Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Jacobs Fiscal Third Quarter 2023 Earnings Call and Webcast. [Operator Instructions]. It is now my pleasure to turn today's call over to Mr. Jonathan Evans, Vice President of Corporate Development and Investor Relations. Sir, please go ahead.

Thank you. Good morning. Our earnings announcement and 10-Q were filed this morning, and we have posted a slide presentation on our website, which we'll reference during the call. I would like to refer you to Slide two of the presentation material for information about our forward-looking statements and non-GAAP financial measures. Turning to the agenda. Speaking on today's call will be Jacobs' CEO, Bob Pragada; and CFO, Kevin Berryman. We are also joined by our incoming CFO, Bob will begin by providing an overview of recent activities and summarizing highlights from our third quarter results. Kevin will provide a more in-depth discussion of our financial metrics as well as a review of our balance sheet and cash flow. And Claudia will provide an overview of separation-related activities. Finally, Bob will provide details on our updated outlook along with closing remarks, and then we'll open up the call for questions. Before I hand it over to Bob, I want to address some reporting changes that were made in the quarter. We consistently review our reporting practices to be aligned with best practices for our industry and SEC guidelines. After review, we have decided to amend our name and convention for revenue, excluding pass-through costs from net revenue to adjusted net rent revenue. Note, this is simply a name change intended to make the non-GAAP nature of this measure more prominent and does not impact measurement. In addition, after an internal review, we have made certain minor adjustments to pass-through revenues in certain prior periods to properly reflect amounts that had not been previously included. As a result, in the materials that we have included in the appendix to this presentation, we have adjusted People & Places adjusted net revenue for fiscal 2022 and fiscal 2023. Note, this change has been deemed as immaterial has no impact on our reported earnings, operating income or cash flow. With that, I'll turn it over to Bob.

Thank you, Jonathan. Good day, everyone, and thank you for joining us today to discuss our third quarter fiscal year 2023 business performance. Turning to Slide four. I'd like to begin by recognizing the continued commitment and extraordinary talent of our 60,000-plus teammates here at Jacobs. I've now been in the CEO seat for over six months and as I spend time with our clients and our people, I continue to be both inspired and appreciative of the dedication and world-class expertise they bring to some of the world's toughest challenges. Now more than ever, our communities require the brightest and best minds to step forward with innovative and technology-enabled solutions to drive better outcomes. I'm proud of all that we do to play our part to enhance and serve those communities. Firstly, I want to provide an update on our previously announced intent to separate the CMS business before I move on to our third quarter results. The company continues to make significant progress on the activities associated with the intended separation. In addition, following the announcement, there has been positive interest from multiple outside parties. We are currently evaluating this interest consistent with our commitment to maximize shareholder value. As previously communicated, a spin-off, which is subject to customary conditions, is expected to be completed in fiscal 2024. Let me reiterate, we are laser-focused on maximizing value for all of our stakeholders. As we progress towards the separation of CMS, our teams continue to work tirelessly to stand up both companies for independent success. In the process, we have identified a number of operational enhancements that we believe will propel each company to greater heights in the future. Consequently, we believe that fiscal year 2024 will be a year of optimization and acceleration. Turning to Slide five, on…

Thank you, Bob, and let me turn right to Slide nine for a financial overview of our third quarter results. Third quarter gross revenue grew 9% year-over-year and adjusted net revenue grew 7.5%. Adjusted net revenue grew 8% year-over-year on a constant currency basis. Gross margin in the quarter as a percentage of adjusted net revenue was 25%, down slightly year-over-year, primarily due to PA Consulting. I will provide additional comments regarding our segments later in my remarks. Adjusted G&A as a percentage of adjusted net revenue was 14.7%, over 100 basis points better sequentially and year-over-year more than offsetting the lower gross margin; Costs were well managed due to discipline and actions taken, and we are still targeting G&A as a percentage of adjusted net revenue to stay well below 16% for the full fiscal year 2023, improving upon the 16.2% figure realized in 2022. GAAP operating profit was $270 million for the quarter and included $52 million of amortization from acquired intangibles, other transaction and separation-related costs and restructuring efforts of $38 million and a $1.4 million noncash charge related to decreasing our real estate footprint aligned to our future work strategy. The other transaction, separation related and restructuring costs of $38 million included three distinct types of costs. The first represents approximately 45% of the $38 million and relates to a restructuring initiative in our PA Consulting business to rightsize the cost structure to align with the company's end market demands. The second cost represents approximately 35% of the amount and is associated with our initial advisory and other costs associated with the separation of the CMS. Third bucket, which is approximately 20% of the $34 million, is related to the cost of noncash PA contingent equity-based agreement associated with the PA transaction structure and other miscellaneous…

