Hello, and thank you for standing by. My name is Lacy, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the US Foods Holding Corp First Quarter 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. Thank you. I would now like to turn the call over to Mike Neese, SVP of Investor Relations. Please go ahead.

Thank you, Lacy. Good morning, everyone, and welcome to the US Foods first quarter fiscal 2025 earnings call. On today's call, we have Dave Flitman, our CEO; and Dirk Locascio, CFO. We will take your questions after our prepared remarks conclude. Please limit yourself to one question and one follow-up. Our earnings release issued earlier this morning and today's presentation can be found on the Investor Relations page of our website at ir.usfoods.com. During today's call, unless otherwise stated, we're comparing our first quarter of fiscal year 2025 to the same period in fiscal year 2024. In addition to historical information, certain statements made during today's call are considered forward-looking statements. Please review the risk factors in our Form 10-K for a detailed discussion of the potential factors that could cause our actual results to differ materially from those anticipated in forward-looking statements. Lastly, during today's call, we will refer to certain non-GAAP financial measures. All reconciliations to the most comparable GAAP financial measures are included in the schedules on our earnings press release, as well as in the presentation slides posted on our website. We are not providing reconciliations to forward-looking non-GAAP financial measures. Now, I'll turn the call over to Dave.

Thanks, Mike. Good morning, everyone, and thank you for joining us. Let's turn to today's agenda. I'll start by sharing our key results in the quarter and then we'll provide an update on CHEF'STORE. Next, I'll highlight several key achievements under our strategic pillars and hand it over to Dirk to review our first quarter financial results and our fiscal 2025 guidance. In the first quarter, we outperformed the industry and again delivered strong profitability with adjusted EBITDA growing more than 9% and adjusted diluted EPS increasing 26% despite the challenging operating environment and severe weather-related headwinds. Our results underscore the strength of our customer value proposition and our team's relentless execution of our strategy. We are delivering consistent share gains with our target customer types including our 16th consecutive quarter of gains with independent restaurants and 18th consecutive quarter with healthcare. I'm also pleased to announce that our Board recently authorized a new $1 billion share repurchase program, which builds upon our cumulative buyback of more than 24 million shares, totaling $1.3 billion since late 2022. I'll now take a minute to briefly discuss CHEF'STORE. At our Investor Day last June, I announced our intent to explore strategic alternatives for our CHEF'STORE business. After multiple conversations with potential buyers and engaging in active negotiations over the past several months, it became apparent that the current macro environment was not conducive to completing a transaction at an appropriate valuation. For the foreseeable future, we plan to retain and further improve the business. While I still believe the CHEF'STORE business is not the right long-term strategic fit for our company, our team has worked very hard over the last year to improve the operations and profitability. More specifically, first quarter EBITDA growth was in line with the overall company. And as a reminder, CHEF'STORE represents less than 5% of our total EBITDA. Earlier I discussed our strong profitability gains in the first quarter and now, I'll dive a little deeper into our case growth. Total volume increased 1.1% with independent restaurant case growth of 2.5% while healthcare and hospitality grew 6.1% and 3.6% respectively. Our healthcare business continues to perform very well. We are the industry leader in healthcare and remain confident in our ability to drive strong growth and continued market share gains this year and beyond. Our independent case growth was impacted by severe weather and multiple storms across the US, including the wildfires in LA. This impact was partially offset as we lapped last year's labor disruptions translating to a net headwind of approximately 160 basis points to independent restaurant case growth. The broader industry faced similar headwinds with foot traffic as published by Black Box, down 3% for the first quarter. It hit a low in February, down approximately 6% but improved in March by nearly 350 basis points. However, we successfully gained share each month in independent restaurants and outperformed the industry. Our organic independent case growth accelerated 450 basis points from February to March and that momentum carried into April. In fact, over the last three weeks, we delivered our highest cumulative independent case volumes of the year and our net new independent account generation was the highest of the year in April. We now expect our growth rate to accelerate for the remainder of the quarter and be in line with our updated modeling assumption of 2% to 5% independent case growth for the full year, which Dirk will discuss shortly. As we look ahead, another topic that's on everyone's mind is a tariff environment and the impact on our industry and the economy. We are monitoring the evolving situation and staying closely connected with our suppliers to source alternative products where appropriate. Imported products account for a small portion of our business with mid to high-single-digit percentage of our purchases likely subject to some level of tariffs. Our customer value proposition remains our focus as we continue to help our customers in their efforts to be more efficient, run more profitably and optimize their menu offerings, most notably with our private label brands. Turning to slide 4. We operate in a large, resilient and growing industry for restaurants, healthcare, and hospitality. The fastest-growing and most profitable customer types represent a $270 billion addressable market, and food away-from-home continues to steadily increase—a multi-decade trend that we believe will continue. Our business and industry have proven to be quite stable across macro cycles. As I've mentioned before, our self-help initiatives are in the early to mid-innings of implementation and thus US Foods is well positioned despite the slower macro backdrop. If demand softens further, we have various levers that we can pull in addition to those we already have in place. These include reducing discretionary spending, further accelerating productivity, and moderating capital expenditures. Importantly, 80% of our distribution operating expense is variable and flexes during sustained periods of softer demand. As a reminder, during the great financial crisis, our volume was down just mid-single digits, while adjusted EBITDA was essentially flat. We will continue to adjust to the macro environment as appropriate while staying focused on executing our proven playbook. Turning to our focused plan to profitably grow US Foods. We are guided by four strategic pillars, and I'll discuss our progress on each over the next several slides. Moving to slide 5. Our first pillar is culture, keeping our associates safe as our top priority and during the first quarter, our injury and accident rates were 12% better than the prior year. We've made strong progress and over the past two years, our rates have improved by 38%. I'm proud of our team's success, but we will not waiver until we reach our goal of zero injuries