Good day, ladies and gentlemen, and welcome to the Toro Company's first quarter earnings conference call. My name is Daniel, and I will be your coordinator for today. At this time, all the participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of today's conference. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today's call, Heather Hilly, Vice President, Corporate Affairs and Investor Relations. Please proceed, Ms. Hilly.

Good morning, everyone, and thank you for joining us for the Toro Company's first quarter 2026 earnings conference call. I'm Heather Hilly, Head of Investor Relations. On the line with me today are Rick Olson, Chairman and Chief Executive Officer, Edric Funk, President and Chief Operating Officer, and Angie Drake, Vice President and Chief Financial Officer. Rick, Edric, and Angie will provide an overview of our first quarter results, which were released earlier this morning, and discuss our priorities and outlook for the remainder of fiscal 2026. Following their remarks, we'll open the phone lines for a question and answer session. As a reminder, any forward-looking statements that we make this morning are subject to risks and uncertainties, including those described in today's earnings release, investor presentation, and most recent SEC filings, and may cause actual results to differ materially from those contemplated by these statements. Also in our remarks, we'll refer to certain non-GAAP financial measures which we believe are important in evaluating the company's performance. Reconciliations of all non-GAAP numbers to the most directly comparable GAAP number are included in this morning's press release, which along with a first quarter presentation containing supplemental information is posted in the Investor Information section of our corporate website. With that, I will now turn the call over to Rick.

Thanks, Heather, and good morning, everyone. Throughout the first quarter of 2026, our teams remain diligently focused on executing our strategic priorities. We capitalized on market opportunities and customer demand, drove operational excellence, and leveraged our portfolio of leading brands for profitable growth and competitive advantage. At the same time, we invested in value-creating technology and innovation. As a result, we beat expectations in both segments and increased consolidated net sales by more than 4% to $1.04 billion. dollars. Our outperformance was driven by strong execution in both our professional and residential segments, which allowed us to capitalize on incremental demand for snow and ice products and continued growth in underground and specialty construction. We reported better than expected adjusted earnings per share of 74 cents, up from 65 cents a year ago, due to higher earnings in our professional segment which represents about 80 percent of our portfolio we expanded our hydrovac excavation solutions to our acquisition of tornado infrastructure equipment further strengthening our capabilities we continue to implement our multi-year amp program which is feeling sustainable productivity improvements and has contributed 95 million dollars in cost savings toward our aggregate goal of 125 million dollars we generated free cash flow of 14.6 million dollars resulting in an impressive free cash flow conversion rate of 22 percent in a quarter where our seasonal preparations typically result in a net use of cash and we repurchase approximately 95 million dollars of common stock reflecting our commitment to return value to shareholders In summary, through strong execution of our strategic priorities throughout the first quarter, we drove favorable sales and earnings growth and further strengthened our financial position. During the first quarter, our teams were prepared to deliver snow and ice products and capitalize on incremental demand as a series of winter storms hit in major population areas. This operational agility and strong execution not only contributed to excellent Q1 top-line growth, but also positions us well for robust performance in these categories in the back half of this year. Adding to this optimism is our fresh lineup of BOSS plows with new cold front technology, or CFT, which has been well-received by customers. The innovative CFT system integrates plow and spreader functionality and is engineered for effortless connections, smart performance, and maximum efficiency. We also continue to invest in underground and specialty construction, reflecting our expectations of multi-year growth in these businesses. Our efforts underscore our focus on broadening our offering to drive both near- and long-term results. During the first quarter, horizontal directional drills, like the innovative JT21, which launched last year, contributed to our sales upside. We expect customer demand to remain strong. We were very excited to welcome Tornado to the Toro company during the quarter. As a natural adjacency to our existing businesses, its complementary offering enables us to expand our growth opportunities in this market. And this spring, we look forward to showcasing our recently launched DitchWitch SK1000, a compact stand-on skid steer with increased lifting capacity and reduced maintenance, making it ideal for utility work as well as landscaping. To preserve our profit margins and remain price competitive, we continue to pursue deliberate strategies through our AMP program to drive sustainable productivity improvements, cost savings, and net price realization. Through the AMP improvements, we are working to moderate the effect of higher material and manufacturing costs and fully offset the effect of tariffs. We're also carefully managing inventory at all stages of production, as evidenced by our healthy net inventory position at the end of the first quarter. This was a key driver of working capital improvement. While external factors like the economy, geopolitical environment, and weather are ongoing considerations, we are committed to maintaining our discipline and aligning our inventories with expected demand as the year unfolds. These actions are strengthening our operations and driving improved financial results, and our teams and channel partners are highly motivated to build on this momentum. I want to thank them for their ongoing commitment to advancing our product and technology innovations, as well as our cost savings and productivity initiatives. Now Angie will share additional insights on our first quarter results and provide our outlook for the year.

