Conference Transcript - ROP 2026-09-10

Operator

Okay, welcome everyone to day three, the final day of Citi's global TMT conference. We, of course, saved the best for last. We have the team from Roper here, Neil and Jason.

Speaker 1

Thanks for having us, yeah.

Operator

Maybe just to start, Roper's a company that has undergone several evolutions in its history. If you could just walk us through the high-level journey for anyone kind of newer to the story, and then where the business is today and how you think about setting up for the next phase.

Speaker 1

Thanks for having us, and thanks for the opportunity to just go through a little bit of the transformation of the enterprise. You know, most may not know this, but we grew up as an industrial business, right? And so Jason joined 20 years ago. I joined 15. We're 75, 80% industrial pumps and valves then. But, and then we closed that chapter really in 2022. We divested all those businesses, about 40% of our enterprise revenue-wise. We divested those businesses and went full towards vertical market software and technology-enabled products that were not cyclical. The history, though, between sort of the old and the new is there's still a lot of common components. In the industrial days to the current portfolio, it's been we like leaders in small markets where there's strong product market fit, high gross margins, so we compete on customer intimacy, a tremendous amount of asset efficiency, so high cash flow generative assets. So it would have been consistent between the two chapters. Once we divested the industrial businesses, then it really became about growth. And so we've been on this growth transformation about leadership, growth mindset, the assets in a portfolio, the enablement of growth. We can get into that later. I'm sure you'll have some questions. And then obviously a couple of years ago, it's another transformation to become AI native in everything we do. And so it's been the one constant for the last decade or so in Roper has been this pace of change. We've become very comfortable with it. But again, there's this steady through line of the portfolio leaders, small markets, customer intimacy, high gross margin, high gross retention, compete on intimacy. The enterprise today is about $8.5 billion in revenue, 40% EBITDA margins, 30-ish percent free cash flow margins. We then take all that cash flow that the 29 business units generate. Then we bring it to the center and we deploy it on the next best idea, whether it's a new acquisition, tuck-in or platform, or the buyback. And taken together, it's a mid-teens cash flow per share compounding, sort of low range of outcome enterprise. And we go to work every day to sort of turn that into a high teens. We're not there yet consistently, but we're working to make the double rate every four years versus every five.

Operator

Great. And I think that was a great overview. You know, when I think about the Roper model, decentralization is one of the first things that comes to mind. It's been one of the core defining characteristics of the business. And yet, as you kind of alluded to, there's been a lot of work under the hood of developing these kind of shared infrastructure that these different portfolio businesses can lean on. And you already kind of alluded to some of these pieces, but maybe you could talk about that journey of the development under the hood and how you still think about this decentralized approach versus how you're kind of supporting these businesses from the center.

Speaker 1

Sure. So first, just the context for why decentralization. So as I've said now twice, the portfolio construct is where the largest player in a small market, which means by definition, all of our competitors are smaller, right? It's a common thing they all have, which means probably they're able to execute at a fast, nimble pace. So to match the pace of the competitive environment in which we compete, we need to be highly nimble and fast in execution. And a huge byproduct of being decentralized is we have massive amounts of accountability, like ownership, entrepreneurial-based accountability. So we match the portfolio construct, the competitive environment with the organizational structure. So we're deeply committed to it. 20,000 people in the company, and there's about 130-ish at the corporate center, to give you a sense of the scale of this. Now, at the same time, we have 29 businesses that, while the end market's very different, the business model's remarkably similar. So there's tons of pattern recognition on what the best practices are in terms of how to build a business that is very effective in improving its organic growth rate over the arc of time. How to do strategy well. How do you run a talent offense? How do you run a structured operating environment? How do you build it on principles of continuous improvement? How do you become AI native in everything you do? How do you drive faster product velocity, commercial excellence? And so this gross system is something that we sort of put together over the arc of time, and it's very much the combination of the ands. How do you lean into this decentralized, local accountability, highly autonomous structure, but then avail all these sort of best practices of the portfolio to these leaders so they can be most effective in the way they operate their business.

Operator

Got it. One of the pieces here you referenced was talent offense. I think that's maybe, I would argue, one of the more underappreciated parts of the Roper journey over the last few years. If you could just talk about maybe some of the more specific impactful recent hires as you see it, and then more generally kind of the infrastructure of identifying and developing and placing leadership.

