Parsons Corporation ($PSN)

For the fireside chat with Parsons. I'm here with Carey Smith, CEO; and Matt Ofilos, CFO. Thank you both for being here.

Thank you very much for hosting us Mario. .

So I like on this industrial conference is to start with -- can you give us a quick overview for whoever is not coming or with parcels on what do you do? What are the key markets you work at?

Sure. So persons reports in 2 segments: Federal Solutions and Critical Infrastructure, and it's roughly a 50-50 business. We have 21,000 employees throughout the world, 25 countries, all 50 states. And we have 6 end markets that we like to discuss the company in terms of -- the first one is cyber and electronic warfare, where I would say we're a distinguished player in how you use cyber and electronic warfare techniques in ways such as nonkinetic effects, and we also do about 75% offensive 25% defensive cyber. That represents about 21% of the company's revenue. The second area would be space and muscle defense. That's about 14% of our revenue. We are the #1 system engineering and integration company with the Missile Defense as a role that's going to be critical for the Golden Drone program. since getting to the flight test by 2028 is really going to require integration of the existing capabilities that we have. We also provide capabilities in space-based situational awareness for Department Award, the Intelligence Community as well as Department of Commerce. We do space resiliency of satellite systems, networks, ground systems. We do a lot of ground processing for the intelligence community, and we've done over 170 different ground systems. We also provide the Neptune software architecture ground system for the space development agency, and we're involved in esure positioning, navigation and timing if you lose your GPS signal. You could still get location information. The third area would be critical infrastructure protection. That represents 9% of person's revenue. Within critical infrastructure protection, we provide capabilities like electronic security systems, biometrics and counter unmanned air systems where we're protecting 285 MSCs in consoles throughout the world -- we're also the #1 provider of electronic security for the Army and #3 for the Air Force. Next area would be transportation, about 29% of Parsons' revenue There, we do roads and highways, designed and built over 10,000 miles across 6 continents. We performed over 450 airport projects and actually expanded to 5 new airports within the last 12 months. We've been involved in over 450 rail and transit projects, and we have the largest globally deployed advanced traffic management system in the world. It's called iNet or Intelligent Network. Next area would be water and environment. Water and Environment, we do water wastewater treatment plants. We're involved in sewage and drainage programs. a lot of environmental remediation capabilities. But I'd probably say the most exciting part of that market would be PFFS emerging Tamina elimination, which we think is a $40 billion addressable market for the company. The final area would be urban development, also representing about 12% to 13% of the company's revenue. Within urban development, we're involved mostly within the Middle East. We have 7,500 employees that work there. We're on every single Giga project that's going on within Saudi Arabia and some of the most exciting projects in the world, like the world's fastest longest metro system, the world's largest park, the world's largest entertainment city, so a very exciting project.

So when you think about those end markets, what is driving growth today? And when you think about like 3, 5 years from now, what are the ones that will drive most of the growth?

Yes. So fortunately, we look at it in terms of a 3-year compound annual growth rate. And when you look across those 6 markets, they're all growing between 4% to 11%. I would say cyber is going to grow the fastest. That's at about a 9% to 11% type of growth rate. Space and Missile Defense runs about 7% to 8% growth rate. Critical infrastructure protection is about a 5% to 6% growth rate. Transportation is 8% to %. Environment water and environment runs about 7% to 8%, and then urban development is about 6% to 7%. So we're in all very good end markets -- and I would also add that when we focus on our markets, we really focus on the growth in areas that we can be differentiated technologically why and really be 1 of the top players in each of those end markets. .

So this is a question I get a lot, especially because most of the E&C companies that diversified into defense solutions, spin off that or are in the process of doing that. What makes you comfortable of like having those 2 business units? And where are the synergies you see on having all of these capabilities under the same umbrella?

