WNS (Holdings) Limited (WNS) Earnings Call Transcript & Summary

Thank you. Good morning, everyone. And as we continue day 2 of our technology conference here. This is Ashwin Shirvaikar, I'm Citi's payments processors and IT services analyst. And it's my pleasure to welcome next, WNS. From WNS we have Dave Mackey, who many of you know is the EVP of Finance and Head of Investor Relations. Dave, welcome, and thank you for doing this.

Thanks, Ashwin. Happy to be here.

Yes, absolutely. So I know, Dave, that most investors are familiar with who WNS is, but in a group setting, there's always a few that might not be. So perhaps we could start with a 2-minute elevator pitch, if you will, who WNS is? Who is competition? How you are differentiated? If you could start with that.

Sure. So we view WNS as a leader in the BPM or the Business Process Management space. Essentially what we do is we help our clients design, transform and manage their core mission-critical business processes. We believe our services and solutions are differentiated by the company's vertical approach and organizational structure, which we believe allows us to kind of focus more on delivering custom solutions for the specific industries in which our clients operate. In addition to that differentiated vertical understanding, WNS has deep expertise in digital technologies, advanced analytics, process expertise and global delivery, which we combine together to help deliver real business transformation for our clients. We view our solutions as helping our customers improve their competitive positioning by helping them enhance the customer experience, increase operating efficiency, allow them to leverage data and analytics to drive actionable insights and of course, reducing cost, which is always one of the tenets of outsourcing. Our differentiated approach is resonating well with both new and existing clients. And we also believe this has allowed us to deliver industry-leading organic constant currency growth and premium operating margins in the space. So long and the short of it is, we think we're executing extremely well in a very healthy business environment and that we think we're still very early on in the evolution of process outsourcing, and the opportunity is only growing.

Got it, got it. So you mentioned a few principles there, deep verticalization top to bottom. And sometimes I think after all these years, the benefit of top to bottom verticalization is not necessarily fully appreciated. I mean, there are other companies that are verticalized, but they're not necessarily top to bottom. They may have salespeople that are -- that are vertical experts or -- and so on. Why do you think it is that, that -- something like that which might sound relatively basic, has continued to be a source of differentiation for you guys?

Look, well, I think there's 2 reasons, and it's a great question. One, we believe that it's the right way for us to service our clients. To your point, for us, end-to-end verticalization of the organization isn't just about the sales force or how we go-to-market. It's fundamental in terms of sales, solutions, delivery and ownership of the resourcing. So from that perspective, our verticals are truly self-contained business units. And what we believe is that allows them to focus on their customers and their business. If you look at the majority of the peer set, while they have verticalized their go-to-market and verticalized the customer-facing layer of their business, if you look at kind of behind the scenes how those businesses execute, they're horizontal in nature. So essentially, what has to happen is when they go to the client with a solution, they need to pull from multiple groups with disparate agendas to be able to bring together, hopefully, a solution that solves what the client is looking for. For us, because we're self-contained business units [ in ] verticalized, we operate that way. So even the accounts receivable and the accounts payable clerks, for example, within our insurance business are looking at it from an insurance perspective. They're looking at actuarial accounting as opposed to royalty accounting or passenger accounting. So that specialization and that understanding end-to-end of what our clients are looking for, we believe, allows us to align better and most importantly to develop solutions because we're looking at the business the same way the customers are. And that's the philosophical difference. I think most of our peers would agree that if they had the opportunity to verticalize their organization's end-to-end, they would do it. Unfortunately, because the industry is healthy, it's difficult to change the engine, if you will, in the plane, while it's flying. WNS had the opportunity to do this back in 2010, 2011 when a new management team came into place. And we experienced a lot of trauma to the business in verticalizing it. It's not an easy thing to do. It's highly disruptive. There is senior-level attrition that goes with it, but we came out of it a business that we believe was much better positioned to service what customers in this industry were going to be looking for. And we think our revenue and margins over the last 10 years have proven that.

Got it. One other question, and you kind of mentioned, when your customers think about a relationship with you. Yes, they think digital, yes, they think analytics, they think vertical. But thinking about cost is never far away from the discussion. You cannot be -- I mean, it's a -- It's part of the overall value package...

Absolutely.

Right? So from that perspective, in digital automation, I guess the question becomes how much of the conversation that you have is evolving to talk about other parts of value as opposed to cost?

