Earnings Call Transcript - BGSI 2026-11-11

Operator

Good morning, everyone. Welcome to the Boyd Group Services Incorporated 2026 Third Quarter Results Conference Call. Listeners are reminded that certain matters discussed in today's conference call or answers that may be given to questions asked could constitute forward-looking statements that are subject to risks and uncertainties relating to Boyd's future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in Boyd's Annual Information Form and other periodic filings and registration statements, and you can access these documents at CDER's database, found at cedarplus.ca and edgar at www.sec.gov. Boyd released its 2026 third quarter results before markets opened today. You can access the news release, as well as the complete financial statements and management discussion and analysis on the company's website at boydgroup.com. The news release, financial statements, and MD&A have also been filed on Cedar Plus and Edgar this morning. On today's call, Boyd will discuss the financial results for the quarter ended September 30th, 2026, and provide a general business update. We will then open the call for questions. I'd like to remind everyone that this conference call is being recorded today, Wednesday, November 11th, 2026. I would now like to introduce Mr. Brian Koehner, President and Chief Executive Officer of Boyd Group Services, Incorporated. Please go ahead, Mr. Kaner.

Brian Kaner, CEO

Thank you, Operator. Good morning, everyone, and thank you for joining us for today's call. On the call with me today is Jeff Murray, our Executive Vice President and Chief Financial Officer, and Stephen Savard, Vice President, Investor Relations and Capital Markets. During the third quarter, we continue to make solid progress across our business. We expanded margins through the disciplined execution of Project 360 and the realization of acquisition synergies, while continuing to outperform industry volumes and generate positive same-store sales growth, supported by a sequential improvement in total cost of repair. We also launched a normal course issuer bid, reinforcing our commitment to a disciplined and balanced approach to capital allocation, with a focus on supporting our Thank you. Strengthening our market position, and creating long-term shareholder value. Revenue increased 28% compared to the third quarter of 2025, while adjusted EBITDA grew 34%, with adjusted EBITDA margins expanding to 13% from 12.4% last year. While I'm pleased with the margin improvement we've achieved this quarter, it's important to take a step back and look at the progress we've made since launching Project 360 in the fourth quarter of 2024. Since that time, we've improved adjusted EBITDA margins by 230 basis points, reaching 13% this quarter compared to 10.7% in the third quarter of 2024. This progress reflects the benefits of several initiatives we implemented over the past two years. In 2025, we introduced our indirect staffing model and made significant progress in bringing scanning and calibration services in-house. We continued building on that foundation in 2026, generating additional savings through indirect procurement and realized synergies from the Joe Hudson's acquisition ahead of schedule. When we launched Project 360, we set a goal of delivering $100 million in cost savings between 2025 and With the addition of approximately $40 million in expected synergies from the Joe Hudson's acquisition, which closed in January, that target increased to $140 million. Through the end of the third quarter, we've realized $90 million in savings, with another $15 million expected in the fourth quarter, bringing the total to an expected $105 million by year end. Looking ahead, we expect to capture the remaining $35 million between 2027 and 2029, with a growing emphasis on using technology and AI to improve shop productivity, streamline operations, and drive further efficiencies across the business. Turning to Joe Hudson's, as I discussed last quarter, we completed the conversion of its locations onto Boyd's system in an accelerated manner. We now have greater visibility into the business's operational performance. Our focus has now shifted to embedding Void's customer-centric operating model, including our successful while operating way, and our regional management incentive structure. The sequential revenue trend versus the prior year improved during the third quarter, with positive momentum continuing. Progressed under Boyd's operating model. These results support our confidence in their continued improvement and contribution to Turning to industry can do We continue to outperform the broader market in the third quarter, generating 2.2% same story. Continued market share of gains.

