Hello and welcome to the Udemy Fourth Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator instructions] After today's presentation, there will be an opportunity to ask questions. [Operator instructions]. I would now like to hand the call to Dennis Walsh, Vice President, Investor Relations. Please go ahead.

Thank you, MJ. Joining me today are Udemy's Chief Executive Officer, Greg Brown, and Chief Financial Officer, Sarah Blanchard. During this conference call, we will make forward-looking statements within the meaning of federal securities laws. These statements involve assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated. For a complete discussion of risks associated with these forward-looking statements, we encourage you to refer to our most recent Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. Our forward-looking statements are based upon information currently available to us. We caution you to not place undue reliance on forward-looking statements, and we do not undertake and expressly disclaim any duty or obligation to update or alter our forward-looking statements except as required by applicable law. In addition, during this call, certain financial performance measures may be discussed that differ from comparable measures contained in our financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles referred to by the Securities and Exchange Commission as non-GAAP financial measures. We believe that these non-GAAP financial measures support management and investors in evaluating our performance and comparing period-to-period results of operation in a more meaningful and consistent manner, as discussed in greater detail in the supplemental schedules to our earnings release. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release. These reconciliations, together with additional supplemental information, are available on the investor relations section of our website. A replay of today's call will also be posted on the website. With that, I will now turn the call over to Greg.

Thank you, Dennis, and good afternoon to everyone on the call. I will start today with comments on our results, highlight some achievements from 2023, and then provide an update on our strategic priorities for 2024. Udemy closed out 2023 with strong results that exceeded expectations for both revenue and adjusted EBITDA margin. Despite the challenging macroeconomic environment, Udemy increased full-year revenue by 16% year-over-year. Within that, our leading growth engine, Udemy Business, delivered impressive 34% year-over-year revenue growth as companies around the world are prioritizing investment in the upscaling and reskilling of their talent. From a profitability perspective, we delivered our first full year of positive adjusted EBITDA, well ahead of plan. As a company, we made meaningful progress in 2023. I stepped into the CEO role last February, and we further bolstered our leadership team with new chief marketing, people, and product officers, who all bring deep experience within their respective functions to Udemy. On our Q4 call last year, we laid out our strategic priorities for investors and other stakeholders. I'm proud to say that we delivered on each of those priorities, which included, first, establish Udemy as the platform of choice for professional learners and increasing skills development through new learning modalities. Last year, we significantly grew our learner base, adding 10 million new learners to our platform and more than 1,800 net new Udemy Business customers. We leveraged generative AI technology to create more personalized learning experiences, including capabilities that enable microlearning. We empowered our instructor partners with tools that help create high-quality, on-demand, and immersive content faster and more efficiently. Further, we shared our generative AI product roadmap that will transform how professionals develop skills, organizations recruit and manage talent and instructors create content. Second, introduce validation of skills acquisition through badging and professional…

Thank you, Greg. I'll start with comments on the key financial highlights and then provide our outlook for Q1 and full year 2024. You can find the complete set of financial tables in our news release, which is available on our investor relations website. We outperformed our full year 2023 guidance for both revenue and adjusted EBITDA margin. Revenue of $729 million increased 16% year-over-year, including the negative impact from foreign exchange, or FX, of three percentage points, while we delivered our first full year of positive adjusted EBITDA ahead of plan. We could not be more proud of our team for their hard work over the past year to deliver these results in a challenging environment. I will focus the rest of my comments on the fourth quarter results. For the fourth consecutive quarter, our results exceeded guidance on both the top and bottom line. Revenue increased 15% year-over-year to $190 million, or nearly $3 million above the high end of our guidance range. The year-over-year growth included a negative impact from FX of one percentage point. The contribution from regions outside of North America was 60% of total revenue, an increase from 59% in Q4 of the prior year. Similar to previous quarters, our enterprise business continues to deliver best-in-class software company performance. Udemy business revenue increased 27% year-over-year to $115 million. Included in that growth was a two percentage point headwind from changes in FX rates. We ended the year with annual recurring revenue, or ARR, of $466 million, up 25% from a year ago. From a macro perspective, the current environment remains volatile, and sales cycles remain elongated, contributing to slower-than-expected conversions across most regions. While we are generally pleased with Q4 ARR, we did have softer-than-expected performance in Vietnam and South Korea, where we have…

[Operator instructions] Today's first question comes from Stephen Sheldon with William Blair. Please go ahead.

