Roper Technologies Inc (ROP) 2022 Q1 法說會逐字稿

Good morning. The Roper Technologies Conference Call will now begin. Today's call is being recorded. (Operator Instructions) I would now like to turn the call over to Zack Moxcey, Vice President, Investor Relations. Please go ahead.

Good morning, and thank you all for joining us as we discuss the first quarter financial results for Roper Technologies. Joining me on the call this morning are Neil Hunn, President and Chief Executive Officer; Rob Crisci, Executive Vice President and Chief Financial Officer; Jason Conley, Vice President and Chief Accounting Officer; and Shannon O'Callaghan, Vice President of Finance.

Earlier this morning, we issued a press release announcing our financial results. The press release also includes replay information for today's call. We have prepared slides to accompany today's call, which are available through the webcast and are also available on our website.

Now if you'll please turn to Page 2. We begin with our safe harbor statement. During the course of today's call, we will make forward-looking statements, which are subject to risks and uncertainties as described on this page, in our press release and in our SEC filings. You should listen to today's call in the context of that information.

And now please turn to Page 3. Unless otherwise noted, we will discuss our results and guidance on an adjusted non-GAAP and continuing operations basis. For the first quarter, the difference between our GAAP results and adjusted results consists of the following items: amortization of acquisition-related intangible assets and purchase accounting adjustments to commission expense. Reconciliations can be found in our press release and in the appendix of this presentation on our website. And now if you please turn to Page 4, I will hand the call over to Neil. After our prepared remarks, we will take questions from our telephone participants. Neil?

Thanks, Zack, and good morning, everyone. Thanks for joining us. As I'm sure many of you have already noticed, we are introducing Roper's new logo on today's call. Our new logo better reflects our transformation journey while paying honor and respect to our legacy. As a fun fact, our legacy logo was first introduced in 1977.

So with that, let's turn to Page 4 and review today's agenda. As usual, we start with our quarterly highlights, followed by our segment by segment overview, then go through our increased outlook for guidance expectations and leave plenty of time to address all your questions.

Next slide, please. As we turn to Page 5, the main takeaways from today's call are: first, we continue to increase the quality, predictability and durability of the underlying business models and revenue streams; second, we continue to deliver strong organic growth and operating results, enabling us to increase our organic growth outlook and DEPS guidance for the year; and third, we have substantial M&A capacity, given our rapid deleveraging and completion of our TransCore divestiture.

As it relates to the first quarter, we're delighted to report another strong quarter of execution and positive momentum across the portfolio. Specifically, we grew revenue on an organic basis, 11% in the quarter. This growth was broad-based across each of our 4 segments. Not only did we grow nicely in the quarter, but the quality of the underlying business also improved as we saw double-digit organic increases in our recurring revenue base.

In addition to our strong software growth, our product businesses performed quite nicely in the quarter as well, experiencing very high levels of demand and record levels of backlog. Also during the quarter, we completed the divestiture of our project-based TransCore business. As you'll note, we now have $3.2 billion of cash on our balance sheet. When combined with our borrowing capacity, we have over $5 billion of available capital deployment firepower, which when deployed will further help drive cash flow and shareholder value compounding. So with this, definitely a solid start to the year.

Now let me turn the call to Rob, who will walk through our financial summary. Rob?

Thanks, Neil. Good morning, everyone. Turning to Page 6 and covering some of the Q1 financial highlights. Total revenue increased 11% to $1.53 billion. As Neil mentioned, organic revenue also increased 11% with broad-based strength across our 4 reporting segments. Application Software grew 9% organically, Network Software grew 16%; our MAS segment grew 7%; and finally, our smallest segment, Process Technologies, was up 18%. EBITDA margin was 37.8% for the quarter, resulting in EBITDA increasing 8% to $577 million.

Notably, that $577 million of Q1 EBITDA on a continuing operations basis is actually higher than the Q1 EBITDA we reported last April, when we still own and, of course, consolidated TransCore and the other 2 divested businesses. Adjusted DEPS for the quarter was 3.77%, which was well above our guidance range of $363 million to $367 million. Free cash flow was $459 million, with solid EBITDA cash conversion of 80%. That's above the Q1 conversion levels we experienced in 2019 and 2020 but below last year's exceptionally strong Q1 conversion of 96%.

To that end, there are 2 discrete cash items that combined to create an $80 million Q1 headwind versus prior year. As discussed on last April's call, last year's Q1 included $40 million of accelerated payments to CliniSys.

