SP Plus Corporation (SP) CEO Marc Baumann on Q2 2022 Results - Earnings Call Transcript

Aug. 07, 2022 2:46 AM ETSP Plus Corporation (SP)
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SP Plus Corporation (NASDAQ:SP) Q2 2022 Earnings Conference Call August 3, 2022 5:00 PM ET

Company Participants

Marc Baumann - Chairman and CEO

Kris Roy - CFO

Conference Call Participants

Daniel Moore - CJS Securities

Kevin Steinke - Barrington Research

Tim Mulrooney - William Blair


Good day and thank you for standing by. Welcome to the Second Quarter 2022 SP Plus Earnings Call. [Operator Instructions] Please be advised that today's conference is recorded.

I'd now like to hand the conference over to your speaker today, Kris Roy. Kris you have the floor.

Kris Roy

Thank you, Stacy, and good afternoon, everyone. As Stacy just said, I'm Kris Roy, Chief Financial Officer of SP Plus. Welcome to our conference call following the release of our second quarter 2022 earnings. During the call today, management will make remarks that may be considered forward-looking statements, including statements as to outlook and expectations for 2022 and statements regarding the company's strategies, plans, intentions, future operations and expected financial performance.

Actual results, performance and achievements could differ materially from those expressed or implied due to a variety of risks, uncertainties or other factors, including those described in the company's earnings release issued earlier this afternoon which is incorporated by reference for purposes of this call and available on the SP Plus website and Risk Factors in the company's annual report on Form 10-K and quarterly reports on Form 10-Q and other filings with the SEC.

In addition, management will discuss non-GAAP financial information during the call. Management believes the presentation of non-GAAP results provides investors with useful supplemental information concerning the company's ongoing operations and is an appropriate way to evaluate the company's performance. Non-GAAP measures are provided for informational purposes only. A full reconciliation of non-GAAP financial measures to comparable GAAP financial measures were presented in the tables accompanying the earnings release. To the extent other non-GAAP financial measures are discussed on the call, reconciliations to comparable GAAP measures will be posted under the Regulation G tab in the Investor Relations section of the SP Plus website.

Please note, this call is being broadcast live over the Internet and is being recorded. A replay will be available on the SP Plus website shortly after the end of the call and will be available for 30 days from today.

I will now turn the call over to Marc Baumann, our Chairman and Chief Executive Officer.

Marc Baumann

Thanks Kris, and good afternoon, everybody. We really appreciate your participation in our call today to review our second quarter results and discuss our updated business outlook. A key takeaway from our Q2 in first half performance is that our business dynamics are changing from where they were pre-pandemic and all in a good way.

First, growth opportunities in our core commercial and aviation businesses have accelerated and we're gaining market share. This is a function of several factors. Our first mover advantage and technology that enables the frictionless mobility that consumers prefer and cost savings that clients value. Secondly, our reputation for superior service levels and finally, our size and the scope of our offerings, which exposes us to a broader array of business opportunities. Secondly, our technology investments have expanded our addressable market.

We now provide technology only solutions at a number of parking operations that we do not manage. Our Sphere offerings have enabled us to increase the broader market for our services to include locations that historically did not need or could not justify the full SP Plus solution. Third, the post pandemic shifts that have had a positive impact on both our commercial and aviation businesses have shown no signs of abating and in fact appear to be developing into what we believe are secular growth drivers.

These are namely the rise in personal car ownership and its increased use for commuting in large metropolitan areas. The pickup in demand for domestic leisure travel, increased airport congestion in both the terminals and on the roadways, and a considerable client focus on touchless operations that prioritize ease as well as promote the health and safety of their consumers and employees. These changes in our business landscape contributed to our ability to post significant growth and increase profitability in both the second quarter and first half of this year and underpin our competence and increasing our full 2022 guidance.

We believe these trends will continue to provide substantial growth opportunities for SP Plus in the coming years. Specifically in the second quarter, we reported strong double digit year-on-year growth and adjusted gross profit across our business segments, with the commercial segment increasing 27% and the aviation segment up 26%. In both businesses, our results benefited from increased activity at existing locations and new contract wins.

Looking at our commercial segment we experienced same location gross profit growth in nearly every vertical compared to last year. Growth was led by the office, commercial and hospitality protocols as well as large venues, but was broad based and represented significant increases at both leased and managed locations. We believe that the actions we took during the pandemic have resulted in a positive trade off. SP Plus today has an optimized portfolio that is heavily weighted toward management locations which provide greater visibility and resilience to inflationary wage pressures and economic cycles. In the second quarter, we were also very successful in winning new commercial business.