First, here, just on the revenue guidance, it'd be great to get some color on the growth assumptions you've made between consumer and Udemy business and then just generally, I guess the high level, how you factored in broader macro trends in your guidance. Seems like you maybe have taken a conservative approach there, but are you kind of assuming that the budgetary pressure from organizations continues throughout the year on the business side? Just approximate detail there.

Yes, thanks for the question, Stephen. So first, we're very pleased with the quarter, delivering UB revenue up 27% year-over-year, and million-dollar-plus customers up 80% and our full-year EBITDA profitable ahead of schedule. But our guidance really took into consideration a few things. One is, there is still this macroeconomic volatility, and we expect that to continue for some period of time and as we spoke about, we did see some execution issues in the second half of Q4 and specifically, that was with some of our reseller partners in Korea and Vietnam and we saw extended software performance in EMEA. On the consumer side of things, the focus for us has been marketplace vibrancy and we are seeing an increase in customer acquisition cost, while at the same time, our ASPs are up, but putting those two things together, along with the pullback that we've had over the last two years in performance marketing spend, our focus really is on continuing to see 5,000 courses a month being published, and that constant stream of high-quality, fresh, broad content. We are not going to be reinvesting behind consumer until we're porting some of the UB capabilities for our learners over to our consumer side of things. What we're looking at for the year is, we are in the process of taking some actions to address the performance and execution issues we saw in the back half of Q4 and so we've set prudent expectations for the first half, because those initiatives will take some time to take hold, but we do expect ARR growth, while it will be down a bit in the first half, to then accelerate in the back half.

Got it. And is there any way to, for Korea and Vietnam, I guess, is there any way to frame roughly how big those countries are in terms of the contribution to ARR?

Hi, Stephen. Good question. So I won't get into the specific numbers or economics around it, but we did get surprised and material enough for us to call it out to you and the actions we're taking is we're putting GMs in the process of, we've already got one of these hired in both countries, in Korea and Vietnam, to bolster leadership, as well as ensuring that, from an enablement perspective, we're taking all the knowledge and best practice we've learned on a global basis, and then specifically in Japan, where we've seen continued growth and acceleration, and porting that over to Korea and Vietnam and that leadership is going to help with that. So those are the actions we've taken and Sarah also mentioned, it wasn't just exclusive to Vietnam and Korea. We did see execution issues in other segments and we're taking similar action in those areas. So the net of it is we're confident that we know what we need to do to address the execution issues. The plans are in flight and as Sarah mentioned, we are confident that we will see acceleration and ARR growth in the back half of the year.

Got it. That's helpful. Just maybe then switching to the margin guidance, you're not assuming much expansion relative to where you ended up in 2023, even with the upward trend in gross margins and you talked about that as being the right expectation last quarter. So not a big surprise. But it'd be great to get some detail. It seems like you're maybe ramping the strategic investments. Just some more detail on specifically kind of where you're making some of those investments.

Yes, that's a great question. As you said, we have shared that this year is going to be an investment year for us. So while we expect about 300 basis points of expansion from a gross margin perspective, from both the instructor revenue share changes and from the continued mix shift to UB, we are reinvesting the majority of that back in the business such that this year we expect about 150 basis points to 200 basis points on the bottom line. Those investments are in three areas, mainly. The first is brand. Udemy historically has not invested in brand, and now is the time. The second is in product investment, specifically some AI-enabled capabilities that are going to be complete game changers for the value that we can deliver to our customers and I'll let Greg share a little bit more on that. But the last thing is in specific areas where we did see great performance in certain segments, we will be continuing to expand the go-to-market teams there.

I'll just add, Stephen, that we could not be more excited about the investments we're making and the impact these investments will have in terms of the intelligent skills platform. We just talked about it a little bit, but this is going to be a game changer for us, and most importantly for our customers, as we begin delivering skills mapping, which is going to save L&D teams hundreds of hours, and the learning assistant, which is going to deliver a personalized learning experience that is transformative, and something that we have not been able to accomplish without the addition of generative AI into our toolkit and then automated Q&A for instructors. Today, many of our instructors spend hours answering Q&A. This is going to enable us to answer those questions in seconds, and then instructors validate the answer, and then off it goes. So this is just the beginning. And one of the things we're probably most excited about now that we have the ability to leverage is the data that we get from 69 million learners on the platform, over across 220,000 courses, that gives us the ability to feed that data into our LLM, and then be able to produce insights back to our customers about the most valuable resource, which is their people, that is going to enable them to transform how they run their businesses and leverage those valuable resources. So we're at the front end of this. We're making some big investments right now. We're already starting to see these investments start to have an impact, and we'll be talking more about this as the year progresses.