Furthermore, this year's Q1 reflects a $40 million increase in incentive compensation as a result of our strong 2021 performance compared to the pandemic year of 2020. So stepping back, we are, of course, focused on long-term compounding here at Roper. In the 3 blue bars at the bottom of our page, you can see our 3-year compounding from Q1 2019 for revenue, EBITDA and free cash flow was 10%, 13% and 17%, respectively. So in summary, an excellent start to the year.

Next slide. Turning to Page 7, which is an update on our financial position. Turning to the balance sheet. As Neil mentioned, we have a very large cash balance, which is the result of closing the TransCore divestiture during the quarter and receiving the gross proceeds. We have yet to pay the approximately $650 million of taxes related to the divestitures and which will be paid during the final 3 quarters of 2022. As of March 31, as Neil mentioned, our cash balance stood at $3.2 billion, which brings our net debt down to $4.2 billion or approximately 1.9x our TTM EBITDA from continuing ops.

So with our healthy combination of balance sheet cash, continued strong free cash flow generation and our investment-grade leverage capacity, we are very well positioned to deploy $5 billion or more of capital. So with that, I'll turn it back over to Neil to cover our segments in greater detail.

Thanks, Rob. Let's turn to Page 9 and walk through the Q1 highlights for our Application Software segment. Revenues here were $632 million, up 9% on an organic basis, and EBITDA margins were 44.1%. Across this segment, we saw recurring revenue, which is a touch north of 75% of the revenue for this segment increased 10% in the quarter. This recurring revenue growth is enabled by strong customer retention, continued migration to our SaaS delivery models, cross-selling activity and new customer adds. Across this group of companies, the financial strength was quite broad. As we highlight a few businesses, we'll start with Vertafore. Vertafore had an excellent quarter, which was highlighted by strong ARR bookings activity and revenue growth. In addition, during the quarter, Vertafore released its new commercial submissions product line. To remind everyone, Vertafore's strategy is to help tech-enabled workflows for their P&C agent customers. This new product is a meaningful step in this direction as it allows agents to quote multiple carriers in a simple automated workflow. Great stuff from the Vertafore team.

Turning to Deltek. They posted another great quarter with strength across all end markets served. Deltek continues to gain momentum, driving adoption to their cloud-based product offerings. Deltek also continues to be benefited by having favorable secular tailwinds. CliniSys and Data Innovations continue to exhibit strong demand and operational strength. Specifically, CliniSys continued its market share gains in the U.K. As a reminder, CliniSys is one of 4 strategic IT vendors to the National Health Service. DI was awesome in the quarter with continued strength, driven by their direct go-to-market approach and large wins within the VA system.

Aderant continues to be a solid performer for Roper, extending their share gains in the large law space. Also in the quarter, licensing activity tied to seed expansions was very strong. They also continue to see a meaningful shift towards our cloud offerings, driving substantial increases to the recurring revenue base. Strata whose cloud-based software helps hospitals plan, budget and manage their operations continues to execute their cross-selling strategy with TTM net retention north of 110%.

Of note, we are in the midst of an orderly leader transition at Strata, Dan Michelson, who has led Strata for the last 10 years is retiring. As an element of Roper's talent offense, Strata has been developing its next CEO, John Martino, for the past several years. As part of John's development, he started in the CFO function then led commercial and go-to-market functions and then became the company's COO. Strata's future is secure given the successful succession planning. Big thanks to Dan for all your leadership and accomplishments at Strata. John, we are super confident with you at the helm, your new role is well earned. Congrats.

Finally, PowerPlan posted a strong double-digit growth quarter, driven by recurring revenue adds and higher services utilization. They also have a substantial new product road map slated for this year, which we're looking forward to discussing on subsequent calls.

Looking to the outlook for 2022 in the segment, we expect to see mid-single-digit growth for the balance of the year, driven by continued strong ARR momentum. With that, let's turn to the next slide.

Turning to Page 10. As a reminder, the financial performance for this segment as well as the X2, MAS and PT are shown on a continuing ops basis. Revenue in the first quarter for our Network segment was $369 million, up 16% on an organic basis and EBITDA margins were strong at 51.2%. The 16% organic growth is underpinned by 16% growth in recurring revenue, which is roughly 80% of the segment's revenue base. As we dig into business-specific performance, our U.S. and Canadian freight matching businesses continue to be super strong during the quarter. The market conditions continue to be quite favorable, which led to record levels of network adds again, especially on the carrier side of the network. In addition, DAT continues to do a nice job of increasing revenue per user by both adding features and improving value capture.