Thank you, Rick, and good morning, everyone. Before getting into the details of our results, I'll highlight three key takeaways from our first quarter performance. First, we delivered better-than-expected top-line growth in both our professional and residential segments through disciplined execution that enabled us to capitalize on seasonal demand opportunities. Second, we delivered adjusted EPS above expectations and prior year through deliberate productivity improvement initiatives that drove favorable operating leverage. And third, our positive free cash flow and strong balance sheet position underscore our commitment to financial discipline and returning cash to shareholders. In short, our consolidated first quarter results demonstrate the strength of our portfolio and market-leading innovation, our commitment to operational excellence, and our thoughtful strategic and financial stewardship. Now, let's dig into some of the details. Consolidated net sales for the first quarter were $1.04 billion, up 4.2% from prior year, and better than expected, as sales in both the professional and residential segments exceeded our guidance. Professional segment net sales in the first quarter were $824 million, while residential segment net sales were $206 million. dollars. Both segments benefited from higher shipments of snow and ice products and net price realization. Strength in underground construction, including the successful integration of Tornado and growth in our landscape business, also contributed to top line growth in the professional segment. We delivered a 9.8% consolidated adjusted operating earnings margin in the first quarter, up from 9.4% a year ago. Both professional segment earnings of $137.6 million and residential segment earnings of $13.2 million exceeded our expectations. Year-over-year results in both segments reflect net price realization and the favorable impact of our ongoing productivity improvement and cost savings measures. This was partially offset by higher material and manufacturing costs. Finally, our first quarter adjusted EPS was $0.74, which exceeded both our prior year adjusted EPS of $0.65 and our previous outlook for this period. Now, turning to our balance sheet and cash flow results. Our balance sheet continues to afford us meaningful strategic optionality, enabling us to focus our capital investment on initiatives that generate profitable growth. Our current leverage ratio of one and a half times remains healthy and well within our stated target range. Our free cash flow for the quarter was $14.6 million, a year-over-year increase of more than $80 million, resulting in a free cash flow conversion rate of 22%. We achieved this performance through meaningful inventory improvement, driven by our integrated business planning process and seasonal demand for snow products. As a result, our inventory turnover improved to 2.8 times in the quarter. Additionally, we returned $133 million to shareholders in the quarter through dividends and share repurchases, demonstrating continued confidence in our ability to generate cash. Looking ahead, we remain focused on capitalizing on top-line growth opportunities, thoughtfully managing our balance sheet and cash flow, and integrating AMP operating efficiency benefits that support our $125 million run-grade target by the end of 2026. We are raising our sales and earnings outlook for fiscal 2026, based on our strong execution and the strength of our first quarter performance. We are increasing our expectation for total company net sales growth to 3% to 6.5%. This reflects, first, professional segment net sales that are expected to grow mid-single digits, and second, residential segment net sales that are expected to be flat to down 3%. This is an increase from our prior residential segment net sales guidance, reflecting strong Q1 results and an improved outlook for the balance of the year. We are also raising our full year 2026 Adjusted Earnings Per Share Guidance to be in the range of $4.40 to $4.60. This outlook assumes a higher total year adjusted gross margin rate consistent with our prior guidance and underscoring our ability to navigate cost pressures while investing in innovation. Higher adjusted operating earnings margin, which reflects annual professional segment earnings margin between 18.5% and 19.5%, and an improved outlook for the residential segment earnings margin between 6.5% and 8.5%, interest expense of approximately $60 million, an adjusted effective tax rate of about 21%, and capital expenditures of $90 to $100 million. dollars. Furthermore, we now expect an improved free cash flow conversion rate of at least 120%. For the second quarter of 2026, we expect total company net sales to increase mid-single digits from the same period in 2025, with mid-single-digit net sales growth expected in both segments. Professional segment earnings margin in the second quarter is expected to be similar to a year ago, while residential segment earnings margin is expected to approach double digits. For the total company, we are expecting mid-single-digit adjusted earnings per share growth in Q2. As a reminder, our second quarter is typically the largest of the year. As evidenced by our strong first quarter performance, we are managing our business to take advantage of our strengths as well as market opportunities while mitigating external pressures. With our team's continued commitment to providing innovative solutions that create value for our customers and drive operational excellence across our business portfolio, I am confident in our ability to deliver sustainable, profitable growth for the long term. With that, I'll turn the call over to Edric.

