Performant Financial Corporation (NASDAQ:PFMT) Q4 2023 Earnings Call Transcript

Performant Financial Corporation (NASDAQ:PFMT) Q4 2023 Earnings Call Transcript March 12, 2024

Performant Financial Corporation beats earnings expectations. Reported EPS is $0.02, expectations were $0.01. Performant Financial Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings, and welcome to Performant Financial Corp. Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Jon Bozzuto, Head of Investor Relations. Thank you. You may begin.

Jon Bozzuto: Thank you, operator. Good afternoon, everyone. By now, you should have received a copy of the earnings release for the company’s fourth quarter and full year 2023 results. If you have not, a copy is available on the Investor Relations portion of our website. On today’s call will be Simeon Kohl, Chief Executive Officer; and Rohit Ramchandani, Chief Financial Officer. Before we begin, I’d like to remind you that some of the comments made on today’s call, including our financial guidance, are forward-looking statements. These statements are subject to risks and uncertainties, including those described in the company’s filings with the SEC. Actual results may differ materially from those described during the call. In addition, all forward-looking statements are made as of today.

The company does not undertake to update any forward-looking statements based on new circumstances or revised expectations. Also, all non-GAAP financial measures discussed during the call are reconciled to the most directly comparable GAAP measures in the table attached to our press release. I would now like to turn the call over to Simeon Kohl. Sim?

Simeon Kohl: Thank you, Jon. Good afternoon, everyone, and thank you for joining us for our earnings call. Reflecting on 2023, our second full year operating as a healthcare focused business and my first year as Chief Executive, I am incredibly proud of our accomplishments. We’ve achieved remarkable success, evidenced by double-digit revenue growth in our healthcare for the full year, resulting in adjusted EBITDA of $3.4 million, which represents a significant increase of over 250% from last year. In addition to our operational success, we continue to execute on our strategic goals, add seasoned talent to our team and scale our business to support our growth initiatives. A major focus since I became CEO has been to evolve our corporate culture from our legacy debt recovery business to that of an innovative and mission-driven healthcare company.

The recent appointment of Dr. Shantanu Agrawal to our Board of Directors emphasizes that evolution. Dr. Agrawal’s sterling reputation and extensive payment integrity experience make him an ideal addition to our Board. His tenure as Deputy Administrator for CMS, where he played a pivotal role in reshaping the recovery audit program, speaks volumes about his commitment to payment integrity. In his current role as Chief Health Officer at Elevance Health, he oversees Elevance’s corporate strategy related to medical policy, clinical quality and health equity. Dr. Agrawal’s experience and values aligned perfectly with our mission, and we are looking forward to his contributions to the Board. Furthermore, throughout 2023, we significantly added to our team with over 200 new healthcare hires.

We have bolstered our management team by identifying and recruiting industry experts with payment integrity experience across the entire claims life cycle. And for existing team members, we focused on providing opportunities for career progression and rolled out numerous appreciation initiatives. Our commitment to our team members is unwavering, exemplified by inaugural employee engagement survey conducted in 2023. The positive results it revealed serves as a benchmark, motivating us to further enhance our culture and provide incentives to employees, equipping them with the tools necessary to propel our organization forward. These early efforts led to the recognition by comparably as the best company for work-life balance. In terms of our business, Performant Healthcare Solutions continue to gain notable traction in the market.

In 2023, we experienced unprecedented commercial growth of 55%, driven by implementations expansion. We implemented a record 41 commercial opportunities during 2023, including seven in the fourth quarter. This achievement nearly doubles the 21 opportunities we implemented in 2022. Our implementation success rests on two pivotal elements. First, we optimize the speed of our implementations through continuous refinement of workflows. Strategic adjustments such as prioritizing data intake and adopting a more concurrent approach enable us to further streamline and expedite our implementation methodology. Second, as a testament to the reputation we’ve cultivated in the industry, our clients are increasingly motivated to accelerate the implementation cadence to expedite their return on investment.

While we still occasionally see client-driven delays, our ability to work with customers to synthesize and simplify complex processes into collaborative digestible experiences sets us apart from the competition. When engaging with a client, our objective is not solely to maximize savings. Instead, we focused on cultivating long-term value that aligns with their organizational goals. This involves collaboration with provider networks to minimize administrative friction. Our client-centric reputation is one of our greatest assets, and it continues to elevate our standing in the industry. This positive momentum has translated into one of our most robust pipelines to date, as payers recognize the value of partnering with Performant. I am so proud of the progress we have made with our commercial clients.

