Proto Labs, Inc. (NYSE:PRLB) Q4 2024 Earnings Call Transcript

Proto Labs, Inc. (NYSE:PRLB) Q4 2024 Earnings Call Transcript February 7, 2025

Proto Labs, Inc. misses on earnings expectations. Reported EPS is $-0.01651 EPS, expectations were $0.32.

Operator: Greetings and welcome to the Proto Labs Fourth Quarter and Fiscal Year 2024 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. I would now like to turn the conference over to your host, Mr. Jason Frankman, Vice President and Corporate Controller for Proto Labs. Please go ahead, sir.

Jason Frankman: Thank you, Melissa. Good morning, everyone, and welcome to Proto Labs fourth quarter and full-year 2024 earnings conference call. I’m joined today by Rob Bodor, President and Chief Executive Officer; and Dan Schumacher, Chief Financial Officer. This morning, Proto Labs issued a press release announcing its financial results for the fourth quarter and full-year ended December 31, 2024. The release is available on the company’s website. In addition, a prepared slide presentation is available online at the web address provided in our press release. Our discussion today will include statements relating to future performance and expectations that are or may be considered forward-looking statements and subject to many risks and uncertainties that could cause actual results to differ materially from expectations.

Please refer to our earnings press release and recent SEC filings, including our annual report on Form 10-K for information on certain risks that could cause actual outcomes to differ materially and adversely from any forward-looking statements made today. The results and guidance we will discuss include non-GAAP financial measures consistent with our past practice. Please refer to our press release and the accompanying slide presentation at the investor relations section of our company website for a complete reconciliation of GAAP and non-GAAP results. Now I’ll turn the call over to Rob Bodor. Rob?

Rob Bodor: Thanks, Jason. Good morning, everyone, and thank you for joining our fourth quarter and full-year 2024 earnings call. We closed out the year on a strong note with fourth quarter financial results above our expectations. As we continued to generate strong earnings and cash flows, while returning capital to shareholders. In 2024, we expanded our consolidated gross margin, increased earnings per share, and generated $78 million of cash from operations. Furthermore, we demonstrated the success of our model in several ways last year. Customers using the combined offer grew 50%, revenue per customer expanded, and revenue from production use cases outgrew prototyping. 2024 was a year of transformation of Proto Labs. At the beginning of the year, we explained our strategy of expanding beyond prototyping into production.

Then in the middle of the year, we announced the reorganization of the business in order to elevate and empower our go-to-market teams to serve the customer better. As part of the reorganization, we also formed a new global operations org to optimize our manufacturing footprint and ensure our full global capabilities are available to customers in any region. Our progress across the key indicators I just shared demonstrates that transformation is working as customers adopt more and more of our production offerings. That said, revenue growth in recent years has not met my expectations. We have the right offer and are organized to deliver at scale. To drive revenue growth in 2025 and beyond, we are making the following investments. First, we are investing significantly in marketing to build our brand as a production manufacturer.

We have an unmatched set of capabilities that solve critical customer needs across the life cycle of their products, and we want to make sure that message is heard. This work includes a new campaign that began in January and creates awareness of Proto Labs expanded offering and capability. Since our founding in 1999 as Proto Mold, and up until recently as Proto Labs, the name of our company has been synonymous with prototyping. And we are continuing to shift that narrative. I would encourage you all to check out manufacture like a pro series of videos and other marketing collateral. There is a preview on slide six of our earnings deck. It’s really great work by our teams. We will bring this new messaging to market through additional channels focused on production buyers.

Second, consistent with our go-to-market reorganization, we are allocating additional resources to improve our sales enablement tools and process. This will drive growth by enabling our teams to better understand the strategic production needs of our customers and make it easier for customers to interact with Proto Labs in this context. Third, we are funding several organizational initiatives to continue to improve and expand our production capabilities. Our production offer has expanded dramatically in recent years. I’ve been quite pleased with our improvements, and we’re leaning in even further. These initiatives include a more streamlined production quoting process, additional inspection reports, industry certifications, refined manufacturing processes, additional robotics, and other proprietary automation in our factories.