Thank you, Angie, and good morning, everyone. Our results in the first quarter demonstrate our competitive positioning and business resilience, our market-leading innovation, and our team's skillful execution of key initiatives. Together, these factors provide a solid foundation for future success. With our strong balance sheet of free cash flow, we continue to invest in technological innovations and growth markets that provide significant value for customers and the Toro Let me share a few examples. We are actively pursuing opportunities to capitalize on the growing global demand for underground construction equipment, which is being fueled by aging infrastructure, new data centers, and a rise in energy and telecommunications projects. CONEXPO, which is North America's largest construction trade show, is taking place this At the show, we are exhibiting our broadest offering ever of underground and specialty construction solutions. With our recent acquisition of Tornado, which is a natural complement to our existing products, we are poised to extend our reach and impact within this category and beyond. In Gulf Grounds and Irrigation, we're building a pipeline of innovations that help customers maximize workforce productivity and reduce costs. Last November, we introduced our AI-enabled spatial adjust software, which has proven to be, in the words of our customers, an absolute game-changer. This water management system is simultaneously helping to preserve one of our most precious resources, delivering more consistent playing conditions, and bolstering subscription service offerings that provide incremental recurring revenue for the Toro company. This spring, we are further expanding our water management suite with the launch of our new RxC irrigation controller. This reliable and contractor-friendly irrigation solution provides modular expandability, advanced flow monitoring, and smart features such as predictive weather-based scheduling, seasonal adjustments, and intuitive programming. innovations like this enable our customers to better manage costs conserve water and maintain the condition of the grounds in their care and finally by coupling targeted acquisitions and strategic partnerships with years of our own internal development we are incredibly excited that we now offer the market's broadest range of autonomous turf maintenance solutions we've accomplish this by leveraging multiple localization and navigation technologies across an array of high-energy and low-energy product platforms. While most of these innovations are still early in their growth lifecycle, we're very optimistic about their future potential. At the same time, we're also excited about the near-term opportunities within our core businesses. For example, following the strong performance of our snow categories during Q1 and given the current health of the channel, we're confident about the prospects for those product lines in the second half of this year. Finally, our team's commitment to operational excellence and optimization of our global supply chain will continue to help us mitigate increases in materials and manufacturing costs, streamline our supply chain operations, and manage our inventory with exceptional success. Through the steadfast engagement of our team, we are building strong momentum for future growth. Now, Rick has a few closing remarks. Thank you, Edric.

In closing, I want to underscore our confidence in the Toro company's strategic direction and continued profitable growth. Our actions are enhancing our customers' performance, strengthening our competitive advantage, and increasing our operational efficiency. To our disciplined approach to capital allocation and balance sheet flexibility, as well as our commitment to strong free cash flow, we are well positioned to deliver significant value to all our stakeholders for many years to come. Now, Edric, Angie, and I would be happy to take your questions.

Ladies and gentlemen, if you wish to ask a question, please press star followed by 1-1 on your touchtone telephone. If your question has been answered or you wish to withdraw your question, please press star followed by 1-1 again. Please stand by for your first question. First question comes from Sam Darkhatch with Raymond James. Your line is open.

Good morning, Rick, Angie, Edric. How are you?

Morning, Sam.

I'm well, thank you. A few quick questions, if I could. First off, pro sales were up 7% in the quarter. Can you give us a sense of what that was organically? Excluding the tornado effects?

Yes. So the largest portion of the increase in the quarter would be snow. And the portion specifically attributed to...

Yeah, we also saw improved underground and pro-contractor shipments. And then, of course, you said tornado. So excluding tornado, it would be snow and then underground contractor engulfing grounds. I'm sorry, underground construction and pro-contractor.

So figure maybe 5% or so is organic and a point or two would be tornado. Would that be fair?

That's probably close. What I failed to mention, though, is that we did see some of that offset by some softness that we saw in international. But yes, overall, I think 1% to 2% is probably fair. What we had mentioned in Q4 is that Tornado would contribute about 2% growth for sales, so inorganic growth would be about 2%, and their sales we were expecting to be about $100 million for the year, so pretty well in line with what our expectations were for Q1.

