Conference Transcript - BWA 2026-06-10

Speaker 4

why don't we kick off the the next session uh with uh bork warner uh today we have the ceo joe fedul and uh cfo uh craig aaron uh as well as uh pat on the uh head ir uh most you probably know uh bork warner is obviously an auto powertrain leader both in ice and ev uh and it has been actually our top pick for quite a while now uh mostly on my view of them proving out the ev story in the e-powertrain story however uh you know recently uh pretty well known now as you've made a pretty smart pivot into data centers uh which is i think a pretty very compelling uh diversification opportunity um and i think it's generated quite a bit of excitement it's obviously reflected in stock here to date uh it'll probably be most of the focus of my questions today but um uh maybe just sort of more maintenancey you know any color on you know i know you guys don't pronounce but how is the quarter trending? We've seen S&P has cut numbers a bit. Does that sort of present a risk to you guys? Any thoughts there in terms of the quarter and the outlook? Yeah, sure. I can

Craig Aaron, CFO

take that one. So, you know, when you look at our full year guide from an industry production perspective, we said flat to down 3%. S&P is coming in right around 2%. So we're right in the middle of the guide. We did reconfirm our February guidance in April. Sales coming in right around $14.15 billion at the midpoint. You know, when you look at Q1, Q1 came in at $3.53 billion. You sort of annualize that, you get pretty close to the midpoint of our guide. So, you know, we feel good about how we executed in Q1. Margins up 50 basis points. Revenue, again, coming in at $3.5 billion. We feel like we're right on track to deliver our guide. So, yeah, we're pretty pleased with the way the year's played out so far.

Speaker 4

Okay. So, obviously, a lot of excitement on the new products and data centers you announced a win on the turbine generators on the q4 call and last call you highlighted storage and the microgrid inverters can you talk a bit about you know how long have you been developing this product sounds like it's been several years and how much overlap is there with your current auto tech in these products sure so thanks for

Joseph Fadool, CEO

having us Colin you know if we first start with the problem we're trying to solve it's all around power availability that's the problem so these three products all addressing that issue starting with the power generation or turbine generator we've been working on this with our partner Endeavor over three and a half years but if you consider all the technologies inside for decades you know when you look at the inside of this it's turbo charging it's high-speed rotating machines power electronics software and controls so we bring quite a bit of know-how and IP to the table here and we're pretty pleased with this partnership we've had with Endeavor when you think about the battery storage business this is a business we actually started talking about this topic of non-automotive for a couple of years now since 2023 but this is the window that we see the opportunity to move into the space more concretely so we have been working to leverage the open capacity we have we all know the CV market which we position this business for has been much softer than we all anticipated but these systems are designed for very high reliability and tough use cases commercial vehicle so it makes them very suitable for stationary power when we look at the microgrid, which is a little bit newer product to market, the basis of that is the convergence of 800 volts in data centers with automotive technology, which already operates at 800 volts. So that's the piece or the window that really gives us a chance to move into this space fairly quick. If you look at why are people moving to 800 volts, it's really driven by the nvidia chipsets on the next generation which require the higher power higher power density and we're a market leader in inverters and have been shipping 800 volt systems for years so you know for us that gives us a right to win when you cut across all three of these products so power generation storage and conversion the one big common theme is the automotive scale and competitiveness you know when I talk about automotive scale you're talking about high volume with very high quality requirements very competitive space and automotive and that cuts across all three of these which allows us to sort of accelerate the disruption can you talk about starting with the

Speaker 4

first the turbine generator I mean what is the endeavor relationship what kind products is that exclusive to what can you do in that area beyond that

Joseph Fadool, CEO

partnership yeah so with Endeavor as I mentioned we've been working with them for over three and a half years and the way you want to think about is they're the front end of you know the relationship so the customer facing piece their principles have been in the data center space for you know 25 years or more they see the world similar to us you know more efficient lower emissions so you know very easy to work with them we're providing the guts of the system so we're designed and developing more or less the content of the turbine generator and this is where we're able to leverage all of our internal knowledge the combination of the two of us makes complete sense you know we want to be laser focused going to market they provide that customer relationship with many of the customers like the hyperscalers and you've probably heard us on our calls we've had visits at our Asheville location from some of the hyperscalers that never would have happened without Endeavor they're the ones that have those relationships so each of us bring you know pretty strong contributions to the relationship and we couldn't be more excited about it now with regard to the other two products the battery storage we can serve Endeavor but we can serve the rest of the industrial and data center market independently same with micro grid inverters we can sell them to endeavor for their use case or we can sell to other players so we're not in an exclusive relationship like we are with the turbine generator just to contrast

