RHI
#Good afternoon, everyone, and thank you for joining us.
As is our custom, I would like to remind you there are comments on the call today that contain predictions, estimates and other forward-looking statements.
These statements represent our current judgment of what the future holds and include words such as forecast, estimate, project, expect, believe, guidance and similar such expressions.
We believe these remarks to be reasonable.
However, they are subject to risks and uncertainties that could cause actual results to differ materially from the forward-looking statements.
Some of these risks and uncertainties are described in today's press release and in our SEC filings, including our 10-Ks 10-Qs and today's 8-K.
We assume no obligation to update the statements made on today's call.
For your convenience, our prepared remarks also are available on our website at www.roberthalf.com.
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Now, let's review first-quarter 2016 results.
Quarterly revenues were $1.303 billion, up 8% from the first quarter one year ago.
Income per share was $0.64, up 10% from this time last year.
Cash flow from operations was $79 million in the first quarter.
Capital expenditures were $19 million.
In February we increased the quarterly cash dividend from $0.20 to $0.22 per share.
This is the 11th consecutive year we've increase the dividend amount.
The dividend was paid to shareholders on March 15 for a total cash outlay of $29 million.
We also repurchased 700,000 Robert Half shares during the first quarter at a cost of $29 million.
We have 9.7 million shares still available for repurchase under our Board authorized stock repurchase plan.
The US job market remains solid in the first quarter, as did demand for our professional staffing and consulting services, resulting in year-over-year revenue growth on all lines of business.
Our accounting and finance staffing divisions had a particularly strong first quarter.
This was the Company's 24th straight quarter of double-digit earnings per share percentage growth on a year-over-year basis.
Our unleveraged return on equity was 33%.
I'll turn the call over to <UNK> now for a closer look at our first-quarter results.
Thank you, <UNK>.
Global revenues were $1.3 billion in the first quarter, up 8% from the first quarter a year ago on a reported basis and on a same-day constant currency basis.
First quarter staffing revenues were up 7% on a same-day constant currency basis.
US staffing revenues were $900 million in the first quarter, up 9%.
Non-US staffing revenues were $215 million, up 4% when adjusted for billing days and currency exchange rates.
We have 330 staffing locations worldwide, including 90 locations in 17 countries outside the United States.
The first quarter had 62.7 billing days compared to 62 days in the first quarter one year ago.
The difference in billing days had the effect of increasing by 1% the reported year-over-year revenue growth rate for the quarter.
The current second quarter has 63.9 billing days compared to 63.2 days in the second quarter of last year.
Currency exchange rates had the effect of decreasing reported year-over-year staffing revenues by $11 million in the first quarter.
Exchange rates decreased year-over-year reported staffing growth rates by 1%.
Global revenues for Protiviti were $187 million in the first quarter, with $158 million in revenues in the United States and $29 million in revenues outside of the United States.
Protiviti revenues were up 14% year-over-year on a same-day constant currency basis.
US revenues were up 15% and non-US revenues were up 8% from the prior year.
Exchange rates had the effect of decreasing year-over-year Protiviti revenues by $1 million in the first quarter and decreasing the year-over-year reported growth rate by 1%.
Protiviti, and its independently owned member firms, served clients through a network of 75 locations in 25 countries.
Accompanying our earnings release is a supplemental schedule showing year-over-year revenue growth rates on both a reported and a same-day constant currency basis.
This data is further broken out by US and non-US operations.
This is a non-GAAP financial measure that offers insight into certain revenue trends in our operations.
Now let's talk about gross margin.
Gross margin in our temporary and consulting staffing operations in the first quarter was 37.1% of applicable revenues.
This is a 10 basis point improvement from the same period one year ago, as higher pay/bill spreads offset lower temp-to-higher conversion revenues.
First quarter revenues for our permanent placement operations were 9.5% of consolidated staffing revenues, which is up slightly from last year's 9.4%.
Together with temporary and consulting gross margin, overall staffing gross margin improved by 20 basis points versus a year ago to 43.1%.
First-quarter gross margin for Protiviti was $51 million, or 27.4% of Protiviti revenues.
Gross margin one year ago for Protiviti was $47 million, or 28.8% of Protiviti revenues.
Staffing SG&A costs were 32.4% of staffing revenues in the first quarter versus 32.2% in last year's first quarter.
