I3 Verticals Inc (IIIV) 2021 Q3 法說會逐字稿

Good day, everyone, and welcome to i3 Verticals Third Quarter 2021 Earnings Conference Call.

Today's call is being recorded, and a replay will be available starting today through August 17. The number for the replay is (877) 344-7529, and the code is 10158331. The replay may also be accessed for 30 days at the company's website.

At this time, for opening remarks, I would like to turn the call over to Scott Meriwether, Chief Operating Officer. Please go ahead, sir.

Good morning, and welcome to the Third Quarter 2021 conference call for i3 Verticals. Joining me on this call are Greg Daily, our Chairman and CEO; Clay Whitson, our CFO; and Rick Stanford, our President.

To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP by reviewing yesterday's earnings release. It is the company's intent to provide non-GAAP financial information to enhance understanding of its consolidated financial information as prepared in accordance with GAAP. This non-GAAP information should be considered by each individual in addition to, but not instead of, the financial statements prepared in accordance with GAAP.

This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding the company's expected financial and operating performance and the expected and potential impact of the COVID-19 pandemic. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. You are hereby cautioned that these forward-looking statements may be affected by the important factors, among others, set forth in the company's earnings release and in reports that are filed or furnished to the SEC, including risk and uncertainties associated with the COVID-19 pandemic.

Consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. Finally, the information shared on this call is valid as of today's date, and the company undertakes no obligations update it, except as may be required under applicable law.

I'll now turn the call over to the company's Chairman and CEO, Greg Daily.

Thanks, Scott, and good morning to all of you. What a difference a year makes. We're very pleased to report our third quarter 2021 results as we once again set new records across the board. Our revenue, adjusted EBITDA, software revenue, payment volume and integrated volume were all at new highs. We exited our second quarter with incredible momentum, and that momentum continued through our third quarter.

Our third quarter revenues increased 96% over 2020. Our adjusted EBITDA increased 104%. Admittedly, this quarter has an easy -- our easiest year-over-year comparison as our third quarter in 2020 was our weakest quarter due to the effects of COVID-19 pandemic. Despite the easy comparisons, we are thrilled with the growth we are seeing across the board within the company.

Most notably, our software-related revenues grew to 40% of our revenue in third quarter 2021, up from 20% in the third quarter of '19 and 26% in the third quarter of 2020. We're especially proud of the growth in our software billings. Our payment revenue have also continued to rebound and the growth in our -- during the growth in our third quarter. We are delivering our software-focused strategy. We will -- and you will continue to see software and software embedded payments continue to be our primary driver for i3 during -- going forward.

For proof of this strategy, 60% of our payment volume in the third quarter was integrated as this percentage continues to grow quarter-over-quarter. For the second quarter in a row, our adjusted EBITDA in Proprietary Software segment exceeded the adjusted EBITDA in our Merchant Services segment. We expect this trend to continue as our M&A strategy continues to focus on software companies, and our recent acquisitions are delivering robust growth rates.

Our software -- our Public Sector vertical delivered record revenue growth in the past quarter. This vertical now represents over half of our company. The third quarter includes our first quarter with our BIS acquisition. Our recent utility software acquisition contributed a partial quarter to Q3. We're very bullish on the utility industry and expect to see this business line be a major contributor for i3 as we continue to expand in the Public Sector.

The federal stimulus package under the American Rescue Plan Act did not have a significant impact on our third quarter. However, our customers are beginning to access the funds available under the plan and have until 2024 to spend them. What we have seen to date is a more fiscal confidence in our customer base, installed projects moving forward, and we continue -- we believe the growth will continue and our sales pipeline to accelerate our customers' access as they -- excuse me -- we continue to believe the growth in our sales pipeline will accelerate as our customers' access the funds available to them under the rescue plan. We're very confident in our solid pipeline of projects to deliver to our customers in the Public Sector vertical.

Healthcare has become our second largest vertical. Two of our most recent acquisitions were closed April 1 and contributed a full quarter in our third quarter. We're excited about the opportunities to grow in Healthcare both organically and through M&A activity. We intend to focus on growth within this vertical in the future.

