SS&C Technologies Holdings Inc (SSNC) 2022 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the SS&C Technologies Fourth Quarter 2022 Earnings Conference Call. (Operator Instructions) It is now my pleasure to turn today's call over to Justine Stone, Head of Investor Relations. Please go ahead.

Hi, everyone. Welcome, and thank you for joining us for our Fourth Quarter 2022 earnings call. I'm Justine Stone, Investor Relations for SS&C Technologies. With me today is Bill Stone, Chairman and Chief Executive Officer; Rahul Kanwar, President and Chief Operating Officer; and Patrick Pedonti, our Chief Financial Officer.

Before we get started, we need to review the safe harbor statement. Please note that various remarks we make today about future expectations, plans and prospects including the financial outlook we provide constitute forward-looking statements (inaudible) provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of most -- of our most recent annual report on Form 10-K, which is on file with the SEC and can also be accessed on our website. These forward-looking statements represent our expectations only as of today, February 7, 2023. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so.

During today's call, we will be referring to certain non-GAAP financial measures. Reconciliation of these non-GAAP financials to comparable GAAP financial measures is included in today's earnings release, which is located in the Investor Relations section of our website at www.ssctech.com.

I will now turn the call over to Bill.

Thanks, Justine, and thanks, everyone, for joining. Our results for the fourth quarter are $1.339 billion in adjusted revenue, up 3.3%, and our adjusted diluted earnings per share were $1.16, down 9.4%. Adjusted consolidated EBITDA was $518.6 million, third highest in our history, and our EBITDA margin was 38.7%. Our fourth quarter adjusted organic revenue was flat, in line with our expectations. For the year, total organic growth was 2%, while our financial services organic growth, which is 94% of our revenue, was 3.7%.

2022 was a challenging operating environment for SS&C, but we are pleased that -- with the revenue performance from our software businesses, including Advent, investment and institutional management and Eze and the resiliency of our alternative fund administration and Intralinks business. In 2022, SS&C generated net cash from operating activities of $1.134 billion, including $67 million in deal-related expenses. We paid down $166 million in debt in Q4, bringing our consolidated net leverage ratio to 3.4, and our net secured leverage ratio to 2.4x consolidated EBITDA.

This past January, as we were in our quarterly blackout period for stock buybacks, we paid down debt an additional $101 million. In Q4, we bought back 1.8 million shares for $90.7 million at an average price of $50.14. For the year, we had stock buybacks of $476 million, for purchases of 7.8 million shares at an average price of $61.01. We will continue to allocate about 50% of our cash flow to stock buybacks and about 50% to debt pay down.

In December, we acquired Complete Financial Ops, a specialized Colorado-based fund administrator that focuses on private equity and family offices. CFO fund services will augment SS&C's capabilities in servicing venture capital and family office funds. CFO clients will enjoy the same outstanding service backed by SS&C's size, scale and comprehensive solutions.

We remain methodically opportunistic in our acquisition strategy. Valuations have come down more in line with our disciplined strategy, and we are evaluating several opportunities. We remain very bullish on our Blue Prism acquisition, and we are wrapping our digital workers' deployment throughout our business.

I'll now turn it over to Rahul to discuss the quarter in more detail.

Thanks, Bill. Q4 results demonstrate the strength of our business amidst the challenging operating environment and highlight our ability to drive margins despite inflationary pressures. We exited 2022 with 38.7% EBITDA margin, up 330 basis points from the low point in Q2. Cost controls, facilities reduction and productivity improvements enabled this quick turnaround.

While labor markets remain volatile, we believe Blue Prism's intelligent automation technology will be an important means to harnessing the productivity of our workforce in 2023 and beyond. As a business unit, Blue Prism continues to grow nicely and exited 2022 with 20% EBITDA margins.

We continue to see opportunity in the private credit market, where we're investing in a highly scalable offering combining the strengths of Advent software products and global services capabilities. A key component will be the build-out of a robust data platform that integrates multiple SS&C technologies, including Geneva, TNR, Precision LM and others. Private credit represents the latest example of SS&C developing technology, expertise and services to address the needs of a very specialized and complex set of fund managers. This is a strategy we have employed effectively and repeatedly as we have built the world's largest alternatives administration business.

