Earnings Transcript for ALYA - Q1 Fiscal Year 2025
Operator:
Good morning. Welcome to Alithya's First Quarter Fiscal 2025 Results Conference Call. I will now like to turn the meeting over to Alithya's management team. Please go ahead.
Unidentified Company Representative:
Good morning and thank you once again for joining us for Alithya's First Quarter 2025 Results Conference Call. The press release and MD&A with complete financial statements and related notes were issued this morning and are now posted on our website. The webcast presentation can also be found on our website in the Investors section. Please be advised that, this call will contain statements that are forward-looking and which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These statements include, without limitation, our estimates, plans, expectations, and other statements regarding future growth, results of operations, performance, and business prospects of Alithya that do not exclusively relate to historical facts. These statements can also refer to future events, including those regarding our expectation of our clients' demands for our services, our ability to take advantage of business opportunities, to leverage our service offering, IP, AI and expertise to meet clients' needs, to stand out and excel in a competitive market and to meet our goals set in our three year strategic plan as well as our ability to deploy our smart-shoring capabilities. For more information, please refer to the cautionary note in our presentation and to the forward-looking statement and risk and uncertainties sections of our MD&A, both available on our website. All figures discussed on today's call are in Canadian dollars unless otherwise stated, and we may refer to certain indicators that are non-IFRS measures. Please refer to the cautionary note in our presentation and to the non-IFRS and other financial measures section of our MD&A for more detail. Presenting this morning are Paul Raymond, Alithya's President and Chief Executive Officer; Bernard Dockrill, Chief Operating Officer; and Debbie Di Gregorio, Interim Chief Financial Officer. I will now turn the call over to Paul Raymond. Paul.
Paul Raymond:
Good morning, everyone and thank you for joining us today. I would like to begin by highlighting three notable achievements by our team for the first quarter. I will then turn things over to our Chief Operating Officer, Bernard Dockrill, to break down some of the specifics around our operational performance, followed by Debbie, our Interim Chief Financial Officer, to cover some financial highlights. First, in Q1, our team delivered yet another quarter of adjusted EBITDA above $10 million. In fact, our adjusted EBITDA increased 11.1% or by $1 million over the same quarter last year on lower year-over-year revenues. Second, 83% of our first quarter revenues were generated by repeat clients, who turned to us from value-added services above and beyond the scope of their initial projects. Our gross margin as a percentage of revenues increased to 31.9% compared to 28.9% for the same quarter last year. Third, in maintaining our efficiency focus, our SG&A spending remained sequentially steady in Q1 despite company-wide salary increases and decreased by 2.6% compared to same quarter last year. And one more thing, it should also be noted that our team delivered very strong net cash flow from operating activities of $16.7 million. This represents 120% improvement over the same period last year, further reducing our long-term debt. I will now pass it on to Bernard to discuss our operations in more detail. Bernard.
Bernard Dockrill:
Thank you, Paul. Despite soft global market conditions, we reported stable sequential revenues, while maintaining our focus on profitability improvements. Geographically, we experienced a revenue decrease in Canada, primarily due to slower-than-expected information technology investments in the banking sector and certain client projects reaching maturity, compared to the same quarter last year. We have continued to reduce the number of subcontractors and increased the proportion of our permanent employees. This has been a priority for a few years now and we are pleased to see the result having positive impacts on our gross margins. Since the start of the year, we have successfully secured our position in several contractual vehicles with our largest public sector clients in Quebec. These agreements covered areas such as access management and security, organizational consulting and cloud architecture and infrastructure. This demonstrates our ability to stand out and excel in a competitive market. Also, our six-year Oracle Cloud supply chain management project to the Quebec Government and the healthcare sector continues according to plan. Despite some delays in new project signings our backlog remains strong. As of June 30th, our backlog represents 16-months of trailing 12-month revenues. We see great promise and projects discussed with our largest clients and our partnership with AWS is providing valuable support for the systems modernization work being conducted by our Digital Solutions Center in Quebec and our smart-shore operations in Morocco. Another key strength that we continue to build upon is our smart-shoring strategy. Our experts in Morocco, Eastern Europe and India are engaged in the delivery of major projects for some of our largest clients. By the end of Q1, we increased our smart-shore workforce to 8.6% of our total workforce, up from 8.1% at the end of Q4. Additionally, Alithya