Thank you, Kevin. Turning to Slide 12, I have now been with Jacobs for just over one year and look forward to formally succeeding Kevin next week. He has been a superb partner throughout this transition period and I feel privileged to help lead this company at such an important inflection point in its history. As EVP of Strategy and Corporate Development, I've overseen the rollout of our strategic stand-up management office at the center of the CMS separation. Our goal is to continue to serve our clients without interruption, optimize both companies operating models and to effectively manage risk associated with the separation. Due to the hard and tireless work of our teams, we have made significant progress towards effective We can also confidently reinforce that we intend to eliminate separation-related stranded costs. In addition, we have identified value levers that we believe can lead to continued productivity gains at independent Jacobs. Last quarter, we outlined independent Jacobs target operating profit margins of 12% from separation alone. Yet, we believe there is further upside, and it is our goal to further expand margins post separation. We'll have more to say about that over time. But one of the most exciting aspects of the separation is the opportunity to drive further growth and profitability with the streamlined Jacobs. Jacobs has a recognized sustainable business model with a strong foundation that aligns purpose with both growth and value creation. I, like the rest of the Jacobs team, am absolutely committed to Jacobs' purpose-led vision. Our vision underpins our commitment to deliver superior results for our shareholders, employees and broader stakeholders. I look forward to meeting more of our employees, clients and investors in the weeks and months to come, as I assume the CFO position. Thank you, and I will turn the call over to Bob.

Thank you, Claudia. Turning to Slide 13, due to strong year-to-date performance and forward indicators, we reiterate our outlook for FY '23 adjusted EBITDA to a range of $1.42 billion to $1.47 billion and adjusted EPS to $7.25 to $7.45. We will provide guidance for fiscal year 2024 in conjunction with our Q4 earnings release. Turning to Slide 14, in closing, I would like to express my tremendous appreciation for Kevin's contribution to the transformational success of our company over the last 8-plus years. Kevin is a great personal friend and has been a fantastic business partner. I am privileged to have his continued support as my special adviser. We are very fortunate to have Claudia as a critical leader on our team. I look forward to her continued accomplishments and contributions building on her success to date. Operator, we will now open the call for questions.

[Operator Instructions] Your first question comes from the line of Michael Dudas with Vertical Research. Your line is open.

Good morning, Claudia. Jonathan. Bob. And well done, Kevin. Thank you. Bob, I'm encouraged about the continued backlog margin improvement. Maybe you could share a little bit about where that margin improvement this quarter is coming from? And as you look at the pipeline and some of the recent bookings, how that may play through as we move into 2024 and the mix, given the -- either the three biggest if you want to include CMS on that margin improvement expectation for 2024?

Yes. Mike, thanks. I'd say right now, the margin improvement is coming from a couple of key drivers. First is around the mix. We are finding a larger part of our portfolio in the consulting advisory component. And when I say that, I'm not saying exclusively PA, that's across the board, even on our infrastructure engagements right now, we're hitting jobs right at the front end where kind of got a higher-end, higher-margin consultative service component. So mix is definitely a driver. The second component on current margin expansion is around the operational discipline that we've been working on for quite a while. And so our project delivery as well as the stability in our offering has continued to evolve. Moving forward, as far as the continued expansion, the digital enablement is starting to come through. You can't quite see it just yet, but it's becoming a larger part of our portfolio, and this is broad. This is broad across the enterprise. And then the global delivery model. We've been talking about that for several quarters, but that global delivery model is paying some real fruit, and we see that continuing to rise moving forward.

Your next question is from the line of Andy Kaplowitz with Citigroup. Your line is open.

Good morning, everyone. Kevin, thanks for all your help.

Thank you, Andy.

So you guys mentioned that you had interested parties looking at CMS. To the extent you can, could you give us any more color regarding the interest? Is it from strategic? What's the time frame for when you might make a decision regarding a potential sale? And could you give us any more detail on how to think about CMS' tax basis and how you consider that tax leakage versus a potential spin?