Our capabilities and approach have positioned us as a leader in the industry, allowing us to consistently capture market share. As a reminder, the commercial segment represents our largest growth opportunity with more than 75% of the $4 billion to $5 billion annual addressable revenue opportunity attributed to commercial clients. Allow me to illustrate how our approach to innovation, nimbleness and operational excellence has translated into success across each line of our healthcare business. On the eligibility front, we demonstrated strong revenue growth of approximately 15% in 2023. We continue to hear that our solution is more effective than our competitors, fueled by our data assets, matching technology and quality validation. A good example of our value emerged when we recently partnered with a national payer.

After identifying gaps in their eligibility workflow with their existing vendor, we conducted a successful proof of concept, securing the first pass position and eventually being entrusted with a multiyear look back. The client initially questioned the look back considering the incumbent had been reviewing the same claims for years. We subsequently uncovered tens of millions of dollars in inappropriately paid claims within the first three months. Our roots in healthcare traces back to the audit business where we were one of the original CMS recovery audit contractors when the program commenced in the 2000s. Our years of work with CMS has made us a trusted partner. In 2023, we worked closely with CMS and several MACs to develop a new solution for hospice audits to address a nationwide gap in waste and abuse oversight.

This novel audit type born out of data mining, analytics and policy expertise, not only aid CMS and expense management, but also exemplifies the success of our collaborative, nimble and innovative partnership with CMS. The positive results of this pilot launched in late 2023 is now in production for 2024. This example underscores the efficacy of our strategic collaboration with CMS. This collaborative and innovative style led to our audit business growing 9% in 2023, despite restrictions imposed on the RAC program during the public health emergency. Within our government clients, 2023 was very successful in terms of both contract wins and implementations. We generated revenue from two new federal contracts, RAC Region 2 and our HHS OIG contracts.

While still in the early stages of these engagements, we anticipate each to reach an improved steady state in 2025. A notable achievement within our government portfolio with the award of our first state Medicaid recovery audit contract from the New York State Office of the Medicaid Inspector General. This opportunity into a previously untapped market for Performant demonstrates our ability to add value to many types of clients across the payment integrity landscape. Despite facing a protest from the incumbent, we are working closely with the office of the Medicaid Inspector General to uphold the award. In the interim, we have commenced discussions with the state on how to optimize workflows and hopes of hitting the ground running once the protest has been resolved.

The award from New York State is especially significant as it provides us with the opportunity to collaborate with the largest Medicaid fee-for-service state in the country, further expanding our reach and impact. We are excited by our entrance into and for the opportunity to grow within the state market, which we believe represents an industry-wide annual revenue opportunity of $300 million to $500 million. Staying with our government clients, revenue declined 14% for the full year. As discussed on previous calls, challenges emerged in 2023, including the timing of addressable claims under the public health emergency and reduced demand inventory within our mature CMS Medicare payer business. Despite these hurdles, our fourth quarter performance has shown a rebound, pointing back towards baseline figures.

We have significant optimism for our government business despite these PHE-related challenges, with a rebound in volumes post-PHE, the New York State RAC win and our ramping federal contracts. Our team’s recent success in both government and commercial implementations have laid a strong foundation for future growth, and I take immense pride in their accomplishments. Equally as vital to our growth narrative is the improvement of our operational efficiency. Throughout 2023, we embarked on a series of strategic initiatives aimed at improving efficiency and automating manual processes. Last quarter, we talked about reconfiguring the factory workflow with a claims-based client, which yielded increased savings pulling fewer resources. This quarter, I’d like to touch on an initiative within our eligibility business.

The service offering requires that we connect with other payers to include medical, pharmacy, dental, and property and casualty to orchestrate more accurate billings. Historically, this process was highly manual, with no transactional feedback loop and was most often completed via paper billings. We made the strategic decision to partner with a leading electronic data interchange organization to serve as the intermediary to aggregate billings on our behalf. Through this partnership, we have significantly reduced friction, accelerated data collection and notably reduced our use of human capital resources. Another key internal achievement from the past year was the reshaping of our overall approach to technology and workflow enhancements. Although some of our technology initiatives scheduled for 2023 were deferred to 2024, we dedicated the necessary time to develop a unified and comprehensive development strategy.