Jeff Murray, CFO

Thanks, Brian. By 206 million of incremental sales. Not in operation for the full prior year period. As we continue to successfully outperform industry volumes during the third quarter. During the quarter, Joe Hudson's locations contributed $170 million in total sales. Profit increased to $473 million in the third quarter, up 29% year-over-year, and gross margin increased 40%. Mention in margins was driven by higher paint margins from acquisition synergies and project This was partially offset by slightly lower Turning to operating expenses, in the third quarter, operating expenses of the percentage of sales improved to 33.7% compared to 33.9% in the prior year. This improvement reflects acquisition synergies, cost savings from Project 360, and increased operating leverage from same-store sales growth. If we look back to the third quarter of 2024, just before we launched Project 360, operating expenses were 35% of sales. Fast forward two years and we've improved this ratio by 130 basis points, reflecting the success of Project 360 and, more recently, the additional benefits from acquisition synergies. Adjusted EBITDA increased 34% to $132 million over the third quarter of 2025, while adjusted EBITDA margins expanded to 13% from 12.5%. During the third quarter, we realized approximately $15 million in combined synergies from Joe Hudson's and cost savings from Project 360, bringing the year-to-date total to $50 million. Adjusted net earnings in the third quarter was $19 million, up from $17.8 million in the third quarter of 2025, as higher adjusted EBITDA was partially offset by higher depreciation expenses. Invested earnings per share was $0.68 in the quarter compared to $0.83 in the quarter. For the nine-month period ended September 30, 2026, adjusted earnings per share was $2.06. The company continues to expect maintenance capital expenditures to range between 1.6% and 1.8% of sales for the full Joe Hudson's acquisition remain on track at an estimated 30 million dollars. As Brian mentioned, we launched a normal course issuer bid in September, providing us with additional flexibility in our capital allocation strategy. During the quarter, we repurchased approximately 14 million dollars of our shares, and we also declared our third quarter dividend. As of September 30th, 2026, our pro forma net leverage ratio was 2.9 times compared to 3.1 times at the end of 2025. I will now pass it back to Brian for closing comments.

Brian Kaner, CEO

Thanks, John. As we approach the end of 2026 and I reflect on the year, I'm proud of what our team has accomplished. It has been a busy and productive year for Boyd as we successfully integrated Joe Hudson's, Realize meaningful synergies, and continue to make progress on progress. Importantly, throughout the year we've maintained our focus on what has been core to Boyd's success for many years, delivering a strong customer experience, improving carrier performance, and building lasting relationships with our insurance partners.

Operator

This focus has been We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Sabahat Khan with RBC Capital Markets. Your line is now open. Please go ahead.

Sabahat Khan, Analyst — RBC Capital Markets

Thank you, and good morning. Maybe just for the first question, I wanted to get a bit more color, Brian, on the commentary you made about T-Core. It sounds like over the last few quarters, the claims volumes are in a reasonable place. There's likely some market share capture, and maybe T-Core and pricing might be the delta versus going higher on the same store sales side. Can you just maybe give us an update on where T-Core is, pricing discussions with your insurance partners, how those are looking? Thank you.

Brian Kaner, CEO

Yeah, yeah, and good morning, please. Yeah, so on T-Corps, look, we have seen now, even leading into October, as we said in the prepared remarks, that, you know, T-Corps continues to improve. We've said for quite some time that the underlying metrics beyond T-Corps, behind T-Corps, were still moving as they normally move. We still saw normal pricing increases on the labor side. We still saw normal price movement on parts through the inflationary environment that we're in. And what had been muting that was just the year-over-year impact of more total losses, so bigger tickets coming out of the repair set, driving down or mixing down the overall T-Corp. We saw that level out in Q3, and we continue to see it now stable as we get into the fourth quarter. And that's giving us now, that's allowing the underlying movement and price to actually illuminate. I mean, obviously, the other thing that is driving price up is the increase in calibration services. We continue to see a higher penetration rate of calibration services on the average ticket that we're seeing, and all of those things are starting to move the ticket back in a more positive direction, still muted from the, you know, I would say still muted from the call at 4% that we expect, but certainly moving its way back towards then.

Sabahat Khan, Analyst — RBC Capital Markets

Great. And then maybe just an update on sort of the startups. I think you might have had a few planned for this quarter. I might have caught that wrong, but I don't think those happened. Maybe just give us an update on the infrastructure you've set up on the new store openings, how many are expected through late this year, and maybe the cadence into sort of, you know, what can we expect annually going forward?