Schools are beginning to reopen in person. And we have seen a partial rebound within the Education vertical as a result. School lunch fees represent about half of our revenue in this vertical, and school lunch is remain free for 2021 and 2022 school year. We expect the Education vertical to come back around 50% of its historic levels for the upcoming school year. When and if we return to student pay school lunches in the future, we will see a corresponding uptick in our financial results. Despite the impact in free student meals, we continue to see growth in our customer base, software sales and remain very positive in the future of this vertical.

The rest of the company experienced continued improvement through the third quarter. Revenues within Merchant Services segment grew to $30 million in the third quarter from $26 million in the second quarter. Additionally, adjusted EBITDA increased sequentially $8.7 million in the third quarter from $7.6 million in the second quarter for Merchant Services. The increase in charge volume that began in March of 2021, along with new sales, were the drivers for the increase in our Merchant Services segment.

I want to briefly touch on COVID-19 Delta variant, as I'm sure everyone has a question about the potential impact. At this point in time, we've seen no impact on our charge volume, payment revenue or software revenue resulting from rising cases. We obviously are keeping an eye on these metrics. Should cases worsen, we would speculate the results might be similar to 2021 -- I'm sorry, to 2020. Our schools, restaurants and T&E merchants would be impacted by any mandatory shutdown. We could also see some sales installs push back to future dates.

Our recent acquisitions in Public Sector have increased our product offering in D&B and utility spaces. We would expect an associated revenue would mitigate some of the -- and potential impacts as they would not be affected. I want to reiterate, we have not seen any impact to our results from the recent rise in COVID cases. We remain optimistic about our future results.

Now I'll turn the call over to Clay. He will provide more details on our third quarter financial performance. Following Clay's comments, Rick will provide an M&A update, and then we'll open up the call for questions.

Thanks, Greg. The following pertains to the third quarter of fiscal year '21, which is the 3-month period ended June 30, 2021. Please refer to the slide presentation titled Supplemental Performance on our website for reference with this discussion.

At the end of my commentary on the second quarter results, I highlighted a change in presentation that would take place this quarter. I want to emphasize this because of its impact, they earlier to include it will result in an apples-to-oranges comparison between our current period and prior periods, and for that matter, consensus estimates.

In Q3 alone, the impact was $1.3 million to revenue and adjusted EBITDA and a full $0.03 per share to pro forma diluted adjusted EPS.

Now to what changed and why, under GAAP, companies must adjust beginning balances of acquired deferred software revenue to fair value as part of acquisition accounting. Like many of our peers, we have historically included in our reported adjusted net revenue, adjusted EBITDA and pro forma adjusted diluted EPS an add-back to reverse the effect of purchase accounting write-downs of deferred revenue in connection with software acquisitions. We have also always included an estimate of this same adjustment, excluding future acquisitions, and our guidance for adjusted net revenue, adjusted EBITDA and pro forma adjusted diluted EPS.

Our historical practice has been based on a belief that such an adjustment is necessary for investors to understand an acquisition's performance in the first year and its true growth in the second year.

The adjustment is noncash and consistent with the treatment in the financial covenants of our senior secured credit facility. However, as part of the ordinary course SEC comment process, the SEC asked us to discontinue adjusting net revenue, EBITDA and pro forma diluted EPS to remove the effect of purchase accounting write-downs of deferred revenue beginning with our Q3 report. As a result of this change, the earnings release yesterday presented adjusted net revenue, adjusted EBITDA and pro forma adjusted diluted EPS without the impact of this add-back for the 3 months and the 9 months ended June 30.

As we believe the adjustment continues to represent material information to investors, we will continue to provide separately, as part of our earnings release, the non-GAAP revenue omitted as a result of the purchase accounting write-down of deferred revenue. We will also continue to provide an estimate of this amount for the remainder of the fiscal year along with our outlook.

The FASB has proposed guidance that would allow us to not write-down the deferred revenue in the first places for the purchase accounting, which we believe would be more useful for investors, but it's not yet effective.

Moving on to results. We had a great quarter with record payment volume, revenues and adjusted EBITDA. Revenues for the third quarter ended in June, excluding acquisition revenue adjustments, increased 96% to $62 million from $31.6 million for Q3 2020, reflecting organic growth from the lows of the pandemic and acquisitions.

The momentum we experienced during March continued through April, May, June and also July. Almost all of the metrics we track are headed in the right direction. For companies we have owned for at least 2 years, we have recently been comparing our monthly payment volumes to 2019 periods because 2020 comparisons have distortions stemming from the pandemic. These companies have increased volumes in the mid-20% over a 2-year period. To clarify, that represents total growth, not compound annual growth.