Our Sphere technology solutions significantly strengthen our competitive position as they provide our clients with an important cost savings while improving the consumer experience through the touch-free interactions and prepaid reservations. In the last 12 months, we added 107 net new locations, and our location retention rate for the same period was 91%. Not included in these metrics are two new municipal contracts that will start later this year. These new municipal contracts will involve our managing meter collections, maintenance, and enforcement, as well as deploying app based payment systems.

As a point of reference, SP Plus currently serves over 100 municipal government authorities at over 600 locations, which includes managing on and off street parking for 65 cities. This was a very strong quarter for our aviation business as well. Gross profit reflected both the new contracts we won over the last two years, as well as the expansion of our services at existing facilities.

Our technology solutions play an important role in business retention and development in this segment as well. In renewing our contract at the Portland Oregon airport, our clients specifically mentioned our industry leading technologies that have elevated the customer experience. Sphere has been deployed at the Canyonlands Regional Airport in Utah to turn an underused asset into a revenue opportunity. Similarly, we also successfully implemented Sphere at Sonoma airport and Reno Tahoe airport, offering an inexpensive and quick to market revenue collection solution that created a revenue stream for overflow parking where revenue was previously not being collected.

Additionally, we continue to roll out our curbside concierge services and now are offering this service at over 35 airports. This fall, we expect to launch our first consumer paid remote airline checking service at an airport. This service will be provided at the airport's new transportation center, and will be the first contract where passengers will pay a nominal service fee that will subsidize the cost to our airport partner.

We believe that airline passengers recognize the value of this service and the convenience of bypassing crowded ticket commerce. As you can imagine, the services are also very appealing to both airlines and airports, as they reduce congestion and improve the traveler experience. Today we're providing services at 77 airports which is the largest number in our history and we see continued growth opportunities ahead as travel activity continues to increase. To sum up, this is another strong quarter for SP Plus.

I'll turn the call back over to Kris for a financial review.

Kris Roy

Thank you Marc. I am very pleased to report on our strong financial performance and continued momentum in the second quarter of 2022 which led us to raise our full year guidance and increase our profitability expectations. For this year, we expect to perform ahead of pre-pandemic levels. My prepared remarks will focus on adjusted results. Adjusted gross profit increased 27% year-over-year to $58.8 million reflecting continued strong business activity in the second quarter along with new business wins over the past 12 months. This positive comparison underscores a number of benefits that Marc mentioned that truly set SP Plus apart including the scale of our business, outstanding service and our Sphere technology solutions.

Adjusted G&A expenses for the second quarter of 2022 were $26.3 million compared to $21.8 million in a year ago period. The year-over-year increase of 21% reflects a similar dynamic to what we have been experiencing over the past several quarters, representing incremental costs to support robust business activity evident in our top line growth. These costs include both higher salaries and higher performance based compensation.

Compared to pre-pandemic second quarter 2019 adjusted G&A is still trending 4% below where it was as a result of cost reduction measures and discipline, as we continue to monitor expenses closely. Excluding depreciation, restructuring and other costs second quarter 2022 adjusted earnings per share increased 65% to $0.81 compared to last year's $0.49. Year-to-date, we generated $35.7 million of operating cash flow and $25.5 million of free cash flow compared to $23.3 million and $17.1 million respectively in the first six months of 2021. The 2022 free cash flow benefited from $20.5 million federal income tax refund which offset the impact of short term working capital needs and higher CapEx compared to the year ago period.

At the end of June, we still had $270 million of capacity under our upside $600 million senior credit facility, providing us with the flexibility to consider organic and acquisitive growth opportunities. Our year-to-date robust performance underpins our confidence in our long term growth potential and strong growing cash flow. As a result, in May, our board approved a new $60 million share repurchase program, providing an additional level of capital allocation and returning capital to our shareholders. Since then, we have repurchased 176,500 shares at an average price of $31.51 to the end of Q2 and another 221,300 shares at an average price of $32.30 subsequent to the end of the quarter.

Since the announcement of our board's authorization of the new stock repurchase program, we have used approximately $12.7 million of our free cash flow to repurchase shares, leaving approximately $47.3 million under our current authorization.

Based on our current results and visibility, we are pleased to raise our full year 2022 gains. Adjusted gross profit is now expected to range from $215 million to $235 million, which at the midpoint represents a year-on-year growth of approximately 21% over the 2021 level. We expect adjusted EBITDA to range from $115 million to $125 million which at the midpoint represents 27% year-over-year increase.