Brian Kaner, CEO

Thank you. Yeah, if you saw in the MD&A, I think we flagged, we've got 34 new startup locations planned for the next 12 months. Um, like any construction project, we'll see delays where things shift, you know, slightly out in and out of quarters. You saw after the quarter, subsequent to the quarter, we announced, you know, seven, you know, seven new locations opening subsequent to the quarter after 10 in the quarter, not, not just startup, but all acquisitions. So I would suggest that we'll get to that kind of 30 to 35, maybe pushing 40-some years of startup locations, which is in line with what we said back in the five-year when we launched our five-year plan.

Operator

Thank you. Thanks. Your next question comes from the line of Chris Murray with ATB Capital Markets. Your line is now open. Please go ahead.

Chris Murray, Analyst — ATB Capital Markets

Yeah, thanks, folks. Maybe just turning to some of the margin performance and just kind of the cadence as we're sort of walking into, I guess, the target or getting closer to it. Can you just talk about how you're seeing kind of the entire system now behaving with margins and your confidence level of being able to get to, I guess, the targets that you've set? And how we should think about kind of margin cadence and the pace of improvement as we go into next year.

Brian Kaner, CEO

Yeah, well, look, as it relates to the pace of improvement, we said that the balance of the Project 360 savings would come in Rattably, so the pace of improvement should be thought of as the incremental savings that are yet to be achieved on Project 360 coming through Rattably. That should be the pace of change. Obviously, some incremental same store sales will help give us a little bit more leverage and push that up a little bit more. But I'm actually very pleased with the cadence that we've been on. As I said in my opening remarks, we've seen a 230 basis point improvement from the time we started this project at the end of, call it Q3 of 2024, to now what we just reported in Q3 of 2026. So the progress on the actual project itself has been, you know, very much so in line with what we've expected. The pace, as I said, will be more tempered as you go forward. And so I think, you know, if you look at, and I think just commenting more broadly on Q3s, you know. Sequential decline in EBITDA rate, we normally see a 50 to 60 basis point movement in downward movement in Q3 versus Q2, just based on some of the seasonality related to our glass business in particular. You know, so if you think about that, if you would have normally seen 60 basis points of downward pressure, 50 basis points of downward pressure, we offset that with Project 360 savings. And we did have some incremental costs in the quarter that, you know, related to things like fuel costs and utility costs that, you know, that were a little bit elevated versus a year ago that made up some of that savings. But by and large, and then we had a little bit of leverage loss. So I think, but by and large, I'm very pleased with where we're at from, you know, the progress against, you know, the 14% goal that we set in February.

Chris Murray, Analyst — ATB Capital Markets

Okay, that's helpful. And then just one question on acquisition and single store acquisitions. So we talked a little bit about startup locations, and, you know, understandably, construction, I'll throw those schedules around. But at the pace that you're kind of running through single store acquisitions right now, just trying to think of, you know, how's the environment out there? I know that, you know, there's been the midterms sometimes can throw things around in the, with, with sellers trying to figure out, you know, how to optimize their, their sale price, things like that. Are you seeing any change in the market? Or is the pace that you're kind of adding stores, like single store operators right now? Is that kind of the way we should be thinking about, call it, you know, six to eight a quarter type of thing is a good, is a good cadence to be thinking about?

Brian Kaner, CEO

Yeah, look, I think we've said this before. I mean, the fourth quarter always tends to be our largest quarter from an acquisition perspective and store opening. So I frankly wouldn't expect anything different this year. I will say that because we are taking a more measured approach to acquisitions, i.e., we're focusing on building density, getting in that number one or number two position in the markets that we operate in, that shrinks the pool of available opportunities that are out there for us. It doesn't mean that there's not a lot of available opportunities. It just means that we're looking for the right opportunity that, again, has the right size box. You know, has, you know, has gives us the ability to do, you know, three and a half to four million dollars a volume out of a location. And when we find that, we're happy to go, you know, we're happy to engage in purchase. If we don't find that, then we're going to be more apt to look for brownfields and greenfield opportunities to build in those markets. So it just, it really is just. You know, there's nothing behind it right now. The sellers in the marketplace outside of the bigger, you know, certainly the regional MSOs and some of the large players that are out there, I think, given where we're trading, have to start to see, you know, their multiples contract, their multiple expectations contract. We're not a buyer in that environment, but the opportunity for single shops is still out there.