Our integrated payments percentage hit a new high of 60%, helping our revenue yield improve to 121 basis points for the quarter from 106 basis points for Q3 2020. Software and services revenues, excluding acquisition revenue adjustments, continued strong growth, representing a record 40% of revenues for the quarter, compared to 26% for the third quarter of fiscal year 2020, reflecting the heavy software weighting of recent acquisitions. This percentage is gained despite a rebound in payments.

Acquisitions completed after June 30, 2020, almost exclusively in our Proprietary Software segment, contributed $20.7 million of revenues during the quarter. Adjusted EBITDA, excluding acquisition revenue adjustments, more than doubled, outpacing revenues to $14.4 million for Q3 '21 from $7 million for Q3 2020. We showed strength across the board with continued momentum in Proprietary Software as well as a rebound in Hospitality and Retail.

Adjusted EBITDA as a percentage of revenues, both excluding acquisition revenue adjustments, increased to 23.2% for Q3 '21 from 22.3% for Q3 2020, reflecting an improvement in the Proprietary Software margin as well as lower corporate overhead as a percentage of revenues.

Pro forma adjusted diluted earnings per share, excluding acquisition revenue adjustments, also doubled to $0.26 for Q3 '21 from $0.13 for Q3 2020. Again, please refer to the press release for a full description and reconciliation.

Segment performance. Revenues in our Proprietary Software and Payments segment, excluding acquisition revenue adjustments, increased 234% to $32.6 million for Q3 '21 from $9.8 million for Q3 2020, principally reflecting growth in our thriving Public Sector vertical, but also the inclusion of our Healthcare and Nonprofit acquisitions for the quarter. We enjoyed the first full year of BIS, a full quarter of 2 recent Healthcare acquisitions and 2 months of our second utility software acquisition.

Education certainly improved over last year, but remained well below 2019 levels due to the free lunch program. The segment's adjusted EBITDA, excluding acquisition revenue adjustments, improved 256% to $9.2 million for Q3 '21 from $2.6 million for Q3 2020, reflecting mainly Public Sector growth, but also the Nonprofit and Healthcare acquisitions.

Public Sector now represents over 50% of our consolidated business. The segment's adjusted EBITDA margin, excluding acquisition revenue adjustments, improved to 28.2% for Q3 '21 from 26.5% for Q3 2020, principally reflecting the inclusion of BIS for a full quarter.

Revenues for our Merchant Services segment increased 35% to $29.9 million for Q3 '21 from $22.2 million for Q3 2020, reflecting a rebound in Hospitality, Retail and B2B. Adjusted EBITDA for our Merchant Services segment increased 30% to $8.7 million for Q3 '21 from $6.7 million for Q3 2020. The adjusted EBITDA margin was 29% for Q3 '21 versus 30% for Q3 '20, reflecting the rebound in retail and restaurants, which carry higher residual expenses.

The balance sheet. Our strong balance sheet has allowed us to continue to execute our acquisition strategy. On June 30, we had $118 million borrowed under our revolving credit and a cash balance of $5 million or net debt of $113 million under a $275 million facility. The face value of our convertible notes are $117 million. As of June 30, our leverage ratio was 3.8x, while the current constraint is 5.0x.

The interest rate for the convertible notes are 1%, while the interest rate for the revolver is currently less than 4%. Over time, we expect to convert roughly 3/4 of adjusted EBITDA, excluding acquisition revenue adjustments, into free cash flow, which can either be used for more acquisitions or debt repayment.

Before the change in presentation for adjusted EBITDA, we guided to 2/3 of free cash flow conversion. So 2/3 conversion, we're now guiding to 3/4 conversion. We now define free cash flow as adjusted EBITDA, excluding acquisition revenue adjustments, minus CapEx, internally capitalized software, cash interest and cash taxes. The change in presentation does not impact our cash flow.

Outlook. Looking forward, we have updated guidance to conform to the change in presentation regarding acquisition revenue adjustments. The guidance always excludes future acquisitions and transaction-related costs. Just to clarify, the 3 acquisitions closed during Q3 were already included in the guidance we delivered when reporting Q2. The following increase in guidance is the result of Q3 performance and the current business outlook. For an apples-to-apples comparison, I'll give the previous guidance and the new guidance.

