Cerence Inc. (CRNC) Earnings Call Transcript & Summary

Thank you. Thank you. Good day, and thank you for standing by. Welcome to the Sarence Third Quarter 2026 Earnings Conference Call. At this time, all participants are in a listening mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kate Hickman, Vice President, Corporate Communications and Investment Relations. Please go ahead.

Hello everyone and welcome to SARINS' third quarter 2026 conference call. Before we begin, I would like to remind you that this call may involve certain forward-looking statements. statements that are not statements of historical fact, including statements related to our expectations, anticipation, intentions, estimates, assumptions, beliefs, outlook, strategies, goals, priorities, objectives, targets, and plans are forward-looking statements. CERNS makes no representations to update those statements after today. These statements are subject to risks and uncertainties, which may cause actual results to differ materially from such statements and expectations, as described in our SEC filings, including the Form 8K with the press release preceding today's call, our most recent Form 10Q, and our Form 10K filed on November 20, 2021. In addition, the company may refer to certain non-GAAP measures, key performance indicators, and pro forma financial information during this call. Please refer to today's press release for further details of the definitions, limitations, and uses of those measures and reconciliations of non-GAAP measures to the closest GAAP equivalent. is available in the investor section of our website. Joining me on today's call are Brian Kruzanich, CEO and Tony Rodriguez, CFO. Please note that slides with further context are available in the investor section of our website. Before handing the call over to Brian, I would like to mention that we will be participating in the Raymond James 2026 Industrial Showcase on August 13th and the Needham Virtual Semiconductor and Semicap Conference on August 19th. Now on to the call.