Chris Murray, Analyst — ATB Capital Markets

Okay, I'll leave it there. Thanks, folks.

Operator

Great. Thanks. Your next question comes from the line of Mark Jordan with Goldman Sachs. Your line is now open. Please go ahead.

Mark Jordan, Analyst — Goldman Sachs

Hey, good morning. Hey, thank you for taking my question. Can you talk about how same store sales trended throughout the quarter and maybe what you're seeing quarter to date? I know you said it was positive in October, but just any color as it relates to maybe the rate of change.

Brian Kaner, CEO

Yeah, I think what we said in the opening remarks is what I would reflect on again. We said that the volume continues to be positive, and we're starting to see some incremental T-Core. So those two things. You know, at least point us to an environment that we're positive. We're moving away from, you know, we're evolving our messaging away from, you know, giving a pointed amount because, you know, we want people to focus on the underlying business performance. We're not providing, you know, additional quantitative details. You know, we'll highlight, you know, we highlighted during the month of October, we saw continued volume growth. Once again, we outperformed the industry and as well as, you know, that sequential improvement in T-Corps. I think that gives you... That should give the, you know, it should give us the sense that, you know, the marketplace continues to be positive.

Mark Jordan, Analyst — Goldman Sachs

Perfect. Thank you very much. And just one follow-up. You know, as we think about the parts mix between aftermarket and OAM, how that might have impacted margins for the quarter. Can you just talk about that a little bit? Because I know it was noted that parts margins were lower year-over-year.

Jeff Murray, CFO

Thank you, Dan. Sure. Well, you know, I mean, we have seen just really, there's been some shifting, I think, in the marketplace, and so there's really not much to say. I would say that I would focus more on the, I mean, there's been some pretty positive improvements year over year in terms of gross margin. There's a lot of factors that were positive. There were a couple that were slightly negative, and we mentioned the parts and labor as being a couple of them, but they really weren't all that meaningful. And so some element of it was after market price related, but again, I would focus more on the net positive way.

Brian Kaner, CEO

Yeah, and I just follow on to that, that the, you know, typically on a quarter over quarter basis, Q2 to Q3, you know, the erosion that I talked about in the margin, EBITDA margin, most of that falls in gross margin. So if you just think about the sequential margin decline, we did report a couple of tens of points of benefit on a year-over-year basis, but the sequential margin decline is simply more tied to that seasonality, and the seasonality is more tied to just the reductions we see in the glass business as we get into the third quarter. Perfect. Thank you very much.

Operator

Great. Thanks. Your next question comes from the line of Stephen Hansen with Raymond James. Your line is now open. Please go ahead.

Stephen Hansel, Analyst — Raymond James

Hey, Steve. Yeah, good morning, guys. Thanks for the time. Brian, Jeff, I just wanted to ask you about your conviction in the buyback around that opportunity that you see there. Valuations obviously come down a fair bit. Brian, you just referenced that it's more expensive to buy the multi-shop MSOs now. Single shops may be still doable, but how do you feel about the pace of the buyback relative to some of the opportunities for acquisitions out there in the market? Thanks.

Brian Kaner, CEO

Yeah, look, I mean, as our business evolves, I mean, so does our capital allocation opportunities. You know, that includes the addition of, you know, share repurchases. You know, the focus of the business remains on directing capital towards the opportunities that, frankly, offer the most attractive risk-adjusted returns and create long-term shareholder value. You know, we're not going to be prescriptive about what we're doing on share buybacks. I think we'll, you know, we will, we have that as a, as an option in our capital allocation strategy now. You know, if there aren't other places to deploy capital, that does certainly become an option for us.

Stephen Hansel, Analyst — Raymond James

Okay, that's helpful. And then just lastly, I just wanted to go back to just the M&A environment just quickly and how you think some of the smaller shop sellers, you know, I think it sounds like the multiple stack or multiple opportunity, they're still quite good. The MSOs in the smaller tier MSOs are still probably off the table. But does the flywheel allow you to continue to, you know, move fast enough to meet your targets? Or do you feel like you can slow a little bit and focus on the greenfield opportunity a little more, I don't know, aggressively, if that's the right word, but how do you feel about that MSO, single shop MSO versus the greenfield opportunity? Thank you.