And for adjusted EPS, we now forecast a range of $286 million to $310 million approximately 54% above 2021 levels. We're increasing our free cash flow forecast by $5 million, and now expect $75 million to $85 million of free cash flow or approximately $3.50 a share to $4 per share. Approximately 91% above our 2021 free cash flow at the midpoint. We are especially pleased to note that our range for our revised guidance implies profitability that of 2019 before the pandemic.

With that I'll turn the call back to Marc.

Marc Baumann

Hey, thanks, Kris. Our operating model combines a well trained workforce and industry leading suite of technology solutions under the Sphere umbrella to deliver world class service and innovative solutions to our diversified client base. These attributes have enabled us to gain market share, strengthen our market leadership position and put us on a higher growth trajectory than we experienced pre-pandemic with additional upside from our reduced cost structure.

As you've heard, we've moved up our expectations for 2022 financial performance. based on the strength of our first half performance and the momentum we're seeing heading into the second half of this year. You can expect us to make additional investments in people and technology in the coming months to drive organic growth and we'll consider strategic acquisitions that expand our presence in key markets, or bring additional technology enabled solutions that have the potential to further expand our addressable market in line with our long term growth prospects.

With that, I'll turn the call back over to Stacy to start the Q&A.

Question-and-Answer Session


Thank you. At this time we will conduct a question and answer session. [Operator Instructions] Our first caller Daniel Moore with CJS Securities. Daniel, proceed with your question.

Daniel Moore

Thank you. Thank you, Marc and Kris for all the color. Congrats on the strong results. You gave a lot of detail, but maybe just expand a little on if you kind of look by vertical starting with commercial. And then aviation sort of the cadence of recovery and traffic and volumes at your facilities across those verticals both sequentially throughout the quarter and as we look into fiscal Q3 as well, as any sort of differences in the rates of recovery there. I've got a quick follow up, or two. Thank you.

Marc Baumann

Sure. Well, maybe I'll start out and then Kris might add a few additional thoughts for the comments. I think it's safe to say within our commercial segment is our largest segment in our business. It's essentially performing ahead of 2019 levels in terms of just stay on the same location basis. And so we continue to see growth in all the verticals in commercial both over last year but also compared to 2019.

The two areas that have seen very strong growth on a year-over-year basis that we commented on one is office buildings, which is improved about 92% year-on-year and some of the retail mixed use facilities are well over 100% on a year-on-year basis, although both the freestanding parking facilities and office buildings that they serve are still generally lagging a little bit behind 2019 levels. But we see that coming back, as people have adopt the hybrid models, people are still avoiding mass transit, for the most part, and are driving cars into the city centers. And so as time passes, we continue to expect to see greater utilization of the commercial properties. I think on the aviation side of the business for the most part, our recovery has progressed as we expected.

We're pretty much operating at all the airports at the same levels we were pre-pandemic. And of course, we added new airports during the pandemic, which is brought our total aviation location, airport footprint up to 77 locations. The bank's business continues to do nicely and recover from the pandemic, as we are handling just massive amounts of delayed luggage as people are experiencing when they travel. And we continue to see further deployment of both curbside concierge for them and also, as I indicated in the prepared remarks an airport consumer paid model and we think, right now the massive amounts of congestion that are taking place in and around airports leave us well-positioned to bring our technology and our capabilities to those areas.

Kris Roy

The only other thing I would add on Dan is just in terms of where we ended on a TTM basis with net location. And I think that's a really strong number for us. I think it certainly demonstrates what we've been able to achieve as a management team about capturing market share. And so I think that's a really good number for us. I think retention rate continues to be in those low 90s and I think that's also a really good number for us. So I think generally we feel really good with where we're at both from a market positioning perspective, but also on the opportunity to capture some of that market share.

Daniel Moore

That's, that's great, Kris and leads to my next question, which is, with location growth look, net locations now growing again, and you winning new business, prior to the pandemic, you have a sort of a mid single digit gross profit also goal, as we now get back to pre-pandemic levels of profitability and beyond, if locations are growing, and profitability for location hopefully continues to grow. What is your sort of longer term outlook at this point, for the business beyond just sort of the recovery, given the cadence and the success you've had in taking share particularly over the last 18 months or so?