So I'd say 1 thing with us is we've made it work. And if you look like '22 to '24, both of our segments, we were 1 of the industry-leading growth leaders in both of those segments. And last year, without 1 contract cancellation, we were also one of the top industry leading growth later. So for us, it's really worked, and we've driven the synergies. Just a couple of examples. If you look at aviation, we've supported the FAA for over 5 decades and are currently supporting them on aviation modernization. One of our biggest growth drivers, in fact, as we look this year. But we've also done over 450 airport projects. So we leverage a common pool of talent to be able to approach the aviation modernization market. PFOS PFAS, another great example, where on the federal side, we're helping department a war in the FAA eliminate firefighting foam, but we're also selling to customers on the infrastructure side, including water customers and some of the customers that have been sued for PFOS PFAS. I would say another area that I would highlight would be Middle East. When you look at the Middle East, we traditionally had done transportation projects that are tourism and entertainment and urban development. But we've since moved into defense and security. That's going to be increasingly important, particularly as we come out of the conflict when the Middle East is going to be a need of solutions such as integrated air missile defense, critical infrastructure protection of areas like data centers, water, utility, counter unmanned air systems, which we're currently providing today and also looking at an $880 billion rebuild.

Yes, that's fascinating. And I want to double tap on a lot of those things, FAA, Golden Domes. But before that, I think it's interesting, and I've gotten a lot of questions right to Matt, on like the dynamics for this year, the first quarter was really, really strong from growth and then also a really strong EBITDA, but you are expecting a second quarter that will actually take some hit and then some growth going forward in the second half. What are the specific dynamics that drive that cadence into this year?

Yes. So high level, to your point, came in right on our revenue target for Q1, which was great coming out of the Q4 government shutdown, so really excited about the top line performance. On the bottom line, we outperformed margins north of 10% for the first time, really strong first quarter. And so the business performed really well in Q1. We do have 7% sequential growth. But to your point, we're contending against a $350 million headwind year-over-year on the confidential contract that a lot of you know about. Q2 has about $100 million of headwinds. So Q3 and Q4, you're going to start to see positive growth. We don't have to talk about excluding confidential program anymore. We'll be back to growing with and without it. And so really looking forward to those days. But Q2, we have about like I said, 7% sequential growth, about $100 million worth of growth. Then you look at the second half versus first half, we have about $400 million worth of growth from the first half to the second half. And as a lot of the programs that Carey mentioned, the ceiling Tech acquisition we did a few years back in the Joint Cyber Hunt kids those kids are shifting from low rate initial production to full rate production in the second half. You think about the FAA work that we're doing, the ramp-up on that ramp we grew 35% in Q1. And to about the same range for the total year, which is amazing on a pretty decent sized base, $150-ish million base. And then some of the munitions programs that we have key milestones in the second half of the year, plus some of these recent awards that we mentioned, $400 million worth of OTA awards as of late and those are quick turns are about 3-year contracts, but we've been working builds of material and prepping for those contracts for the past 6 months. So those will be quick moving. And so each 1 of these contributes $40 million to $50 million. So you add up to $300 million out of the $400 million on a very small number of programs. The other 1 in the Middle East, and King Sand and Cadia and those programs are ramping. And so just very clear line of sight to those program growth. And so again, it's just a really very strong view toward the second half of the year and to your point looking forward to those positive growth rates for the second half?

Yes, I would add. We have some really good leading indicators, whether it's 22 consecutive quarters of greater than 1.0 book-to-bill with a critical infrastructure. At the company level, we've always been over a trailing 12-month book-to-bill, very strong book-to-bill for Q1, 1.4 for persons for both segments and Middle East of 1.5. And -- we've got $9.3 billion in backlog. We got 71% of funded backlog. And then we also have $11 billion that's been awarded but not yet booked a person as a single contract for prime contracts -- so some really good leading indicators on a $54 billion pipeline. .

And when you think about executing towards those contracts, what is the main factor in factor is it labor? Is it clearances? Is it like to money getting funded? Like what are you concerned about when you think about a those?

Yes. The most important thing for us is always going to be labor. It's hiring and retention. We're really proud of the fact over the last 2 years, we've had the best retention in the history of the company. And it's not just a 1 group. It's across all 4 business units. And I think it's a testament that people want to come work at our company because of the culture and because of the exciting projects that they got the opportunity to work on -- and then from a hiring perspective, we started off good, but hiring is going to be a critical focus for us as we go through the years, it always is. .

Perfect. So you mentioned the Middle East, both of you. I was surprised. One quarter was like the first quarter was really resin and considering all the conflict there for your operations, and you just mentioned like 1.5 book-to-bill. How operations there, are there any money getting like refocused to more like defense projects from like or run development? How do you think about that? And then you also have a really strong positioning for anything post-conflict rebuilding, how fast that could happen? How are you thinking about those opportunities?