We will continue to invest to expand our production capabilities to better serve our customers’ production needs and to drive growth. These three areas of investment are strong levers to grow the business. We delivered solid results in 2024, a year of evolution for the company. Across the organization, we have been focused on redeploying our resources to grow revenue and expand margins in both factory and network. As discussed last year, we have refocused our regional go-to-market teams to ensure the best possible customer experience from prototype to production. Our teams provide collaborative support for customers across sales, marketing, application engineering, production experts, customer success, and others. This team-based selling approach ensures better targeting, customer penetration, deeper understanding of our customers’ needs, faster responses, and better solutions from prototyping through production.

To support these efforts, we’ve established a new revenue operations team led by Greg Forsberg who joined the company in January. As a member of the executive leadership team, Greg will oversee the systems and process improvements to ensure we serve our customers efficiently and effectively across these use cases. Meanwhile, the newly formed Global Operations Organization has the responsibility to fulfill customer orders in the most efficient manner by a factory or network. They bring our complete global capabilities to every customer in each region. In October, we announced the closure of a manufacturing facility in Germany, an example of how the Global Operations Org has already begun optimizing our global footprint, while serving customer needs.

A realigned structure went into full effect as we entered 2025 with proper goals and objectives established for our annual planning. We are set up to benefit from the first full-year under this new operating structure. Throughout 2024, we continued our journey to serve more production use cases. In a press release in January, we highlighted the expansion of our full-service production manufacturing capabilities. Proto Labs offers end-to-end manufacturing services to help serve customers at every stage of their product life cycles. Our production offering includes improved pricing options for larger part orders, enhanced documented quality control, and focused industry certifications that are critical in production. As a manufacturer ourselves with over 25-years of experience producing parts across a multitude of manufacturing processes and techniques, our deep manufacturing expertise is a differentiator for Proto Labs in our industry and is key to the value we provide our customers.

And we continue to offer the world’s best low volume quick turn prototyping capability. The combination of these two offerings enables Proto Labs to serve the customer across the lifecycle of their products. In fact, we are truly the only one-stop shop in our industry, and our sales and marketing teams are actively driving awareness of our expanded capabilities. We are a great partner throughout the product lifecycle, providing immense value to customers that are focused on simplifying and consolidating supply chains, while maintaining resilience and agility. As part of our broader production offer, the entire customer experience at Proto Labs is evolving. In addition to immediate online access to instant quoting, customers have the option to connect directly with a team of production experts for complete program management on projects.

We are focused on low-to-mid volume production in our top five industry verticals, predominantly complex and regulated industries. Proto Labs is uniquely positioned to serve these production use cases. We serve over 50,000 customers annually, who are used to relying on us for their prototyping and product innovation. We already have strong relationships with these customers with Proto Labs already qualified as a vendor, it’s advantageous for them to advance into production with us. In addition, the production work we are winning carries a higher margin than the low value, high quantity commodity manufacturing. So Proto Labs is truly a single end-to-end manufacturing resource for companies around the world in any macroeconomic environment. In recent years, global supply chain shocks have been a catalyst for our customers to build efficiency and resiliency into their supply chains, and Proto Labs has been there and has evolved along with them.

With respect to the current global trade policy developments, I’d remind you that we have a proven track record of being a valuable partner to customers during global supply chain disruptions. This period of potential disruption may provide an opportunity for Proto Labs as customers look to source parts differently. We have capacity and can deliver reliably across many use cases and through our global manufacturing footprint. In summary, we delivered solid fourth quarter and -year 2024 results, while transforming the company for future growth. I’ve highlighted the transformation and investments made during 2024 and early 2025 to reorganize our structure and better position the company for growth and value creation over the long-term. We will continue to drive growth in our key metrics, customers using the combined offer and revenue per customer.

Those are metrics that I evaluate as we continue to serve more customer use cases across product life cycles. To that end, our priority in 2025 is to grow revenue. And here’s how we plan to do so. 2025 is the first full-year under our new organizational structure, and we’re leaning in. We’ve transformed the business to accelerate growth and improve efficiency. As I’ve said, I believe we can grow much faster in our internal realignment, better positions, and business for future success. Second, we will serve more production use cases. I’ve spoken at length about our expanded production capabilities and the investments they’re in. Production is outgrowing prototyping, and we are investing accordingly in go-to-market and fulfillment. We are committed to forging deeper partnerships with our customers, ensuring full production support, and capturing more of this massive production market.

