Thank you for standing-by. Welcome to Accenture's Fourth Quarter Fiscal 2024 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, today’s conference is being recorded. And I will now turn the conference over to our host, Katie O'Conor, Managing Director, Head of Investor Relations. Please go ahead.

Thank you, operator, and thanks, everyone for joining us today on our fourth quarter and full fiscal 2024 earnings announcement. As the operator just mentioned, I'm Katie O'Conor, Managing Director, Head of Investor Relations. On today's call, you will hear from Julie Sweet, our Chair and Chief Executive Officer; KC McClure, our current Chief Financial Officer; and Angie Park, our incoming Chief Financial Officer. We hope you've had an opportunity to review the news release we issued a short time ago. Let me quickly outline the agenda for today's call. Julie will begin with an overview of our results. KC will take you through the financial details, including the income statement and balance sheet, along with some key operational metrics for the fourth quarter and full fiscal year. Julie will then provide a brief update on our market positioning before Angie provides our business outlook for the first quarter and full fiscal year 2025. We will then take your questions before Julie provides a wrap up at the end of the call. Some of the matters we'll discuss on this call, including our business outlook are forward-looking, and as such, are subject to known and unknown risks and uncertainties, including but not limited to, those factors set forth in today's news release and as discussed in our Annual Report on Form 10-K and quarterly reports on Form 10-Q and other SEC filings. These risks and uncertainties could cause actual results to differ materially from those expressed in this call. During our call today, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures where appropriate to GAAP in our news release, or in the Investor Relations section of our website at accenture.com. As always, Accenture assumes no obligation to update the information presented on this conference call. Now, let me turn the call over to Julie.

Thank you, Katie, and everyone joining. And thank you to our 774,000 people around the world who have worked every day to be at the center of our clients' business and deliver 360 degree value for all our stakeholders. Our performance this year clearly demonstrates the resilience and agility of our business model, the power of our scale and reinvention in action. FY '24 was marked by a challenging market environment, and we have rapidly shifted to where our clients are buying, large reinventions that utilize the scale of Accenture's expertise and ecosystem relationships. And we have yet again put reinvention into action at Accenture with our significant investment and yearly (ph) leadership in what we believe will be the most transformative technology of the next decade, GenAI. As a result, over the last four quarters, we have successfully positioned Accenture for strong growth in FY ‘25. When market conditions improve, we will be well positioned to capitalize them. In FY ‘24, we continue to deliver on our enduring shareholder value proposition to grow faster than the market and take share, deliver earnings growth and margin expansion while investing at scale with strong free cash flow, disciplined capital allocation and significant cash return to shareholders. Turning to our results and the foundation for growth we have built for FY '25. With our clients prioritizing large scale transformations, we doubled down on our strategy to be the reinvention partner of our clients. Our success is reflected in our full fiscal year bookings of $81 billion, representing 14% growth in local currency, including 33 clients with quarterly bookings greater than $100 million in the fourth quarter, bringing the total of such bookings to 125 for the year, 19 more than last year. We are proud to now have 310 Diamond clients, our…

Thank you, Julie, and thanks to all of you for joining us on today's call. We're very pleased with our results in the fourth quarter, which were aligned to our expectations and reflect improvement across all dimensions of our business. We continue to invest for long-term market leadership, while delivering significant value for our shareholders. So let me begin by summarizing a few highlights for the quarter. Revenue grew 5% in local currency, driven by mid-single digit growth or higher in seven of our 13 industries, including public service, industrial, software and platforms, health, high tech, energy, and life sciences. We had growth in all three markets, all three services as well as return to growth in consulting type of work for the first time in six quarters. Organic revenue improved as well to slightly positive growth, and we continue to take market share. Adjusted operating margin was 15%, an increase of 10 basis points over Q4 last year. We continue to drive margin expansion while making significant investments in our business and our people. We delivered adjusted EPS of $2.79, which represents 3% growth compared to adjusted EPS last year. And finally, we delivered free cash flow of $3.2 billion and returned $1.4 billion to shareholders through repurchases and dividends. With those high level comments, let me turn to some of the details. New bookings were $20.1 billion for the quarter, representing 21% growth in U.S. dollars and 24% growth in local currency with an overall book-to-bill of 1.2. Consulting bookings were $8.6 billion with a book-to-bill of 1. Managed services were $11.6 billion, with a book-to-bill of 1.4. Turning now to revenues. Revenues for the quarter were $16.4 billion above the mid-point of our guided range, reflecting a 3% increase in U.S. dollars and 5% in local currency.…