Yes, yes. Great question. And I think this is the natural evolution of the industry. I mean 10 years ago, the only companies that were outsourcing in a meaningful way were companies that were looking to cut cost. The key driver was cost reduction. And to be honest with you, if customers were outsourcing core mission-critical work, the reason they were doing it is because their businesses were struggling badly. No one wanted to do it. Companies felt like they had to do it in order to keep themselves afloat. If you fast forward, what's interesting is if you look at WNS's growth, for example the 4 years prior to COVID, we steadily accelerated. We averaged 13% organic constant currency growth over that period in a relatively healthy macro environment. And if you look at not just the overall macro that we were selling into, but also the new customer additions that were brought on during that period, what you'll see is a fundamental change in the type of customer that was coming to us. We've added significantly large numbers of digitally native organizations as clients, to where they're now 17% of company revenue. We've added organizations that are industry leaders in travel, in healthcare, in retail as customers. So the profile of who is outsourcing had changed. And because the macro was healthy, it wasn't cost that was driving those initiatives. The bottom line is what we've seen is that companies are outsourcing today on the process side because they need to change their business processes in order to be competitive, in order to keep up with competition. And if they're not doing these things, they're not -- they're going to struggle from a business perspective. They're going to lose revenue. They're going to lose clients. The fact that we do save them money is obviously critical, and it makes the investment decision easy, right? I mean, if you can help reposition your business and save 30%, 40% from what it's costing you internally to manage those processes, that's a compelling value proposition. The ROI is immediate and highly visible, and it becomes a much easier decision for people to take. But I can say in no uncertain terms that today the #1 reason for outsourcing is not cost, it's competitive positioning. And the cost component of it is certainly nice to add if it keeps the entire organization happy, and it makes the investment decision easier. But the bottom line is this business is dramatically different not only in terms of the drivers, but also in terms of what we do for our clients, from where it was 10, 15 years ago.

Got it, got it. The -- I guess maybe that leads to what I hope is an interesting question, and not to put you on the spot, but I know you have a lot of -- a lot of client relationships. But if you're now signing more work that is not specific to cost and is more about transformation, more about doing interesting things, can you maybe give 1 or 2 examples illustratively of some really cool projects or cool things that WNS is working on?

Sure. Just last month, we launched a new offering for the pharmaceutical space called Precision. And essentially, it's a cloud-based competitive intelligence platform that helps companies combine real-time granular data from both commercial and public sources, to create what we view as kind of a 360 view of the competitive landscape within where they're operating, which allows them to improve their strategic decision-making and help support things like customer expectations, drug pricing, R&D prioritization. So this is a critical tool for pharma companies to be able to really assess kind of how their business is operating and where they want to be going forward. This unique capability for us is powered by artificial intelligence and machine learning, and it leverages very deep domain-centric analytics to be able to supply those insights. So it's a tool that's resonating extremely well in the pharma space. We're also kind of expanding that into the biopharma and parts of the life sciences world. So this is kind of a neat tool that obviously is not driven by cost reduction. It's driven by helping these companies understand where they want to be and how they want to behave. Another example, I think, that would resonate extremely well with everyone on the call here now is, for our insurance clients, we're now leveraging drone technology to help them process rooftop damage claims. Our solution, while it certainly saves money, the real important thing is it reduces health risks to insurance adjusters, right? We don't have to put people up on the roofs. It immediately helps analyze the validity of a claim, the extent of damage to that roof and the repair cost, which helps reduce claims processing time. So not only is it safer, more efficient, less errors, it also helps customers get their claims processed in a shorter amount of time, which helps with customer set and helps sell policies. So this is -- these are both great examples, I think, of how we're helping our companies better position themselves to meet the demand of what their end customers are looking for.

That's [ fast really ]. So broadly speaking on demand. Given all the talk about digital transformation that while it has happened for many years, now seems to be coming to a head. You mentioned in your last call accelerated hiring. Is that kind of a sustainable thing with regards to the demands coming and improving and you're hiring more people, should we then just automatically look for a higher level of growth?