Brian Kaner, CEO

Yeah. I mean, look, I think the desire to – the acquisition strategy is still – the whole new unit growth strategy is still predicated off of building out market density. And so, as we've talked about before, we have a map that has dots on the map, and our acquisition team is out in the marketplace looking for the opportunities to fill that dot on the map. And so it seems it comes across as a little bit more opportunistic, you know, where we'll go into the marketplace. It's just the pacing of the pace. It's just the pacing of. The way that the team can get into the market to fill those opportunities. So if you get into a market and you realize that there's not somebody to buy in the market, now you've got to get somebody that's out looking for land in the market or looking for a brownfield opportunity in that market. So I think it's because we've gotten a lot more purposeful with our capital deployment and have just gotten very specific around where we want to grow. That inherently will slow the pace. If I had a shotgun approach to buying across the United States, there's all kinds of places. I'm sure there's places I could buy in Wyoming and Idaho and Montana and places that I ultimately don't want to be. But the opportunities to go build out densification just narrows the pool of things that we can go do or places that we can go buy, and that, I think, puts a little bit of pressure on the pace. But that's okay, you know, because it's ultimately driving, you know, we know that the success of those, we're hedging our, you know, our bets on success on the ones that we are buying.

Jeff Murray, CFO

And, Brian, I'll just add, too, that because we're opportunistic, it is wealthy. If you look back over time, as a result, it's been wealthy over time, and it will continue to have some level of wealthiness. The startup strategy does mitigate that to some degree, because you're going to have some pleading in that are essentially signed for like that, but otherwise, we're still

Brian Kaner, CEO

Yeah, and look, we said in the MD&A, we've got 34. New startup locations. Those are the ones that we have certainty around, and acquisitions will, as Jeff said, they'll just be lumpy.

Operator

Very good. Appreciate the time. Your next question comes from the line of Derek Lessard with T.D. Cowan. Your line is now open. Please go ahead.

Derek J. Lessard, Analyst — T.D. Cowan

Yeah, good morning, Brian, Jeff, Stephen. I hope you're well. I just wanted to maybe just hit on the volume trends in the quarter. It was down 1% to 3%, but that seems like it was a bit of a deterioration compared to Q2. I think it was down 0% to 2%. So maybe just talk about some of the trends that you were seeing there and then maybe specific to you guys. Looks like you did outperform the industry a little bit better in Q3. So if there's anything you'd like to point out there.

Brian Kaner, CEO

Yeah, and you're right. The volume in the quarter did contract a bit, a little bit. You know, I think a large portion of that is if you look at vehicle miles traveled in the quarter, you saw some suppression in vehicle miles traveled in the summer months. That's largely what probably drove the decline in volume, still within the range that we expect it to be. So it's not that it didn't go back down to the high single digits. It just stayed in that band. And relative to our performance against it, you know, remember we said there was a little bit more T-Core movement in the quarter, so that gave us a little bit of incremental spread against how the market was performing. We talk about claims in terms of units. We talk about, you know, same-store sales in terms of dollars. So that incremental T-Core helped us, you know, increase the spread, albeit the, you know, the volume spread, if you will, was probably fairly consistent.

Jeff Murray, CFO

I think it's also worth pointing out the third quarter in a row now is where we're essentially in the in the typical range of 0 to 30 percent, so.

Derek J. Lessard, Analyst — T.D. Cowan

Absolutely. Thanks for that, Colin. And maybe one last one for me. Just correct me if I'm wrong, too. I think you guys are pretty much done on the internalization of your scanning and calibration. Are you able to quantify the margin impact on that $90 million year-to-date realized, or maybe just highlight sort of like the biggest margin bucket contributors to the $90 million in savings you've realized so far?

Jeff Murray, CFO

I think you're talking about just the overall progress on both the project 360 and the synergies from the transaction.

Derek J. Lessard, Analyst — T.D. Cowan

Right, and I guess what did the scanning and calibration contribute to those savings that you realized?