Thank you, KC. Our FY '24 growth was driven by our clients seeking to reinvent using tech, data, AI and new ways of working. Reinvention requires a strong digital core. In FY '25, a significant driver of our growth will continue to be helping our clients with digital transformation, including building out their digital core and then using it to drive productivity and growth. We see the advent of GenAI and its tremendous potential acting as a catalyst for reinvention. Our clients turn to us for our unique combination of services across strategy, consulting, song, Industry X, technology and operations. Our strategists and deep industry functional customer and technology consultants work hand-in-hand with our clients and across services to shape and deliver these reinventions. Our investments in our advanced platforms, our assets and solutions, our process expertise, the insights from our scale and diversification, and our ability to both design and build the solutions, combined with our managed services are key differentiators for us. At the same time, we see AI as the new digital. Like digital, AI is both the technology and a new way of working, and the full value will only come from strategies built on both productivity and growth. And it will be used in every part of the enterprise. We believe the introduction of GenAI signifies a transformative era that is set to drive growth for us and our clients over the next decade much like digital technology has in the last decade and continues to do so. As part of that, we expect that the work to prepare enterprise data, which is the fuel for AI will be an increasing part of our growth. To accomplish reinvention and take advantage of AI, businesses need to focus on talent, their ability to access the best…

Thanks, Julie. Now let me turn to our business outlook. For the first quarter of fiscal '25, we expect revenues to be in the range of $16.85 billion to $17.45 billion. This assumes the impact of FX will be approximately positive 1.5% compared to the first quarter of fiscal '24 and reflects an estimated 2% to 6% growth in local currency. For the full fiscal '25, based upon how the rates have been trending over the last few weeks, we currently assume the impact of FX on our results in U.S. dollars will be approximately positive 1.5% compared to fiscal '24. For the full fiscal '25, we expect our revenue to be in the range of 3% to 6% growth in local currency over fiscal '24, which includes an inorganic contribution of a bit more than 3%. And we expect to invest about $3 billion in acquisitions this fiscal year. For operating margin, we expect fiscal year '25 to be 15.6% to 15.8%, a 10 basis point to 30 basis point expansion over adjusted fiscal '24 results. We expect our annual effective tax rate to be in the range of 22.5% to 24.5%. This compares to an adjusted effective tax rate of 23.6% in fiscal '24. We expect our full year diluted earnings per share for fiscal '25 to be in the range of $12.55 to $12.91, or 5% to 8% growth over adjusted fiscal '24 results. For the full fiscal '25, we expect operating cash flow to be in the range of $9.4 billion to $10.1 billion, property and equipment additions to be approximately $600 million and free cash flow to be in the range of $8.8 billion to $9.5 billion. Our free cash flow guidance reflects a free cash flow to net income ratio of 1.1 to 1.2. We expect to return at least $8.3 billion through dividends and share repurchases as we remain committed to returning a substantial portion of cash to our shareholders. Finally, as part of our routine review of our capital structure, we expect to tap the long-term debt market in the near term to increase our liquidity for general corporate purposes as we look to optimize our capital structure and reduce our cost of capital. We expect to raise a modest amount of debt. In connection with that, there would be no change to our capital allocation strategy, which includes how we look at and use D&A (ph) or our strong credit ratings and our net leverage will remain low. We have incorporated the potential for long-term debt into our guidance, including the interest expense. With that, let's open it up, so that we can take your questions. Katie?