I'll mention some key deals for Q4. Three existing SS&C clients upgraded to our newest platform, Aloha. We currently have over 30 clients live on Aloha. A $13 billion asset manager partnered with SS&C for fund accounting and reporting functions on their real assets portfolio. This partnership includes lifting out 60 employees in Texas. One of DST's largest clients expanded their relationship to include more transfer agency operations.

A Canadian alternative asset manager chose SS&C for a suite of private equity administration services, including regulatory reporting, treasury services and InvestorVision citing their need for Canadian and international expertise as well as scale for future growth. A $75 billion hedge fund chose Geneva for its superior functionality around loan processing and accounting. A Hong Kong-based asset manager chose Eze, EMS, OMS as they needed greater asset class coverage, flexibility, third-party integration and compliance functionality.

Mine Super managing $12 billion in assets on behalf of 55,000 members became SS&C's first Australian superannuation client. The partnership will deliver superior digital experiences for members, driving greater member engagement and stronger retirement outcomes.

I will now turn it over to Patrick to run through the financials.

Thanks. The results for the fourth quarter 2022 were GAAP revenues of $1.338 billion, GAAP net income of $207.5 million and diluted EPS of $0.81. Adjusted revenues were $1,339.1 million. Adjusted revenue was up 3.3%. Adjusted Operating income decreased 1.1%, and adjusted diluted EPS was $1.16, a 9.4% decrease from Q4 2021. Overall, adjusted revenue increased $42.9 million or 3.3% from Q4 2021.

Our acquisitions contributed $72.5 million. Foreign exchange had an unfavorable impact of $28.7 million or 2.2% in the quarter. Adjusted organic revenue was flat on a constant currency basis. We had strength in several product lines, including alternatives, institutional investment management and the Intralinks business. That strength was impacted by weakness in our GIDS transfer agency business and health care businesses.

Adjusted operating income in the fourth quarter was $502.1 million, a decrease of $5.4 million or 1.1% from Q4 '21. Adjusted operating margins were 37.5% in the fourth quarter of '22 compared to 39.2% in the fourth quarter of 2021.

Excluding acquisitions, expenses increased 2.6% on a constant currency basis. Acquisitions added $56.7 million in expenses and foreign currency decreased cost by $27.9 million. Our cost structure has been impacted by wage inflation and higher staffing to support our business.

Adjusted consolidated EBITDA, defined in Note 3 of our earnings release, was $518.6 million or 38.7% of adjusted revenue, a decrease of $4.3 million or 0.8% from Q4 '21. Net interest expense for the quarter was $104.9 million and includes $3.7 million of noncash amortized financing costs and OID. The average interest rate in the quarter for our amended credit facility, including the senior notes, was 5.64% compared to 3.09% in the fourth quarter of 2021.

Adjusted net income was $296.6 million, and adjusted EPS was $1.16. And the effective tax rate used for adjusted net income was 26%. Diluted shares decreased to 256.4 million from 260.9 million in Q3. Share repurchases and the lower average stock price during the quarter led to the decrease.

Fourth quarter -- in the fourth quarter of 2022, we reported 2 GAAP fair value unrealized gains totaling $68.8 million for investments we made in 2020 and 2021. These gains are excluded from our adjusted financial results.

On the balance sheet, we ended the quarter with $440 million of cash and cash equivalents and $7.1 billion of gross debt. SS&C net debt, which excludes the cash of $134 million at DomaniRx, was $6.8 billion as of December 31. Operating cash flow for the 12 months ended December 2022 was $1.134 billion and includes the impact of $67 million of Blue Prism post-acquisition transaction costs. Adjusted for the transaction costs, cash flow was $1.201 billion or a decrease of $227 million or 15.9% compared to 2021.

Cash flow was impacted by higher interest rates, lower EBITDA and an increase in receivables DSO. During the 3 months ended December 31, we paid down $166 million of debt and purchased $90.7 million of stock buyback.

Highlights for 12 months on the cash flow. We paid $1.636 billion for acquisitions, including Blue Prism, Hubwise, MineralWare, O'Shares, Tier1 and Complete Financial Ops net of cash acquired. Treasury stock buybacks totaled $476 million with purchase of 7.8 million shares at an average price of $61.01 compared to $487.9 million of treasury stock buyback in 2021.

In July, the Board authorized the new stock purchase program up to $1 billion. Program to date, stock buybacks totaled $305.2 million for purchases of 5.5 million shares at an average price of $55.78.