Yes. Andy, unfortunately, we can't. That's -- right now, I've just mentioned that the interest is strong. We're evaluating. And we can't go into any more detail on that. I apologize.

That's fine, Bob. So then let me ask a different question. You -- People & Places growth moving forward. You mentioned P&PS adjusted net revenue up 9% year-over-year. I think your main peers suggest morning they're also seeing some acceleration in fiscal funding in the U.S. Do you see IIJA related funding continue to accelerate from here? And do you think you could keep up or accelerate the kind of growth you recorded in Q3 into '24?

We do. We do. The IIJA component is really kind of in the -- I'd still say it's in the early innings, but we're seeing that flow through Andy, we actually got in front of that with the grant component and assistance in the grant applications. That now, coupled with the formulaic based funding that's flowing, has really helped. So yes, we do see that legislation-driven funding, not just IIJA, but also the other legislation that's been passed and that moving forward is going to continue to be a big piece. The other thing that it's done is it has -- it's kind of stimulated other legislative acts around the world. I think there's an EU Chips Act that we've now seen some of the components to as well as infrastructure stimulus coming out in other parts of the world. So kind of the world is getting behind this.

Your next question is from the line of Jamie Cook with Credit Suisse. Your line is open.

Nice quarter. And congrats, Kevin, and thanks for all your help as well throughout the year. I guess my first question, understanding the margin story that you're talking about consulting mix, project delivery, digital enablement. But as you, depending what happens with CMS and we have the new Jacobs, is there a greater opportunity on the cost side, just to sort of restructure streamline costs as well as what you're seeing on the project delivery or mix side? Just wondering if there's a cost story there. And then my second question, it was nice to see the strong cash flow in the repurchase in the quarter here. Can you talk about sort of shorter-term capital allocation priorities, share repurchase the way that investors should continue to think about things with acquisitions being more in the sideline?

Sure. Go ahead, Claudia.

So thank you, Jamie. On the first one, the cost opportunities. So as I mentioned in my prepared remarks, we see the opportunity -- day 1 is just to start. And with a more streamlined strategy and the business model, we see lots of opportunities for more efficiencies as we can also leverage more our global delivery platform. So efficiencies, more focused strategy and the agility that, that will bring. So lots of opportunities on the cost optimization front. On the capital allocation structure, we are -- we said it before, we are very happy with the opportunities we have, our portfolio. We are focusing on our organic growth, and we see it. We've building this portfolio over time. We see the opportunities to invest in ourselves to continue delivering this growth. So we prioritize that and returning excess cash to our shareholders. So those are the priorities and all that really on a risk-adjusted basis.

Your next question is from the line of Jerry Revich with Goldman Sachs. Your line is open.

Hi, good morning, everyone and Kevin, congratulations. I think in your nearly 9 years, the stock has nearly quadrupled. So well done, and Claudia congratulations again. .

Thank you.

I'm wondering if you could just ask on advanced facilities just based on the disclosures, it looks like that's about 1/4 of People & Places at this point, so a really good performance so far. Can you just talk about, given the backlog in that business, is there a runway for that portion of the portfolio to be 30% or more of People & Places over the next year or 2? Just if you could touch on the backlog, Bob, if you don't mind?

Sure. Yes, Jerry, that's a great way of looking at it. The short answer is yes. We see it as a larger part of our portfolio moving forward. Backlog is robust. And I guess what really gives us some confidence in the continued growth, and Kevin mentioned that it was -- it's been six quarters, but just kind of step back, we've been in growth mode in this business for probably the better part of the last four years, is what's happening in the industry You talked about re-shoring, but specifically in life sciences, and it's been well published, the level of technology coming out was really driven by oncology in the past, but now we're seeing things with regards to obesity and then the obesity drugs that are having a positive effect on heart disease, we're seeing that in our pipeline and in our backlog with the Tier 1 customers that we've been doing work for ages. That coupled with the Chips Act and all that's going on in the EV world, we got -- the tailwinds would give us confidence that, that is going to be a bigger percentage of our portfolio.

Your next question is from the line of Bert Subin with Stifel. Your line is open.

Hey, good morning. and congratulations both Kevin and Claudia.

Thanks, Bert.

Thank you, Bert.

