Diebold Nixdorf, Inc. (NYSE:DBD) Q2 2022 Earnings Conference Call August 2, 2022 8:30 AM ET
Christine Marchuska - VP & Head, IR
Octavio Marquez - President, CEO & Director
Jeffrey Rutherford - EVP & CFO
Conference Call Participants
Matt Summerville - D.A. Davidson & Co.
Jeffrey Harlib - Barclays Bank
Kartik Mehta - Northcoast Research Partners
Peter Sakon - CreditSights
Arun Seshadri - Crédit Suisse
Matthew Bryson - Wedbush Securities
Good morning. My name is Adam, and I will be your conference operator today. At this time, I would like to welcome everyone to the Diebold Nixdorf Second Quarter 2022 Conference Call. [Operator Instructions].
Ms. Marchuska, you may begin your conference.
Hello, everyone, and welcome to our second quarter 2022 earnings call. I'm Christine Marchuska, Vice President of Investor Relations for Diebold Nixdorf.
To accompany our prepared remarks, we have posted our press release and shareholder letter to the Investor Relations section of our corporate website. I would encourage investors to review the shareholder letter, as it contains additional information regarding the progress of the company.
Later this morning, a replay of this webcast will be available on the Investor Relations section of our website.
Before we begin, I will remind all participants that during this call you will hear forward-looking statements, including related to an update on guidance. These statements reflect the expectations and beliefs of our management team at the time of this call, but they are subject to risks and uncertainties that could cause actual results to differ materially from these statements. Additional information on these factors can be found in the company's periodic and annual filings with the SEC. Participants should be mindful that subsequent events may render this information to be out of date.
We will also be discussing certain non-GAAP financial measures on today's call. A reconciliation between GAAP and non-GAAP measures can be found in the tables of today's earnings release.
And now I'll hand the call over to Octavio.
Thank you, Christine, and thank you all for joining us today.
Over the past several weeks, our company has worked quickly to take important steps to become more agile, customer-focused and better equipped to face the volatile macroeconomic environment. During my first full quarter as CEO, we delivered on our prior commitments, with sequential quarter-over-quarter improvement on several key measures, including revenue growth, margin expansion, adjusted EBITDA and cost savings through our restructuring initiatives; all of this leading us to reaffirm our EBITDA guidance for the full year.
Our solution set is as strong as it has ever been, and we continue to see robust demand in order entry from a stable customer base that wants our market-leading solutions. We ended the second quarter with $1.4 billion in product backlog, our highest backlog to date.
Order intake continues to outpace our ability to convert backlog to revenue. Important to note that approximately 90% of our 2022 total company revenue is secured either via contract or scheduled backlog, which means committed spend. Additionally, approximately 70% of our service business is recurring in nature at any given time, and we expect to grow this metric.
Banking and retail are 2 of the world's most competitive and demanding industries, and we continue to play a vital role in supporting our customers' efforts to succeed in an ever-evolving customer landscape. Demand remains strong across both areas, specifically for our cash recyclers and self-checkouts.
In banking, we address the demand for cash recyclers as banks rethink their branch footprint and move more transactions towards the self-service channel. DN Series cash solutions are now live in over 90 countries, with over 500 certifications, and we continue to see a shift away from our legacy devices with our new DN Series cash recyclers compromising now 82% of new Banking orders in North America. We achieved a year-over-year growth of 79% in connected ATMs to our DN AllConnect Data Engine.
In retail, the evolution of consumer behavior, along with the rapidly changing labor dynamics, have led to increased demand for self-service and automation, and growth is being driven by customer momentum for our self-checkout solutions. Our self-checkout, or SCO, business keeps gaining new customers globally and continues to grow faster than the market, specifically in Europe, and we are seeing success now also in the North America market.
We continue to look for ways to deploy one of our best assets, our service organization, which includes a dedicated and talented global technician base, spare parts and logistics capabilities, multilingual help desks, all working together to deliver on customer [indiscernible]. Leveraging these assets, we continue to expand and explore the EV charging services business. We saw progress as we extended pilots with several existing customers. We also added several new countries to our service footprint and projects through original and new contracts with OEMs, ChargePoint operators and retailers.
EV charging stations are a great example of a service horizontal for our managed service capabilities, and we are looking forward to more opportunities where we can add horizontals or verticals that align where we can leverage the scale of our service business.
