MSCI Inc. (MSCI) Earnings Call Transcript & Summary

All right. Good afternoon, again, to our European listeners, and an early good morning to the folk in North America. For those of you who have not met in person, my name is Manav Patnaik, and I'm Barclays' business and information services analyst. And as much as I missed doing this event in person in London at the moment, I'm delighted that we, at least, get to go ahead with this virtually and with the record number of companies being willing to participate as well. And I couldn't be happier than to continue with the proceedings this morning with MSCI, and we have with us Linda Huber, CFO, who many of you know from a time at Moody's, but she's just about coming up to her 1 year at MSCI now. So Linda, thank you very much for being here and being with us virtually as well. Just one quick housekeeping item. Linda is going to walk through a presentation. I will come back for some Q&A based on the time left at the end. We will not be taking live Q&A, but if you do have any questions, you can feel free to e-mail me, and I'll try and get that in. So with that, Linda, over to you.

Okay. Thank you, and good morning to everyone on the East Coast, and good afternoon to everyone in Europe. I'm doing this by phone. I cannot see the slides, so this is going to be a very interesting presentation. And if we get off, thanks for those who are helping with the slides. I'll just call out the slide number to hope that we can keep this in sync. I'll be speaking for about half an hour, and then hopefully we'll have some time to allow Manav to ask some questions. I'd like to start with the disclaimer on our slides, which are on Page 2 and 3. Those are the usual MSCI disclaimers. And I'll start on Page 4, just a quick update on what's going on with the COVID-19 response at MSCI, and then we'll get into the business. We have been working almost 100% remotely for about 10 weeks now across 35 locations in 22 countries. And we're very pleased with our key data production and technology services are up approximately 99.9% of the time. So we're functioning very well, and we're doing our best to ensure that our employees are healthy. On the client front, the clients really come first. We've been doing very intensive outreach for our clients using some of the tools that you see on the page. Most importantly, we've been making available a 3-month free trial of a number of our products. That has been very, very successful, and this resulted in hundreds of trials, which, in fact, has really worked very, very well. We're also offering trials on ESG Metrics as well as certain daily index data and real estate data and access to our multi-asset class model portfolios. So those things have gone quite well. And we've upgraded a number of our tools as well. So we've moved forward despite the COVID-19. [Technical Difficulty]

Operator, did we lose the line?

Manav, I can hear you, but I cannot hear Linda.

Okay. Yes, I can't hear Linda either. Inessa, operator?

If you like, I can pick up from here.

If you're live, that's fine, but I'm trying to see -- let me see if that draws the attention. Operator? I wonder if she -- I'm seeing...

Hello?

Hi, it's Linda. I'm going to pick up again on Page 8. Can you hear me?

Yes, we can hear you, Linda. If you could go back to Page 7, that would be great.

Okay.

Thank you, Linda.