Brian Kaner, CEO

Yeah, I don't know that we haven't split out the incremental improvement we're getting from scanning and calibration. That, you know, that is, I think I'll answer your first part of your question. You know, we are, we are. We are at the threshold that we said we would be at. We're at, you know, at and beyond, frankly, the 80% coverage of internalization. That team needs to continue to build, as you see, higher penetration rates of calibration services now. So it isn't that the journey is done, because now we need to continue to add staff to maintain the growing environment that we're in. And I just wanted, just to make sure we're clear, I mean, the $90 million that you're referencing is, you know, we said we'd be at $105 million by the end of the year on total Project 360 savings. Not a year to date, but a project to date is the $90 million. So that's project to date as of the quarter. That includes Joe Hudson Synergies. Remember, when we get the incremental 15 in the fourth quarter, we'll be $105 million towards our goal of $140 million, with the remaining $35 million that's out there being really, as we've talked about before, coming from investments in technology that will help drive efficiency in our stores.

Jeff Murray, CFO

And maybe just add to the internalization of scanning calibration was not part of those numbers. However, there were some of them in a synergy element.

Brian Kaner, CEO

Yeah, it wasn't part of Project 360. It was part of Joe Hudson's synergy. But I think about it that way. We've got 15 million to achieve in Q4, and we'll have another 35 million that will come in ratably throughout the balance of 28 and 29. Got it.

Derek J. Lessard, Analyst — T.D. Cowan

I think that was my point. It was the scanning and calibration margin improvement on the back of the synergies.

Brian Kaner, CEO

No, no. It is part of the synergies are definitely driven by the, frankly, some of the pull forward in synergies is driven by the faster internalization of scanning and calibration versus what we anticipated. So you are seeing some of that in that number. Got it. Thanks, guys. Yep.

Operator

Your next question comes from the line of Gary Ho with Desjardins Capital Markets. Your line is now open. Please go ahead.

Gary Ho, Analyst — Desjardins Capital Markets

Thanks. Good morning. First question, just on the Joe Hudson contribution, I think it's roughly $170 million in the quarter. Feels like that business is running a little bit lighter than it was acquired. Correct me if I'm wrong, maybe seasonality. And your disclosure noted trend versus the prior year improved through 3Q and into October. Or perhaps can you update us on the progress on kind of stores moved on to the Boyd operating model and thinking, you know, fixing some of the underperforming stores and the path to growth from there?

Brian Kaner, CEO

Yeah, and look, I mean, we, as said on the last call, we accelerated the integration of Joe Hudson because when we got the business, remember we closed at the end of October, we actually got the business on January 9th for all kinds of purposes. You know, there had been erosion in that business in that period of time, so as we picked that up and we started to realize Tools we had in the available operating environment to run the business, we realized that they didn't have the same type of, you know, tools and data visibility and business processes that, frankly, we had in the void business. So as we bought that, we realized we needed to integrate more quickly. We did that, you know, and now, as I said in the prepared remarks, the focus now is just. Improving client scores that we know will drive incremental volume, making sure that we've got the staffing in the stores to deliver on that volume, and implementing the while operating way within that environment. And as we do that, we continue to see sequential progress from the business. Just note, you are right. There is seasonality from Q2 to Q3, so we do see that. So we do – the business normally sees a dip. The whole south normally sees a dip from Q2 to Q3. And what we're referencing is as we look on a year-over-year basis, the business is actually getting better. You know, so it's, you know, we do continue to see improvement there. And it just takes a little bit of, it will take a little bit of time. It takes a little time for us to get the metrics that we normally look at to get enough data behind them for us to form an opinion on what's happening. But I'm actually, as I've said before, I mean, I don't have. You know, I have confidence in the fact that, you know, what we bought with Joe Hudson will ultimately be there. We bought ourselves now an opportunity with the air cover incremental synergies, an opportunity to, you know, get the revenue flowing in the business the way that we had expected to. And that's progressing each and every month as we go forward.

Gary Ho, Analyst — Desjardins Capital Markets

Okay, thanks. Appreciate that. And then my second question, I just want to touch on self-pay. So some industry peers have pointed to self-pay repairs approaching historical highs, just with more work not going through insurance carriers. Just curious kind of what you're seeing with your own customer experience there, and how does that affect volumes, average ticket, and margins?