Thanks, Angie. We will now take your question. I would ask that you each keep to one question and a follow up to allow as many participants to ask a question. Operator, would you provide instructions for those on the call?

Thank you. [Operator Instructions] We'll go to the line of Tien-Tsin Huang of JPMorgan. Please go ahead.

Hey. Thank you so much. Yeah, really strong bookings. I wanted to think about how that translates into revenue visibility. If you don't mind, I know Accenture doesn't normally talk about ACV, but can you maybe comment on the current relationship between ACV and TCV and how that's evolving? It seems really important to us as we think about revenue and visibility. Duration looks like it's up, but you also have a lot of large deals converting as well, so can you comment on that?

Hi, Tien-Tsin. Good morning. It's Angie. So let me cover guidance because maybe it will help to paint a picture of how we're thinking about the full fiscal year. I think it's really important. Let's start with how we ended Q4. If you think about the 5% growth that we posted in the fourth quarter, what we highlighted was that we did have slight growth in organic, which is important as we exit the year. And as you just talked about, over the last few quarters, we've really pivoted our business to what our clients are buying, which are the large transformation deals. And what that does is it positions us better than compared to the same time last year on the revenue that we've already sold. From an inorganic contribution, I do want to highlight that overall, we expect a bit over 3% for the year, which would imply with our guidance of 3% to 6%, that at the bottom end of the range, organic is flat. And then at the top end of the range, we're growing 3% in organic growth. And then as you peel it back and you look at the revenue growth that we see, it is broad based, and we saw that coming out of Q4, we see it across the market and across all of our industry groups. And then as -- when you look at it by type of work as well, what we see right now is that both consulting and managed services, we see low to mid-single digit growth rates for the year. And so stepping back with the color and how we're looking at our guidance, we're very pleased with how we have set ourselves up that and positioned ourselves for fiscal '25.

Yeah. And so Tien-Tsin, what that means is, we're not commenting specifically on ACV and TCV because as you said that isn't. But the way to think about the confidence level and going to the year, right, is that we told you that we had a strategy to have more megas. We've shared with you that we had 19 more of these bookings than last year, $100 million or more. So you can see there's a big quantum. And so as you think about going into the year, we've got a bigger base of revenue coming from these larger deals coming online than we did going into fiscal year '24. And so that's really how we're trying to help you all think about it is by being clear about that strategy and how -- and the quantum of that, and that's how we then think about the year. So hopefully, that gives you some more insights together with the view on the guidance.

No, it does and it's very reasonable as well, just to say that loud out. Just on the acquisition side, Julie, I think I asked it last quarter, so I'll ask again. I know you've been very busy. I like the examples that you gave around the productivity you're getting from some of the deals and the examples you gave again. But how about just overall appetite this year, are you still seeing good opportunities? Could we see a stepdown or a pause in the short term, anything else to add?

Yeah. So what I would say is, as Angie just said, our inorganic plan for the year, like, in terms of -- as you think about revenue guidance, we kind of -- we're going into the year with nearly 3%, and we think we'll -- right now, the plan for is a little bit above 3% is what we're seeing for fiscal year '25. And that reflects an expected plan right now of about $3 billion of deployed capital. So a step down from last year and probably more backend loaded as we look at our pipeline. Now obviously, we always have the ability to flex up or down. We only tie it to the opportunities in the market, but that’s how we’re seeing this year as we think about our investments.

Perfect. Thank you. Well done. Thanks.

Thank you.

We'll go next to the line of James Faucette with Morgan Stanley.

Great. Thanks for taking our question, guys. This is Antonio (ph) on for James. I wanted to actually dig into the technology segment. I know cloud is a big component of this. Could you talk through how clients spend on these cloud migration projects has been trending over the last 90 days and how we should think about cloud growth going into fiscal year '25? And then I have a follow-up after.

Hi, Antonio. I'm not going to think about it in the last 90 days is just think about like sort of where we've been and where we think we're going, right?

