Stagwell Inc. (NASDAQ:STGW) Q4 2022 Earnings Call Transcript

Stagwell Inc. (NASDAQ:STGW) Q4 2022 Earnings Call Transcript March 2, 2023

Jason Reid: Good morning from Stagwell’s headquarters at One World Trade Center in New York City, and welcome to Stagwell’s Inc.’s earnings webcast for Q4 and full year 2022. My name is Jason Reid, Chief Investment Officer at Stagwell. I’m here joined by Mark Penn, Stagwell’s Chairman and Chief Executive Officer; and Frank Lanuto, Chief Financial Officer. Mark will begin with a business update followed by a full financial review for Frank. We will then proceed to a discussion with Barton Crockett for Rosenblatt Securities and open the floor for Q&A. You are welcome to submit questions through the chat function. As we begin, I’d like to remind you that the following remarks include forward-looking statements and non-GAAP financial data.

Forward-looking statements about the company include those related to earnings guidance, are subject to uncertainties and risk factors addressed in our earnings release, slide presentation and the company’s SEC filings. Unless otherwise stated, comparisons to prior full year periods discussed on this webcast will be pro forma for the combination, giving full effect to historical results as if the combination had been completed on January 1, 2021. Please refer to our website, stagwellglobal.com/investors for an investor presentation and additional resources. This morning’s press release and slide deck provide definitions, examples, explanations and reconciliations of non-GAAP financial data. And with that, I’ll turn it over to our Chairman and CEO, Mark Penn.

Mark Penn: Thank you, Jason. Stagwell closed out 2022 with industry-leading double-digit growth, strong margin expansion, record free cash flow, record earnings per share and a net debt ratio significantly below our year-end target. We promised to transform marketing, building game-changing AI and AR products and services as we continue to grow and transform both our business and the industry. In 2022, Stagwell hit a record $2.7 billion in revenue, achieving a 21% overall revenue growth and 19% organic growth. On a net revenue basis, we achieved 15% growth, 14% organically. This growth was led by our digital transformation services, performance media and research offerings. In line with our strategic focus on global expansion, Stagwell grew 26% internationally, about twice as fast as in North America.

In Q4, we also grew by double digits, marking six consecutive quarters of double-digit growth. All this in the face of market headwinds and a difficult economy tempered by rising interest rates. We delivered 20.3% EBITDA margin on net revenue for the full year as we controlled our labor costs benefited from the even-year advocacy cycle and reduced our comp to net revenue ratio to 62.7%. This generated over $450 million of EBITDA, $270 million of free cash flow is 60% conversion ratio. We delivered $0.90 of adjusted earnings per share and this performance in turn drove our net debt ratio down to 2.17 times , significantly below our previous target of 2.5 times and placing overall net debt on December 31 at $979 million. We also invested over $7 million out of OpEx in the new cloud product teams, and we’ll continue to expand that level of investment to $12 million next year as we €“ or this year as we bring new products to market.

Our Q4 revenue topped $700 million. We closed out the year with a 21.1% on adjusted EBITDA margin on net revenue. We are reaffirming our long-term annual organic growth target of 10% to 12%. Stagwell is achieving consistent double-digit annual organic growth in the ex-Advocacy parts of the business and even higher growth in advocacy years, and we expect to exceed this target in the 2024 to 2025 cycle. Recall that our overall growth is a combination of organic growth, self-funded acquisitions and the creation of the Stagwell Marketing Cloud, all of which are on or above plan. Based on the metrics of growth, margin, EBITDA, cash flow, adjusted EPS that we are consistently delivering at scale. Our stock remains significantly undervalued. I’ll take my word for it, ask the growing set of analysts who cover us.

The state of Stagwell remains vibrant despite the headwinds of a too hot, too cool economy. Some clients, especially the tech companies are holding back work early in the year as they right size their staffing. But we expect full resumption of that work as they stabilize their workforce. But there is no slowdown in RFPs, which are coming in at record rates. We continue to push the envelope of what a well-managed digital-first company can do. Today, we’re announcing another $35 million drive over the next two years to cut administrative expenses as we close out the final round of deal-related synergies later this year. This will contribute to expanding margins. These new savings will be above and beyond the past efforts as we streamline IT, HR, real estate and other centralized offerings.