So I'd say the most important thing for us was making sure our 7,500 employees were safe, and they are all safe. Our employees are all working at the job sites or in the home offices. And our customers have also continued to award. We overdelivered our expectations on revenue and beat bookings, and we beat cash within the first quarter. So those are all very good signs. It's because we're -- I think we're in the right markets, whether it's tourism and hospitality, transportation, infrastructure, and we've moved into defense and security. . In addition to the work that we've had ongoing within the Middle East, we've also beefed up our defense capabilities in support of the conflict. So we're providing support areas, including cyber, electronic warfare, counter unmanned air systems. -- our command and control system is being used for a tasking. We're doing intelligence and operations center operations 24/7. We're providing early warning capabilities from our air-based aerodefense system in Europe. So a lot of defense capabilities also that we're providing for that in support of our war fighters. Then post conflict, we see the opportunities in critical infrastructure protection. There's going to be a need to secure, herded and potentially underground assets, including data centers, water companies, utility companies are air bases within the region. There's also going to be a continued need for kind of our unmanned air system and even in places that you didn't have that capability prior. And then the rebuild area, we see a significant $880 billion across the Middle East. When you ask about starting to get a bit, there's things that we can actually be doing now so we can be looking at anything that would require kind of getting rid of unexploded ordinance, we can look at things like master concept planning. We can start thinking about different security aspects. We can look at ramping up in terms of what staffing going to take, what type of companies do we need to be partnered with. When you look at the duration of the $880 billion, it's estimated that those funds would flower about a 15-year period. That's pretty similar with what we saw when we did a lot of the rebuild effort in Iraq. That effort for us went over about a 10-year period.

That's fascinating. And you just mentioned air defenses. So like that click on Golden Dome to me because you guys have exposure to the nonkinetic effects, that you can contribute in this like layered structure that is being designed, but also, you have a strong relationship with NDA, and you were able to also get down-selected to shield despite like the early conflict of interest of going one side or the other, like -- how are you thinking about that? Are you seeing opportunities flow there? I think it was in a recent hearing that development, of course, at just 20% of the reconciliation bill has been actually kind of like awarded so far, like it's taken a while. Like are you thinking about timing of that exposure to that? And how fast could that play out?

Yes. So first, starting on the relation build, to your point, Mariana. department for us suppose to get $158 billion, and about $20 billion has been spent. So yes, there's quite a bit yet to be spent. We are starting to see gondoexpenditures. A lot of that work is in the classified space, which we're participating and we'll discuss that. But I will say we expect our major role to be the integration role. So Golden Dome has indicated that the Missile Defense Agency will be the system integrator for the Golden Dome contract. We are the system engineering and integration company for the Missile Defense Agency. We currently have over $1 billion in sealing remaining on our contract, which runs until 2029. The other area that we can play in is the nonconnectefects. How do you use cyber and electronic warfare to stop incoming unmanned systems or missile systems instead of doing kinetic to kinetic. It's much cheaper, and we have ways that you can do things like potentially address swarms if those should occur. We are in a space-based center sector team. We're 1 of the 4 teams. So that will be another role that will play. And then we'll see what ends coming out in terms of shield capabilities, but we are in that contract as well. So Golden Dome will be a contributor for the company.

Great. And you mentioned system integrator and that also spark FAA to me after you were not selected for the air traffic control system like the big contract against Parati, even being the favorite from a capabilities point of view, that hit the stock a lot. But after that, you got an extension, a system integrator and like with your long-term relationship with the FAA, you also got like to support Raytheon antennas being integrated, like is all loss? How you think about your role in this FAA modernization that goes beyond that contract that you were pursuing?

Yes. So it's the most important thing. FAA has been a customer of ours for 50 years. We've done work at over 1,000 FAA location. We have hundreds of people spurring the FAA and hundreds of contractors that support us in the FAA's mission. Our most important focus is to make sure the air traffic modernization gets done on time anywhere that we can help. So our current technical support service contract has over $1 billion remaining on it. And the customer, to your point, did exercise over $500 million 3-year option of full year or early, which I think is a testament, once again, to our performance. And we were rated as the technical superior company in the mid of the air traffic modernization. So I think we're going to be playing a significant role we've been doing engineering and design. We do site installation. We do a lot of the test capacities and basically work at all the facilities coast to coast. So our work involves all the work streams, whether it's automation, whether it's communication, whether it's surveillance or facilities we participate in all 4 of those. We expect to have over 25% growth on our core contract this year, but then we're also seeing additional growth. A good example is we had 35% growth in the first quarter, and part of that came through the voice communications switches -- so the FDA went directly to the voice communication vendors and then they've come to us. So whatever we can do to help the FAA and make sure that they meet all their milestones. Our company is going to continue to support that as we have for the last 5 decades.