For the year, we declared and paid dividends of $203 million compared to $174 million last year, an increase of 16.7%. In 2022, we paid interest of $298 million compared to $192.5 million in 2021. Income taxes paid this year totaled $281 million compared to $310 million in 2021. Our accounts receivable DSO was 52.3 days as of December '22, and that compares to 51.8 as of September '22 and 49.5 as of December 2021.

Capital expenditures and capitalized software totaled $208 million or 3.9% of adjusted revenue compared to approximately $137 million in 2021. The spending is predominantly for capitalized software and IT infrastructure. Our LTM consolidated EBITDA, which we use for covenant compliance, was $2.010 billion as of December '22. And based on the net debt of $6.8 billion, our total leverage was 3.4x, and our secured leverage was 2.4x as of December 31.

On outlook for 2023, I'll cover a few assumptions first. We'll continue to focus on client services, and we expect our retention rates to continue a range of most recent results. We have assumed foreign currency exchange at the year-end 2022 levels. As a result, adjusted organic growth for the year will be between 2% and 6%. And adjusted organic growth for Q1 will be in the range of negative 0.5% to positive 2.5%. We've assumed interest rates will average approximately 6.35% for the year for our credit facility and senior notes.

We expect staff productivity to improve by approximately 5%, and we'll manage expenses during this period by controlling variable costs to improve our operating margins in the rate of 50 to 150 basis points compared to 2022. We'll continue investing in our business long term in the areas of capital expenditures, product development, and sales and marketing. And we'll continue allocating free cash flow to -- both to pay down debt and buy back stock. And we've assumed that the tax rate will be approximately 26%.

So for the first quarter of 2023, we expect revenue in the range of $1.332 billion to $1.372 billion, adjusted net income in the range of $282 million to $299 million, and diluted shares in the range of 256 million to 257 million. For the full year of '23, we expect revenue in the range of $5.455 billion $5.655 billion, adjusted net income in the range of $1.190 billion to $1.285 billion, and diluted shares in the range of 255 million to 258.5 million. And for the full year, we expect cash from operating activities to be in the range of $1.275 billion to $1.375 billion.

I'll turn it over to Bill for final comments.

Thanks, Patrick. 2023's improved operating environment will present more growth opportunities for SS&C. We look forward to capitalizing on these opportunities and delivering superior results to our shareholders.

I'll now open it up to questions.

(Operator Instructions) Your first question comes from the line of Surinder Thind with Jefferies.

I'd like to start with a question or 2 around productivity. Can you maybe talk a little bit about just the digital workers and kind of the efficiencies that you're seeing there. So when you give metrics such as there's 180 digital workers, does that replace a certain amount of employee hours? Or how should we think about that and maybe just the kind of the targets that you have for the full year that you laid out relative to last quarter?

Yes. We expect, on average, conservatively, that a digital worker will probably save us $50,000 per digital worker deployed. We're not replacing personnel on a one-for-one basis with digital workers. What we're doing is allowing ourselves to hire less and get more productivity through the deployment of digital workers and then also perhaps not to have -- to hire for some of the attrition.

So we look at this as a win-win for our employees. The digital worker tends to take over repetitive tasks, which gives our employees a more interesting job. And then it also is obviously a cost savings and efficiency process for us. And we would hope to deploy, I believe, somewhere around 1,500 to -- I think 1,350 to 2,700 digital workers in 2023.

Got it. And then in terms of just what that means for the expense line item, the comment around a 5% improvement in productivity, also -- so in terms of when we think about the revenue guide, does that mean expenses should be relatively flat year-over-year just in absolute terms?

I think that is what it implies. And I think, obviously, we have to manage -- and we're subject to every other -- just as every other company depending on what inflation is and what's happening in the labor markets. But other than that, the productivity we expect out of the deployment of digital workers should offset some of the expenses that we would pay for higher salaries and other expenses.

Got it. And then just one quick follow-up. In terms of the commentary around the M&A, any additional color that you can provide there in terms of the types of opportunities you're looking at or the scale of opportunities? Any color there would be helpful.

Yes. We see a number of dislocations in the fintech space. So there's going to be opportunities both large and small. And as always, SS&C is a disciplined acquirer. We're also somewhat of a reasonably voracious acquirer when prices are in our disciplined strategy, and that's not 10x revenue. So we think that the market is moving to where we are. We think that we have lots of productivity opportunities, and we think we'll be a good home for different types of companies we could acquire.