Third, we will also reinforce the core by investing in prototyping. Proto Labs offers the best prototype service in the world, and we will continue to expand our advantage. We’re expanding our high requirement injection molding and CNC machining capabilities at our fastest lead times, adding additional 3D printing materials and technologies, and further accelerating our already industry leading speeds. What makes Proto Labs unique is the combination of factory and network, which enables us to serve use cases across our customers’ product life cycles from prototyping through production to end of life. Finally, I want to say thank you to all our employees at Proto Labs for their commitment and hard work. We have a lot to be excited about in 2025.

And I’m grateful for their tireless efforts to advance our mission and expertly serve our customers. We are dedicated to continue to inspire and engage our employees to foster a great working environment and drive the business forward. In 2025, we are committed to driving revenue growth and increasing value for shareholders. Thank you. Now I’ll hand it over to Dan to cover the financials. Dan?

Dan Schumacher: Thanks Rob and good morning. I’ll start with a brief overview of our fourth quarter results then touch on a few full-year financial highlights and finally provide our outlook for the first quarter of 2025. One quick note on the financials. Our fourth quarter GAAP results include $5.6 million of costs related to the closure of an injection molding facility and discontinuation of select 3D printing operations in Germany. We have discussed these portfolio reshaping decisions as the Global Operations Organization works to streamline our fulfillment portfolio. These expenses are employee related and asset write-down costs and are excluded from our non-GAAP financials for more accurate comparisons. Please see our SEC filing dated October 25, 2024 for more information.

Financial results begin on page nine of the slide presentation. Fourth quarter revenue payment at $121.8 million within our guidance range and down 3.1% year-over-year in constant currencies. Revenue fulfilled through Proto Labs network was $26.5 million, up 17.7% in constant currencies. Fourth quarter consolidated non-GAAP gross margin decreased 280 basis points sequentially to 43.4%, mainly due to the sequential decline in value. Non-GAAP operating expenses declined $800,000, compared to the third quarter of 2024, driven by lower utility costs, lower discretionary costs, and a non-recurring third quarter expense related to the departure of our European general manager. Non-GAAP earnings per share were $0.38 in the fourth quarter, down $0.09 sequentially due to lower volume and a lower gross margin.

EPS came in above our guidance range, primarily because of a lower effective tax rate than anticipated, driven by favorable resolution to outstanding tax positions. Now for our full-year financial results. We generated $500.9 million of revenue, down 1% from 2023 in constant currencies. Proto Labs network was $100.4 million, up 21.3% year-over-year. We served 52,000 customer contacts in 2024, and revenue per customer grew 3% year-over-year. Despite lower revenue, consolidated non-GAAP gross margin increased 50 basis points to 45.2%, driven by improvements in both factory and network fulfillment. Factory gross margin increased 90 basis points year-over-year to 48.3% and network gross margin increased 230 basis points to 32.9%. I want to pause here and highlight this accomplishment.

In our business model, volume is a big driver of gross margin, so higher margins on lower revenue is a testament to both operational execution by our teams and a resilient business model. No other company in the digital manufacturing services space can match the margin profile of our combined factory and network offerings, and we will continue to drive improvements in both the factory and the network. Turning to operating expenses. For the full-year, non-GAAP operating expenses increased by $5.4 million over 2023. This increase was driven by higher employee costs, including severance and additional license spend, partly offset by lower incentive compensation and utility spend. As Rob mentioned earlier, 2024 non-GAAP EPS of $1.63 grew 3% year-over-year.

Proto Labs continues to lead the digital manufacturing industry in terms of cash generation. We generated $77.8 million in cash from operations in 2024, up from $73.3 million in 2023. And we returned $60.3 million to shareholders in the form of repurchases, or 88% of free cash flow. On February 4, our Board approved a new $100 million share repurchase program. We will continue to repurchase shares opportunistically, and our capital allocation strategy remains unchanged. On December 31, 2024, we had $120.9 million of cash and investments on our balance sheet and zero debt. Our outlook for the first quarter of 2025 is outlined on slide 17. We expect revenue between $120 million and $128 million. This guidance incorporates order and revenue trends to-date.

