My name is Emma and I will be your conference operator today. At this time, I would like to welcome everyone to the Freesia Fiscal First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Balaji Gandhi, you may begin your conference.

Thank you, Operator. Welcome to Freja's Earnings Conference First Quarter of 2023, which ended on April 30th. Joining me on today's call and in our related Form 8K submission to the SEC, including our quarterly. These documents are available on the Investor Lab, freja.com. As a reminder, today's call is being recorded and a replay will be available. During today's call, we may make forward-looking statements, including statements and the anticipated performance of our business regarding future financial forward-looking statements. Interiorly, in our quarterly report on Form 10-Q that will be filed with the forward-looking statements made on this call will be based on our and speak only as of the date on which no obligation to update these forward-looking statements. These non-GAAP measures should be considered in addition to and not as a substitute for or an isolation gap to non-GAAP result from 8K filed.

With that out of the way, let me hit a couple of the highlights from the quarter in case you have not had a chance to review the earnings release in the quarterly letter. First, our investments continue to drive strong growth in our network. In the first quarter, average healthcare services clients were up 33% year over year. Second, payment processing revenue in the quarter reflected patient utilization trends that were slightly below our expectations based on our prior experience. We think this trend could persist in the remainder of the year, which is the main reason we're maintaining our revenue outlook for the year at $271 million to $275 million. This range implies growth of 27 to 29 percent year over year. Third, life sciences growth was up a strong 51 percent year over year, and revenue was down a slight $563,000 sequentially from Q4. This sequential trend is consistent with historical periods where you see Q4 to Q1 flat to down due to seasonality. We continue to be pleased with our team's performance in this area, and we expected this team's continued performance to contribute to our overall growth in fiscal 23. And the last highlight, we began to see strong operating leverage across all of our investments over the past year, which is why we've taken up the adjusted EBITDA outlook for the year to a range of negative $126 million to negative $122 million, which is up from our prior outlook of negative $154 million to negative $149 million. And before jumping into the Q&A session, let me hand it over

to our CEO. I'm ending. Thank you, Balaji, and good evening, everyone. Thanks for participating in our fiscal first quarter earnings call. I'm very proud of our team for their commitment to our clients and their mission internally we think of ourselves as operators who provide an amazing experience across over a hundred million patient visits a year that impacts the entire healthcare ecosystem we're able to do this because of our outstanding and committed product and engineering organization i want to say thank you to all of them for 17 years we have felt strongly that if we build great product and put it in the hands of our clients, we will produce a great return and they will remain happy clients. It's been wonderful to see a net effect of our product and engineering teams working with our go-to-market teams, and we know it will continue to pay dividends for all of our stakeholders in the years to come. I'm sure we'll get deeper into the highlights Elijah touched on, as well as other topics, but let me add, it's been great to be out there and meeting in person again. I've had the opportunity to meet with three of your colleagues, clients, and shareholders in person over the past few months, and it really does make a difference. We look forward to seeing many of you over the summer and the months that follow. Operator, I think we can open up

for Q&A now. Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Your Our first question today comes from the line of Anne Samuel with J.P. Morgan. Your line is now open.

Hi, guys. Thanks for the question, and congrats on the Strongly Logo growth this quarter. I was hoping maybe you could touch on some of the dynamics around revenue per provider client and what caused the decline there.

So, Annie, just so we're clear, you're talking about total healthcare services revenue?

Yes.

So the revenue per client, you're talking about the 19.2?

Yeah, so the revenue for provider client.

Oh, for the year over year?

Yeah, I think from the perspective of, you know, we've talked about this in the past, where, you know, we're doing a big land and expand as we get additional clients. often they come in and you know the first dollar of revenue comes in and we expand into two other areas if you look at it quarter of a quarter there was nice expansion on the revenue per client and I think you know in the in the table I think we also show too if you look at the subscription per provider client it's been consistent at eleven and a half thousand you know first for several quarters now so you know we see that continuing to go um you know at that level or higher as we move into the future quarters okay and then i was just going to have i think randy

brought up a good point which is you know we've talked a lot to a lot of people about those two lines independently so if you actually look at subscription per client and payments per client you sort of see that story that randy talked about a little better okay very helpful um and you know

was hoping maybe you could touch on EBITDA. You know, you raised your EBITDA outlook by more than you beat today. You've now got an improved timeline for profitability. I was hoping maybe you could talk about, you know, what some of those profitability levers are, you know, coming in

