Science Applications International Corporation (SAIC) Earnings Call Transcript & Summary

Okay. I think we are live and are going to get started. My name is Jason Gursky, the aerospace and defense analyst here at Citi. I have the pleasure today of hosting SAIC. And with me, I have Prabu Natarajan and Joe DeNardi. I don't think either really need much of an introduction. But Prabu has been at the company now for about 3 years I think it is 2020?

2 years.

2 years. Okay. For 2 years. Prior to that, he was at Northrop and spent some time, including the CFO of the IS business, I think, right, and PricewaterhouseCoopers back in the day. And all of you probably know Joe, given his background as a former sell-side analyst himself. So welcome to the stage. I appreciate both of you being here today. You guys are kind of in between reporting periods, I guess, the best way to describe it. So Joe, I don't know if you have any prepared remarks that you guys need to make.

No, I don't.

No. Forward-looking statements, all that kind of good stuff?

As long as you stick to...

Yes. stick to the script, I get it. Yes, that's the idea here. The spirit of this is not to rehash recent quarters or talk about real near-term things and instead focus a little bit more on the bigger picture strategic things. I'm going to put my glasses on here. And let's start with the big picture.

And we're all aware of the strategic doctrine of the United States which seemingly would set us up for a prolonged period of robust defense spending. And I think we can all argue about what that growth rate looks like, and I'm guessing that's a lot of the questions that you guys get these days. But maybe we can step back a little bit and talk about maybe some of the less formal conversations that the company is having with your customers. What's worrying them today, what's on their minds, and how is that informing how SAIC is thinking about the business.

Sure. Great. First of all, thank you for having us. And hopefully, you all can hear me. Perfect. So nice to see you again, Jason, and good to see everybody here. Very big picture. As Jason said, we're in the middle of our reporting period, and we have a [ corky ] year-end January calendar. So we report first week of April. Very big picture. I think there are probably a handful of things animating from a customer perspective. I'd say big picture, the industrial base is smaller than it used to be 20, 30 years ago. For the first time, many of them are actually seeing real inflation in the operating environ. It's not flat to 1% anymore. And there are real constraints in the labor market and making sure that they are continuing to execute on the mission that they have in front of them is probably the most animating concern they have. There's the budget issues, and we'll probably talk about it at some point. But those are probably very big picture the things that concern them. Now the technology today is very different from the technology we had 5, 10, 20 years ago. And I suspect it's going to look very different 20 years from now. So I think part of the challenge for companies like SAIC, and we're doing our darndest here is, how do we become a premier technology integrator of choice that can be very agnostic to the kind of technology that the customer needs, but truly bring capability and capacity to them in a way that truly integrates the offerings. And so if you think about an environ where labor is challenged, supply chain is challenged, there is inflation, being able to be a premier technology agnostic integrator becomes a key differentiator for a company like SAIC and that's, frankly, what we're truly committed to be.

Okay. Great. Maybe sticking with this same kind of -- on the customers' minds and sticking a little bit with this idea of the industrial base. And in that, I'm not necessarily referring to your suppliers, but the industrial base kind of at large, you mentioned that it's gotten smaller, which I guess comes with both some pros and cons.

Yes.

But if you were to step back and think about the overall capacity and capability today of the industrial base, do we have the right industrial base? And if not, what needs to change?

Yes. So let me pull the thread on it a little bit. I think I said fewer people in A&D today than maybe the mid-80s, fewer companies in A&D today than the mid-80s, it does put pressure inside the industrial base. And if you think about -- I'm a student of history, you go back 100 years and you look at the First World War, Second World War, you had commercial base ready to step in when there was a need inside the industrial base on the defense side. You could argue whether that legitimately exists today or not. On top of that, if you think about the labor challenges inside of the market today, it tends to create more constraints. Now this is not a unique U.S. problem. This is actually a global problem. There's actually a fantastic RAND report study that came out last year that talked about industrial-based labor constraints in China and them having struggles to fill the STEM talent that they're losing inside of their businesses. So to me, I think this actually is a little bit of a global phenomenon. So I think as we think about it in a constrained environ, whether that's labor-based constraint or constrained in terms of availability of materials, you have to think about how do I get more for the investments we're making today, and that's where being agnostic to technology focused on being a cloud provider, if you think about AI, if you think about edge computing, all the things that will make a difference in the next 20 to 25 years, that is where we are squarely focused on our strategy on, to say, let us make outsized investments in these key markets, which fully will be very differentiated over the next 15, 20, 30 years. That's where the investments are going. So to me, I think that's how we're addressing it and that is candidly how we are trying to address the constraints that exist on the customer side.