I'm back on Page 7 to speak about MSCI quickly. For those of you who are not familiar with the company, we provide products and services that global investors use to help build better portfolios and build a better world. 7,700 clients in 85 countries. These are must-have products and services that we provide to the investment industry. We work across asset classes, looking at both performance and risk. Our revenue is $1.6 billion as of -- for the 12 months ended March 31, 2020. 10% organic subscription run rate growth. We have a very strong and inclusive culture and 3,400 employees, which are located in 22 countries, 63% of whom are in emerging markets and 37% of whom are in developed markets. This helps us with both our cost efficiency and our effectiveness. If you go on to Page 8. Clients of many types use MSCI's tools and services. You'll note that we work with asset owners, which include pensions, sovereigns, insurance and individuals; asset and wealth managers, which include active and passive managers and advisers; and intermediaries, who include brokers, exchanges and custodians. And we work across asset allocation, portfolio construction and performance and risk management. And our tools, you can see there the number of things that we handle on the right-hand side. So we help defining investable universes, asset allocation, risk management and performance, regulatory compliance and climate-related risks and opportunities. Going on to Page 9. You can see that we focus on client portfolio needs. Clients use both our indexes and our performance risk models and analytics to help them build portfolios. We work with both public asset classes, including the various types that are listed across the page; and also private asset class, including real estate benchmarks, real estate performance attribution and now private equity and private credit models and risk analysis. So both the public and private asset classes. Moving on to Page 10. The -- an important part of the MSCI story is that a number of investment trends provide wind at our back for the business. So you'll see throughout this presentation, increasing mandates for sustainable returns and the use of ESG, environmental, social and governance, factors in investing. You'll note that there's been a strong movement from active management to index-enabled investing, from manager selection to internal management of large asset owners, a shift from home country bias to global, and increasing demands have been placed on investors that they be more efficient and differentiated, so we can help with that. And there's a real trend towards the private asset classes, which we've also been able to assist with. So the major trends in investment are very much factors that MSCI is able to use to drive its business. If we move on to Page 12, the numbers in the business have proven to be very strong. We're very proud of that. You'll see that this does match up with our long-term goal. So looking at Page 12 on the upper left, revenue growth has been 10% in a CAGR view. We've included here the trailing 12-month number ended 3/31/20 of $1.6 billion. Adjusted EBITDA growth has been a 15% CAGR. Again, you see $882 million as of 3/31/20. Our free cash flow has grown at 24% to $678 million. And our adjusted earnings per share has grown at 29% to $6.79 cumulative, again, on a trailing 12-month basis. Very strong numbers and numbers which we are quite proud of. If we look at Page 13, you can see different parts of the business. We had -- the first row is Index; the second is Analytics; and third is All Other. These are our 3 reporting segments. So if you look at Index across the top, you see the trailing 12 months revenue number of $955 million. We're getting quite close to $1 billion in the Index business alone in terms of operating revenue and an adjusted EBITDA margin of 73.4%. For the Analytics segment, you'll see $501 million of run rate for the trailing 12 months at a 30.3% adjusted EBITDA margin. And the All Other segment, which contains Real Estate and the ESG operating revenue, you can see that on the far right, that also is a 19.4% revenue. And each of these businesses feature quite strong revenue CAGR as well. So again, 3 segments, and you can see the details on Page 13. Moving on to Page 14. You can see our subscription model is a very important part of business. Recurring subscription make up 73% of the business; asset-based fees, 24% of the business; and nonrecurring fees, only 3% of the business. So we are very pleased by the strength of the business. And by geography, Americas are 46% of our run rate; EMEA is 37%; and APAC at 17%. So at the bottom, you see there $1.3 billion total subscription run rate provides us a nice predictable revenue line even in difficult times such as these. Moving on to Page 15. You can see our subscription run rate year-over-year. This is a very robust number. If you look at as reported, we're at 10% for the first quarter of '20 and the same on an organic subscription run rate growth level. Our retention rates are at 95%, and they tend to move around this mid-90s figure, which is again very strong and a number that we're quite proud of. If we move on to our capital position and allocation on Page 16. Our cash and debt is on the upper left. Our total cash is over $1 billion as of March 31, total debt of $3.1 billion and net debt of $2.1 billion. And our debt to our trailing 12 months adjusted EBITDA is 3.6. On a net basis, it's 2.4. We would note below in the debt maturity profile, we have our debt nicely laddered. And we don't have any debt, which absolutely is coming due until 2025. And we have a $400 million revolver, which is undrawn at this point to provide additional flexibility. Back in February, we issued $400 million of debt at 3 5/8%. That was a record low for a speculative-grade deal. We used $300 million of that to redeem our 2024 notes. And we continue to provide a disciplined and consistent approach to our capital allocation using, what we call, our Triple-Crown framework in terms of making sure that our investments have fast returns, high returns and also are in the businesses that are most favorably viewed by our investors, which include index and ESG. We've aggressively remaining returned capital to shareholders through both dividends and share repurchase. We paid $57.8 million in dividends in the first quarter of '20, and we repurchased a total of, through April 24, $356.8 million, which -- of our stock, which is 1.4 million shares, average price of $250.65. So very happy with that opportunistic share repurchase, as we had discussed before. Now our full year guidance is on Page 17. You'll note that our operating expenses are now in the range of $790 million to $840 million. On an adjusted EBITDA expense, which is the way we look at it, $700 million to $750 million. You can see another revised item is our effective tax rate in the range of 18% to 21%, capital expenditures in the range of $50 million to $60 million. And then at the bottom, free cash flow, $540 million to $600 million in the quarter to consider what we're going to be doing here for 2020. Now on Page 18, you'll see one of the most important things for MSCI, which is we have a downturn playbook which we bring into effect as soon as we see a situation like the one we're in now. Our bonus metrics and our compensation plans adjust automatically. So the first part of our expense savings is based on lower bonus payout