better than you expected. Yes, I think, you know, we made some significant investments in fiscal 22, and I think GNA is a really good example where we made some investments. We went live with a new ERP system last year. And we're seeing the benefits of that this year. And I think the leverage on those investments is accelerated versus what our expectation is. I think there's also, you know, when we did guidance for the year a couple months ago, there's still some questions about Ukraine and some of our third party providers. And I think we have more clarity there. So that's also helped us, you know, revise our expectations for the year. Great. And then

just one housekeeping question. I didn't see it in the letter. I was hoping you could provide

how many SDRs you have now. It's the same as it was at year end at that 232. Great. Thanks very

much, guys. Your next question comes from the line of Ryan Daniels with William Blair. Your line is

now open. Yeah, guys, congrats on the strong start to the fiscal year. Thanks for the questions. Curious what you're seeing in regards to patient utilization trends. I know you mentioned in your prepared comments it was lower than anticipated. Is that more a dynamic of COVID-related issues with patients coming in, or is it some of the challenges your client base is seeing in workforce and, you know, just retaining or maintaining productivity of the healthcare

workers hey ryan um you know i think you're hearing it's a mixture of you know covet you know hitting their staff and obviously their patients but also just staff like staffing levels and i think we're seeing that as a combination throughout i don't think there's any one answer and i think we've seen it fluctuate throughout the entire healthcare ecosystem okay that's helpful

It's been tough for our providers.

We're just trying to make sure that we're providing them all the tools so that they can treat the patients that need to be treated.

Yeah, absolutely. And then I guess my follow-up, I'd love to get an update on your offering for social determinants of health. You specifically called that out in some detail in your letter. It's a topic we've focused on a lot of late, and I think regulators and payers and providers are all focused on it. So I'm curious what kind of traction you're seeing there and what maybe future investments or growth outlook for that specific product offering is.

Yeah, well, you know, Ryan, I'm glad you brought that up. Social determinants of health are not just impacting people's health and their wellness and how they get treated, but there are also things that people we found in working with drives that they often have a hard time bringing up that they want to address, whether it's

food insecurity or domestic violence or having a safe place to sleep and what we really focused on

is not monetizing social determinants of health but empowering our providers to figure out who needs help and how they need help and making sure we do it at scale in a non-judgmental way And that's just an important part of doing the right thing. And, you know, I don't know what the economic benefit of social determinants are, Ryan, but I know it's just the right thing to do. And people go into health care to do the right thing. And we will keep doing that as an organization.

Okay. I appreciate that. And, Haim, congrats on the announcements on your best places to work. I know culture is important for you, so kudos on that.

It is. The only reason we got this amazing company is because of this amazing group of people that are committed.

I'm really proud to work with them.

Your next question comes from the line of Jessica Tassin with Piper Sandler. Your line is now open.

Hi, thank you so much for taking the question and congrats on the strong EBITDA. So I just had a couple of questions on the Connects offering. First off, I think we know patients are typically engaging with the intake management interface and self-scheduling, but just curious, who is primarily interfacing with Connect? Is it the patient or the practice admin or the provider themselves? And then just if it's the provider, where does Connect kind of sit in the context of the EHR and the provider's practice management interfaces?

Well, Jess, that was like a very long question. i think i got it um so all right so let me see if i can so you think connect is awesome like we do okay it's sort of what i heard uh all right and you're trying to figure out who uses connect and so uh over a long period of time we do envision connect really being uh tied to the patient, right, because it's how they book their appointment, and we, but right now, the vast majority of the connections with Connect are between the provider's staff and the other provider's staff. Did I answer the question? Very rarely, the actual provider themselves.

Got it, and so the vision is eventually, though, the patient might be able to access that through the self-scheduling or intake management interface?

You said that, but we are very focused on that.

Got it. And then just are the provider clients who are potentially exclusively participating in the Connect referral network included in the total provider count, or does a provider have to be a freesia intake management and scheduling customer in order to have access?

For a client to be counted, you've got to pay us money. And so if they're a client, they're a client.

Is that the right word? Yeah, that's correct. Yeah, we count them as soon as first dollar comes in.

That's helpful. And then just finally, in terms of revenue recognition and seasonality of the Connect offering, where is that revenue recognized? And then I would imagine its strength is correlated to the sequential recovery and payment volumes, but I just want to confirm that that's true.

Yeah, I don't think there's a correlation between that and payment volume right now.

