In a recent earnings call, Emerald (ticker: EEX), a leading events company, revised its full-year revenue forecast for 2024 to at least $400 million and adjusted EBITDA to at least $100 million. The revision is primarily due to the discontinuation of 20 underperforming events and challenges in the Content business.
Despite these short-term setbacks, CEO Hervé Sedky projected strong growth in 2025, fueled by a refined event portfolio and improved margins. CFO David Doft reported third-quarter revenue of $72.6 million and an adjusted EBITDA of $12.5 million, marking a slight revenue increase and a more substantial margin growth from the previous year.
Key Takeaways
- Emerald's 2024 revenue expectations have been reduced to a minimum of $400 million, with adjusted EBITDA expected to be at least $100 million.
- The company's Content business now represents approximately 5% of total revenue.
- Emerald anticipates robust growth in 2025, driven by an optimized portfolio of events.
- The third-quarter revenue was $72.6 million with a 17.2% adjusted EBITDA margin.
- A share buyback program and a quarterly dividend of $0.015 per share have been initiated.
- The company has improved its cash flow and reduced SG&A expenses, with a net leverage ratio of 2.11 times.
- S&P upgraded Emerald's debt rating from B to B+.
Company Outlook
- Emerald expects to achieve an adjusted EBITDA margin of around 25% in 2024, with a long-term goal of 35%.
- The company remains committed to the value of in-person events as essential marketing tools.
Bearish Highlights
- Discontinuation of 20 underperforming events, resulting in a loss of $20 million in historical revenue.
- The Content business faces challenges, contributing to lowered revenue expectations.
Bullish Highlights
- Strong growth anticipated for 2025 due to a refined event portfolio and improved margins.
- S&P's upgrade of Emerald's debt rating indicates improved financial stability.
Misses
- A hosted buyer event was canceled due to a hurricane, affecting the company's performance.
Q&A Highlights
- CEO Hervé Sedky discussed the Xcelerator team's efforts to enhance growth, including an upcoming launch in Miami.
- The company has expanded internationally with over 50 sales agents, although challenges persist, especially in China.
- Emerald is leveraging AI for internal marketing to improve personalization and conversion rates.
- The focus on portfolio optimization is a key pillar for sustained growth, despite the tough decision to discontinue certain events.
Emerald's management has outlined a strategy that balances immediate challenges with long-term growth prospects. The company's focus on optimizing its event portfolio and leveraging technology like AI for marketing demonstrates a commitment to adaptability and innovation. With a strong cash balance, a disciplined approach to capital allocation, and strategic international expansion, Emerald is positioning itself to capitalize on the eventual rebound of in-person events and the evolving needs of its global clientele.
InvestingPro Insights
Emerald's recent earnings call and strategic decisions are reflected in several key metrics and insights from InvestingPro. Despite the company's revised revenue forecast and challenges in its Content business, there are signs of potential resilience and growth opportunities.
According to InvestingPro data, Emerald's revenue for the last twelve months as of Q3 2024 stands at $393.5 million, with a revenue growth of 4.96% over the same period. This aligns closely with the company's revised full-year revenue forecast of at least $400 million for 2024. The company's gross profit margin of 64.88% and operating income margin of 16.7% suggest that Emerald maintains strong profitability metrics despite recent challenges.
An InvestingPro Tip highlights that Emerald "operates with a moderate level of debt," which is consistent with the company's improved cash flow and reduced net leverage ratio mentioned in the earnings call. This financial stability is further supported by S&P's upgrade of Emerald's debt rating from B to B+.
Another relevant InvestingPro Tip indicates that "analysts predict the company will be profitable this year." This aligns with management's optimistic outlook for 2025 and their focus on portfolio optimization and margin improvement. The company's adjusted EBITDA of $96.7 million for the last twelve months, with a growth of 24.94%, supports this positive forecast.
It's worth noting that Emerald's stock has faced recent pressures, with InvestingPro data showing a 6-month price total return of -32.8%. This decline may reflect the market's reaction to the company's revised forecasts and ongoing challenges. However, with a price-to-book ratio of 2.04, the stock may present value for investors who believe in the company's long-term strategy and the recovery of the events industry.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Emerald, providing deeper insights into the company's financial health and market position.