SG&A costs for Protiviti were 19.6% of Protiviti revenues in the first quarter compared to 18.8% of Protiviti revenues in the year-ago period.
Operating income from our staffing divisions was $119 million in the first quarter, up 7% from the prior year.
Operating margin was 10.7%, the same as the prior year.
Our temporary and consulting staffing divisions reported $98 million in operating income, an increase of 5% over the prior year.
This resulted in an operating margin of 9.7%.
Operating income for our permanent placement division was $21 million in the first quarter, up 13% from the prior-year and producing an operating margin of 20.2%.
First-quarter operating profit for Protiviti was $15 million, a decrease of 11% from the prior year.
This produced an operating margin of 7.8%.
At the end of the first quarter, accounts receivable were $734 million.
Implied days sales outstanding, DSO, was 51.3 days.
Now turning to guidance.
Before we turn to guidance, let's review the monthly revenue trends we saw the first quarter, and so far in April, all adjusted for currency.
Globally, year-over-year revenue growth rates for our temporary and consulting staffing divisions decelerated slightly during the quarter and we exited the quarter with March revenues growing 6.3% compared to 6.7% for the full quarter.
Revenue growth for our staffing and consulting services in the first two weeks of April was up 5.5%, compared to the prior year.
Global permanent placement revenue growth rates accelerated during the first part of the quarter, then moderated thereafter, with March revenues growing 1.5% compared to 8.6% for the full quarter.
For the first three weeks in April permanent placement revenues were flat compared to the same period last year.
This information is designed to offer a glimpse into trends we saw during the quarter and in April.
But as you know, we hesitate to read too much into these numbers as they represent very brief periods of time.
With that said, we offer the following second quarter guidance: Revenues $1.325 billion to $1.385 billion.
Income per share $0.70 to $0.76.
The midpoint of our guidance implies year-over-year revenue growth of 6% on a reported basis and adjusted for currency, including Protiviti, and EPS growth of 8%.
We limit our guidance to one quarter.
All estimates we provide on this call are subject to the risks mentioned in today's press release and in our SEC filings.
Now I'll turn the call back over to <UNK>.
Thank you, <UNK>.
We were pleased with the Company's performance during the first quarter.
Our results were boosted by still low US unemployment in numerous professional occupations and stronger labor markets in key international locations.
The number of US job openings has exceeded the number of hires since February 2015, according to the most recent Job Openings and Labor Turnover survey from the Bureau of Labor Statistics.
The competition for skilled talent is intense.
Multiple offers and counter offers are common for high-demand candidates, particularly in technology and accounting.
Internationally we see higher demand for professional level talent in a number of markets, notwithstanding economic headwinds that persist outside the United States.
We feel we will continue to benefit from a widening skills gap in a number of our professional specialty areas.
Employers that are struggling to find needed talent are recognizing that flexible staffing can help them manage total labor costs and also increase the pool of potential full-time talent through temporary-to-hire arrangements.
Turning to Protiviti we were pleased with Protiviti's performance during the quarter, including once again reporting double-digit revenue growth on a year-over-year basis.
Protiviti has an excellent growth outlook based on multiple factors favorably influencing service and demand.
These include a robust regulatory environment and increased need for stronger internal controls and data security measures among others.
At this time <UNK> and I would be happy to answer questions.
We ask that you please limit yourself to one question and a single follow-up as needed.
If time permits we will certainly try to return you if you have additional questions.
Thank you.
Okay.
So several sub-questions there about trends, comparing cycles.
Clearly, we see clients remaining cautious due to the uncertain macro environment.
That lengthens the sale cycle.
Further, as we've talked about before, candidates have many options with their current employer, with other employers.
That makes them harder to close.
That also lengthens the sales cycle.
So generally speaking, across our divisions ---+ less so with the accounting and finance ones, but the sales cycle has elongated, which has impacted our growth rates and is expected to impact our growth rates into the second quarter.
Compared to prior cycles, it usually gets white-hot for candidates such that clients will very quickly take any candidate that's close.
And the current environment is nowhere near that environment.
So to the extent in prior cycles, the late stage has been indicated by this white-hot hyper demand where permanent placement goes at very high double-digit rates.
That hasn't happened, and notwithstanding the fact that we're in year seven or whatever of this cycle, we still don't see that type of hyper demand that we would typically see late cycle.
But instead, we continue to slug it out in this relatively sluggish macro environment.