Importantly, we recently implemented a new and simplified operating model that is helping us improve our financial performance, elevate customer service and put us on a path forward to a stronger future. We have confidence in our operating model to drive us forward and double our efforts on what matters most: serving our customers and building value for shareholders. We have the industry's best self-service solutions and leading-edge technology, coupled with world-class services, and our simplified operating model will allow us to strongly leverage what we do best.
Going forward, our operating segments will be Global Banking and Global Retail, and we will be discussing our business in terms of Technology Product Solutions and Services.
In terms of these new segments, Technology Product Solutions includes our hardware as well as our software licenses, and Services includes our product-related services, including installation, maintenance and support for both hardware and software, professional services, billable work as well as advanced managed services and others.
This reporting better reflects how we will run the business and measure success. Jeff will go through the numbers in more detail, and we also have provided historical comparisons in our shareholder letter.
While we strive to improve what we do and how we do it as a company, we are still working against expected headwinds that we discussed over the past few quarters; namely, a difficult supply chain and inflationary environment that is challenging our ability to deliver solutions to customers in a timely and cost-efficient matter.
Specifically, we are still experiencing higher costs in parts and key components necessary to manufacture our products during the quarter, but availability has improved. In addition, shipping products have moderately improved, but we continue to experience longer lead times to deliver our solutions, as global shipping demand is exceeding capacity in logistics channels around the world. The war in Ukraine continues to add complexity and uncertainty to logistics-related issues and the global economy with respect to inflationary pressures as well as the impact on foreign exchange.
Looking at the world today, we want to provide you a better picture on how our business is doing geographically, especially considering the FX challenges I mentioned earlier. Our euro-denominated business constitutes approximately $1.6 billion of annual revenues. We have seen from our original planning assumptions to today a devaluation of 15%. On a constant currency basis and adjusted for divestitures, we expect growth to be flat on a year-over-year basis. Jeff will provide more commentary on this as well.
We are seeing steady progress with constructive discussions on repricing the backlog and are increasing our operational rigor and better managing cost as a company. We continue to make progress reconfiguring our supply chain. We are proud that our facility in North Canton, Ohio, keeps ramping up to meet demands of our North America market, exemplifying the can-do attitude of Northeast Ohio and supporting our investments in the region as we expand and develop local suppliers. We reiterate our targets of meeting 80% of North America demand for cash recyclers from this U.S.-based operation by the end of 2022.
However, as it stands to date, Paderborn, Germany, continues to remain our main production facility for both Banking and Retail, followed by Asia and, lastly, North Canton. This will shift as we continue to see more production coming out of the U.S. Important to note that our Brazilian facility in Manaus is solely dedicated to the Brazilian ATM market.
During our Q1 call, we announced the commencement of our $150 million-plus cost-savings restructuring plan. As of today, we have identified and are executing against $120 million of this initiative and have clear line of sight to more than $30 million of additional cost savings. We are implementing these initiatives as quickly and efficiently as possible.
Finally, we often receive questions from investors about mergers and acquisitions, including potential divestitures, and other value-creating strategic opportunities. As part of our constant efforts to maximize shareholder value, we will continue to evaluate strategic alternatives that will benefit our shareholders.
Before Jeff provides more detail on our financials, I want to thank our employees for their dedication, our customers for their continued trust and our shareholders for your support. We have the right strategy in place. And more than ever, our leadership team is committed to improving our business and creating long-term growth and value for our company.
I will now turn it over to Jeff.
Thank you, Octavio. My prepared remarks will include references to certain non-GAAP metrics, such as adjusted EBITDA. As a reminder, please see our shareholder letter for additional financial details from the quarter.
Here, I will highlight a few of our key performance metrics. We continue to see strong demand from customers for our products and solutions in the second quarter 2022. Total revenue was $846 million, an increase of approximately 3% sequentially and a decrease over second quarter 2021 of approximately 10% as reported and a decrease of approximately 1% excluding a foreign currency impact of $58 million and a $28 million impact from divested businesses, inclusive of Russia and Ukraine.
Adjusted for foreign currency and divestitures, Banking revenue increased 5% sequentially and decreased approximately 1% on a year-over-year basis, excluding a foreign currency impact of $29 million and divestitures of $11 million.
Retail revenue decreased 2% sequentially and remained flat to the second quarter of 2021, excluding the foreign currency impact of $28 million and divestitures of $17 million.