All made possible by the new systems coming online now. We are also announcing a doubling of the stock buyback program to $250 million from $125 million. We bought back 7.2 million shares in 2022. We are setting 2.0 as the long-term net leverage target lowering it from 2.5. We will continue to use our free cash flow for three purposes, making prudent investments to augment our growth in tech services and expand our global footprint, paying off existing investments and three, buying back our stock or otherwise supporting our shareholders through debt reduction. We continued this year to reduce forward deferred acquisition costs, bringing them to about $60 million in cash in 2023. DAC is scheduled to drop to de minimis levels in 2025, reflecting our strategy of growing fully owned properties.

In 2022, we used less than a third of our free cash flow for new acquisitions, including Brand New Galaxy an e-commerce company that uses AI to improve online shopping; Maru, a leading SaaS research platform that is part of the Stagwell Marketing Cloud; and Epicenter Experience, we named The People Platform, a location data company within SMC and that augments our media performance and valuation. Stagwell is gaining share and reputation in the marketing arena. RFPs increasingly includes Stagwell alongside global competitors, and we win a disproportionate charter. In 2022, Stagwell was invited to a record $1 billion of pitches. Q4 net new business was $42 million, bringing 2022 total net new business to a healthy $213 million. We’re increasingly successful at executing a land and expand client strategy.

Our top 25 clients contributed a record average of $6.3 million in net revenue per client in Q4, up from $6.1 million in Q3. We achieved 28% growth in business from our top 25 clients for the full year, bringing our annualized average of each major client to $24 million. Technology, food, beverage, experiential, transportation and travel clients drove the largest gains in this group. Notable Q4 wins include Cotopaxi at GALE, Joanna at Instrument and a joint win between Forsman & Bodenfors and Assembly for global brand duties at the Mandarin Oriental Hotel Group. For the full year, we picked up significant accounts on Audible, 72andSunny, Bud Light at Anomaly, T. Rowe Price at Assembly, Lenovo at Assembly to inspire and Donor Dropbox at GALE, and AT&T Mexico at YML.

Three key industry trends are working in our favor and will work for us in the long-term as we position Stagwell at the frontier of marketing. First, media and creative are coming together; our creative media consultancy GALE grew 140% in 2022. We’re bringing two disciplines together €“ two disciplines together across Stagwell and giving media capability to all our major creative agencies so that they can plan and execute online campaigns. This is opening up scores of new pitches that generate long-standing client relationships. Second, every company is not only becoming a digital company, but also becoming a digital marketing company. Businesses need to market to a set of targeted consumers based on data across addressable mediums. And our companies and services are best oriented to service those consumers as 57% of our services are high-growth digital services.

Digital transformation grew 33% in 2022. Performance media and data grew 18%, and consumer insights and strategy grew 32%. Third, we are getting ahead of the next wave of technology with the Stagwell Marketing Cloud. We’ve unveiled our stadium augmented reality experience called ARound, developed with the Minnesota Twins and held the largest virtual snowball fight in history with the LA ramps. Users engage with the ARound app for an average of 25 minutes each opening up vast sponsorship potential beginning with so far as our first sponsor as we aim to take augmented reality to every stadium and every sport in the world. Additionally, a large PR agency just signed on to our generative AI-based communications technology product profit that helps PR professionals right and pitch the most effective news release.

Our next version of the product in beta now. We’ll write the first draft of a news release and refine it based on AI feedback. Profit came out number one in a recent competition more than 750 tech products in the public relations space. Among other Stagwell Marketing Cloud products, the Harris brand terminal is growing at nearly 100% per year. We’re progressing in the development and deployment of our Media Studio product, which by next year, will place us in direct competition with the Trade Desk, leveraging our $5 billion of media that we place to train and perfect our models. By 2024, we expect SMC services to contribute significantly to the bottom line, building to $500 million in SaaS, DaaS and advanced media platform services by 2027.

Stagwell continues to be best positioned in the industry amidst the digital revolution and marketing. Our performance-based media division is ideally situated to benefit from the growth of connected TV while competitors struggle with the transition. Our research is fast, agile and sophisticated commanding a premium in the marketplace as companies need more advice than ever in an uncertain world. And our digital transformation division takes on ever more complex projects on creating online publications to advising on Web 3 implementation, all while our creatives turn out top-rated Super Bowl commercials, an anomaly which was behind the famous Ben Affleck Commercial on Adweek’s 2022 Agency of the Year. In 2023, we expect to deliver 7.5% to 10% net organic growth and $450 million to $490 million in EBITDA in line with our long-term targets.