Over the longer arc of time, our freight matching businesses continue to be well positioned to enable the digitization of the spot freight markets.

Moving to Foundry. Our software business that enables the combination of live action filming and computer-generated graphics to be combined into a single frame, had record bookings, revenue and EBITDA for the first quarter. Net retention is north of 110% and ARR grew double digits. Foundry success is rooted in their fast-paced innovation capability in favorable long-term market conditions. iTrade, our network food supply chain business and iPipeline, our life insurance SaaS business helping to tech enable the quoting and underwriting processes each had strong customer additions, which helped drive strong ARR growth in the quarter.

Finally, RF IDeas had record orders with growth coming from secure print and identity management applications. Turning to the outlook for the balance of the year. We expect to see high single-digit organic growth for this segment, driven by a combination of strong recurring revenue momentum and favorable market tailwinds.

Kindly turn to the next slide. As we turn to Page 11, revenues in our MAS segment were $392 million, up 7% on an organic basis. EBITDA margins for the segment were 31.5% for the quarter. Again, these results are on a continuing ops basis. Before getting into business-specific details across this segment, demand continues to be very strong and product backlogs continue to be at record levels. Also, each of these businesses are navigating the current supply chain complexities.

While margins were in line with our expectations, they were negatively impacted versus prior year and are impacted by the availability and pricing of raw material components as well as expediting freight costs. As our businesses increased price actions take hold throughout the year, margins should improve as we get into the second half. As it relates to our business-specific commentary, we'll start with Neptune, which had record orders, revenue and quarter ending backlog.

Neptune has been able to gain market share by being successful in keeping product lead times at industry-leading terms and releasing new products, both in terms of cellular connectivity and static meter reading technology. Verathon, Northern Digital and each of our medical product franchises remain super solid. Verathon continues to see strong demand and market share gains in their single-use bronchoscope category and NDI sees the same in both our optical and electromechanical measurement capabilities. These businesses are beneficiaries of long-term and favorable market tailwinds. As it relates to our industrial businesses, demand throughout the quarter was quite strong, given the improving end market and capital spending conditions. As it relates to the outlook for the balance of the year, we expect to see high single-digit growth for this segment, underpinned by strong demand and backlog levels, but somewhat constrained by the current supply chain environment. Net-net, we expect a very strong balance of the year for this group -- for the balance of the year for this group.

Now let's turn to our final segment, Process Tech. As we turn to Page 12, revenue on our Process Tech segment were $134 million in Q1, up 18% on an organic basis. EBITDA margins were 32.5% in the quarter. These results are also reported on a continuing ops basis. The story here is we continue to see improving end market conditions across virtually every one of our businesses in this segment and very strong demand. Cornell continues to perform well for us delivering record orders in backlog in the quarter. The strength is partially based on market conditions, but also based on Cornell's product innovation as they're seeing very nice demand tick up for their IoT connected pumping solutions and the share gains they are doing as a result of their niche-focused go-to-market teams.

Also, our upstream oil and gas businesses saw strength in the quarter. Similar to that, our MAS product businesses, these businesses are also being impacted by supply chain challenges, but continue to navigate well through the issues. As we turn to the outlook for the balance of 2022, we expect high-teens organic growth based on strong levels of backlog and solid market conditions. Now please turn to Page 14, and we'll talk through our 2022 increased guidance outlook.

Based on a solid start to Q1, strong growth in our software recurring revenue base and record levels of product demand and backlog, we are increasing our full year 2022 DEPS guidance to be in the range of $15.50 and $15.75 up from our original guidance of $15.25 and $15.55. Underpinning this DEPS guidance is our increased organic revenue growth expectation of 7% to 9% for the year. We expect a steady tax rate in the 21% to 22% range.

As we look to the second quarter, we're establishing DEPS guidance to be in the range of $3.80 and $3.84, again, on a continuing ops basis. Now our concluding comments, and we'll get to your questions.