Speaker 4

the three product lines and with the turbine generator though is it a certain size generator or and only data centers can you do any of that on your own or everything in that space is through the partnership not everything so what we

Joseph Fadool, CEO

have an agreement on is what we call a 350 kilowatt system and that's the one we're going to market first with and and quite frankly has a lot of interest and demand so that's where we're putting all of our efforts I mean we've developed smaller systems in the past we have a hundred kilowatt system that we've worked with a different startup on for a sort of waste to energy conversion so we we've been playing in this space for I would say 12 to 15 years in some form or another but the exclusive relationship is with the 350 kilowatt

Speaker 4

system okay and then but you have you're bringing two gigawatts of capacity so is that just a whole bunch of those systems together so right so if you want to

Joseph Fadool, CEO

imagine and this is in our investor deck these 350 kilowatt systems you can also put them in a single enclosure for a one megawatt system okay that is likely the first application but may not be the only and then as you need more capacity you add more of these generator systems in place one one of the things we probably don't talk about enough is the flexibility of that so when a hyperscaler designs and develops you know an AI farm let's call it they don't start with maximum capacity you know even here today some are building two gigawatt to five gigawatt data centers well they don't start there they start at maybe a half a gigawatt and then over time they add on and that makes our system completely flexible for them so they don't have to build a complete turbine power system that meets the whole needs at once they can do it incrementally as they bring more capacity out can you talk about the

Speaker 4

competitive landscape who are the main competitors and you know in terms of size cost and efficiency how does your product compare so there's really two

Joseph Fadool, CEO

use cases one is primary power and the main competitor there are turbine companies so you think a Siemens GE vernova Mitsubishi now the advantages our system has to theirs is gonna be lower emissions it's designed for tier four emission levels a little bit less noise I would say the big advantage right now is if you were to order a large turbine right now you probably won't see it till 2030 let alone find an EPC that's gonna build it for you so you know for us we're installing that capacity we know how to scale quickly and you know we're gonna make a decision later this year do we add additional capacity given the demand and the backlog so the other use case is backup generation backup generation usually is with diesel gen sets a little bit natural gas these are guys like Cummins and Caterpillar well-known players now how do we compare to them so significantly lower emissions which becoming more and more talked about today for our system the total operating costs also much lower diesel you know fuel pretty expensive compared to natural gas so even you know let's just say this power to compute starts to subside and you don't have such demand which is really giving us the window to play right now let's say that gets back to more normal situation we still have a very competitive product are the reasons I mentioned so we think this

Speaker 4

business is very sustainable over time and your initial off your initial launch in 2027 that's primary or is it back up we believe it's going to be primary I'm

Joseph Fadool, CEO

not sure we announced it yet but you know when we started this journey three and a half years ago 80% of the applications were going to be back up and 20% primary but with the acceleration of generative AI and companies like Anthropic and others we think it's gonna be just the opposite 80% primary so I think we're in a really strong position I'm sorry primary is

Speaker 4

usually more lucrative I think they're yeah we haven't delineated between the

Joseph Fadool, CEO

two of them I mean for us they're both great business cases but let's just say if you're solving the primary need you're in a lot stronger position because the you know the utilities can't get there fast enough yeah once you're there you know you're you're building your brand and your knowledge of the site much more than you are as a backup so we're gonna learn a lot more in that primary position so yeah we're we're happy to serve both markets but yeah

Speaker 4

it's more likely the primary is gonna be larger and on if we look at the the BSS battery storage honestly that was a pretty smart pivot so any color on you know where did this tech come from this this was part of Acosol I believe that that was already in the capability set and you know any color on the capacity that you have to pivot over to storage and the opportunity there so yes we