From the 11th perspective, it's in the subscription number.

All right. That's helpful.

Your next question comes from the line of John Ransom with Raymond James. Your line is now open.

Hey, good afternoon, team. This is sort of Analyst 101, but a couple of nits. First of all, is there anything to call out in sort of the rhythm of smaller clients versus larger clients in your customer growth year over year? And then secondly, if we think about the rest of the fiscal year, how should we think about the components, the three revenue components? Is there anything – I know you said life science is seasonal, but is there anything to think about in terms of how the three interplay the same or different than that?

I think I'll answer the first part, which is how we think about size of client. I think I've said this a couple of times, but I appreciate you making me say it again. We care about all clients, big and small. We sell them all. And as long as you need help, we'll be there to help you. And I think we've historically seen the plethora of that happen across our growth in our network. And then what was the other question?

Time and revenue. I mean, I think, you know, as mentioned in the letter, I think in the life science business, you know, typically because of the way that the advertising budgets roll year over year, you know, moving from Q4 to Q1 is typically flat or slightly down. And then that builds during the year. You know, I think, you know, Payments Elsa has some seasonality to it based on the patient responsibility, which is typically paid earlier in our year. But, you know, I think the patterns are similar to, you know, what we've seen

in other years. And John, you know, just I think, you know, in terms of what we communicated back at the end of March for the year, I think the only thing, you know, to consider is that the The reason we're keeping the guidance where it is is because of this, you know, the payments trends that we saw in the first quarter. But otherwise, nothing different from what we saw 60 days ago.

If I could, like, reset that first question, I wasn't asking, like, who's important to you. I just said the customer ads that you had, was there anything to call out between the mix of larger versus smaller clients and that change? I didn't have to call out, I apologize.

No, all right, good. I thought you were trying to see if we liked one more than the other. No. But the answer is no, John. We're not seeing any material shit in the mix. Thank you.

Thank you. Did I answer it the second time?

Much better. I'm working really hard. This is like I'm almost three years in. Maybe one day I'll be good at this. I know you are.

Nobody questions that.

Your next question comes from the line of Joe Rewink with Baird. Your line is now open.

Hi, everyone. A question on going back to subscription revenue per client and the trend there. It makes sense just given the magnitude that's been onboarded new over the past really five quarters now that you kind of expect a sequentially stable trend. And I guess it also follows that we'll reach a point where we should start to expect some expansions out of this cohort. Any updated guidance? I think it's been a couple of years, maybe since dollar-based net retention figures were provided, but maybe how that should look as we think about kind of a mature customer base that is looking to grow.

I mean, I think, you know, last quarter we talked about, you know, the low levels of churn that our customer base is, you know, very sticky. You know, I think we continue to have success in upsell and cross-sell. We haven't given, you know, net revenue retention numbers since the IPO. But, you know, our strategy is still land and expand and still feel, you know, that that's going very well for us.

And, you know, I think the other thing, Joe, is you could look at where we were when we went public three years ago on subscription revenue per client and look at where we are at this quarter. It's grown meaningfully. It's just sort of got that step function aspect to it. And in terms of the opportunity, we still think the TAM is $126,000 per client on average, and that's all types of clients. And so, you know, that's I think it's close to three times in terms of the opportunity. We still feel good about that.

Thanks. That helps. And then last one for me, in terms of the sequencing of maybe quarterly investments for the remainder of the year, you know, obviously the guide kind of entails just annualizing the 1Q EBITDA. is the right way to think of it, you know, kind of stable with 1Q OPEX, stable with 1Q cost of sales, or is there anything, you know, timing related where things are maybe a bit lower here in 1Q, and so sequentially there's still a bit of a step up to go? Yeah, you know, Randy,

maybe you want to talk about the gross margins, how we think about that aspect. Yeah, I mean,

I think if you look at the gross margins, we expect those to expand in the second half of the year. And then, you know, I think there are certain expenditures that do have timing, you know, such as corporate events or marketing. You know, also, you know, we have internally capitalized software. So sometimes that fluctuates from quarter to quarter. So those things all affect the timing.

That's great.

Your next question comes from the line of Glenn Santangelo with Jeffries. Your line is now open.