I think when you look at the hiring that we did in the fiscal first quarter, there were really 3 drivers for that hiring. One was certainly healthy demand and new logo signings, expansions of existing relationships, which is always great to see and is the long-term driver of our -- the growth in our business. The second component of some of that hiring was a rebound in the travel vertical. So we had some hiring that we had to do to meet up with increased expectations and increased commitments from some of our travel clients to higher volumes from where we've been operating the last several quarters, which is always great to see. I mean, this is just a recovery of some of what we've lost during the pandemic. And the third was a short-term hiring burst that we had to do to cover for absenteeism in light of the Delta variant in India. We had case counts the first couple of weeks of May in India that spiked up to almost 400,000 a day. We hired additional people to make sure that we were able to support our clients in the event that we had a resource that was either ill or attending to family members that were ill and therefore unable to work. Good news is those case counts have come down dramatically. The resources are now being put to work into growth initiatives. So all good from that perspective. But certainly, the 2,900 people that we hired in the fiscal first quarter, which represented, I believe, almost 7% or 8% sequentially, not a growth in headcount that is sustainable for us, but we certainly do expect to continue to hire here as we go forward. I think the one thing that we do want to mention here, Ashwin, is that while we do expect hiring to continue to accelerate in support of not just the digital transformation initiatives and the healthy pipeline that we have in support of some recovery on the travel side. But we also are conscious of the fact that we do want to continue to make sure that as an organization, we're leveraging more technology and automation in everything that we do, and that we're focused on delinking the growth in headcount from the growth in revenue. We've seen that in our business over the last several years. We've averaged almost 3% differential in growth in revenue versus growth in headcount. So I think what you will see over time is that while headcount needs to continue to grow to support the company's growth, the amount of headcount needed to support that growth will diminish.

Yes, yes. Would you -- and this may sound like a [ odd ] question given you sounded quite bullish with regards to demand or at least optimistic with regards to demand. But are clients of yours still being conservative either because of persistent uncertainty given Delta, or supply chain constraints or what have -- labor constraints or labor issues? In other words, while demand is recovering and you're projecting that things are still perhaps careful or conservative?

I think there are certainly some pockets of that, Ashwin. But the reality is, if you look at our business through the pandemic, the real impacts to us were the loss of volumes through the processes we own and manage, right? And we mentioned travel. We also had some of this in utilities and a little bit in the retail vertical as well. But if you look at what really happened through the pandemic, we did not see a drop-off in demand. As a matter of fact, we signed 33 new logos last fiscal year, which lined up almost exactly with the start of the pandemic March 31. We signed 33 new logos, which was the highest we've ever signed, right? Our customer expansions over the last year were the highest in the company's history. So in addition to maintaining a healthy pipeline, we saw decision-making continue to happen during the pandemic. Certainly for some of the very large end-to-end transformational kinds of deals, things moved a little bit slower at the outset than we would have liked. But the bottom line is, I don't really think that was a function of the pandemic per se as much as a function of initiatives that were so disruptive and so strategic to the organization that they wanted to proceed cautiously. So the bottom line is you've seen our demand reaccelerate here in terms of the revenue over the last couple of quarters, but the underlying metrics that we track in terms of progress continued to be healthy straight through the pandemic. So if anything, we kind of view coming out of this as an opportunity to accelerate growth in the company, and accelerate growth in the industry for that matter, as more and more clients focus on digital transformation as a key tenet to their strategic initiatives.

Got it, got it. Okay. So if I think of volumes, you're basically saying it was volumes in certain processes that went away. But what...

Correct.

But what part of that has not come back yet?

Travel. That...

I mean in percentage terms is there like another 5% lift there...

Our travel business last quarter was still 25% below pre-pandemic levels, which represents approximately $10 million a quarter in revenue, so $40 million annualized. We're sitting there with roughly 5%, 6% of revenue that we still own the customer. We still own the process, but the volume of transactions moving through those processes has been reduced as a result of reduced end customer demand. As and when that comes back, we see the opportunity to recover all of that volume plus. So the bottom line is that's more a function of time from our perspective. We don't have to go sell it. We don't have to reengage to get it. That's something that will come as their business recovers. Obviously, we have no control over the timing of that. And certainly, with what we've seen over the last 12 months, would expect to see some volatility that those numbers will ebb and flow over time. But the bottom line is as we kind of move along, we believe those volumes will normalize and that should be additive to the normal growth that we produce from adding new customers and expanding existing relationships.

Got it. Got it. You've talked a couple of times about analytics, and I know that for you, it tends to be sort of an integrated analytics offering. But how large of a business is it? What kind of growth are you seeing in there now?

