Greetings and welcome to the Cognex First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the form of presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. It is now my pleasure to introduce your host, Gria Aviv of Investor Relations. Thank you. You may begin.

Thank you, operator. Good morning, everyone, and thank you for joining us. Our earnings release was published yesterday after market closed, and our 10-Q was filed this morning. On today's call, we will refer to materials available on our Investor Relations website. We are joined here today by Rob Willett, our CEO, Matt Moschner, our President and COO, and Dennis Fair, our CFO. Today, we plan to share several key messages with you, including the CEO transition announced yesterday, Our new five-year strategic objectives, our performance in the first quarter, and our expectations for the second quarter. After prepared remarks, we'll open the lines for Q&A. Both our published materials and the call today will reference non-GAAP measures. You can find a reconciliation of certain items from GAAP to non-GAAP in our press release and earnings presentation. Today's earnings materials will contain forward-looking statements, including statements regarding our expectations. Our actual results may differ from our projections due to the risks and uncertainties that are described in our SEC filings, including our most recent form, 10K. With that, I'll turn the call over to Rob.

Thanks, Greer. Hello, everyone, and thank you for joining us. I am pleased to announce that Matt Moschner, President and COO, will succeed me as CEO effective June 27th. While this may seem fast, I can assure you this transition is the culmination of a thoughtful multi-year succession planning process with our Board of Directors. Over the past five years, we have focused on developing and preparing a number of leadership candidates. And it's very clear to me and the board that Matt is absolutely the right leader to see Cognex through its next phase of growth. As you can see on page three of the earnings presentation, Matt has been a Cognoid since 2017. Throughout that time, Matt has successfully navigated a range of challenges and growth opportunities, which proved his readiness to assume the CEO role, including successfully leading our engineering organization, overseeing our logistics growth strategy, and managing the successful global integration of Moritex, the largest acquisition in company history. Matt also led our supply chain recovery efforts in 2021 and 2022, addressing formidable challenges including COVID disruptions, chip shortages, and a fire at our key contract manufacturer. I am honored to have served Codnex and our shareholders as only the second CEO in our company's 44-year history. Since I joined, we have grown revenue from $175 million in 2009 to over $900 million in 2024, while supporting a strong culture of innovation. This is the right time for me to retire from my successful tenure as CEO, and I look forward to continuing my role on our board and advising Matt in his new position. Let me now turn the call over to Matt to give you a preview of our new five-year strategic objectives.

Thank you, Rob. I'm excited for the opportunity to lead Cognex as we embark on our next phase of growth. I extend my gratitude to Rob for his mentorship over the past eight years and for entrusting me with the responsibility to preserve and enhance this exceptional company. At Investor Day, I will introduce new strategic objectives, which are outlined on page four. Over the next five years, we will concentrate on three key goals that will generate long-term shareholder value. These include the first, being the number one provider of AI technology for industrial machine vision applications. The second, providing the best customer experience in the industry. And the third, substantially expanding our served customer base. Taken together, we expect this strategic focus to yield significant results, including Cognex achieving a number one or number two position in all major markets that we serve. We will discuss these strategic objectives in more detail at our 2025 Investor Day in June, and we hope to see many of you in person at our NATIC headquarters for this event. On page five, you can see the high-level agenda for Investor Day. Starting on the evening of Monday, June 9th, we will host a welcome reception, which will feature an engaging customer panel discussion and ample time to interact with members of the Cognex management team. On June 10th, you will hear presentations from Cognex leaders emphasizing our path to achieving our strategic objectives as well as our updated financial framework the capital allocation strategy we also have some cutting-edge product demos planned which you will be able to see firsthand if you attend in person we look forward to discussing these objectives in more detail at our investor day we have allotted ample time for q a on june 10th and i look forward to addressing your questions at that time rob and dennis will be taking the questions on today's call. I'll turn the call back to Rob to highlight the first quarter performance.