Full transcript - Emerald Expositions Events Inc (NYSE:EEX) Q3 2024:
Eric I. Lisman: Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This includes remarks about future expectations, beliefs, estimates, plans, and prospects. In particular, the company's statements about projected results for 2024 are forward-looking statements. Such statements are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those indicated or implied by such statements. For a discussion of these risks, uncertainties and other factors, please refer to the company's SEC filings, including its most recently filed periodic reports on Form 10-K and Form 10-Q as well as the company's earnings release, all of which can be found on the company's Investor Relations website. The company does not undertake any duty to update such forward-looking statements. Additionally, during today's call, management will discuss non-GAAP measures, which it believes can be useful in evaluating the company's performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. The reconciliation of these non-GAAP measures to the most comparable GAAP measures can be found in the company's earnings release, which is available on the company's Investor Relations website. As a reminder, this conference is being recorded, and the replay of this call will be available on the Investors section of the company's website.
Hervé Sedky: Thank you, Eric and good morning, everyone. This is Hervé Sedky. It's good to be with you and to discuss our third quarter results. I'll start with a brief review of our performance and then give an overview of our strategy. David Doft, our CFO, will then provide more detail on our financials. We've spoken often about the concept of portfolio optimization here at Emerald. And today, I want to fill you in on some of the more aggressive steps that we're taking to position the company for better growth and profitability in the future, which had near-term implications on our expected 2024 results. In addition, although we're seeing strong and broad-based year-over-year pacing growth into the first half of 2025, we do not expect our performance in the second half of 2024 to meet expectations. As a result, we're reducing our previously communicated expectations for full year 2024. This update is primarily driven by two factors. First, a proactive decision to optimize our portfolio mix and second, certain macroeconomic and operational impacts on our Content business. Let me address each of these in more detail now. First, to optimize the long-term organic growth and margin trajectory of our portfolio, earlier this year, we conducted a thorough review of our entire catalog -- event catalog. An outcome of this review was the decision to accelerate certain portfolio optimization activities by pruning several smaller and unprofitable events. Over the past several months, we have permanently discontinued 20 events totaling $20 million in historic run rate revenue. $17 million of this total is for events that will not stage in 2024, but did stage in 2023 and $3 million is for events that did stage in 2024, but we have decided not to stage in 2025. In aggregate, these events were not growing and had negative margin at the EBITDA level. As a result, we expect these actions to positively impact growth and margin in 2025. Additionally, we had to cancel one of our hosted buyer events in early October, which was set to stage in Florida during Hurricane Milton. The impact was just under $1 million in revenue with high contribution margins. We are now in the process of submitting a corresponding insurance claim. Given that a state of emergency and evacuation orders were issued, our view is that this cancellation will fall under our event cancellation insurance policy and we expect to be reimbursed as we have been several times in the past following similar weather-related disruptions. Moving forward, our priority remains growing the business. Our actions are consistent with our stated objective of portfolio optimization, which we believe puts us at an even stronger foundation for expansion next year and beyond. We expect solid growth and a return to margin enhancement in 2025, aided by the removal of these unprofitable assets. David will touch on the near-term impact to the business in a moment. Despite these challenges, our existing show portfolio continues to thrive. Just a few weeks ago, we completed the New York Edition of Advertising Week. We had a great turn-out with several new tracks added, including an Investor Summit and leading voices from some of the most prominent industry players, including Meta (NASDAQ:META), Google (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), TikTok and Netflix (NASDAQ:NFLX), among many others. We're now excited for the upcoming slate of fourth quarter events, including BDNY, Healthcare Design Expo and MJBizCon and feel confident about the strength of our portfolio as we move into the first half of 2025. In fact, our pacing into 2025 is stronger and more broad-based than at this point last year and reinforces our view that growth should improve in the new year. Currently, we expect solid revenue growth in 2025 with a return to margin expansion aided by an improved mix of business from our portfolio optimization efforts. Second, beyond our event business, we're seeing continued softness in our small content business. This segment currently accounts for approximately 5% of our total revenue, but has continued to perform below expectations. We made significant organizational changes over the last 18 months that were expected to drive a recovery in the second half of the year. However, the advertising environment in several end markets has remained challenging and our expectations for near-term growth are modest. Even with such a small exposure, we're experiencing a low-to-mid single-digit million-dollar