Joseph Fadool, CEO

purchased aca saw you know three four years ago and the primary purpose was to serve this CV space and the ebus space and we installed you know quite a bit of capacity to serve that space unfortunately those trucks and buses are more expensive than their equivalent diesel so the market hasn't developed like we all expected given that though the technology is very fitting to these industrial and data center applications so it's more how do we design the form factor different we're cell agnostic so we're not stuck to one cell type or chemistry and then of course we're leveraging the open capacity the the name of the game right now is if you can provide generators if you can provide stationary storage people are moving you way up the list okay so they're willing to take more risk on a player like BorgWarner which is unknown in the industrial space but we're well known in the auto space so that existing capacity we haven't released a number on it but let's say it's able to serve the next couple of years what we expect the demand to be and if you know we see that demand's gonna be even higher we're happy to put more capital in more investment in but I would say we're we're able to leverage that pretty fast

Speaker 4

and be in production by next year yeah we did announce we capacitize to six

Joseph Fadool, CEO

gigawatt total storage between the three facilities Darmstadt Seneca and Hazel Park we've since closed Hazel Park so we have in total capacity we have less than six now we haven't really given those numbers yet and when we think

Speaker 4

about transitioning from the bus type packs to storage are they're pretty much the same technology just one's sitting flat and one's up and down yeah I would

Joseph Fadool, CEO

say it's similar technology there's not a lot of new invention going on you know we're we're pushing these down the same production line we're using the same end of line testers we have to make some small investments to adapt to the new form factor and there's some software changes needed for stationary power but in all essence they're very similar product and where are you looking to

Speaker 4

compete because I think there's some big players that are doing more grid type applications I assume you don't have that kind of capacity or plans and what gives you sort of an edge in the areas that you're looking to compete right so

Joseph Fadool, CEO

you know some of the big announcements from Ford or LG are more in the segment of those very large container storages which support the grid directly we're not playing in that space we're more in the custom tailored solutions for particular use cases so think about smaller form factors that are designed specifically for an application and again speed to market is important here you know if I think in Ford's announcement they're not going to start shipping till 2028 so the need is is now for some of those customers we're able

Speaker 4

to fulfill that I mean any sense of how quickly you because you're actually already showed us some customers on the store side or yeah so we're actively

Joseph Fadool, CEO

quoting battery systems we're doing everything needed to support a 2027 production launch so not that far away and and I would say you know it's likely

Speaker 4

we're gonna be successful the microgrid inverter can you talk about the competitive landscape there in any way to frame the the sort of revenue opportunity from these systems. I guess it's sort of interesting that with the 800 volt shift, the current products, the current players in that space don't have the, or aren't used currently spying. So is that the big window for you to kind of get into this? That is the window.

Joseph Fadool, CEO

You know, as a technology company, you're always looking for the right time to jump into a market because there's incumbents that are very strong. We have a lot of respect for the current players. the shift to 800 volts is the moment why is that first of all these 800 volt systems are not just higher voltage they're higher power in general and we've been serving that market in automotive for quite some time you know we're a top three player in inverters so we understand the requirements there we design and develop and produce our own power modules which is the guts of the system we do that in singapore so for us you know this is the moment to move and you know we're getting very good feedback from the four customers we have samples with uh so you know i would say we would expect the next step would be to make sure this is ul certified uh and that you know we can support production again in 2027 so we feel we got a very good right to win in this space

Speaker 4

How should we frame the revenue opportunity, though? Because I think a car inverter is like $600, $700 per car, something like that.

Joseph Fadool, CEO

Yeah, thank God they're not at that pricing. But, you know, we haven't quantified. Automotive is a different space. You know, you're talking about one or two inverters per car, highly competitive, and we're very successful in that space. So we haven't released any numbers for industrial. But if you think about the backdrop of data centers, they're growing in the mid-teens every year for the next 10 to 20 years. I mean, it'd be hard to believe we wouldn't see a significantly different landscape, especially using 800-volt technology and higher in the future. So pretty sizable TAN. And, you know, also outside of data centers, power conversion plays a big role anytime you're trying to adjust power from, you know, AC to DC or up and down the voltage level. Like in a data center, you're generating power at, let's say, 480. You need to move it up to 800, maybe even 1,500 DC. And then when you step it into the building, you've got to step it down again to serve the individual racks. So there's tons of opportunity for inverters throughout that entire data center. And that inverter technology is applicable to other industrial applications as well. If you think about oil and gas or you know power security power gen Applications, they all need inverters that operate at this higher voltage

Speaker 4

In terms of sort of sizing like are you looking for a handful of winds here because it sounds like they'd be in the Hundred you know very large in terms of revenue for just one individual wind