And I'm going to switch gears a little bit towards infrastructure. The infrastructure bill is about to expire in September, end of the fiscal year. And if this is a new surface transportation bill is now introduced and like actually authorized on time, there is a real risk of that flow of funds to toe slowdown. How do you think about that? How much is the political risk how much funds could be awarded from now till September and actually give visibility for multiple years, where the puts and takes on that risk?

Yes. So the infrastructure investment Jobs Act was passed November 2021. And to your point, it's a 5-year bill, so it does expire this fiscal year. $1.2 trillion. Now that $550 billion of that was new dollars. -- there's only been as of the end of January, about 60% obligated and about 40% outlaid. So that means there's still a lot of money remaining within that bill. Our estimation is that the peak of outlays is not going to hit until the 27 to 28 time frame, then you're going to have 3 to 6 years expenditure beyond that. So a lot of money remaining from the current bill. -- the next surface transportation bill, we're expecting the surface transportation component of that to be somewhere in the range of $500 million to $600 million, not too dissimilar from what it was in the IA -- that bill, I'm not sure will be passed on time with the upcoming elections. However, we do expect that it will get past somewhere in the 2027 time frame. So you're basically going to be looking at a case where IIJ is still ramping up. and then you'll be adding to that new surface transportation funding. SP999 Perfect.

And you just mentioned this timing and midterm elections and what is the risk for that. We get that question a lot, like investors today are concerned about a continued resolution and extended continuing resolution going into 27. What is the new spending level for that continuing resolution are you positioned to that? Because on 1 hand, there is a high rate of that consumer resolution to be long one. But on the other hand, you have the reconciliation build, the reconciliation 1.0 money flowing through a system they enacted 26 money flowing through the system, a lot of that outlay still out there to what extent do you need the money to get appropriated versus not? -- to going to keep growing next year.

Yes. So I'd say we're very used to running through CRs. It's unfortunately been going on half of my career decades. So we know how to look through CRs. And the biggest thing for us I'd say, first 50% of our business is not federal government. So that helps us quite a bit from a portfolio perspective. The 50% that is we've won some good ceiling level contracts. Great example are the 2 other transaction agreements. We were just awarded that we announced on the first quarter call for $400 million. So we've got these contracts that have ceiling values that we can drive work to. Within our $11 billion of awarded not booked, half of that amount is ceiling value contracts. So we have $5.5 billion plus the additional $400 million. So we can just continue to drive work and we don't expect a CR impact from that point in time. .

Perfect. And when I think about all these multiple factors, you are also a super acquisitive company. When you think about the pipeline and your appetite, where are you looking for in terms of capabilities or access to markets? Where are you looking for when you look at the M&A.

Yes. I'll hit on that, and Matt will go a little bit about our balance sheet and the position that we're in for that. So we have an excellent pipeline. We've done over 17 acquisitions since 2017, the majority of those have been in the federal space. When we buy a company in 1 segment or another, it doesn't really matter because if we buy a company in federal and we have cyber cloud, artificial intelligence capabilities, we take those technologies and we use it as an enablement across the entire business. So we've got a very good pipeline. We already closed 1 deal this year, Altamira, a $330 million deal with a $45 million earn-out that capability adds to our signals intelligence, our golden done capability for missile tracking, missile warning, our ground system processing capability for the intelligence community as well as other efforts. So very excited about that acquisition. So I would say, expect to see us do a couple more deals as we go through the year.

Yes. And I'd just add the balance sheet is obviously in great shape, 2x levered at the end of Q1 after a $330 million acquisition -- cash acquisition in Q1. So with $450 million of free cash flow over the next 3 quarters, in really great shape of a lot of capacity to continue to do more. .

And where are you seeing from a pricing perspective? Because defense and defense tech, you just talk about like since intelligence, exposure to Golden Dome. I could imagine that's way more expensive. How you manage that?