This strategy encompasses completing the overhaul of our implementation process and shoring up our audit workflows to integrate artificial intelligence or AI via natural language processing, all without losing sight of our central data strategy and related competitive advantages. Looking ahead with this comprehensive plan in place, we are optimistic about being able to operationalize these advanced technologies in 2024. We refer to this plan as project touring and projected completion timeline is 18 to 30 months. We are excited as these projects are positioned to fuel both scale and efficiency. These efforts also support our goal to achieve our long-term EBITDA target of 20% in a timely fashion, as revenues continue to demonstrate incremental growth.

Our diverse portfolio of products and clientele provides a strong foundation for performance to achieve steady organic revenue growth. Looking at 2024, we expect government to lead the way, while commercial continues to build upon its strong historical growth. The scaling of CMS RAC Region 2 and the HHS OIG contracts underscore this trajectory, as does our New York State RAC win pending resolution of the protest. While the government portfolio experienced some challenges in 2023, we are largely past those trials and expect to build off the 2023 trough. As a result, we are forecasting healthcare revenues to be in the range of $117 million to $122 million for 2024. While our business has the potential to exceed these growth targets, we remain grounded, focusing our efforts on strategic initiatives that will fortify our long-term market position, enhance our product offerings and allow us to aggressively pursue new opportunities.

We have learned that implementation timing can vary and we are therefore charting a course that is in the best interest of our stakeholders and equally important places Performant on a sustainable path for long-term success. In considering our outlook, it is important to address the recent change healthcare outage. While as of now, performance has not been directly impacted by this outage, we are mindful of the challenges faced by payers and providers navigating through claims and payment processing difficulties. The strain on our system, coupled with potential processing delays, could affect payers behavior and the timing of available claims for our review. Although the situation is fluid with information updating daily, we deem it necessary to bring attention to this issue.

Despite the challenges posed by the outage, we perceive any resulting disruptions as temporary. Reflecting on our achievements, we attribute our current position to how we collaborate with clients to address both short and long-term needs. Our commitment to such collaboration remains steadfast, providing support for the decisions our clients make to navigate through uncertainty. Collectively, we’ve accomplished more in 2023 than I could have imagined. Without our amazing team, we would not have been able to implement 41 commercial opportunities, build our most robust pipeline to date, undertake multiple projects to become more efficient and most importantly, deliver on our mission to reduce waste in the healthcare system and redirect those funds to improve health outcomes.

Our clients recognize Performant as a leader in the payment integrity space, knowing it is our people who live and breathe our client centric philosophy. I want to wholeheartedly thank our team and I remain confident in our strategy to grow through our unparalleled commitment to our clients as we strive to be the most innovative and adaptable partner in the healthcare payment integrity industry. With that, I’ll hand it over to Rohit Ramchandani, our Chief Financial Officer for discussions of the financials. Rohit?

Rohit Ramchandani: Thanks, Sim. Good afternoon, everyone. I’m pleased to reflect that 2023 marked another record year for our healthcare business. The results for both the fourth quarter and full year reflect the ambitious initiative we focused on over the past three years since declaring our commitment to become a pure-play healthcare company. In the fourth quarter of 2023, our successful efforts to perform under newly implemented opportunities and scale operations were evident. Total company revenues in the quarter were $32.6 million with healthcare revenue contributing $31.1 million, showing growth of about 20% over the same prior year period. Full year revenue ended at $113.7 million, including $106.4 million of healthcare revenues.

Our healthcare revenue set another Performant record for both quarterly and annual results. Turning to our customer care outsourced services business, it contributed $1.4 million in revenue during the quarter. While this marks a decline of $1.7 million from the previous year that aligned with our expectations for this business. We did observe a pickup in demand after federal student loan repayments officially restarted on September 1. We are taking a measured approach to rescale this business to meet demand knowing the volatility of this industry. Looking ahead to 2024, our expectation is for moderate growth and it is worth emphasizing again that this business operates with a minimal distraction to our healthcare growth initiatives and we focus on ensuring it generates a positive contribution to the bottom line.