Oh, yeah, thanks, and good evening, guys. Hey, I just wanted to follow up on that sequential EBITDA question previously. You know, if we take your annual revenue guidance, it kind of implies about 6% sort of sequential growth here for the remaining three quarters. And so I guess the assumption is that your OPEX is going to grow maybe even faster than that if you're talking about some gross margin expansion in the back half of the year. it was my understanding, and I just wanted to get an update, Haim, on the hiring needs of the business. It sounds like we were largely through the investment phase that we talked about on the previous two or three calls. I was wondering if you could update us on that investment phase and how we should think about the operating expenses on a sequential basis from here relative to

revenue growth there's a lot all right let me let me try to unpack that so are we through the investment phase and the answer is no not like we're continuing to invest we're just now starting to see really good leverage off these amazing people that we've brought on board and they're doing amazing work and we expect like we're continuously investing in them and our clients But will we see the ramp of the number of people that we bring on the organization in the near term at the same pace that we had? I don't think that's the plan. Did I answer the question?

Yeah, I mean, I guess you did, right? But what we're looking at is a loss this quarter of about $31 million in EBITDA, right? And you're guiding basically, as the previous question kind of implied, right? $125 million for the year. So that would imply, you know, a negative 30 million in EBITDA on each of the next three quarters, roughly speaking. So it kind of suggests that expenses are growing essentially in line with revenue. You know, and I get it. We don't have all the details. I just want to make sure we're sort of thinking about that right.

Yeah. Yeah. And I think Granny talked about like timing of certain things. So, you know, maybe we could try to be helpful in following up in terms of the cadence of this. but it's a pretty tight range, you know, as it is. And, you know, we obviously expect to get better as time goes.

Yeah, for example, but I mean, the capitalized software is just, you know, location of cash flows. Is it investing or is it in operating? And that can affect the EBITDA numbers. I think we're just, you know, thoughtful about, you know, how do we forecast that? Because it's somewhat based on the investments and what the engineering teams are working on.

Yeah, perfect. The last question, a lot of people are always asking about the balance sheet and the cash needs of the business. And, you know, if you look at sort of your cash balance at this point, you're at, let's call it 269, I think, right? And, you know, it's taking your EBITDA guidance of, call it minus 125, right? That's almost, I don't call it half the cash, but rough numbers, it's kind of half the cash. And based on your Fiscal 25 guidance, I think you're sort of implying that you will reach profitability in Fiscal 25. Is that in one specific quarter in Fiscal 25? And so how should we think about the cash needs of the business relative to, I'll call it the three-year fiscal plan you've laid out in terms of revenue and profitability in Fiscal 25?

Yeah, that's a good question. And, you know, we feel confident that the current cash balance in the line of credit is sufficient to finance our plan to achieve the fiscal 2025 target. And, you know, if you look at the goal of being profitable in 2025, I mean, that implies that, you know, revenues grow in a CAGR of 28 percent and that our expenses will grow somewhere, you know, 10 to 11 percent or less to achieve that profitability.

Okay. Very helpful.

Your next question comes from the line of Richard Close with Canaccord Genuity. Your line is now open.

Yeah. Thanks for taking the questions. Congratulations. Maybe a follow-up to, I think it was, I forget whose question it was, sorry. But there was an HFMA survey out there that said something like 35% of health systems have vacancies on the front staff and scheduling and registrars and whatnot. I was just curious, you know, how much do you think that is driving demand for your products? And then when you guys go to market, how important is it showing that Freesha's enhancing productivity, maybe they don't need to fill those vacancies going forward? Just any thoughts there? All right.

Richard, I don't know whose question you're following up on, but why don't I give like a random statistic that I think Karen told me who runs our marketing organization. It, our SDRs last year made 2 million phone calls into healthcare organizations. I think the reason we saw the uptick in clients is not just because they have a need, but we got in front of them and we had a proposition. We had a great product that provided a phenomenal amount of value. But, you know, whether it's, you know, changing nature of the healthcare ecosystem, whether it's demand changes, you know, the reason I think we're doing well is because we've got a great product and we get it in front of prospects in a very thoughtful, efficient way. And we do it with an amazing group of people. But I don't think, you know, Evan often says, like, fish aren't jumping in our boat, right? We know where to fish.

Okay, that's helpful. And then, Randy, maybe with respect to fiscal 25, I think you said you have multiple levers there to reach the targets. I wonder if you could just dive in a little bit deeper on specifically what you're meaning there.