Thank you, Kate, and good afternoon, everyone. Now, before we dig in, I'd like to briefly reflect on Sarance's progress as I approach my two-year anniversary as CEO in October. And when I stepped into the role, we established a clear roadmap. first year was about strengthening the foundation of the business, improving our financial profile, restoring profitability, generating cash flow. and reducing debt. I believe we delivered on those commitments. Now, we said the second year would be about execution as we approach the end of fiscal year 26. I believe we have delivered there as well. We advanced our technology roadmap by bringing XUI from concept to production. We improved free cash flow, and we are continuing to create value for customers and shareholders. Most importantly, we're now beginning to see the early stages of our next chapter. XUI is entering into commercialization phase. Our Jetix AI portfolio is gaining traction. And our non-automotive initiatives are beginning to move from proof points toward revenue contribution. We believe that our fiscal third quarter results demonstrate a company executing against its strategy, delivering strong financial performance. and positioning itself for future growth. In Q3, we delivered another strong quarter, with revenue of approximately $70 million, in line with our guidance. adjusted EBITDA above the high end of our guidance at $13.5 million, and free cash flow of $20 million. Importantly, we continue to grow our recurring connected services business with revenue up more than 20% year over year. This growth further increases the recurring portion of our revenue mix, enhancing visibility into the future performance. and demonstrates the value of the connected platform we've built across our installed base. Looking ahead to the rest of the fiscal year, we're again raising our fiscal year 26 free cash flow guidance. to $76 million to $82 million, and narrowing most of our remaining forecasts as we approach the end of fiscal year 26. Given the continued cash generating strength of our business, I'd like to give an update on our capital allocation strategy. As mentioned in the past, we have several core capital allocation priorities. all focused on delivering returns to our shareholders. Investing organically to support growth, reducing debt, managing equity dilution, and selectively pursuing inorganic opportunities that can enhance our long-term growth and strategic position. And we evaluate these priorities based on the opportunities available to us, the strength of our balance sheet, and where we believe capital can generate attractive, rich, and adjusted return for shareholders. With that, I'm pleased to share that our Board has authorized CERNS' first ever share repurchase program. This reflects our confidence in the business, the progress we've made in improving profitability and cash generation, and our commitment to discipline capital allocation. As we look ahead, we remain focused on creating long-term shareholder value through execution, strategic investment, and prudent capital allocation. The Stock Repurchase Program adds another tool to that approach while preserving our flexibility to continue investing in growth and reducing debt while also helping to offset dilution. and Tony will provide further details on the program. Now, turning to updates and highlights from the quarter, continue to see strong investment in next-generation AI-powered user experiences. automakers increasingly view AI not as a discretionary investment, but at a strategic priority that reinforces the competitive position. As vehicles become more software defined, automakers are seeing differentiated user experiences that reinforce their brand, improve customer satisfaction, and create opportunities for recurring revenue. That's where we believe CERNS AI continues to be uniquely positioned and why we continue to win. We combine decades of automotive expertise with leading AI capabilities, enabling OEMs to bring powerful conversational experiences to market while reducing complexity, cost, and execution risk. As a result, despite the dynamic industry that OEMs are navigating, engagement remains strong. Our pipeline continues to develop and interest in our next generation platform is growing. Xerence XUI, which is now available in nearly 20 languages, remains the center of our automotive strategy. In Q3, we signed a new XUI deal with Stellantis, who expects to deploy our platform across multiple brands and regions initial production having recently started. And throughout the quarter, we continued to advance our XUI programs with JLR, a VW Group brand, BYD, Geely, and a major Japanese automaker. Several of these programs have started production or are expected to start production in fiscal Q4. Today, we have approximately 100,000 XUI-powered cars on the road, an important milestone in bringing this technology to market and consistent with what we've said in the past, that XUI will begin its ramp at the end of 26 and impact revenue during fiscal year. year 27 and beyond as additional programs enter production and vehicle volume scale. And we continue to expect XUI deployments to support higher average price per unit, reflecting its broader functionality, increased software content, and expanding agented capabilities. A testament to the value we're bringing to our customers, Cirence AI was recognized at JLR's Global Supplier Excellence Awards in June. ELR honored us with their exceptional creator recognition, a special category they introduced specifically to highlight truly outstanding partners. In their nomination, the JLR team highlighted how we fast tracked our partnership into a true AI era collaboration. They specifically called out Sarence's flexibility as a key enabler in their ability to adopt a new AI capabilities faster and