to our employees. We would expect that as the year weakens moving forward, we may see that happening automatically. We wouldn't have -- in the first quarter, we did hit our numbers, and so we accrued our bonus levels at 100% in the first quarter. Other things that we can do in order to manage our expenses, we can delay hiring, limit our travel and entertainment, our training, our professional fees and our marketing. All of these things are happening right now. You heard Baer Pettit talk about we basically have a hiring freeze, and any extremely essential new hires have to go through Baer for hiring. We can also look at the pacing of our investments, our headcount optimization. And in this environment, it's pretty easy to ensure that our T&E is almost 0 because, like most of you, we are not traveling at this point. Page 19 is our long-term growth targets. This is very important cornerstone of MSCI. So you'll see the revenue on the left, our growth rates excluding asset-based fees, so for Index, low double digit; Analytics, high single to low double digit; ESG in the mid-20s; and Real Estate in the mid-teens. All that led to low double-digit revenue growth. Adjusted EBITDA expense growth rate led to high single digit. Our adjusted EBITDA growth rate is in the mid-teens, and our adjusted EBITDA margin is mid- to high 50s. Now these are our long-term targets which we expect to achieve over time. These are not quarter-by-quarter goals or annual guidance. But as you can see on the chart that I reviewed earlier, for the most part, we have been hitting all of these goals. Our robust financial model is further detailed on Page 20. You can see recurring revenue of about 97% from 2015 to 2019. In the first quarter, our recurring revenues were greater than 96%. We have retention rates for the first quarter at 95%. We have a very scalable cost structure and great operating efficiency. So you've seen our adjusted EBITDA margin of 55% in the first quarter. Tax rate in the first quarter is 9.5%. The reason for that would be the vesting of performance shares. And our cash dynamics are very attractive as well. You can see free cash flow of $102 million in Q1 and $112.8 million -- I'm sorry, that's the operating cash flow of $112.8 million for the Q1 number. As we move to our segments quickly, on Page 22, the largest segment is Index. It's broken into 2 parts. We have the subscription run rate on the left and the asset-based fees run rate on the right. You can see that the subscription run rate for market cap weighted indexes, factors and ESG and custom and specialized are handled through license fees. The increases in those fees come 2/3 from new clients and upsells, about 1/3 from price. And again, the retention is very strong. Now asset-based fees come from ETFs and futures and options and passive investments. These are more subject to market fluctuations. And this is the part of the business which is more difficult to predict. Base is split in the first quarter of $574 million of subscription run rate and asset-based fees of $348 million in the ABF side of the house. If you look at Page 23, you can see the nice growth in the subscription run rate, coming to $574 million over the trailing 12 months and 11% year-over-year growth in subscription run rate. If you move on to Page 24, you see some of the other features of the Index part of the business. You see asset-based fees and the changes in the absolute levels of those moving up 22.5% from the first quarter of last year to the first quarter of this year. In the center, you can see average AUM. And in this case, for the first quarter, we did see AUMs go down to 2.71 basis points versus 2.82 basis points in the fourth quarter of '19. This is a mix issue. And also, as we spoke about on the earnings call, this is the result of a recent renegotiation with BlackRock, and the majority of that transition has been handled in the first quarter. Our quarter end AUMs bounce around. In the first quarter of '19, we had $802 billion and then moving down to $709 billion in the first quarter of '20. As we said in the earnings call, by the time we did the earnings call, we had bounced up to $744 billion. So this number has seen some recovery, which is very helpful to us. On futures and options on Page 25, one of our fastest growing business. These futures and options are measured by contracts. So if you look at the left-hand side of the page, last year, we were handling 26.3 million contracts; this year, 40.4 million. And the run rate for futures and options has moved from $17.8 million to $49.1 million, 175% increase from first quarter of last year to the first quarter of this year. Our Analytics product, again, about $0.5 billion of run rate across this business. You can see on Page 26, we work with investment teams and products and operations teams and marketing and distribution teams to do a number of things. You can see those listed across the page. And as we move on to Page 27, you can see that the total addressable market in the Analytics business is $20 billion plus. We can grow this business from greenfield opportunities, replacing internal client spend and displacing smaller niche providers, as asset managers look to have fewer vendors with whom they deal. So all of these things are very helpful to us. ESG is on Page 28. This is a very fast-growing business for MSCI. We view that we're a leader in this space. We have a number of innovative tools, which are very helpful. Most recently, we've added Climate Value-at-Risk, and this has come from our acquisition of a business that we recently bought at the end of last year called Carbon Delta based in Switzerland. And the ESG business is one where we intend to continue to invest in order to ensure our leadership. The demand for ESG investing on Page 29. You can see the UN PRI measure the growth in the number of signatories to 2,300 and $86.3 trillion in assets under management with an ESG flavor, which is obviously a very fast pace of growth. If you look over on the right-hand side, you can see quarter-over-quarter comparison of 120% growth in equity ETF AUMs tracking MSCI ESG Indexes, which is an indication of the strength of the business. And you can see down at the bottom, some of the catalysts and the drivers in the ESG business, which, again, is one which we're quite proud of. The growth rate across the franchise can be shown best on Page 30. For the first quarter, you'll note for content, we're at $104 million, which has doubled since the $49 million in 2016. And for indexes, we're running at about $52 million for the trailing 12 months, which is double about what we were doing in 2018 of $27 million. So again, these businesses are growing very, very quickly. And again, we're quite proud of that. Real Estate is in the All Other segment. As you're aware, we have a very extensive private Real Estate database. This is an asset class which is having challenges at this moment. So the need for our Real Estate data is more important than ever. And you can see some of the things we do down in the bottom. We have standard indexes. We have specific measures and customized indexes. This is basically a give-to-get model in Real Estate and one which has served us quite well to this point. And with that, I'll stop. We have a few more items in the appendix. Obviously, look at those at your leisure. But I wanted to make sure that Manav had a chance to ask us some questions. So Manav, please go ahead.