and accidents. In March, I held my second annual CEO award ceremony to celebrate associates who ignited excellence across US Foods. Shortly, I'll highlight two winners in particular, to exemplify our cultural beliefs and drive our results. Not only are we supporting our associates, we are helping our communities. Last week, we announced an increased strategic investment in support of our Helping Communities Make It program, which represents more than a fivefold increase over the last two years. As part of this commitment, we donated $250,000 to Giving Kitchen to provide emergency assistance to foodservice workers. We're also proud to have renewed our American Red Cross partnership as an annual disaster giving partner. Turning to slide 6, our second pillar, service. We continue to make excellent progress in improving our on-time delivery and service levels to our customers, and we are currently at our best service levels since 2019. An important element of our service is operations quality composites or Ops QC, which measures our ability to deliver products to our customers without errors. During the first quarter, our Ops QC metric improved approximately 20% from the prior year and was our best performance since the first quarter of 2021. We continue to roll out our cart routing platform, which is driving delivery efficiency gains and providing better customer service. 50 markets are live or in active deployment which represent nearly 70% of our routed miles and we remain on track to be fully deployed by year end. In the fourth quarter of 2024, we launched a new generative AI automatic order guide for our sellers to make it more efficient for them to create customer proposals and onboard new business. This more efficient process along with other activities we've taken off our sellers' plates resulted in an acceleration in net new independent accounts during March and further acceleration in April. We are in the early stages of leveraging proprietary AI tools, and we're excited about the momentum we're building. Let's now turn to our growth pillar on slide 7. We remain focused on accelerating profitable growth and gaining market share with our target customer types. We continue to invest in our Pronto small truck delivery service. Last year, we launched Pronto penetration in six markets to further increase our share of wallet with our existing customer base. As a reminder, Pronto penetration extends our Pronto service to existing independent customers who will be able to order on non-routine delivery days with later cutoff times. In our pilot markets, we saw a sustained 10% to 15% uplift in overall case growth from customers in the program. As a result, we now have Pronto penetration in 10 markets and plan to be in a total of 20 markets by the end of 2025. We are also continuing to gain new business in healthcare and hospitality. During the quarter, we began onboarding more than $100 million in annualized new business wins across hospitals, senior living, lodging, and recreation facilities. We captured additional share gains during the first quarter in both healthcare and hospitality by leveraging our expertise, our differentiated selling model and our long-term relationships. And we are thrilled to announce that our Scoop products surpassed $1 billion in annual sales for the first time in 2024. We just launched our new Spring Scoop, which features 18 high-quality innovative and labor-saving products designed to attract and retain diners and address back-of-house pain points. A great example is our chef's line on natural Beef Birria, a trending Mexican deep dish that is projected to grow by more than 100% over the next four years. Turning to slide 8, our profit pillar. Adjusted gross profit grew 5% in the first quarter to $1.6 billion driven by volume growth, improved cost of goods savings and increased private label penetration. We made further progress on cost of goods by collaborating with additional vendors and we remain confident in achieving $260 million of COGS savings under our new long-range plan. Total company private label penetration increased 90 basis points to 34% and core independent restaurant penetration grew by nearly 50 basis points to a quarterly record of more than 53%. Private label growth remains a significant opportunity for Foods and helps our customers offset inflationary pressure. Our products offer a competitively priced high-quality value proposition that our customers are looking for while improving our margins. As a reminder, we do not see a near-term ceiling to our private label growth. We also continue to drive significant improvement in associate retention across our supply chain network. Our annualized selector turnover improved by approximately 20 percentage points and driver turnover improved by low single digits over the prior year—both driven by our initiatives including flexible scheduling. While there's more to do in this area, this is our best turnover rate for both selectors and drivers in the last five years. We're also seeking ways to identify cost savings and further streamline administrative processes. We removed spans and layers in 2024. And earlier this year, we took steps to reduce complexity, waste, and non-value-added work across the organization and focus resources closer to the customer. More specifically, additional administrative cost actions we have taken this year are expected to generate $30 million in expense savings in 2025. This is in addition to the $120 million in annualized operating expense savings actions we took last year. Our focused strategy and our ability to drive improved profitability through controlling what we can control highlight the resilience of our business model and our ability to adjust to any macro environment. I very much appreciate each of our associates for their hard work and dedication supporting our customers and executing our strategy. Before passing it to Dirk, I'll highlight two CEO award-winning associates, both of whom are veterans. Brian Butts, who served in the Army National Guard for eight years, is a market field trainer and was part of a team that led the replacement of our forklifts with safer center ride models. His contribution made a positive impact on our safety results, and to date there has not been a single recorded injury with a new center ride powered industrial equipment. Thank you, Brian, for not only keeping our associates safe but keeping our country safe through your military service. I'd also like to acknowledge Philip Sagardoy, Region Margin Manager, who served in the Marines for four years for his contributions as part of our next-generation pricing team. This initiative provides an integrated and agile platform that serves as a single source for local pricing execution and analysis. Thank you, Philip, for your work on this important initiative and for serving our country so greatly. As we approach Memorial Day, I express my deepest gratitude to Brian, Philip, and all of our veterans including our associates who have served our great nation. US Foods proudly supports those who have sacrificed for our country from our Those Who Serve employee business resource group to our new partnership with SkillBridge, which connects transitioning service members with hands-on civilian career experience through innovative internship partnerships. This holiday is a time for reflection, appreciation, and remembrance. As you spend time with family and friends, please join me in honoring the heroes who made the ultimate sacrifice for our country and for our freedom. Let me now turn the call over to Dirk to discuss our first quarter results and our 2025 guidance.