Speaker 1

So we have been working on this for a long time, you know, for a decade, I mean, eight or nine years, we've started to introduce the concept of a talent offense to our business units. We have a lot of admiration for a company called Striker. It's a medical products business, like a remarkable business. And a lot of their success is built on their talent offense. And we benchmarked that, worked with their, understood from their CEO and their teams what they do and brought a lot of the core principles to what we do. And I will say that like most things in business, this is not like a particularly novel idea, but the execution or the brilliance or the good things that come from it accrue because you're consistently applying the principles with a great amount, a high degree of rigor. And so we've done this and all 29 businesses runs a talent offense. It's focused on employee engagement, employee selection, employee development. At the leader level in the employee base. There's management routines around this. I think every business twice a year, four to six hours is a deep talent reveal where they're making commitments across all these dimensions. We've seen the enterprise engagement score as measured by Gallup across the enterprise go from like the mid-50s to the mid-70s over this period of time. So becoming truly top quartile in terms of employee engagement and sort of what you get the discretionary effort. And so this has been like a consistent thing. Now we see these things happen, better selection that's objective, better engagement, better development of the high potential talent, you see a very clear corresponding increase in business results in the business. And so you see employee attrition go down, you see product velocity go up, you see commercial exits go up, you ultimately see growth go up. This is very clear connection, but it takes time. There's no like silver bullet. This just takes the grinding effort of building sort of true sort of talent DNA in the business. On top of that, when we said in the second transition or transformation here going from the industrial business to more growth-oriented software business, we've had to re-sort of think what a growth-oriented leader looks like inside the business. And so we're very behavioral-based. We hire leaders that are competitive, intensely competitive, curious learners that love to build, that can connect a long-term to what every person to organization does tomorrow. And so we hire on these attributes and we get this intense growth mindset at our leader level that then sort of sets into their organizations. And so you can have a growth system and all the practice sharing, but if you don't have a growth-oriented leader, it's for naught. And so when we look at our portfolio of leaders, it's substantially more growth-oriented today than six or seven years ago. We're seeing more internal promotions from leader, from CEO to CEO. I think four of the last six or seven CEO promotions or hires have been internal. And then finally, on a talent perspective, we've supplemented from an AI perspective, you know, a tremendous team of about 30 people that then is an accelerator team that's now working with our technical teams across our portfolio to sort of go faster. So, yeah, talent is a huge focus for us. Anything you want to add to that? I covered a waterfront.

Operator

Great. Yeah, maybe we can segue there into that AI centralized resources and the team that you've developed there, the accelerator team. Maybe if you could just talk about the components of the value that they're delivering to the portfolio businesses. How far does that extend and what do you see as kind of the long term vision?

Jason P. Conley, CFO

Do you want to start? Sure. Yeah, I can start. So we've hired around 30 folks. We started with two last October. So it's been, I'd say, successful. So the model is they're either going to be, it's kind of a continuum of providing consultative support all the way to like working shoulder to shoulder with our technical teams, as Neil said. And really it is the businesses are serving up all their ideas around agentic workflow that could be agentified. And then our teams are helping to actually help build their teaching and then helping to build. and then the goal is for them after they've teached and they've built to then dismount and go to the next company so that's really the process and I would say so far it's gone really well. You're always going to skin your knees a couple times with maybe some folks in the business that maybe don't work at the same speed as this team but what you're also seeing is there's others in the organizations that have raised their heads and say I want to be part of this. I want to be part of this next wave of development. So they're working at sort of 10x in terms of agentic development of code. And that's also been an accelerator across the portfolio.

Operator

I think there's clearly an opportunity on the product development side. I'm curious now, it seems like the main or an increasing focus is the commercialization side. Is there a component of that centralized resource today or maybe in the future that can help your businesses kind of come up the curve on that So the short answer is yes.

Speaker 1

Are we equipped to do it today? No. Right. So it's been about what we've added to the central sort of kit, if you will, in the last 12 to 18 months is, is a true point of view on product velocity, like organizationally, how do you drive faster product velocity? This is more than just using, you know, using the models. It's like the whole organizational design approach, team structure, what they focus on proximity to customer. So product velocity, and then obviously the enablement of the agentic use cases with the center team. We're going through a massive amount of commercial learnings right now. Now that we have products, agentic products that are hitting the market across 13 to 15, 12 to 15 of our 21 software companies, now we're starting to see the patterns emerge about how do you sell? How do you price? How do you deploy? How do you drive utilization? And we very much could envision in the growth system, if you will, a commercial excellence function or capability, I don't want to overstate. I mean, these are like one or two or three people. These are like calling best practices and then teaching them. It's not like they're doing it. But yeah, we could definitely see commercial excellence as part of the kit.

