Good morning and welcome to the Montrose Environmental Group, Inc. Third Quarter 2023 Earnings Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would like now to turn the conference over to Rodny Nacier from Investor Relations. Please go ahead.

Thank you. And welcome to our third quarter 2023 earnings call. Joining me on the call are Vijay Manthripragada, our President and Chief Executive Officer; and Allan Dicks, Chief Financial Officer. During our discussion today, we will be referring to the earnings presentation, which is available on the Investors section of our website. Our earnings release is also available on the website. Moving to slide two. I would like to remind everyone that today's call will include forward-looking statements that are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ in a material way due to known and unknown risks and uncertainties that should be considered in evaluating our operating performance and financial outlook. We refer you to our recent SEC filings, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which identify the principal risks and uncertainties that could affect any forward-looking statements, as well as future performance. We assume no obligation to update any forward-looking statements. In addition, we will be discussing or providing certain non-GAAP financial measures today including consolidated adjusted EBITDA, adjusted net income, and adjusted net income per share. We provide these non-GAAP results for informational purposes and they should not be considered in isolation from the most directly comparable GAAP measures. Please see the Appendix to the earnings presentation or our earnings release for a discussion of why we believe these non-GAAP measures are useful to investors, certain limitations of using these measures, and reconciliations thereof their most directly comparable GAAP measure. With that I would now like to turn the call over to Vijay beginning on slide four.

Thank you, Rodny. And welcome to all of you joining us today. I will provide you with business highlights. Allan will provide you with financial highlights. And we will then open it up to Q&A. I will speak generally to the third quarter earnings presentation shared on our website. As we have noted each quarter, I would like to emphasize that our business is best assessed on an annual basis given the demand for environmental solutions is typically not driven by quarterly patterns. We manage our business on an annual basis, and it is how we recommend you view our results as well. Before we dive into the quarter's performance, I would like to thank our approximately 3,500 colleagues around the world for whom I am very grateful. Through their efforts, we were able to produce another quarter of record results and further our leading position in the environmental industry. As for our financial results, we had another quarter of exceptional performance due to reasons consistent with those discussed during the first half of this year. First, we focused 2023 on delivering on our adjusted EBITDA targets and increasing our adjusted EBITDA margins. As you can see from our results, we are achieving both goals. Second, we continue to see strong organic growth in our business lines, and our long-term organic growth outlook remains as attractive as ever. Our objectives and strategy have not changed in this regard. During the third quarter of 2023, operating segment adjusted EBITDA and consolidated adjusted EBITDA margins were approximately 20% and 14% respectively, which represents an increase in margins versus the prior year for both. The improvement in our adjusted EBITDA margins is a result of organic revenue growth in most of our business lines and our pivot away from lower margin revenue, particularly within our ECT2 biogas services. The third theme I will highlight is the strength in tailwinds from new and anticipated regulations, as well as our clients' voluntary focus on environmental stewardship. From new regulations affecting PFAS disposal and tightened methane leak detection protocols, the pending rules on climate disclosures, and changes in air emission standards, we are seeing regulatory tailwinds across our business. The fourth theme underscores the sustained advantages from our acquisitions. Our acquisitions are driving scale benefits, technology access, and widening our geographical reach, including the recent addition of Matrix in the Canadian market. We have closed five acquisitions this year, and our acquisition pipeline remains very attractive. Finally, our balance sheet and cash flow remain strong. Year-to-date adjusted cash flow from operations of $42.1 million increased 52%, compared to the prior year period, providing us with ample flexibility to continue investing in our business. Our balance sheet capacity remains very robust, and our debt is hedged against rising interest rates, insulating us from the current uncertain rate environment. I will next discuss our third quarter performance by segment. Within our Assessment, Permitting and Response segment, we were pleased to see continued strong organic revenue growth in our advisory services, which excludes CTEH. We also saw positive contributions from our acquisitions. CTEH, our environmental response business, performed above run rate level year-to-date given several high-profile environmental response projects that continued from earlier this year. The increase in margins for this segment was driven by strong organic revenue growth in our advisory services and CTEH outperformance. We remain bullish on the outlook for our advisory services through the rest of 2023 and beyond. Within the Measurement and Analysis segment, strong organic revenue growth continues in this segment as well. We are especially pleased with the positive performance from our new data platform, methane leak detection and measurement services, and PFAS lab services. Given the building regulatory pipeline, we remain upbeat about continued performance in this segment. Though quarterly margins remain elevated and are higher than the prior year, we expect annual margins to remain in the high teens to 20% range. And finally, within our Remediation and Reuse segment, revenue growth in this segment was primarily due to our acquisition of Matrix, partially offset by the expected moderation in our ECT2 technology services, which includes our water and biogas services. Margins during the quarter were lower, primarily given the impact of the Matrix acquisition and moderated revenues at ECT2, which saw triple-digit organic growth last year. Our previously communicated shift towards higher margin biogas services and the improvements we are making within Matrix will enhance our margin profile in this segment. Next, I will discuss recent regulatory updates and industry trends that support our long-term growth outlook. The US EPA continues to focus on PFAS and in September finalized an important rule under the Toxic Substances Control Act. This rule requires reporting from companies in a wide variety of industries that have manufactured or imported the PFAS chemicals. With regards to methane emissions, the US EPA and Bureau of Land Management have implemented new rules targeting methane emissions such as flare events and leaks, supporting incremental demand for our measurement and assessment services. And finally, regarding demand for our environmental consulting services, in October, the US EPA pledged significant funding to states to support projects aimed at advancing environmental justice. We anticipate these campaigns will drive increased demand for our advisory and testing services. These recent regulatory developments, in addition to those we've highlighted over the past several quarters, demonstrate that macro tailwinds for our integrated environmental solutions remain very robust. Montrose remains very well positioned to benefit from the rapidly evolving environmental industry and regulatory landscape. So, in summary, I remain incredibly grateful to the entire Montrose team. Our continued outperformance is attributable to the hard work and execution of our colleagues around the world. Given this continued momentum in our business, we are reiterating our full-year 2023 revenue and consolidated adjusted EBITDA guidance. We remain very optimistic about our outlook and our opportunity to create more shareholder value. With that I will hand it over to Allan. Thank you.