We expect free cash flow to again be in the 50% to 60% range and that should generate between $0.90 to $1.05 of adjusted EPS. Remember that our high-margin advocacy businesses are semi dormant and odd years and then add to the growth rates in even years. We’re once again guiding double-digit growth, 10% to 14% in the ex-Advocacy services and believe we have hedged for a difficult economy in these projections. We expect 2024 to be a year in which advocacy, the economy Stagwell Marketing Cloud come together to accelerate growth even higher. Our strategy is working. We’re generating results double or more than traditional competitors because of accelerated growth of our high-growth digital services, and we’re achieving expanded client relationships through global scale, yet we are not standing still.

We’re innovating with the Stagwell Marketing Cloud and AI and AR experiences that put us at the forefront of the industry. Now Frank Lanuto will need a deeper review. But first, enjoy a short film made by our own company, 2022’s highlights.

Frank Lanuto: Thanks, Mark. Good morning, everyone. We’re pleased to have you join us today to discuss our Q4 and full year results. As has been the case with our recent post-merger results, my comments today will include a limited discussion of our GAAP results as they pertain to the full year, followed by pro forma comments for the full year. Beginning in Q4, we no longer have quarterly pro forma results to report, as we have anniversaried the merger from August 2021. The full year pro forma combined results are presented as if the business combination had occurred on January 1, 2021. Our Q4 revenue was $708 million, an increase of 16% over the prior year. Full year revenue grew 21% to $2.7 billion, both marked records for the company.

Q4 net revenue, excluding pass-through costs, grew 12% to $583 million. For the full year, net revenue increased 15% to $2.22 billion, again, records for the company. When reviewing our revenue, based on our four principal capabilities, digital transformation organic net revenue increased by 21% and 33% in Q4 and the full year, respectively. Net revenue in Performance Media and Data increased by 12% and 18% in Q4 and the full year, respectively. In consumer insights and strategy, organic net revenue grew 17% and 25% in Q4 and the full year, respectively, as our research-related businesses continued to perform strongly. And finally, creativity and communications grew organic net revenue by 3% and 5% in Q4 and the full year, respectively. Shifting to operating expenses.

The company continued to manage costs carefully in 2022. Despite the highest level of inflation in decades, we were effective in controlling our single largest expense and improved our compensation to revenue ratio to 62.7% in 2022, down from 64.2% a year ago. Since our merger, the company has increased the use of equity awards to drive financial performance and improve the retention of key talent. For 2022, stock-based compensation represented 1.5% of net revenue, down from 3.6% in 2021 and consistent with our estimate of 1.5%. Administrative costs rose 22% to $378 million versus the prior year, in line with our revenue growth. While some of these costs increased with our sales activity, and T&E increased above pandemic lows, we continue to reduce our real estate costs by consolidating our footprint in Los Angeles in 2022 and have plans to consolidate further in Los Angeles, London, Chicago and Toronto in 2023.

We are targeting a further reduction in annual real estate costs by $3 million to $4 million. As a result of our strong revenue growth and effective cost management, we delivered record adjusted EBITDA of $123 million in Q4, up 19% from the prior year and $451 million for the full year, also higher by 19% from the prior year. We also expanded our adjusted EBITDA margin by 120 basis points in Q4 to 21.1% and by 70 basis points for the full year to 20.3%. For the year, we delivered net income to Stagwell Inc. common shareholders of $27 million, up from $21 million a year ago and EPS of $0.17 a share up from a loss of $0.04 a share a year ago. Normalizing for certain onetime and noncash items, we delivered adjusted net income of $63 million or $0.22 per share in Q4 and $268 million or $0.90 per share for the full year.

With respect to our ongoing initiatives and specifically our previously discussed core synergy program. We expect to complete the program during 2023 and achieve the $30 million in annual run rate cost savings. We are not slowing our efforts. We have nearly completed our rollout of a global ERP and have initiated the deployment of a global payroll system, which we expect to complete by early 2024. These financial systems will allow us to continue our plan to expand our shared service operations, consolidate our accounting back office and ultimately reduce costs further. As Mark said, we are targeting an additional $35 million of administrative cost savings over the next two years. Moving to our balance sheet. We made significant strides in strengthening our financial position in 2022, leveraging and maintaining financial flexibility.