Maybe just a follow-up on that question, Bob, if you think that Advanced Facility is going to become a larger part of the business and the rest of the business is sort of already on track to grow high single digits, at least in the medium term. Does that lead you to believe that, that business can continue growing double digits for a period of time?

I think right now, the indications are, yes. But the visibility that we have, we have visibility from a project standpoint probably six to nine months out. What we're basing our confidence in is the continued trends in technology. So the short answer is yes.

Got it. And then just a broader P&PS question. Can you just sort of walk us through what sequentially changes, I guess, as we think about the fourth quarter? I know FX will become relative tailwind, but the guidance has seemed to imply that margins remain at or above sort of the targeted range that you guys have out there with sales potentially also stepping up. So is that in your view, sort of largely driven by IIJA ramp you're starting to see projects come through or is there something else that's posting that?

Go ahead, Kevin.

Look, I would say it's a variety of things: good execution, certainly good growth as it relates to those businesses that we've already discussed in our prepared remarks. And so I think it positions us well to end the year well and ultimately continue to drive forward in 2024.

Your next question is from the line of Sean Eastman with KeyBanc. Your line is open.

Hi, team. Thanks for taking my questions and, Kevin, I just wanted to say a very impressive CFO tenure. Congratulations. I wanted to press Claudia on the efficiencies and streamlining comments a little bit more. And I realize it's early days, but I'm just curious where we should expect to see that enhancement? Is it kind of across all the segments? Is it more so in the corporate costs? And then also, Kevin, I think you made a comment about the corporate costs remaining elevated for a short amount of time. So I wondered if that run rate is expected to step down going into next year? Some clarity there would also be helpful.

Yes. Thank you, Sean. So first, I want to say the work is under with way, right? So part of the separation is understanding the entanglements and all that. So just -- and we will be sharing a lot more as we progress in the process. So to explain it is, one, there are many functions or tasks and processes that you have when you put different factors together, and so that applies to different functions. Is it support functions? Is it workflows and so on? So Sean, you can think of finance put in numbers to that, is it HR, is it the delivery model and so on. So as you simplify and streamlined, you see those efficiencies also the ability to share data depending on where you operate. So it really goes at multiple levels. And as I said, we will be sharing that as we progress in the process and the work is underway. And it's a very well structured process and the standup management office that we have. To give you an idea, it's around 25 work streams that we have all the different functions and in operations and everywhere where we operate. And as I said before, one key element of that is our very strong model of the global delivery platform. So that allows us to extract further efficiencies as we maximize the use of that platform.

Okay. And my follow-up would be for Bob. I think it was relative to P&PS, but I think you made a comment about being able to continue to grow at current rates. So I just wanted to flesh out as much as we can relative to the top line growth expectations for RemainCo on a go forward?

Sure. We stuck to the [ 6% to 9% ] long-term top line growth rate, and that was what my comment was referring to. And right now, we've got some nice tailwinds behind us. So the higher end of that range is where we are.

Your next question is from the line of Chad Dillard with AllianceBernstein. Your line is open.

Hi. Good morning, guys. And I just want to extend my congrats to you, Kevin. So I want to spend some time on the water business. I think you talked about it being a $2 billion business. Can you give a little more color on what you're seeing in terms of like a pipeline from a pipeline perspective? How to think about the growth rate and margin relative to the broader P&PS targets?

Sure, Chad. The pipeline within the water sector, and I'm talking globally, is probably the fastest-growing pipeline that we have in the business, and that is in the 30%, 40% year-on-year growth in the pipeline. So very robust, being driven by a infrastructure EPA regulations in the states as well as just the need for water, the drought infested areas of not just the U.S. and all that's happening around climate change and then our climate response is driving the need. This need is being funded in a whole variety of sources. I mean these are user fees, these are supplemented by certain government actions that are happening around the world. So all of kind of the drivers are strong and they're not going away. The need is high and governments and state and municipal areas are standing behind it. So we're -- and we're right in the middle of it. And as you know, Chad, we've been a leader in that sector for decades, and that's really coming through.

That's helpful. And how should we think about just the growth rate of that business and margins relative to the broader P&PS segment?

Yes. I'd say margins right now are above kind of the mean margins within the sector today. I think there's some room there. And I think that it's going to continue to be a major part of our overall enterprise-wide portfolio moving forward.