While our focus remains on healthcare, this remains a nice capital light positive cash flow market. Shifting back to healthcare. Revenue from our eligibility services were $16.4 million for the quarter and $61.2 million for the full year, representing an increase of roughly 21% and 15%, respectively year-over-year. Commercial accounts performed well and continued to be a driving force behind our enterprise-wide growth. Our growth in eligibility stems from the success we’ve seen implementing commercial clients, including both net new as well as existing client upsells. Echoing Sim’s remarks, we have a best-in-class offering, which we’ve heard directly from clients and have seen when displacing incumbent vendors. It is important to note that while our long standing CMS MSP government contract has matured and volumes lagged a bit in 2023, this has been more than offset by the high growth seen in our commercial eligibility market.

Within our claims-based business, also known as claims auditing, revenues in the fourth quarter of 2023 reached $14.7 million, contributing to a full year total of $45.3 million, respectively resulting in growth rates of 18% and 9% year-over-year. In the fourth quarter government led the way demonstrating significant sequential growth. This recent trend is important to note as we spoke about Q3 being a trough for government. Due to the PHE, we were restricted from auditing certain claims and once the PHE ended, there was a timing lag for the new claims to regenerate and funnel through our workflows before we begin to see the results of revenue. An anticipated growth of available claim volumes coupled with a ramping RAC Region 2 and HHS OIG contracts position us well for resumed government growth in 2024.

In addition to the continued momentum in commercial limitations, we are encouraged by the tailwinds we have in this business and are committed to further scaling operations in support of these contract wins. Overall, we are pleased that our total revenue results fell squarely in line with our $111.75 million to $118 million revenue guidance and our healthcare revenues fell in line with its guidance of $105 million to $110 million. Our growth and diversification initiatives, particularly with commercial clients are proving successful and represent a significant opportunity over the long-term. Building on this commercial opportunity, we implemented 41 commercial offerings in 2023 or 20 more than the previous year. The estimated annual revenue contribution of these implementations at steady state is expected to be approximately $18 million.

For 2024, our current expectations are for additional implementations to have a similar, if not greater annual revenue contribution value as the implementations completed in 2023. As Sim mentioned, our implementation focus is centered around prioritizing value and speed. From quarter-to-quarter, we will have a variance in the number of implementations and their aggregate value. However, our commitment to a strategic and measured implementation approach allows for sustained success and client satisfaction. Shifting to operating expenses, they represented $30.7 million in the fourth quarter or $1.6 million higher compared to the fourth quarter of last year and roughly $120 million for the full year or $3.8 million higher compared to 2022. This was primarily driven by increasing headcount and salaries to support our continued growth between our government backbone and commercially building upon the record number of implementations in 2023, not to mention continued initiatives for technological advancement and margin improvement.

Turning to adjusted EBITDA. For the quarter, we had a positive $4.5 million or approximately $2.2 million ahead of the prior year. For the full year adjusted EBITDA, we landed within guidance at $3.4 million, representing $2.4 million of growth ahead of the prior year. 2023 marked a year of margin expansion as our standalone healthcare business begins to show operating leverage, though it clearly still shows the impacts from seasonality between the quarters that we’ve historically witnessed. Now looking at our financial guidance for 2024. We are positioned for another strong year of organic growth. As Sim mentioned, healthcare revenues are forecasted to be in the range of $117 million to $122 million and the overall revenue we expect to be in the range of $124 million to $129 million.

We are choosing to leave our forecast for the customer care revenues modest for the time being. As we think about the trending between the quarters for 2024, I want to remind folks that the third quarter of 2023 did include some pull forward in an eligibility project from our original Q4 2023 expectations. Beyond that, we expect our typical seasonality and expect approximately 20% of the full year revenue contribution to be in the first quarter with subsequent step ups as volumes ramp throughout the remainder of 2024. Looking at operating expenses, I would like to dive into a few discrete initiatives for the coming year. As Sim mentioned, we had some of our expected IT spend, both operational and capitalized delayed from 2023 into 2024. The comprehensive plan the team has put in place is an exciting step into our technology enabled scale and efficiency frontier.