Yeah.

So, in cloud, you still have a lot of migration that's happening, but on more of the high-performance compute applications. So things like mainframe, right? So -- and you also still have some clients who are very, very early in their cloud journey. And one of the things I talked about in the script, for example, was like retirement services. Like that's an entire segment where they're very, very early in the cloud journey. And so at the same time, you've got companies that are very early, just starting their cloud journey. You have those who are farther along who are now getting to the harder applications like mainframe. And then we still have a lot of modernization because what happened in the pandemic, people who were trying to get to the cloud to get the infrastructure savings, have not yet done the modernization. And that modernization, of course, feeds into all the things we do, right, brings the industry and the functional expertise. And so as we look going into FY '25, we continue to see those strengths. So we expect that cloud is going to continue to be a significant driver of growth but on all of those dimensions, right? And the high performance compute as well requires very deep industry knowledge, like doing mainframe in the context of health is very different than the context of banking. So hopefully, that helps you.

Got it. No, that's helpful. And then, I wanted to ask on the organic headcount. It actually looks like that ticked up quite a bit. Could you comment on your hiring strategy and in what geographies you're sort of looking to shape that?

Yeah. Why don't I start and then Julie add (ph) any additional comments as well. So as you can see, I mean, I want to start with how we're exiting the year. We saw slight organic growth in Q4, and we see that momentum into FY '25. You will have also seen that we added about 24,000 people this year in Q4, which is reflective of the momentum that we see in the business. And as always, right, looking ahead, we will always hire for the skills and the demand that we see. And just more broadly, I would just remind us that as you think about us, as a business, our core competency is balancing supply -- managing supply and demand. And you see that through our utilization rates, which continue to be in the 92% range.

And we're hiring -- from a talent strategy, right, we are hiring primarily in India. So a lot of that hiring is technology in India and, of course, also addresses -- we are refreshing our pyramid at this time. So you've got kind of the new college graduates coming in. So there's really no change in our talent strategy. We hire all over the world. And in technology, which is a big driver of the growth that we're seeing now and going into FY '25, that is a lot of hiring in India.

Great. Thank you, both.

We'll go next to the line of Jason Kupferberg with Bank of America.

Good morning, guys. Thanks. I wanted to pick up on the commentary about the consulting outlook for fiscal '25. You said up low to mid-single digits. I think that's very consistent with the exit rate of 3% coming out of fiscal '24. So does that imply that you are not building much of a discretionary spending recovery into this initial F '25 guide?

Yeah. Hi, Jason. Good morning. How are you? And let me just give you a little bit of color on that as you think about the types of work and the question that you just asked. If you think about our range overall, so we're at 3% to 6% for the full year. And what this assumes is, at the top end, we see more of the thing, right, in terms of the discretionary spending environment. While at the bottom end, it allows for further deterioration in the discretionary spend environment over what we experienced in FY '24.

Okay. That's very helpful. And then maybe one for Julie. I just wanted to get your broad take on the macro backdrop. I mean, I guess, what are decision makers telling you right now versus three months ago? What are they waiting to see to open the discretionary budget a little bit more?

Yeah. Well, the environment is really more of the same and that environment has been kind of a cautious environment. Right now, they're going into budget season. So as always, we'll really see in January and on February, but there hasn't been much of a change, right? The macro is kind of the same. Obviously, there's some events going to come up in the fall that people are thinking about, but there's not like a big tone change, right? And I think, because if you look at the macroeconomic environment, FY '25 is going to click down in the U.S., maybe a little bit better in Europe. But overall, not a lot of improvement. So we're not hearing -- I'm not hearing from CEOs, and I'm talking to them almost every day, some big like, hey, now we're ready to go spend more, right, in discretionary spending. So it's really just more of the same. And by the way, one of the changes that we made this last fiscal year '24 was normally we do for decades, our big promotion period was in December, and then a small one in June. And so in fiscal year '24, we switched these, right? We said we have a lot more visibility in our business in January or February because that's where budgets are set. So we did that this past year and had a really big promotion, a very nice promotion, I would say, not really big, but very nice promotion in this past June. We've now permanently shifted that promotion cycle. So we will do our big promotion cycle in June and our smaller one in December to better match when our clients are setting their budgets and we have better visibility. And that's what we're seeing again. The justification for that is clear that we're really no IT spending and spending on our services in the budgets in January, February.