Thank you, Matt. Turning now to first quarter results on page six. We remain focused on our two strategic initiatives. First, we continue to drive innovation. We launched the Insight 8900 in Q1, bringing the power of embedded AI to our OEM customers. Second, we continue to support our sales force transformation and expansion, enabling our sales team to reach a broader customer base and acquire new accounts. We will provide a more detailed update on this initiative at Investor Day. Looking at Q1 performance, revenue grew 5% year-on-year on a constant currency basis, representing a third consecutive quarter of organic growth. Higher revenue from the logistics and semiconductor industries was partially offset by weakness in the automotive industry, while broader factory automation revenue remained stable. Operating expense discipline contributed to a year-on-year expansion of adjusted EBITDA margin of nearly 500 basis points ahead of our guidance. This strong increase demonstrates the leverage our business delivers on incremental revenue and our continued focus on cost management. While there have been modest improvements in global PMIs, overall the macroeconomic environment remains mixed with increasing uncertainty driven by geopolitical and tariff related risks. As always, we work closely with our customers and suppliers to assess any changes to their business plan and even more so in an environment that is changing quickly at this time we have not seen material changes in purchasing activity or order cancellations however this is a fluid situation we also expect to substantially mitigate any direct cost impact from tariffs in effect as at the time we published this earnings release dennis will provide more details later in the call Longer-term, manufacturing and logistics will increasingly rely on automation, demanding greater throughput, capacity, traceability, and quality, all at lower costs and with less labor. As the global supply chain shifts to a more regional structure, COGMEX stands to benefit from these trends. I now want to provide you with an update on our product innovation. We're excited about the launch of the Insight 8900 smart camera. As you can see on slide 7, this is the compact, fully embedded vision system powered by AI, engineered to tackle some of the most complex manufacturing challenges with ease. The Insight 8900 brings the impressive functionality of AI to OEM, combining AI-powered and rules-based tools in a single, powerful vision system. Whether the task is simple or complex, the Insight 8900 enables our customers to optimize automation with a compact design that integrates effectively into large-scale equipment, such as that widely used in electronics component manufacturing and food and beverage packaging machinery. As we continue to execute our AI-driven product strategy, we will incorporate AI into more products, making them easier to use, and able to solve applications in a more intuitive and human-like way. Turning now to what we have seen across our end markets, which you will find on page 8 of the earnings presentation. To increase transparency, we are adding two additional end markets to our quarterly disclosure. The first is semiconductor, and the second is packaging, which includes fast-moving consumer goods and health care. Our discussion of 2025 trends is based on current observations, while acknowledging the heightened macroeconomic uncertainty. First quarter growth in logistics and semi-markets was somewhat offset by order timing and consumer electronics and ongoing weakness in the automotive sector. Starting with logistics, revenue continued to grow double digits year on year. This is the fifth consecutive quarter of growth and marks the highest level of revenue since Q1 of 2022. As of today, for the full year, we continue to expect strong growth in logistics. Our outlet reflects positive momentum driven by ongoing investments by large e-commerce players and the further penetration of the broader logistics market. Moving on to automotive. As expected, revenue in automotive was down year on year with weakness across all geographies. This reflects continued declines in EV battery investment and tentativeness in large capital projects across the broader industry. Looking to the full year, we remain cautious about the outlook for auto as we have previously discussed. However, we anticipate a more modest decline in 2025 versus last year, which declined 14%. Turning our attention to packaging, our business remained relatively stable in Q1, and we're beginning to see a modest recovery in healthcare following the post-pandemic slowdown. Packaging is now our third largest market and is poised to become a more significant part of our business over time. This market is particularly promising for us with our new product offerings that are easy to use for our customers. We have been proactively pursuing the packaging market through our Salesforce transformation and expansion investments, targeted at reaching a broader cross-section of customers. For the full year, we expect our packaging business to remain stable, with increased penetration opportunities enabled by our Salesforce transformation efforts. Turning to consumer electronics, Q1 revenue was down year-on-year, primarily due to project timing. As promised last quarter, we are providing an update on our full-year outlook, which currently assumes modest growth. This expectation does not include any potential geographic shifts in production due to tariffs. Regarding this year's seasonality, we expect electronics revenue to be relatively similar in Q2 and Q3, unlike 2024 when Q2 was more pronounced. We believe consumer electronics has positive long-term trends and we are well positioned in the market. Moving to SEMI. SEMI remains a robust market for us with widespread growth driven by increased investment from major machine builders. We continue to see demand driven by high bandwidth memory chip investments. However, we have a more cautious outlook for the full year due to increased uncertainty from trade policy and tariffs and the secondary impact on demand for chips. Let me now hand it over to Dennis to walk you through financial results and the outlook for the second quarter.