Yes. Thank you, Linda. Can you hear me?

If you could speak up or get closer to your mic, Manav, that would really be helpful to me.

Okay. I'm going to try it here. So my first question is just to start with some of the COVID impacts and maybe from a finance angle. We've read a lot about how work from home is the new norm. You save some real estate cost down the road, T&E, self-adjusts. Just some thoughts on that, and if there's anything else you think that could structurally change for companies in this environment.

Manav, as I said, the work-from-home situation has worked quite well for us. So we don't see a lot of change to our business in that regard. Our data operations, as I said, are running at 99.9%. Like many companies, we are just considering now what it will take to return back to the office in coming months in North America. That process is further ahead in Asia, as is the case with many financial institutions. We spoke about on the first quarter call that we're being thoughtful about the potential for deal cycles and sales cycles to potentially take a little bit longer. That was not evidenced in the first quarter, which was quite strong, but we're redoubling our efforts with clients to ensure that we can keep pace with the sales cycle. You might have recalled that Baer had noted that it might take a little bit longer to get signatures, to get through procurement chains and things like that. But again, thus far, we have not had particular challenges on that front. We have found that we may even have more time to speak to clients directly as they're working from home. And again, the free trials have been taken up by hundreds of potential new clients. So we found that this actually has worked pretty well for us. So we're continuing on as we have been, and we're being very careful on things that might come to the fore in the COVID environment. For example, it is possible that collections could be stretched out, and we're working very assertively to ensure that we're keeping everything on good schedule and just following good housekeeping to ensure that everything is functioning as it should.

Got it. And just to follow-up on the delay in the sales cycles, is that a function of your clients' inability to get installed and ramped up virtually or maybe a bit on your side as well? Or just maybe some more color there.

No. The installations are working fine. The issue is much simpler, Manav. It's working through approval processes, ensuring that we can get approval signatures timely. Potentially, customers are less able to operate their normal procurement chains in an environment such as this. But we can demo virtually, even in cultures which have been potentially less accepting of virtual demos, such as Japan. With the impact of COVID, we found that it has driven quite a remarkable cultural change, and there's a much greater acceptance for remote demos and being able to handle installations remotely. So we've actually found some silver lining in this part of the business. We just have to be very thoughtful about ensuring that our processes move along timely and that all parts of the process are coming together, particularly in our global deals, which have always been larger and more complex. But so far, so good, and virtual demos, including the free trials that we've been doing for COVID-19, have all been working very well.

Got it. And just a question on your downturn playbook. You pointed out that slide, and you've mentioned many times, and you, as a CFO, have always had a downturn playbook. And at MSCI, it sounds like Henry is even more paranoid about being prepared. But just some perspective on -- I don't think anyone could prepare for a COVID-19 lockdown. So did you have to make a lot of adjustments? Or just some thoughts on how that transpired.