We saw that again in the first quarter.
Our guidance anticipates more of same in the second quarter.
With respect to RH Tech and perm, I would say those trends were particularly evident in both of those divisions.
While it's true that Tech's year-over-year growth rate slowed, from 10% to 6%, if you look at their a-year-ago comps, they got harder from 12% to 19%.
So given the tougher comps, the deceleration in the growth wasn't totally unexpected.
Perm did fine in the beginning of the quarter as we said.
It decelerated late.
That deceleration continued into the first part of this quarter.
That said, we all know from experience that those are short periods of time.
They were disproportionately impacted in the post-quarter start by our non-US operations.
But on balance, the guidance we're giving is that the economy will continue to chug along at a slow rate.
The sales cycle has elongated.
It's taking longer to close deals.
That includes perm.
That includes tech.
And therefore, our growth rates have slowed modestly.
Well, as you know, we typically don't go beyond a quarter, but we've been slugging it out in 1% or 2% GDP environment for several years.
The comps do get easier.
That's certainly better than them getting harder and gives us a better shot at decent growth rates on the backside of the year.
There are certainly plenty of economist types out there that say GDP growth will accelerate in the back half of the year.
We don't know if that's true or not.
But easier comps are better than harder comps.
First of all, Protiviti, once again, on very tough comps, reported very robust revenue growth.
They were up 14% on comps that had grown 26% in the year-ago period.
That said, on the cost side, there have been many investment hires on the managing director side to expand their practice, both in the US and abroad.
January 1 is the date for the annual raises for their entire practice.
The raises, due to the competitiveness of the market, were higher this year than they were in years past.
So the combination of those two ---+ their direct costs were up 17% off of the revenues that were up 14%.
Clearly, some of those costs are front-loaded for the full year.
We expect to leverage those as we progress through the year.
We would also observe that in the financial services regulatory consulting practice, we had some projects again that were delayed and deferred.
On a few new projects, the rates were lower than they had been in the past, as some clients get a little more cost conscious.
The regulatory practice for many quarters in a row has had absolute hyper growth.
In this quarter it went from hyper growth to fantastic growth.
It's shades of really good, but it was slightly slower this quarter than we expected, frankly.
And to the extent it was a little light relative to our plan, all of that lightness dropped all the way to the bottom line.
So notwithstanding, very robust revenue growth.
Our margins declined year-over-year, as you noted.
As we move into the year, for the second quarter, we expect Protiviti to still have growth in the low to mid-teens.
Again, that's on very tough comps a year ago, which were up 23%.
We think the margins will grow nicely, sequentially, but the margins will still be slightly below last year's levels.
That said, we do expect to get back into double-digit percentage operating margins, which is certainly going in the right direction.
Demand for Protiviti services remained strong.
The pipeline remains strong.
It had a very good quarter.
It certainly has been aggressive adding to capacity.
It will now leverage that capacity over the rest of the year and the margins will improve.
It's our fastest growing division.
It's been our fastest growing division for several quarters running.
We are very pleased with Protiviti.
Conversions were 3.2% of revenue for the quarter.
As we said earlier, overall, our temp margins expanded by 10 basis points.
That's notwithstanding a 10 basis point contraction in conversions, which means our pay/bill spreads more than made up for that.
So they were down a tick.
Clearly, we would have liked to have seen those a bit higher.
We're still optimistic, over the medium term, that we have some upside in conversions.
But for this quarter, they backed up just a little bit.
Sure.
Once again, Germany, by leaps and bounds, was our strongest non-US operation.
It performed just wonderfully on very tough comps a year ago.
It's where we've invested the most headcount.
It's where we focused the most effort, and we're getting a very nice return on our German investment.
The UK and Belgium were also very solid.
On the flipside, we had challenges in Canada and in Australia, which are minerals/mining related.
France continues to struggle a little bit, as well.
But Germany, easily number one.
UK/Belgium solid.
The other three trailing a bit.
I'd say first of all across all our accounting related divisions, whether it's Accountemps, whether it's Management Resources or whether it's Protiviti, you've got a backdrop of more focus on internal controls.
You've got a backdrop of more regulation that has to be figured out, processed, dealt with, complied with.
So that overall umbrella is helpful for all our accounting divisions.
But further than that, we would also observe that there is a shift to higher-level skills.
In Accountemps it's a shift from accounts payable/accounts receivable payroll to staff and senior accountants and to business analysts.