Joseph Fadool, CEO

Yeah, I wouldn't put a number on it. I would say We don't enter any market lightly You know, we want to make sure we have a right to win in the space. So, you know, based on our assessment, we continue to invest R&D into this area. And we're prepared to capacitize for that microgrid inverter that we've been talking a little bit about recently. But I think we have walk before we run. You know, we want to make sure we get it right out of the gate. And that's why it's important to have samples with customers. We'll get important feedback from them and we can fine-tune the application and make sure we go to market with something That's really different and of value to those customers

Speaker 4

And can you talk about the financial profile? I think you've talked about mid-teens Type margins are converting at mid-teens businesses not really existed today

Craig Aaron, CFO

So is that a mid-teens EBIT margin overall what we're thinking about? Yeah, when we've publicly discussed the power generation opportunity we've shared 300 million dollars in revenue in 2027 and we would expect that to convert in the mid-teens consistent with our auto expectations we're of course expecting some inefficiencies in that mid-teens conversion because it's our first year launch we're just ramping up we're not at full capacity so that's the expectation in the first year and that's what would mean success for us as we look at power generation. As we get into battery and power conversion the same discipline applies in our auto business. Hey we're looking for 15% ROIC or higher and I think Joe and I feel pretty bullish that that will meet or exceed that threshold as we look at those other opportunities.

Speaker 4

What about R&D and CapEx in these areas? It seems so far it's extremely CapEx light but how are you thinking about you know those headwinds going forward what

Craig Aaron, CFO

I think is really impressive about our business and I'll use power generation as a great example you know we've been working on it for three years that's what no Joe mentioned but when you look at TTT that's been doing all of this work they've exceeded or expanded or at least maintain their margin while still investing in this technology that that's incredible work by that team and we have same expectations as we jump into battery and we jump into power conversion we still think we can meet our mid-teens incremental conversion while still investing in these new technologies so that's how you i think you should think about it from a margin perspective as we jump into the capital side we did a phenomenal job yet last year really managing capital we had a lot of e-product capital in play we needed to make sure that we utilize that capital throughout the world and that's why capex as a percentage of sales is only at three percent as we step into this year our guidance assumes about four and a half percent which is more in line with our historical range and as we move forward joe and i think hey that four and a half to five percent of sales range is likely where we're going to stay as we expand into these new opportunities and and we see that as a very achievable level of capex as we move forward support all this growth that we expect

Speaker 4

to see in the near future i mean how much if you were to add more capacity i mean how how should people frame that in terms of the capex needed yeah so when we think about power generation and

Craig Aaron, CFO

this expansion uh we publicly disclosed it cost us about 70 ish million dollars to um stand up this greenfield site in north carolina so that's probably a good baseline you know as we move forward. But again, I think as you think about as this revenue comes into our P&L and we're going to continue to expand, that four and a half to five percent of sales range is probably a good modeling assumption as we move forward. That's the best way I think people should think about it. And I think

Joseph Fadool, CEO

what's important to note, you know, in the automotive space, efficiency of capital is super important, of course. It's no different in this industrial space, but the demand is so high, we'd be happy to invest more capital because ROIC is super attractive so you know people shouldn't think about us constrained too much on the capital side if if the demands there for the products we're gonna invest because it's very

Craig Aaron, CFO

attractive for us and don't forget we were generating a billion dollars of free cash flow we have we have plenty of opportunity to invest in the business case makes sense. So I completely agree with Joe. Got it. I mean maybe going back to the core

Speaker 4

business. You didn't change guidance last quarter. S&P has gotten a little bit worse. Raw mats are a bit worse. I mean any puts and takes to kind of kept things sort of held in line? Yeah it's really

Craig Aaron, CFO

what I mentioned earlier. You know S&P is coming in about two percent down for the year. It's right within our range flat to down three percent. So market production's right in our assumptions for the guide. Q1, Q2 seem to be holding up you know pretty well from a revenue perspective. Really happy with how the team performed in the first quarter. You know ten and a half percent margin up 50 basis points. It's a continuation of the great performance that we've seen over the last couple years. You know as Joe and I sit here I think we feel really good about our guide and we're just going to continue to focus on Q2 and execute. So we feel we feel good about where we're