continues to establish itself as a leader in cybersecurity expertise surrounding new standards in Canada for critical industries, particularly in the nuclear energy sector. On that note, in Q1, we secured a $14 million operational technology implementation project, reinforcing our leadership in this sector. In addition to providing cutting-edge cybersecurity technologies, including AI powered threat detection Alithya's regulatory expertise assists clients to be compliant with relevant laws and standards. Now looking at our U.S. business, the ongoing reduction of lower margin business in Canada was largely offset by growth in our U.S. operations. This is due to the kickoff of projects from our strong bookings performance in fiscal 2024. U.S. revenues increased by 3% year-over-year, largely due to our Oracle Cloud and Microsoft Dynamics ERP practices and a favorable U.S. dollar exchange rate. Beyond maintaining our active presence in the U.S. health care industry with Oracle Cloud, we have successfully expanded our business to include other sectors, including manufacturing and professional services. Our Oracle practice welcomed new projects in Q1 in these sectors, which demonstrates that we are on the right path to diversification. Our Oracle practice also continues its long-term focus on managed services to generate additional recurring revenues. We are initiating discussions as early as possible during the execution of our implementation projects as clients become aware of such future needs. Our Microsoft business also posted a strong performance in the first quarter of fiscal 2025. At the end of the quarter, our teams achieved an important recognition for our efforts and innovation initiatives. Alithya was named as a finalist for the 2024 Microsoft Dynamics 365 Supply Chain Global Partner of the Year Award, honoring top Microsoft partners, who have demonstrated excellence in innovation and implementations of solutions based on Microsoft technologies. Alithya has also achieved its Microsoft advanced specialization for infrastructure and database migration, which is an important step aligned with Microsoft's recommendation as its clients preferentially turn to partners with such advanced specializations for their projects. Alithya is currently one of only 220 Microsoft partners worldwide with multiple specializations in Microsoft Azure spanning analytics, AI and machine learning and business solutions. Additionally, Alithya has achieved three of six Microsoft specialization designations with two more awaiting the auditing phase. This puts us in a very select group globally. Our longstanding Microsoft partnership continues to open many doors, including a recent agreement to serve as a strategic Microsoft partner for clients migrating their end-to-end Cloud Automation platforms to Microsoft Power Automate. In June, we set the launch of the Alithya Copilot Academy during our quarterly call. Since then, we have seen a surge in interest from our clients. In Q1, we delivered Copilot services, including discovery workshops, technical readiness assessments and training to several clients. Copilot services are just one of the many ways, in which we are helping our clients improve their AI preparedness. We continue to build up our portfolio of proprietary AI-leveraged products and solutions, including our Alithya Rapid Capture and Alithya Rapid Q8 solutions. Moreover, we were completing more fixed price projects now and these initiatives combined with our IP and subscription services currently represent over 27% of our total revenues. I will now turn things over to my colleague, Debbie Di Gregorio, Alithya's Interim CFO to take a closer look at the numbers. Debbie.
Debbie Di Gregorio:
Good morning, everybody and thank you for joining us today. It is a privilege to address you all for the first time and present our latest financial results. I have been spearheading the team that prepares financial disclosures for more than six-years now. So I'm excited to share our achievements with you today during this call. As mentioned, our first quarter fiscal 2025 was highlighted by continued performance improvements on many levels. First, we are reporting stable sequential revenues. Consolidated revenues came in at $120.9 million, a sequential increase of $400,000 from $120.5 million for the fourth quarter of fiscal 2024. Despite the current global market conditions, approximately 83.1% of Alithya's Q1 sales came from existing clients, which we had in first quarter of last year. This demonstrates strong client relationship, trust and satisfaction in Alithya's services regardless of market trends. If we dive a little deeper, we can see that, revenues in the U.S. increased by $1.5 million or 3% to $50.7 million in first quarter, due primarily to organic growth in certain areas of the business including a favorable U.S. dollar exchange rate impact of $900,000 between the two periods. On a sequential basis, Q1 revenues in the U.S. also increased by $300,000 including a favorable U.S. exchange rate impact of $200,000. The U.S. now represents 42% of our revenues. Bernard addressed the challenges we faced in our Canadian business as shown by our revenue numbers year-over-year. Revenues in Canada decreased by $11.9 million or 15.4% to $65.1 million in Q1. But on a sequential basis, revenues in Canada increased by $500,000. Regarding our gross margin, as a percentage of revenues, we are reporting a third consecutive quarter of improved performance. As noted in previous