Operator

Got it. When you think about, you know, there's been a few notable successes in the portfolio businesses in terms of developing, starting to come up the curve and on the commercial side, seeing some notable impacts. When you think about how to broaden that across the portfolio, how that journey has gone, what kind of comes to mind in terms of maybe patterns where you're seeing more and less success and how to kind of bring the median company up more quickly?

Speaker 1

Just to make sure we answer the exact question, on the commercial side or development side or both? Maybe both. Okay. So on the development side, I mean, again, the good news is vertical market, our pattern is vertical markets, leaders in vertical markets, there is just in the surface area or the remit of software is just expanded massively because of AI. Obviously, AI is about what software can do versus just how it's delivered, which is on-prem mobility and SaaS. So it's about what software can do. And it just can do more. And when you're close to these things, what things have to go do is like incredible, like high ROI ideas. So that's not the gating problem. The gating problem then, the next gating problem is then how do we get to these products fast and furious, hence the velocity in the AI team. I think some of the patterns, by the way, is smaller teams are better than large, obviously. Closer to the customer is better than not. Solving problems versus creating features is what the objectives should be. And Jason said it a few times, probably ultimately a smaller number of total development headcount, but the dollars might not be less because you're going to pay more for the 10X engineers and they're going to obviously have the token costs that sort of companions with them. So we're not viewing this as like a productivity as a savings, but more how do you get more throughput out of the system. On commercialization, I think the early patterns are how to monetize and how to price. What's very clear across the portfolio from our customer conversations is it's not going to be straight consumption based. Customers have to have some sense of what the budget is going to be, what the spend is going to be. And the bulk of what we're doing is I'll call it like an old school cell phone or mobile plan, which is you buy a chunk of credits or usage capability against the tool, but it's going to be a fixed amount, whatever the number is, $50,000 a year for X amount of consumption. But it's going to be easier to lose it so we can take it as recurring as opposed to reoccurring revenue. And then as you go through that, you need to buy the next bolus. You'll buy another sort of subscription tier on top of that, another 20 or 50 or other numbers. So you have some sense of planning and predictability. You also get commitment from the customer. This is not about like just trialing and testing. It's like making a commitment that I'm going to change my workflows to do this automated You're going to make some commitment to the dollars. So we would expect that. I think that's a pattern. It's very clear. There'll be some exceptions to that on the tails of the portfolio, but that appears to be like the primary monetization sort of methodology.

Operator

You referenced kind of high ROI workflows. I think that's been a kind of a core theme debate at this conference in terms of how do we think about quantifying and capturing ROI from these AI products. When you think about the most tangible proof points, the highest impact use cases that you've seen, what are some things that come to mind?

Speaker 1

I'll give you a couple. I'll give you a three come to mind in this example of like low dollar, high volume. I'll get a relatively high dollar, medium volume, and then very high dollar, low volume. But the use case is slightly different. So we have a business that's in pharmacy automation versus pharmacies that serve long-term care and skilled nursing facilities. These are not like the retail pharmacies. These are you wouldn't even see a sign on the door. But they're basically factories that are sort of tens of thousands of prescriptions get pumped out on a daily basis. Every one of those prescriptions has to be verified by a pharmacist today, manually verified. The time and motion study on that, it costs $1 to $2 of human labor to verify one of these prescriptions. Our first agentic tool does that at a quality level that's higher than a human, and we charge about $0.30. So it gives you a sense of the value capture and the value share with the customer. So very tangible, hard ROI from the day you turn on the product. Similar concept, different in market, in transportation. We are today, those that know us, we own a business called DAT. It is the organizing force network for the spot market in North America for trucking. So we organize all the brokers and all the carriers in the marketplace, and we're the hitching post to where 750,000 loads are brokered or advertised every day, unique loads. We monetize that today on a subscription on both sides. To make a load of brokerage happen, it takes about 10 phone calls between the broker and the carrier. There's about $100 to $200 of labor on the side of the broker to make that happen. And we have the capability in market today to do the full matching, the full sort of transaction closing, the factory of that transaction, the financial sort of reconciliation of that transaction for $40 to $60, depending on the transaction. So, again, very hard ROI. The final one I would say is in our utility business. So we have talking about like a niche of a niche. So we're the leader in tax accounting software for investor-owned utilities for their assets. Like it's a niche within a niche within a niche. And there's a process that has to happen. All these utilities are investing all their capital, and they can only get a return on the capital in the rate base once they sort of get it sort of perfect. In service. In service, and they sort of perfect the asset. They get it, and so that's when they start getting a return on it. Today, to sort of put the assets in service and sort of curate the asset, it's a consulting So that's why these utilities have billions of dollars a whip that they're not earning a return on. So we have an agentic use case that's releasing right now that does that for the customers in lieu of a consulting service. That's a button that'll be pressed a few times a year, but has high value as opposed to the button that's pressed thousands of times a day in the pharmacy automation. But you get a sense that a range of hard value that happens.