Thank you, Dave and good morning, everyone. We again delivered solid top line and strong bottom line growth as we gain share in each of our target customer types and grew our business profitably. This growth is despite softer restaurant traffic driven by widespread extreme weather and weaker consumer sentiment. Starting on Slide 10. First quarter net sales increased 4.5% to $9.4 billion, driven by case volume growth of 1.1% and food cost inflation and mix impact of 3.4%. Our independent restaurant volume grew 2.5% including 120 basis points from acquisitions. Healthcare growth remained strong at 6.1% and hospitality accelerated to 3.6%, as we continued to successfully onboard new business. We expect healthcare and hospitality to show continued growth over the coming quarters based on our differentiated strategy. Our chain restaurant volume declined 4.3% and was broadly in line with industry foot traffic reported by Black Box. First quarter adjusted EBITDA grew 9.3% from the prior year to $389 million from a combination of volume growth, gross profit gains and operating expense productivity. We again delivered meaningful operating leverage improvement as adjusted gross profit dollars grew 120 basis points faster than adjusted operating expenses, driven by the strong execution of our self-help initiatives. As a result, adjusted EBITDA margin increased by 18 basis points to 4.2%. Finally, adjusted diluted EPS increased 26% to $0.68. We continue to grow adjusted EPS significantly faster than adjusted EBITDA, due to the combination of earnings growth and accretive share repurchases. Turning to Slide 11. We increased adjusted EBITDA per case again this quarter as we drove further operating leverage improvement. Adjusted gross profit per case continued its strong growth trajectory, improving $0.30 or 4% compared to the prior year, driven in large part by our initiatives to accelerate cost of goods savings and increased private label penetration. Adjusted operating expense per case increased $0.16 or 2.7%. We continue to offset a portion of operating expense inflation by improving supply chain productivity, streamlining administrative processes, and capturing savings on indirect procurement spend. First quarter adjusted EBITDA per case was $1.90, up $0.15 from the prior year as our increase in adjusted gross profit per case was nearly twice as large as the increase in adjusted operating expense per case. We have consistently grown adjusted gross profit per case faster than adjusted operating expense per case with our first quarter results building on consistent operating leverage gains every quarter of the last three years. This consistency in execution and balance of volume growth and operating leverage gains positions us well even in a slower macro backdrop. Our results demonstrate our sharp focus and effective execution of our strategy. As we've commenced our 2025 to 2027 long-range plan, we are confident in our ability to deliver on the financial commitments we outlined at our Investor Day last June. Moving to Slide 12. We continue to increase our cash flow and deploy capital in a manner that's consistent with our capital allocation priorities, investing in the business to support growth, returning capital to shareholders via share repurchases, maintaining net leverage within our target range and executing accretive tuck-in M&A. Operating cash flow increased $252 million to $391 million, driven by earnings growth and working capital management as well as a shift in the year-over-year timing of holiday-related inventory build. In the second quarter, we expect inventory levels to normalize compared to the prior year. We repurchased $23 million of shares during the first quarter and closed on the acquisition of Jake Spiner Foods for $92 million. As we stated last quarter, we remain committed to returning capital to shareholders and will return to more meaningful share repurchases over the balance of this quarter and the remainder of 2025. As Dave noted earlier, our Board recently authorized a new $1 billion share repurchase program. Finally, we ended the quarter at 2.7x net leverage, well within our 2x to 3x target range. This is a slight reduction compared to year-end and the same period last year. Our debt structure is strong, and we have no long-term debt maturities until 2028. I'm also pleased to report another positive development related to our credit rating. Our corporate credit rating was recently upgraded one notch by S&P to BB+ based on continued improvements in our financial performance and ability to sustain lower leverage. Now turning to our guidance and modeling assumptions on Slide 13. Given our year-to-date performance and outlook for the balance of the year, we are reaffirming our fiscal year 2025 guidance and updating several modeling assumptions. Despite the softer backdrop, we continue to execute our self-help initiatives to drive profitable volume growth, enhance gross profit, streamline operating expenses and deliver strong earnings growth. As a result, we continue to expect adjusted EBITDA growth of 8% to 12% and adjusted diluted EPS growth of 17% to 23%. We also still expect 4% to 6% sales growth. Within the sales growth, however, we expect higher sales inflation and mix of approximately 3% and lower case growth. Given the slower foot traffic and the soft macro environment, we now expect total case growth of 1% to 3%, which includes independent restaurant case growth of 2% to 5%, as Dave mentioned. All other modeling assumptions remain unchanged. We have a long runway of growth ahead of us with distinct competitive advantages, scale, a diverse customer base, and brand awareness that sets us apart. We remain focused on executing our margin expansion initiatives, delivering strong earnings growth and generating substantial cash flow, which drives our confidence in achieving our long-range plan. With that, I'll pass it back to Dave for his closing remarks.