quarterly calls, it is challenging for organizations to increase gross margin during times of slower revenue growth. However, once again, we achieved good performance with our gross margin as a percentage of revenues increasing to 31.9% up from 28.9% in Q1 of last year, when we reported revenues that were 8.1% higher than this quarter. On a sequential basis, gross margin as a percentage of revenues decreased only slightly compared to 32.1% for the fourth quarter of last year, despite salary increases that came into effect at the beginning of this fiscal year on April 1st. Our gross margin percentage increased across North America, both year-over-year and sequentially, mainly due to a proportionately larger decrease in the use of sub-contractors compared to permanent employees, as mentioned by Bernard and due to higher utilization rates. And this again despite salary increases, which came into effect during the quarter. Now looking at SG&A expenses, we have continued to witness significant improvements over consecutive quarters and we are happy to see our cost efficiency efforts continuing to bear fruit. In the first quarter, total SG&A expenses amounted to $31.7 million, a decrease of 2.6% year-over-year. SG&A expenses as a percentage of revenues came in at 26.2% in Q1, compared to 24.7% for the same period last year. This was driven mainly by decreases stemming from impairment charges last year as part of Alithya's ongoing review of its real estate strategy, following the integration of acquisitions and changes in working conditions in order to reduce the Company's footprint and realize synergies along with decreases in other costs, partially offset by increases in employee compensation costs. Overall, thanks to the above performance on cost management, our first quarter adjusted EBITDA amounted to $10.1 million, an 11.1 percentage increase year-over-year, which is much higher than the same period last year when our revenues were notably higher. Again, this reflects our rigorous approach to not losing ground on the progress we have made in terms of operational performance and it will position us well once we return to our higher historical revenue levels. Our adjusted net earnings came in at $4.9 million or $0.03 per share, an increase of 65.1% year-over-year. I would point out that, our accounting net income of negative $2.8 million in Q1 improved significantly from negative $7.2 million in the same period of last year. Finally, considering our $10.1 million of adjusted EBITDA and our $16.7 million of cash generated from operating activities, this translates into an impressive cash flow conversion of 165.3%. Net cash generated from operating activities represented an increase of 120% year-over-year. As of June 30, 2024, when combined with other cash flow elements, this resulted in a long-term debt reduction of $9.5 million to $107.9 million. As for Alithya's net debt, during Q1, it decreased to $97 million from $109 million at the end of fiscal 2024 primarily as a result of the decrease in long-term debt partially offset by an increase in cash. Now I pass it back to Paul. Paul.
Paul Raymond:
Thank you, Debbie. So as you can see, since going public just over five-years ago, Alithya has made great strides. Between our first full fiscal year as a public company, which ended March 31, 2019 and our trailing 12-months based on our most recent first quarter of fiscal 2025, Alithya's revenues have grown 129% and our gross margin dollars have grown 175%. Over the same period, our adjusted EBITDA dollars have increased 4.87%. But our market capitalization over the same period has decreased almost 13%. As our progress demonstrates, we believe, we are doing the right things to build a sustainable Alithya over the long-term, but the market has not recognized this progress, yet. We believe Alithya is a much more valuable company today than it was five-years ago. We have greater scale and we are more diversified. We are in higher end services of our industry and over 80% of our revenues are from repeat clients. We are more profitable and we are a growing company in a growing sector. As I often like to remind people, there will be more technology in our lives 10-years from now. Alithya has been serving as a trusted advisor to its clients for over 32-years and we plan on being around for a long time to come. We have gone through many different phases of our economy. We have lived through recessions, hyperinflation, global pandemics, global and local crises and everything in between. We have lived through many technological revolutions, evolutions and fads and we have always emerged stronger. Today, our clients are leaders in their respective industries across North America and Europe and they turn to us in growing numbers for trusted advice. Our experts operate from five different continents and our future is bright. Still, Alithya is trading at a significant discount to its peers despite these facts. Rest assured that we remain undaunted and more focused than ever on delivering on our three-year plan. Before we move on to questions period, I would like to take a moment to remind you that, our Virtual Annual General and Special Shareholders Meeting will take place at 10 am on September 10th. Additionally, please note that our ESG report will be disclosed on the same day. Following the annual meeting, you are all invited to attend our Investor Day at 1
Operator:
Thank you. [Operator Instructions] Your first question comes from Rob Goff from Ventum. Please go ahead.