Right. You clearly read the questions ahead of time because every time you mention something it [ leads ] right into the next one and that's the long-term strategic priorities of the company. We're sitting here 3 years from now, 2026, and we're trying to figure out what the second half of the decade is all about and where the company is going to be positioned in 2030. I do see some investors out here that have that kind of time frame. What are we talking about in 2026 we're sitting here 3 years from now? What are you guys focused on over the next 3 years from a strategic perspective, for the company that we're going to be talking about?

At the biggest picture level, one of the things we have tried to do and we're getting credit for doing is making sure we isolate the bets we want to make as an organization. There's almost nothing that we view as a bet in the '26 to '28 time frame that we are not already investing in today. So we are investing in the cloud areas, edge computing, AI. It's a tuck-in strategy in terms of looking at venture entities that actually can operate inside of the framework we're setting up on the R&D side to say we cannot out invest a lot of bigger companies. And therefore, how do we get smarter about the investments we're making. And can we get the right venture entities interested in a company like SAIC, so we bring capability forward. So you're seeing a lot of investment go inside cloud. And most people talk about cloud as cloud migration. We actually talk about migration, but we're also talking about active app development while you're inside the cloud in a multi-secure environ, secret, top secret, SAP, SAR, SCI and all of that stuff. So we are doing that kind of work inside the cloud, bringing in automation into the operate part of the cloud and most people are talking migration today that's what the future looks like in the next 3 to 5 years. Think of a solution like Koverse, which is a very small company that we acquired about 2 years ago. What it does is algorithmically it will sift through individual classification levels for people accessing a government system to be able to say, based on access levels, here's the level of access they need to have. So think multiple systems getting compressed into a single system and algorithmically being able to figure out based on the participants' access levels, you give them access to the right kinds of data. Think about how much compression in hardware and footprint there is on the customer side in a budget-constrained environ, that's a solution they're going to want because what we are actively doing is operating more efficiently inside of an infrastructure. So almost nothing that we are not investing in that is going to be relevant for the company in that '26, '27 time frame. The reality is I think if we're starting to invest for those markets for those time frames, we're probably a little late. And so I think we're actively thinking about here are the GTA, the growth and technology excellence area that we have core competence and core capability in, how do we out-invest the competition inside of the constraints of a business that's trying to expand margin and deliver top line growth for our shareholders, which we've been able to do for a couple of years now but the expectation is, how do you fully balance all of the competing requirements here such that you can actually continue to do that?

And Joe, maybe we can bring you into the conversation a little bit because if memory serves me correctly, you're helping out with some of the venture investments at the company. Maybe you can describe a little bit about how the company approaches venture investing, where you guys are making some of your bets. And I don't know if you've been involved -- if the company has gotten one in the late stages and either gobbled up and run it in-house or had an exit. But if you could just kind of walk us, what is your approach to venture investing, where are you guys investing. And maybe just walk us through a deal cycle.

Yes. I think there are probably a couple of pockets of our business that kind of lend themselves to the venture strategy. Cloud is one. And I think part of that is you have kind of an abundance of capabilities related to cloud in the commercial market. And many of these companies, particularly now given what's happening in that market are very interested in working with the U.S. government, but really have no idea or no interest or the resources to do that. And so when we can go to them and offer them a pipeline of programs where we think we can sell their solution as part of our kind of broader solution. That's very interesting to them. I think once you get to that step, there are a ton of challenges in terms of like doing that efficiently and quickly. And I think that's really the problem that we're trying to solve for now is there are a ton of companies that we can kind of bring into the funnel that makes sense for us from a capability standpoint. How do we identify the right ones and then kind of work them through the plumbing of SAIC to make sure that there's value in it for them and for us. And so I think we've kind of focused that on the cloud side of the business, cloud security, cloud operation, automation. And yes, we look at it primarily from a strategic standpoint. So to the extent that the investment is successful strategically it will probably work out financially. But it's really about kind of shifting PWIN on existing pursuits and opening up new pipeline for us.