As we turn to Page 15 in our closing remarks, we want to leave you with the same 3 points we started with: One, as we grow, we are increasing the quality of the underlying business and business model; two, we had a strong start to the year; and three, we have substantial M&A capacity available to us. As it relates to a strong start, we grew revenues organically 11% and EBITDA 8%. More so, we have grown our cash flow 17% on a 3-year compounded basis. We are lifting our full year organic growth and DEPS guidance based on the factors outlined during this call, specifically strong recurring revenue growth, record demand for our product businesses and generally favorable market conditions.

Finally, we have reloaded our balance sheet and continue to have an active and engaged pipeline of M&A opportunities. We have north of $5 billion of available M&A firepower. So as we turn to your questions, we would like to highlight that our inaugural ESG report was published to our website earlier today. This report outlines our commitment to ESG and our sustainability principles. And with that, let's open it to your questions.

(Operator Instructions) Our first question comes from Christopher Glynn with Oppenheimer.

I was curious about the double-digit recurring software revenue in aggregate. I forgot what the comparison was, but I don't think it was particularly light. So just curious about were you surprised by that metric in the quarter? And any implications on how the overall execution and strategic throughput is flowing?

Yes. Thanks for the question. As we look back over to recurring revenue growth over the last 5 quarters. I think 4 of the 5 have been in the low double digits. And so we were not surprised by it, but it's certainly encouraged by strength, also encouraged by the breadth of the strength that wasn't isolated in 1 or 2 businesses really quite broad-based against everything. And we also, just as of Q1, there was a lighter comp from a year ago.

Okay. And for my follow-up, just curious, as you look at the pipeline, curious if any comments on the mix of platform deals versus bolt-on variety, if they're both well represented.

Yes. They're certainly both well represented. If you go back over, I think, the last 15 years, something like 90% of the capital deployed at Roper is spent on platform deals and 10% on bolt-ons. It's not a budget. It's just a historical reference to platform versus bolt-ons. If we were guessing it might tilt a little bit more towards bolt-ons in the next 10 years because we have more things to bolt things into. But the preponderance of the capital deployment will be on platform deals, and the pipeline is well weighted across both of those.

Our next question comes from Deane Dray with RBC Capital Markets.

Can you start with Process Technologies. This is where -- if we were going to see big pressures on the industrial side, supply chain, you really didn't see that. It came through, especially on organic revenue growth. But just give us any specifics regarding the supply chain challenges? And where -- is there a big ramp? Are you seeing it yet in CapEx that with greater focus on increasing U.S. shale?

Dean, it's Rob. Yes, we're still seeing, of course, the impact like everyone else of supply chain. I mean you can see it in our MAS segment, probably more so than in process but the businesses have done a really, really good job of working through it. And so that allows us to have great organic growth and then the margins, which were down a little bit in MAS on supply chain should incrementally improve moving forward. So I think overall, the businesses are doing a great job of handling what everyone else is also having to deal with.

And Dean, this is Neil. The only thing I'd add to that. We said it a number of times in the prepared remarks, is the level of order activity throughout the quarter and the backlog we entered the quarter with and left the quarter with are just -- are quite robust to give us quite a bit of confidence for the balance of the year.

That's all good to hear. And then on the M&A front, you've got the balance sheet fully reloaded -- but there -- what's the tone of the market right now? Has -- with so much macro uncertainty, are sellers just holding back now? Is there any pause in activity? And just what's the expectations over the next couple of quarters?

Yes, hard to predict exactly how things will unfold in the near term, but the activity in the market and the activity that we're involved with is at very high at or above where it's been on -- if you looked at the last 5 years sort of average pace, we're at or above that in terms of the number of deals we're seeing, the number of management meetings we're doing, the number of processes we're involved in. Ultimately, how many of those transact based on uncertainty on the valuation market is still very much to be determined, but encouraged by the level of activity currently in the market.

Our next question comes from Julian Mitchell with Barclays.

This is Kiran Patel-O'Connor on for Julian. So just looking at operating leverage for 2022, I know you guys had previously talked about approximately 40%. Is that -- do you guys still feel good about that number? And where do you think we should land for Q2?

Yes. I think that's a pretty good number for the year. Overall, for the company, we're still looking at sort of EBITDA margins relatively flat year-over-year. And so again, it's sort of a little bit of improvement throughout the year as some of the supply chain stuff starts to get a little bit better. Again, the software businesses with this really strong organic growth, you get great leverage there, and it's really about our reinvesting in order to make sure there's more growth in the future. So our businesses are reinvesting at a pretty high level, which is great to see, and that will continue to drive more organic. And that's really what moves you from 40% or 45% leverage or 50% or whatever it is, it's really about the investments that we continue to make.