Thanks Dirk. Looking ahead, we remain intensely focused on executing our strategy amid this challenging environment. Despite the noisy quarter, we drove solid adjusted EBITDA growth, increased our margins, and delivered industry-leading 26% adjusted EPS growth. We operate in a highly resilient industry. Ours is a self-help and execution story and we have multiple gross profit and operating expense levers to pull to deliver results within our guidance range. We have the fastest growth algorithm among our large competitors. We remain confident to deliver our new long-range algorithm of a 5% sales CAGR, 10% adjusted EBITDA CAGR, 20-plus basis points of annual adjusted EBITDA margin expansion, and a 20% adjusted EPS CAGR through 2027. I am convinced that US Foods will continue to gain share and deliver value for our customers and our shareholders in any environment. With that Lacy, please open up the line for questions.

Your first question comes from the line of Edward Kelly with Wells Fargo. You may go ahead.

Yes, hi. Good morning, guys and nice quarter in a tough backdrop. Dave I wanted to ask you, you delivered EBITDA growth within your guidance in Q1 despite what we saw this quarter. I guess first like what does that say about your ability to flex the self-help momentum of the business? And then you maintained the full year guidance despite added uncertainty. So, I just want to be clear about what you're saying there. Does that mean that the added choppiness maybe just sort of chipped away at maybe some of the upside that you might have expected if conditions stay where they are you can hit that range? Maybe just update us on what sort of defines the top end and the bottom end for the year at this point?