Your next question comes from the line of Alex Kramm with UBS.

Just to follow up on the, I guess, cost and margin question. I think Patrick specifically said 50 to 150 basis point margin expansion. Maybe I didn't hear that right, but if that's the case, I guess...

That's correct.

Yes. So I think it gets you in EBITDA terms to around 39% hat the midpoint. Is the cadence of that -- and I guess we came back into the first quarter. But can you maybe just lay out any sort of seasonality? Or also if you're taking measures still this year, is that a glide higher with revenue growth? Or how should we be thinking about the cadence of margins if you think about the 4 quarters?

Yes. I think we will have had Blue Prism for a year in the middle of March, and we're rapidly deploying digital workers, but the ramp-up will be obviously higher as each quarter goes and the savings that we will incur will be heavily weighted probably to Q3 and Q4 just as the use of those digital workers will be full time in those quarters and less so as much in Q1 and Q2.

Okay. Fair enough. And then flipping to the revenue side. I think 2% to 6% organic, that's an acceleration clearly from where we were in 2022. So I mean, anything to point out? Any puts and takes? But in particular, I mean, health care obviously, was a big detractor in '22. So is this now all in the run rate? Or is it actually a little bit more bleeding? Or should that business actually start growing again?

And then since you just mentioned Blue Prism, I think last quarter, you actually gave the growth rate. And now that it's flipping organic, it would be very helpful to see how the business is doing on an external perspective. So any other comments on organic would be helpful.

Again, I think we've -- go ahead, Patrick.

Well, just to answer a few of your questions, I think Blue Prism turns organic in mid-March, right, of '23. But if you calculate the revenue growth this past year organically, I think they've averaged in the mid-teens, maybe a little bit higher, and they were about 13% in Q4, and we expect them to be in -- around mid-teens in 2023.

And then on the health care side, sorry, again, since that was the biggest area of weakness, is that behind us?

I think the -- on the health care side, there'll be a little bit of reduction in the revenue reduction. So I think they were down about 20% in 2022 and might be down about 10% in 2023, especially in the first half of the year with the comparables.

Okay. So is that still new client losses? And should we just expect that, that business doesn't really grow organically until DomaniRx really kicks in? Or is it just a holding pattern that clients are in? Or how are you thinking about health care in general? What's going on under the hood?

Well, we have done a lot of things in health care, and I think that we have a lot of opportunities. The question is obviously, is you have to hit those health care systems on renewal dates. So we're cautiously optimistic that Domani is progressing well, and we have some talented people working on that. And I think that there is not gigantic optimism for 2023, but we think there's a pretty good ramp we can get to in 2024.

Your next question comes from the line of Jeff Schmitt with William Blair.

Alternatives organic growth is holding up fairly well, 4.5% in the quarter, but it looks like private market is growing in high teens. So I presume the hedge fund business is -- is it negative growth? And maybe if you could speak to the disparity in growth in those 2 businesses.

Rahul, you want to take that?

Sure. I actually think the hedge fund business is slightly positive. You're correct that it's not -- it's nowhere near the private markets growth. But we're probably assuming in 2023 and our plan 2% to 3% growth in the hedge fund side of it and mid-teens or higher in the private markets, and that's what kind of makes the sum of the 2.

I would say in commentary and specific on the hedge fund side is our sales performance continues to be strong. I think we've continued to see demand for middle office services and some of the additional modules and things that we have rolled out, including GoCentral. We're obviously not benefiting from a ton of inflows in hedge funds now. But as that turns around, we think we'll be well positioned because we are taking market share. And in the meantime, the private markets and private credit businesses continue to become bigger parts of this and so move the growth algorithm higher.

Okay. And then a question on the healthcare business. It seems like it's the medical business that is sort of you're downsizing, and I think that's a lower margin business relative to the pharmacy. But I guess my question is, with that sort of going down, is it big enough? Is it having a positive impact on overall margins? Or how big is the margin disparity there, I guess?

I think health care runs in the high 20s, and the rest of the business is running in the high 30s. Is that about right, Rahul?

That's about right, Bill.

So -- and it's about -- I guess, about $280 million, $290 million business. So it's still a substantial business with substantial opportunity, and I just think it's execution and attention. And I think we're putting execution and attention into that space.