We have been doing what we normally do during the downturn playbook. And in fact, there's been great calm about all of this, Manav, and the organization has handled the whole thing very, very well. What we found is that the initial bonus adjustment is something that we're contemplating, but until we see changes in the numbers, we wouldn't necessarily do that. We did immediately put on a hiring freeze, as we said. We also greatly limited travel. And these changes allow for a couple of tens of millions of dollars of expense reduction. You saw that our expense growth rate in the first quarter was moderated. I recall, it's about 8%. Revenue growth was about 12%. So that all worked out very well. But the employees understand what has to happen, and everyone moves into efficiency mode. Right now, we are rebalancing our investments. We'll speak more about that in the second quarter earnings call. But as we noted, we're able to hold on to most of our investment money, more than 90% of it, and we're very pleased about that. So we're watching quarter-by-quarter as to what we should do. We are not making dramatic changes to the business. We have no reduction in force planned or anticipated at this time. It's just being very careful on the hiring front, not traveling anywhere and thinking carefully about the pacing of investments. And all of that happens quite automatically, and everyone in the firm is aware of what we need to do.

Got it. Just a broader question on whether COVID-19 or the market impact now accelerates the active to passive move that's always been part of the story, just keep it the same. We saw articles, obviously, that BlackRock stage 3, they seem to be consolidating the power on the ETF side. But just how do you guys -- if you have any data showing that maybe the shift to passive continues or gets faster.

I think, Manav, you'll see more information on this in the second quarter as flows become clearer. One thing I can note is we have seen flows back to the U.S. as U.S. markets have been stronger. We did point out that assets under management drop down and then have picked back up. We've seen 2 weeks now of positive trends, perhaps a little bit more in that, which has been very helpful. In terms of passive to index managed, we would expect that, that will continue as more and more firms have launched index products. And sometimes, those products are based on MSCI tools. So sometimes with self-indexing, you may see something that effectively looks like MSCI inside. We're very happy with that sort of use case. And again, we're happy to help in any way that we can, provide tools or just have investors buy indexes linked to our products. So we would expect, given the trends we've seen moving toward index, that will likely continue, but we'll have more, I think, more measurable evidence as we move into the second and third quarter.

Got it. And just on the index side, could you just remind us how we should think about the ABF movement or the flows based on your exposure to U.S. or emerging markets?

Sure. We have greater exposure to emerging markets. And generally, if flows are into emerging markets, we tend to do better. If flows are into the U.S., that can be a little bit more challenging for us. So that's an area to watch. So we'll probably have more to say about that in the second quarter. But again, with MSCI ACWI and other worldwide indices where we're really the leader, we benefit from more flows into emerging markets, but we also have very strong U.S.-based products as well. So either is fine. Inflows are best. On the margin, inflows to emerging markets are slightly better for us.

Got it. And just sticking on the index side real quick, I mean, I think you guys pointed out on your call that the flows into ESG indices have been positive and strong. Maybe just some broader thoughts on whether that shift accelerates. It sounds like a lot of the articles and people chatting at these conferences think that the ESG focus definitely picks up here.

Yes. We were very interested in what happens with ESG during the COVID situation. What we found is it hasn't missed a beat. The focus on ESG continues. And some people are making a link between the pandemic and various climate change issues. One has to decide individually whether that's a linkage that one feels is inappropriate or important to portfolios. However, we do find that the focus on ESG, the interest, the number of people who are working with ESG investing continues to increase. And we've been, frankly, pleasantly surprised at the pace of growth of the business and the fact that ESG continues to be our leading area of inquiry and focus and one of the very strongest parts of this pre-trial situation that we're working with right now. So everything on that front has continued to be quite robust. And as a result of all of that, we continue to invest heavily in our ESG business.

And just on the research side, have you seen a pickup in the number of requests for new subscribers? I'm sure usage has gone up, but that's been growing pretty nicely, but it sounds like it could even pick up pace from there. Is that fair?

Yes. From what we understand, new trials in research have also been growing very nicely. I don't have specific data here on research as an item or as part of the business. But our climate change research, the research on the nature of the pandemic, what could happen with the economy as we come out of the pandemic, all of these pieces have been very well received. You're right. They received very high numbers of hits, and MSCI is viewed as a very objective voice on this entire situation. So we found that there is great demand for the research products, given what's going on worldwide right now. One of the things that we're noting is pieces on our Asian research, as Asia is perhaps coming out of this first, and those pieces that are tracking what's happening in Asia have been proving particularly popular with our clients.