Thanks for all the color.

Thanks.

We'll go next to the line of Keith Bachman with BMO.

Hi. Good morning. Thank you very much. I wanted to revisit on M&A, if I could, and just get some clarification. In FY '24, you spent, as you noted $6.6 billion, which was up about 160% year-over-year. And if we sort of do the math on what your normalized multiples are to revenue, it looks like you're starting the year of FY '25 with 3 points of M&A help. And so I just want to understand, is that the right way to think about it? And then Julie, you had indicated that you plan to spend $3 billion more in M&A this year, and it will be, as you said, backend weighted. But I'm just struggling why M&A is that $3 billion number is even second half weighted, why M&A isn't 4% or more for the year?

Let me just start with peeling back our inorganic contribution a bit. As we look at the deals that we closed in '24, it's nearly 3% contribution, right? And so with the backend loaded approach in our capital deployed, we do see a bit over 3%, and that's just the math.

Yeah. It's just timing, right? It's not quite 3% going in because a lot of this closed at the end of Q4, right? And so it's just its timing, right? And it's the way we see our pipeline developing, right? Because we have a view of what we're going to -- we think we're going to spend in Q1 and Q2 and how that rolls in.

Okay. Let me transition the bookings then. As you think about FY ‘25, and I know you don't guide to bookings, it's more of an output, but any puts and takes that you want us to think about in terms of the book-to-bill ratio in FY '25 that might be higher or lower? Any kind of cadence there? And if you don't mind, was there an M&A help in the August quarter bookings as well or signings, excuse me?

Why don't I start, in terms of the way to think about our bookings, we were super pleased with the $81 billion of bookings that we had for the year, which was 14% growth, which included the 125 quarterly client bookings over $100 million. And so I think that, that we were super pleased with. And you saw that in our book-to-bill and our growth rate in managed services was driven by our large transformation deals. For us, over time of our four trailing quarters, we're always looking for our consulting book-to-bill to be 1.0 or better and for our managed services to be 1.2 or better and nothing has changed there.

Yeah. And there was nothing in M&A about our bookings in Q4.

Okay. Many thanks.

Thanks.

We'll go next to the line of Bryan Keane with Deutsche Bank.

Good morning. Julie, I just want to ask about GenAI. I think bookings were up almost about $300 million in the third quarter sequentially, up about $100 million this quarter. Anything about the cadence there of GenAI and fall through there that you can help us understand?

Sure. So yeah, so we ended with $3 billion bookings for the year, and we'd expect in FY '25, another healthy increase. We know there's clear demand. We're starting to see more of our clients move from proof-of-concept to sort of larger implementations, which is important. So the size of those bookings is kind of, is clicking up. And also, we're continuing to see kind of at least every other one has got data pull-through and even that's kind of moving up. So we're kind of going into the year, we'd see -- we'd expect another healthy increase in our bookings and our revenue from that and also that data will continue to kind of be a bigger and bigger part of that building out of the digital core because one of the biggest limitations on using GenAI today and why it's going to take a while is our client needs data and our clients have a lot of work to do on data, which is, of course, a big opportunity for us.

Got it. And then just a clarification on the guide. I know the fourth quarter organic growth was positive, and we're talking about fiscal year '25 revenue guide of 3% to 6% on a constant currency basis. And if you back out the acquisitions, I think you guys said on the low end, we're talking about flat organic growth, that would be a slight step down from the fourth quarter, which is -- would be a little surprising given some of the momentum that you guys are seeing in bookings and in headcount growth. So just wanted to make sure I understood what that low end might imply and why would there necessarily be a step down from where the fourth quarter kind of ended? Thank you.