Thanks, Vijay. We are very pleased to have delivered strong third quarter results. Our resilient performance throughout the year thus far reflects the themes we've discussed since becoming a public company over three years ago, as new environmental regulations and corporate mandates continue to drive demand for our unique environmental solutions. Our business remains strong and continues to grow, given our successful execution of attractive M&A, ongoing cross-selling successes, and expanding customer relationships. Moving to our revenue performance on slide eight. We saw organic growth across many of our service lines, helping drive revenues to record levels in the third quarter. Our third quarter revenues increased 28.9% to $167.9 million compared to the prior year quarter. Year-to-date revenues were up 13.2% versus the prior year period to $458.5 million. The primary driver of revenue growth in both periods was the positive contributions from acquisitions, including Matrix, strong organic growth in our Assessment, Permitting and Response and Measurement and Analysis segments, and an increase in CTEH revenues. This was partially offset by lower revenues in a specialty lab that has been discontinued, and the change in our Remediation and Reuse segment given the timing of projects and a strategic shift in our biogas business to focus on higher margin, lower revenue services. Growth in our year-to-date revenue was also impacted by our planned exit from legacy O&M contracts in 2022. Excluding revenue from discontinued businesses, revenue was up 32% to $165.9 million in the third quarter and was up 16.4% to $452.6 million year-to-date. Looking at our consolidated adjusted EBITDA performance on Slide 9, third quarter consolidated adjusted EBITDA was a record $23.3 million or 13.9% of revenue. This compares to consolidated adjusted EBITDA of $17.1 million or 13.1% of revenue in the prior year quarter. The year-over-year improvement was driven by higher revenues and higher operating margins, driven in part by the benefit of pricing. Year-to-date, consolidated adjusted EBITDA was $61.1 million or 13.3% of revenue compared to consolidated adjusted EBITDA of $48.4 million or 12% of revenue in the prior year. With that said, I'll reemphasize that Montrose's performance needs to be assessed annually, as quarterly results are not always indicative of annual performance. Turning to our business segments on slides 10 and 11. As we previously highlighted, we remain primarily focused on meeting or exceeding our target for adjusted EBITDA dollars and operating cash flow generation, with the longer-term goal of optimizing our margin profile. To that end, we were pleased to see the impacts of shifts through our service portfolio, which helped contribute to the increase in operating segments, adjusted EBITDA margin to 19.5%. In our Assessment, Permitting and Response segment, revenues increased 22.8% year-over-year to $57 million. The year-over-year increase was driven primarily by organic growth, growth in revenues from CTEH, and to a lesser extent, positive contributions from acquisitions. CTEH is entirely in this segment, so that business's increase in environmental response revenues are fully captured here. The AP&R segment adjusted EBITDA increased 51.5% year-over-year to $14.9 million, or 26.1% of revenue, up from 21.2% in the prior year quarter, reflecting the benefits of organic growth, favorable CTEH revenue mix, and higher aggregate margins across our other businesses within the segment. In our Measurement and Analysis segment, revenue increased 15.3% to $50.5 million, primarily attributable to double-digit organic growth, as well as the benefits from acquisitions completed subsequent to the end of the prior year quarter. The M&A segment's adjusted EBITDA increased 22% to $10.4 million or 20.5% of revenue, up from 19.4% in the prior year quarter, reflecting strong demand for our testing services and the benefits from our pricing action. In our Remediation and Reuse segment, revenues increased 50.6% to $60.5 million, primarily due to the acquisition of Matrix, and partially offset by the anticipated decline in revenues from certain large water treatment projects, and the recent pivot in our biogas business to focus on higher margin, lower revenue projects. The decrease in R&R segment's adjusted EBITDA as a percentage of revenue was due to lower water treatment revenues and the dilutive impact of Matrix, partially offset by the higher contribution margins within our biogas business. Our margin optimization efforts are well on track at Matrix, and we expect to see low to mid-teens adjusted EBITDA margins by the end of 2024, up from low single digits at the time of acquisition. Moving to our capital structure on slide 12. Year-to-date cash flow from operating activities was $41.5 million, which improved compared to cash provided by operating activities of $8.2 million in the prior year period. Cash flow from operations includes the payment of acquisition-related contingent consideration of $0.6 million in the current year and $19.5 million in the prior year, respectively. Excluding these acquisition-related payments, cash from operating activities was $42.1 million in the first nine months of 2023 compared to cash from operating activities of $27.7 million in the first nine months of 2022, an increase of $14.4 million and representing an adjusted EBITDA to operating cash flow conversion of 69%. The year-over-year increase in operating cash flows was driven primarily by a lower working capital build and higher earnings before non-cash items compared to the prior year period. These strong operational cash flows reflect our ongoing focus on balancing the generation of cash with investments in technology, R&D, and corporate infrastructure to ensure continued scalability. Our leverage ratio as of September 30, 2023, which includes the impact of acquisition-related contingent earn-out obligations payable in cash, was at a healthy 1.9 times. Our current leverage ratio, inclusive of our fixed rate on $170 million of debt under our interest rate swaps, our weighted average interest rate under our credit facility was 4.4% as of September 30, 2023, with no exposure to rising interest rates at current borrowing levels. Our Series A-2 preferred stock has no maturity date, and we have the option, but not the obligation to redeem the preferred shares at any time for cash. The holder has the option to convert up to $60 million to common equity in April of next year. We view this preferred equity instrument favorably due to the value creation potential in the business given its flexible dynamics and the fixed nature of the dividend in a rising interest rate environment. If you include the $182 million of the Series A-2 equity in our market cap, our total equity capitalization stands at approximately $948 million. Moving to our reiterated full-year outlook on Slide 14. Based on our strong performance so far in 2023 and the expectation for CTEH business to return to run rate levels during the fourth quarter, we reiterate our outlook for full-year 2023 revenues to be in the range of $590 million to $640 million, and for consolidated adjusted EBITDA to be in the range of $75 million to $81 million. Our revenue and consolidated adjusted EBITDA outlook for the full-year continues to represent double-digit growth and margin expansion over the prior year. As we begin to look ahead to next year, we anticipate strong organic growth in 2024 and we'll provide a more fulsome outlook next quarter. In summary, demand for our environmental solutions remains robust, and our reaffirmed outlook for 2023 represents our optimism in the positive trajectory of our business. We remain as confident as ever in our ability to deliver shareholder value through our best-in-class suite of environmental solutions and to capitalize on end market and regulatory tailwinds. Thank you all for joining us today and for your continued interest in Montrose. We look forward to the opportunities we see ahead and updating you on our progress next quarter.

