Corpay, Inc. (CPAY) Earnings Call Transcript & Summary

Hello, everyone. Good morning and thank you for joining Deutsche Bank's Technology Conference. I'm Korey Marcello, and I'm an analyst at the bank covering payments. And we're excited today to be hosting Charles Freund, from -- the CFO of FLEETCOR. And the format today will be a fireside chat. And throughout the session, we encourage you to ask questions by submitting them through the Q&A box on the left-hand side of your screen.

So with that, we can kind of just kick off into questions. Charles, how are you doing today?

Doing great, Korey. Thanks for having me.

I appreciate you being here. And I guess I'll just start with a few big-picture questions, and then we can kind of dig into kind of some of the segments and things like that, if that's all right. So I guess starting with the big picture, my question is just how is FLT positioned over the next few years coming out of the pandemic? What's kind of the strategic direction of the company, if you will? And how does that accelerated shift to digital really benefit FLT?

Sure. So coming off of a great quarter, we've got really strong organic trends. So sales are at record levels, our retention is at record levels. So all of that positions us quite well for continued growth. We've seen a great bounce back in terms of same-store sales coming off of a miserable 2020 with COVID. We've seen a lot of recovery, but there's still more to come. And so even despite our great performance, there's still additional kind of COVID recovery upside in the future. I'd say between that and then obviously our high cash generation, which gives us different optionality for capital allocation. So good organic growth plus optionality for inorganic growth, I'd say we're very well positioned for the future. In terms of our strategic direction, you mentioned digital. We continue to focus on digital selling more and more across all of our businesses. We're looking at cross-selling or bundled selling, which would allow us to generate more revenue per client, which also creates more of a sticky relationship. And then all of our beyond strategies, which increases the utility of our payment products that our clients are currently using, which again creates additional revenue streams and more stickiness. In terms of the shift to digital, comes in kind of 2 flavors. So one, people want to get out of cash and paper-based processes. So we're seeing more and more demand for our RFID solution down in Brazil as well as more of our payment automation solutions, which eliminate check writing and help automate the invoice flow through a company's processes. And then in terms of sales, more and more people are on their phones, spending more and more time doing research and selling, so we have actually embraced that. We're doing more digital advertising, which is creating an uplift, particularly in our small business section, largely our fuel card business, where our digital sales have basically doubled over the near term. So for all those things, we're positioned well. We've got a clear strategy for future growth and riding the kind of digital tailwind, so to speak.

Got it. Yes. So just to kind of go off of that question on the sales there. Can you talk about some of the sales trends kind of by segment? In particular, I think the fleet segment has been quite strong. And maybe discuss kind of the pipeline. And I know the sales were up quite strong from an easier comp, but they're also up from the 2019 period. So just the kind of key drivers there, I know you talked about digital, but anything else to kind of note and kind of the expectations going forward?

Sure. So as you mentioned, we came off with some pretty bad comps in 2020. Our teams were distracted, the prospects were distracted, so they weren't taking our calls. That's shifted now. So we figure out how to sell with remote sales folks who are all Zooming like we are today. We've obviously increased investment. So we slowed down investment in COVID. As people were distracted, there was no point in investing at that time. So we've ramped up investment again this year, which is good. We've also revisited our credit policies. So when COVID hit, we really battened down the hatches, restricted who you could sell to, what levels of credit line might we extend, et cetera. We've now reopened credit in almost every place, and in some cases, even more than before. So as we get smarter and smarter, we saw what worked and what didn't through the pandemic. We can take different kinds of risk going forward because we're smarter. So I'd say all of those things have helped kind of create the momentum across all the lines that you're seeing. I'd say there -- in terms of real pockets of strength, our full AP solution continues to sell; part of that's demand, part of that's our sales. And we've really reoriented our corporate payments sales group to really focus on that product because it's a great customer experience, fully automates the processes but also leverages our virtual card and cross-border capabilities on the back end to monetize the payments. So it kind of helps sell all those things all in one bundled package, which we love and the clients enjoy as well. So we've seen good strength there from both demand and our ability to close those deals. We continue to build out our ERP sales channel in that regards of partnering with them to help us sell that product. And then we've also seen real good strength in our tolls business. And so with that, demand for more RFID. And as we've continued to expand both the use cases, so going beyond tolls, fast food and fuel and other things, so the product has more utility, is therefore, more attractive. We've also tailored offerings in that regard, so it's not a one-size-fits-all. But depending on your use cases and what you need, there's a special pricing program for you. And so that has also helped facilitate sales. And so I'd say that overall, feeling very good about the momentum that we're carrying, and we'll continue to increase our investment going into next year.