Yeah. No. And the way we're thinking about it, right, we're going into the year with momentum. We had executed on the strategy around the bigger deals. So we have a stronger base of revenue. We've got the acquisitions. And so on the bottom end of the range, what we would see, like the most likely reason to be there is if there was a deterioration in the discretionary spend environment, right? So we're trying to just kind of give some flexibility. We’re not seeing that, right? We sell more of the same this quarter. And so as we kind of go into the year, at the top end of the range, it’s the current environment going forward. And at the bottom of the range, if you were to ask me today, what is that mostly accommodated is if there was a deterioration in spending, right, so -- because of kind of the way we’ve positioned ourselves.

Great. Thank you.

Thanks.

We'll go next to the line of Dan Dolev with Mizuho.

Hi. Thanks for taking my questions. Great results and great guidance here. Two questions on GenAI. Are you seeing more of your conversations being less replacement and reallocation and purely incremental on G&A? And then I have a follow-up.

Well, I think it starts with, we're not seeing a change in what our clients are spending on IT, right? So -- but what we are seeing is the continued trend of trying to save money on IT to free up the spending on areas of GenAI. So on the one hand, right now, we haven't seen a change in overall spending. We'll see what the budgets come in January, February, but we're not expecting a big change. But what we also are seeing is that as they're saving money, they want to invest it in things like GenAI and data. So that's really the dynamic that's going on, save to invest, but we haven't seen signs of overall change.

Got it. And then a quick follow-up on margins. Can you maybe touch on the GenAI services margin, how it stands versus your traditional business? I think that would be really helpful for investors. Thank you.

Are you -- I mean, are GenAI margin and sort of -- is that different from when we're doing GenAI versus other GenAI technology?

Correct. GenAI services versus your traditional consulting business.

Look, GenAI is still a small part of our business, and I wouldn't really think about it as having a particularly different margin profile at this time. And as you probably heard in our -- in my script that a lot of time we're starting to embed GenAI in our larger deals and so we're not really thinking about it as like a sort of a separate way. So I wouldn't think about it too differently than our usual business.

Got it. Thanks. Well, great momentum. Thank you.

Thanks.

We'll go next to the line of Jim Schneider with Goldman Sachs.

Good morning. Thanks for taking my question. Very helpful commentary on the client outlook on limited discretionary spend. But can you maybe help us understand or unpack, when you talk to them, what are they looking for to release discretionary spend? Is it more macro factors, whether that be rates, election or regulatory or is it more micro factors tied to their IT budgets? And if it's the latter, what are the things they're looking for in terms of getting increased clarity on those priorities going into 2025?

Sure. It's a good question. And it's really -- overall, there is a sense of the macro, right? Because if you look at the -- a lot of our clients are global. If you look at the macroeconomic, there isn't a big change. There's kind of going into next year, like the U.S., which is a big market, it looks like it's going to be down a little bit. Europe's up a little bit, but still not great. And so kind of if you start with they're not seeing a big change in the macro. But then you really have to look at it industry by industry because each industry has factors. So for example, in the energy industries, they're super focused on how much investment they have to do and the change – and the shift in climate change and renewables. So there's a big appetite for major investment. So there's no catalyst that says, oh, like I've got a ton of thought. They've got a lot of big investments, right? If you look at consumer goods, where a lot of the consumer goods companies are not able to get pricing. They've got to get up volume, which means they've got to drive down their -- they've got to improve their efficiency and their manufacturing costs, and that takes big investments because manufacturing. Our latest research says like two-thirds of the journey in digitization is still to come. And so those are big investments. And so I can kind of take you through industry by industry. The reality is, it's obviously good growth for us is the digitization journey is still very early in many, many industries, that's like public service is another great example. So they've got big transformations going. And at the end of the day, if you're a big enterprise, like, the deals that are smaller, right, they do not move the needle. And when you've got big investments, that's where they're focused because they see now the potential of things like GenAI, and everyone's like we got to get going, that's really what's driving it. So that's why we're not having a bunch of discussions about like I can't wait to unlock that spending. Our discussions are entirely on help us move faster with our bigger information. That's really what we're focused on.