In Management Resources it's a shift to more accounting managers, more controllers, more senior analysts.
So the net of that is, the assignments are little longer, there is a little less candidate turnover, and so you see higher growth rates in Accountemps, Management Resources.
And as we talked about earlier, that in Protiviti ---+ they are all somewhat related.
With more complexity comes the need for higher skills.
And we are seeing that positive skills drift, if you will, that you can see we are benefiting from in those divisions.
The tax rate was lower.
Our foreign tax rate was lower than we had projected.
We made some elections that reduced those rates positively.
Some of that actually carries through for the rest of the year.
We've talked about 39% being the midpoint of a range of 38% to 40%.
So maybe rather than 39%, maybe it's now 38.75%.
I mean it's still in that range.
But as you know, and as you've seen for many quarters, our tax rate's a bit volatile.
And the source of the volatility is typically non-US tax rates.
Okay.
By segment, I would say ---+ without getting totally granular, generally speaking, we would expect Accountemps and Management Resources to have higher growth rates than the other staffing divisions.
We've already talked about Protiviti.
At the gross margin line, our guidance contemplates a contraction of 10 to 20 basis points for temp gross margin.
However, that's because we have not considered any additional workers' compensation credit that we got a year ago, that a year ago was 20 basis points.
So with no consideration of a workers' compensation credit this quarter, we're talking about temp GM being down 10 to 20 basis points.
If you figure we get our workers' compensation credit, which we have a third-party review and we just don't know.
Although for many quarters we have gotten one, then we wouldn't have that contraction.
On the staffing SG&A side, we believe we will start to leverage the headcount investments we made in the second half of last year because we are holding those pretty much constant.
And the quarter just ended as well as the second quarter ahead, as we've talked about in the past, so that we should get 10 to 20 basis points of year-over-year SG&A leverage.
Again, in the absence of any workers' comp credit, our staffing operating income percentage would be down 30 to 40 basis points year-over-year.
Half of that would be workers' comp.
A piece of the balance of that would be expected less perm mix than we had a year ago.
The second quarter is always a strong perm quarter and you give a nice lift sequentially.
We got a really nice lift a year ago.
We're expecting a lift this quarter, but not as much lift as we had a year ago.
We talk about Protiviti, year-on-year, will be down 1 point or 2, operating margin-wise, but that will be up sequentially versus what we just reported.
Tax rate, we just talked about.
Share count would be down 0.5 million shares or so as they flow through what we bought in the first quarter.
So at a high level, we see a couple of points of top-line deceleration.
As we go into the second quarter, we hope we are being conservative.
But when people start talking about Q1 GDP growth is being sub 1%, we thought it prudent to be conservative.
Frankly, our start in April is a little stronger than the full-quarter guidance that we have given, but it's not a lot stronger.
We constantly look at our headcounts, and with the turnover early in our business, there's a lot of attrition.
So you get a lot of opportunities to decide, do you replace the attrition or do you not replace the attrition.
So we will focus carefully on our headcounts.
We still are growing, projected to be 5% or 6% topline, so it's not like we are not growing.
But we always look at our headcounts.
And to the extent we feel like adjustments are needed, it's just part of the ordinary course of our business with attrition that we get a lot of opportunities to adjust in a very quiet, behind the scenes kind of way.
We would agree.
As we talked about earlier, typically when you get late cycle, you get hyper-perm growth, and we haven't seen that.
Demand has not overheated anywhere near to the extent that it has in prior cycles.
That in and of itself would be indicative of we're not late cycle.
That said, we are in a condition where our internal sales cycle has lengthened.
Clients take longer to pull the trigger.
Candidates with all their options take longer to close.
And even with robust demand and even with candidate supply, when it takes longer to close a deal, that shows up in our growth rates.
But relative to cycles past, the demand environment has not overheated no where near to the extent which it has in prior cycles.
And our perm growth rates are pretty reflective of that.
Well as we talked earlier, it's a very mixed bag.
Most headcount investments we've made have been in Germany temp and perm ---+ but including perm.
No question, Germany came through with flying colors, and we are very happy with the investment and we're really happy with the return.
That improvement was offset by some declines in the other countries that I talked about.
So when you put the two back together, you don't see the net improvement that we would like to see, but it's not because the places that we invested didn't perform.
It's more because the places where we'd didn't invest were more challenged than what we expected.