shortfall versus expectations for the full year 2024, which had called for growth this year. As a result, we now anticipate that 2024 Content revenue will decline on a year-over-year basis. Our Content portfolio remains an important component of our operations due to the leverage it gives us in event marketing and the proprietary data assets it generates. This business is additive to our strategy around personalization and enhances lead generation for our event customers throughout the year. As growth in other much larger parts of Emerald continues, Content is naturally becoming an increasingly smaller component of our overall revenue, which means that variances here should have a limited impact on our overall performance in the future. As a result of these factors, we're adjusting our full year revenue and adjusted EBITDA guidance to at least $400 million and $100 million respectively. Our updated guidance still implies year-over-year growth in both revenue and adjusted EBITDA, albeit at a lower level than previously anticipated. We expect the changes to the make-up of our portfolio and more aggressive efforts within our Content division will leave us well positioned for strength in 2025 and beyond. We believe that the value proposition for Emerald's large and diverse collection of events is strong and our customers understand and appreciate the strong ROI that in-person events offer as is evidenced by the solid growth we're experiencing in 2025 bookings. As I've said before, trade shows are often the number one selling and marketing events of the year for our customers. According to a recent survey by The Boston Consulting Group, 87% of CMOs are reporting that traditional channels like e-mail campaigns and display ads offer diminishing returns due to the rise of ad blockers and algorithmic changes. As a result, CMOs are reallocating spend toward more effective channels like in-person events and experiential marketing. Nearly 65% of CMOs, according to Deloitte, are reported increasing their investments in in-person events to improve brand loyalty and customer engagements. In-person events are also no longer seen as large cost centers, but rather as a necessary and incredibly valuable part of a company's marketing strategy. To under-invest in them is viewed by many C-suites as a competitive disadvantage. In short, in-person events provide a real opportunity for long-term value creation through knowledge sharing, innovation, and relationship building, the key building blocks for any growing business. As we look forward, we continue to believe in the strength and value of our portfolio. We are confident in the positive mid to long-term trends for in-person events as we get further removed from the volatile comps created during and immediately following the pandemic, and we believe in the deep value Emerald brings to the market. Ultimately, we're not afraid to make difficult decisions based on data that strengthen our prospects for growth. This quarter was no exception. We are a profitable portfolio on the EBITDA level of some of the industry's most well-known and respected events in the markets they serve. And we are committed to building this portfolio through accretive acquisitions alongside new event launches. More importantly, recent transactions in the industry serve to further validate the value of the live events space. I'm excited for the path forward and continue harnessing the power and impact of in-person events. With that, let me turn things over to David Doft. David?
David Doft: Thank you Hervé, and good morning. I will start with a financial overview of the most recent quarter and then discuss capital allocation as well as our guidance. For the third quarter, total revenue was $72.6 million compared to $72.5 million in the prior year quarter. This was primarily driven by $4.2 million in revenue from acquisitions as well as scheduling adjustments of $4.2 million. These gains were offset by $5 million in discontinued event revenue that was not contributing to profitability as part of our portfolio optimization strategy and organic decline of $3.3 million. Organic revenue, which takes into account the impact of acquisitions, scheduling adjustments, and discontinued events, declined 5.3% in the third quarter to $58.7 million as compared to $62 million in the prior year quarter. Besides the items Hervé reviewed, growth in the quarter was also impacted by construction at one of the venues [Technical Difficulty] where we hold large events, which has temporarily caused disruption for a small number of events in the short-term. Year-to-date, organic revenue was up 4.8% as compared to the same period last year. Third quarter adjusted EBITDA, excluding insurance proceeds, grew 56.3% or $4.5 million to $12.5 million versus the prior quarter. This equates to an adjusted EBITDA margin of approximately 17.2%. As Hervé discussed, we conducted a thorough review of our entire event catalog as part of a proactive review of our nearly 150 show portfolio. As a result, we removed 20 unprofitable events this year. For the events that were discontinued, there was some positive contribution at the event level, which means we're in the process of reducing overhead related to those changes and we expect the full benefits should be seen in 2025. Turning to expenses, third quarter SG&A was $40.8 million versus $41.6 million in the prior year period, driven by continued management of overhead costs and lower stock-based compensation expense. This was partially offset by lower gains from the remeasurement of contingent consideration for prior acquisitions. In the third quarter, we generated $6.7 million of free cash flow, excluding event cancellation insurance proceeds as compared to $2.7 million in the prior year period. As many of you know, the Federal Reserve recently reduced their interest rate by 50 