Thank you, Raoul. Our quarterly financial highlights can be found on page 9 of our earnings presentation. At a high level, we are pleased with our Q1 results. Our focus on profitability is yielding strong results with an almost 500 basis point year-on-year increase in our adjusted EBITDA margin. When I joined about a year ago, one of my priorities was to enhance capital efficiency. I am pleased to report that results are now visible in our numbers, with trailing 12-month free cash flow conversion of 120% and more than $100 million returned to shareholders in the form of share buybacks in Q1, the largest quarterly buyback since the first quarter of 2022. to me looking more closely at the first quarter results on page 10 revenue of 216 million dollars was above the midpoint of our guidance this represents two percent year-on-year growth or five percent on a constant currency basis in q4 we noted accelerated demand late in the quarter which pulled revenue forward if we adjust for this first quarter revenue growth would be modestly higher. I will now discuss geographic revenue trends on a constant currency basis. The Americas led our year-on-year growth in the quarter, expanding 20% on the back of continued strength logistics. Revenue in other Asia was roughly flat. Europe declined 7% due to a weaker automotive market, and Greater China was down 9% due to lower consumer electronics revenue, which is mostly timing related while we saw strength and other factory automation turning to margins adjusted gross margin was 67.6 percent in the quarter in line with our guidance this represents a decline of 120 basis points from 68.8 a year ago which was mainly driven by unfavorable mix and fx headwinds higher logistics contribution and lower consumer electronics revenue drove the mix effect. Pricing impacts were offset by productivity measures. Adjusted operating expenses declined 8% year-on-year in the quarter and 6% sequentially. The reduction was driven by lower overall head count, disciplined cost management, lower stock expense and effects. In recent quarters, we've highlighted our increasing focus on bottom line profitability, which is yielding substantial results. We can see this in our numbers with a 490 basis points year-on-year improvement on an adjusted EBITDA margin to 16.8 percent, which is well above the high end of our guidance and consensus. We achieved a strong performance through improved cost discipline and operating efficiency. At our upcoming investor day, we will introduce our updated long-term financial framework which underscores our commitment to profitable growth and outlines the path towards further increasing adjusted EBITDA margins diluted earnings per share on a gap basis for 14 cents up from 7 cents a year ago and adjusted diluted EPS for 16 cents up from 11 cents a year ago the increases were driven by higher margins resulting from revenue growth and lower operating this our focus on profitability and discipline working capital management drove another strong quarter for free cash flow the first quarter cash generation of 38 million dollars compared to 10 million dollars in the year ago period trading 12 months free cash flow conversion was 120 percent of adjusted net income we have also made significant progress in driving improvements to our cash conversion cycle reducing the number of days by more than 70 days year on year considering strong cash generation and attract the share prices we deployed capital opportunistically returning 116 million dollars to shareholders in the quarter including 102 million dollars of stock buybacks our highest quarterly total in three years turning to page 11. i will now address recent developments in tariffs and their impact in Cotnex. The tariff situation remains fluid and highly uncertain. Cotnex utilizes multiple third-party contract manufacturers to assemble our products in Southeast Asia. We've conducted an analysis of tariff impacts based on those in effect as of April 30th, including a universal 10% rate on U.S. imports and the elevated tariffs between the U.S. and China. We believe we can substantially mitigate the direct cost impact of the tariffs, resulting in no material impact to earnings per share or adjusted EBITDA margin. While we do not expect an impact on profitability, we do expect a dilution of approximately 50 basis points and adjusted gross margin. Should tariff rates on U.S. imports continue to rise, we would evaluate further actions and cost mitigation efforts to help contain any impacts. Longer term, we believe the potential recalibration of global supply chains represents a growth opportunity for us. Cognex has built a strong market position globally and a small position to capitalize on any such trends. Moving on to our second quarter guidance, which can be found on page 12 of our presentation. In the second quarter, we expect revenue between $235 and $255 million. dollars. This range is reflective of a mixed macro backdrop. At the midpoint, this represents modest year-on-year growth compared to Q2 of 2024, driven by our expectation for continued growth in logistics, partially offset by weaker trends in automotive. As Rob mentioned, we expect consumer electronics to be more evenly weighted across Q2 and Q3 as compared to last year. It's skewed more strongly to q2 we also expect adjusted gross margin to remain in the high 60 percent range which reflects continued mixed headwinds in the year-on-year comparison we expect adjusted ebitda margin between 18.5 and 21.5 percent the midpoint of this range is comparable to last year driven by operating expense discipline somewhat offset by gross margin mix As it relates to cash flow, in April, we made a final tax payment of approximately $16 million related to one-time transition tax on unrepatriated foreign earnings related to the Tax Cuts and Job Act of 2017. We expect our adjusted effective tax rate to be approximately 16% compared to 15% in Q2 of 2024. for. Lastly, as you mentioned earlier, we will be hosting Investor Day on June 10th at our native headquarters. Please reach out to the Investors Relations team to RSVP. We look forward to seeing many of you there. Now, Rob and I are ready for your questions. Operator, please go ahead.

Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing these star keys. We do ask all participants in the queue to please limit yourself to one question and one follow-up. One moment, please, while we poll for questions. Our first question comes from the line of Joe Giordano with TD Cowan. Please proceed with your question.

Hey, guys. Good morning, Joe. Maybe I'll start on the OpEx. Like, I don't want to overreact to any one quarter, but, like, that was nice to see, like, on higher revenues, see an OpEx decline.

How much of that – was there anything kind of, like, more one-time-ish in nature there? like how should we think about the ability to leverage the the opex expense through the remainder of the year and like structurally from here enjoy yeah we have been talking in the prior quarters about our focus on profitability and cash and cost management and we're really pleased um to see the results both on the opex side but especially the flow through to the bottom line certainly we'll talk a little bit further on on investor day on our past how we will manage certainly fx played a role right so if you think about a strong dollar in the first

from that regard that and then while i have both rob and matt on here like i had more of a philosophical question about embedded versus kind of computer computer vision like i know that i mean clearly you guys lead in what you do and how you do it i think there's just been a push from the market to at least make a claim that you could do more things than you could in the past without having to have embedded, right, that there's been technology changes that have allowed that other technology to compete more directly. Like, how do you respond to that, and how do you think Cognex in the next decade plays in, like, the combination of those two types of technologies?

Yeah, thanks, Joe. Well, first of all, I think that's a great question to bring with you when you come to Investor Day. I think you're going to hear a lot more about how, you know, we and Matt certainly have a vision around that. A quick answer would be, you know, most customers really want embedded vision. They want the height. And, you know, that's why, you know, we invested in those. And the connectivity between embedded systems and the cloud, you know, provide a lot of opportunity. It's kind of an exciting future for us. You know, we have very strong vision software capabilities and that are most sophisticated.

Our next question comes from the line of Damian Tyrus with UBS. Please proceed with your question.

Hey good morning everyone.

Damian hi.

Rob congratulations on all you've been able to accomplish over the years and I know you're not vanishing from Cognex but wish you the best in your retirement and that obviously congratulations on your new role. So maybe just starting with consumer electronics, I would like to hear a little bit more on your thoughts there. I know you mentioned it was down in the first quarter, but you're expecting modest growth this year. Could you just talk a little bit about what you're hearing from customers, what trends you've been seeing, and just thinking about you know like a large smartphone maker looking to move production to India from China like what are the potential implications for Cognex around that?

Yes thanks yes just to reiterate you know consumer electronics was down in Q1 but we obviously expect normal strong sequential growth into Q2 and then modest growth and then more similar what we saw last year that the EWON wants to keep that in mind as we I'm sorry more skewed equally balanced between Q and Q2 and Q3 last year was more skewed to Q2 right okay I hope I haven't confused you there I think what what that might be useful as you think about Q2 revenue year on year obviously we had much we'll have had more in about longer term going on you know certainly there's a lot going on in this industry that there always is and always new features and new form factors certainly are exciting for. There are also, you know, placement of human, a great many human visual inspectors in our technology and the AI were developed. Certainly cosmetic appearance as well in that market. And you asked about geographic.

Well, I'm sure we can talk more about that at the investor day. But that's really helpful. And then, Dennis, I was hoping you could maybe just unpack a little bit more of the tariff details. How much are you importing from China into the US? What are we talking about? What kind of components? What kind of products?