Speaker 4

going for 2026 I mean actually going back a second for the when would you decide to put more capex in place do you need the orders in hand for the the turbine generator opportunity or would you do it just anticipating those orders

Joseph Fadool, CEO

how are you thinking about that yeah what we've said is you know second part of this year will likely make a decision on whether we put more capacity in so the criteria we're using for certain demand is part of it but not only you know if you think about bringing a new product to market we want to make sure the quality is right the first time through on the manufacturing site our supplier readiness you know so we're evaluating all those things you know hey we want to come out strong and make sure the BorgWarner brand really shows well in our first big industrial play so those are the criteria also we're looking at you know where would we put that investment would we would we put that in Hendersonville or will we put it in Europe we see demand on the data center side in Europe or where we put it in Southeast Asia so that's also part of the decision so we can balance the capacity and serve the customers in their market Got it.

Speaker 4

Okay. Appreciate switching back. But going back to the core guidance, one pushback I have gotten has been too much year to date. But Q1 organic growth was a bit weak. I mean, even if you take out batteries, it was down three. How should we, what sort of drove that sort of weaker growth? And how should we think about it playing through the rest of the year? Because you've historically been, you know, very solid grower over market.

Craig Aaron, CFO

Yeah, so if you look at Q1 and you remove battery, we're basically right in line with market, which is right in line with our foliar guide. So that's one data point. When you break it down by region, North America, we saw some strength. It was really coming from our DMS business, from some transfer case growth in that market. On the European side, we did have a thermal program ending, so that was a bit of a headwind for us. And then in China, it was really timing of an e-product program. So those were kind of the puts and takes. But I wouldn't over-index on any one quarter. You know, when I take a big step back, you know, $3.53 billion in revenue in the first quarter. You know, you annualize that. You know, we're right around $14.15 billion, which is the middle of our guide. So it seems like we're right on track. That's, I think, the best way to look at it.

Speaker 4

And how should we think about it? You mentioned we're talking organic growth. I think you've highlighted this year is a tougher year going into this year. But 27 is still on track to be a strong recovery with some launches coming. Is that the right way to think about it that growth picks up on the core auto business next year?

Craig Aaron, CFO

Yeah, so when you think about where have we been the last couple of years, it's been, you know, we've been moving in this flat 1% growth over market. And it's because we've had this EV overhang for the last several years. Obviously, there were a lot of expectations that EVs were going to grow, and we won our fair share of business, but those programs either didn't launch or they launched at much lower points. And one of the things that Joe and I were really focused on as we took these roles was we're not happy with the outgrowth profile of our business and we want to change it. And Joe set a tone of we want all of our business units to grow. Find your growth opportunities. And that's led to a lot of energy in our company being released and 40-plus wins that we've announced over the last five quarters. And as we look into 27, 28, 29, we expect to see some of those programs into our P&L. And we see it as a step function. You know, so we should see outgrowth in our auto business in 27, further outgrowth in 28 and further outgrowth in 2020, 2029. And so we're really excited to get to a place where we're seeing outgrowth and increasing revenue in our P&L, because it's amazing what our company has done to expand margins and the earnings power of the company, despite revenue being relatively flat. I think we're really excited to see what our company can do when we see that top line growing again in 27, 28, 29. It's going to be a really powerful story

Speaker 4

for us any questions out there you're gonna quick chicken raise your hand if you have any I'll try to get you before we end you know oh yeah so it matters to

Joseph Fadool, CEO

certain extent um you know our system comes up in about 45 seconds which is a main requirement uh diesel gensets come up a little bit faster than that um so you know we feel that where we're positioned with that 45 seconds is adequate for what the hyperscalers are asking for remember they got they often have battery storage on site too you know that the trio effect here is primary power backup power and battery storage to help smooth out you know

Speaker 2

transients and also interruptions to primary power yeah I mean as we had

Joseph Fadool, CEO

mentioned on the calls you know the change we made to leverage the entire business for growth not just electrification resulted in the business units really working on and winning new business and we've been trying to share you know many of those awards the last 18 months if you look in those awards some of them are conquest businesses so this whole idea of the strong get stronger in these, especially the foundational businesses, we're starting to see it now in the wins. So, you know, those wins take two to three years to bring to production. So this year we're still living with this EV slowdown in the Western world, but we'll start to see those programs launch next year and then pick up volumes in 28. So that's our thesis there. Maybe to add just a

Craig Aaron, CFO

bit more you know i love the profile you know it's across region it's across customer it's across technology you know when you think about where the world was two or three years ago it was really focused on e-products you know now it's across all different technology all different customers that gives us a lot of confidence that we're going to see this growth accelerating in in 27, 28, 29.