Yes. So we've talked a little bit about the industrial base and it being pretty constrained, we've talked about your strategic priorities and making sure that you're staying out ahead of things, your approach on the VC side of things. Yes, maybe we can try to cap off the conversation here on the industrial base. It sounds like this country may have some issues. If God forbid, we were to ever get involved in a near-peer conflict, it sounds like we're going to be pretty constrained. Are you seeing any discrete actions at DoD or inside the halls of Congress that are -- can help address this issue? Like what should people here in the room be kind of monitoring here over the next 12, 18 months on this particular issue?

Yes. So the hardest thing from a customer perspective is budget stability. We've lived in a CR 13 out of 4 years now. And while we all get comfortable saying we know how to operate in a CR, it becomes very hard to plan for a $700 billion investment budget when you're living on a year-in, year-out basis. The second source of disconnect is we would want the government to think about budget planning on a truly longer-term basis, and you expect corporates, companies to plan for a shorter cycle. It feels like it's actually the reverse. We see more companies thinking about the business on a 3- to 5- to 10-year basis and the government effectively going 1 budget cycle to another. So to me, I think there's real recognition that there is disruption in the system today, and there are people trying to address it on both sides of the aisle to ensure that there is some sense of agreement on the priorities that impact the government. There is an acute level of conversation around near-peer conflicts and threats to the operating environ. And I think in that arena being agnostic to a particular platform, being more data-centric, network-centric, I think actually works to the benefit of a company like SAIC that is committed to not being in hardware, that is committed to keeping a capital-light model where it is all about the data, where it is all about the capability you bring at scale in a technology agnostic way. And to me, I think companies like SAIC that aim to do that over the next 3 to 5 to 10 years, probably end up having a little bit of an advantage. You would really think the conversation on O&M budgets and procurement budgets and RDT&E budgets, you would think that service companies end up doing a little bit better on balance just given the threat environ and the constraints on funding and having to get more done with less. And to me, that's why I think we're cautiously optimistic about the longer-term setup because it is going to be a constrained environ. And I think we have, I think, the right areas of focus, and we're investing to make sure that we are bringing in improvements to the business model. I think this is one where we truly have to be a little bit careful. It is easy to get ahead of the business model that the customer is willing to experiment with. But it's important to not leave them behind as well or be left behind. So it's truly important to have the conversation to say, "I'm a mission partner that can help you figure out this business model challenge." And that means in 2026 or 2028, if this business has about the same number of people, better margins, higher growth that's an environ that actually works for the customer and works for us. So I think that's what we're really driving to.

Let me ask you, it's interesting that you talked about the longer-term planning model because ironically back when the Republicans control the legislature during the Obama administration, we had a series of 2-year deals, right, for DoD. So I'm just kind of curious, was that a better operating environment for the company? Did that allow you all to run the company more efficiently than going from CR to CR and annual budgets because it seems like there's this potential here -- one of the potential outcomes I would think here is another 2-year budget deal. We may not like the top line numbers. It might be a little lower than what they would have otherwise been, but at least it's a 2-year deal. So maybe you can talk about the pros and cons of a 2-year deal versus going from 1 year to the next, maybe you get a little bit more top line going year-to-year. But you get a little bit more certainty out of the 2 years and does it allow you to do from an operational perspective some tweaking that actually benefits shareholders and your [indiscernible].

I would say on balance having -- whether that's a 2-year deal or a 3-year deal, on balance, having that length in the planning cycle, truly allows you to bring a differentiated experience to your customer. And I think it truly endures to the advantage of being able to plan on a multiyear basis to say, here's what my CapEx planning looks like, here's what my data center planning looks like, here's what my headcount needs to be in an inflationary environ, and you start to make choices and bets inside of the operating environ that is then tied into a macro view of what budgets are likely to be over the next 2 to 3 years. So I certainly think anytime you have budget stability for 2 years or longer, it does allow you to plan for things a little more efficiently on the inside because there's almost nothing worse than reacting to a top line that is lower than what your expectations were. And especially, I think maybe the primes are a little bit different where you actually look at specific programs of record and you are able to tag it. If you're funded primarily out of O&M dollars, it's very hard to follow the money all the way through the individual line item, and there's a fair amount of plumbing that needs to happen to ensure that, that money comes down to the program level. And I think most investors struggle with the slowness of outlays last year, for example, it's just connecting the dots between that first level decision and all the way down to the outlays and then the appropriations and just getting contracts funded. I do think having length there is going to be, I think, significantly beneficial now. You would hope that this is not something we have to debate every year and you can get the predictability of longer-term budgets in place. But to me, I think on balance, it's probably what you want to see.