Marc Baumann

Yea , I don't think we're ready yet to take the old numbers which was sort of gross profit growth target on a long term basis of 3% to 5% and give you new numbers today. It is something that we're giving a lot of thought to, but if you can imagine there's a number of things that are likely to push that number higher one, of course, is in the inflationary environment we're in now has given us the opportunity to put parking rates up, both for our management clients, but also at our lease locations.

And that is beneficial to the growth picture for us. I think also, as we deploy Sphere in more and more places and as we indicated on the prepared remarks, we're having the opportunity now to deploy technology, where we are ”not the operator”, or we aren't putting boots on the ground. And that represents a market expansion opportunity for us, that should help us accelerate our gross profit growth as we go forward, as you point out, like any more locations that's helpful in and of itself. But it also gives us more geography, if you will, to deploy our technology solutions.

So we're very eager in our organization to get more locations, we can bring the technology there, but at the same time, continue to look for ways to bring additional capabilities to our existing client base because a lot of our growth fundamentally, historically and in the future is going to come from serving more clients with a broader array of our services. So I think all indications are that we will be increasing that guidance our target guidance in the near future. Hopefully, we'll be ready to do that in Q3, but we're just doing a little bit more work to try to be able to be specific about that for you.

Daniel Moore

Really helpful. And lastly, bags business without breaking it out specifically what sort of profitability levels are embedded in your 2022 updated guide, relative to pre-pandemic? In other words, how much either gross profit or EBITDA do we still have left to regain mid lap 2022 in the revised guide? Thanks.

Marc Baumann

Yes, we're not going to break bags out separately. But what I would say, Dan, is that our aviation segment, in terms of the level of business activity, it's serving, both our airport group and our bags business have really resumed all of the services that they're going to be providing to our existing client base, and that includes any new clients, we've won. And so I think the recovery and level of business activity for aviation is completed. Now, that being said, we have talked during the pandemic, about the fact that certain clients have either not brought back some of the services that we provide a pre-pandemic or in some cases, in some of the airports we restructured contracts, we talked about that at length during the pandemic.

And so the financial recovery of the aviation segment to pre-pandemic levels, as I indicated on protocols is going to take a couple of years. But that recovery is going to come from us winning new business, expanding the array of services that we provide to existing clients as opposed to resuming activities that have been paused during the pandemic. I think the pause of activities during the pandemic is pretty much over now. And now we're just move forward to find ways to grow our business.

Daniel Moore

Very good. I will come to, I will jump back to queue if you have any follow-up. Thanks for the color.

Marc Baumann

Got it. Thanks Dan.

Kris Roy

Thanks Dan.


All right, our next call comes from Tim Mulrooney with William Blair. Tim go ahead with your question.

Tim Mulrooneyr

Marc and Kris good afternoon.

Marc Baumann

Hey afternoon Tim.

Tim Mulrooneyr

So you guys, are team. I mean, you've managed the business well, through unprecedented conditions and unprecedented change over the last several years. And there is a lot of positive things I could point to. But I think the thing I'm most encouraged by that 107 net location wins over the last 12 months. We didn't have that built into our model. But I think you're right not to give a new long term gross profit growth algorithm yet, because folks first have to underwrite that net new location growth moving forward. So based on what you're seeing today, is it your expectation that we will see more net wins over the next several years or do you view these last 12 months as kind of a onetime step up in the recovery period following the pandemic?

Marc Baumann

I think we'll continue to see ongoing location growth. I mean, it's a key focus area for our leadership team. But I think it also reflects a recognition in the marketplace that we have some competitors who are struggling to deliver what clients are expecting, or whose technology is lagging. And so I think we're at the right place at the right time in terms of our competitive offerings in the marketplace. And so for sure expect us to continue to see net location growth on a sustained basis. Now, will it be 100 at any quarter run at a TTM basis, maybe it'll be more, maybe it will be less I mean we have to go pitch our business to clients, and when you have to get them to make a decision and select us. So it's never going to be an exact straight line. But I think we're moving into a period where we have the expectation ourselves, that we will add locations on a sustained basis and move ourselves up from the 3000 or so in our commercial segment that we've had for a while up toward 4000 in the years ahead.

Tim Mulrooneyr

Well, that's very positive to hear. Thanks for that explanation. Another thing I wanted to ask, I didn't realize that you are winning some business just technology only solutions. Are these tech, are these locations where maybe you don't have a manager or at least contract, but you're just doing a technology only solution is that counted in your location count.

Kris Roy

It is 10. Tim it is included in our location count.