So we've been continuously between about 10 to 13x EBITDA range. We have 1 that was about 7.7x. So it was on the infrastructure side. But I would say our valuations have been pretty continuous. One reason is we do preemptive deals generally. We like to work with companies in advance, make sure we have the right mission focus, same culture, and then we'll discuss having an acquisition. That way, you have a much better probability of success. I mean, it's neat when you look back over some of our recent acquisitions and some of the awards we've gotten as a result of those, we won a $1.2 billion contract with General Services Administration that largely came through our Black Signal acquisition or our Black Horse acquisition. We've moved into a highly classified space work through our Black Signal acquisition, which was very helpful. The 2 OTAs that we just announced, those came largely through our Chesapeake technology acquisition. Our PFOS PFAS work over the last 2 years has grown by 38%. That's through TRS acquisition. Our Applied Sciences acquisition in less than a year has already helped us win a lot of water work. which has been our fastest growing and most profitable market. So I think we've done an excellent job of not just buying companies, but really being able to drive the value out of those companies in a very short period of time.

And then on the critical infrastructure, you also made like critical acquisitions to position 2 key markets. Do you see in the U.S., any state where you're still looking for a bigger footprint or How should we think about that?

Yes, we've identified Tier 1 states. And for us, those are California, Texas, New York, New Jersey, Florida and Georgia. So those 6 are really where we're focused. And the reason is based on demographics, they get the most allocation out of formula funds. And there's an effort underway to do more formula funds and less grant funds as we go into the next reauthorization bill. So we'll continue to double down in those states. It's important if you're in a state that you're also in the right cities. So for example, our BCC acquisition, we didn't have a very strong footprint in Miami. So we bought BCC so that we could strengthen our footprint in Miami. .

Perfect. And sticking with capital employment, M&A has been like the priority for you, but how do you think about repurchases, especially with the price being net like at like the early '25 peak levels.

Yes. Without a doubt, repurchase a bigger part of deployment. We've -- over the last 2 quarters, we bought back almost $100 million worth of stock, $95 million. So $35 million in Q1. And so we're very interested in the stock at this price, of course. And so balancing the pipeline of acquisition opportunities and leverage and the price. It's just a great opportunity. Last year, we did $125 million. So clearly feel this dislocation and feel like it's a great return on investment. .

And you mentioned before in capabilities, I -- sometimes defense services are put all in the same back or IT services in general. And people are like, okay, AI agents will take over all these jobs and like, this is a risk. But on your side, you see it as an advantage because you can actually implement these things as part of your solutions. What are you doing with AI? For how long have you been working with the different versions of AI and how that makes you more competitive versus less competitive?

Yes. So for us, AI is an enabler to deliver mission outcomes. If we can help our customers get solutions on the federal side more quickly to the Board fire on the infrastructure side, to improve quality of life through efficiency of transportation systems. That's a big asset. We've been doing AI for 2 decades. We first developed a system that could detect counter improvised explosive devices and video graphics. And then an early open source intelligent search tool for the intelligence community. I personally my second job at a college was work in an AI laboratory. So I've been personally doing AI forever. . Then you fast forward to today, I'll just give you some representative examples. Cyber, we've been investing research and development on how can we do more autonomous cyber. How do we determine an adversaries next move? How do we figure out if a circuit board -- it's been tampered with. We use it for counter-unmanned air systems, how do you identify the track and to feed a UAS that's incoming -- on the infrastructure side, we've applied AI to our intelligent network solution. So for advanced traffic management solutions. How do you do it? That's a great example of where we've been able to increase our revenue while our head count has gone down, and it's really been through the use of AI and improving our software development capability by 25% productivity. I'd say on the infrastructure side of the house, when I graduated, I was drafting my hand. After I got out of school, my first year, I was using computer design that we went to building information modeling, 2D, 4D, 5D, genic AI is just your next step on that journey. It's really a toll. It's an enabler. I always like to say if a customer has $5 to spend. and we can deliver a product or an offering to them with $4. That's great. We just gave them another $1 to spend. And that's important because the demand is there in every single one of our markets. And if we are always solving our customers' emerging challenges, more than likely that dollar will come back to us in another form. So for us, AI is critical. It's embedded throughout the entire business. We have trained our entire workforce. We developed internal training several years ago. That's been a focus for us. We have our own instantiation of ChatGPT. We have over 6,000 of our employees that are users on that. So it's a critical enabler to win more business. In fact, if I look at the last 10 wins that we just announced since the end of Q4, there were over $100 million, I would say 9 of those had an AI contribution.