Operator

To shift gears a little bit, you know, last earnings call, you called out an expectation for maybe a potential warming of the M&A environment. It's obviously been slow this year. Maybe you could just talk through your confidence there of maybe potentially seeing some activity towards the back end of this year and into next year. What are kind of the tangible points that you're seeing there?

Jason P. Conley, CFO

Yeah, I think, well, we've been talking about this for years, right? It's, you know, the DPI pressure continues. The hold periods continue. There's not many transactions that have happened this year in software, as we all know. There's credit cliffs that are coming in the next couple of years as well. So to be able to recap is going to be very difficult for the sponsor. So all those, that's sort of at the macro, I'd say, and kind of what we're observing on the ground is just much more constructive conversations about value. We're getting a lot of access management meetings sort of on one-off basis, getting a lot more access to information than we normally would. So I do think, you know, to keep the wheels moving in private equity, there does need to be some transactions. So we feel good. Again, just time's been our benefit. We're going to be super patient. If I, you know, on the bolt-ons, that's been much more liquid, much more active for us right now. We're putting a lot of deposits for platforms. We think that's probably going to be more of a 27 timeline versus later this year. But that's sort of what we're seeing on the ground. It's good.

Operator

On your approach to identifying and selecting potential targets, you know, obviously, this is a very dynamic time in software. You guys have historically had more of a risk-averse mindset, you know, trying to bat 1,000 as best you can. How has maybe that targeting changed at all? How do you think about incorporating a company's AI strategy? What are kind of the things you would look for to say, we think this company is maybe better or worse positioned?

Speaker 1

Yeah, so we are definitely a the whole concept of a cash flow pressure compounder is you need to have a low range of outcome, right? And it's our, our whole business models built on like a steady, consistent, low range of outcome, not highly cyclical sort of compounding methodology. and inside of the portfolio over the years, we believe that the best way to do that is you need each individual asset to have the same sort of low range of outcome as opposed to have a bunch and assume the portfolio effect dampens it. And so we've always been, I'll call it like a low range of outcome sort of investor. With AI, certainly it adds to the range of outcomes. And so we have to just assess that, but we've always been the ones that sort of try to evaluate existential risk. If a company can go to a zero, conceptually a zero in the Monte Carlo, well, we're just out. Even though it could have like a 5X upside, if you can go to zero, that's not us. That's the opposite of a low range of outcome. So when it comes to AI, we have both an offensive and defensive framework that we built for our own portfolio. We apply it to every acquisition going forward. Increasingly, it's more objective versus subjective evaluation of the criteria. It's things like network effects, regulatory overlay, you know, obviously the level and amount of proprietary data and the knowledge graphs of the various companies, the configuration density of the software, things like that, that we look at. Regulatory. Regulatory overlay, for sure. And certainly then the stability of the end customer. You can have a business that might have the score very well in all those dimensions, but if the customer is going to be fundamentally disintermediated by AI, then you don't want to be in sort of that end market. So right now, we apply the framework to our best ability as objectively as we can. We obviously have the pattern from our own portfolio. We apply prospectively to these targets. And this only is going to get easier over time as the AI winners emerge and you see more bookings contribution, more revenue contribution from the agent excuse, and they're emerging as the winner and they have the RL on their products are getting higher quality and more deterministic in their outcome. Those are going to be the clear and obvious ones to acquire, but that's going to be a couple for years from now, not right now. So we have the perspective and the analysis on that. That's how we think about it.

Operator

Are there any more quantitative metrics? I think the framework you laid out makes a lot of sense. Are there any more quantitative metrics that you're able to use today? I mean, I think, for example, in the software, in the public software space, a lot of people are looking for acceleration stories. Is that something that's part of your framework as well?