The next question is from Curtis Nagle with Bank of America. Please go ahead.

Thanks very much for taking the question. One, maybe just more of a clarification in terms of, I guess, the pullback or decision not to invest more in marketing to stabilize the consumer revenues. It sounds like the return hurdles aren't quite, I guess, they're too high to justify the investment. Is that the case? Or anything else you'd, I guess, elaborate on?

Yes. Really what we're looking for before we start to invest more than we are currently from a marketing perspective behind consumer is getting some of the functionality that we're launching on UB first on the consumer platform such that the LTVs of those learners make sense. And so for us, it's all about balancing where you're investing, balancing growth and profitability. UB Business is the growth engine of our business. And so we're focused our investments there first. But we will be putting some of those capabilities like badging and certifications onto the consumer platform and then making some decisions about how we invest behind that.

Okay. And then just one on UB in terms of the accelerating revenue for AR. It sounds like that's a 2H event. I guess aside from maybe a clear emaco and maybe more importantly, new product rollout, what are the catalysts and what really gives you the confidence to say that you think that's going to happen from this point right now?

Yes, it's a good question. Thanks. It's in terms of the forward look or the look forward as far as UB and our confidence with respect to the AR growth and expansion in the back half of the year really comes down to three primary areas. The international expansion that we're leaning into and investing in is a massive opportunity for us based on the brand awareness we have in countries like India and Brazil and the lead bowling pins that we've already knocked down in these markets to give us a lot of confidence that we can run the table with the right investments and the right programmatic approach. Second is the leverage that we believe we will get through the investments we're making in strategic partnerships with the likes of AWS, ServiceNow, Docker, and many others that we're engaged with. There'll be more to come as we start to progress throughout the year, but we absolutely believe that we're going to see material leverage from these partnerships. Then finally, it's brand and product investments. We've talked quite a bit about the product investments already. We're making equally important investments in brand. Those AI-related product investments, of which I just highlighted, really are going to transform learning in organizations. Again, we're at the front end of this, and so we're making some big bets. Those bets are well-placed, and we expect those bets to start to materialize in the back half of the year, which gives us a lot of confidence that AR growth will happen.

Next question is from Ryan MacDonald with Needham & Company. Please go ahead.

All right. Thanks for taking my questions. Maybe first, starting on the investments, Greg, can you help me understand the investment in brand? Obviously, Udemy, a very large marketplace, millions of learners coming per month to the platform. You've had a pretty good B2B business in terms of gaining share. Help me understand where you feel like you need to invest incrementally to build out the brand. Are there opportunities or bets that you think you're not getting still? Maybe just help provide some more context around that. Thanks.

Happy to, Ryan. Like most organizations, we do brand surveys on a fairly frequent basis. Our unaided and aided brand awareness in a number of our key markets is much lower than we would have thought and much lower than you would expect. Yes, we believe that there'll be a halo effect and we will get significant lift by investing in, developing Udemy into a household name synonymous with skills and skills development within organizations large and small. We're underway. The investment we're making in McLaren and the partnership there, multi-year investment, is just one of many investments we're making to start to elevate the brand and give us an opportunity to make it much easier for our sales organization to have that first conversation in terms of just the awareness of the value and impact a relationship with Udemy can bring. Top funnel, without question, is to quantify and impact, Ryan, is a goal and focus. We are quantitatively measuring the investment in brand in a variety of different ways. We're excited about the early impact we're starting to see and the programs are just kicking off. There's a big opportunity for us. There really is.

Appreciate the call there. Maybe for a follow-up, on the product side, obviously great to see the investments on AI, generative AI, and then obviously skills mapping. From the checks that we've had out in the marketplace, it seems like that with AI, a lot of interesting functionality out there early days, but there's still a hesitancy, with heads of L&D, CHROs, to invest in this area or maybe just not sure where to start. And on skills mapping, it's something that seems like most organizations we speak to wants to move towards, but it's not an easy fix. So, as you think about some of these product investments and then commercializing those, how do you start to get customers over the hump this year as you, more broadly go to market with that functionality? Thanks.