Marc Baumann

And I mean you kind of we sometimes in our industry, there's the debates over what, if someone, an operator is someone, a tech provider, and there are people in our industry that all they are is tech providers, and many times they are a one size fits all tech provider. So they try to convince prospective clients that their one size fits all tech solution is what that client needs. And in some cases, that's fine. In other cases, it's not the right solution. And then at the other end, you have people that don't have any of their own technology, and they just work with whatever's there. And they just are really managing hourly workers to provide a service. And we do that in some places too. But our positioning in the marketplace, is to really be able to do any of that.

We can blend people and technology. We can bring our own proprietary technology solutions. We can bring technology only where there's a technology only opportunity, and we can just bring people were, so we're really trying not to limit our market scope by having a strategy that is narrowly focused on either managing people with existing technology or just bringing technology. I think the advantage of the Sphere of capabilities is that enables us to bring a pure technology solution only to places where revenue is not being captured.

We're not just placing a person operator, we're displacing a free parking situation. And this has been deployed, as we indicated in the prepared remarks at some airports. It's also being deployed in retail shopping malls, and other facilities and cities. And we have a client base now that is recognizing that with our technology, they can monetize their asset and not have any investment at all. And so that I think represents a real market growth opportunity for us.

Tim Mulrooneyr

Got it. Thank you. Last question from me. Maybe this is for Kris. I just wanted to ask about the balance sheet. I saw the share repurchase this year. And I've heard you talking about the potential for more M&A. But I wanted to get your perspective on your leverage ratio. What the ideal target leverage ratio would be? And any thoughts you have on potentially lowering that ratio given the increased level of macro uncertainty we now find ourselves in?

Kris Roy

Yes. I don't think so. I think we've kind of always said that two to three times is the right spot for us. I think that continues to be the right spot. But in light of our [indiscernible] and the investments that we're making around technology. And I think it really does give us, we've got a great and a new upsized credit facility, generate strong free cash flow. I think it gives us a lot of flexibility in terms of capital allocation to make investments organically, do share buybacks and return capital to shareholders, and also look at potential acquisitions.

And so I think it gives us puts us in a really good spot. And I think it gives us a lot of flexibility. I think if you look at where we ended, kind of Q2 and I kind of think about a TTM basis from a leverage ratio. I think we're under 3 and kind of right around that 2.8 times and so we feel good with that. Certainly, as we look at the back half of the year. If you just look at kind of the implied cash flow that we'll be generating the back part of the year, that's going to be a strong cash flow second half and so we'll continue to do what we do which is delever and use some of that cash to pay down debt and as well as look at opportunities to return capital to shareholders.

Tim Mulrooneyr

All right. Thank you guys.


Thanks, Tim.


[Operator Instructions] Our next question comes from Kevin Steinke with Barrington Research Associates. Kevin?

Kevin Steinke

Good afternoon Marc and Kris.

Marc Baumann

Key Kevin.

Kevin Steinke

I wanted to start off by just asking a question about the guidance. It just looks like the midpoint of your adjusted gross profit guidance went up at a slightly greater rate than your adjusted EBITDA guidance at the midpoint. So is that should we just think about that as some of the compensation expenses you mentioned as well as the business investments that you're making, leading to that small difference in the percentage increase?

Marc Baumann

Yes. I would say it's two things, and I think you hit on both of them. I think first and probably more largely, as you're making those investments today that we think and facilitate and accelerate growth in the future. And so we want to make those types of investments. And so that's certainly included in the second half of the year, in terms of additional investments, and then we do have some performance compensation that will be impacted in the second half of the year as well. So both of those are at but I think, largely, it's positioning ourselves for, as Marc mentioned before, accelerated growth in the future. And that's what we think these investments will deliver.

Kevin Steinke

Okay, thanks. That's helpful. And I wanted to ask about the consumer paid I guess remote check in and it sounds like you're going to be launching that soon at an airport. I'm just trying to distinguish that in my mind from the curbside concierge and how this is additive to your market opportunity within the airport space.

Marc Baumann

Sure, I think it might be useful just to go back to the pre-pandemic and say the bags, business has the capability through its proprietary platform to check in people for any one of seven airlines, which represent about 90% of domestic employments anywhere. It could be a curb, it can be in a garage, it could be at a hotel, it could even be at home. I mean, right now, that's a challenge because of some of the TSA regulations. But the technology is capable of checking someone in collecting their bag fee, printing their boarding pass anywhere. And one of the things we focused on pre-pandemic was introducing that capability as a tool to alleviate congestion on the curb front and also in the terminals at airports.