And how -- you mentioned about like being more efficient and cost efficient. How that invest your margins in the long term. And that's a mix with like how you do M&A. If I were to think about the company like 3, 5 years from now, how margins should look like because of these dynamics?

I'll talk generally about margins. Over the last 2 years, we've seen 110 basis points of margin expansion that's on the back of really the critical infrastructure business has come out from some challenging programs and delivered 10-plus percent margin 5 quarters in a row. So we're seeing really great performance there on infrastructure. Within federal, the margins are typically a result of contract mix. So we've seen faster growth in cost types. So you think our FAA contract, you think a bad, you think all these different missile defense agency all these contracts that are more cost-type oriented. That puts a little bit of downward pressure on the margins within Fed. But as we get toward the latter half of this year, and we started to deliver more on products, you start to see the contribution from ULTOMIRA at full scale. And the acquisitions that we've done that are all 10-plus percent margin, you'll start to see Fed trend in that double-digit direction as well. So continue to see opportunity within margin. Probably North America with an infrastructure will continue to contribute additional margin expansion. And then on the Fed side, we'll see products become a bigger part of the portfolio. And then there's a possibility of shift to a little bit more fixed price, then you'll see additional margin expansion.

And I would also say through operating leverage, we're able to get margin expansion, all the acquisitions we do are greater than 10% EBITDA -- and then back on artificial intelligence, we're not just applying it for external customer solutions, but it's also how we automate and make ourselves more efficient. Matt, you say, for example, on cash forecasting, Dave can use AI to tell how Matt and care you are sounding on an earnings call. Do we sound confident or coffee or less confident than the last quarter. We're using it for legal and contracts. We're using it for proposals. How do I make sure that my proposal is more compliant? How do I produce proposals more efficiently. We're using it for hiring, we're using it for recruiting. We're using it for all of our marketing communications. So AI is really going to help us as well. .

So between what you mentioned about like a higher product-oriented portfolio, and this we like incorporating technologies that fast. I was always complaining because we always complain on defense. It's never enough. It's a continued resolution, but actually, there are things that are changing and are changing way faster than they used to. How do you think about like this, like fiscal year '27 that asked for $1.5 trillion for all the acquisition reforms we're seeing the OTAs you mentioned before. How can you benefit from this more agile growing defense spending?

Yes. So I would say, for us, again, half our business more commercially already. And so I like to look at us on traditional company. And when you look at our federal business, it was purpose-built starting in November 2016. At that time, we really only had the Missile Defense business. So our cyber business, as I mentioned, 21% of the company's revenue today didn't exist. Space and missile defense, 14% of the company basically has grown up since that point in time in the critical infrastructure. So because we're purpose-built, we built a company that is very agile that is very commercial-oriented and nontraditional. So we're in the best place, I think, to capitalize on things like OTAs. We currently have over 30 other transaction agreements across the entire company. We're advertising our product offerings on commercial solution offerings. We believe in all the acquisition reforms that are underway in terms of how do you streamline that far and make things more efficient. But I would say we're a commercial company at heart, and our focus is getting solutions out as quick as possible for our war fighters.

And do you think that the signal towards where the requirements and needs are strong enough for you to actually put your own dollars and investment towards those?

Absolutely. I mean when you look at the defense budget, $15 trillion and the base that's proposed for FY '27, whether it's $70 billion that's going into drone dominance, counter Mandar systems, $60 billion going in the space, $58 billion going into JADC2, artificial intelligence $48 billion going into critical minerals. We got $20 billion that's going into cyber, we've got $11 billion going in Pacific deterrence. It aligns perfectly with our portfolio, and there are all areas that we have been investing in, many of them since we started research and development investment back in 2016. .

Perfect. And to close, I always like to know like what is that gets you most excited about the future and what actually keeps you up at night?

So I would say most excited about the future of the strong tailwinds. We're very fortunate to be and 2 growing thriving segments that have bipartisan support and global demand. We're also in 6 end markets that are growing between 4% to 11% over the next 3 years. We have a proven ability to show that we can be on the industry leaders in organic growth within both of those segments. What keeps me up at night? I think it'd be mostly any unknown unknowns or unpredictables, .

Well, thank you both very, very much for being here.

Thank you. We really appreciate it, Mariano.