Image source: The Motley Fool.
Date
Tuesday, August 5, 2025 at 2:00 p.m. ET
Call participants
Chief Executive Officer — Bob Pragada
Chief Financial Officer — Venk Nathamuni
Need a quote from a Motley Fool analyst? Email [email protected]
Takeaways
Adjusted EPS-- Adjusted EPS rose 25% year-over-year to $1.62 in Q3 fiscal 2025, with a minimal gap to GAAP EPS ($1.56) in Q3 fiscal 2025, suggesting enhanced earnings quality.
Adjusted net revenue-- Adjusted net revenue increased 7% year-over-year in Q3 fiscal 2025, supported by broad-based end market contribution.
Gross revenue-- Gross revenue grew 5% year-over-year in Q3 fiscal 2025.
Adjusted EBITDA-- Adjusted EBITDA increased by more than 13% to $314 million in Q3 fiscal 2025; Adjusted EBITDA margin was 14.1%, up 80 basis points year-over-year in Q3 fiscal 2025.
Backlog-- Backlog reached a record of nearly $23 billion in Q3 fiscal 2025, up 14% year-over-year; Trailing twelve-month book-to-bill stood at 1.2x in Q3 fiscal 2025.
PA Consulting performance-- Delivered 15% revenue growth and 15% operating profit growth (9% on a constant currency basis) in Q3 fiscal 2025; Operating margin was 22% in Q3 fiscal 2025.
Free cash flow-- Generated $271 million in free cash flow in Q3 fiscal 2025, with free cash generation in the second half of fiscal 2025 inflecting as working capital improved.
Dividend-- Declared quarterly dividend of $0.32 per share.
Net leverage-- Ended Q3 fiscal 2025 at the low end of the 1.0x–1.5x target range.
Fiscal 2025 guidance raised-- Now projecting adjusted net revenue growth of approximately 5.5% for fiscal 2025 (non-GAAP), Adjusted EBITDA margin of about 13.9% for fiscal 2025, and adjusted EPS in the $6.00–$6.10 range for fiscal 2025, with full-year free cash flow conversion above 100% in fiscal 2025.
Q4 2025 outlook-- Management expects sequential improvement in net revenue, adjusted EBITDA margin, and adjusted EPS in Q4 fiscal 2025.
Fiscal 2026 preliminary outlook-- Revenue growth is expected to outpace fiscal 2025 with further margin improvement as gross margin initiatives take effect.
Data centers submarket-- Experienced the highest number of inquiries and engagements to date in Q3 fiscal 2025; scope of work expanding beyond design to full program delivery including power and water requirements, with over 150 data center engagements in the pipeline as of Q3 fiscal 2025.
NVIDIA partnership-- New collaboration on digital twin technology for AI data centers may serve as a reference framework forNVIDIA(NASDAQ: NVDA)'s global customer base.
Major project wins-- Secured critical modernization project for Little Miami wastewater treatment, landmark digital transformation engagement at Dallas Fort Worth International Airport, and Australia's Marinus Link energy project.
End market commentary-- Water and environmental adjusted net revenue rose more than 5% in Q3 fiscal 2025; Life sciences and advanced manufacturing adjusted net revenue grew approximately 5% in Q3 fiscal 2025; Critical infrastructure adjusted net revenue increased over 6% year-over-year in Q3 fiscal 2025, with energy and power as the fastest-growing segment.
Geographic trends-- Critical infrastructure and cities/places growth in Europe and the Middle East remained favorable as of Q3 fiscal 2025 and are contributing to top-line expansion.
Restructuring costs-- On track for $75–$95 million in one-time restructuring costs for the separation in fiscal 2025; further reduction expected in fiscal 2026.
Summary
Jacobs Solutions(J 3.78%) posted record backlog and double-digit adjusted earnings growth in Q3 fiscal 2025, directly attributing performance to broad end-market strength and disciplined cost management. Management raised full-year fiscal 2025 adjusted EPS guidance for the second time, citing favorable project mix and ongoing margin gains. Supporting record capital returns through both repurchases and a special distribution of Momentum shares. The company highlighted expanding strategic partnerships, notably withNVIDIA(NASDAQ: NVDA) in AI data centers, and reported a rapidly growing pipeline in this area as of Q3 fiscal 2025. Leadership projects continued revenue and margin growth into fiscal 2026, driven by secular demand in water, data centers, and life sciences.