And we introduced banks to all the SP clients pre-pandemic, and there was a very enthusiastic interest in it. Of course, the pandemic came along and put a lot of that on hold. But one of the impediments to making a decision has always been many parties benefit from this service; the traveling public, the airline's themselves, and the airports. And it's always a question of, well, who's going to pay for it. And of course, as we all know, in the end, the consumer pays for everything. And so coming out of the pandemic, the bags team experimented with a consumer pay model, as opposed to a sponsored model.

And that showed that there was wide acceptance by consumers, they love this service, we did consumer survey on satisfaction and likeliness of reusing the service and they're in the upper 90s even if they're charged, charge out of pocket for that service. And so that's what gave rise to curbside concierge is being sold to airlines. And so as we indicated, we're operating curbside concierge for one airline at 35 airports. We believe we're close to starting another airline at a couple of airports and I'm sure we'll continue to grow it from there. Independently of that, we've now been talking to some airports who have congestion problems, of course, and maybe there's not enough interest from the airline in bringing that service. Or maybe the service would serve more than one airline. And so then the question again, comes up, how can we provide this service and who's going to pay for it.

So what we were really relating in our comments was that we now have an airport, who is going to adopt this consumer pay model. And I think that opens the door to more airports particularly smaller airports, where no one airline would be willing to be involved in the service and for bags to bring that technology and provide that service. So in the end, no matter what we call it is essentially remotely checking people in and trying to get pressure out of the airport lobby, or in some cases doing checking in the parking garage, at a remote car rental facility, at a train terminal. Other places where people are congregating as they come into the airport property to get them away from the curb in some cases, or out of the lobbies with their luggage and their check-in.

Kevin Steinke

Okay, yes, that's helpful. That makes a lot of sense. Just Lastly, I wanted to ask about the municipal market. You mentioned, a couple of wins there and just maybe an update on that market and how municipalities are responding to your technology offerings and potentially gaining traction with those offerings in that particular market.

Marc Baumann

Sure. I think for a long time we have felt that the municipal market, particularly the on street, municipal market was right for outsourcing to people like us. The vast majority of the 3000 municipalities that have parking meters still have the single head meter where that you put coins into, and there's definitely a missed revenue opportunity with that technology. And so there will always be an advantage for a municipality to outsource to somebody like us. A few municipalities have made that decision some years ago, and as you know, we collect the money for the meters from the city of Atlanta, from New Orleans, from Los Angeles.

And as we indicated about 100 other cities. So what this is a, it's an important market for us. But there's always that obstacle for those that have never outsourced before. It represents a big change. And so I think increasingly, as municipalities are facing pressures on their finances, pension obligations, and other costs, they're starting to be receptive to the idea that someone could come in, bring technology solutions, potentially bring them in without any cost to the municipality, and enable the municipality to share in an economic upside from that technology.

We're certainly finding that our textbook pay capabilities are very popular with people parking, because you don't need to create a credential on a mobile app. In other cases, the parking.com mobile app, which is our URL is available for people that want to create a wallet and have their payment information stored there safely. So I think the time is right for that. We all know, as people driving around and looking for places to park, we want a low friction transaction, and getting out of your car and walking over to a pay station and having to swipe the credit card or enter information by pushing buttons that's not much of a step beyond the old parking meter with the coins.

And so we're offering the same no touch, no friction. It's all done with your mobile device opportunity to pay and to pay efficiently. And I think increasingly, we're looking at providing some of our capabilities, even in cities where we are not operating for the municipality. We're just bringing technology once again.

So I think as you look to our future, you will see us looking for ways to take our technology solutions that we've developed under the Sphere umbrella, and sell them as an offer them as pure technology offerings into the marketplace, even in places where we are not going to be the operator. Now just to finish up and in these two cases, we will be the operator as well providing a full suite of services. We do enforcement and ticketing and all the other things that a municipality needs but we're trying to be versatile so that we can operate in both that environment and the one we're just a pure tech solution is called for.

Kevin Steinke

Okay, thanks. That's very helpful. Appreciate you taking the questions, and congratulations on the nice results.

Marc Baumann

Thanks very much, Kevin.

A - Kris Roy

Thanks Kevin.


That concludes all of the Q&A for today. I would like to now turn it back over to Marc for any closing remarks.

Marc Baumann

Hey thanks Stacy and I just want to wrap up by saying thanks for being with us today. Appreciate your interest in SP Plus, and we're excited about the remainder of the year and speaking to you next quarter. Thank you.


This concludes today's call. Thank you for your participation. You can now disconnect.

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