We typically see a slight seasonal uptick from the fourth quarter to the first quarter. We expect foreign currency to have an $800,000 unfavorable impact on revenue, compared to the first quarter of 2024. Moving to earnings guidance. We anticipate non-GAAP add-backs in the first quarter to include stock-based compensation expense of approximately $4.3 million, and amortization expense of $900,000. We currently estimate a non-GAAP effective tax rate between 26.5% and 27.5% in the first quarter. As in every first quarter, our operating expenses will increase sequentially due to timing on items such as refunding the bonus, vacation, and payroll taxes. In addition, as Rob described, we are leaning in and continuing to invest for growth. Those investments, including the new marketing campaign and sales enablement tools, will cause an additional step up in our operating expenses.

In summary, we expect first quarter non-GAAP earnings per share between $0.26 and $0.34 cents. That concludes our prepared remarks. Operator, you can open up the call for questions.

Q&A Session

Operator: Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Brian Drab with William Blair. Please proceed with your question.

Brian Drab: Hi, good morning. Thanks for taking my questions. A lot going on here this morning. So I’ll start with the marketing and sales, enablement tools and the spending there. I don’t know, Dan, if you could quantify any further, how we should think about the model in 2025 in terms of incremental dollars spent or percentage of sales for those line items?

Dan Schumacher: Yes, I think simply we expect to have higher operating expense in the first quarter. I think that increase quarter-over-quarter is going to be a little bit over $1 million. That will cause our — this is a non-GAAP — our non-GAAP operating expenses to be up a little over, you know, about $2.5 million quarter-over-quarter. We’re investing in on the growth and we’ll continue to invest as we go through the year. You know, we’re going to be watching that closely to see the traction that we get from that, the return we get from that in higher revenue because we would expect the revenue to increase as we’re doing that. And we will end up adjusting that spending as we move forward, really to get that revenue growth.

Brian Drab: Okay. Just to clarify, did you say non-GAAP OpEx up how much? I wrote down $2.5 million quarter-over-quarter.

Rob Bodor: $2.5 million quarter-over-quarter.

Dan Schumacher: Q4 to Q1, $2.5 million.

Brian Drab: Yes. Okay, yes, that’s helpful. Thanks. And then could you guys talk a little bit about your mix today of production versus prototyping? I don’t think you talk about a specific breakdown, but give us any sense for what percentage of revenue is production today and how that — you said it’s outgrowing prototyping? How has that been growing and how are the margins lately in production versus prototyping? And one of the concerns always is that production is maybe going to have lower margin ultimately?

Rob Bodor: Yes, sure, Brian. Thank you for the question. So the way to think about our business, just as you say, right, is in terms of the use cases that we serve for our customers, and those fall broadly into the categories of prototyping and production. Prototyping is about two-thirds of our revenues today and production is the remaining one-third. And the production business is growing quite well and we’re quite pleased with it. The margin profiles I think are also healthy. We’ve talked about mix in terms of where it gets fulfilled in the past, I don’t see that as changed. That would continue kind of the same way to think about it. I am really, really confident and encouraged by what we’re seeing in terms of the growth in our production business.

I shared some of those key metrics, right? 50% growth in customers, adopting our comprehensive offering. We’re growing revenue per customer, hearing really good engagement from customers on our new team, go-to-market motion and adoption of these offerings, which has been great. And that’s really why we’re leaning in on it, right? We went through a major pivot and reorganization last year. We’re structured behind it. We’ve got broader capabilities and global operations teams delivering this to all customers. We’re investing in branding to really shout it from the rooftops. And I’m very encouraged by the adoption that we’re seeing. And I’m quite certain this is going to drive our growth in 2025 and beyond.

Brian Drab: Great, okay, thanks. And then can I just ask one more question on the injection molding business, which I’ve always thought and I think our studies have confirmed that you have had a very special offering there in terms of speed and just overall capability? But it’s down, sequentially down year-over-year. Is that a function at all of the German plant that you shot? And just what’s the outlook for injection molding, do you think, here in ‘25?

Rob Bodor: Yes, thanks for the question. No, it’s not a function of the change in kind of our operational configuration and exiting of that German plant, that was a small plant. Again, I’ll take this back to how you think about the business with prototyping and production, right? We’re seeing nice growth in production. I would say that in ‘24, we did not expect as we started that year the manufacturing contraction to continue throughout all of 2024 as it did, and particularly the headwinds from that. Now as we talked about before, prototyping has more sensitivity to the macro and particularly to the manufacturing contraction, right? In those slower economies, customers are more price sensitive. They launch fewer new products and they’re less in a hurry.