That's a really good one, Ryan. So, first I'll say that the example we gave, the Genpact example, Genpact creating their own AI academy, we're seeing that type of scenario play out in a number of our engagements. Another one is, just to give you a little bit more color and bring this to life, Emirates Integrated Telecom, Middle East, I think this is one of the first large organizations in the Middle East has developed their own version of an academy. They call it TechUp. And they partnered with us specifically to up-level the AI literacy in the organization with respect to chat GPT. And a key component of that was being able to validate that there are employees that acquired those skills through our validation capability. Now, they started with tech skills first and they're in the process of putting the plan in place to expand to management, leadership, coaching, and then the sales organization. So, although it may feel like, and you're doing some market tests and touch points, that a lot of organizations, and they are, are in the exploratory stage, there's also the progressive organizations that are much beyond that. They're moving. And we believe that those are the organizations that are truly going to get a leg up and have the ability to distance themselves in their category. And so, again, we're enabling that and, our content and the focus we're putting on enabling our customer success organization to help these companies develop the right strategy in addition to the platform that we provide. It really is one of the key components because, Ryan, the platform without the strategy, most organizations don't know how to do this, right? They're looking for, from us, they're looking for as much of the strategic value and insight in terms of how to think about developing, a capability around AI in their company as much as they are the platform to do it. And we've invested heavily to enable our customer success organization to provide that strategic level of service and support up front to enable the organization to get comfortable with making that investment, starting that transition. So there's a lot that goes into it. You're absolutely right. And we've made some big investments and we'll continue to make those big investments to help organizations take that step. And the ones that have, are already starting to reap rewards as a result. And we're doing that ourselves, by the way, right? We put everybody in our organization through a boot camp. And, a lot of the progressive companies are doing just that.

Thank you. The next question is from Josh Baer with Morgan Stanley. Please go ahead.

Great. Thanks for the question. I want to stick with growth and margins. And thinking about it from a rule of 40 basis, I think in 23 it was close to 17%. And then in guidance implied, it's closer to 12%. And so with that in mind, two areas of questions. First, what is your growth and margin framework? And how should investors, what should we think, what should we expect from a rule of 40 like metric from a philosophy standpoint? And then second, if you could talk through any areas of conservatism that are embedded in this initial guidance.

Yes, Josh, thanks for the question. our philosophy around rule of 40 is we are, working toward achieving that. For this year, what we see is, at the midpoint, it's about 10% revenue growth, and that includes about three percentage point headwind from FX. What you have to remember is we are sitting in front of a massive opportunity. And organizations have to transform how they upscale and rescale their employees to stay up with the pace of change and to embrace AI technology and other things that can actually really help their businesses. And so, as you're thinking about the long term opportunity, this is an investment year because of our position, because of the opportunity in front of us, we're always thinking about balancing that growth, balancing profitability. But the long term, our long term expectations around EBITDA margins have not changed. We are still committed to achieving EBITDA margin of 15% to 20% by 2027. And so while we work through some of these short term execution issues that are impacting the top line in the first half, we continue to invest in the things that are going to drive that long term growth, continue to deliver UB growth at scale above 20%. And at the same time, we are committed to continue to pursue areas of operational efficiency, which you saw us deliver against very meaningfully in 2023.

The next question comes from Terry Tillman with Truist. Please go ahead.

Great. I see. And this is Conor Pesarella on for Terry. Appreciate you taking the question. I just want to ask one as it relates to UB, curious on the uptake of badging and certification and how the adoption curve has trended there. Has it been coming mostly from the advanced L&D organization so far or has it actually been more mainstream with adoption coming from, I guess, a variety of organizations? Thank you.