As Octavio pointed out, with the current dynamic currency environment we feel it would be helpful to break out our revenue by geography. For the second quarter, approximately 40% of our revenue was from the Americas, 50% from Europe and 10% from APAC. With the euro declining versus the dollar, although we see benefits on the cost side, we are negatively impacted on revenue.
In May, we began discussions with customers around backlog orders that had been placed previous to the commencement of our price increases last summer 2021. These constructive talks have generally resulted in customers choosing to lock in their pricing or prepay or take a price increase relative to the inflationary environment. To date, we have not had any material cancellation of orders, and most customers are choosing the prior option, which is contributing to our target of accelerating the velocity of converting backlog to free cash flow.
We saw a sequential increase in Technology Product margins in the second quarter, as planned, and expect this trend to continue as price increases begin to flow through.
For the second quarter, operating expenses were down to the previous period a year ago and also down sequentially. We reported adjusted EBITDA of $71 million and adjusted EBITDA margin of 8.3%.
Unlevered free cash flow for the second quarter of 2022 was a $61 million usage, compared to a $176 million usage last quarter and a $52 million usage in the second quarter of 2021. The sequential benefit was driven by an increase in EBITDA and working capital changes.
We have executed approximately 80% of our cost savings plan, with approximately $120 million of annualized costs either removed or in a transition period, equating to roughly $12 million of non-GAAP savings in the second quarter. We remain committed to our initial timeline of 12 to 18 months to execute cost savings resulting in more than $150 million of savings.
Separately, in the second quarter the company received a favorable decision in the shareholder appraisal proceedings related to Diebold's combination with Wincor. All claims seeking to increase cash compensation by the minority shareholders have been dismissed by the first-level court in Germany.
For our 2022 financial outlook, we are reiterating our adjusted EBITDA outlook of $320 million to $350 million. Additionally, we are reiterating our free cash flow outlook of breakeven, which includes our cash restructuring charges. In terms of gross margins, as we continue to realize price increases, improve backlog-to-revenue conversion, we reiterate our guidance on sequential improvement in gross profit throughout the remainder of 2022. We are adjusting our revenue guidance for the full year 2022 to $3.55 billion to $3.75 billion, with the majority of the revision due to foreign exchange.
For 2022 to 2024, as noted in our shareholder letter, we are targeting the following as well as providing additional detail: revenue growth of 3% annually; gross margin growth of 200 to 250 basis points as a percentage of revenue by 2024; SG&A to decline 150 basis points as a percentage of revenue; and R&D to trend downward 50 basis points as a percentage of revenue; adjusted EBITDA margin of 13% as a percentage of revenue by 2024; and additionally, from 2022 to 2024, unlevered free cash flow margin is modeled to expand from approximately 50% in 2022 to approximately 70% in 2024. I look forward to updating you on the progress in upcoming quarters.
Finally, I'd like to provide an update on our debt refinancing initiative. As communicated last quarter, management is working with Evercore and Sullivan & Cromwell to assist in our refinancing efforts to reach a resolution as soon as practical. We are in constructive conversations with banks and other lending institutions, and we'll continue to provide detailed updates as to the various elements of our refinancing process as more information is available to share publicly.
As discussed previously, as of July 20, our revolver is classified as current on our balance sheet. The discussions that we are having with banks and other lenders are comprehensive with regard to near-term maturities in our debt stack, inclusive of the revolver.
Now I will turn the call over to the operator for Q&A.
[Operator Instructions]. The first question today comes from Matt Summerville, with D.A. Davidson.
My first question is, is there any more granularity you can provide as to how the debt process has evolved over the last 90 days since you reported last and whether or not you're able to put a little bit more of a ring fence around the time frame we might be looking at in terms of resolution? And then I have a follow-up.
Matt, I would say what I said in my prepared remarks are what we're comfortable saying at this point in time: we continue to have constructive discussions. But we are not going to go into any further detail than what we've previously stated.
Got it. And then with respect to the $150 million, you continue to talk about it as $150-plus million. And I guess I'm curious as to whether you feel given where you're at, 80% kind of the way there, if you're willing to maybe talk about how much upside we might be able to see on that $150 million. And then I would also be curious as to what you're seeing in realized price today versus maybe where you were at starting the year.
Well, as far as upside on $150 million, we're always looking for upside. I mean, that's what we do, right? What we have modeled in is the $150 million.