And that’s what we see affected our injection molding business. It was really on the prototyping side last year. And so that informed us that we’re really driving production this year and I’m very pleased with how that’s going. We’re seeing traction in that across the board and I’m confident that’s going to drive our growth this year.

Brian Drab: Okay, thanks very much. I’ll follow-up more later.

Operator: Thank you. Our next question comes from the line of Troy Jensen with Cantor Fitzgerald. Please proceed with your question.

Troy Jensen: Hey gentlemen, good morning. Congrats on the nice results.

Dan Schumacher: Thanks Troy.

Troy Jensen: Hey Dan, maybe for you, just on the gross margins, you know, I get them being bounced essentially up to lower revenues. If you look at Q1 through Q3 of last year, if you guys are north of $125 million in revenues, you guys have been north of 45% gross margins. Would you expect the same here in ‘25 or is the mix of more network business going to weigh on your ability to kind of get above that level?

Dan Schumacher: Yes, I mean, I think mix is going to play a factor, right, depending on how that comes through as we look at it quarter-to-quarter. One of the things that we’re seeing that is driving that margin improvement is really automation in our factory. So as we get more of this production volume that Rob’s talking about, we have more automation, which allows us to have better margins. We’re also leaning in to continue to innovate what we do, both from production offerings within the factory and just the speed and efficiency that our plants work with. On top of that, we are continuing to focus on and improve that AI enabled pricing algorithm that we have through the network as well. So we’re continuing to focus to improve on those margins.

We’re making investments as we see higher volume that goes through the year. Our focus will be on improving both those margins independently. But as I said, depending on the mix, that could have some headwind as we move forward, but we’re going to be focused on improving both the margins.

Troy Jensen: All right, perfect. And then maybe for Rob here, I know you talked about the network business or customers using it has grown 50%, but can you tell us what percentage of the 50,000 plus customers are using both services? I’m just curious how much opportunity there is if any continue to cross sell into the installed base?

Rob Bodor: Yes, so it’s still small. We’re just a little over 5% at this point. So still see tremendous opportunity to continue to drive that. I think we’ve just scratched the surface. I’m really excited about how that’s going to help us drive growth.

Troy Jensen: Okay. And one last one for Dan, I think he said 27% taxes in Q1. I think previously we were told kind of like a 24%. Is that 27% going to be through the year or is that just a Q1 number?

Dan Schumacher: That’s through the year. You know, we’ve got favorable tax rates in Q1 of last year. We had a favorable IRS judgment in the first quarter, which caused their tax rates to be lower in the first quarter. And then again, we had favorable resolutions of some uncertain items in the fourth quarter as well, which allowed that, that tax rate to be lower than what we would expect. So I would assume the tax rate for the first quarter would continue through the year.

Troy Jensen: Okay. Okay. So keep with the good work.

Rob Bodor: Thank you.

Operator: Thank you. Our next question comes from the line of James Ricchiuti with Needham & Company. Please proceed with your question.

James Ricchiuti: Hi, thank you. Good morning. Hey Rob, you suggested that you’re seeing some traction in some of the production initiatives. I wonder if you could talk about, and I know it’s early, some of this early progress. Are these — do these tend to be more established customers of Proto Labs? I wonder if you could talk to the type of customer and/or the vertical where you’re seeing this? And maybe how you see some of these initiatives playing out over the course of the year?

Rob Bodor: Yes, certainly Jim, thank you for the question. Yes, so we’re absolutely seeing it both in terms of newer customers and existing and established customers. And I think you’ve heard that in the use case examples that we’ve shared over time on the earnings calls and so forth. But what I would say is we served over 50,000 customers last year, right? These are customers that we have longstanding, many of them longstanding relationships with. And they are used to relying on us for their prototyping. So we are really taking our message to them about our capabilities and how we’ve expanded. And we’re communicating that to them through branding campaign that we talked about through our new team-based sales model where we’re bringing a team of experts to them in a much more of an enterprise sales capacity to serve their production needs, and we’re engaging with them.

Our whole production strategy is based around the customer, right? And what we’ve heard from customers and what they’ve been asking us to be able to do, so that we can naturally flow from serving them in the early stages of prototyping into their production use cases. And so I’m very encouraged by their response that we’ve seen so far. A few weeks ago we had our kickoff in the Americas, our sales kickoff. And we had a customer who addressed us there, right? Who presented to us from a major medical device company, who talked about all the ways that we help them accelerate their innovation and bring products to market faster. So I’m convinced we’re on the right strategy. And I’m really encouraged by what I’m seeing from customers in this.