innovate with confidence. That expectation, paired with our disciplined delivery and sharp road map alignment, is now their blueprint for future-facing technology. We believe this recognition validates not only our technology, but also our ability to serve as a trusted strategic partner as OEMs transition to next-generation AI platforms. During the quarter, we also advanced our Jet-Tec AI roadmap across parking, dining, and other task-oriented experiences. Our goal is to evolve the in-vehicle assistant from a system that primarily responds to requests into an agentic experience that can take action and help users complete tasks in context. Of note, we reached an important milestone in this strategy in Q3 by signing the first customer for our mobile work agent, developed in collaboration with Microsoft. The customer is a global premium automaker and an existing Sarence customer with rollout expected to begin in fiscal Q4. We believe this win is significant for two reasons. First, it demonstrates our ability to quickly deploy a complex agent that turns a car into a managed, trusted device compliant access to enterprise tools in the Microsoft 365 suite. Second, it validates our strategy to sell and deploy agents on a stand-alone basis. Not only can these agents be deployed within new XUI programs, but they can also be integrated into non-XUI programs and even competitive stacks. This expands our addressable opportunity and gives OEMs a flexible path to introduce adjusted We're in talks with several other automakers to deploy our mobile work agent in the near future. Now, beyond XUI and our agent roadmap, we continue to win business across our broader technology portfolio. During the quarter, we signed our first customer for exterior vehicle interaction. which extends the reach of the vehicle's voice assistant outside the cabinet, allowing drivers to use their voice to perform authenticated vehicle actions, unlocking doors or opening the trunk. We also secured winds across our stack with Subaru, HKMC and GM. We signed an emergency vehicle detection program with a Chinese robo-taxi company. and a CERN's assistant program with Stellantis, for the vehicles that will not initially use XUI. These programs have the potential to generate recurring business, maintain our seat at the table within the OEM technology stack, and create opportunities to expand our role over time, even when customers use multiple technologies. We are also making progress in extending our voice AI and agentic capabilities beyond the vehicle. we continue to focus on complex environments similar to the car, including commercial and industrial operations, robotics, and select IoT applications. We believe our products have the ability to serve as the trusted interaction layer across a broad range of verticals, where our edge AI, reliability, security, and domain-specific integration translate well and provide a meaningful competitive advantage. One example of our progress is the launch of our dealer assistant agent. live at infinity of Grand Rapids, Michigan, targeting a real pain point for dealerships, missed and after-hours sales and service calls that can translate into lost leads and revenue. Thank you. Our AI agent provides an always-on, instant response, serving as a virtual expert on vehicle features, scheduling test drives, and booking service appointments while freeing staff from routine repetitive calls. Since the program went live, dealer assistant agent has delivered measurable business impact to the customer with 100% of after-hour calls now being captured. There's been a 20% increase in sales opportunities, driven by always-on lead engagement and qualification. and nearly 30% increase in service appointments booked in improving utilization, and capturing additional service revenue. While this is an early deployment, we believe that it demonstrates the impact of our GenTech solutions can deliver. And with tens of thousands of car dealerships worldwide, we see this as a promising growth opportunity. Consistent with our prior outlook, we expect approximately $7 million to $9 million in non-auto revenue forecasted for full fiscal 2026. and the larger opportunity ahead of us in fiscal year 27 and beyond. our next earnings call, we look forward to providing you additional details on our fiscal year 2027 roadmap, forecast, and strategy for building a meaningful business beyond automotive. In terms of our intellectual property strategy and ongoing enforcement efforts, we continue to actively protect our technology and investments as part of the orderly course of our business. while the timing of IP-related outcomes can be difficult to predict on a quarterly basis. We believe these efforts support our broader commitment to innovation and long-term shareholder value. And we'll continue to keep you posted as additional progress is made. As we approach the end of fiscal 2026, I want to close with the four drivers that that underpin our belief in CERNS' long-term value. First, CERNS occupies an important position in the automotive AI stack, supported by deep OEM relationships a large install base and durable recurring revenue. Second, our XUI and Agentech AI WINS provide an opportunity for ongoing growth and higher revenue per vehicle as these programs enter production and scale. And third, we continue to deliver strong free cash flow while maintaining our focus on disciplined capital allocation. We believe that our business model supports debt reduction, balance sheet strength, inorganic growth, and the strategic and operational flexibility necessary to make key decisions like our stock repurchase program. And fourth, our expansion outside of automotive and our IP enforcement efforts provide additional sources of potential long-term value. And with that, I'll turn it over to Tony. Thank you, Brian.