Yes. I'll address the second part of your question first. We are confident in achieving that range. This confidence assumes that the macro environment remains steady, which ties into the first part of your question regarding our self-help initiatives. I believe this quarter illustrates the strength of our strategy and the enhanced execution we've been focusing on for the past two and a half years. We have implemented significant self-help measures in our operating expenses and gross margins, which you've seen in action. Additionally, this highlights the uniqueness of our business model. Our approach to the market is centered around the fastest growing and most profitable segments within food service distribution, particularly healthcare, where we continue to gain market share regardless of macro conditions. I'm very optimistic about our model, our execution, and the self-help opportunities still ahead of us, and I feel very positive about our momentum.

I wanted to just follow up on independent cases. I think sequentially your gap versus your biggest peers probably improved a little bit this quarter. Can you maybe just talk about the underlying momentum there? You mentioned some things like Pronto and Generative AI stuff. And then I'm curious as to how April and May are running versus that 2% to 5% full year goal.

Well, I'll take the second part of that. We saw good strength in the back half of March that carried into the first several weeks of April, then we had Easter which was strong, and then the week after Easter is always fairly weak as it is every year. But we're squarely within that range of the new guide that Dirk outlined in April and we had increased strength as we started the month of May here. So I feel really good about our momentum with independent case growth. And as I said in my prepared remarks, we expect that to continue to strengthen throughout this quarter. Net new account generation in April was the strongest of the year. We're squarely focused on taking market share where we need to in the right way that's highly profitable. So our team is focused. We continue to add to our sales headcount in the mid-single-digit range. That's playing out this year just in a similar fashion to what it has for the last two years. So I like our model. We're executing it consistently, and I think it's going to mean good things for the future.

Good morning. Thank you for answering our questions. I wanted to ask Dave and Dirk about some of the additional cost-saving measures you mentioned that could be implemented if demand decreases. Have you already started any of those measures? You also mentioned $30 million in expense reductions this year. I just want to confirm that this is in addition to your initial plans and inquire about which areas these savings will come from and the timing of their impact this year.

Yes. I'll take the second part of your question there and then flip it over to Dirk to add some color and give you a little more detail. So the $30 million, yes, is incremental to any actions that we took last year. As you've heard me talk for the past year and a half or so. We're taking some of the cost burden out of the center and pushing the right resources back into the field to get the organization increasingly focused on the customer, but importantly, giving them the resources that they need to execute. And with that shift to the field, we're taking some cost out. So that $30 million is incremental to the $120 million that we did last year. Dirk?

And the only thing I'll add, Kelly, is you're right, it was executed, and it's beginning to show savings toward the end of the first quarter and through the year. And it's really as we saw this softer market, it was being proactive and working against it, but they're all still good healthy things that will continue to make the business stronger as we move ahead. But I think the bigger picture on gross profit and OpEx is what Dave said earlier in his other comments is with our self-help and the things we have in play, both on gross profit and OpEx, we're not starting from a standstill position. We really have a lot of this in play, and that's how you really see that excellent balance of top line growth, margin expansion, and resulting in that industry-leading EPS that Dave talked about.

And just to give our team all the credit that they deserve. I've never worked with a team as strong as this leadership team in my 40 years of working. Our team is very aligned on what we have to do to execute, and you see all parts of the organization, all functions aligned on our customer and executing to deliver our results. And that's really what informed our confidence in maintaining our guide for the year. If we can execute like we did in the first quarter with all the challenges that we had, there's no reason that we can't continue that execution and hit that guide. We're highly confident.

Thank you. That's helpful. Just following up on the turnover points, the turnover rates you mentioned with selectors and drivers that sounds like quite substantial improvement there. I was just curious if you can give some more historical perspective how that would compare, I guess, beyond the last five years which maybe are not quite normal. And then also if you can give an update on sales force turnover and where that is typically and where that is today if anything to note there?