Yes. And you just mentioned the disconnect between outlays, I mean, appropriations and outlays. And I just spent the last 5 years inside of a corporate myself and understand, yes, the frustration that goes on with the lack of a better word, kind of the slowness of the procurement process. How has this played out over the last 12, 18 months? Are we starting to see some improvement in the pace of RFPs converting into actual awards or things getting the time that it takes to get all that done.

Yes. And I'm going to invite Joe as well here on this question. But big picture, it feels a little bit less constrained on the awards front than it did maybe 6 months ago. And we see anecdotal evidence of getting better. I'm a fan of data, 2 anecdotes don't make a data point. So it's just hard to get comfortable that it's visibly better, although it feels better. I think the other constraint is, if folks are worried about a CR to start GFY '24, so you've got, let's call it, 8 or 9 months left before the expiration of the current fiscal year and people start to wonder what does funding look like starting October 1. And it's O&M money, so it's a 1-year money or 2-year money. So people start to think about what does it take in a constrained budget environment starting with [ over 1 ] and how do I preserve my chips. So part of the conversation we're having internally is, how do we get our teams actively engaging with customers in a constrained budget environment because we are assuming base case CR to start and probably a lengthy CR in GFY '24 base case. Our base case is not [ BCA 2.0 ] for the record. But a lengthy CR, what does it actually do to budget. And we have businesses that are somewhat uniquely positioned in the sense that in a constrained CR environ, some parts of our business actually do a little bit better. Let me sort of pull the thread on it. So for example, we have a large Army business, well over $1 billion, primarily Huntsville-based where that Army customer has customers of their own. In a constrained budget environ, the customers of our customers actually come to them for additional statement of work and additional work to be done. If you have adequate ceiling in those contracts, it allows you to start to plan some ideas for things they could be doing in a constrained budget environ. So on balance, there are parts of the portfolio that actually do a little bit better in a CR situation. But the reality is, I think they're starting to think about it, and therefore, I think we're starting to plan with them to say what does it look like.

Yes. And I think we all listened to Leidos last week talking about their base case and their assumptions for this upcoming year with regard to a CR and even mentioned that they're preparing for a government shutdown. So I imagine you're all kind of running those kinds of traps, so we'll learn more about it when you report out soon, I guess. But the question I had was, and this is probably a fact-based historical looking, feel comfortable going off script a tiny bit here. So in a shutdown, obviously, getting access to facilities -- government facilities becomes pretty important for a company like yourselves. Have you talked historically about what percentage of your revenue gets generated from through access to government facilities, if you didn't have access like...

So we've not talked about on-site versus off-site. I think it's fair to say a number of our folks that work on government sites are considered critical. So to me that designation, the nomenclature is important because they continue to go and work at these sites even in the event of a shut down. Now where there was a visible impact to the financials was when we had the last shutdown. 2018, early 2019, there was an impact to cash collection at the end of our fiscal year, which was at the end of January and the shutdown effectively happened at the end of December to mid-January. So there was about a $50 million impact to cash collection, not a material impact to revenue. And candidly, we ended up collecting that cash early the following fiscal year. So it's one -- I hate to say it this way, we're used to operating in an uncertain environ. We have -- I cannot tell you how many backup plans for people that are unable to go to government site. We have places where we have tents setup with laptops for people to be able to access networks. And I hate to say we're actually pretty good at it. But it's not an environ you want to be operating in on a consistent basis.

One of your core competencies is [indiscernible] Yes, I recall. I was the Treasurer in my last job, and we actually stationed somebody across the street from the office where they could actually go physically get a check if it actually happened. One of my favorite topics, so I think it is for you all as well as JADC2. You've talked a little bit about computing and cloud and designating certain access to different parts of the network. But this is obviously a very important strategic initiative for the military. And maybe just for the edification of those in the room, you can briefly describe from SAIC's perspective, what JADC2 is and then talk a little bit about your involvement in it today and the investments that you're making that you think are going to drive more revenue streams for the company.