Well clearly, tougher comps was a big part of the story given how much tougher the comps got.
But this whole phenomena of the sales cycle elongating certainly applies to Tech.
We had had clients take longer to pull the trigger if you want to call that softening.
That would be fair.
Candidates are still in tight supply, particularly the mid- to higher-level candidates.
It does take longer to close them.
That impacts growth rates as well.
So we would characterize the market for tech as firm, as strong, but it's taking us longer to get deals closed, and therefore our growth rates are slowing, exacerbated by the toughness of the comps.
Particularly on staffing, we're very diversified from an industry end-market point of view, so I wouldn't necessarily single out any industry per se.
On the Protiviti side, it is more financial services focused.
You do have some of the larger financial services firms a little more focused on cost control than they have been in the past.
Having said that, the regulatory compliance environment, even at those largest of the large financial services firms, is still robust.
It's just not quite as robust as it has been.
It's degrees of strong.
It's not the difference between strong and weak.
Bill rates were up 4.7% year over year.
That's down slightly from the 5% they were down last quarter.
Right.
That's a smaller rate of growth than the 5% rate of growth from last quarter.
To be real clear.
And is candidate supply holding growth.
It's certainly impacting growth, yes.
There's no question that if we could close candidates more quickly, we would be growing more quickly.
That's not to say that the candidates aren't there.
It's their confidence level that if they don't take this job there is going to be another job available to them, makes it harder to convince them to take this job.
And to the extent it's harder and takes longer, that impacts our growth rates.
So are we saying that candidates aren't there.
We are not.
Are we saying because they have more confidence in their alternatives, it takes longer to get them to say yes.
We are saying that.
It's true on the accounting side.
I'd say it's not as severe as it is in tech development.
But on the accounting side, in the mid-to-higher levels, which is where our practice near term is gravitating toward, clearly there are shortages.
Regulatory compliance would certainly be the case.
Senior financial analyst certainly would be the case.
So there are pockets in accounting finance.
But as a percent of accounting financing overall, they're not as significant as is the case in tech.
Okay.
For the quarter, there virtually were not any headcount additions, which is what we expected the case to be.
We front-loaded 2016's hires in the second half of 2015, and we announced then that we didn't expect much in the way of headcount addition in the first half of 2016.
And that has in fact been the case.
Now there are always pluses and minuses, one line of business to the other and one country to another.
But outside the US, we've been the most aggressive in adding to headcount in Germany.
And as I said earlier, that's both temp and perm, and it's paid off nicely.
It continues to pay off.
And we'll continue to invest heads in Germany.
But we won't net up as many heads as for adding to Germany alone, because we're doing some adjusting in other countries.
Our expectation would be bill/rate growth would be a little higher than our overall bill rate growth because candidates are in shorter supply.
That said, just as a sector, there seems to be more pressure on bill rates in Technology than our other lines of business.
Whereas our other lines of business clients focus on our markup or our margin, in Technology they tend to focus more on the absolute bill rate.
And that's something that's existed for decades, which is a little head-scratching, frankly, given the supply and demand dynamics.
But short story is, the bill rates in Tech are a little higher than overall, but arguably aren't as much higher as you would expect them to be given relative supply and demand of candidates.
As to how broad-based it was, it wasn't isolated and it was certainly something we saw in more than just one or two lines of business.
First of all, let's keep in mind we are talking about 10 basis points.
So we can't come up with broad theories over 10 basis points.
But we did see situations that weren't isolated, where we had an order that was a temp-to-hire order and because the market is hot, our candidate left for a full-time job with some other client rather than hang around and be converted to full time on the assignment they started with us.
Which is yet another indication of candidate tightness.
Having said that, in the past, we would typically see clients converting them more quickly to avoid that situation and that isn't happening at the moment for the macro conditions and the macro backdrop we've described.
We do not believe we are at or near peak in temp gross margins.
We do not believe 3.2% of revenue is peak conversions.
When the traditional range is 3% to 5%, midpoint being 4%, we just do not except that 3.2% is as good as it gets.
And whatever more we get above that is pure margin.
Further, we still got 30 to 40 basis points in unemployment fringe cost, higher than what they were at the last point.
That's upside.
That upside will be offset a little bit by more and more states adding mandatory sick pay for our temporaries, and so that sick pay is going to offset some of those 30 to 40 basis points that you're going to get on an employment.