Chief Executive Officer Pragada said, "this opportunity with NVIDIA is pretty transformational." referencing the strategic significance of the new digital twin partnership.
Chief Financial Officer Nathamuni stated, "We are on track to return well more than 100% of adjusted free cash flow in [fiscal 2025]." demonstrating a robust capital return commitment.
Management identified the backlog mix as weighted toward advanced facilities and water, with those segments offering longer project durations and higher revenue visibility.
End market strength is complemented by geographic diversification, with strong momentum in European infrastructure and double-digit growth in Middle Eastern cities and places in fiscal 2025.
Industry glossary
Adjusted net revenue: Revenue excluding pass-through costs; provides a clearer view of underlying business growth and profitability.
Book-to-bill: Ratio of orders received (bookings) to revenue billed; a figure above 1.0x indicates backlog growth.
Digital twin: Virtual model of a physical asset or system, used to simulate, design, and optimize infrastructure projects.
Momentum shares: Reference to Jacobs Solutions' previous investment holdings in Momentum, whose mark-to-market impact was excluded from adjusted EPS and which were distributed to shareholders as a special capital return.
Gross margin initiatives: Internal strategy aimed at improving the portion of revenue retained after covering direct project costs.
Full Conference Call Transcript
Bob Pragada: Thanks, Bert. Good day, everyone, and thank you for joining us to discuss our third quarter 2025 business performance. We delivered very strong results for Q3, meeting or exceeding our expectations across all key metrics. First, adjusted EPS grew 25% to $1.62, supported by 7% net revenue growth and meaningful year-over-year margin expansion. Second, PA Consulting capitalized on strong demand, delivering double-digit revenue and operating profit growth. And third, backlog grew 14% to nearly $23 billion, setting a new record.
Overall, we are very pleased with our third quarter results, which enabled us to raise our FY '25 adjusted EPS guidance for the second time this year. We continue to monitor macro conditions, and right now, we feel good about our operating environment. We're seeing secular growth drivers in life sciences, semiconductor, data center, energy and power, and water sectors that have resulted in continued upward trends in spending across our business. We continue to manage well through an uncertain economic backdrop and expect to build on our strong Q3 performance in Q4.
Turning to Slide 4 and focusing on our results, adjusted net revenue growth of 7% in Q3, combined with strong year-over-year margin expansion, helped drive a more than 13% increase in adjusted EBITDA to $314 million. Excluding the mark-to-market impact from our investment in the Momentum stock, which we now have fully exited, and other items, Q3 adjusted EPS was $1.62, a robust 25% increase compared to the previous year. The small difference between this and our GAAP EPS of $1.56 underscores what we view as improving earnings quality.
Turning to bookings, our trailing twelve-month book-to-bill was 1.2 times, with gross revenue and backlog up 14% year over year in Q3. Gross profit in backlog was also up 14% year over year, reflecting another strong quarter of sales. Our backlog growth and bookings momentum remain positive, positioning us well in the fourth quarter and into fiscal 2026. Turning to Slide 5, I'd like to highlight a few notable infrastructure and advanced facilities project awards from Q3.
To redefine the asset life cycle as we prioritize expanding our addressable markets with core clients in high growth areas of our portfolio, our full lifecycle delivery model and deep domain expertise are helping our clients address aging infrastructure, water scarcity, and regulatory challenges worldwide. This quarter in the water sector, we secured additional scope for the Little Miami wastewater treatment facility with the Metropolitan Sewer District of Greater Cincinnati. This critical modernization effort will support region-wide biosolids reuse for three wastewater treatment plants, providing a renewable energy source to operate the 70-year-old facility. Construction for the program is expected to be completed in late 2028.
We continue to deliver solid growth in life science and advanced manufacturing end market with data centers becoming the fastest-growing submarket. At Jacobs Engineering Group Inc., we have leveraged digital twin technologies for more than a decade to transform how critical infrastructure is designed, built, and operated. Most notably in the water and transportation market. Today, we're applying that expertise to AI data centers, expanding beyond traditional design into intelligent integrated solutions. In a new partnership with NVIDIA, we're advancing the Omniverse blueprint to create digital twins of AI factories, enabling high fidelity simulations that optimize power, cooling, and network systems.