Good afternoon, everyone, and thank you for joining us today. We appreciate your continued interest in Sarens. Today, I'll review our third quarter fiscal 2026 results. highlight the key drivers of the quarter, and then provide guidance for our fourth quarter and the resulting full fiscal year. For the quarter, total revenue was approximately $70 million, within our guidance range of $68 to $72 million, and up 12% from $62 million in the prior year period. The increase was led by higher license revenue, including the timing of fixed license contract execution, a positive shift to recurring connected service revenue. Total license revenue was $41.6 million, up 22% year-over-year, reflecting the higher fixed license contribution this quarter. Fixed license revenue was $12.5 million this quarter compared to no fixed license revenue in the prior year period and above the approximately $10 million contemplated in our Q3 guidance. As we've discussed, fixed license revenue can vary quarter to quarter based on the timing of contract execution. We do not expect any additional fixed license revenue for the remainder of the fiscal year. Variable license revenue for the quarter was $29.1 million, down 15% year-over-year. Two factors drove the decrease. First, the comparison was against an exceptionally strong prior year quarter that benefited from higher than normal production, as some manufacturers built ahead of anticipated tariff impacts and from favorable foreign exchange rates. Second, our unit volumes came in below the broader market this quarter. Production of vehicles with CERN's technology was down 8% year over year, while global light vehicle production declined roughly 2%. Based on the customer production data available to us, the difference relative to the broader market primarily reflects our specific OEM and regional mix. Much of the global market's relative resilience came from regions where we have limited presence, such as South America and South Asia. while the OEMs and regions that represent the majority of our volume saw softer production. This was compounded by a period of program life cycle transition. some programs winding down faster than their replacements are ramping. That said, we have not seen a change in pricing or economics to our existing programs, and we have continued to experience recent design win activity. Connected services revenue was $15.5 million, up 20% year-over-year, driven by continued expansion of our connected install base and a higher attach rate. We believe that this growth underscores the increasing importance of connected service revenue within our business model and provides improved visibility into future performance. Professional services revenue was $12.5 million, down 18% year-over-year, reflecting our continued focus on standardization and higher margin implementations, as well as the impact of revenue deferrals when services are bundled with license arrangements. Gross margin for the quarter was 76% compared to 74% in the prior year period and in line with the high end of our guidance range of 75 to 76%. The improvement over prior year was driven primarily by favorable revenue mix, including the higher fixed license contribution, along with continued discipline across cost of revenue. adjusted EBITDA for the quarter was $13.5 million, an increase of $4.5 million or 51% year over year. and a guidance range of $8 to $12 million. With revenue finishing near the midpoint of our range, this outperformance was driven by favorable margin mix and operating expenses below plan. A portion of the expense variance was timing related and is expected to normalize in the fourth quarter, while the remainder reflects our continued cost discipline. Total non-GAAP operating expenses were $43 million compared to $40 million in the prior year period. Non-GAAP R&D expenses was $26.5 million, up from $24.4 million, reflecting lower capitalization of internally developed software rather than an increase in overall investment, total technology spending remains stable. Non-GAAP sales and marketing expense was $4.6 million. down year over year by about 8%, but consistent with continued investment to support our customer base and long-term growth initiatives. Non-GAAP G&A expense was $11.5 million, up from $10.1 million, reflecting normalized general operating costs as well as additional legal expenses associated with our ongoing efforts to protect, enforce, and license our IP portfolio. Excluding the one-time legal costs incurred in Q1 to secure our patent license agreement with Samsung, we expect full-year fiscal 2026 IP-related legal costs of approximately $9 From a GAAP profitability perspective, Q3 net income was $1.5 billion, with diluted EPS was $0.03. versus a net loss of $2.7 million and a net loss per share of $0.06 a year ago. On taxes, the Samsung-related withholding tax is spread across the year through our estimated annual effective tax rate. So it isn't confined to the quarter in which it occurred. front-loaded our tax expense in Q1 above the expected full year total and impacts taxes even in quarters with little or no pre-tax income like here in Q3. We continue to model full-year tax expense of approximately $20 million, consistent with our prior projection range. with a significant tax benefit expected in Q4. During Q3, we generated $20 million of cash from operations and $20 million of free cash flow, continuing our strong cash conversion performance. We ended the quarter with $128 million in cash and cash equivalents, which we believe provides significant flexibility to invest in our strategic priorities while further strengthening the balance sheet. As we evaluate capital