And Matt, probably, as we've discussed in other meetings, as we make our model more efficient we will continue looking for opportunities to generate greater savings. But we feel very comfortable that we'll deliver the $150-plus million in the time frame that we committed.
As far as the pricing environment, if you look at our product gross margin sequentially, they improved, and that is part of the -- part of that comes from our pricing activities. And as Jeff mentioned, we expect that trend to continue for the remainder of the year as more of the backlog is now -- that's being converted. It's either repriced or has been sold with the appropriate price increases to the new cost structure. So you should expect our product margins to continue improving sequentially through the remainder of the year.
The next question comes from Jeff Harlib, of Barclays.
First, Jeff, can you talk about the EBITDA add-backs? I mean, the restructuring, now back up $77 million, I kind of get that. But then there's $43 million of nonroutine expenses. I'm just wondering what these amounts are and as we look at our free cash flow estimates for the year what should be sort of the actual free cash flow or the sort of unusual cash charges as your breakeven guidance.
Thanks, Jeff, for those questions. Let's start with the free cash flow, and I'll give you a bit of a walk from EBITDA to where we need to end up with relative to free cash flow.
And this is indirect. So we start with EBITDA. So if you take the midpoint of the guidance. Here are the scheduled uses of cash off of that EBITDA. Income tax is approximately $50 million. Pension, approximately $17 million. CapEx, approximately $50 million; that's inclusive of capitalized R&D. Interest, just slightly below $180 million. We'll pay a bonus in 2022 related to 2021 and have no provision for bonus in 2022. So it shows up in that reconciliation; that's approximately $35 million. Restructuring transformation, that's both severance and transition costs for FTEs and some third-party payments in 2022 of approximately $85 million.
So you'll get -- depending on where you start with your EBITDA range, you're going to get something around $70 million to $90 million to get to breakeven. That $70 million to $90 million is really related to the management of working capital and expectation of an inventory reduction in the back half of the year, continued good progress relative to deferred revenue and then other balance sheet items being managed to get back to free cash flow of 0.
So you're saying that free cash flow of 0 is an actual amount? Because I noted it excluded restructuring.
No, no. Now it includes restructuring. And then the other question was relative to the non-GAAP adjustments. We do disclose that both in the release schedules and in the shareholder letter, right? The biggest piece of that is what I referred to earlier as the expense for restructuring and transformation. You can see that that's approximately $78 million, pretty similar to what I said relative to cash payments. Then we've always adjusted out that amortization of Wincor Nixdorf purchase accounting. And then we have an asset held for sale. Go ahead, Jeff.
And just shifting gears, on the expense reductions I think you had mentioned that you -- I don't remember if you said you've executed or put in place $120 million of the $150 million. Can you just talk about the flow-through for those savings for the rest of this year and when you expect to get close to the full run rate?
Well, we'll be at pretty close to the full run rate on the $120 million relatively soon. So that's generally headcount reductions.
There's a portion of those cost reductions related to indirect spend reduction, and that usually takes a little bit of a cycle to work through. So some of that will come through next year.
But we'll see a bulk of the benefits coming through on an annualized basis by the time we get to the end of the year.
Got it. And my last question is just on the revenue, the revenue realization. Obviously, you still have supply chain, transportation delays, et cetera, and it looked like 2Q maybe didn't ramp as quickly as you might have expected. How do you see the visibility on being able to improve on that front with respect to supply chain to meet your commitments?
Jeff, this is Octavio. I would say that Q2, if you were to add back some of the FX headwinds, I think we ramped up pretty nicely from Q1 through Q2, both revenue and regaining some of the margin that we said that we would be improving sequentially. So I'm actually pleased with the progress that we're seeing.
Clearly, we need to keep accelerating that trend. I think that the good news is that we have very -- we have all the orders that we need in place to meet our revenue commitments for the year. We are working very closely with our customers on finalizing installation schedules, finalizing delivery plans for them. So I would tell you that we're managing this at such a granular level that I probably know where every ATM is going, where every self-checkout device is going, to what customer on what dates for the remainder of the year. And we're just managing that and being very tight on execution against that as we accelerate our backlog conversion.
So we do have good line of sight, and we're executing and managing things very closely. That's part of the new operational rigor that we're trying to implement in the company.
The next question comes from Ana Goshko, from Bank of America.
Ana, your line is open. Please ask your question.