And could you just maybe give us a sense, like how is your footprint in machine vision market compared to your competitors yeah no happy happy to do that so uh in general our exposure in terms of the supply chain mostly or certainly there are some some components think about it like accessories and then also some optical equipment that regard we are in a pretty good position and um we'll manage that.

Terrific. Best of luck. I'll pass it along. Thank you.

Thank you. Our next question comes from the line of Tommy Mall with Stevens, Inc. Please proceed with your question. Good morning, and thank you for taking my questions.

Rob, I wanted to start on logistics, essentially to ask for whatever additional detail you can provide, whether it's by geography or customer type. You called out e-commerce as one of the drivers for the full year, but any additional detail you could provide on the outlook would be helpful. Thank you.

Yeah, thanks, Tommy. Certainly, we're seeing a lot more momentum in our leadership. It was our fifth straight. We're certainly seeing the large e-commerce leaning into investment, and we have good sales. You know, both, a lot of things we've seen, kind of, there's a lot of opportunity. You obviously read about what's going on in that market, a lot of change.

Right at the apple here. Noting that FX was a good guy in the first quarter you just reported, but can you give us any insight, excluding the FX impact, would you still characterize the OPEX dollars as lower year over year? And is that repeatable in future quarters where you may show top line growth accompanied by OPEX decline?

Anthony, I think, in general, we have been starting managing the top of last year.

I'll turn it back.

With Kalia with BNP Paribot Asset Management. Please proceed with your question. Hey, good morning, everyone.

I wanted to get your take on your comment that you're not really seeing, you know, much delayed decision making or customer hesitancy yet. First off, does that surprise you in the quarter? Do you think a company with a little bit more tied to CapEx cycles would see something like that or see that coming in the future? And then you do talk about a little bit of weakness in auto, which seemed to be maybe slightly worse than you expected.

So are you seeing it maybe in that segment and maybe comment on your thoughts on auto for the rest of the year? yeah thanks um you know this is a very fluid situation and there's a lot of obviously volatility and but i'll but i'll give you some color you know kind of on on what we saw we we have not seen material changes in purchasing activity or order cancellations um currently uh you know we're keeping an eye on to what degree customers may be buying forward ahead of tariffs you know we don't think that's particularly significant um at the moment in the numbers that we're seeing If I look around kind of the world and industries, maybe we just start with the U.S., you know, in the U.S. in logistics, the current sentiment seems to be to maintain investment levels, although, you know, customers are monitoring potential inflationary trends and other impacts. And we tend to have longer lead times and we tend to have, you know, better visiting plans. And there, as we talked about in the previous question, there are quite good paybacks on automation. I would suggest, you know, good providing this certain level of, you know, a mixed reaction. And in some instances, manufacturers increasing or accelerating domestic production capacity and build in the U.S. you know i'm certainly hearing i've met with some customers some in asia in the last quarter to lean into that but suppliers at their term um and then i think interesting yeah a lot of a lot of moving

yeah that's good color thank you um you know i just want to get your take on gross margins and in that you know it's some sort of each quarter you think you think we've seen the bottom here in your margins and they take a little bit lower and now you got this incremental 50 basis point headwind from tariffs it seems do you do you expect margins to improve sequentially from here despite that headwind and and what were the biggest hits within growth margin in q1 yeah happy to take that so i think that the two topics which we have been really seeing in this quarter are are mixed in fx right so in that regard fx headwinds in the quarter based on where

I did not see that again in the second quarter, but again, and then the second item, mix. So I think mix, we have been talking about this for growing logistics mix head. However, I think volume growth quarter, I think we really, so that we will be very focused on bottom line and we'll certainly talk a little bit more about.

Our next question comes from the line of Jamie Cook with Truist Securities. Please proceed with your question.

Hey, this is actually Kevin Wilson on for Jamie. Good morning and thanks for the time.

Hi, Kevin. Good morning.

Congrats, Rob and Matt. And I just wanted to ask about that new packaging bucket that you split out. I know there are a lot of different end markets you serve within that, including healthcare. I'm just wondering if you could talk more about the penetration opportunity for those markets, maybe the current degree of machine vision adoption there in the competitive landscape in those markets? And then any thoughts on outside of packaging and medical, which smaller markets like aerospace and that now true other bucket that you might see the most potential for long-term adoption of machine vision growing meaningfully over the next few years? Thanks.