Sure. So very big picture. I characterize SAIC as a technology integrator, agnostic to systems. At the core, JADC2 is about being agnostic to systems. It is an approach to data that is data-centric as opposed to platform-centric. And so to me, I think JADC2 is at the heart of it all very much in line with where the core investments and the capabilities of the companies are being developed. So to me, that's sort of a very big picture. Inside of JADC2, we've had a number of very notable wins recently, and I'll just talk about the ones that we publicly talked about AOC Falconer which was a prime, it was a takeaway for SAIC. It was a $320 million contract. We took it away early this fiscal year for us, FY '23 still. And that was a very material contract for the company in the JADC2 area. ABMS digital engineering and integration absolutely core to the JADC2 strategy. SAIC was 1 of 2 services companies, and there were probably tens of services companies and product companies that bid for the work. We were 1 of 2 service companies to actually win the job. Then we have cloud-based C2, which is a takeaway from another service company, recent win that allows us to start to set the architecture for what cloud looks like. When you then combine the approach we have inside of JADC2 market with a solution like Koverse, which is sort of our AI solution, it becomes a very powerful way. So think advanced targeting or detection of bad actors in a cloud-based environ where you're digitally engineering an approach to data. What you start to see is threat detection gets faster, and you're able to fuse data in that come from multiple OEM platforms in a way that you don't actually care which platform it comes from. It is about the data. And that's what we're doing very actively inside of what the JADC2 arena broadly defined but I'd specifically call out AOC, ABMS DI as well as cloud-based C2. And there are a few other things going on in the restricted area where we are running some very interesting programs for restricted customers that allow us to continue to pull the thread on what we can do, which is a series of very powerful solutions and offerings that allow us to be and continue to be very much a data-centric company.

I think, Jason, when you came down to meet with us, you met with Vinny and that's where his business is, where a lot of this work falls and it's really important strategic campaign for him and for SAIC. And we've had a lot of success recently there.

Yes. I guess one of the big questions around this environment, right, is that it's Joint All-Domain, right? The jointness part of it that is maybe going to be the hardest part to solve for because we've got the Army is doing one thing, Navy's doing another and the Air Force is doing their own thing, all with an eye towards increasing the ability for them to communicate, share data, targeting otherwise. But does there have to be one clear winner from a system perspective, one approach to it that needs to kind of win out? Or are these things going to grow up in silos and just kind of intertwine themselves over time. How does this all shake out from the leadership of this initiative?

Yes, I think that's a great question. And I'd say, in some respects, we're probably in the early stages of that ball game. I still think we will continue to see shaping efforts from folks that are [ wedded to ] platforms, trying to shape the JADC2 outcomes that are more platform-centric and then we will see some companies that are shaping it to be more data-centric. Now we actually have a contract called CENTCOM, where we actually run the allies networks. So part of the JADC2 campaign, broadly speaking, is about getting the data through the ally networks so that it's interoperable. The data that some of our customers can see would not be data that our allies can see or vice versa. And Koverse-like solution actually starts to filter out the data that is now available for various participants inside of the network. So to me, there's a way to combine the CENTCOM contracts with the JADC2 approach on data that you can start to -- that you can actually start to sift out the kinds of data that's available for people to access. But in reality, I think it will probably some time out from sort of seeing this ultimately resolved. It's the jointness that's the complicating part. And you'll see the yin and the yang and the push and pull for probably a few more years. It won't change our approach to it, which is be data-centric, be agnostic to platform and keep going at it because, again, big macro and all the budget tensions we've talked about in a constrained budget environ being that way is actually on balance better because -- and candidly, you're starting to see some primes talk about it, being platform agnostic. So to me, I think this is the wave in a constrained environ, especially, and I think we're ahead of the competition.

And correct me if I'm wrong, I mean, gosh, I would think that one of the big lessons that we're going to walk away from this conflict in Ukraine is how important JADC2 really is to be able to seamlessly share information, particularly friend or foe and targets and figuring out what assets can neutralize targets more quickly is the name of the game here.

Some valuable lessons being learned right now.

Yes. So that brings up another question. So we're learning some lessons, and we're seeing what's going on, on the ground and the types of systems that are being used there today. How do you think that informs the fiscal '24 budget that's about to be introduced? And then maybe bring that full circle back to SAIC. So you've got a mix of business today with the branches of the military, maybe NGA, NRO, some other parts of the government. Are we going to see in this fiscal '24 budget some toggling of the spending as Army get a bid finally, right, given what we are seeing in Ukraine. And is that at all kind of changing the way that you guys are thinking about the business? Like will we see a potential mix shift in your customer set over time? And how does that come about? Are you developing some new products and services to kind of enable that?