As we have no audio from Ana, we'll move on.
The next question is from Kartik Mehta, from Northcoast.
Jeff, I know you don't want to give any more details on the debt refinancing, but I'm wondering if there have been any changes, surprises, I'm not sure what the right adjective to use, considering the environment has changed quite a bit in the last 6 months.
Here's what I'd say, Kartik, is we still believe that this model should be in an ABL. We've said that previously. We've been saying that for a while. Obviously, the position that puts us in has been a process with our current debt holders to work with them to make that a possibility. We are in that process, utilizing our advisers, as we've mentioned. It would be premature for us to make a prediction on that process. We're confident, but obviously there's still work to be done. We appreciate the support we've gotten from our banks and from the lenders groups. We're in communication with them on a continuous basis. But it's -- we're at a point in time that we really can't make a prediction on the outcome, although we remain very confident.
Kartik, I would tell you from my side we continue working with our banking partners. We continue working with our lending group. Conversations are very constructive. We're all looking for the best possible outcome. So we feel confident that with the help of our advisers, with the support of our lenders and our banking partners, we will find a resolution. So we remain confident on the progress that we're making.
And then just, Jeff, on free cash flow, obviously, you'll need to have a strong back half. And I'm just wondering on a cadence perspective, is this primarily related to your ability to kind of convert that working capital to get to the breakeven guidance?
Jeff, yes, we need to convert that inventory, that backlog to revenue, both from a revenue perspective for EBITDA and then also for an inventory reduction perspective relative to working capital.
I was just going to say is that, as Octavio mentioned earlier, our management of that conversion of backlog to revenue is very granular and very -- it's a process that's being managed very closely.
The next question is from Peter Sakon, from CreditSights.
Just a follow-up on the questions regarding free cash flow. Cash used in operating activity and in investing activities year-to-date was a little more than $300 million. So to clarify, you expect to generate over $300 million in free cash flow in the second half of this year to get to breakeven?
Last year, we generated $400 million in the fourth quarter and $250 million in the back half. So again, what we need to happen in the back half of the year is the conversion of -- our inventory is high right now. We admit that. We need to convert backlog to revenue, which is effectively converting inventory to revenue. The sooner we do that, the sooner we convert that to cash based on 50-day DSOs. So we need good execution on that conversion in the back half of the year and reduction of inventory to make that number.
And what DSOs do you expect on your accounts payable?
DPOs? DPOs, we run in the 90s.
No. I'm assuming your accounts payable will come down. Okay. And just transitioning, can you give a bit of context on how much the self-checkout units average in price versus the ePOS? You talked about the 22% growth rate in the next couple of years. So are they more profitable than the ePOS?
So clearly, self-checkout is a more complex device. So it's clearly more -- a higher price and more profitable than our point of sale. So again the range, remember, goes from devices that are just card or devices that are cash enabled. So we have a broad range that goes from probably $3,000 to up to $6,000, $7,000 at the most complex self-checkout device. Remember, the importance of self-checkout as well...
I'm sorry. Could you repeat that?
I was just trying to [indiscernible] the average ePOS [indiscernible].
So, on average, POS devices are probably in the $1,000 to $2,000 range.
All right. That's helpful. And then just on the German operations, MCR has transitioned, your competitor has transitioned most of their manufacturing to a contract manufacturer. Given the high cost of and the taxes of the German operations, do you foresee any impediment to making a similar move? And would that be helpful for the company?
So as I stated before, we are very focused on streamlining our supply chain. The first part is setting up our Ohio manufacturing, something that I'm very proud of, of bringing back our manufacturing to Ohio. And that will help us serve our North America market, which is a key market for us.
That will also alleviate some of the volume that comes out of Germany. And I still believe we have a very efficient operation in our German facility. But obviously, as we move into the future, we will continue to evaluate what the right manufacturing footprint is and whether we should look at other options on how we manufacture. But for the time being, my main focus is adding velocity to our revenue conversion through our supply chain and making sure that we set up our Ohio manufacturing facility for future success.
The next question comes from Arun Seshadri, from Credit Suisse.
Just one follow-up from me, probably for Jeff. Just a question on restructuring expenses and noncash sort of -- and sort of add-backs to EBITDA this year and next year, any way you could give us some direction around for the full year of that adjusted EBITDA guidance at $320 million to $350 million how much would be, quote-unquote, noncash EBITDA, sort of a full sort of add-back loaded number? And then if you could give us some sense of a guess for 2024 how much would remain in restructuring? And if you could also break down cash restructuring expectations at this point for 2023?