Thank you very much. We will now begin the question-and-answer session. The first question comes from Tim Mulrooney with William Blair. Please go ahead.

Vijay, Allan, good morning.

Hey, Tim. How are you?

Good morning.

Doing all right. Thank you. Just a couple of questions. So, I know I completely agree with you that the business should be analyzed on an annual basis and that's certainly how we think about it. But sometimes talking about the quarters can help folks understand what's happening in the business. So, my question is just on the adjusted EBITDA margin, which was very strong and, you know, great to see in the third quarter. The implied guidance for the fourth quarter is showing that it would be down sequentially year-over-year. I'm sure there's a good reason for that. If you look at it on a second-half 2023 basis, you guys are right in line with doing what you said you were going to do. So, it's not so much about, you know, are you hitting numbers, you're clearly hitting numbers. I'm just curious what's causing that change in the margin profile from quarter to quarter or if there is a specific project or something like that.

Yes, that's a valid question. I'll begin, and Allan can add his thoughts. You're correct that this is an annual business, so comparing quarterly results may not be as significant. However, to directly address your question, we've raised our guidance twice this year, which makes us optimistic about the business. At the midpoint of our range, we could easily see flat or even positive growth quarter-on-quarter; it's not guaranteed to drop. The only uncertainty for us is CTEH, which is difficult to predict. As you may recall from Q4 of last year, that was the variable we struggled with the most. That's the reason we're being cautious. Overall, we remain very optimistic about how this year is unfolding and the potential outlook for Q4. Does that answer your question?

The other part of that on the margin question, Tim, is remember Matrix being a Canadian business is very seasonal. They are already a low margin business, and Q4 is at or below their average. So that's certainly going to be deteriorative to margin percentage in the fourth quarter.

Okay. Yes, that is helpful. And that does answer my question. A follow-up on that might be, you guys usually do call out how CTEH performed in the quarter, which is helpful for us for modeling purposes, especially as we model back towards normalization. How did CTEH perform in the quarter, third quarter of 2023? I know in the press release, you said it was up, but can you quantify that for us for modeling…

Yes, yes. And all of this will be in the Q that gets filed later today, Tim. So, they remained elevated in the quarter. Their large response has now tailed off, but did have an impact on the third quarter. So they did $33.8 million in Q3 and that puts them at $103 million year-to-date.

Got it. But expected normalization in the fourth quarter and that $75 million to $95 million range is still relevant.

Yes. Yes, when we say normalization, Tim, I mean we always talk about quarterly averages, right? So $6 million to $7 million of EBITDA, call it $24 million to $25 million of revenue a quarter. They are demobilizing in Q4. So, they will be below their normalized levels if that makes sense. Still an incredible year and a home run by any set of circumstances, but Q4 will be materially lighter we expect than the rest of the year has been so far.

Got it. Thanks very much. I hop back…

The other point worth mentioning in relation to CTEH, which is likely to be a topic of discussion not just with you but with your peers, is that they have successfully integrated Montrose's capabilities. This includes air monitoring and remediation work that enhances the overall platform, positively impacting their performance. A lot of credit goes to that team, as their operations have evolved beyond just a response portfolio. It's now much broader in scope. Moving forward, Allan and I plan to delineate the pure response aspect of the business, as the rest of it is more sustainable and predictable.

It doesn't make sense. It makes me wonder if that $75 million to $95 million is even relevant anymore, Vijay, if you're growing another part of it that's what's variable or is it perhaps structurally higher than that. I know you've already raised it from $55 million to $65 million at the IPO.

Yes.

Now we're talking about $75 million to $95 million. Perhaps it's even different; we can take into that more next quarter.

Yes. Yes, I think we've got some great news. The team deserves a lot of credit on that. And so we'll separate that out and be a little bit more transparent with you as we begin to forecast 2024 for you.

Look forward to that. Thanks, guys.

Thanks, Tim.

Thanks. Tim.

Thank you. The next question comes from Jim Ricchiuti with Needham & Company. Please go ahead.

Hi. Good morning.

Hey, Jim.

My question is how are you guys doing?

Good.

Good to hear. Matrix. Wonder if you could talk a little bit about how the integration is going. And Allan, you may have given it; and I apologize if I missed it, what the revenue contribution was while I assume we'll see it in the Q, and maybe some color around the adjusted EBITDA margins in the business? And then maybe lastly just relating to that question about the implied Q4 guidance that Tim just had, it's a little bit wider range not a whole lot than you normally do. And I'm wondering if some of that might be due to the seasonality of the Matrix business in the December quarter.