The steps we took to recapitalize our balance sheet with the refinancing of our bonds at a fixed rate of 5.58% and an eight year maturity immediately after the merger allowed us to add long-term financing at an attractive cost of capital as compared to the current interest rate environment. And driven by free cash flow of $270 million for the year, an increase of 35% over the prior year, we were able to successfully deliver our capital allocation plan this year. We lowered our acquisition-related liabilities of deferred acquisition consideration and redeemable non-controlling interests by $65 million to $200 million as compared with $265 million at year-end 2021 as we systematically move towards 100% ownership of our agencies. And in 2023, we will lower our obligations further with estimated cash payments of approximately $70 million, after which our acquisition-related obligations will be under $100 million.

We also acquired 7.2 million shares under our stock repurchase program during the year, returning capital to our shareholders and reduced our net debt by $201 million from Q3, ending the year with $221 million in cash and $100 million drawn against our $500 million revolver. This resulted in lowering our net leverage to 2.17 times below our prior target of 2.5 times. And CapEx for Q4 and the full year was $5 million and $23 million, respectively, or approximately 1% of full year revenue in line with our previous guidance. And finally, reiterating our 2023 guidance, Stagwell expects to deliver 7.5% to 10% organic net revenue growth, 10% to 14% organic net revenue growth, excluding advocacy, $450 million to $490 million of adjusted EBITDA, 50% to 60% conversion of adjusted EBITDA to free cash flow and adjusted earnings per share of $0.90 to $1.05.

Thank you. Jason, back over to you.

Jason Reid: Thank you, Frank. That concludes our prepared remarks for this morning. We will now turn to Q&A. We’re going to prevent for good questions from Barton Crockett, Managing Director and senior research analyst at Rosenblatt Securities. We’re pleased to have Barton joining us here live from One World Trade Center. Barton, the floor is yours.

Barton Crockett: Okay. First off, I want to say thank you for inviting me to join you here. It’s a privilege in my first quarter covering you guys to get the opportunity to interact with you after this earnings report. So thank you. I wanted to ask about the, first of all the performance relative to kind of your guidance, right? So you delivered a full year that was kind of at the low end of your guidance that you had put out on your €“ in terms of EBITDA on your last earnings report. And that suggests to me that perhaps things got a little bit more difficult than you were anticipating just a couple of months ago. And I was wondering if you could talk to that why at the low end versus kind of the midpoint or above?

Q&A Session

Mark Penn: I think the difference between the low end and high end was primarily a fall off in low dollar of political contributions. That was what I said in the third quarter earnings call was a fall off once gas prices went up, and that continued throughout the election season in which the Republican fundraising frankly, given the overall turnout, what happened in the midterms, fundraising in the Republican side was significantly down. And I think that was the major factor between being towards the lower end of the guidance and the higher end. We don’t expect this to repeat itself as the upcoming presidential raise promises to be the election of the century.

Barton Crockett: Okay. And I want to ask a little bit more about the presidential before you do that. In terms of the current environment, what can you tell us about what you’re seeing right now? How do things look relative to your guidance for the full year? How does that kind of trend?

Mark Penn: Obviously, we’re tracking in line to the guidance for the full year. I think that right now, we’re seeing, as I pointed out, some of the tech companies, I think, what we call management €“ temporary management disarray while people kind of get their footing again and then we expect to see a full resumption. Outside of that, we see very strong work across areas like travel, which will come back really strongly, alcohol, which I think is really expanding and coming back. And we see caution out there, but we don’t see panic.

Barton Crockett: Okay. All right. And then one more question about your guidance in terms of margins. So one of the great things with this past year is you had margin expansion as you highlighted. In your guidance, the revenue growth at the low end would still be up, but EBITDA would be flat year-over-year, which suggests maybe risk of margin compression at the low end and at the high end, they’re kind of trending at the same kind of pace which would suggest margin stability in your guide. But always things you’re talking about sound like that would make you more efficient, higher-margin business. Is there some conservatism in this guidance?

Mark Penn: Well, I think as I said that I’ve tried to incorporate various economic projections in the guidance already. I think second, remember, we’re €“ we’ve spent a lot of money to really steam out some of the administrative expenses. So, we’re right in the middle of putting all these systems in. Once they’re in, I think we’ll be able to shrink administrative expenses considerably.

Barton Crockett: Okay. And then you teased the presidential. And so I was wondering if you could talk about what you’re seeing in the buildup to this presidential election. What are the indicators that kind of support your belief that this will be a record year for political overall and for your company?