Your next question comes from the line of Peter Heckmann with D.A. Davidson.

I had just a couple of follow-ups. There were a couple of larger customers that we talked about through last year. Can you talk about when you expect them to go live this year? And then in terms of the couple of lift outs, you talked about the one in Texas. Not sure if you talked about the others but when we should see some of the bigger customers in the conversion backlog hitting and starting to contribute to organic.

Yes, a number of them, we think are in the first quarter at the end -- I think, primarily in March. Then we have a number of other ones that we would expect to be in the second quarter. And then hopefully, we will be able to -- with everything that started off and had been signed and closed in 2022 that we would be able to pretty much have them live by the end of the third quarter. So there's still substantial amounts of sold revenue that we have not recognized yet. And I don't know, Rahul, if you have any more comment on that.

No, Bill, I think that's exactly right. It's throughout the course of the year, some in Q1 and Q2, and we get pretty close to full towards the latter half of the year.

Okay. And then I think you covered it in part. But I guess, how would you characterize the environment for new business in the fourth quarter? Was it basically in line with your expectations, better, worse? And then how do you find customers' kind of decision-making, their willingness to make decisions here in the first half of '23 given some of the uncertainties?

Well, I think, Pete, that's right on, right? I mean it's -- I think there's people that need to get efficiency. As Rahul said earlier, there's an awful lot of opportunities in middle office, and I think there's a lot of pressure on our customers to get more efficient. And I think they're finding that maintaining software systems and large staffs of operations and accounting people is not necessarily their core competencies, and that's really our opportunity. And we think we're taking advantage of it. And we believe we have the best sales force and that they're executing at a pretty high level.

Your next question comes from the line of Andrew Schmidt with Citi.

Kind of just drill down on organic growth. This has been asked a few different ways but if you could just talk about your visibility in terms of the acceleration in growth as the year progresses. Part of it is obviously Blue Prism coming to the mix, and then some of it is go-lives, which you have a pretty good sense, perhaps even a better sense now that implementation resources are a little bit more stable. But maybe talk through if there's any other drivers we should think about in terms of your confidence for achieving the organic growth outlook for this year. And then anything about just embedded macro assumptions? Goes back to other questions that have been asked, but any other color there would be helpful.

Yes. We've been implementing price increases over the last couple of years and that's beginning to bring fruition to us, and we would hope that those price increases start to approach 2% overall for the whole business. And so that gives us some confidence and some lift, and we continue to bring out new systems and new services and successful new products like Aloha and Singularity and GoCentral are all positive things that drive the business forward and packages of products of ours that we sell like our trust system, combined with our wealth management product. Black Diamond has been pretty effective, and we think it will continue to be.

Got it. That's helpful. And then last year, obviously, with the labor pressure, there were some pressure on implementation time lines and things like that. Has that now stabilized in terms of client implementation time frames and where you're seeing the retention with the implementation workforce? Anything to call out there?

Well, we're -- we all work here. So we're focusing on it, and we have talented people that have hired more talented people. And that group of people is focused on it, and we're executing in an increasingly higher level. But these are big complex implementations, and you have -- still have some work-from-home issues and other things that cause collaboration to be a little bit more difficult and stretch out some time lines. But I would say that we're optimistic that we're getting increasingly better and that hopefully, those results will start showing up in our quarterly financials.

Your next question comes from the line of Kevin McVeigh with Credit Suisse.

Great. So again, nice acceleration on the organic growth in '23. Beyond Blue Prism, is there any way to disaggregate kind of the components that get to the 2% to 6% in terms of some of that's Blue Prism, some of that's pricing, some of it's retention? Is there any way to maybe just ring fence those numbers a little bit?

Well, I think we've talked about it. I think you got to allocate it probably to 4 buckets, and you can put 1% to 2% to 3% in each 1 of the buckets. But I think it is price increases. It's new business sold. It's clearing the backlog, and it's new products and services that we're bringing to the market. So we're saying 2% to 6%. And we would love to guide you to just 6%, but we want to be cautiously optimistic. And there's still a lot of things happening in the world, whether it's the war in Ukraine, it's inflation in the United States, it's labor issues here in the United States. There's weakness in Europe and in the U.K. And so you heard a lot of things, and we're trying to give you as much color as we can without trying to act like we have a crystal ball because we do not.