Yes, Connor, good question. Yes, we continue to remain very bullish and excited about the adoption of badging and certification as well as the probably most importantly the value and impact that it's starting to have. I'll give you an example. We've got a large, large multinational tech company that decided to run a side-by-side A-B test with 200 consultants and the A-B test was around AWS certifications. The first 100 ran through the process of educating themselves and then taking the certification the way they always had. And the second group leveraged our content and Udemy Pro, our immersive learning capability, to prepare them for that test. The group that used our technology, our platform, and our approach earned that certification in half the time and that half the time equated to saving 15 hours per person for the prep along the path of acquiring that certification. So we're starting to see meaningful impact of the combination of Udemy Pro and our validation capability around badging and certification. That's just one example of many that are like that. And we are starting to see even more velocity and impact around us winning new business as a result of having the full complement on our platform of tech content, soft skills, power skills content, management leadership development content, all with the ability to validate and form a badging and certification that skills have been acquired. Again, coming back to our approach around skills development and developing that intelligent skills platform. So all to say, really excited about what we're seeing and we expect it to continue.

[Operator instructions] The next question comes from Brent Hill with Jeffries. Please go ahead.

Thanks. David Lusk for Brent. Thanks for taking the question. I wanted to ask you an automated Q&A and a little bit more about the strategy, about how you guys are building that and going about it. I guess, for one, are you building your own LLM? Or are you partnering? And I know you talked about it being used for answering instructor questions quicker for instructors to then look at and validate. But is there an opportunity to roll this out more broadly to the consumer in a way where it's not necessarily course related but can help someone who's just trying to understand any question? Thanks.

Yes, good question. So effectively how it works, and I'll keep this very brief, is we have trans. We automated. We develope We've automated the ability to develop transcripts associated with all 220,000 courses that are on our platform. We feed those into the LLM and that gives us the ability, obviously AI enabled, to light up the ability to answer questions as they come through instantaneously because we've got all the insight and information, the transcripts from all of the courses that our learners would take. And so really what that does, and we've got many instructors that spend upwards of 50% of their time a day, four hours a day, either themselves or their TAs, teaching assistants, answering questions. So it removes all of that time and energy that goes into answering those questions. Now all they have to do is validate that the answers are accurate, make any adjustments, hit send, and off it goes. And we're really excited about the level of accuracy we're seeing in the early days. We know as we continue to educate the LLM, and that happens automatically, that the accuracy is going to improve over time. And do we have the ability to port this type of capability to the consumer experience? The answer is yes, and in a variety of ways. And we're really excited about that. I mean, I'll tell you one of the things we're most excited about in the short to midterm is porting the badging and certification capability to the consumer experience so that all of that validation opportunity is now made available in that environment. In addition to all the capabilities we're talking about now that we're initially launching into the enterprise segment, everything that's applicable, we're going to port down to the consumer experience. So you can surely expect the enhancements to flow down, and that process will not be elongated. We expect that to be a fairly quick process.

Thank you. The next question comes from Noah Herman with JP Morgan. Please go ahead.

Hey guys, thanks for taking the question. With respect to linearity in the quarter, can you provide just some color on the top of funnel demand and conversions throughout the quarter? Thanks.

Yes, I'll take that. Thanks for the question, Noah. So very typical with a fourth quarter, and any quarter, but you see this more so in the fourth quarter, the bookings come in the last month. And so from a linearity perspective, you book a small portion in month one, a small portion in month two, and then the most significant portion in the last month, and that's exacerbated in Q4 as companies are figuring out their budgets for the next year. And so that's what we saw and expected again in this quarter. And when we got down to that last month, that's where we identified some execution issues where the bookings didn't come in as expected. And in some respect, it was masked a little bit by the macro, but we are taking actions against that. And we expect to see that those initiatives take hold in the back half as we continue to invest in all the areas that are going to drive our long-term growth.

Thank you. The next question comes from Brett Knoblauch with Cantor Fitzgerald. Please go ahead.

Hi guys, thanks for taking my question. I'm maybe just on the broader budgetary commentary. I think Gen-AI has been making waves for over a year now, and I think this is supposed to lead to increased rescaling and up-scaling by organizations. So I guess what's the holdup or hesitancy on the organization's part, and what do you think is going to be the cause for an inflection in what they're willing to spend money on from a rescaling perspective? Thank you.