Yes. I'll take the last question on the sales force. Our sales force turnover is consistent and in line with historical levels. We've had no increase in turnover. In fact, we're adding to our head count quite nicely. And to preempt any further questions in this area, we are not having any issues attracting strong sales talent to the company, people want to join this team because we're winning and consistently taking share. Back to the supply chain side of it I pointed out it was the strongest performance in five years because if you go back to the pandemic, we had our challenges for the first couple of years coming out of the pandemic for a lot of reasons. The whole industry had those sort of challenges. And we've been systematically and consistently digging out of that over the past five years. And my point in tying a bow around the strength of the last five years we don't need to talk about turnover anymore in supply chain. It's that consistent. It's at that lower level. We're back to historical turnover we've not had any issues staffing in any of our operations for a long time now. And so you probably won't hear me say a lot more in the future about turnover because it's no longer an issue.

Thank you very much. I wanted to follow up on the independent case growth. Can you just level set expectations for where you're running in April. So we in the low end as a 2% to 5% guide. And you expect acceleration as you move through the quarter what's driving that assumption? Do you compare it ease? Do you expect to gain incrementally more market share as you move through the quarter? Any color on that would be helpful?

Yes, great question. Yes, we're at the lower end of that range now but I expect us to move closer to the mid and perhaps the highest. And what gives me confidence in that. And that's why I made the point earlier that our net new account generation has been ramping up and it was the strongest of the year in April. And just as a reminder our growth in independent restaurants is predicated on our ability to generate new customers. And it always has been and it always will be the lifeblood of our growth. And so I'm very encouraged by the momentum. It was hard with all the storms in January and February; places weren't open. It's hard to generate new business if they're not serving existing customers. But that started to ramp back up again in March and accelerated in April and I expect good things in May and June as well. So we feel good about the underlying momentum and how we started the quarter versus Q1.

Great. Thank you for that. And then if I could just ask about the competitive environment. Are you seeing any increase in the competition promotional intensity? And just historically do you tend to see that fueled more by the smaller local competitors or the large national players? Thank you.

Sure. I really am not seeing a significant change and I'll predicate that with the foundation of what I always say in this question is it's a very competitive industry. With the fragmented nature that we have, it's roughly 35% to 38% of the share in the Big 3 it's still a highly fragmented industry. And so to your point a lot of those smaller regional and even local competitors drive a lot of that competitive intensity. But what you've seen over the last decade in this industry is the big three have been and continue to take share. And I expect that will continue. Certainly we're going to do our part.

Hi Dave, what are you seeing with lines per account and penetration generally, right? And I would assume drop size is still declining low single digit. Is that fair?

No. I think our lifeblood is the new account generation there, our ability to generate new business and penetration. The foot traffic challenges have shown up in penetration which means less cases per line. Our lines per account are fairly stable. Our drop size is obviously in the first quarter were down just because the volume was down overall. But I really haven't seen any significant shift in how that's playing out. And we just got the black box data for April. It was still down, but it accelerated from March it was down about 1.5%. I think we're kind of seeing that play out. But again what I focus on, John, is our ability to generate new accounts. That's what's driving it. Obviously, the penetration now for 18 months has been a challenge with the foot traffic. It's getting better, but it's still negative. And I expect that will continue to be a challenge with us hopefully less of a challenge going forward as our team works hard to penetrate that existing customer base.

Hi. This is Mathew Rothway on for Mark Carden. Thanks for taking our question. I was hoping you could dig into the trends in chain and healthcare chains were quite a bit weaker compared to last year's growth. Health care appears to accelerate even further. How do you see those unfolding over the year? And then maybe any color as far as penetration or new accounts that you can share?

Good morning. This is Dirk. I’ll take that. Regarding the chain, our decline is similar to the overall trend in black box traffic for the first quarter, reflecting broader softness in the market. Our focus remains on optimizing chain business, but as Dave mentioned earlier, we are dedicated to gaining market share and stimulating growth in independent healthcare and hospitality. This strategy is particularly effective and more profitable. Our focus will continue to be on these areas where we are gaining share, which we are pleased about. Specifically, healthcare has shown remarkable growth, and healthcare hospitality has also accelerated this quarter. As the industry leader, we differentiate ourselves through our customer service model, the technology we provide to ease operations, and our valuable third-party partnerships. We expect healthcare to maintain a healthy growth rate, and we are confident in our ability to continue gaining share across all three customer segments. Hi. Good morning, Jacob. This is Dirk. So, really, the environment hasn't changed. I'd say that the backdrop doesn't change a whole lot, our ability to engage and continue to look for opportunities. Our team continues to work their pipeline and engagement with others out there, so, really, no change overall.

Thanks Lacy, and thanks everyone for joining us today. Our team is executing well. We're excited about our future and will deliver our outcomes in any macro. Have a great week.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.