Accordingly, we see the potential for this digital twin design to serve as the reference framework for NVIDIA customers globally. In addition to our key win with NVIDIA, we're also engaged by a confidential client during Q3 to provide engineering procurement manufacturing facility in the Southeastern United States into a cutting-edge high-performance data center. We captured meaningful scope on this program by leveraging our cross-sector capabilities, and we are seeing more and more opportunities like this in the market. Technologies as they advance the next generation of transportation systems, airports, buildings, and energy infrastructure. We're helping them achieve these goals through integrated solutions that prioritize efficient capital investment.
In Q3, we secured a landmark digital transformation engagement with our long-term client, Dallas Fort Worth International Airport. In partnership with PA Consulting, leveraging our expertise in both artificial intelligence and airport infrastructure, we are helping DFW accelerate innovation and enhance operational efficiency. Our number one ENR ranking in airport design, paired with our leading digital portfolio, positions us well for global demand across air as air travel increases and airport investment needs rise. Additionally, our energy and power team secured one of the company's largest wins in Australia year to date as the integrated delivery partner for the Marinus Link project.
This 345-kilometer electricity and data interconnector between Tasmania and Victoria will provide 1,500 megawatts of capacity, enough to power 1.5 million homes, playing a critical role in strengthening the reliability of Australia's East Coast electricity grid. This win highlights how we leverage global expertise in capital project execution and utility infrastructure to help clients meet their energy and sustainability goals. In summary, these awards reflect our focus on execution in high-growth markets and our ability to deliver leading digitally enabled solutions to our clients. Now I'll turn the call over to Venk to review our financial results in further detail.
Venk Nathamuni: Thank you, Bob, and good day, everyone. Let me begin by summarizing a few of the financial highlights on Slide number 6, followed by additional context on our quarterly performance. In the third quarter, gross revenue increased 5% year over year and adjusted net revenue, which excludes pass-through revenue, grew by 7%. Q3 adjusted EBITDA was $314 million, growing more than 13% year over year. Our adjusted EBITDA margin during Q3 came in strong at 14.1%, which is an increase of 80 basis points versus the same quarter last year. As a result, adjusted EPS rose to $1.62, a 25% increase year over year.
Our disciplined cost management contributed to a new record for margins, and we're well positioned to build on this momentum in Q4 and fiscal year 2026.
Also, Bob touched on, consolidated backlog was up 14% year over year to a record, putting our trailing twelve-month book-to-bill. Gross profit and backlog also increased 14% year over year during Q3, a strong indicator of our positioning as we head into next year. Regarding our performance by end market in infrastructure and advanced facilities, let's now turn to Slide number 7. Remains favorable across all major geographies, with very strong top line performance in the water sector during Q3. Total adjusted net revenue growth for water and environmental rose more than 5% in Q3, and we expect growth to remain in a similar range in Q4, aided by continued demand strength in water.
In our life sciences and advanced manufacturing end market, adjusted net revenue also grew approximately 5% in Q3. We've seen notable growth in the data center submarket that has complemented continued strong performance in the life sciences sector. We expect growth to increase as we move into Q4, relative to our Q3 results. In critical infrastructure, adjusted net revenue increased over 6% year on year. Within this end market, energy and power remain our fastest growing sector, but improvement in transportation sector growth, particularly in Europe, helped drive better year on year performance versus Q2. Encouragingly, growth in the cities and places vertical is also moving in the right direction on the back of Middle East trends.
Looking ahead, we expect critical infrastructure growth to moderate slightly in Q4 but remain healthy.
So, moving on to Slide number 8, we will provide a brief overview of our segment financials. In Q3, infrastructure and advanced facilities operating profit increased over 13% year on year with a modest tailwind from FX. PA Consulting built on strong second quarter improvement and delivered a notable update in revenue growth to 15% during the third quarter. This resulted in operating profit increasing 15% year over year in total and 9% in constant currency on a 22% operating margin. PA Consulting's momentum in the US and across the private sector was augmented by improving public sector spending in The UK.
We continue to see favorable trends in PA's backlog and pipeline, which have both increased double digits year on year. We believe growth in these metrics is a positive leading indicator of future results.