Speaker 1

Certainly. I mean, all this is about, like, we fundamentally believe, I think most people, or this is not a fact in dispute, that AI is TAM expanding for software. The debate is who's going to be the claim that TAM expansion. You know, we have a strong thesis that incumbents have a high, high, high right to win for all the reasons we get into or we've been into in the past. But yeah, I mean, it's ultimately, this has to manifest into accelerating growth, second positive, second derivative growth, for sure.

Operator

Maybe just more broadly on your capital allocation framework, it seemed like that's been shifting, you know, obviously, at the buyback this year, reduced share count pretty meaningfully. If you could talk about, you know, positioning yourself, developing kind of a dry powder bank, how's that mindset changed?

Jason P. Conley, CFO

Yeah, I mean, we're really pleased with the buyback over the last eight months. But back to the point of what I talked about earlier in terms of the opportunity and the option value around M&A, we think it's a unique opportunity. And so we are delevering right now and preparing our balance sheet in the belief that things will fall in 2027. And so we've got the proceeds from our Indicort minority investment that we've got the instrumentation piece with flow control probably in the fourth quarter. So that's about $1.6 billion or so. And they'll have strong second half cash flow. So that'll prepare us and allow us to be able to do $5 billion or more of M&A in the next 12 months.

Operator

And then in terms of your decision framework between buybacks and M&A, How is that?

Jason P. Conley, CFO

Well, look, like I said, it's an option. So if the M&A markets don't cooperate, we have the buyback. So it's really just a time value of money sort of deferral of the buyback if the M&A markets aren't cooperative.

Speaker 1

I think it's important that the folks here listening, we say this on repeat, but for us, cap allocation is simply just a math exercise. There's no emotion tied to this in any capacity. We're not trying, what we say at the beginning, we're trying to build the best cash cash flow per share compounder. That is what we're attempting to build. We're working to build. We think about it all day, every day. We're not trying to build the biggest fill in the blank, transportation software business. So that gives us tremendous optionality and tremendous discipline in just what the math says for the best long-term cash flow per share compounding. Now, we focus on the five and seven year compounding, or about compounding. So not what's the best in the next 12 months, but what's best in the next five to seven years. And so mathematically, when we did the acquisitions of the church management and autism therapy acquisitions 18 months ago, or 12, 15, 18 months ago, we paid, this was a different valuation era. We paid 22 times next 12 months for those deals. We underwrote those to be about nine or 10 times year five EBD. At the time, we could have bought our stock back at about 15 times. So there's a year five. We could have bought ourselves back in year five at about 15 times. So about a 50% risk premium to deploy the balance sheet towards acquisitions. Then valuation change, our valuation change, and we could all of a sudden buy ourself back at nine or 10 times year five, where the private markets were still wanting to price on yesterday's valuation. So it made no sense to buy. He could have bought any company he wanted for 22 times trailing or forward, but it makes no sense because there's no risk premium attached to it. Now we think that math is going to tilt even further towards M&A, right? So if you can get a 20% to 40% discount on the private companies versus where we paid a year to 18 months ago, now we're going to underwrite to something like six, seven, eight times year five EBITDA, and you're back in the risk premium that makes sense and the cash flow for sure compounding accelerates from that point forward. It's just a math exercise. Anytime that math changes, it changes the way we think about how we allocate the capital.

Operator

Interesting. Maybe I'll pause there if there's any questions in the audience for these gentlemen. We have a mic coming to you one moment.

Speaker 1

Just to pick up on what you said there about capital allocation math exercises, kind of wanted to know, and I heard your point about delevering here into 27, kind of how does the balance sheet fit into that math exercise yeah so we um we run a levered a mod an investment grade but levered play right so we we attempt to be between three and three and three to three and a half times leverage over a long arc of time sometimes above sometimes below and it just provides a cost of capital advantage versus the people we compete with you know we We borrow at whatever, 5.5% plus or minus, and our competitors borrow at 10% plus or minus in private equity. And so it's a cost of capital advantage for us. And we run the levered play, which helps on the equity return. Great. Honestly, levered play. I mean, we're always going to stay investment grade.

Operator

Any other questions out there? Okay. Maybe we can just talk about the organic growth outlook. I think there'd been this objective of returning the business back to kind of high single digit growth, organic growth. You know, there's been a few kind of stumbling blocks along the way that derailed that. You know, each sort of feels idiosyncratic, but when you sort of stack them all together, you know, Dell Tech, Neptune, arguably DAT. If you could just talk through some of those, to what extent do you feel like those headwinds are behind us? Where do you still see maybe potential to linger or a wider range of outcomes?