allocation, we continue to maintain a strong financial position and invest in the business while deploying excess capital toward opportunities that offer the highest risk-adjusted returns. In the current environment, that may include discounted debt repurchases, share repurchases, and selective strategic investments that support our long-term growth objectives. Putting that framework into action, earlier this fiscal year we repurchased a portion of our 2028 convertible notes at a discount to PAR, reducing interest expense and leverage. Building on that, as Brian mentioned, today we announced that our board has approved our first share repurchase program, authorizing the repurchase of up to $30 million of our common stock over the next 12 months. We intend to execute through open market purchases, funded from cash on hand and free cash flow, while preserving the flexibility to keep investing in the business. and to address our remaining outstanding convertible notes. The program does not obligate us to repurchase any specific amount, and we expect to stay disciplined as we consider our capital allocation priorities. From a metric standpoint for Q3, production of vehicles with CERN's technology totaled 11.4 million in the quarter, compared to 12.4 million a year ago. Connected cars shipped increased 4% on the trailing 12-month basis, while recurring connected services revenue grew 20%, reflecting higher attach rates and per-unit economics. Adjusted total billings were $240 million, up 6% year-over-year. Pro-forma royalties were $38 million compared to $43 million in the prior year period, reflecting the lower production volumes. Fixed license consumption within that quarter total was $8.7 million. Before turning to guidance, let me put the XQI wins Brian discussed into financial context. From an accounting perspective, we recognized revenue as licenses shipped and as connected services are delivered. So new program wins flow through our reported results in stages rather than all at once. For multi-year platform transitions such as XUI, that cycle plays out over several years. As a result, the wins we've announced are not fully reflected in our current revenue run rate and for connected services, but near-term impact will show up first in billings with more meaningful revenue contribution phasing in during fiscal 2027 and beyond. These programs carry attractive per unit economics that we expect to support both revenue growth and margin as they scale. Also, consistent with Brian's comments, our current outlook continues to assume only modest initial contribution from non-automotive programs as we exit FY26, with the larger opportunity remaining primarily a fiscal 2027 and beyond growth driver. Turning to the fourth quarter, with respect to the sequential progression, there are two dynamics to keep in mind. First, our third quarter results included $12.5 million of fixed license revenue. And consistent with the timing-driven nature of these arrangements, we are not contemplating any fixed license revenue in the fourth quarter. Second, we expect a normal seasonality with production volumes often stepping down a bit from the third quarter to the fourth. Together, this means we expect fourth quarter revenue to be lower on a sequential basis. For the fourth quarter, we expect revenue between $61 and $65 million. margin between 72 and 75 percent, expected EBITDA between 1 and 5 million dollars, net income in the range of 1 to 5 million dollars, and diluted EPS between 2 cents and 10 cents. I want to be clear that this guidance reflects the timing of fixed license revenue in ordinary seasonal patterns, not a change we see in the health of the underlying business. Excluding the fixed license revenue recognized in Q3, the midpoint of our fourth quarter revenue outlook is higher than our underlying Q3 revenue level. Our per-unit economics have remained intact, our recurring connected services revenue of 20% year-over-year has continued to grow, and our design wind momentum is expected to support future volume. A couple of further notes on the fourth quarter. First because the fourth quarter does not carry the high margin contribution from fixed license we expect gross margin to normalize below the 76% we reported in the third quarter. Second, as we discussed previously, the Samsung IP license resulted in a unusually high tax expense earlier in the year, particularly in the first quarter. The expected fourth quarter benefit is incorporated into our Q4 and full year outlook. Taken together with our year-to-date results, this Q4 outlook is contemplated within the full-year guidance I'll walk through next and reflects the same discipline execution we've delivered through the first three quarters of the year. For the full fiscal year, we now expect revenue of $310 million to $314 million. gross margin of 78 to 79 percent, gap profitability in the range of net loss of $1.1 million to net income of $2.9 million. diluted EPS of a loss of two cents to an income of six cents, adjusted EBITDA of $66 to $70 million, and free cash flow of $76 to $82 million, an increase from our prior outlook of $66 to $76 million. In closing, we delivered solid execution this third quarter with growth in total revenue, gross margin ahead of guidance, continued strength in our recurring connected services, and year-over-year profitability growth. As we look to the remainder of fiscal 2026, we remain focused on discipline execution, strong cash flow generation, and maintaining the financial flexibility to support long-term profitable growth. On our next call, we expect to provide our initial fiscal 2027 guidance and an update on our strategic priorities.