Now moving on to Slide number 9, we provide an overview of cash generation and our balance sheet. Overall, our balance sheet remains in excellent shape, exiting Q3 inclusive of record capital returns for '25. Focusing on the quarter, Q3 free cash flow was $271 million, which is in line with our expectation for free cash generation to inflect in the second half of the year as earnings increase and working capital improved. During the quarter, we repurchased $101 million in shares, bringing our fiscal year-to-date repurchases to a record $653 million. Additionally, early in Q3, we received $70 million in favorable working capital adjustments from the CMS transaction and finalized ownership of Momentum shares previously held in escrow.
We used these cash proceeds to further reduce our debt. In addition to our quarterly cash dividend, we also distributed the Momentum shares released from escrow to shareholders on a pro-rata basis. This represented approximately $159 million in incremental capital returns to shareholders based on the Momentum share price when declared. Our balance sheet strength supports continued investment in the business, along with continued returns to shareholders via share repurchases and long-term dividend growth. Our commitment to return capital to shareholders is evidenced by our 32¢ per share dividend, representing 10% year-over-year growth, as well as our material increase in share repurchase activity this year.
We continue to view our shares as an attractive investment and have remained consistent buyers as a result. In total, we returned $927 million to shareholders through repurchases and dividends over the past three quarters alone. Summing this all up, ended the quarter at the low end of our 1.0 to 1.5x net leverage target, and we are on track to return well more than 100% of adjusted free cash flow in fiscal year 2025. This puts us in a strong financial position as we close out the year.
Finally, please turn to Slide number 10. As we enter Q4, we're updating our outlook for fiscal year 2025. We now expect adjusted net revenue to grow approximately 5.5% year over year, adjusted EBITDA margin to be approximately 13.9%, and adjusted EPS in the range of $6 to $6.10, and we will continue to expect reported free cash flow conversion to be more than 100%. As it relates to the fourth quarter, the midpoint of our guidance implies sequential improvement in net revenue, adjusted EBITDA margin, and adjusted EPS. In summary, strong Q3 performance combined with our forecast for Q4 support our decision to raise the midpoint of our full-year adjusted earnings outlook.
Now looking ahead to fiscal year 2026, we feel good about our positioning. Since we're still in the planning phase, our expectations for fiscal year 2026 will be set in more detail next quarter. What we can share now is that we expect revenue growth to be ahead of fiscal year 2025 with continued margin improvement as our gross margin initiatives begin to phase in. Altogether, this should result in solid adjusted EPS growth next year. In summary, we are building on strong Q3 performance and plan to build on this performance in fiscal year 2026. With that, I'll turn the call back over to Bob.
Bob Pragada: Thank you, Venk. With FY 2025 nearly complete, we are preparing for continued success in FY 2026, aided by our record backlog and strong pipeline. We've navigated our first few quarters following the CMS and Divergent Solutions separation very well and are just beginning to unlock the full potential of our business. As global secular trends take hold and our strategy to redefine the asset life cycle gains momentum, we see significant opportunity ahead. Operator, we'll now turn the call over for questions.
Krista: Thank you. We will now begin the question and answer session. We also ask that you limit yourself to one question and one follow-up. Your first question comes from the line of Sangita Jain with KeyBanc Capital Markets. Please go ahead.
Sangita Jain: Good morning. Thank you for taking my questions. So the first one, would say on the data center submarket growth that you guys talked about, can you maybe expand on that? Are you seeing bigger scope being assigned to Jacobs? And what about the nature of these contracts?
Bob Pragada: It's all of the above. So right now, if you kinda look at the three distinct sectors of data centers, hyperscalers, colos, and now what we're seeing with regards to vertically integrated vertical integration going on in different sectors and companies organically having their own data centers, we're seeing the source of those opportunities come through that. The number of inquiries as well as engagements we have grown substantially in the highest that they've been this quarter. The second is that they are multi-scope. In that before, we were doing predominantly the design, both of the gray space and the white space, inside the boundary limits of the data center.
Now we're seeing that scope expand into the power requirements as well as the water requirements, which in AI data centers is substantial. And then from a delivery model standpoint, traditionally, we were exclusively an engineer. As I mentioned in the script, we're actually now expanding that scope to deliver a full program and full project delivery around that. You know, one other item, Sangita, is that this opportunity with NVIDIA is pretty transformational. In that this will be the reference design and the plan of record that NVIDIA will give to their customer base using the NVIDIA chip, which we're already getting increased inquiries from those customers back into Jacobs. So we're excited.