Yes. It's probably harkens back to one of the earlier discussions we were having if it is a prolonged CR or a 1-year budget deal, it's unlikely to result in a material change in the way resources get allocated. I think that's lack of stability in the top line prevents the customer from -- or even the executive branch from making these tangibly visible, measurable choices around where the investment dollars have to go. So I suspect it feels more like how it's being done. And then, frankly, it's down to the lessons from Ukraine and what the plus ups look up -- look there. And I think we're probably back to what feels like a more familiar budget scenario playing out here.

I would maybe just add, I think there are probably a lot of lessons that should be learned, and it's a question of how quickly they get implemented into the budget. But one we've had some really good success in Counter-UAS. Obviously, that's a specific capability that's kind of been at the forefront of the conflict. We were 1 of 4 companies selected on a fly off about a year ago with our solution. And so I think we're cautiously optimistic that this could actually be an inflection point where spending for that capability, which is obviously very needed actually occurs and starts to ramp up.

Yes. Yes. Okay. Great. Shifting gears really quickly. You talked earlier about a capital-light business model, asset light maybe is the word you used. And we do seem to see on the prime side of things, vertical integration kind of comes and goes from a [ Fed ] perspective. We're starting to see some services companies that are becoming maybe a little bit more asset-intensive, right? They're going to still supply services, but they've got to buy assets to be able to provide that service. Can you just -- I mean, is there -- are there any hard and fast rules at SAIC? Like how do you guys think about asset intensity and what is a service and what kinds of assets that you need to...

So this very much comes back, I think, to what the vision for this company is. We are very, very committed to staying asset-light. You will not see us do product deals for the sake of adding product to the portfolio or improving margins. We are committed to investing in the areas that we've picked. We like our free cash flow story. We are committed to improving our free cash flow on a consistent basis. And you will see this company be more solutions-focused than product focused. And because product by definition, implies a level of silo inside the product architecture you're building out. So you're likely to see us continue to talk about being more solutions focused, hopefully less labor focused over the long term and remaining capital light because that, I believe, is the balance we're looking for and our shareholders are looking for, and we're committing to ensuring that excess capital is returned with a bias towards buybacks, which has sort of been our capital deployment story, which is sort of the other side of the capital CapEx question. And to me, I think you're going to see us stay with that plan over the next few years.

Okay. Great. And maybe we'll end it -- maybe we'll sneak one more in depending on how quickly you've answered this question. But we are -- as a group here at Citi, the analysts are sitting up, having these conversations are committed to asking one question across all companies, so I'm going to ask that question over to you now, and you can like tell me I'm crazy or Jason, I've already answered it, but I've made a commitment to my colleagues to ask the question. So let's see here. The question is, yes, what are the top 2 or 3 innovations and structural changes affecting the company over the next 5 years? And are there any emerging industry trends that are perhaps being overlooked in the current discourse. Maybe focus on that last one, that we would be the most interesting part because I think we touched on some of the other things but.

I invite Joe in here as well here. So to me, I don't think there is a trend that we are overlooking. I think we are underappreciating the value that service companies can bring in a constrained budget environ. And if you then combine that with inherently getting a better return on your net asset, I think that's an underappreciated part of that conversation I think.

Yes, I mean I think if history is any indication, we'll probably be talking about a lot of the same things that we're talking about now 3 years from now. I think 1 interesting question is whether kind of the acceleration of technology will change that dynamic, whether there's some technology that emerges that becomes a must-have for our customers and changes the way that they buy stuff from us and really accelerates the shift more towards solutions and away from services which makes a lot of sense. It's just -- there's a lot of inertia in the system. So I think that could be one interesting kind of question whether there's some inflection.

And that's why I think the venture side of business just as important because we don't have to build all of this ourselves. And to the extent that we can bring real disruption to the operating rhythm inside the DoD, inside the customer base by bringing differentiated capability via venture partners that are aligning R&D efforts to be more in line with where we think the budget priorities will be, where the customer priorities will be, I think that gives you a leg up in that conversation. I mean that's sort of how we think if we can do ventures at scale, and I'm talking to the 4 deals here on an active basis to say, and these are not material investments, these are small investments, but every one of them will have a multiplier effect inside of the pipeline. And if we could get that math to work, I think that becomes very, very disruptive, more so than anything, anybody else is doing right now.

Yes. Great. That's perfect. I think we just clicked over to 0. So I appreciate both of you joining us today. I wish you well. I hope you get a chance to enjoy the nice weather. And thank everybody in the room for sticking with us.