Speaker 4

On maybe China, it seems like you're a very strong position globally in your technologies, but what is the competitive landscape in China, particularly on the e-power train, where there's just a lot of emerging suppliers, at least in other segments, that seem to be taking share? Are you seeing the emergence of pretty good competition out of the Chinese suppliers at this point?

Joseph Fadool, CEO

So there are a few new players in China. but we're competing extremely well. You know, a number of those wins that we've announced over the last 18 months have been in China. So why are we winning there? First, we've been there a long time, over 30 years. We have very close relationships. And especially when we think about the leading six, they're the ones that are gaining the export market benefits. What do Chinese OEMs want? They want speed and they want competitive technology. And we have both of those. So we run shoulder-to-shoulder with them to get products into the market, usually in the 12- to 18-month time frame after you kick off a program. So that's half the time as a Western OEM. So speed's super important. So as we see those Chinese OEMs exporting more, you know, over 7 million vehicles last year, this year it's likely going to be higher. you know we're on a lot of those product lines and a lot of those vehicles we even get a little tailwind here and there like in the four-wheel drive business because the take rates are higher in europe than in china so we feel real good about our position there and you know the next step is they're going to have to localize and we're going to be the likely partner of choice if we're supporting them in china we already have factories people knowledge we understand the local laws we can move fast because we've already got existing assets and folks that can stand up localization for them in those markets so that's our that's our game plan for China so far it's working quite well and I think being nimble as they adjust is also important overall e-products

Speaker 4

profitability so you've shown really really good growth seems like the competitive landscape seems like you're emerging as a leader but when when should we think what needs to get that to profit levels overall and then sort of

Craig Aaron, CFO

in line with the rest of the business yeah so if you go back a couple years we were investing heavily in that side of the business and it made a lot of sense because the world was moving to electrification and we were supporting a lot of programs that we had won but it was important as time went on that we right-sized that business to the level of revenue that we were seeing and so we went through a restructuring that started in 2024. And one of the things that Joe and I were really watching last year, besides the growth, and we had phenomenal growth, 31% light vehicle e-product growth, was are we converting that growth into income at the mid-teens? That's our expectation. And that would give us confidence that we got that restructuring right. And that's exactly what we saw last year. 31% growth and we converted in the mid-teens. That's something that we need to continue to watch as we execute this year. We're expecting growth and light vehicle e-products around 10 percent. We've got to make sure that we can continue to convert that growth into income. If we do that, we got our restructuring right. But we also need to look at the regions. The regions are adapting electrification differently. You know that very well. So we need to make sure that we're continuing to adapt our cost structure to what's happening in the various regions and I see our business units doing that maybe to wrap

Speaker 4

it up you know there's so much focus on data centers how are you now thinking about M&A which is a big seem to be a bit historically has been a big focus of the company doing smart deals what are you looking at now are you looking more outside of auto or yeah how should we think about what you're focused on in terms of M&A priorities and types of assets from here yeah first of all we're

Joseph Fadool, CEO

really pleased with the portfolio and the move back toward growth and growth above market and we're getting good traction there when we think about M&A you know we've really raised the hurdles around M&A we're in a different situation than we were five or six years ago so we can be a little more selective but we've opened the aperture so we're not just looking at automotive we're looking at non automotive including industrial and data center spaces the criteria we use is straightforward it needs to make industrial logic leverage our core the second is you know near-term accretion is important and then third how we value it we want to pay a fair price so you know we we are very active looking at targets we've passed on a number of deals that didn't meet one or more of those criteria but I feel you know Craig and I and the team will be as disciplined around M&A as we're being around the rest of the business and you can see the benefits that's yielding so you know if we can't action something we then return much that cash back to shareholders and buybacks dividends in fact the last five quarters we've returned 70% of it back to shareholders in that form so we're looking for balance and consistency in in the capital allocation side.

Speaker 4

Great, I guess we'll wrap it up there. Thank you very much for joining us.

Joseph Fadool, CEO

All right, thank you, Gallen. Thank you, Gallen. Thank you.