Rob Goff:
Good morning and congrats on the quarter. I know there are a lot of hard fought won gains within the quarter.
Paul Raymond:
Thanks, John.
Rob Goff:
So for my question, it is one of how would you characterize the financial services outlook? Is it fair to say it is one of stabilization where there are signs of growth or would that be overly optimistic, pessimistic?
Paul Raymond:
Yes. Thanks for the question. It is pretty stable right now. I mean, we are not seeing a rapid increase and we are not seeing a further decrease. The decisions are just taking a lot longer. People are very careful and there seems to be more interest in business case driven or efficiency driven type projects, which of course take more time to close and negotiate just because of the structure of deals. But, yes, I would say it is pretty stable right now.
Rob Goff:
Very good. And as a second question, you made mention of the Quebec Health and Social Services Ministry contract. Is there any more color or perspective you could provide in terms of how this could unfold and expand with success?
Paul Raymond:
Sure. First of all, the project is on plan and I just want to remind people that is a six-year project with a very long tail in terms of support and maintenance. So the revenue coming from that project is very gradual and it is on plan. It is one department only. So within the department, they have these regions. This is one region only. There are many regions in the province. If this goes well, it does position us for the other regions as well. It could be a much larger project over time, but this is not going to happen overnight.
Rob Goff:
And when might you have clarity in terms of adding additional regions to the contract?
Paul Raymond:
It is going to be probably a couple of years. I mean, if you look at typical rollout of a project of this size, it is usually a multiyear project. So before the other regions start moving, it is several quarters out.
Rob Goff:
Okay. Thank you.
Paul Raymond:
Thank you.
Operator:
Thank you. Your next question comes from John Shao from National Bank. Please go ahead.
John Shao:
Hi, good morning. Thanks for taking my questions. How should we think about your gross profit margin potential in a situation where the demand environment improves?
Paul Raymond:
Thanks for the question, John. You know what, I will ask Bernard to give you a bit more color on the gross margin, because we do get a lot of questions on that, because of the improvements that we are showing, and he can give you a bit more color.
Bernard Dockrill:
Thanks for the question, John. And, yes, gross margin has remained a priority for us even in the solar market that we have been in. There is a number of levers that we have. We talked a little bit about the reduction of our sub-contractors and the use of more permanent employees that has a positive impact on our gross margins. Our utilization rates continue to and as we grow and have more work, it is easier to increase those utilization rates. And as I mentioned in our discussion, our smart-showing strategy continues to be a big part of where we want to go. And as we are growing, it is easier to increase or accelerate the use of smart-showing and that also comes with strong gross margin improvement as well, a number of levers that we have at our disposal and as we continue to get back into a growth mindset here, we will see hopefully more on the gross margin side.
John Shao:
Thanks for the color. So it is a strong quarter of operating cash flow. So just curious any changes to your working capital policy?
Paul Raymond:
I will let Debbie take that one, John.
Debbie Di Gregorio:
Good morning. Well, we are always looking at conserving cash and making sure to manage our cash. So we continue our journey through our cash management. But just good policies going forward and continuing with what we are doing, nothing overly special, paying down the debt and having managing that debt and the cash.
Paul Raymond:
A lot of discipline there. A lot of discipline, John.
John Shao:
Thank you. I will pass the line.
Paul Raymond:
Alright.
Operator:
Your next question comes from Divya Goyal from Scotiabank. Please go ahead.
Divya Goyal:
Good morning, everyone. Paul, I actually wanted to get some more color on the bookings momentum here. It looks like, the bookings came in slightly weaker than what we have seen over the recent quarters. So could you potentially provide some color and what are the signs of stabilization that you are seeing across Canada and U.S.? Which verticals are you seeing stabilizing BFSI and government? So help us understand how things are trending here.