That's helpful. And then I think you talked about some restructuring PA. Just trying to get a sense for how to think about any future costs? How to think about margin benefits? And when you think we'll actually kind of get the full run rate of those cost saving initiatives?

Are you talking specifically on PA or what...

Just PA.

Just PA?

Yes.

Well, look, the cost actions have been taken. So we're expecting on a go-forward basis that, that will improve the margins. we have been talking about utilization and rightsizing the business for a while. And ultimately, the management team got to the point where they decided to proactively go after it as opposed to grow into it. And so we're excited about the ability for that to have taken place. Really good work by the management team. And so that run rate is effectively being embedded into the business going forward.

Yes. And sustainable.

And sustainable.

Yes.

Your next question is from the line of Steven Fisher with UBS. Your line is open.

Thanks. Good morning Kevin, best wishes. I wanted to zoom into the P&PS profit growth. You were talking before, Bob, about the top line at the high end. Just about the 13% year-over-year profit growth in Q3. Where do you see that going? Is that -- I mean it was still double digit, but it was a slowdown from 21% in the quarter before. So I guess, is this sort of normalizing into a low double-digit trajectory from here or is this -- do you think there's an actual reacceleration here? Just trying to think about how to frame the expectation for that profit growth in Q4 and into 2024?

Yes. Steve, I think that from a sustained standpoint, we've been vocal that we could drive double-digit growth from a bottom line perspective. I think there was an earlier question around mix. So we're going to have events where we might get some pops in the business. But I'd say on a sustained go-forward basis that double-digit growth in the sustaining area where it's at now is the way to think about it.

Okay. That's helpful. And then a bigger picture question here. Bob, I'm curious how you're managing the business with regard to the broader economic outlook? There's clearly lots of talk about different types of landings for the economy. What are you planning for at the moment? You're about seven to eight weeks away from the start of our next fiscal year, so how is that affecting the decisions you're making today? Obviously, you're sort of been proactive in streamlining operations, but curious if the different economic landings are factoring into your decision-making 1 way or the other?

Yes. I'd say a couple of things, Steve. One is that we have been very deliberate over the course of several years. And Kevin and I have talked a lot about it over the last years and now you're hearing Claudia say the same thing is that we feel comfortable of those end markets that we are acutely focused in on, have got strong tailwinds. Wouldn't -- nobody is going to say that they are resilient of recession. But those tailwinds aren't going anywhere and are probably less tied to inflation than other consumer-driven type of areas. And even in the area that we have some exposure to the broader consumer, these are now in the world of life sciences and chips and broad-based manufacturing that is tied to geopolitical as well as geoeconomic kind of reshaping of the world. So from a portfolio standpoint, we feel strong. And wherever the economy is going, those tailwinds, we feel confident in. The other is around our operations and our cost posture. We're doing a lot right now on the operating model and how we run the company and how we go to market, and we're using this inflection point with the separation of CMS to even accelerate that component, talk a little bit about in the prepared remarks. So that's creating more internal resilience. And then the last I would say is something that Claudia spoke about earlier, and that's cost optimization. We have known us -- Steve, you've known us for a long time, for decades, we have been a company that has been very acutely focused in on cost and cost management and that's in our DNA, and we're going to continue to do that as we continue to look at the leaner structure prospect.

Your next question comes from the line of Andy Wittmann with Baird. Your line is open.

Great. Good morning. Thank you for taking my questions. And Kevin, it's been a pleasure. I guess I wanted to ask about some of the cash restructuring costs. It looks like they're down the new outlook for them. The split of cash is up a little bit, noncash real estate down a little bit. I suppose that's probably related to the $17 million for PA taken in the quarter on cash restructuring. But I guess there's kind of 2 questions that come out of this. One is, do you think that this round of restructuring charges can flow through to the profit line, recognizing in the past, the various restructuring programs we've had in the past have generally been reinvested for growth? And the second question would be, given that '23 is a little bit higher on the cash restructuring costs, what do you think the outlook for '24 could be? Obviously, the CMS been or the potential sale is a big factor, but do you think that the costs will be up or down versus the roughly $55 million of cash cost that you expect to recognize in 2023?

Kevin, go ahead.