Yeah, I mean, I think I talked about the investments that we made. I think GNA is a good example where, you know, we grew that organization to support a public company and we're at that level now. And I think, you know, as we continue to become more productive, we realize the benefit of that. I think also from, you know, a multi-year perspective, it's like we haven't invested, you know, we're a remote organization. We haven't invested in the corporate headquarters. We haven't done really large transformation, you know, acquisitions. So, you know, that enables us to be flexible and not have huge fixed costs in our cost structure. So, you know, all of that helps us, you know, leverage towards profitability in 2025.

Okay. And then final question would be on payment facilitation. That ticked up a little bit. Can you just go over that number in terms of how we should think about that the rest of the year? Is that just, you know, basically the mix of new clients that have come on over the last several quarters that drove that up? Just thoughts around that would be helpful.

And are you talking about the payback percentage, the 80 percent? Yeah, correct. And I mean, I think if you look at the last couple of quarters, it's actually been fairly stable. I think, you know, it depends on client mix and if they take our payments or not. You know, of course, some of the larger health systems may have treasury functions where, you know, we're unlikely to win that business. But we try with every client to win that business, and it's been fairly stable. So I don't expect that number to move a whole lot, you know, in the next couple.

Okay, thanks.

Your next question comes from the line of Ryan McDonald with Needham. Your line is now open.

Hi, thanks for taking my questions, and congrats on the great quarter. Hi, maybe the first one for you. You know, in the stakeholder letter, you talked about the research you're doing in class and the report really focusing on sort of the misalignment between what patients want and what vendors currently have. And I think one of the examples was around self-scheduling. Just curious, you know, as you kind of have that report and kind of go out to existing customers, how do you try to drive greater adoption of those additional modules around the self-scheduling to expand sort of your penetration or wallet share with those customers and maybe close that gap of misalignment?

I think what was very telling about this, and we really were pretty excited about it, like while you were talking, I'm sorry for the shuffling. I was like moving around the paper so I could look at the report, which is out here. It's a great report, by the way. But this is sort of a lens into how we think about building and where we make investments in product, and when we talk to clients, also explaining to them what their patients are telling them, right? And so sometimes I think there is a push-pull with what people think that they want based on what vendors are telling them versus what patients are telling them are important to them and well we what we found is having data has been very very powerful in being able to best represent the needs of their organizations and how we fit in them and it's worked really really well for us uh over the last 17 years and we continue to invest in that and and we hope this is a lens into how we think about our product roadmap and our investments long term it's really

helpful maybe in terms of my follow-up on the life sciences business I understand sort of a return to normal sequential seasonality before fourth quarter and first quarter but as we think about you know your conversations with customers and what mark digital marketing budgets look like for this year. Are you seeing any changes or maybe a sort of a comeback down to normal marketing sort of campaign trends post-pandemic as you think about this year? And I think you used the term in the stakeholder letter that you continue to refine your campaigns. Are you seeing any increased scrutiny around sort of the efficacy of some of the campaigns that you're pursuing with

your customers. Thanks. Yeah, I think we've always assumed that there should be a ton of scrutiny around the things we do and the value they provide. And that is why we almost all of them have third party ROI analysis, why we provide regular reporting to our clients and why we work with them so closely. And I would say that I'm, you know, and I don't want to speak for all of our clients. I don't think there is a rush to return back to paper and pamphlets. And I think everyone's questioning how many more ads you could put on network TV because most people are just streaming. So I do think we've seen a real change in behavior. And now that we've gotten a lot of these clients using us at scale. We're starting to see the net effects of them seeing their results, and it's been very promising. Your next question

comes from the line of Stephanie Davis with SVB.

Your line is now open. Hey, guys. Thank you for taking my questions. Congrats on the client ads. Do you guys have exposure to telehealth, the overall patient visit market? How should we think about your volume exposure to more discretionary areas of medical, such as dermal, dental, that could be impacted by a potential recession or inflationary

pressures? Without giving out too much data, I don't think we have that much discretionary. Stephanie, I'd say most of our large germ groups, I'd say, are more focused on medical therm than they are in cosmetic. And I'd say our dental footprint is almost nonexistent outside of health systems, our larger clients, and FQHCs that have some dental practices. But I'd say we are

nominally focused in some things that are elective at this point. And if that changes, we'll probably

communicate that to our investors. Awesome. Thank you. And you guys touched on this a little bit on the the margin outlook but i was surprised to see that your adjusted sales and marketing was flattish quarter over quarter could you help us tease out how much of that was efficiencies

or how much of that was an end to the salesforce build-out most of it was just efficiencies

i don't like i don't think we're communicating the end of our salesforce build-out i think it's more along the lines of, you know, we have a phenomenal group of operators who are shareholders and pay attention to where they spend money. And that's why we trust them. And, you know, they look at how we spend money and they spend it and, you know, where the best place to allocate it for return. And, you know, it's what happens when you have amazing people and you trust them and do the right things.