I view project touring as one with conscious expansion and spending with the aim to then reduce our overall IT footprint once complete in support of our overall contract to revenue flow strategy for continued scale and efficiency. As such, we do anticipate hitting our CapEx spending goal of approximately $6 million in 2024 and would additionally expect an increase in related operating expenses. In addition to this IT spend, we are making a strategic investment into our sales, marketing and business development efforts to continue tackling our opportunity of expansion within existing clients and keeping our pipeline of new logos robust. We want to ensure that we fully capitalize on our opportunity to disrupt the current marketplace and stay ahead of the curve when it comes to the next iterations of the payment integrity industry, one that we hope to shape ourselves.

This increased IT spend, along with the investment in our sales and development efforts, should represent roughly $3 million to $3.5 million in increased operating spend year-over-year. We couple this with the tangible investments of approximately $1 million to $2 million to support the expected New York State Medicaid RAC contract, the continued work on the 41 other commercial [ph] implementations from the previous year, and the new implementations we have in our pipeline. It is only because of our strategic successes in prior years that we have reached our current adjusted EBITDA inflection point and are able to support making such investments without jeopardizing our cash flows. I am pleased to note that in a year when we are making several strategic investments to support growth and scale, we still forecast to show an expanded adjusted EBITDA with a growth rate of 19% to 48% and achieving $4 million to $5 million of adjusted EBITDA in 2024, inclusive of all aforementioned spend.

In thinking about the start of the year, we find it prudent to acknowledge that the combination of the more subdued revenue growth in the first quarter, the higher run rate of spend, and the investment initiatives we are undergoing will likely result in a negative year-over-year adjusted EBITDA trend for the first quarter. After that, we do anticipate stronger adjusted EBITDA in the remaining quarters of 2024, though may look more muted year-over-year by the fourth quarter as the technology and sales investments would become part of our run rate and we would anticipate being well underway in standing up the New York Medicaid RAC contract. This financial guidance aligns with our strategic commitment to invest in innovation and expansion laying the foundation for a more profitable and sustainable future growth trajectory.

Another strategic accomplishment in 2023 was the extinguishment of our existing debt facility and entering into a more friendly and flexible revolving credit facility with Wells Fargo. This revolver, amounted to $25 million, was initially drawn upon for $5 million to retire the remaining $12 million on the prior facility. Aligned with our sustainable growth strategy, this revolver provides the flexibility to draw upon it as we secure new opportunities, enabling us to confidently continue pursuing our growth strategies. In summary, 2023 was an exciting year for me to evolve my partnership with Sim and his leadership of this organization. Our financial growth, margin improvement and headline wins evidence symbiotic relationships needed between finance and operations to effectively run this business.

We have become more efficient through many initiatives to ultimately drive margins. I am pleased with where we have positioned ourselves and I am excited for what we have planned in the future. Operator, would you please open up the lines for questions?

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Q&A Session

Operator: Thank you. Ladies and gentlemen, at this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of George Sutton with Craig-Hallum. Please proceed with your question.

George Sutton: Thank you. Good afternoon, guys. So I wanted to put two things together that you said. Both seemed encouraging. I just wondered if you can give us more detail. Sim, you mentioned one of your most robust pipelines to date as we sit here today, I wondered if you could go into more detail on that. And Rohit mentioned that you had 41 opportunities implemented in 2023 at about an 18 million steady state. He mentioned that it could be similar, if not greater, in 2024. Again, I want to make sure I understand exactly what you’re saying on that statistic.

Simeon Kohl: Yes. Hi, George. Yes, good call out. I think both – in both pipelines we watch very closely and have good line of sight. I think on the sales pipeline, right, we continue to see a healthy pipeline of opportunities from both existing accounts and as Rohit pointed out, as well as new logos. And equally important is we have a real nice balance of demand for both our claims and eligibility based offerings. And so as I’ve shared previously, our sales team has just done a great job focusing on new logos, mid markets, especially while our account management folks continue to look for opportunities for cross-selling our expanded portfolio of offerings in our existing accounts. Rohit, you want to tackle the expansion on the implementations?

Rohit Ramchandani: Yes, absolutely. So, yes, on the implementation, George, as you mentioned, $18 million for 2023. As we look to 2024, what I meant was I would anticipate our ACV or annual contract value of the implementation, sorry, to happen in 2024 to be equivalent to $18 million if not greater.