basis points, which delivers an immediate boost to our free cash flow as we have a floating interest rate on our debt. Specifically, we have $410 million of term loans, so every point reduction from the Federal Reserve leads to approximately $4 million of incremental cash flow for Emerald. This is good for our equity holders and provides added fuel for investing in value-added initiatives. Turning to the balance sheet, we had a healthy cash balance of $188.9 million as of September 30th versus $193.2 million as of June 30th. As a reminder, in early May, we completed the conversion of our convertible preferred stock, eliminating the preferred dividend and resulting in a simpler all common equity structure. I should also highlight that in the third quarter, S&P upgraded Emerald's debt from a B rating to B+, reinforcing the strength of our model and liquidity position. Our total liquidity is $298.9 million, including full availability on our $110 million credit facility. As of September 30th, we had net debt of $221.2 million, leading to a net leverage ratio as defined in our credit agreement of 2.11 times our trailing 12-month consolidated EBITDA based on the definition in our credit agreement of $105.0 million. Our balance sheet strength and cash flow generation support our ability to opportunistically invest in and grow our business. Going forward, we expect to continue to balance our capital allocation priorities between acquisitions to bolster our portfolio of events, investments in our own business, managing debt leverage to 3.0 times net debt to EBITDA or below, and returns of capital to shareholders, which includes dividends and opportunistic share buybacks. During the third quarter, we bought back 743,000 shares for $3.6 million or an average price of $4.85 per share under our existing buyback authorization, which had $19.6 million of capacity remaining. Our Board of Directors authorized an extension and expansion of that existing share repurchase program through December 31, 2025 for the repurchase of $25 million of Emerald's common stock, representing approximately 3% of the current equity market capitalization. Additionally, on October 29th, Emerald's Board of Directors declared a regular quarterly dividend of $0.015 per share for the quarter ending December 31, 2024, which would imply an annualized cash dividend amount of $12 million and reflecting a dividend yield of 1.3% based on yesterday's closing price. Turning to guidance, as Hervé noted, we now expect that our 2024 performance will be at least $400 million of revenue and at least $100 million of adjusted EBITDA. Our revised guidance reflects the impact of the discontinued events, the aforementioned content softness, and the cancellation of one hosted buyer event in October due to Hurricane Milton. As Hervé also noted, we believe this cancellation should fall under our event cancellation insurance policy and we expect to file an insurance claim for this event shortly. Our guidance implies an adjusted EBITDA margin of approximately 25%. Note that we continue to believe that we can achieve an adjusted EBITDA margin in the range of 35% in the coming years as we continue to leverage our existing cost base, realize the benefits of our investments, and reap the benefits from the pruning of our portfolio. Thank you very much for your time. And with that, we'll now open the line for questions.
Operator: [Operator Instructions]. Your first question comes from the line of Barton Crockett with Rosenblatt. Please go ahead.
Barton Crockett: Okay, thanks for taking the question. I guess, a couple of things. One, I was wondering if you could explain a little bit more about why your outlook for EBITDA is reduced if so much of this is really tied to canceling unprofitable shows and I think you were kind of getting at it with the event level and other expenses but if you could kind of elaborate on that a little bit more, just would help me kind of understand the guidance?
Hervé Sedky: So there's really three components here, Barton and so one of them is the cancellation of events. And ultimately, many of these decisions, given we're sitting here in October, were made later in the year, but a lot of the SG&A related to those events was already spent this year. And so by not having the events and the related contribution margin as modest as many of these were, we're not generating the money to fund SG&A we've already burned. And so as we adjust the SG&A, which is ongoing and will be done prior to entering next year, we'll be able to realize the full benefit on a bottom-line basis in 2025. So it's really a timing difference around when events were canceled and when money has been spent. But on an ongoing basis, this we expect to be beneficial to us in absolute dollars and surely margin because of that. The second is, there was real softness in the Content business. That is a business that has become volatile over the last two to three years in a difficult ad market with shorter term decision-making by advertisers that has made it a little more difficult for us to forecast admittedly. And so there is some bottom-line impact from that, as we mentioned in the call, a low-to-mid single-digit $1 million impact versus our prior expectations. We took down our expectations on a percent basis fairly meaningfully for that business. The third, and it is a much smaller one. Admittedly, we didn't emphasize it a lot in the financial discussion, but the hurricane did cause -- in Florida did cause a small event to be canceled. It's hitting us about $1 million. Ultimately, we'll recover that in insurance, we believe. And there's nothing we've seen at this point to make us believe we won't. But it's unclear when that money is going to come as we've learned in the past around insurance recoveries and so we've just stripped that out of our expectation entirely.