Revenues, excluding acquisition revenue adjustments, $198.4 million to $214.4 million previously. The new guidance is $212 million to $222 million. Adjusted EBITDA, excluding acquisition revenue adjustments, previously, $46.4 million to $52.4 million. It is now $49 million to $52.5 million. Pro forma adjusted diluted EPS, excluding acquisition revenue adjustments, previously $0.85 to $0.95, currently $0.90 to $0.96. The acquisition revenue adjustments included in -- or not excluded in the previous guidance was previously $5.6 million. And the new guidance is $5.083 million. The impact on pro forma adjusted diluted EPS would have been $0.13 previously, and the current guidance is an $0.11 impact.

I'll now turn the call over to Rick for company updates and M&A activity.

Thank you, Clay. Good morning, everyone. Like our previous calls, I'll start with an update on a few operational items, including updates on things I've addressed before. After that, I will discuss M&A.

First, we continue making progress on our unified product offering, or UPO, in our Public Sector vertical. Over the last quarter, we have expanded our geographic and product reach with solution sales in Delaware, Minnesota, Arizona, Ohio, Indiana and North Carolina with add-on solutions also being sold into Arkansas, Texas, Georgia and Louisiana.

BIS has successfully expanded our kiosk business line, historically only used for D&B, with additional units being deployed across multiple product categories, including utilities and several Court Solutions by multiple entities in multiple states. BIS also won a new state-level motor vehicle inventory management contract.

ImageSoft has achieved state-level wins in our digital evidence management solution and document management contracts. As referenced, we are achieving multiple product category sales, kiosk, law enforcement, records management and digital evidence management, to name a few, across multiple states. This is evidenced by continued wins for specific customers by designing leverageable data and processes across public entities. With our, domain expertise and seamless integrations, we are assisting our Public Sector customers and enabling them to be more responsive to their constituents.

On the ISV front, our total number of signed and integrated ISVs at the end of our third fiscal quarter was 84, with 7 more in the process of integration. Our pipeline for ISVs continues to grow quarter-over-quarter.

I'll now speak about our ongoing M&A efforts. At any one time, in our pipeline, we are working 3 to 4 primary deals towards the term sheet. These targets typically range from $2 million to $5 million in EBITDA. And usually, each are at varying stages in the process.

With that said, we have entered into a nonbinding term sheet with a company in our Healthcare vertical, and we are currently in the due diligence phase. Assuming the process goes as planned, we anticipate closing this deal in our first fiscal quarter and before calendar year-end.

Further, our pipeline continues to be strong, and we believe we could potentially close another deal by the end of the calendar year. As always, we continue to be disciplined in our approach relative to multiples.

Lastly, our M&A pipeline has an emphasis on Public Sector, Healthcare and Nonprofit in that order, from most to fewest, and we look forward to sharing more on the acquisition front in the near term.

This concludes my comments, Sara. At this point, we'll open the call up for Q&A, please.

(Operator Instructions) Our first question comes from John Davis with Raymond James.

I think, Clay, you commented that you saw some nice sequential improvement from 1Q to 2Q versus 2019. Just curious what July trends look like relative to '19 and if you've seen kind of that continued improvement there or also any comments about how trends were throughout the fiscal third quarter.

Well, as you know, we had a really nice March exiting -- or the calendar Q1. April, May and June, each sort of improved sequentially. And then July has had very slight improvement over June, but it's seemed to have plateaued the growth we were seeing in April, May, June.

Okay. And then just -- I heard Greg loud and clear on the Delta variant, but I think your guidance range is still relatively wide for the implied 4Q. So I would assume that, that would contemplate, if we did get some impact there, that would be the difference maybe between the high end and the low end. Just any comments there would be helpful.

Yes. I think that is a variable, for sure. Software deliveries are also a variable. About half of our software and services revenues are point in time as opposed to recurring. And so the timing of those can be accelerated or can be delayed. And that's -- we're always going to have that variability as long as we are shifting more towards SaaS over time because our customers are shifting more towards SaaS over time. But currently, it's about 50-50.

Okay. And then I think Public Sector is now over 50%. Software is over 40%. Integrated is now 60%. I guess, where do you see those kind of trending over time? I mean, is Public Sector going to become 60-plus percent of the business over time? Obviously, that would bring up your percentage of software revenue as well as integrated.