Yes, good question. I'll take that. So amidst the guidance that we provided, I think it's important to call out that we are seeing strength in our enterprise segment, North America and around the world. And we're seeing accelerated expansion opportunities start to come to life and get executed. And the pace of those is starting to increase. I'll give you an example. Mercado Libre, the largest econ fintech company in Latin America, just significantly expanded the relationship with us this last quarter from initially Argentina and Brazil to all of Latin America based on our ability to help them execute their strategy with respect to upscaling and rescaling, their tech teams and beyond, including AI, which was a key component of that on an ongoing basis. And that's as a result of the success we had in the initial two countries. And you look at a government entity, like the County of Los Angeles, 100,000 employees, been a customer since 2021. Based on the success that they saw and over 90% of their supervisors seeing an increase in productivity and employee engagement, this is quantifiable impact, they made a decision to deploy to all 100,000. Prior to that, it was a subset. So we are seeing acceleration. We are seeing organizations spend money. We are seeing organizations leaning into the notion of we have to develop the skills necessary for us to be competitive and win in this environment where the pace of change is increasing every day. So as much as I know right now, based on the guide, it may appear that, and we are taking a conservative approach to the year, there's no doubt about it, but it may appear that the velocity of the business is not necessarily where we would like it to be.…

Thank you. The next question is from Jeff Meuler with Baird. Please go ahead.

Yes, thank you. Stephen Pollack on for Jeff. You mentioned that sales cycles remain elongated. Maybe just put that into context. Are you seeing incremental elongation? Is it sort of stable at higher levels? And how much longer are they than you would expect for a normal sales cycle? And then Sarah, I think you had mentioned something about higher quality leads in the pipeline. Is there any color there around what makes it characterize them that way?

Yes, thanks for the question. so sales cycles did not elongate further in Q4. We did see some pockets in Q3 where the sales cycle pulled in a little bit, but we are nowhere near historic levels still. Those sales cycles are pretty stable. That elongation continues but did not get worse. From a quality of leads in the pipeline, there has been a lot of work done on our funnel and ensuring that we are capturing the leads and then spending our resources on following up on the leads that are more likely to convert. So we have seen our win rates go up and that is a function of the quality of the leads that then get converted into opportunities for us are those parties that are more interested, that know more and understand more about our business because of the upfront work that we have done on the marketing and the outbound side.

Thank you. The next question comes from Jason Salina with KeyBank Capital Markets. Please go ahead.

Hi, Greg. Hi, Sarah. This is actually Devin on for Jason today. Thanks for taking our question. I just want to also follow up on kind of your expectation of ARL growth to pick up in the second half. Are you also assuming net retention to improve and also new customer growth to kind of accelerate in the second half? Any additional color you can provide on your confidence there? Thanks.

Yes, great question. from a net dollar retention, we don't give out guidance on that. But what we expect is once that net new ARR starts to pick up in the back half, that will over time translate into an improvement in net dollar retention, which again, is still strong in this macro, 113% for our large customers and stable at 106% overall. From a logo perspective, because I heard you talking a little bit about customer count there, we did in Q4 see some of the smaller side of our SMB business not renew at year end. But that is something typical that we also saw last year where we add more logos in the third quarter than we do in the fourth quarter where that enterprise business continues to chug along and drive that growth. But you see some attrition on the low side.

Thank you. The next question is from Arvind Ramnani with Piper Sandler. Please go ahead.

Hi, thanks for taking my question. I wanted to ask about, kind of staying disciplined on the kind of operational efficiencies and kind of being prudent on where you'll spend money, but also at the same time making investments. I heard both of that through the call. So I just want to kind of reconcile those two dynamics on the expense side?

Yes, I'll take that question. Thanks, Arvind. So if you just look across, '22 and '23, from a percentage of revenue, what we are spending on the different functions in the organizations that has come down dramatically. And that is because of the operational efficiencies, the systems that we're investing in, the processes that we're investing in to drive that operational efficiency. And we're going to continue doing that. You heard Greg say that we have, done an AI boot camp across the organization. There are AI investments that we can make for our operations, not just our platform, but for operations that will continue to drive operating efficiency. At the same time, we are going to be investing in the R&D capabilities that we spoke about and our brand spend that is new. And so those two things are balanced out. And that's why you're seeing we had a significant margin expansion on the bottom line in 2023. But it's only going to be modest in 2024 as we make those investments and continue to focus on capturing the long-term growth.

Thank you. This concludes our question and answer session. I would now like to turn the call back to Greg Brown for closing remarks.

Thank you. I'd just like to thank you all for joining the call today. And we look forward to connecting again in May for the Q1 update. So thank you again. Have a great afternoon.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.