Maybe -- thanks, Andy. But let me take a stab. As Claudia suggested in her prepared remarks, we're working through that right now as we speak, relative to the CMS separation efforts. And so it's premature to really give any perspective on that. I think the bottom line relative to your cash comment for 2023 is basically correct. And so at the end of the day, I think the other point that you asked, is it going to be -- it's going to drop to the bottom line or be reinvested? I think that Claudia has made it very clear in her comments that the stranded cost opportunities are, we believe, of substance, and that's going to take a lot of hard work to get after it. But I think we'll leave it there. And fundamentally, I think what the plan will be is that we'll give some additional color, Claudia and Bob will give some additional color when we talk in our Q4 earnings release and outlook for 2024.

And what I would add to that, Andy, is we use the cash conversion as a key metric for us. So it's really important to show is the cash conversion and we have shown the strong cash conversion. So all these numbers is to help our investors understand the numbers. Hopefully, that helps to analyze the numbers. But the cash conversion remains very strong, and we are very committed to maintaining that strong delivery.

Got it. I guess for my follow-up question, I would just ask about Divergent here. I heard the comments for the fourth quarter. This business has always had kind of an implicit kind of ramp that you believe that some of the contracts that you're on will start contributing more significantly. I guess the question is, what's the visibility you have into that ramp? And do you still believe that, that revenue ramp can lead to better fixed cost coverage and push margins up more materially even than you've realized in the last couple of quarters, which has been notable for sure?

Yes, Andy, we do. And part of that is, if you look -- if you kind of dissect Divergent, as we've talked about in previous quarters, the area that's growing at the fastest rate are those platforms that we've developed around transportation and water. And those are growing very fast. Now the reason why we're not necessarily seeing that at the top line is because these are platforms that are driving growth at the bottom line for Divergent and creating margin expansion in P&PS, part of that digital enablement of an earlier question, too. So from a bottom line standpoint, the answer would be, yes, we see that visibility, and it's being driven by infrastructure, transportation and water, and we're getting those platforms now into the energy sector as well. So more to follow on how that's going to continue to catalyze P&PS.

[Operator Instructions] Your next question comes from the line of Sabahat Khan with RBC Capital Markets. Your line is open.

Okay. Great. Just, I guess, on some of the infrastructure stimulus money that you said you've seen so far. I'm just curious which end markets that's concentrated and sort of where are you winning some work? And then -- and as you look ahead even to kind of the next 12 to 18 months, which end markets, you think we'll probably see more of the money, whether it's IIJA, IRA or the chipset. I'm just curious how it's flowing by end market at this point?

Sure. Sabahat, it's really the early phases of the early innings have been probably indexed more towards transportation. So we're seeing more in that. But now we're kind of starting to see the front end of different -- I mentioned the New Orleans job where we're doing some green fleeting of the bus systems and the other transport. So under the guides of transport, with now some clean energy components that are tied to it, and we'll start to spill over in some IRA application as well. I would say on the larger, whether it be some of the lead-free work or -- I'm sorry, the lead pipe and the lead topic work as well as some additional support of some of the larger water infrastructure, we would expect to see that coming up, too. So transport first, moving into clean energy and the energy component of transport and then down the road water.

Great. And then just more of a housekeeping-type question on the cost improvements that you've talked about on P&PS. I guess just trying to understand, is that -- is the kind of the -- just going full throttle on the plan tied to the timing of the sale or separation of CMS business? Or is that something that's ongoing and we should see a meaningful benefit in your fiscal '24 numbers? Just trying to understand if those two events are tied in terms of timing of when you execute and the savings that we see in fiscal '24.

Yes. So the PA comment is really focused on PA and it's more aligned with the end markets that PA has. So they have a lot of strength in specific markets and then is more aligned the resources with that strength in some markets and then what they see in the other markets that are more flat. So that's really PA related. And then CMS is more the connectivity with -- between CMS and the rest of the company and the comments that Bob made about our efforts looking at our operating model and all the efficiency gains and productivity that we see as we have cost reductions with a more streamlined strategy and execution.

In the 2024, Sabahat, which I think is the last part with P&PS, the answer is yes.

Thinking about the savings from P&PS. Okay. So we should see them in '24?

Yes.

There are no further questions at this time. I will now turn the call back to Mr. Bob Pragada.

All right. Thanks, everyone, for joining and look forward to continued growth and success. Kevin, thank you so much, and welcome Claudia to the future. Thanks, everyone. Look forward to talking to you next time.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.