Yes. Look, I mean, you're right. We report 11%, 12% of company revenue that's standalone analytics, which is largely what we call functional analytics. And that's where we take over and manage the analytics group or the analytics function on behalf of one of our clients. So essentially, it's not a project-based business. It's where the client makes a 3- to 5-year commitment to have us support their internal efforts for analytics. The second piece of analytics, which we don't call out separately, as you rightly mentioned, embedded analytics. And that's where we are doing analytics work as part and parcel to managing and owning the responsibility for a process on an end-to-end basis. For example, to kind of use something that we've been talking about here, when you talk about an insurance claim. There's a lot of analytics work that goes into understanding whether or not a claim is fraudulent or it's a fair claim, to understanding what the amount of that claim should be and what the repair cost of that should be. Those -- we don't charge the customer separately to analyze a claim and understand those things. That's part of whatever price we get paid to manage that claim. As a result, because we can't separate the analytics from the customer interaction, from the data entry, from the finance and accounting back-office component of that, we don't. And that's part of what we call industry-specific revenues. That probably represents, if we were to ballpark it, another 8%, 9% of company revenue. So in total, we view analytics as roughly 20% of company revenues. And that 20% has been growing above company average. So you want to think something like 15% compounded, it's probably a good number. So we do have a healthy amount of what we do that is tied to delivering actionable insights for our clients, whether it's on a separated basis or an integrated basis. And it is critical to part of what we do for all of our customers. But we don't call ourselves out as an analytics company. That's not who we are. That's not what we do. We don't do analytics projects unless specifically requested by a customer. We want to sell annuity types of businesses where we have that repetitive relationship, and we can drive long-standing value to our clients.

Got it. Okay, okay. Maybe we could shift to talking about sort of delivery and the delivery organization. How do you view sort of the longer-term delivery mix evolving? I mean, obviously, the pandemic has convinced or at least may have changed viewpoints about where work can be done from. But in terms of work from home versus in office, I know you mentioned in the past that work from home maybe is a little bit cheaper and better for you. Can you talk about the dynamics of that maybe?

Sure. And obviously, a lot of this is we're going to have to wait and see. But yes, the good news is what the pandemic has now proven, and we've certainly been moving into the office and out of the office as waves have struck here over the last 6 to 12 months. What we've proven is the ability to not only execute either in office or work from home, but also to be flexible in terms of moving resource back and forth as needed. So we think we've got a very flexible delivery model right now. We can do what clients want us to do, either in office or work from home. The real question now becomes, are there differences in terms of safety, security, perception and what do clients want? And I think, obviously, if you dial back to the beginning of the pandemic, none of our contracts allowed for work from home, right? Everything that we were doing early on was on an exception basis where clients had to sign off on a new work from home solution on a temporary basis so that we were able to continue to support them. Clients were appreciative of that because they knew that regardless of whether they did it themselves or whether they allowed us to do it, they were going to have the exact same challenges. But we also understand that there are certain benefits to not only us as a company, but to our clients, of working from production facilities, right? When you look at places like India and the Philippines and South Africa, which are our 3 major delivery locations. The infrastructure that a WNS can provide to an employee working from a WNS facility is going to be superior to the infrastructure that they're going to have working from home, right, whether that's bandwidth connectivity, quality, so on and so forth. In addition, there are certain things that are more safe, more secure from a customer perspective about working in a production facility versus working from home, right? We can keep employees from having pens, pencils, papers on the production floor, which means they can't write down sensitive data and information from clients. They can't have cell phones on production floors, which means they can't take pictures. These are things that are very difficult to protect in a work from home environment. Certainly, we've developed some solutions that allow us to get around some of these things, like social security number or medical record masking. But the bottom line is, I think clients understand that there are benefits to them of being in office. So I do think as and when we're able to get back into the office safely, you will see large numbers of people coming back into the office. The other thing is from a WNS perspective, when you have 45,000, 50,000 people globally, to build a true corporate spirit and a true corporate culture, it's very difficult to do in a distributed environment. We don't want to be a company of 50,000 people all working from home. So I think what we're going to have to do moving forward is strike that proper balance between what clients want and clients need relative to their process partner. And also, being sensitive to what employees want and need. So I think it would be safe to assume that we will be 60%, 70%, 75% work from office when things return. But again, some of this will be a function of the overall environment and kind of what both customers and employees demand, and we'll have to strike that proper balance. I think anybody who says today that this is what their company is going to look like a year from now or 5 years from now is probably fooling themselves.