Mark Penn: Well, 40 years of experience in the field. We’re seeing things on track. But right now, this is kind of the low and the political season. But what we’re really seeing is storm clouds are gathering on both sides, and it looks to me like they’re going to have active primaries on both sides. And that come May and June this political season is going to take off. And no question, given the 50-50 country that the battle here will really drive, I think, fundraising and financial commitments to an absolute high level.

Barton Crockett: Yes. And you would flag the small dollar as an issue here most recently. What gives you confidence that, doesn’t continue to be a problem. And in general, do you see anything in the fundraising side that can speak to that.

Mark Penn: We are seeing recovery from what last year when gas prices went up, particularly during the summer, it was extreme panic, and I think people choosing between another political contribution in food and gas, chose food and gas. I think that what we’re seeing is much more of a normalization of that. You’ve seen gas prices come down, which I think is a key indicator. I’d be surprised if the administration allows gas prices to rise in the face of a presidential election. But we’re seeing really high levels of political involvement activity. Again, trust me, this is going to be in the scheme of things and all out that for the soul of America, and that means active participation. We’re also broadening out our services on our side from just fundraising to also male balance collection.

I think we’re also going to add additional services. And on the D side, I think we’re going to have a very, very active season with a lot of successful candidates who are advancing will be defending their Senate physicians.

Barton Crockett: Okay. And the…

Mark Penn: That’s all about 2024. As I said in my script, I think you see all of that coming together in 2020.

Barton Crockett: Yes. Now one of the things that’s also interesting about this report is that you’ve upped the share repurchase authorization. And you’ve been an active share repurchaser. You noted that your EPS for the past year was $0.90 in a single dollar stock €“ single-digit dollar stock. So in terms of looking ahead, the up share repurchase authorization would suggest that there could be more dollars going towards that. It’s an environment that is somewhat constrained €“ is there still an opportunity and ability for you guys to continue to do M&A? Or do you think that that’s maybe less and it’s more of an opportunity for as we look at?

Mark Penn: Yes. I’ve said previously that I generally look to take about third of our free cash flow put it in new M&A, generally, a third paper other obligations. And then a third kind of flexible for buybacks and others. You notice we have our DAC obligations down to a record low. So actually, that will also free up some useful cash. So, we’re continuing to look at acquisitions that make sense and that fit in line with the strategy. And I think we have the cash capability to do both of those things. Quite strongly as we did last year. We €“ look, we have continued confidence that the stock is undervalued at this level. As long as it’s undervalued, that’s one of the best investments we can make.

Barton Crockett: Okay. All right. Now switching gears a little bit to an industry issue that I was curious to get some perspective from you on and that is, this AI-driven search debate that’s been solved by Microsoft and impacting sentiment around Google €“ this is part of your business. Having a meaningful part of what you do is driven around search-based advertising. So, I was wondering if you could talk to, Mark, what you think will happen. How do you think this evolves? And what impact, if any, does this have on your business?

Mark Penn: Well, as you know, I was Chief Strategy Officer of Microsoft before coming here. So, I’m pretty well grounded where I think the tech industry is going. And AI is the next big thing here. It’s the next major development that’s going to change people’s lives. Certainly, in terms of our industry, we’re at the forefront with our profit product. I think that AI could be incredibly useful and accurate in helping people write and draft things. I don’t think it does the final draft, but it sure does the first draft, and it does the first draft ways that are quite powerful. In fact, I’m demonstrating later this afternoon to the entire company. How our new product generates the entire release from just a few sentences of what you want.

Barton Crockett: Okay. All right. And then to lean in on that a little bit. Any predictions do you think Microsoft takes share? Do you think it’s disruptive?

Mark Penn: Look, I think over at Google, they’re saying, how Microsoft get the drop on this. And I think that Google has the engineers and the talent to bounce back. So, I think for the first time, we’re going to see some real head-to-head competition in the tech industry to see who winds up the leader. And I think that both companies are going to go all out.

Barton Crockett: Okay.

Jason Reid: Thank you, Barton.

Barton Crockett: Great. Thank you.

Jason Reid: We will now move to questions from the call. The first question comes from Laura Martin at Needham. What are your key goals and strategic priorities for 2023?