That's helpful, Bill. And then maybe just it sounds like Blue Prism, you exited 2022 at 20% EBITDA. Any sense of how that should scale over the course of '23?

I think we've said over the last year that we would expect Blue Prism to increase their margins in the 500 to 1,000 basis points in 2023. I don't know if Rahul has more color than that, but I think that's what [we're in].

No, I agree with that, Bill. I think the goal for us at the end of '23 would be to exit at about a 30% margin. So that's the -- obviously, the upper end of what Bill just said.

Your next question comes from the line of Terry Tillman with Truth Securities.

I guess the first one, Patrick, for you in terms of I was trying to write this information on -- at a fast pace, but I may have missed some of it. The 3.7% organic growth for financial services, was that 4Q or for the full year?

I think that was a full year.

Could you tell me, Patrick, or give me a sense how it was in 4Q?

I'd have to look it up. Let me look it up if you've got another question.

I do. Okay. Bill, I was curious about the private credit opportunity. You all called that out in the prepared remarks. Is there anything you could share with us in terms of important technology milestones in '23? And what about selling? And could this start to become a monetizable setting in a meaningful way in '23? And just what's that market like from just a size or a scale perspective?

Well, welcome back, Terry. We haven't heard from you in a while. Welcome to Truist. And I would just say that private credit is really -- you look around the world and you have companies like Apollo that has $550 billion under management and they also own the fees with another $330 billion. And you know the other large-scale private equity firms and the deals getting done like the -- I think the recent deal out of Emerson Electric or somebody where Blackstone did a completely private spinout of a big division. And I just think the private markets are becoming to rival the public markets.

So there's a lot of stuff that we've done, and Rahul talked about it in his remarks about tying a bunch of our pieces of technology together and really distancing ourselves from our competitors with what our capabilities are. And I think that's why you see that growing as nicely as it is. And I think that there's a number of funds that are pivoting towards private credit and other private fund type investments, and I think that's going to continue.

Yes. Got it. And maybe just one more. Well, I had Patrick off on a goose chase.

I got the number for you, Terry. So the number for Q4 for the financial services, excluding healthcare, organic growth was 1.3%.

Your next question comes from the line of James Faucette with Morgan Stanley.

Great. You guys -- Bill, you mentioned that you're seeing you want to be acquisitive and you're seeing some dislocations in the fintech space. I'm wondering if you can talk about a little how you're thinking about potential structure of those deals financially, especially since the cost of capital now is obviously higher than has been at least pre-pandemic, et cetera. Just wondering if that changes the way that you have to approach those deals, what kind of companies you can look for and what would be a targeted structure for you there.

Yes. I think that there's still money to be had out there. And I don't think that you have to get too cute with these structures, and we like to have a capital structure that is pretty easy to understand. And we have operated under quite a bit higher interest rates than what we're seeing today even though interest rates today are quite a bit higher than they have been for the last 5 to 10 years.

And so I don't think that we would structure them very different. We might have a partner or we might have a large-scale private fund or a large-scale pension be a big supplier of credit to us or even some equity if we can give it at the right price, which would be where we are now.

Got it. Okay. That's really helpful. And then you mentioned that you felt like you were taking some share in the hedge fund space. Is this -- and I guess, kind of what I'm looking at is one of your primary competitors, at least in the hedge fund launches, has been going through some management transitions. How much of an opportunity has that presented? And has that been a chance for Eze Eclipse to grab some share in business?

Well, we think we have very stuffed pipelines. The question is, is obviously closing them. And as you well know, right, when the markets are as choppy as they have been for the last couple of quarters, you don't have nearly as many fund launches as you've had in the past. So we're cautiously optimistic that we can ramp our Eclipse product and then also tie in with our funds administration capabilities. And so yes, we're optimistic about that. And yes, that's just one other fintech company that has a few challenges.

There are no further questions at this time. I will now turn the call back over to Bill Stone.

Yes. We really appreciate everybody getting on the call today. I would like to recommend that you recognize that the $518 million in adjusted EBITDA is the third largest in our history, which is 36 years. So we're pretty proud of that. We think we're doing the right things. We're thinking that we're keeping our nose in the grindstone and getting stuff done. And I appreciate the 27,000 people that work with us and make things happen. And we're optimistic that when we talk to you at the end of Q1 that, hopefully, we have a positive story to tell. Thanks again.

This concludes today's call. You may now disconnect.