Right, right. So when -- and maybe jumping ahead to a margin question. But when we do come back to the office, [ this ] -- relatively close to normal, let's call it. What would you say, all else being equal, might be the impact on margins? And then obviously, all else equal is a flawed statement. So what's not equal?

Yes. Look, the good news, I think, from our perspective is there's not a huge difference in the unit cost of a work from home employee versus a work in office employee. Certainly, there are some costs that we don't incur when we're working from home, right? So we don't have transportation for employees. We don't have cafeteria costs; our utilities costs drop. These are all savings, right? In the short run, we can't do anything about rent, in the longer term we might be able to. But the flip side to that is when we work from home, we have incremental infrastructure costs. We have bandwidth and connectivity costs. We have endpoint and software security costs that are more expensive for us in that environment. The other thing that people don't think a lot about is in places like India and the Philippines, where we run multiple shifts, right? We can use a single seat, if you will, 2 or 3 times a day. The minute we move to a work from home environment, we have to double or triple the amount of infrastructure cost because people can't share a desktop anymore. So while there are some very modest savings to work from home, I don't believe it will ever be a driver for where we operate our business. The savings that you're seeing primarily in our industry from COVID-related pressures today comes from the travel side. It comes from the fact that our sales force aren't going to customer sites. Our executives aren't traveling around the world to eat, to meet with clients and prospects. We're doing this over Zoom instead of doing this in person in New York, right? And more importantly, when we deliver for clients, right, the transition, the knowledge transfer, these were typically activities that were done in person. We would send a planeload of people from a geography to the client site to spend 2, 3 weeks with that customer. That's being done virtually today. So these are all savings that we'll have to, again, wait and see what the customer wants coming out of COVID. But I think some of these savings may be more institutionalized than the infrastructure potential.

Got it. Got it. Okay. The other thing that obviously comes up, and this is really not necessarily for your industry related to COVID, but talent and talent shortages, right? And potentially a more distributed model enables you to overcome those sorts of shortages because you can hire more part time, maybe a more diverse workplace. Is that true, how much of an impact is it, let's talk about talent maybe a little bit more in [ term ] sort of impact?

Yes, probably not a huge impact for us. Again, part of the ability to attract and retain talent is predicated on finding pools of talent to look at, right? I mean, you don't want to be -- if today, for example, you're hiring 5,000 people in a place like India, you don't want to be hiring one person in 5,000 countries. It's not sustainable. Now does it open up certain pockets and pools of talent? Yes, it could, but again, there are costs to managing multiple geographies as well. And there's some loss of productivity that comes with it. Now for us, I don't think it's going to be as much of an issue, as you kind of rightly alluded to, Ashwin, based on the diversity of our business, right? I mean, obviously, we all have seen kind of some of the challenges that are showing up in the IT services space because you've got dozens of very large companies, all looking for the exact same type of skill sets in the exact same geographies, which by definition means you're going to have significant wage pressure and you're going to have attrition challenges. When you look at a WNS, we certainly have some skill sets that overlap with what those folks do, right? When you're talking about people that are digital experts, whether it's on the consulting side, or the transformation side, or the product integration implementation side, we've got overlap with them. But it's a relatively small percentage of our population because we're also hiring people to answer the phone. We're hiring domain experts like doctors and nurses and actuaries. We're hiring people to do accounts payable and accounts receivable. So because we run hundreds of processes and we do it over dozens of countries, the reality is we're never going to be beholden to one specific skill set. As long as we have adequate supply at the entry level and can properly manage the delivery pyramid, we don't see a significant challenge. And we are not seeing that pressure at all at the entry level.

Okay. Okay. And...

So you want to go find a digital transformation expert with 5 years of experience, it's going to be difficult and expensive. You want to go find a data scientist in India with 10 years of experience, it's going to be difficult and expensive. You want to find an AP clerk or somebody to answer the phone in India, the Philippines or South Africa, not a challenge.

Understood. Thank you for breaking that down. Is that then automatically then mean that when one thinks of such things as the attrition rate or wage inflation, things are not that different than, say, traditional trends?