George Sutton: Got you. Perfect. One other thing, I’m just curious what you expect the impact of the increased utilization all the carriers are talking about. It’s obviously impacted all of their businesses in the last quarter or so. Can you walk through when that starts to show up in your opportunity set and should we get a surprise quarter, for example, in two or three quarters? That’s kind of what I’m wondering.

Simeon Kohl: Yes, it’s hard to crystal ball that, right. We are seeing and hearing the same things. We see a little bit more and hear more coming from our MA plans, our Medicare Advantage plan. So at this point it’s not remarkable in terms of any correlation with the claims uptick. So it is hard to predict that timing. I can tell you that with the utilization and where MLR stands in many of these plans, and we’ve seen it called out in earnings announcements, it is, I think, a positive for Performant and the business that we’re in as our payer clients certainly are very mindful and continue to look at ways in which they can contain costs. And so that definitely is a tailwind for us. But George, trying to predict timing of that and when we may see some of that, that’s really difficult at this point.

George Sutton: Okay. Thanks, guys.

Operator: Our next question comes from the line of Jacob Stephan with Lake Street Capital Markets. Please proceed with your question.

Jacob Stephan: Hey, guys. Thanks for taking my questions and congrats on the quarter. Just one thing I wanted to clarify. It sounds like government dropped in kind of Q3, but and it’s picking back up here nicely. Is that more a function of kind of the RAC Region 2 revenue coming into play, or is that really just an overall kind of resurgence in claims volumes?

Rohit Ramchandani: Hey Jacob, it’s a good question. You’ve got a combination of both. But I would say for the existing business, we’re seeing the start of it pointing back in the right direction. And so we do anticipate some of that picking back up into the next year. And then a good piece of it will be the growth of RAC Region 2, as well as our HHS OIG contract.

Jacob Stephan: Okay. And maybe just one more. The [indiscernible] $3.5 million of increased OpEx in 2024 here. How can we think about the overall kind of margin expansion opportunity that comes from the increased investment?

Rohit Ramchandani: Yes. So I think there’s two pieces in there. So from a sales and margin [ph] perspective, I think that’s the way you get at the margin expansion would have to do with just increasing the revenues and the fact that a good chunk of our adjusted EBITDA expectations in the coming years come from the addition of revenues and scale. And then from an IT perspective, I think you’re looking at a couple of modules within that overall project. But the simplified way I think about it is one chunk of it continuing to speed up the time from contract to revenue. And the other side really looking at workflow efficiencies, newer technologies, furthering some of the work on the artificial intelligence pilots I mentioned in the previous year, which should drive the higher kind of operating gross margin, if you will, as those revenues come in.

Jacob Stephan: Got it. And maybe just one last one, kind of piggybacking off of George’s question in your comments. Seven implementations in Q4, I think on a year-over-year basis that’s down. What can you kind of tell us about just the overall size of the deals in your pipeline? It sounds like they’re trending up decently, but maybe if you could help us understand by how much that would be helpful?

Rohit Ramchandani: Yes, of course. And I would say I would not read too much into trends when it comes to the average sizes there. You can do the math. I mean, I think overall, we’re still running about $400,000 to $500,000 for the year, but I think it still holds true what we’ve shared previously, that we can have an implementation in the low six figures, $100,000, and you can have one that’s a couple of million, and you still see kind of a random assortment of those, just depending on the timing of when deals come up. And so for that reason, I think we’re focusing a little more on the true total ACV that we add in a given year, which like or sort of our projections for the current year matching or being the $18 million rather than focusing on just the quantity of implementations.

Jacob Stephan: Okay, understood. Best of luck going forward here, guys. Take care.

Simeon Kohl: Thanks, Jacob.

Operator: There are no further questions in the queue. I’d like to hand it back to Simeon Kohl for closing remarks.

Simeon Kohl: Thank you, operator. In closing, look, 2023 was a strong year for Performant both in terms of growth and our strategic accomplishments, and we’re equally enthusiastic about 2024. We remain focused on driving growth alongside our continued efforts to scale the business and achieve greater operating efficiency. And I really want to express my gratitude to the more than 1,000 Performant team members for all their hard work, dedication and absolute unmatched commitment to serving our clients. I also want to say thanks to our shareholders as your trust and continued support has been instrumental in enabling us to execute against our strategy and continue to maintain our focus on long-term success. So thank you all for joining us today, and we look forward to chatting with you again on next quarter’s call.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.