So is it wrong to assume we flatline that number for the rest of the year?

I don't think we're saying whether we flatline it or not. I think we're fairly comfortable with our UBIT on guidance and our revenue guidance. And so, you know, eventually something's got to give. You can't make, like, there's a pie, and the pie can only cut it so many ways.

Yeah, I think Randy's comment around, you know,

expenses growing. Yeah, I think longer term, right, they have to grow in a 10% to 11% range.

Okay, helpful. Thank you, guys. Thank you.

Your next question comes from the line of Joe Goodwin with JMP Securities. Your line is now

open. Great. Thank you so much for taking my questions. Can you just talk about the pipeline for enterprise clients or larger health systems, and if you've been making any adjustments to go to market motion um you know for for these larger customers uh we don't tend to comment on the

pipeline i think our go-to-market motion for the enterprise has been fairly consistent joe for for a fairly for quite some time which is build amazing product show that it works when you land them, and then continuously add value, add more value, grow the account, and then do it again over and over again, and never, ever stop. And do that for large clients and small ones, and treat all of the clients the way they should be treated, which is unbelievably well, because they take care of all of our families. And I think that's the way we think about all of our enterprise clients and our small clients got it okay thank you for that and then i

guess haim you know are you seeing clients land with more solutions from the get-go and you know are you seeing any changes into what solutions these new clients are actually landing with

yeah so what i am hearing a lot from our team is that we're getting more clients landing with different things as opposed to just intake right so like we're landing with different products at our clients and that's great to see especially as our sales organization has gotten more comfortable and has had more reference accounts and more successes with different product offerings so yeah we've seen the plethora and but i still think like you know we're generally known for intake you know because that's what we've been doing for so long so that's still the vast majority of what we land with. It's a great product.

Great. Thank you.

Your next question comes from the line of Jack Wallace with Guggenheim. Your line is now open.

Hey, thanks for taking my questions, and great job on the quarter. To further the analogy from earlier, are there any ponds that are more well-stocked than others where you've had more or less success fishing? And, you know, not necessarily the client size, but in some of the specialty areas or geographic regions.

Yeah, no, I don't think there has been any area. I'd say what it really comes down to is just work, right? Like we just made a lot of phone calls and sent a lot of emails and, you know, tried to find people who had problems that we could help solve. And I think what we continuously find is that people are so busy, you know, trying to take care of their patients and run their ERs and, you know, deal with their, you know, they're not necessarily looking for solutions. And we're getting out in front of them to make sure that we can deliver solutions to just add that tremendous value. And it's been working. So this past quarter is another testament, as we've had for many years.

It's usually just hard work.

Gotcha. That's helpful. And on that front, the efficiencies of the sales and marketing team, is there a pullback in some of the travel and entertainment that would be, say, a pre-COVID level? Obviously, we hired a ton of people over the last year plus. And now, as we're seeing the expense line level out a little bit, more efficiency on what's called a per rep basis. Is there a baseline level or lower level of T&E required to go make the incremental sale? So that's going to be a carryover going forward. Are we still seeing some of that potentially coming back in the back half of the year?

Yeah, I think we let our people decide our best travel. know travel I don't say we're big on the entertainment front so it's more just yeah yeah we don't spend a lot of entertainment well so it's mostly just travel and do and travel to see each other because I think that is important you know you don't it as much as we can we try to make sure that we get together in person where it's like cost effective and reasonable but you know I think we're I think it mostly has to do with like as I said earlier to Stephanie's question, which is just making sure that we empower our team to make smart decisions. If you hire really good people and you empower them to make smart decisions, more often than not, it works out well for all of us.

That's helpful. Thank you.

There are no further questions at this time. I would like to turn the call back over to Haim Indig.

All right. Balaji says I have to say really nice things to wrap up the call. Thank you, everyone, for participating. And we look forward to talking to everyone in a couple months. And if you have any questions or comments, investors at freesha.com. It's a great place to reach us. You don't know Bellagio's number. Have a great one, everyone.

This concludes today's conference call. Thank you for attending. You may now disconnect.