Sangita Jain: Great. That's helpful. And then maybe on the backlog growth in the quarter, can you talk about the makeup of that backlog? And the pace of burn you expect on it? Is it more faster book-and-burn work or longer-duration projects? Just as we start thinking about FY 2026 top line.
Venk Nathamuni: Yeah, I'll I'll start it off, and then maybe Bob can add to it. I'd say as far as the end market profile of that backlog, it is growing in the advanced facilities and water sectors probably at a faster rate than the others. And those two sectors tend to have larger and longer tail burn profiles. These are still fast-paced projects, but they span multiple quarters. The other sectors like defense and security, PA, and the public sectors, those might have a four, five, six-year type of burn profiles. Bob?
Bob Pragada: Yeah. No. You hit it, Venk. I'd say in addition to what Venk said, we have a pretty good balance of new wins across multiple end markets. I know from a burn profile, Sangita, to answer your specific question, the life sciences and advanced manufacturing tend to have a faster burn, and we're seeing improvement in that business as well. In fact, for our upcoming Q4, we've guided for that business to grow pretty strongly. We are seeing that momentum continue into fiscal year 2026 as well. It's a pretty broad-based mix across the various end markets. With water and critical infrastructure being slightly slower burn but giving us a lot of visibility beyond fiscal 2026.
One more thing to add on the data center point, we have more than 150 engagements today on data centers, and that pipeline is growing nicely for us.
Sangita Jain: Great. Really appreciate it. Thank you.
Krista: Your next question comes from the line of Andy Wittmann with Baird. Please go ahead.
Andy Wittmann: Great. Good morning, and thanks for taking my questions. I wanted to ask Bob about the puts and takes associated with the one big beautiful bill here. Obviously, there's a lot of new policy that we've got some certainty on from the federal government. Certainly, we'll talk about the increase of the Department of Defense. But there's also some secondary impacts to state and local governments, whereby you're seeing cuts to Medicaid and maybe some education programs in there.
So since you didn't comment in the script on how this could affect the business, I thought I'd give you a platform right here to talk about the puts and takes and if you're seeing anything back in terms of commentary from your customers.
Bob Pragada: Yeah. Let me talk first, Andy, about the puts. You said it's putting some more stability in the state and local governments specifically around transportation and probably a little bit more of a backstop around water. But the two biggest puts are around DOD and DOD infrastructure. The second I'd say is around the FAA. That actually presents a nice opportunity.
Andy Wittmann: Got it. Then maybe for my follow-up, Venk, this one's for you. Just thought maybe given that you've progressed with the separation and some changes that go along with that for the organization, just wanna give you the opportunity to update us on where you are seeing the onetime costs associated with the split.
Venk Nathamuni: Yeah, Andy. Thanks for that question. With the separation mostly behind us, we are seeing a significant reduction in our onetime restructuring costs. We've guided to, I think, 75 to $95 million. We're well on track with that. In fiscal '26, we expect this restructuring to come down even more dramatically. We will provide you more detailed guidance in our next quarter earnings call as we talk about fiscal 2026 in totality.
Andy Wittmann: Thank you.
Krista: Your next question comes from the line of Andy Kaplowitz with Citigroup. Please go ahead.
Andy Kaplowitz: Hey, good morning everyone.
Bob Pragada: Morning, Andy.
Venk Nathamuni: Bob and Venk, like, I think you said that you expect FY '26 growth to be ahead of FY '25 growth. I think it's a pretty big statement as we sit here in August. So maybe just confidence around that.
Bob Pragada: Sure. Maybe I'll start off, Andy. From an end market perspective, Andy, I'd point to three main areas. One is life sciences. The second is around data centers. These are smaller type bookings, but they go fast. And as I mentioned on the question game showed us, our scope is growing on those opportunities. And then the third is water.
Venk Nathamuni: No. I think you covered it, Bob. Life sciences, we see good momentum. Water, as Bob mentioned, for the last three or four quarters, we've talked about really multifaceted wins across various aspects of the water cycle.
Andy Kaplowitz: Very helpful. And then, Robert Bank, you mentioned improvement in critical infrastructure in Europe and cities in places in the Middle East. Maybe you can talk about what you're seeing there, whether it's Continental Europe or The UK and The Middle East and how you think about those areas going into '26?