Brian Kaner, CEO

Yeah, we certainly do see, I mean, albeit a small piece of our business, we do continue to see self-pay growing at a pace that's greater than, you know, what the insurance volume is. But it is growing off of a much smaller base. You're right on the average. The average ticket on a self-paid job is much lower than an insurance-paid job. You know, and, but look, our focus today You know, still remains on providing, you know, great service for the insurance partners that we do business with. It's the largest portion of our business. As we continue to focus on client metrics and driving performance and driving, frankly, or outperforming our competitors on metrics, you know, we continue to accrue more volume from that. You know, on customer pay or self-pay, you know, we've got the, you know, we've started to introduce tools like, you know, the Sunbit financing program in our business that allows a, you know, that will allow a consumer to be able to finance, you know, a self-pay job. So we're taking steps towards being able to be more amenable to a, you know, to a consumer. The focus of the business still remains heavily on our insurance partners.

Gary Ho, Analyst — Desjardins Capital Markets

Okay, great. Those are my questions. Great, thank you.

Operator

Your next question comes from the line of Brett Jordan with Jeffries. Your line is now open. Please go ahead.

Brett Jordan, Analyst — Jeffries

Hey, good morning, guys. On the self-pay question, I guess, the ticket's lower, but is the margin potentially higher in the sense that you're not negotiating with an insurance company on labor rates, et cetera?

Brian Kaner, CEO

No, I wouldn't reflect it that way. I think that the challenge with consumer pay is you're actually dealing with somebody that might be more price competitive because they're… There's a threshold by which they can do the repair versus not do the repair. So often, and it's why consumer pay is really not a great, it's not something that's so prevalent in the MSOs, because oftentimes you'll see that. You know, they want to do different things with the repair, maybe not fix it completely, maybe not do something that needs to get done on the vehicle. And in our job, you know, as collision repair providers is to make sure that we complete the repair, we get the car back on the road safely, we do everything that needs to be done, and insurance carrier work allows us to do that. When you get into consumer pay, I think you get into a lot more negotiating of what can or should be done. Not that it's so price sensitive from a rate perspective, but there really isn't any discernible margin difference between the two.

Brett Jordan, Analyst — Jeffries

Okay. And then sort of a macro question on the space. I mean, you said down one to three sort of in line with longer-term expectation. Is there any pent-up demand out there? I mean, obviously, being down high singles a year ago, you'd think there would be more cars driving around with a dent, and that customer, when they can come up with a deductible, might fix it. Is there a chance that you're going to see some snapback, or are we sort of back to normal and don't expect any? You know, you know, any surge of pent up demand.

Brian Kaner, CEO

Yeah, I mean, we've said this in previous discussions, when you look back to that 2007, 2008 timeframe, when, you know, we were in, you know, the financial crisis and unemployment was high, there was there was a bounce back year, I think it was 2011 that became the bounce back year. So could could there be something, you know, Certainly. Are we, is that what we're banking on? No. But I think history would tell you that there, and I think history tells you that there could be something like that, but, you know, that's not the way we're thinking about the business right now.

Jeff Murray, CFO

Or it could come up as through over time, roll over of loans, roll over of leases. Like, that could be where it starts to come through, but it would sort of bleed in over time.

Brett Jordan, Analyst — Jeffries

Okay, great. Thank you.

Operator

Your next question comes from the line of Daryl Young with Stiefel. Your line is now open. Please go ahead.

Daryl Young, Analyst — Stiefel

Hey, good morning, everyone. Looks like the free cash flow generation was quite strong this quarter, but EPS was a little weaker than I might have anticipated. Is that a function of maybe some lease accounting and depreciation nuances, or is it more operating leverage in the seasonally weaker Q3 period?

Jeff Murray, CFO

No, I would agree. It's probably more the former. The ready-use asset depreciation and other depreciation on assets from our growth is probably the one that's contributing the most.

Daryl Young, Analyst — Stiefel

Got it. That's all for me. Thanks very much.

Operator

Thanks, Gerald. Your next question comes from the line of Kristen Thomas Martin with BMO Capital Markets. Your line is now open. Please go ahead.