Our next question comes from Rob Mason with Baird.

Yes. Just as you think about your product-centric businesses, both MAS and Process Tech, again, you've said it that you expect some sequential improvement as we go through the year in revenue with supply chain helping out some. But could you tease out how much of the revenue growth sequentially is coming from better supply chain versus perhaps price aiding a little more? You made the reference in MAS. So that was one question. And then just around supply chain. What specifically gets better? I mean, is it around chips, electronics or is it other components? I just want to drill into that a little bit.

Yes, it's Neil. Let me take a crack at both of those, price versus volume, if you will, and then the nature of -- or characterize the supply chain challenges, and then maybe ask Rob if he has any follow-up behind that. So on the price versus volume, it's very hard for us to track with precision how much of the revenue rolled up at the Roper level in the product businesses is price versus units. That said, we would characterize it that we put a lot -- there's -- every one of our companies has taken pricing action or actions. We're certainly not the backstop for global inflation, so we're passing that to our customers. .

But it does take time for that price to get in. And so for instance, in Q1, in the MAS segment, there was a bit of margin pressure because a lot of the revenue booked was from orders that were in the fourth quarter or the second half of last year, that was at a lower price point than the orders are booked this year. So it takes a little bit of time for that pricing to get into the system. But that's more of a commentary about margins than it is about revenue growth. It's just hard to break out.

As it relates to characterizing the supply chain challenges, it's not a thing, and it's not even a thing at a company. A company might have a chip problem for a quarter or a few months and then it might become a glass problem for computer screens and it might become a caster problem for a cart. And it really is a little bit of a whack a mole at the individual company level and nothing sort of pan Roper that we would characterize it as a single supply chain threat, if you will. Rob, anything you want to add to that?

Yes. So for MAS, we had 7% organic in Q1, and we're calling for HSD for the rest of the year. So I mean, really gradual improvement. We've got very strong order performance. We've got, of course, record backlogs. We've got great book-to-bill -- and so again, a little bit of improvement, we're not assuming that the supply chain improves dramatically anytime soon.

I see. Okay. That's helpful. And just as a follow-up, again, you've made the comments that your industrial-focused businesses continue to see -- saw good strength through the end of the quarter. But I know you don't have a lot of international or European exposure specifically, but Struers is one business that touches that area. Just specifically to Europe, I was just curious what you saw as you finished out the quarter and into April.

So Struers was -- had a great quarter as they saw, I mean, Struers is tied partially to global industrial GDP and also global auto. And so Struers really picked up nicely because of the global automotive demand. All markets are strong at Struers ex China, for instance, in the quarter. So anything you want to add more broadly on Europe, but...

No. I mean I think overall, we're seeing -- still seeing pretty good strength across the world.

Our next question comes from Andrew Shlosh with Vertical Research.

So I can appreciate the color around the supply chain challenges. And obviously, that's not unique to you. But when we think about margins in measurement and analytical and process from Q1 to Q2, just given the commentary you've given us, do you think that margins would be flattish sequentially Q1 to Q2 in both of those segments? Or do you even think we could see some expansion there?

Yes. I think sequentially a little bit of expansion Q1 to Q2. Not a ton.

Okay. That makes sense. And on Vertafore, you kind of cited some strength there. Do you know how much that business was up in the quarter?

We know precisely how much that business is up in the quarter.

Yes. As we said when we bought the business, it's a solid mid-single-digit organic growth business and it's certainly done that since we've owned it.

It was better than that -- better mid- meaningfully better mid-singles in the quarter.

Our next question comes from Joe Giordano with Cowen.

Sorry, I had to jump on late, so apologies if this was asked. Just curious in the -- just like the overall M&A landscape right now, just given what's going on in the markets, like are you seeing more of a willingness of maybe private companies to sell now? Or are they still trying to like, "Hey, we'll get back to where we were." Like what's the mindset of a seller now? And where are you -- like are things more or less actionable than they were like 3 months ago?

Yes. So what we see is the activity level, the number of processes, the number of companies that we're meeting with, the number of diligent streams is above trend level in terms of that level of activity. I think it's still -- your question is still yet to be ultimately determined. I think we'll know more over the course of the next quarter or 2 as we see if these processes actually conclude based on if they're willing to accept the price where the market is, -- and so a little bit of a partial answer to your question. I think we just need a little bit of time for that to unfold.