Here's what I would say, is that the biggest portion of restructuring has been taken. Now there's going to be some restructuring that's going to come through in the third quarter. What you will see is there will be some transition costs that we'll recognize. It will not be as large as the $65 million that we took in the second quarter. So it's going to be around $100 million through the end of the year, and as I said, cash-wise, it will be approximately $85 million in the first quarter.
Now as far as what goes into next year, we haven't given any guidance on that yet for next year, but I would say that the P&L GAAP to non-GAAP adjustment will be approximately $100 million for 2022, with $85 million of cash payment.
[Operator Instructions]. The next question comes from Matt Bryson, of Wedbush.
I'd like to focus on revenue backlog, please. And so on the backlog side of things and in terms of converting backlog, it seems like semiconductor availability [indiscernible] grew on the logistics side. What I've heard from other companies is that things aren't getting more difficult, maybe a little bit of easing. I guess, what exactly are the primary constraints you're running into in terms of converting the backlog today? And do you have line of sight into when those constraints are alleviated?
Matt, I apologize if I -- it was a little bit hard to understand your question, but I'll do my best. I think you were asking about what is the main difficulty in accelerating backlog conversions to date. So I would tell you that this is an evolving process. So probably at the beginning of the year, late, we were experiencing still component shortages, very tight shipping lanes. As we go into Q2, we saw easing of the shortages, with more availability, still at higher prices but more availability. And we also saw improved, slightly improved, shipping.
So what I would tell you is as we move into the following quarters, our main concern is just making sure that we can get product shipped to customers on a timely manner and making sure that we receive inbound material in a timely manner. So it's more around the logistics part of the, both inbound into our manufacturing facilities and outbound into customers. Those are the 2, I would say, points that we're managing very tightly, and that has been the -- if we manage that correctly, we should be on track to accelerate revenues for the back half of the year.
When I think about that backlog number, it is predominantly systems and software, right? Is there some multiplier effect where if you ship a dollar of ATM, there's typically 20 cents of services attached to it, or something that we should think about in that line such that the revenue...?
There is, Matt, and we could probably provide that information later. But yes, every self-checkout device we ship or every ATM that we ship has installation services attached to it. It also has, in some cases, in ATMs, almost certainly always software attached to it. And self-checkout, most of the time it has software attached to it.
So there's clearly unit economics that every piece of hardware that we ship does carry installation revenue and, in some cases, software revenue. It varies by geography, obviously, but there is some multiplying effect. Every dollar of product revenue generates some service and some software revenue as well.
And I guess, for my last question, do you have to worry about double-ordering at all, in the sense that it's obviously been difficult for you guys to meet expectations? Any concern that, in some cases, customers have overordered because maybe they've been uncertain about your ability to supply?
Matt, I would tell you that we are -- we probably have the best customer base that any company could wish for. Banks and global retailers, we have tight relationships with all of them. I would tell you -- I'll give you some color around some of these things. Around retail, our sales teams have been working with some of our largest customers to place POs significantly ahead of when they need equipment, to allow us to be able to deliver on time [indiscernible]. The situation around the supply chain is clearly not unique to us. So when you talk to customers and explain what's going on, there's a lot of flexibility on their part to accommodate to our needs.
I would say the same thing with our banking customers. As they have rollout plans that cover multiple months for the most part, once we sit down with them, understand their plans, we normally are able to accommodate to their needs and try to make sure that we're serving them in the best possible way.
So I would tell you that we're confident and we haven't seen any shortage of orders from customers in this first half of the year, and I expect us to continue having strong demand for our products in the second half of the year.
There are no further questions at this time. So I will now turn the call back over to Octavio Marquez, CEO of Diebold Nixdorf.
Thank you, Operator, and thank you, everyone, who listened in and participated in today's call.
I am very pleased with the progress we are making: serving our customers, simplifying and streamlining our business, executing our cost-savings plans and moving forward with our refinancing efforts while we tackle the macroeconomic challenges. As noted previously, we have laid out a path to profitable growth over the coming quarters and years and are beginning to execute on it. Importantly, there continues to be no shortage of demand for our solutions and services.
We look forward to seeing you at upcoming investor conferences and during our next earnings call. Thank you again.
This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.