Yes. Why don't I start with the first part of that question, and then Allan can talk about the contribution, and then we can talk about the range, Jim. So, the Matrix integration is going really well. If you recall that business at acquisition was around $75 million of revenue and 4.5%-ish EBITDA margins. Those margins have been nicely accreting up on the back of the team's efforts, not just with integration but with pricing discipline, higher utilization, and operating performance. And so we're looking forward to sharing a case study with you and others about how well that's been going in the very near future. We are well on track to achieve our goal of mid-teens or higher EBITDA by the end of next year. So the short answer is going really well. It is a seasonal business. But if you look at it on an annual basis, it's going to be a really nice year-on-year comparison, 2023 and 2024. Why don't I let Allan answer kind of the numbers part of that question, and then we can jump to the range.

Yes. So, Jim, we don't break out individual business line revenues. But again, you'll see in the Q that in the third quarter acquisitions contributed $27.6 million to revenue. The majority of that was Matrix. Just to remind you, Matrix does about $75 million of revenue a year, but very seasonal, right? So about 55% of that is in the back half of the year, and a large chunk of that is in Q3. Their margin profile follows that seasonality, and again averages in the kind of low to mid-single-digits currently. So although seasonally the Matrix margins were better than average in Q3, it was still margin deteriorative to operating margins in the quarter.

And Jim, so to wrap up, the last part of your question around range. This is the first time Montrose has had Matrix in our portfolio, which is Q4 in Q4 of a year. So that plus the CTEH variability is exactly why we're keeping the range, why even though we're feeling really good about how the business is performing so far.

That makes sense. And you'll be talking I guess about this early next year. But, yes, I'm just wondering as you look out over the next couple of quarters, how we should be thinking about the PFAS water treatment business, the biogas business, particularly on the biogas side where you've made some adjustments in terms of the way you're pursuing that market.

Yes, we are optimistic about it, Jim. This relates to our previous discussions regarding organic growth. Excluding the Remediation and Reuse segment, the remainder of our business is experiencing double-digit organic growth. Much of what you're pointing out is linked to our intentional shift this year towards prioritizing margins and cash flow while moving away from some lower-margin work in our biogas division, especially after our investment in what we believe to be very promising early-stage technology. As we look ahead to next year, we anticipate not only capitalizing on the margin successes we've achieved this year but also returning to our historical pattern of double-digit organic growth. We feel confident about that, and we believe it will be an integral part of our narrative for next year, just as it has been thus far.

Good. Thanks very much, guys.

Thanks, Jim.

Thank you. The next question comes from Andrew Obin with Bank of America. Please go ahead.

Hi, this is David Ridley-Lane on for Andrew Obin.

Hey, David.

Hi, David.

Good morning. So just to follow up on that last comment on the Remediation and Reuse. So, is first quarter 2024 kind of when you'd fully lap those portfolio optimization efforts? Is that a good like-for-like comparison or does some of the lower margin projects have a bit of a longer tail?

Yes, it's really, I would think of it more as a second, third quarter lap. The tail is coming off now.

Got it. And then just because your gross margin progression was quite strong, it looks like Matrix might have pretty good gross margins relative to the EBITDA margin. And I kind of I'm sort of leading into the results here. But is some of the margin improvement less about gross margin and more about sort of the cost structure.

The Matrix does have good gross margins, but they are less of a contributor to the year-over-year increase. Again the biogas pivot that was very low gross margins given the large equipment sale component. And then we're seeing really strong utilization across the business, and that's certainly helping.

Yes, David when we say pivot, if you think about some of the advantages we have on the water technology side, right? So, intellectual property, high barriers to entry, strong moats we've effectively moved our renewable energy since the biogas side of the business more into that type of model, which means it's more anchored on technology implementation and the engineering associated with it and less around the part that Allan just talked about. So that's really when we say pivot the margin flow through not only on the gross margin side but also on the EBITDA margin side and cash flow ultimately was heavily impacted by that pivot, which we did consciously, and you're seeing it in the results.

And then last one from me, I know you don't normally talk about kind of bookings or backlog, but those metrics part of the reason you have the confidence to reiterate your guidance for the full year. And any update on sort of the European PFAS pilots.

Yes. Europe is going really well, and the acquisition of Vandrensning has been very additive to that portfolio. We still have a small footprint, David, but that's going to be a really nice story that we'll share with you as we talk through 2024. The war notwithstanding, the continued momentum in that market is quite positive. And so we're really happy that we made the investments that we did. As it relates to our Q4, yes, we don't, we don't really talk about bookings and backlog; it's not relevant to every part of our business. But we do have strong visibility on an annualized basis. And given the trajectory of the company so far, we're feeling quite good about the Q4 outlook.