Barton Crockett: Okay. And in terms of the Content, is that revenue largely come out of EBITDA, those low-to-mid single-digit millions?
Hervé Sedky: It does at this point. Digital media is a high contribution margin business. Again, given the timing, it's late in the year. And so it's a bit hard to get the cost basis adjusted in time to benefit this year. And so there is a high flow-through in the short-term of that shortfall versus what we thought.
Barton Crockett: Okay. So second question I'm wondering about is the commentary you've offered that the pacings look good for 2025. Is there anything different that you see now or that you know now that should give us any different level of confidence in what you see for 2025 relative to what you saw when you were starting 2024, I know you said pacings are better, but things -- but is there anything in terms of forward reservations, the fact that this is driven by some event cancellations or is that just the nature of the beast, I mean, it can look good and it can still change a few months later?
Hervé Sedky: So pacings are -- they build over time. And so when we're looking into the first half and that -- our comment is around the first half of 2025 because that's where we have all events in market and have been in market for some time and have high visibility, where in the back half, we have a little less visibility right now. As we move through the next few months and when we give our next update on the year-end results, we'll have more visibility on the back half of the year than we do today. So we're not making a comment on the back half of the year. And as a reminder, we have talked extensively in the past about our mix quarter-to-quarter of our business. And it is true that our poorer performers are more concentrated in the second and third quarter. And so we do have some time before we can make a call in the back half next year. However, in the first half next year, what's different is that the pacing strength, it's not only higher as a percent of growth versus where we sat at this point last year, on this day last year, right, because we track this every day. It's also more broad-based. There are more events outperforming in their pacing for next year than there were at this point last year. And for us, when we talked about portfolio optimization and portfolio mix and the number of events we run across a number of sectors, that's a really good sign. And you're right, we are also eliminating underperformers. We are eliminating events that we don't believe have a path to be growth assets, to be profitable assets that were part of the long tail of Emerald and will better allow us to focus our resources on the strong brands to drive better financial performance.
Barton Crockett: Okay. And then switching gears a little bit. I was just wanting to make sure I understand, there's been some press releases around Blockchain Futurist where suggesting an acquisition, which I'm just not clear that that's exactly what's happened. So I was wondering if you could talk a little bit about what you're doing with that event, which is obviously popular in Canada and I think expanding to Miami, what is your engagement there?
David Doft: I'll start and then I'll turn it to Hervé. There's a nuance that I think is also important as we think about portfolio optimization is, we've talked a lot about investing in new launches in our Xcelerator unit. There's been a slight shift in thinking where if we can identify emerging assets that are a couple of years in and kind of do more of an acquihire type and bring them into the portfolio, we can accelerate launch activity in a way where it doesn't burn as much on the bottom-line because we recognize that we've invested quite a bit in EBITDA losses the last couple of years in launches. And so if we can minimize launches and accelerate path to market by finding the right emerging brands, we would do that. And so we had a launch in the blockchain area. This supplements what we were already doing and accelerates it in a way where we expect to eliminate the burn of that launch and have it be a contributor faster with a more favorable growth trajectory.
Hervé Sedky: And the only thing I'll add is managed by the Xcelerator team and we continued to invest and push the team to grow. And to your point, there will be a launch in Miami that has been announced. And again, the Xcelerator team, which is our launch team, is investing and pushing that launch. So it is part of our -- to David's point, our launch strategy. This just fuels and accelerates our launches.
Barton Crockett: Okay, alright, thank you guys.
Hervé Sedky: Sure.
Operator: Your next question comes from the line of Derek Greenberg with Maxim Group. Please go ahead.
Derek Greenberg: Hey guys, thanks for taking my questions. To start, could you just give a little bit more color in terms of the profile of the events that were discontinued and why you think they were underperforming?