I think there is some difference now on the IT side. I don't think for us, they're any different. I think what we've -- essentially, what we've seen is the wage inflation is the same as it's always been. It's somewhat redistributed, right? It's not as prevalent at the entry levels, and it's more prevalent at the senior levels or for the niche skills that we're looking for. But the overall wage inflation on the organization is not different at all. We had the same wage increase April 1 at the end of a 12-month pandemic as we had the 4 years prior to COVID. So that's not an issue. The challenge on the IT side might be somewhat different just based on 2 things, right? One, the fact that the demand is all in one specific area and that, that supply has not been created over the last several years, as well as the fact that they're trying to convert the existing legacy base at the same time. So it's not just new demand that's creating the challenge for them. It's also the fact that all the things that they'd previously done need to be reworked. And then obviously, that's got to be done through a combination of training, reskilling as well as hiring. But the bottom line is there are massive numbers. I mean, you're talking about $5 billion, $10 billion, $15 billion organizations that are trying to overhaul their entire workforce. That's going to be a major challenge.

Right, right. Okay. Makes sense. Makes sense. Can we talk maybe about margins a bit holistically? Obviously, your margins have historically been higher than that of your competition. Would you -- we've talked about some of your components here. But post pandemic, given particularly, I would say revenue mix shifts more [ vertical ], more analytics, things like that. Would you expect to continue to move up into, say, if I put a number to you [ and ] said, the end of this decade, you're going to be closer to 25 than 20, would you be shocked?

No, I wouldn't be shocked. It's the trend that we've been seeing in the industry. And it's not just the higher-value services and solutions, although that's certainly a part of it. And obviously, digital and technology-related assets help there. But it's also going to be, I believe one of the primary drivers for the margin expansion potential in this industry will be -- we talked a little bit earlier about companies getting comfortable, if you will, with outsourcing things that are core and mission-critical to their business. The second piece of that will be companies getting comfortable with giving up control of ownership of those processes, right? So if you look at our business today, 2/3 of it is still done in an FTE-based model. And while the client is moving work to us and holding us accountable for delivering on what they want to accomplish, the bottom line is the client is still managing that process, right? They're telling us how many people. They're telling us where they need to sit. They're telling us what the skill sets need to be for those resources. So while we can take accountability for the productivity of our teams, we can't really take accountability for the results of the process in that situation, because the client still owns the process, we don't. What we are seeing is that more and more, as clients work with us, understand what we do and what we bring to the table and that we can drive ongoing benefits to them over time, they're willing to give up control of those processes. And I think this will be the key driver for margin expansion potential in the industry. The shift from FTE-based models to transaction, outcome, subscription-based models where the client doesn't tell us how many people or where they sit, the client just holds us accountable for results, whether that's customer satisfaction levels or cycle times or cost to deliver, right? These are the things that they're going to want from us, that we meet the key benchmarks that help make their business competitive, and care less about how many people and where they sit. And if we're successful in moving more and more clients to these models, and we're able to deliver successfully and execute successfully, I think there are margin opportunities. Our margins today in non-FTE-based models average 250 to 300 basis points higher than they do in an FTE-based model. So we know that we can execute better when we have control of the process. And shifts to that kind of a model will come over time as companies get more comfortable with us as a partner. But more importantly, as the industry gets comfortable with this being the standard or the norm. And we saw the exact same thing 20 years ago in the IT services space, to be honest with you. Every deal in IT services in the late '90s was a headcount-based deal. And fixed price, fixed service level or fixed price, fixed deliverable was something that clients really only started to embrace post Y2K [ and ] the financial crisis. So our hope is that COVID serves as an accelerator for our clients to move to these types of models where ownership and accountability gets transferred to the partner and clients can then focus on running their business better.

Got it. Okay. Okay. I wanted to ask you an M&A question given your balance sheet, I think, is in the best shape it's been in, but I think we're out of time. Unless you want to give me 2, 3 quick lines.

Yes. And just real quick, it remains the top priority for our balance sheet. We are looking for assets aggressively that complement our capabilities, that fit well into what we're trying to do as an organization. But we're also not going to be desperate. We want to find the right asset at the right price, that's the right fit for us. And if it doesn't expand our capabilities and doesn't help us reposition what we do, we would rather not -- we'd rather do not do M&A than do a deal that doesn't meet our criteria. And we think when you look at -- while we have not been heavily acquisitive, when you look at the deals that we've done and look at the results of those deals, I think we've proven to be good stewards of capital. So healthy M&A pipeline, aggressively looking, but not going to change our approach.

Okay. Got it. Got it. Well, on that note, Dave, thank you, as always, for the insights. Thank you for doing this and being at our conference.

No, my pleasure. Thanks for having us, Ashwin.

Thanks.