James Ricchiuti: And you also mentioned, I think, that you intend to have the company grow in any kind of macro environment. Just on that topic, what are you seeing here from some of the major verticals that you sell into thus far in the year?

Rob Bodor: Yes, last year we saw a lot of strength in aerospace and defense, that’s one that I would definitely highlight and that has certainly continued as we start the year. So I think that has been very strong and overall I’m feeling good about what we’re seeing with our customers in the space.

James Ricchiuti: Are you seeing a better tone to the demand than you saw entering last year or exiting Q3? I’m just trying to get a sense as to the overall macro environment. And then we’re going to be able to gauge, I think, going forward how some of these initiatives are playing out?

Rob Bodor: Yes, I think, you know, as of speaking to the guide, you know, I think we had a more normal start to the year, but that trending rate has been below last year, which is indicative that the middle of the guide is about down 3% year-over-year. So I think we’ve had a prolonged period here, manufacturing contraction within the U.S. as indicated by the PMI. Now January had a slight uptick, but we’re going to need to see a longer period of time or many more data points to kind of see us moving into a different type of economy. I would also say there’s just, there’s a lot of uncertainty, right to begin the year as things change or there’s legislation that changes that may impact people’s supply chains.

James Ricchiuti: Fair enough. Right, thank you.

Rob Bodor: Thanks, Jim.

Operator: Thank you. Our next question comes from the line of Greg Palm with Craig-Hallum Capital Group. Please proceed with your question.

Greg Palm: Yes, thanks. Good morning, everybody. I wanted to — I might have missed it, but did you give the network gross margin in the quarter, and just digging into that a little bit, revenue down, I don’t know, 3% sequentially, but gross profit down almost 10%. So I didn’t really figure your decremental’s was being that bad. So was there anything else driving gross margin down maybe a little bit more than normal sequentially seasonality-wise?

Dan Schumacher: Yes, so the network gross margin in a quarter was around 32%. If you take a look at the revenue number, Greg, it’s $121 million. In that number, the network grew. The network was up a bit sequentially as well, which means that the factory in the fourth quarter had lower volume, which is really what drove down that gross margin quarter-over-quarter and year-over-year.

Greg Palm: Okay. And just digging into kind of the 2025, on growth specifically, Rob, you talked about growing for the year, the guidance for Q1 still assumes a year-over-your revenue decline. So what’s, I guess, what’s giving you confidence that, you know, it’s just easy comparisons in the back half, but what gives you confidence that at some point, and I don’t know if you can give a little bit more color or clarity on when you might return to year-over-year growth, whether that’s Q2 or the second-half?

Rob Bodor: Yes, I think what’s given me confidence is that we’re seeing the traction in the production business, right? And we’re seeing healthy growth there. We’re seeing great adoption of our combined offerings. And just what I’m hearing from customers as I think about that. Now yes, as we start the year things are a little slower, but we do expect in the full-year that we will see a nice return to growth.

Dan Schumacher: Yes, Greg, I would see it to the second-half of the year. And another thing just to piggyback on Rob’s comments, we reorganize for growth. And so as those teams are coming together, as we’re making these additional investments, we feel like we’re positioning ourselves in the right ways to grow and specifically to grow in production.

Greg Palm: And does — I’m curious, does the revenue growth come at the expense of margins or earnings given this elevated level of investments? Or do you think you can also grow earnings in lockstep with revenue as well?

Dan Schumacher: Yes, so we are investing on this for the long-term, right? So the way we see it, we’re investing to give a return to shareholders as we go and do that, that comes through the top line growth. And that’s where the focus is. If we meaningfully grow that topline, then over time we should see a pickup in earnings for sure.

Rob Bodor: We’re investing now to grow revenue. Revenue growth drives earnings growth.

Greg Palm: Yes, understood. Okay, I’ll leave it there. Thanks.

Dan Schumacher: Yes.

Rob Bodor: Thanks, Greg.

Operator: Thank you. Ladies and gentlemen, this concludes our Q&A session and thus concludes our call today. We thank you for your interest and participation. You may now disconnect your lines.