Paul Raymond:
Sure. Thanks Divya for the question. I guess my first comment would be, we always look at our bookings and I have said this before kind of on a rolling 12-months basis, because of this size of some of the contracts that we signed. A shift of a week from one quarter to the next can have a big impact like we had in Q4. We brought in a lot of deals that might have been might have taken longer, got into Q4. So we had a very strong Q4. Q1 was a little lighter, but we look at it on a rolling 12-months, on a 12-months basis, we think is a better representation of what the future business is going to look like. So we like that. You have to take into consideration, there is a lot of things that go into what goes into the quarter or not. For example, a big part of our backlog are projects tied to Microsoft and Oracle implementations as an example. Depending on when their year-end is, you will see a lot of big contracts being signed before their year end. That happened in June in Q4. So that is going to happen in future quarters as well, depending on the partners themselves. I think just things are taking longer to close and moving from one quarter to the next. We did have very strong bookings last year that are converting into projects this year. So we shouldn't be seeing upticks coming from that eventually. But I don't know, Bernard, if you want to add anything else on that.
Bernard Dockrill:
No. I think you covered it, Paul. If you look at the trailing 12-months, our numbers are where we expect them to be, especially when you take into consideration the large contracts that we signed as part of the acquisition.
Divya Goyal:
Very helpful. One question that I wanted to understand was on the cost containment efforts. Alithya has been doing a great job managing the cost over the recent over the last few quarters here. I wanted to understand, these cost-cutting that you have been doing on the real estate footprint and trying to minimize the footprint. Is it fair to assume that, this cost cutting would be sustainable given your increase in smart shoring? And if you could provide some further color on what is how should we anticipate this cost cutting to go on for the coming quarters? Thank you.
Paul Raymond:
Yes, sure. Couple of things on there. Actually just maybe to add on your previous question, Divya, on the bookings. One thing that does not appear in our bookings, so in Q1, this latest quarter, we signed Bernard mentioned it in his comments, but we signed many very large MSAs in the government sector, multimillion dollar MSAs. But we do not recognize that in the bookings because the way we work with government is, we will qualify for something, win the MSA and we will only put it in our bookings, when we have signed contracts or SOWs within those MSAs. Again, it kind of impacts, there is a zero impact short-term, but it is very positive for us on the longer term that is on the bookings. On the cost cutting, I just want to differentiate between two things. On the real estate side, it has a cash impact, but it does not really have a P&L impact because of the IFRS rules. The cost cutting that we have done on the real estate side, you don't see a big impact in our numbers on that. The rest is more efficiency driven type things that Bernard was talking about. So one is focusing on the right business, so higher profitability, better business that we go after, that means picking our battles and being more selective in terms of what we go after, which also reduces our cost of sales, because then you are only chasing things that we have a good chance of winning that have higher margins. The other piece in reducing our cost is really, where do we do the work from, where do we leverage, do we leverage lower cost areas to do more work, which again impacts our cost savings and there is still significant opportunity there. If you look at our comps out there, they are in the 30%, 40%, 50% range of offshore usage, we are at just under 9%. It is an area of focus that we believe we can grow. The other areas are use of IP, AI and IP leverage services, which is also growing. So the services that we do around that have higher margins, higher value. Even growing our offshore operations, we see that, as even if we need to add real estate in those locations, we don't see that as an incremental cost. We actually see it as a savings opportunity.
Divya Goyal:
Thank you. That is great color.
Paul Raymond:
I'm not sure if that answers your completely your question Divya.
Divya Goyal:
No, it is very well answers my question. Thanks a lot for all the color. I appreciate it.
Paul Raymond:
Thank you.
Operator:
Your next question comes from Gavin Fairweather from Cormark. Please go ahead.
Gavin Fairweather:
Hi, good morning. Maybe just on the bookings outlook. Looking forward, you talked about longer sales cycles and a bit more focused on business cases, which is commentary in recent quarters. But I guess I'm curious if you would characterize the buying or demand environment as similar or worse to three or six months ago? And maybe you could just touch on the pipeline size and whether that is growing?
Paul Raymond:
Thanks for the question, Gavin. As you know, we don't give outlook. What I can say is, we are not seeing a big change in the demand market or whatever you want to call it six-months ago. I mean, for us, we are still focused on the same things. We are focused on growing the same areas that we are in. Some deals are taking longer, but they were taking longer six-months ago as well. It is really a question that more of a timing like I was saying earlier, the seasonality of the bookings in our business varies like we are in the summer months right now, things are slower. It is always the case, it has always been the case. And then things pick up based on events or cycles that are sometimes outside of our control like the year-ends of our client or the year-ends of Microsoft or Oracle or AWS. Whenever you are into those, you are working with those partners, their year-end usually drives many deals. So we stake most of those things, but we are comfortable working in the current environment, but then it changes. We work in many different environments and economic cycles and we adapt. So we are okay with what is happening right now.