That's very helpful. Thanks. And then maybe as a follow-on, you referenced several verticals there. Can you maybe, as you prospectively look into fiscal '25, call out maybe one or two verticals where you expect the most improvement and maybe one or two where you see potential risk of deterioration? Thank you.

Yeah. Hey, Jim. Nice to talk to you. I think that as we look across FY '25 in our overall guide of 3% to 6%. We see broad-based growth across -- it's really broad-based across all of our industries as well as our services and markets.

Great. Thank you. Katie O’Conor: Operator, we have time for one more question, and then we’ll wrap up the call.

Thank you. And that will come from Bryan Bergin with TD Cowen.

Hi. Good morning. Thank you. On GenAI, can you give us a sense of the size of some of the largest individual programs have reached? And then as it relates to internal productivity progress, may be comment on any of the service lines where you're seeing the earliest impacts as it relates to productivity or any metrics that you can share in more advance programs?

Sure. I don't want to start like giving tons of data on this. But like you went from deals that were -- in GenAI that were, on average, kind of sub-$1 million, right, that you've now got some that are above $10 million, right? So that's still the smaller end because you're sort of moving into production and scale. But you're starting to see these things move from POCs to larger bookings. And then with respect to internal productivity and our guidance, of course, takes into account what we're seeing. As I've been talking about is that the first area that we anticipate -- remember, we're trying to embrace GenAI fastest because we think it's a big differentiator with our clients. And so in our managed services is where we're seeing the most because that's where we have a platform. So you all remember we used to talk about myWizard. Now we talk about GenWizard, right? But what we're seeing is that the technology and the productivity is like similar ways before. So if you go back to 2015, 2016, when we first introduced myWizard, right? So it's not really different than the kinds of productivity that we've been experiencing. And here, of course, there's an added wrinkle in that GenAI, in order for us to use it with our clients, they have to allow us to use it and they have to prioritize. And they have a lot of other areas where they want to use GenAI that's not necessarily in their technology productivity where they're already many of our clients are using our platforms, they're using AI, etc. So there's a lot of factors that kind of go into the pace of how quickly we can use it even if we're ready to use it now in many places. So hopefully, that's helpful because it is a little bit different in that sense because our clients have to prioritize where they want to use GenAI, too.

Okay. That's helpful. Thank you. And then I appreciate your commentary on the capital returns on the balance sheet and understanding this has overall been a tougher environment, while M&A outlay has been on the upper end. But just curious how we should be thinking about the potential magnitude of leverage in the model going forward? Just any guardrails we should consider?

Yeah. And a couple of things that I would say around that. We indicated that it's going to be modest. We'll maintain our strong credit ratings and net leverage will be low. And so -- and included in our guidance that we provided you, we have also allowed for the potential for the interest expense and in our overall guidance, which is in addition to the variability that we may see in operating margin throughout the year.

Okay. Thank you.

Great. Well, thank you, everyone, for joining us. Before I wrap up, I want to thank KC, who's been an amazing partner and friend these last five years. They've been quite some five years, as we all know, just a few things in the environment that we've gotten together work with. And so I'm really excited for KC and her next chapter. And KC, would you like to say a few words?

I would, thanks, Julie. I just want to offer my sincere thanks to the investor and analyst community for the decade plus of console and support. It's really meant a lot to me. It's really been appreciated. Thanks a lot, and best wishes to all of you.

So I want to thank everyone for joining us and thank all of our people for what you do every day, allowing us to create 360 degree value and giving us a lot of confidence in our success in FY ‘25. And thanks again, KC, and welcome Angie to your new role, and we’ll see you all in the next quarter.

Thank you.

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