Gotcha. And then on an all-in basis, what was snow and ice? I understand it's a relatively attractive margin category in both segments for you. Can you help us contextualize how much snow

and ice was up in the quarter? Yeah, it was. We did, as Angie said, we had strength across our businesses. If you look at the two reporting segments, it was the largest portion of each of those segments. On the residential portion, it would be the largest, but also offset by some shipments of spring products that will be a little bit later rolling into the second quarter, so there was some offset there, but it was definitely the largest portion of the increase there. Interestingly, on the residential side, as we talked about, there was field inventory in place, so retail was even stronger than the shipments that we saw. Shipments, if you look at a 10-year average, they're about on average on the residential side. On the professional side, a little different story. The shipments were well above the 10-year average, and in both cases, it just puts us in a very positive field inventory position as we go into the second half of the year. That gives us confidence in the preseason fills both for the professional and the residential side as we go into the third and the fourth quarter. So the largest portion of each of the segments was snow, but really strength across the businesses. And, you know, in the case of residential, kind of back to a more normal snow shipment here for us.

Gotcha. And then my last question has to do with the annual guide. um the your the six and a half percent high end of your range i'm trying to first off i'm trying to get there with the professional and residential guide professional up mid single high end of the residential is flat obviously that doesn't get you to six and a half so what in order to get to six-and-a-half, would pro be closer to high single-digit growth, or would resi turn positive? I'm just trying to get a sense of how to think about that high end of the range, Angie.

Yeah, Sam, I think what we can talk to the pieces of that would be, as we think about the full year tornado, we expect to contribute about 2%. We expect to get a little bit more than our average 1% to 2% on net realized price, and And then the balance of that will be driven by organic growth. And that will be largely in the professional segment and in the categories that we talked about earlier, underground, professional contractor, golf and grounds, and a strong second half snow sell-in.

Okay. I'll ask that offline. It's fine. Thank you all. Very good stuff.

Thank you.

Thank you. Our next question comes from Tim Weiss.

with Baird. Your line is open. Hey, everybody. Good morning. Nice job. Maybe just to kind of piggyback off Sam's question, just I guess you raised the residential guide, but you didn't raise the professional guide. Is that just kind of going from one end of the range to the other end of the range, or is there something in pro that's kind of offsetting some of the upside that

you saw in the quarter in Q1? I'd say that from the pro, we probably saw a little more softness in international than we expected. So, we are having to offset some of that. But the rest of it is really largely as we expected in the professional segment for the year. We raised resi because we did see some upside in snow that was a little higher than we expected in Q1 based on some of the snow events that we saw across the country okay okay great and then

i guess one of the one question just when you look at your snow contractor base and your lawn and garden kind of contractor base do you have any sort of sense as to what the overlap between the two is and if strong snow does kind of help the professional landscape business and vice versa

there is uh excuse me there is a lot of overlap so i think what you're uh what you're kind of getting at is if you come into the spring season with contractors that do both snow and summer work they're going to come in in a healthy position and we would anticipate that that would be the case for the contractors and one thing to keep in mind is contractors have really been strong throughout the cycle uh where we had some softness was with the homeowners that were buying professional products. So they've been pretty solid throughout. And the current strength is also being bolstered by the new products that we're introducing. For example, in the Exmark area, the laser that was introduced two years ago and the Radius are both selling very, very strongly. So that put those factors together and it's a very positive position for landscape contractor on the pure pro side. Gotcha. Okay. Okay. That's helpful. And then the last one I

have. Just as we kind of did our golf kind of checks this quarter, we got back kind of an abnormally high response rate around autonomous adoption. And I guess, could you just review for us kind of where you are in autonomous in golf and if there's any sort of kind of KPIs around how big autonomous is, how it's growing, you know, kind of the products that golf courses