Paul Raymond:
I'm curious if the pipeline. I don't know if you want to comment on this. So the second question around the pipeline size, I'm curious if you are seeing just an expanding pipe and potentially in a year or so maybe if the environment is a little bit better, we could see bookings reaccelerate, if you have that bigger pipeline?
Paul Raymond:
No. We have a healthy pipeline. We are very comfortable where we are at.
Gavin Fairweather:
Okay. Got it. And then maybe just - maybe for Bernard. Just on the offshore mix, I mean, nice to see that ticking higher this quarter despite the organic growth not being as fast. I'm curious if you view kind of the current pace of offshore mix moving higher as a reasonable expectation, maybe before a macro recovery. Like can you - with a stable top line, can you keep pushing that higher?
Bernard Dockrill:
Yes. Great question. And I think looking at the rates that we have had in past quarters and the growth in revenue, slow growth in revenue, we haven't been able to do it incrementally. As we do get back to larger growth, we will have more opportunities to increase that. But that will come with growth as well. But I do believe, we will be able to maintain the momentum that we have had in past quarters as we go forward as well.
Gavin Fairweather:
Okay. Great to hear. And then lastly for me, nice to see the leverage tick lower. I know M&A is in your plans, but absent additional M&A, is the plan to just let the leverage on the balance sheet keep ticking lower and pay back debt or is there a level where if you got to maybe you would start to consider more share buybacks?
Paul Raymond:
Yes. Thanks for the question, Gavin. As I was saying earlier, given where the stock price is, it gets very dilutive for us to use our stock and transaction. So our balance sheet is very important to us right now. But as you can see, we are deleveraging very fast. We are around 2.6 right now in the net debt, 2.5, 2.6. We said we were comfortable between two and three. We will keep deleveraging and when we have the right acquisitions to pull the trigger on we will have the cash to do it. Absent that, our stock is probably the best deal out there in the market right now for us to buy back. If you go based on our priorities, first one is to reinvest in the company, so acquisition. I would say, buyback is probably number two after that. So paying down the debt is very good right now, based on where the markets are.
Gavin Fairweather:
And I think in previous quarters, you had characterized the deal environment as one where high quality companies hadn't seen a big revision in terms of the multiples of the vendors we are looking for. Would you say that, that is still the case or is maybe the more mixed macro environment starting to lead to a more favorable purchasing environment?
Paul Raymond:
We are still seeing very interesting deals, Gavin, in the range that we typically pay for. And the reason for that is our M&A strategy is a bit different than many other players. I have mentioned this before, but we look for organizations that are very high quality that fit into our platform, where the leaders want to stick around. And the leaders who want to stick around and see us as a platform for growth, have a very different perspective than somebody who wants to sell the cash out and leave. We still see many opportunities. Again, we just need to make sure the three key factors are aligned, right. It is the right company at the right price, and the people want to stick around. So we are still looking actively. We have a healthy funnel. We will pull the trigger when all those conditions are met.
Gavin Fairweather:
That is it for me, I will pass the line. Thank you.
Paul Raymond:
Alright. Thank you Gavin.
Operator:
[Operator Instruction] Your next question comes from Rob Goff from Ventum. Please go ahead.
Rob Goff:
Thank you for taking my follow-up. You have commented in previous quarters that you find yourself bidding on more larger contracts. Could you talk to whether that remains the case and any RFPs outstanding in such a category?
Paul Raymond:
Thanks for the question, Rob. So I won't comment on the outstanding stuff, but yes, we are still bidding on very large projects. As you saw in our latest bookings, we won one for $14 million in cybersecurity in the energy sector in Canada. So we compete with very large companies in that area for these contracts. Yes, we continue to see those and actually what is nice about that is our scale, our current scale gives us access to those types of deals. So, less competition, we can beat with the very large companies and for us there is some opportunities to differentiate there with what we do and how we do it. So yes, we are going to keep looking for those larger opportunities.
Rob Goff:
Very good. Thank you.
Paul Raymond:
Thank you.
Operator:
And there are no further questions at this time. I will turn the call back over to Paul Raymond for closing remarks.
Paul Raymond:
Thank you very much, Julie. Thank you everybody for joining us today, and I look forward to seeing you at our Investor Day.
Operator:
This concludes today's conference call. You may now disconnect. Thank you.