Yeah, great. Thanks. So to increase transparency, we added packaging and market to what we're splitting out, and that includes fast-moving consumer goods and healthcare. So it includes industries like food and beverage and tobacco, but also products like razor blades and diapers. And some of the applications would include packaging and labeling, OCR, and then assembly. You asked about other...

And then following up on that emerging customer sales force, which you just mentioned there, you know, understanding the sales transformation efforts, you know, makes sort of quantifying incremental revenue from that cohort more difficult, but just wondering if you could provide, you know, color qualitatively on how bookings and sales for, you know, that less sophisticated customer base have gone in the quarter. And then any thoughts on the OPEC spend associated with emerging customer?

Are you, you know, considering pulling back costs or just anything around OPEC spending, given just how that initiative has performed relative to your targets when you started the program thanks yeah i'll start with sort of the top the top line and the channel and i think dennis may comment a little on expenses um so when you come to investor day you're going to hear about you know a long-term strategy and and a big part of that is substantially expanding our served customer base so if we go back to what i just mentioned about markets like consumer packaged goods, healthcare, aerospace. Getting more into those markets is one of the reasons that we invested in this channel. So we're not going to break out more, but to recap some of the things that we've talked about in the field, and they also generated our metrics, doubling that number of new customers. And then this year, I think you'll hear more about that at Investor Day, But, you know, there's a level of sales.

Dennis.

Abassi with Citi. Please proceed.

Good morning, guys. Thanks for taking my questions.

Good morning. Good morning.

I think you highlighted reshoring and recalibration of global supply chain as an opportunity. I understand it's still early and macro environment remains fluid. But have you seen a step up in conversations with your customers and would be curious to know if it's any particular end market or it's more? If you could remind us, how long does it generally take for, you know, these conversations to convert to orders for Cognex?

Yes, thanks. So this is not a new topic, obviously. You know, we've seen efforts by previous administrations, you know, the Investment Act to build new fabs. Those projects are still, some of them are moving along and will result in Cognex sales as they are brought up and start to produce. So that's it. But I think what we're contemplating now is bringing...

And I want to go back to China. It was down in the quarter, but I think you expect improvement in consumer electronics in 2Q, 3Q, so I think that should help. But can you elaborate on the trends? I think there's a bit of anti-American sentiment that's going on. I don't know if you sense that. And I think you have talked about pricing challenges in the region as well.

Do you expect pricing to improve as demand picks up, or do you think pricing could stay challenged in that region? um yeah so so overall you know our revenue in in china was down about nine percent in the quarter and really the year on year um and the whole story there is consuming aside from that i'd say that you know our business in china was relatively uh stable automotive you know has has been stronger in china than in other markets and you know i think i think those who study the automotive market can see that chinese automotive and how that's performing and i think i mentioned some trends around machine builders, you know, which are important that they're seeing currently in that market. You asked about kind of, you know, anti-American sentiment. So I'd say most of our customers…

Look, Rob, on whatever is next, and congrats, Matt.

Jacob Levinson with Amelia's research. Whoever's your line on mute.

Sorry about that. I'm sure it's going there. Can you hear me, I'm sorry?

We got you. Yeah.

Hi. well i just wanted to say um welcome matt and and congrats uh rob on on the uh on the great run and certainly after 17 years i think uh i think you've deserved a vacation at least so hopefully hopefully yeah two on them um i just said i know we're coming up on the hour here so i just had a quick question for dennis but um you know certainly your stock is uh is down quite a bit this year even after the rebound here. I know you bought back some shares in the quarter, but can you just give us a sense of how you're balancing maybe the buyback opportunity versus keeping some cash from a rainy day fund given the uncertain outlook out there?

I know it's a great question. First of all, I think the basis has really strong cash generation. I think over the last three quarters, And if you look at 12 months cash generation, I think we have been really performing very In that regard, we are certainly mindful about our casualties, and on one side, right, when we think about share-wide banks, the long-term objectives, about 150.

Is your line on mute again?

Thanks for me. I appreciate the time, and I'll see you folks in June.

Excellent. Looking forward to it.

And we have reached the end of the question-and-answer session. I would like to turn the floor back to Matt Motioner for closing remarks.

Thank you for joining us this morning. We look forward to seeing you all at Investor Day in June at quarter's call.

Thank you. This concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.