Hervé Sedky: I'll cover that. We are not going to get into the detail of the launches that were discontinued because largely the -- they are adjacency to existing brands. So just to give you a little bit of color, largely -- not all, but largely the brands that were discontinued were added brands that were either geo extensions, so brands that were extended in other cities or brands that were just extended from existing brands. And they just were not -- they didn't have the uptake or didn't serve the customers in the way that the brands initially thought they were. And as such, we -- they weren't really driving the returns to the customers or to us that we were expecting. The large one that I will call out that didn't meet -- that doesn't fit this profile is NBA Con. One, it's more -- it's the largest one in the group and it doesn't meet the profile that I just described. But other than that, we're not going to go through the detail of the list of the brands that we've discontinued. Hopefully, that gives you the color that you're looking for.
Derek Greenberg: Yes, that's definitely helpful, thank you. And then can you just comment on how the business is tracking relative to pre-pandemic and some of the steps that could make it get back to full performance there?
Hervé Sedky: So pre-pandemic is, at this point, a very long time ago, and our business looks very different. So it's not really that relevant for many of our parts of our portfolio, especially as we shift the mix of what we're executing on. Per the discontinued events comments, there's clearly some events that were -- frankly, they were underperformers before the pandemic. And after the pandemic, they're still underperformers. And while stronger brands have bounced back and many, many, many of our brands across the portfolio are exceeding pre-pandemic levels, this group is a big part of the group that hasn't been. There are still a small number that still have not gotten back and each industry has its own issue. Each industry that we have our events have their own dynamics of what's going on and we continue to work to drive growth and more growth out of those assets.
Derek Greenberg: Got it. And then in terms of getting international to return and driving that side of the business, I was just wondering, how you're progressing there?
Hervé Sedky: How we're progressing in terms of international? So as we've shared in the past, we've invested in an international sales team. So we've invested in that because we said that we were underweight in terms of Emerald's international penetration. That takes a bit of time in terms of really building the international network, but the network is built. We have over 50 sales agents now around the world. I forget the exact number, but it's north of 50 sales agents that are representing Emerald brands around the world. And we are starting to see some activity from -- and diverse activity from more countries around the world. But it will take some time for us to see the full impact of that investments, but we expect to see that over the coming few years. Now we do see -- we have a team that just came back from China and we do expect some headwinds from China. I think some of it will depend on the outcome of the election next week, but we're watching that closely. But we are hearing from China that they're watching that closely and it's -- while it's a small part of total Emerald revenues, it's a large part of the international revenue. And so we are taking active steps to diversify our international revenues from China as we speak.
Derek Greenberg: Okay, got it. And then in terms of the hosted buyer event that was impacted by the hurricane, is that something you plan on still trying to host this year or is it just canceled until next year?
Hervé Sedky: No. We are -- we've canceled it. We've canceled the event altogether for this year.
Derek Greenberg: Okay. Got it. And then my last question would just be how you're progressing with integrating and using AI across the business?
Hervé Sedky: So that's a good question. That's -- it's work in progress. AI for us is a hot topic and we have a number of tests around the company. They're largely around internal use. For instance, our marketing teams are using it for e-mail copy and for headlines and landing page copy and some of those types of things. But AI can really help scale our personalization efforts in marketing and more quickly and effectively and efficiently help improve some of the conversion rates that we see from our marketing team. So we really think that, from an internal use, it will help on the marketing side and we're testing a number of initiatives and we'll continue to test use of AI internally and we plan to scale that as we monitor the outcome of these tests.
Derek Greenberg: Okay, great. Thanks for taking my questions.
Operator: I will now turn the call back over to Hervé Sedky for closing remarks. Please go ahead.
Hervé Sedky: Thank you very much. Well, I wanted to thank you all for joining the call. Over the course of the last few years, we've talked a lot about our three pillars of growth, which are portfolio optimization, customer centricity, and 365-day engagement. And the reality is this quarter we've really focused more on portfolio optimization. And portfolio optimization in the last few years' discussion has really centered largely around M&A. Today, we've talked more about discontinuing events and we've made difficult decisions. But these difficult decisions were important to optimize the mix of our portfolio to really position us well for sustained growth for the foreseeable future. So while they were difficult decisions, they were important. And we look forward to updating you as we continue to make progress on our growth strategy in the upcoming quarters. So thank you again for joining the call, and I look forward to speaking to you next quarter.
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