And then also, when do you think you'll actually see the revenue benefit from any of the American Rescue plans? Is this something that we should think about in fiscal '22? Any color there would be helpful.

Well, as far as the metrics go, the integration percentage, we think that will probably top out around 80% over time. And we have a target of improving 10% a year. The software and services percentage, we have a goal of getting it to 50% of revenues. As we add payments to some of our software assets, that will go in the other direction over time. But we have -- we think 50-50 would be a nice mix there. As far as timing of the American Rescue funds, Rick or Greg, do you have a comment on that?

Rick?

We know -- we've been instrumental in helping our customers understand what is available to them. We've been very proactive on that basis. They've had a lot of good questions. we know there's activity around that, but there's certain amounts of hurdles that they need to overcome to get the funds. So I'd say it's reasonable to say that we're looking at our next fiscal year before we start to see any kind of impact from those funds.

Okay. Fair enough. And then just Public Sector, I know, obviously, you have Education coming back at some point once the lunch program expires. Is that something we could think as being kind of greater than 50% of the business going forward? Or just kind of how you think about the long term of your revenue mix relative to Public Sector and the others?

Yes. I would be surprised if -- I'm sorry I forgot to address that. I would be surprised if Public Sector didn't get to 60% and maybe higher over time. It just seems to -- in our pipeline, it will be largely acquisition-driven and what deals we're able to get done. But our pipeline, it's over 50% of our pipeline, so I got to believe Public Sector is going to get larger rather than smaller.

Your next question comes from George Mihalos with Cowen.

This is Allison on for George. Congratulations on the results. First one for me, it looks like, based on the old reporting method, that the 3Q results came in roughly $5 million higher versus consensus on revenue. Yet, the EBITDA flow-through was relatively low. Is there anything we need to think about from a margin standpoint in this quarter?

We think -- you mean Q4? I think we can expand margins a little over Q3 and Q4. If you look at the midpoint of our guidance for revenues and EBITDA, that it does imply some improvement there.

Generally, we try to be conservative with revenues. We're more concerned with revenue dollars than we are the percentage margin. And I think we generally guided to, if we get $1 of EBITDA, that translates into $2 of revenues because our software assets sometimes have high margins, like BIS has a 50% margin. But some of the acquisitions we've done have 30%, 20% margins. And I think that accounts for the overperformance in revenues.

Okay. Great. That's helpful. And then you also mentioned within Education there was some rebound there. I think, previously, you were anticipating quarterly revenue around the $2.5 million range with about $600,000 of EBITDA over the near term. Have those estimates now changed a little bit upwards?

Well, our revenues this quarter in Education were about $2.5 million. Q3 last year, they were almost $1 million less. So last year was a horrible quarter. Schools were just shut. But we're still making -- this quarter, we earned less than $1 million of EBITDA in Education. So that's a pretty good step down from what we were doing back in 2019.

Okay. Great. That's helpful. And then last one for me. You've been mentioning how Public Sector is now 50% of the business with Healthcare now the second largest vertical. Is it fair to think Healthcare is now around 20% of the business? And how do you think about the long-term growth rate between those 2 verticals?

No. Healthcare is not that large yet. It's somewhere between 10% and 15% still. We are growing it, but Public Sector, as we keep mentioning, has been growing even more quickly through acquisitions. But we do think the assets we have we can grow 10% organically. And then we're hopeful about land in some more Healthcare acquisitions, but time will tell on that.

Our next question comes from Josh Beck with KeyBanc Capital Markets.

This is Maddie on for Josh. I was wondering, if you guys could talk about the recovery that you're seeing in Hospitality and how you expect it to recover in the second half of the calendar year? And I have a follow-up.

Well, for internal growth purposes, we used -- we -- in the last couple of years, we've been excluding Hospitality from those numbers because we've been undergoing a SaaS transition in that business. This quarter, Hospitality grew over the same quarter last year. And we're reaching a point in the SaaS transition where if we aren't positive in a quarter it won't be a big deal. So I'm thinking that's something we'll remove from our disclosures going into '22. It's just not the headwind that it was in the beginning of the SaaS transition.

Okay. Super helpful. And so my follow-up, I was wondering if you guys could talk about any B2B trends that you're seeing, even if there's any interesting opportunities in the pipeline there?