But net, we still think there's upside between the two.
On the pay/bill spreads ---+ as late as this quarter, just ended, we did expand our pay/bill spreads.
There's not as much upside as there is in the other two areas, but we've done a nice job with our pay/bill spreads.
That continued into this quarter.
While we think we have got a little room to go with our pay/bill spreads, we think more of the future expansion will come from conversions and lower fringe charges.
Well, to some degree all those things are true, <UNK>, but to the extent clients get more bullish if, in fact, the second half macro improves, they're not going to wait as long to pull the trigger.
To the extent they don't wait as long to pull the trigger, then the sales cycle shortens and we expand our margins.
And further, while we're growing mid-single digits in this environment, we still get some operating leverage from doing that.
Notwithstanding that we are making infrastructure improvements internally to our ERP system, to our staff payroll system, to Protiviti's front-office system as well, we still get some operating leverage over time from growing revenues period.
So we believe we certainly have not peaked from an operating margin standpoint.
Protiviti's costs got a little ahead of their revenues this quarter.
But for heaven's sake, they grew their revenues almost 15% on mid-20% growth a year ago.
They've got the rest of the year to leverage themselves out of that, and you'll see margin improvement from it.
It's a lot of different explanations, except I think it got an open enrollment lift the last couple of years as companies reviewed their medical insurance policies, whether they should go to private exchanges, whether it was ACA motivated or related or not.
There's been a lot of motion and activity with clients in the insurance enrollment area, medical insurance enrollment area, and that hasn't been quite as robust the last couple of quarters as it was in quarters past.
I guess our experience over many years is that you never know whether it's under valued or over valued over short periods of time.
Generally speaking, we spend our cash flow.
If it's down, we get more shares.
If it's up, we get fewer shares.
And so during the quarter, we spent a little more than our cash flow, not much.
But it's pretty much dollar-cost average.
Because over short periods of time you don't know.
We bought more shares than we would of but because of the price, and that's been our policy and philosophy for many years, it seems to have done well for us.
When the price dips and goes back up, we can always be criticized for not getting more.
We've also seen the other happen, but at the end of the day it's pretty much we spend our cash flow.
Well, anything's possible.
I guess as the labor markets tighten, we would observe it takes a more human intervention, not less because somebody has to convince either or both sides that they need to move forward with this job or with this candidate.
So whereas clearly there are more technology options be it job boards, be it job aggregators, be it social media including LinkedIn, finding the identity or an existence of a candidate or a job isn't hard nor has it been hard for a long period of time.
But just as our efforts are more labor-intensive to get things close to, we would argue self-service, either by a candidate or by a client is less effective as well.
And in fact, those same technology driven options you describe are also places, are also tools we use in our own recruiting of candidates and in our own pursuit of leads for which clients are looking for people.
We have more visibility to open job orders or unfilled openings today than we've ever had.
We have more visibility to candidates in our functional roles today than we've ever had.
But notwithstanding that greater visibility into both sides of our business, we find it's more labor-intensive today, not less labor-intensive, to get things done.
Oh it's a subjective evaluation on our part.
I'd say we certainly haven't seen a cycle that's lasted this long, that's had sluggish 2% and less growth rates, economically, for this long.
And so you've got this odd situation where clients are still cautious because they're worried about the macro, but because the elapsed time has been so long on the candidate side they have a lot of choices.
So you've got both sides of the equation dragging their feet, to our detriment to some degree.
We've been here now 30 years, and because it's easier to remember the near term than the long ago, it's easy to say yes if the longest we can never remember, but that's a subjective answer.
I'd just add to what <UNK> said.
The current environment is really peculiar because you have a lot of small and mid-sized clients we deal with who on the one hand know they need help.
On the other hand, they're nervous about the economy and there's a lot of delay in procrastination involved.
They're about as uncertain as which way the economy is going as the stock market appears to be.
The slow GDP growth rates make them nervous, they're part of it.
And yet, they see demand in their own businesses that is encouraging.
So I think everyone's in a little state of limbo here waiting to see what the macro economy is going to do.
From our standpoint, it certainly doesn't feel late cycle, let's put it that way.
We've had elongated sales cycles in the past, and my guess, this one will change also and go to a more traditional format depending on which way the economy breaks in the months ahead.
Thank you.
That was our last question.
We appreciate everyone joining us on today's call.