Mark Penn: Well, obviously, in 2023, you can see that we’re €“ in 2023, we’re focusing on organic GAAP revenue growth within the three top layers of the pyramid. We believe continuing that and continuing that overall pattern, I think, is number one. Lot of my time, is personally spent helping to develop the cloud products. I believe that those cloud products here are just getting to market come out with the media studio that that’s going to be a major new products. So and then the third level, as I announced, we’re going to embark upon a new effort really to try to bring the latest in technology and even AI into the central management of the company to reduce expenses even further. We’re not going to be satisfied up there with just business software as usual. We really want to be a model company in the way we administer our own finances.

Jason Reid: The next question comes from Jeff Van Sinderen of B. Riley. What’s the update on what you are experiencing in the cloud industry?

Mark Penn: The update is really that we’re €“ now kind of moving to the next level. The stadium product now was released August 22. We’re going to be in stadiums, come the opening of baseball. We’re really developing that product €“ we’re developing that product, not just in stadium, but at home. So that it expands the at-home television experience. And so we think there’s going to be great pickup on that product. We think that we are also in the process. We bought Maru last year, and that gives us kind of a self-service research platform. We are right now in the process of re-skinning that to make it even more consumer-friendly. That and the Harris brand terminal, I think, really gives us a significant competitive offering in the self-service automated research space.

As I said, the Media Studio, I expect to come probably second or third quarter. We’ve just finished our media mix modeling product, and we’re working to the other components of that product. We’re testing right now special QR code marketing on the advanced marketing platforms. And we’re doing really well with ReachTV and out there to the addressable airport screens. So, I think this is going to be a big year for the cloud and profit, as I said, the PR product. One, the competition against 750 products and now is really, I think, out there with degenerative AI. And we’ve also now put together a central team. Our lead, CTO is taking all of the company’s data and putting it together, and we will also have a central AI resource that can be drawn upon by all the variable programs.

So, we’re really building, I think, state-of-the-art platform here with a series of products that are going to win in the marketplace over the next few years.

Jason Reid: The next question comes from Steve Cahall at Wells Fargo. What’s your outlook for M&A in 2023 after doing eight deals in 2022? What are you seeing in terms of valuations? And is the environment either better or worse for deals?

Mark Penn: Jason, if you want to comment on that?

Jason Reid: Sure. I think it’s going to be a very interesting year in terms of valuations. You are certainly seeing some rationalization from what we experienced effectively was a bubble in the past few years. But we remain long-term disciplined around our investment philosophy, and I believe we’ll have a very constructive year again. And do a few deals, probably not to the extent in 2022, but we remain very focused on adding value through strategic acquisitions.

Mark Penn: And we continue to look to expand the global market or to add to our advanced tech services as our primary goals and acquisitions.

Jason Reid: Next question comes from . Please qualify, quantify the market for global RFPs and how does a mutant macro perhaps impede these ops. Following a record-setting net new business in Q3, $86 million. What does the trajectory look like for the next 12 months? Will marquee existing client brands such as Amazon, Google, Microsoft, drive the majority of your continued net new business wins?

Mark Penn: We achieved about $1 billion of pitches last year. Our goal really is a billion to this year. We don’t wind up participating in about 20% of them for various reasons. And then we have been winning 25% to 30% of the pitches that we do participate in above our share. Our goal this year is to actually €“ we just expanded the team to get more pitches in Europe that actually we have a lot of resources in Europe generally have been overlooked by the marketplace. Now that I think Stagwell is at scale, we’re going to have a very strong presence at Con as well with what we call Sport Beach in order to kind of again, I think last year, our biggest marketing came after the splash we made at last year’s time. So again, tech companies strongly favor us.

They favor a combination of services and people. Some other of the holding companies might do best across older segments and industries. We tend to do best in the forefront of technology and industry. And I think that will continue to be the case. It is a very, very diversified client mix. You look at some of the recent clients. And you see hotels; you see a lot of alcohol. So it’s going to continue to be a mix like that.

Jason Reid: Mark do you have any closing comments on?

Mark Penn: No. I just want to thank you all. Thank you for following Stagwell. I think we become each year too big to ignore in the marketplace. As I think our numbers grow, the size of the company grows, our continued double-digit performance grows and our ability to outpace competitors and to transform marketing grows with 57% of our resources that are digital first with the creative resources that you saw all out in force at the Super Bowl and the kind of awards that they win that combination, I think, that really makes for transforming marketing. Thank you.

Jason Reid: This concludes our conference call. Thank you, everyone, for joining us and we look forward to seeing you next quarter.