And you guys obviously made a lot of portfolio moves within the last year, maybe some very company-specific, specific opportunities. But as you look at your total portfolio, do you see more opportunities still ahead of you to kind of prune and kind of find more appropriate owners if you don't think you're the right one for some of the businesses?

If you just take that question and you sort of elevate it a touch. I mean our strategy has been for 20 years and continues to be how do we increase not just the size of the business, but more importantly, the quality of the business. That is the whole punch line of our cash return on investment model is how do you improve the quality. And so we've been doing that for 20 years on the buy side, recurring revenue, organic growth, less cyclicality, more asset lightness. As you saw in the last really 3 years, there's been a little bit on the sell side. And so the management team and the Board looks -- our charter is to do that is to improve the quality of the business principally through the buy side and here recently on the sell side.

Our next question comes from Steve Tusa with JPMorgan.

Congrats on the execution this quarter.

Thank you.

Can you guys just give a little more color on how free cash flow should trend over the course of the year? Maybe a little bit of a -- I know you're not giving like explicit guidance there. I might have missed it. I was on another call, but maybe just some high-level guide on cash?

Yes. So sure. So high level, total cash flow is going to be driven by organic revenue and organic EBITDA growth first, which is looking great for this year. And then basically timing of capital deployment and how big the deals are. And so that's why we don't guide free cash flow because we're always going to be -- it's always going to be based on what our total deployment, which, of course, we're very patient and disciplined. And as we mentioned, on Q1, the performance on a conversion basis was very good versus history, obviously, lower than last year given the one-timers that we outlined earlier on the call.

Right. So I guess you're saying that it depends on what kind of deals you do, ultimately, where the cash ends up? Like the accretion -- deployment?

Yes. So the Roper model, right, is about double-digit long-term cash flow compound in the combination of organic growth and capital deployment. So in '20, we grew our free cash flow 15%. In '21, it was 19%. And if you look at the 3-year Q1 CAGR, it's at 17%. And so we'll continue to do that moving forward as a combination of organic and capital deployment.

Next question comes from Alex Blanton with Clear Harbor Asset Management.

The first question is about compressor controls. Could you give us an update on how that's going and what the outlook is there and what the backlog is?

Sure. So CCC had a very good quarter coming off a great Q4. Order growth was nothing short of spectacular in Q1. And in fact, it was the largest Q1 in a decade for greenfield activity at CCC.

And does this have to do with the oil price?

No. I mean think of CCC as much longer cycle than that. I mean these are, for the most part, gigantic infrastructure LNG projects that are planned out, in some cases, greenfield decade out. And so there was just a lot of -- in this case, a lot of greenfield activity. And then further, if you want to just break -- simplify CCC, you basically have the services book of the business and the projects, services for callbacks, meaning coming in for maintenance was strong, services for new commissions, meaning tied to new activity was strong. We just talked about how greenfield project work was very good, orders and brownfield has been consistent. So it's sort of on the 2x2 grid, all 4 part of that boxes are green for CCC in the quarter.

Doing more LNG projects to take gas to Europe would help you? Is that correct?

As a general matter, if there is, yes. I mean if there's LNG compression happening, CCC is benefited by that.

Okay. Second question is regarding the $5 billion. Could you just reassure us that there are businesses out there to be acquired that are large enough that are of the kind that Roper has traditionally purchased that are large enough to enable your growth to continue at the past rate for how long?

Yes. I appreciate the question. I mean that's always an important investor question. And the answer is resoundingly yes. We've talked about the size of our broad pipeline. It's very, very large. There are many opportunities we'll have no issue continued compounding cash flow for many, many more years based on the availability. Now the challenge, as we talk about, right, is sort of valuations, which remain relatively elevated compared to history. And so the idea is to do the best deal for the best price and by the highest quality business. And so we're working hard on that. But no, we're in no way concerned about the availability of assets. We are very, very busy working on many things, and we feel great about our chances to be very successful.

And these are the same kind of quality that you've been able to acquire in the past?

Yes. Very similar, if you look at our last -- yes, our last decade of acquisitions, right, decade plus, it's very similar asset quality to all those businesses, the Vertafores, the Delteks and all the great things we've done.

This concludes our question-and-answer session. We will now return back to Zack Moxcey for any closing remarks.

Thank you, everyone, for joining us today. We look forward to speaking with you during our next earnings call.

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