how many of them are you going to be.
Speaker Change: <unk> in 2025 and is there.
Speaker Change: And.
Speaker Change: You had mentioned too.
Speaker Change: To admit or how does that spread out or they kind of similar size.
So we will capture all of them.
Speaker Change: In 2025.
Speaker Change: There are two in the second quarter.
Speaker Change: One in the third quarter and there are four in the fourth quarter.
Speaker Change: The two largest events one is in the second quarter and one is in the third quarter.
Yeah.
Okay. Thank you and then.
Speaker Change: Any commentary just on.
Speaker Change: How to think about.
Speaker Change: Difference in seasonality for the quarters going forward.
Speaker Change: Sure.
Speaker Change: With acquisitions.
Speaker Change: And with the.
Speaker Change: <unk>.
Speaker Change: Okay.
Speaker Change: Movements in the schedule sometime at events.
Speaker Change: April one year's March the next year or so it shifts a quarter thats the $3 million scheduling change in the quarter that you can see in the organic revenue growth reconciliation.
Speaker Change: Ultimately our first quarter. If you just look at our guidance right. It's about a third.
Speaker Change: Give or take of the of the year.
Speaker Change: Q2, and Q3 are our smallest quarter.
Speaker Change: They are also if you look at the overall portfolio mix.
Speaker Change: There also were some of our.
Speaker Change: <unk>.
Speaker Change: Weaker performers are relative to the strong performers and so they will also have a lower growth profile in those quarters.
Speaker Change: <unk>.
Speaker Change: Right now we're looking at Q2 at about a quarter of the revenue for the year.
Speaker Change: In Q3 at about 20% of the revenue for the year.
Speaker Change: And then the remaining revenues in Q4.
And then Q4 again.
Speaker Change: Has a strong mix.
Speaker Change: The portfolio and we would expect.
Speaker Change: Improved growth again that look more like Q1 frankly.
Speaker Change:
Speaker Change: Then.
Speaker Change: Then we would see in Q2 and Q3 that don't have much growth profile at all at this point based on the mix of events in the quarters.
Speaker Change: But then we get back to the full year.
Speaker Change: Which again tracking.
Speaker Change: Tracking to our guidance range and.
And implying the growth that were were talking about that.
Speaker Change: Great and for US this is beyond <unk>.
Speaker Change: Planning to fund that.
Speaker Change: From cash on the balance sheet completely yet.
Speaker Change: Yes.
Speaker Change: We are okay.
Speaker Change: And for ensure tech I don't know if the Q10 out of it and see it before the call.
Speaker Change: The Q should come out in the next 24 hours or so so just dotting semis and <unk>, but.
Speaker Change: That will come out shortly.
Speaker Change: And all of the information will be disclosed in there.
Speaker Change: Okay great.
Speaker Change:
Speaker Change: Okay.
Speaker Change: And just sorry, just one last question I'm sorry, if.
Speaker Change: This was a great very good quarter. So congrats.
Speaker Change: One of the things you mentioned the performance was.
Speaker Change: Continued expense discipline.
Speaker Change: Talk about how you're thinking about that going forward.
Herve: Yes, let me take that hi, Alan its herve.
Herve: I think and we've talked about this in the past.
Herve: Emerald has traditionally been more of a federation of different businesses and what we have done is we have consolidated it onto what we're calling the emerald platform and so what what that is allows us to do is to really find efficiencies.
Herve: Across.
Herve: The entire business. So that's one key.
Herve: Our area of focus the second key area of focus is we're testing with some applications of artificial intelligence to allow us to be more effective.
Herve: Inefficient and so we've launched some applications, particularly in our content business and for our marketing teams that allow them to operate with with more efficiency and lastly.
Herve: We've talked also in the past about the addition of our procurement function.
Herve: That has allowed us to really benefit significantly from really looking at all of our contracts across the entire business and really by increasing the emerald buying power by buying centrally for Emerald as a company to hold as opposed to.
Herve: There in the past various events in various businesses, where we're doing work on their own and we had multiple contracts with sometimes the same vendor and so that is an area that we continue to focus on we've we've we have been able to achieve some.
Herve: Some good savings from the procurement work and we're actually adding some we've just added an additional resource because we believe there is incremental opportunity in the business. So those are the three kind of key key areas that we focused on and just to reinforce one thing that we've talked about for.
Herve: A long time right.
Herve: Believed.
Herve: This business is scalable at higher incremental margins.
Herve: And.
Herve: Part of our plan.
Herve: Is.
Herve: As you know to show meaningful steps forward in EBITDA margin.
Herve: This year or next year or the year after by leveraging the investments we've made in the core platform and the overhead of the business that.
Herve: We believe that we can.
Herve: More events.
Herve: Effectively with the platform.
Herve: The underlying overhead grow at a much lower rate than revenue overall, and so part of Q1 is seeing that play out.
Herve: It will average out a little bit over the course of the year of course based on the seasonality of the business quarter to quarter.
Herve: But it is one of the things that is the driving force behind our view of at least a couple of hundred basis points of margin improvement this year.
Herve: Yeah.
That's great and then maybe just one other follow up since you mentioned NII do you have any early data points or anecdotes of.
Herve: The benefits you might have gotten from from starting with it.
Herve: No. We don't know I don't have any specific data points are but what we have is we have.
Herve: Basically you have a number of Bob we've.
Herve: <unk> had a number of applications.
Herve: I mentioned, one which is really around the marketing and the and the content business, but there are others across across the business or even our legal function is using.
Herve: Some some AI, we've we've got a number of different areas that that are I wouldn't even say testing because it's further than testing. They are now in in market. It started with a test and we have realized some some efficiencies and so we've done some we've rolled them out more aggressively across all.
Herve: All of our marketing people and many of our content people are legal teams and so we have somewhere like five or seven different applications that are in market today in terms of specific measurable.
Herve: Yes outcomes, we don't have any to report as of yet.
Herve: Okay great.
Speaker Change: Thank you for.
Herve: Everything.
Herve: That's <unk>.
Herve: Thank you very much thanks Alan.
Herve: That concludes our Q&A session I will now turn the conference back over to Jose for closing remarks.
Jose: Thank you very much so in closing I want to thank you all for your time and participation and as I said I am pleased with our first quarter performance and current sales pacing for the balance of the year in early 2026 to remain on track to achieve our full year 25 guidance, but I am mindful of navigating the micro the Mac.
Jose: Pro economic pressures that we've talked about having said this I am excited as we look ahead to continue to realize the benefits of our strategy of our investments to deliver greater value to our customers.
Jose: To find a greater opportunity for our people and expect double digit revenue growth for our shareholders. So with that I want to thank you and and <unk>.
Jose: Goodbye.
Speaker Change: This concludes today's conference call you may now disconnect.