With that, I'll turn it back to Brian. Thanks, Tony. In closing, we're proud of our performance as we approach the end of fiscal 2026. We believe that our results reflect strong execution, solid cash generation, and continued customer momentum, together with a disciplined approach to capital allocation. We believe the underlying trajectory of the business remains strong. Connecting services continues to be our extended growth engine. The economics of our recent business is very attractive. And the FQI and the agent programs discussed today are expected to position as well for growth as they scale. The story of fiscal 2026 has been one of execution. We believe that the story of fiscal 2027 will be one of growth, powered by the foundation we've built, the customer commitments we've delivered, and the opportunities we see ahead with XUI and outside of automotive. We remain confident in our strategy and execution, and we're excited about the path ahead.

And with that, we'll open up the line for questions. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Mark Delaney with Goldman Sachs. Your line is now open.

Yes, good afternoon. Thank you very much for taking the questions. Congratulations on the XUI win with Stellantis. I'm hoping to better understand the financial implications of the XUI backlog, including the recent win, and now I think you have six in total. I understood the comments around that. taking time to ramp up, but maybe you can help investors to better understand what those existing wins will mean for the business for both revenue and profits when they do fully ramp and how long that may take to occur.

Sure, I can start. This is Brian. And then Tony can jump in probably with some of the more high level detail of the finances. But, you know, we said there's about 100,000 vehicles on the road right now with XUI. And that's really pretty good considering really starting pretty early. production was just a little over a month ago. So for me, the ramp is off and going. We have several more OEMs that should do start of production, say, at the end of Q4, beginning of Q1. We don't actually control exactly when, and there's a lot of partners that have to come together to do that. to deliver the on-time launch. So I really think that number is going to go up significantly as we go into Q1, Q2, Q3 fiscal of 27. So if I looked at 27 in total, I think you should see a couple million cars on the road X, Y versus the 100,000 that we have today. financially what that'll mean is we get paid the same way we do with the prior products where we get um the connect the the license fee when the product uh the car is shipped from the factory and then the connected uh fee over the life of the connection and what we're seeing is these licenses for connected vehicles are actually going longer we said in the past that our average was like three years, uh, the average of the XUI deals would be more close to seven years. Um, so we're seeing much longer, um, times for those. So for 27, it will, XUI will, XUI and connected will be the growth engines and automotive for us. We haven't forecasted 27. We haven't forecasted So I expect it to still be relatively minimum as they ramp up in Q4, but as we go into 27, it will fuel the growth along with connected. All the XUI models are connected, so it kind of has a double whammy. You get paid more for XUI, and they're all connected. We haven't given an exact price for what the XUI deals are, the price per unit, but it is significantly higher than the current price per unit that we quote in our earnings calls for our current products. but we haven't given an exact number for that. And part of that's because it varies depending on the features that everybody chooses and some of that, but all of them are significantly higher than what we're quoting today.

Yes, and just to summarize that, I think it's exactly right. The impact of XUI is that it's a growth driver both to revenue and to profitability, but it does take time to ramp the old programs down, ramp the new programs up, but it'll It will result in higher PPU over time as those ramp up. And with the higher PPU, it creates the operating leverage that we've talked about. Brian, I've always talked about that our goal is to have a growing business that's increasingly profitable. And we've shown that over the last probably eight quarters now that we've been together. So, yes, this will, you know, XUI means, you know, again, revenue growth and increasing profitability growth.

Very helpful context. My other question was about the revenue trajectory into next year. I very much recognize your comments around needing to wait for next quarter for the quantitative guidance. I do think last call the company suggested that revenue next year could grow high single to low double digits. So if you could speak a little bit qualitatively on how you think about the top line trajectory into 27, if you have any early thoughts there and any key puts and takes. Thank you.

Sure, I can start again and Tony again can give you kind of the a little more financial detail, but again, we tried to give you a little bit of a grounding this quarter by giving you, hey, there's 100,000 XUI vehicles on the road and I expect non-auto to be $79 million. That kind of gives you the baseline from this year for where we're at. By the time Q4 ends, expect the XUI number to be significantly higher than that 100,000. And we'll probably give you the number again at the end of the year just to, again, kind of set the baseline. If I look into 27, yes, I think overall, you'll see us in the high single to low double digits overall growth. But again, what I think you'll see is strong growth in connected because the XUI vehicles will be the driver of a lot of those connected vehicles. You'll see strong growth in PPU as connected as XUI continues to grow more into the product base. And then, we plan on having significant growth in the in the non-automotive space for next year. We haven't given you the forecast for that, but you can think of it as my expectation is non-automotive will grow faster as the percentage than the automotive space for next year. And so you put those together, and that's how you get to that, well, it should be high single digits to low double digits. But then it's going to be increasingly better as we go through the year. I expect it's going to be growing much faster as we exit 27, because more and more of it will be connected, and more and more of it will be non-automotive. So it'll be a nice, steady ramp as we go through that year. We haven't given the numbers yet. to give me what we're thinking right now, but I'm held to my forecast process.

But yes, that's what's going to drive and fuel the growth. Yes, and a couple of caveats, of course. When we talked about those growth rates that we see in our core business, it was for the technology growth. Again, I think we've said before that professional services, as they become more efficient, will decrease as a percentage in the mix. And we still think there's a strong base in professional services, but we certainly don't believe that that's growing. We think that's kind of a base number and that it's important to the business, but it lowers the percentage of the mix. As Brian mentioned, the non-automotive will kind of be of the growth, the real growth from a percentage standpoint growth engine in the future, albeit at a smaller base out of the blocks.

And then just remember, none of those forecasts include anything about IP monetization. And we've said that we have, currently efforts going with the Sony TCL Apple and Amazon in that space. And we don't forecast those because we don't really, we can't absolutely predict the schedules. And so if I miss by a month because of court dates or whatever, I need to be careful. Those would all be on top of that. We have a couple of those that are due to go to, the court before the end of the year, this year, and then some more into next year. So I see that as on top of everything else we've talked about from our core technology.