Bob Pragada: Sure. In Europe, we're seeing a bit of a rebound. We kind of telegraphed this happening. The rebounding has been strong. In The Middle East, cities and places have been experiencing strong double-digit growth, and we're hopefully gonna have some announcements here in the next few weeks.
Andy Kaplowitz: Helpful, guys.
Krista: Your next question comes from the line of Sabahat Khan with RBC Capital Markets. Please go ahead.
Sabahat Khan: Great. Thanks, and good morning. I just want to get a bit more perspective on some of the evolution we've seen over the recent quarters.
Bob Pragada: Yes, Saba, I would characterize my answer as balanced. I think that if you look at our portfolio, the delays in IIJ spending have not significantly impacted us.
Sabahat Khan: Great. And then maybe if we could dig a little bit into the PA consulting side. You know, the top line is trending well. I think the operating profit, at least on a run rate basis, is trending quite a bit above where the last three years have been.
Venk Nathamuni: Yep. So on PA, yes, the top line has inflected to a robust number this quarter and visibility for that to continue. Really driven by stability in the UK government.
Sabahat Khan: Great. Thanks very much.
Krista: Your next question comes from the line of Michael Dudas with Vertical Research Partners. Please go ahead.
Michael Dudas: Good morning, gentlemen.
Bob Pragada: Good morning, Mike.
Michael Dudas: On your focus as you talked about in February on the total life cycle on projects and opportunities, could you touch on where you think you're making the most substantial impact?
Bob Pragada: The short answer, Mike, would be that life cycle focus, especially getting involved early on with PA in the business advisory and capital planning component with our customers, is in real time and it's working.
Venk Nathamuni: Yeah. Mike, thanks for the question. You know, good improvement in margins. We've guided to an on-track 13.9% EBITDA margin for the full year.
Michael Dudas: I appreciate it. Then, maybe for Venk, two thoughts. One as you look at the margins into backlog and your margin performance, how would you break down from cost efficiency, how that looked this quarter?
Venk Nathamuni: Yeah, Mike, thanks for the question. You know, it's slightly pointed out good improvement in margins. And as we guided to for the full year, on-track delivery of a 13.9% EBITDA margin represents a 110 basis point year-on-year increase. Substantial progress in gross margins made some good progress on global delivery and mix; we're still in the early stages of releasing substantial improvements in gross margins.
Michael Dudas: Thanks, Venk. Thanks, Bob.
Krista: Your next question comes from the line of Chad Dillard with AB Bernstein. Please go ahead.
Fareco: Hi. Good morning. This is Fareco filling in for Chad. Thanks for taking my question. So have you seen any change in customer activity in the design business as it relates to the change in bonus depreciation?
Venk Nathamuni: Yeah. I'll take that. So in terms of bonus depreciation, obviously, that's one of the benefits of the OBBA deal. We'll see some tangible improvement in that in fiscal '26.
Fareco: Okay. Thank you.
Krista: Your next question comes from the line of Judah Aronovitz with UBS. Please go ahead.
Judah Aronovitz: Hi. Good morning. Thank you. Just to follow up on PA consulting. The revenue growth was impressive in the quarter. Does the backlog support continued double-digit growth?
Bob Pragada: I'll break those down into three: the top line margin and utilization. On the top line, I'd say we continue to guide to that high single digits. As for margins, we have an opportunity for increased margin. That's gonna take some time.
Judah Aronovitz: Okay. That's helpful. And then just on the NX growth guidance, did you maybe take it down slightly?
Venk Nathamuni: Yeah. I'll take that. For full-year guidance of five and a half percent, we feel pretty good about where we stand right now.
Krista: Your next question comes from the line of Kevin Wilson with Truist Securities. Please go ahead.
Kevin Wilson: Hey, good morning. Calling on behalf of Jamie Cook. Could you speak to the trends for environmental specifically?
Bob Pragada: Yeah, Kevin. As far as projections we made on both water and environmental, we're standing behind them.
Kevin Wilson: Got it. Thanks. And then for my follow-up, any update on the investment in PA Consulting?
Bob Pragada: The dialogue with our partners at PA continues to go well. We're being thoughtful about how we value moving forward. There's been a lot of positive learnings and successes over the last four years.
Krista: This concludes today's conference call. Thank you for your participation and have a great day.