Jason P. Conley, CFO

Sure. So, yeah, so with Dell Tech and, And, you know, they are heavily exposed to government contracting space. And so it's been, as you can imagine, last year was it was idiosyncratic when you had Doge, you had agencies that were sort of gutted. And then and then we had the shutdown, prolonged shutdown. So this year, starting to see appropriations flow, we're second and third sort of derivative demand on that because they got to get the money and then they provision the licenses. Usually now it's more when they actually get the funds. It used to be a little, we used to not have this sort of lag. But we do think there should be some recovery, the timing of which is still sort of TBD. We saw some green shoots in the second quarter, but we're not ready to call a market yet. But when that does happen, we should be the beneficiary. There's a lot of OPPB that's going to be flowing in for Deltec. The other sort of catalyst for Dell Tech, and this is more bookings, probably not in period sort of revenue, is they have announced end of support on their cost point solution for the first quarter of 28. Now that won't all happen up through the 28. It'll still continue. Customers will stay on-prem, but that's a catalyst to move from on-prem to the cloud, which should move it over two times from maintenance to subscription. And so that's sort of what's going on at Dell Tech. DAT, I think we've mentioned that we've seen a freight recession. We had a freight recession for three or four years. It's been positive in the first half of this year. And so we hope that continues. It's more of a supply-driven rally. And so we're a little cautious, right? We're not seeing constructive demand, but it is certainly, we like the trends in that business. And then at Neptune, you know, it's sort of, I would say, kind of doing okay, sort of bouncing along the bottom. They did perform better in the first half than we thought they would. But we'll see how the market sort of is still settling from COVID. I would say it's not completely, we're not out of the woods yet. But we're sort of, we are, you know, sort of, it's in our guide. And we would expect that in the coming years, it'll sort of, volumes will start to normalize back. The good news at Neptune is we've been able to sort of offset some of the market volume declines with the move to static from mechanical meters. And so that's been the story of Neptune.

Operator

Okay, I think that's great color. Maybe if we think about just bridging that organic growth to the free cashflow per share framework that you gave kind of mid-teens growth, maybe you could get us, walk us through the math to mid-teens growth and then how do we bridge that up to the aspiration of high teens?

Jason P. Conley, CFO

Yeah, I think it's simple, right? It's the getting that organic growth is is a is a major component of that uh and then i think so that's sort of one component you get a point or two of organic growth and then i think capturing more value out of mna and that's really just some of these maturing leaders you know obviously it's as neil mentioned paid a little bit more up front for those but as they start to uh compound over time then you're capturing more value out of mna and i would also say the bolt-ons doing more bolt-ons so we're doing a lot more bolt-ons than we did three or four years ago. And those are obviously very cash accretive, but they also improve the organic growth. So it sort of ties back to increasing the organic growth of our platform. So that's how you bridge the sort of mid-teens to high-teens.

Speaker 1

Yeah. And the baseline is, think you have, and not any like for this year, next year, more like the model, you have six, 7% organic growth, you get a little bit of margin expansion. So sort of high single digit, sort of organic EBITDA growth. Then we have our baseline capital deployment within Bridges is like mid-teens. And then as we get a little bit more organic growth and a little bit more return on the baseline capital deployment, it goes from mid-teens to high-teens. Perfect.

Operator

Maybe just with our final minute, what would get you most excited about the position of the future and the journey ahead over the next few years?

Speaker 1

I've never been more excited than I have in my career about that front opportunity in front of us with ai i mean it is the the resonance that our customers have with the with thing i mean we're literally delivering a button and when you press it magic happens and i've always been in like the boring part of software and all of a sudden software is not boring and just the the reaction like i i've said this a couple times um but the local the guy runs a local health system in sarasota we had lunch he's like hey i hear you have a a pretty cool new AI tool with a company called Strata. We'd love to learn more about it. That never happens. We have a conversation. They got in the early developer group and we just did a great teach-in with a thousand of Strata's customers a couple of weeks ago on launch day. So it's just really fun to sort of see the magic that's happening in the product base and the reaction from the customers.

Operator

Great. I think we'll leave it there. Thank you everyone for coming.

Speaker 1

Thank you, guys thank you thank you