Got it. On the first quarter call, Andy gave a good update on the Burgiss acquisition. What I wanted to focus here was more on the real estate side of the data. As you mentioned, the end market is obviously challenged, but you made an interesting point that your data is now even more important. I don't think a lot of people are as familiar with what that data really is and where that value-add comes in. If you could just help us with that.

Sure. So we have a very strong databases that are provided by real estate investors, and we then provide an index to look at performance of individual firms versus what is going on in the index. We have information on the environmental suitability of various buildings, which is something that has very much come to the fore right now. We have information on -- and analytics on mortgage-backed securities. You're probably aware that the commercial mortgage-backed securities market right now is somewhat challenged. As you can see what's going on with shopping malls, with office buildings and so on. So as this sector is stressed, the tools that we have are very helpful for investors, who both are in the sector and maybe looking to come into the sector as opportunities abound. And as I noted, some of this information is available under free trial right now.

Got it. Just moving to the Analytics business a little bit. I think there's always a question on what's the competitive landscape. And everyone seems to say that they don't compete with the other players that we know of. But just maybe some help on where the differentiation lies on the MSCI Analytics business.

Sure. What we do in the Analytics business is primarily to serve asset managers and asset owners. Other companies' analytics businesses, as you know, Manav, might be more tailored toward banks and their regulatory requirements. We do some of that at MSCI, but we like our space in the asset management industry. So in terms of looking at performance and for CIOs, we're trying to track their fund's performance. MSCI really is the gold standard in the business. And we've been very pleased in our Analytics business, which is based on the old RiskManager and Barra platforms. That part of the business has been extremely steady and growing nicely. We're very pleased to have the best-in-class products for those types of investors, which are also used by hedge funds who are having some challenging situations now as well. We continue to also be pleased in the progress in the adjusted EBITDA margin of the Analytics business, which has come up nicely over the past few years. And the secret to that is really thoughtful investing to make sure we're getting the dollars to the right products and the right places for the business. And we're very pleased with the $0.5 billion run rate in the Analytics business. Those of you who might have heard Henry speak about this business, he is quite excited that over time, the Analytics business could be as big as the Index business. So with the $20 trillion addressable market there -- $20 billion addressable market, I correct myself, we see that there's a lot of runway there in the Analytics business, and we're strongly positioned, and we're investing in a smart way to ensure that we continue that trajectory.

Got it. And then just last question on my end. In terms of capital allocation, just reminder of your plans with buybacks and dividends, but more focus was just my question around M&A. You guys have a strong balance sheet. This is the time, I guess, when you have opportunities. But just your views there.

Sure. We're seeing opportunities, particularly from smaller private companies that may be having challenges with capital raises. We are looking at those opportunities very carefully and very selectively. What we're looking for is really business models that fit nicely with what we already have that would be additive. The issue with a number of these companies, as Andy Wiechmann who runs Corporate Development and Strategy has spoken about, oftentimes, these early-stage companies use a lot of capital and have smaller or even nonexistent revenue streams. So we need to be very cautious about that at a time when we have very good uses already for our investment dollars. So we're looking at a number of things that are being shown to us. There are quite a few of these. But we don't see anything at this moment of size that is compelling. And as we talked about before, we like the smaller bolt-on acquisitions, and particularly, we like partnerships. So we've done one of each of those with Carbon Delta in the fourth quarter of last year and then the Burgiss partnership in the first quarter of this year. We are quite focused on Burgiss making best use of its very expensive base of private equity information. It sits again between the general partners and the limited partners and has extraordinarily strong data going back as far as 30 years. So that is really an incredible partnership for MSCI and one which we're starting to get that under our belt. That work is ongoing. So we see some things. We're being very selective. We're very thoughtful about these businesses that are so early stage that there are limited revenues. And I think Andy will continue to do an excellent job in making sure that part of the business well. But our capital allocation, the priorities continue to be to feed the great, fast-growing businesses that we have. And we pay our dividends, obviously. If we do have capital to return to shareholders, we've done that through opportunistic share repurchase. And we're very, very proud of the $250 and I believe $0.64 average acquisition price as we move through the first quarter and into the beginning of the second quarter. So we think we did a great job of demonstrating our opportunistic share repurchase, not just philosophy, but our ability to execute in a way that really makes sense for the shareholders.

Got it. Well, Linda, I think we'll leave it there. Thank you very much for dialing in and dealing with the technology here. So I appreciate that.

No problem, Manav. And we hope to get ourselves back on to before the one-on-one. But thank you very much and hope that your conference goes well.

Yes. Thank you. Take care, guys.

Bye.