Yes. Good question. So I think somebody asked yesterday about valuations in our various verticals. Public Sector, we're not -- we're seeing the same valuations we were seeing a year ago. Nothing has really changed, still highly fragmented. A lot of opportunity there. B2B, valuations are crazy. That's why I rarely talk about B2B in our pipeline because unless something just perfect falls in our lap we're probably not going to go after that stuff because valuations are really extremely high.

If you look at Healthcare, some are high, some are low. So it's kind of 50-50. We can find stuff where they're reasonable. And then Nonprofit is very high as well. I would compare that to B2B. There's crazy valuations out there on Nonprofit right now.

Our next question comes from Chris Donat with Piper Sandler.

Chris, you might be on mute.

You are correct. I'm on mute. Can you hear me now?

Yes.

Sorry about that. Just wanted to go back to the trends you saw through April, May and June and that July was a slight improvement. Is it safe to say that expectations for August and September sort of at that kind of plateaued level and we're sort of expected to plateau from here? Or is there any reason there should be a dramatic change in -- set aside the Delta variant for now, I guess.

Yes, I think that's fair. We've reached a plateau in the recovery. I feel like -- now seasonally, every year, August is a bigger month than September. But other than normal seasonal things, yes, I'd say a plateau outlook and the charge volume is appropriate.

Okay. And then just my follow-up is on the integrated volume. If that tops out at 80%, should we think about the 20% that's not integrated? Is that sometimes, though, your pipeline? Or is your pipeline really away from that? Is that not a big contributor to future integrated volume -- the volume that's not integrated at this time?

It's not really -- we're not looking for face-to-face nonintegrated companies to buy. But sometimes, new innovative technologies are found within legacy companies that transitioned 10 years ago. They grew up in a face-to-face world. And like us, they've seen the light and transitioned to more of an integrated strategy. And so you have to buy the entire company. You can't just buy the part of the company you like. And so we're always going to have some of that.

Plus, the ISO business, it's pretty effortless on our part. And so -- and we love ISOs. And so if they come to us and want to switch to us from one of our peers, we're always happy to take them.

Our next question comes from John Rodriguez with D.A. Davidson.

This is John calling on for Pete Heckmann. Just a quick question. What was the total acquisition revenue and adjusted organic growth in the period one more time?

Acquisition revenues were $20.7 million during the quarter. And so I think you can just make that adjustment to come up with your growth rate.

Awesome. And just a quick follow-up. Roughly, what percentage of revenue now has the convenience fee attached? And what are the implications for fee rate and margins?

Do you mind repeating that?

Yes. What percentage of revenue now has convenience fee attached? And what are the implications for fee rate and margins?

Well, I think the volume you see in our Proprietary Software segment, that is generally all what we call PayFac or convenience fee. And we give you that in the supplement on Page 3 at the bottom. I think you could assume that Proprietary Software number, that's all convenience fee. It's generally higher margin. And you see it's had tremendous growth year-over-year.

(Operator Instructions) Our next question comes from Jason Kupferberg with Bank of America.

This is Kathy on for Jason. I just wanted to go back and follow up a little bit about the margins. I know you guys are talking about how you're expecting a step-up in the next quarter. Can you just talk about your visibility on that acceleration? Like what factors are you expecting to drive it, whether it's by top line or maybe there's OpEx cadence? Or are there any other factors involved that we should be aware of?

Well, Kathy, it's largely a mix issue and BIS coming online with a 50% margin. We got a full quarter this quarter, and so that helped. And the reseller we bought last year, ImageSoft, has a low margin. And so the 3 acquisitions, we did 2 in the beginning of April, 1 in the beginning of May, have higher margins than that. So it's just a blend. This quarter, we had 3 months of 2 of those and 2 months of the utilities company -- utility software company. So getting 3 months of the utility software company will blend us a little higher in Q4.

Got it. Okay. Understood. And just a quick housekeeping question for me. Are the other pieces of your guidance unchanged like your diluted share count, interest expense, G&A, et cetera, with -- from last quarter?

No, they're all pretty close. So we didn't see any reason to reiterate them with just 1 quarter to go.

This concludes our question-and-answer session. I would like to turn the conference back over to Greg Daily for any closing remarks.

Maybe on mute, Greg.

Well, thanks, everyone, for attending, and we look forward to talking with you. If you have any questions, just give us a call. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.