are adopting, I think that'd be really helpful. Thanks. Yeah, great question, Tim. The response you got is not surprising. There's a lot of interest, and that wouldn't surprise any of us knowing that labor represents such a significant portion of golf course budgets, and that for a lot of golf courses, they're finding it difficult to find and attract the labor. So that's clearly the driver it has been for some time. We've seen, it's kind of difficult to find a golf course that hasn't at least experimented with some autonomous solutions. And I think they're still looking for how that ultimately fits into their business. And so some of what we're excited about, we've been investing in this category because of those drivers for a long time. And as I mentioned in the prepared remarks, we're pretty excited now that we cover all the bases. So if somebody's looking for that traditional mobot style, whether that's for around the clubhouse or smaller areas of the rough we have that if they're looking for still low energy but a more productive piece we we now offer that product as well if they're looking to uh rather than mow collect balls on the range we've got a version of that platform that does that piece and then we're also now offering products up in the higher energy range so if it's about mowing that longer turf that again you might find in the rough but but they're looking for an even more productive machine and One with the traditional mowing technology, we've got the platform for that, and then all the way now to the fairway mower. So we're pretty excited there. As we said, it's still early days on people, you know, I'd say being all in across the board, but we only expect additional interest and growth in that area.

Awesome. Thank you. Thanks for the detailing, and good luck, guys.

Thank you. Thank you. Our next question comes from David McGregor with Longbow Research. Your line is open.

Hey, good morning. This is Joe Nolan. I'm for David. I was just wondering with the – hey, guys. With the bottlenecking investments and other investments you've made in the Ditch Witch business, just can you talk about how much improvement you're seeing on margins today in that business and how much more improvement we could see in 2026?

Yeah, and Angie can comment specifically, but we continue to see really from the time of the acquisition in 2019 steady growth in our profitability in that business. And it's from a number of factors, obviously, leveraging across the scale of the Toro company, but just also the continued improvement by that business. So we're back in the, you know, soundly in the range of the professional profitability at this point. And the investments that you mentioned, like the new paint system and others within the facility, are helping us to continue to fuel the growth that we see across a lot of drivers within that business. So business continues to be healthy. We've continued to make solid profit improvements, and we're very optimistic about the outlook for that business going forward with a long runway.

Got it. That's encouraging. And then on the international business, you mentioned some weakness there. Could you just expand on what market sets in and just how that's factoring into your guidance?

Yeah, broadly across our businesses, that's the one area that's a little bit behind where we would expect them to be at this point in the year, just through the first quarter. And, you know, I just looked at that detail actually this morning, and it's kind of broadly across a number of areas, both in Europe and in Asia, across multiple categories. So it's more just kind of a general, you know, economic environment sort of situation. Our team is still optimistic that they'll pull that, you know, be on track for the year. But we just see some softness there so far this year that we wanted to pass on commentary.

And then just one last one for me quickly. On M&A, can you just talk about what you're seeing in terms of valuations and just also update us within the existing enterprise where you see the greatest opportunity to build within organic growth?

Our approach to M&A has remained pretty consistent through the years. So the activity has always taken place, building opportunities for M&A. We stay pretty focused in areas where we know we can compete and win. So it's close to our existing businesses, and if you pick those out, it's going to be likely on the professional side, and we see opportunities within, as evidenced by the tornado acquisition within the underground specialty construction particularly, but also opportunities for technology investments and adjacencies that might be there as well. But the key point is process continues on an ongoing basis. Valuations have been high, but some signs of moderating a little bit, just recent data points. So nothing necessarily statistically valid there, but valuations may be moderating a little bit.

Great. Thanks for answering my questions. I'll pass it on.

Thank you. Thank you. Our next question comes from Eric Bosshardt with Cleveland Research Co. Your line is open.

Two things that I could. First of all, with leverage at now one and a half, I'm curious how you're thinking next 12, 18 months is, you know, that there's been a handful of acquisitions, tucking acquisitions and some bigger ones. But I'm curious as we move forward, what the strategy is with the leverage opportunity? Is this buying more stock? Is it more acquisitions? If you could just start on that, that would be helpful.

Yeah, thanks for the question. Our capital allocation strategy remains the same. We first invest in research in our new products and innovations. We invest in opportunities for productivity, improvement, and technology within our facilities. We obviously look for opportunities with M&A, and then, of course, we fund our dividends and typically would buy back stock at the end of that list. With regards to M&A, you know, we have the capacity and we have, you know, the interest in M&A of all sizes. It's really, for us, the process that we go through and the discipline that we maintain in that process. So we're always open to M&A, but it's really the process and the opportunities and the timing for potential sellers that is the gauging factor. So did that answer your question?

Yeah, that helps. The second question is from a field inventory perspective, on both the pro and residential side. Curious what that looks like presently and also the appetite for loading in both the pro and the residential side from your partners.