Right. Thank you very much.

Thanks.

The next question comes from Wade Suki with Capital One. Please go ahead.

Good morning, everyone, and thanks for taking my questions.

Hey, Wade.

Hi, Wade.

Just a follow-up, I think it was on Tim's question earlier. And I hate to put you on the spot. But as we think about margins heading into 2024, maybe you could walk us through why margins in 2024 might be lower than, let's say, the Q2, Q3 average. I mean is it just a function of CTEH normalizing, or am I thinking about it the wrong way…

Yes, that's not what we're saying. We're not ready to provide guidance on margins or EBITDA for next year. We're very optimistic about the top line given the momentum in the business. However, we're confident about where margins are currently and our ability to increase them over time.

Yes. Wade, I would say, it's the opposite. We are not calling for lower margins and we haven't guided 2024. But what I was saying earlier, is that the work we've done this year with the conscious focus on improving margins and cash flow, we think that we will continue to harvest the benefits of that into 2024, and we'll couple that with getting back to our accelerated organic growth trajectory.

Awesome. Very helpful, thank you. And then again, just to kind of follow up on Tim's question earlier on water treatment, last quarter you discussed some of the uncertainties related to the low contaminant thresholds that were being proposed. And I'm wondering if you could give us an update on what if any changes you're seeing in customer behavior along those lines. And maybe just taking a step back, I mean is this a business that's been pushed out maybe a couple of quarters, or when do you expect sort of a major inflection point in this part of the business.

Yes, it's a great question, Wade. We just met with some of our large clients and they are also looking for a little bit more clarity from the regulatory agencies before they really jump into this. But they're certainly prepared to do so. So we've seen, I think, what we would consider forward progress on the projects, but not yet ready to pull the trigger, which is why we say that as we kind of think about our ECT2 business, which is a combination of our water and biogas business, that really in the Q2, Q3 timeframe of next year is when we think you'll start to see some of this uncertainty unwind and getting back to a positive foot. With the one caveat there being, it is dependent on the regulatory confirmations, which are expected towards the end of this year and early part of next year.

Got you. Great, thank you all very much. That's all I had.

Thanks, Wade.

The next question comes from Stephanie Yee with JP Morgan. Please go ahead.

Hi, good morning.

Hey, Stephanie.

Could I ask about your comment regarding how the EPA has finalized the rules concerning toxic chemicals and mandates additional reporting from companies that manufacture PFAS? Can you discuss Montrose's role in that regulation and whether you are collaborating with companies like Dow and 3M to assist them in measuring and reporting those requirements?

Yes, so yes we don't talk about our specific clients, Stephanie. But yes, we are working with many of the Fortune 100, Fortune 1,000. The rule effectively goes back I think to 2011. And if you've transported, manufactured or sold products with PFAS in it, you have to report on the potential impact and the potential toxicity of it. And that requires a combination of our advisory services, and so you'll see a positive impact on our consulting part of the business, and it does require some of the reporting and testing sides of it as well. So it is a broad incremental tailwind over time for both of our Measurement and Analysis and our Assessment, Permitting and Response segments.

Okay. That is helpful. Thank you. And can I just ask on how you're pricing or how do you feel your pricing is aligned your cost structure at this point in time, and as we kind of head into 2024.

So I think we spoke about this with you earlier. Our pricing has been very disciplined and credit to Allan, Todd, Josh, and the team for that. We have a lot of the margin benefits you're seeing this year are a combination of both the organic growth. And that organic growth was partially driven by the pricing solutions that we've implemented over the last 18 months. And we expect that that trend will continue into 2024. So some of our bullishness, Stephanie, on our ability to continue margin accretion is partially predicated on the impact of pricing on our overall performance.

Okay. I appreciate the color. Thank you.

Thanks, Stephanie.

Thank you all very much. This concludes our question-and-answer session. I would like to turn the conference back over to CEO, Vijay Manthripragada for any closing remarks. Please go ahead, sir.

Thank you and thank you all for joining us today. We were thrilled to spend the time with you and we're excited to share how the rest of the year unfolds and to speak with you again as we look forward to a stellar 2024. Thank you.

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines. Have a good day.