Yeah, we're actually in a very healthy position from a field inventory standpoint. Even in a normal situation, there will be differences by businesses, so some a little high, some a little low, and those businesses are working to adjust those just with the normal flow. So I would say we're pretty normalized at this point. And with regard to your question about channel fill, it really, as we mentioned earlier, sets us up in case we're confident in the second half of the year with the snow professional products would be going into the preseason and the third quarter and the residential products in the fourth quarter.

Our next question comes from Michael Schliske with DA Davidson & Company. Your line is open.

Hi, good morning. Thank you for taking my questions. Hey, guys. Perhaps you have people on your staff who track this, but does the heavy snowfall that we saw most of this winter, does that lead to a potential greener spring, assuming temperatures, you know, are somewhat normal?

It does, Mike. So, yeah, obviously snowfall leads to early spring moisture that gets, obviously, the growth started early in the spring. So it is typically a positive, and we've seen, you know, solid snowfall across the U.S., interestingly, on average, a little bit below, just because of the extremes. The West had little snow, if you think about some of the ski locations. The Midwest was kind of mixed relative to normal, and then you experienced on the East Coast a really exceptional winter. So that would also influence the effect that you talked about. So less snow in the West would be, you know, less positive going into the spring.

Got it. Thanks for that. Turning to ConExpo, I really enjoyed that. I checked out the booth the other day at ConExpo, the Zitch Witch booth. And I was curious about something I saw there called the Orange Intel System, which looks like an interesting fleet management kind of telematics type of system. But the other brands that you have have similar systems like Horizon 360, for example. And I was curious how you feel about your offerings compared to the competition. Are both of those other offerings on shared infrastructure that maybe other people can't really replicate? And are there any other digital offerings on the way like getting Tornado Edge to it or other digital offerings that might have a good subscription tailwind here?

yeah great observation mike and thanks for the question on that as well we um we get more excited every day with the development of those things in addition to the ones you referenced uh intel 360 would be another one that we're using on the gulf and ground side of the business so some of those grew up in different places orange intel is something that that has existed with the Ditch Witch brand and the Formos Charles Machine Works company even prior to the acquisition by the Toro company. But now all of those teams are working together. We execute something within the company that we call our technology forum that brings all of our technology practitioners together to share and continue to co-develop. So going forward, what you hinted at is absolutely absolutely likely that you'll see more and more commonality, let's say, and ability for customers who work across different segments of our product lines to be able to use some common infrastructure. So lots and lots of good stuff going on now and excitement for the future

there. Great. Maybe one last one on the golf business. I think last quarter you said that, you know, grounds would be a little bit more of a growth area than golf, just because golf has such tough comps and grounds has been a little bit of a kind of, it was hard to meet that demand when golf was so strong. A quarter later, do you still feel that way? Are golf courses, is grounds going to be a bigger driver than it was before? I'd also be curious about the outlook for international golf courses versus domestic. Yeah, another good question. So I'd say

we're probably feeling a bit more optimistic on both fronts in Gulf and grounds. Our efforts in grounds are showing benefits. You remember well that that was something that we were intending to put more energy toward. On the Gulf side, we've done some recent research that's showing actually continued growth in equipment purchase expectations and the budgets to support that. So we were prepared for some, I guess you'd say softening off the incredible growth trajectory that we've been on, seeing that normalize more, and it has, but the incoming orders have been a bit more brisk than we probably anticipated. So I'd say we're probably more optimistic than we were three

months ago in that regard. And just your thoughts on global golf as opposed to domestic. Any

Yeah. Yeah. Thank you. Yeah. You know, connecting back to Rick's earlier comments, things haven't been as strong. Now, participation internationally has been really good, just as it has been in the U.S. There's still money going into the industry, but we've seen a bit more softness there. Development remains pretty strong. Now, given some of the geopolitical things that are going on in the world, We were prepared that that may slow and defer some of the projects in certain regions. But generally, we think things are just connected back to the macroeconomic environment not being quite as strong and maybe a bit less investment internationally than we're seeing in the U.S. Nothing that we're alarmed about, but something that we're watching closely.

Thanks for that. I appreciate it. I'll pass it along.

Thank you. This concludes the question and answer session. Ms. Hilley, please proceed to closing remarks.

Thank you, everyone, for your questions and interest in the Toro Company. We look forward to talking with you again in June to discuss our second quarter 2026 results.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.