Got it. Helpful. And then you touched a little bit, one more high-level question on kind of the retention trends. They've obviously been quite strong. There are a number of reasons for that. A lot of people have seen kind of fairly good retention trends. What is FLT doing in particular to drive retention in the business? And what can you kind of take with you forward post pandemic to kind of keep those retention rates high?

So retention is driven by a number of different factors. So some of it is -- can be sales. So when sales are low, attrition is high in the first early life. The good news is when we measure our same-store sales, that customer has to have been with us for a full year. So we eliminate kind of first year attrition. So because sales were down the last year or so have recovered, but since they were down last year, some of that is driving this. But most of it, what I'd say is around continued improvements in customer experience. So we continue to improve our UIs. We continue to improve the utility of our products. We continue to expand our networks. So all of that combined creates a better user experience centrally as either a manager of a program or for users in the field in terms of convenience and where they can use our payment products, all of that is helping. We do get some benefit from mix. So when we report our overall metric, it is blended across lines of business in certain lines, because of either the nature of the product or the customer segment that it serves, with larger customers being more sticky than small businesses, we are getting some mixed help. So corporate payments being -- growing faster than some of the other lines, and it tends to be more of a mid-market product and it tends to be a stickier product. So that's also helping. And we think that trend will continue as we move forward. But the great news is that we're seeing this retention uplift across all lines. So it's not just a mix game. It really is all lines performing better. So we're quite encouraged by that. And when you think back to the strategy moving forward of cross-selling, bundled selling, and where we've seen when we have multiple solutions or multiple use cases with a given client, those clients stay longer. They're stickier. And so we believe our strategy of cross-selling our bill pay into small business clients will create stickiness in that small business segment that we haven't experienced like in the past. So all of those things, I think, set up really well for the future.

Got it. So I guess we can kind of just shift gears a little bit and kind of get into the segments. Kind of starting with the Corporate Payments segment, I believe it's about 20% of revenue. And it grew around 32% last quarter, I think, led by kind of the full AP solutions, up plus 50%, as you kind of mentioned, very strong results there. Can you just talk a little bit more about kind of that strategy to drive the full AP sales, how that's leading to kind of the additional revenue opportunity? And then maybe get into -- like you said, some of the different cross-sell and the bundling of the corporate payment solutions and kind of what's left there from a cross-sell perspective?

Yes. So let me start. There's kind of 2 segments within that full AP corporate payments arena. There's the mid-market, and there's small business. Let me just start on mid-market. In that regard, we've reoriented the sales force. Hey, let's not sell to stand-alone virtual card and such, let's really try to push full AP. Because when you do that, it comes with a virtual card on the back end and our cross-border if it's needed. And so we think it's a better solution for the client and it incorporates multiple products all at once. So we've been really pushing sales in that regard and retraining folks accordingly. We've also rebranded. So brought all of our corporate payment stuff under the Corpay brand, which we think will also help with that kind of cross-selling and such that we want to do. We're also working hard on these ERP partnerships that we talked about. And so not so much big horizontal folks, think SAP, Oracle, but kind of more mid-market ERPs that really are targeted on certain verticals where we have strength with our virtual card acceptance network. And so by doing that, the ERP makes it easier to implement, makes it easier in terms of a customer experience. It's also easier for us to monetize on the back end because I have more of the vendors in that ecosystem already enrolled in my virtual card network. So all of those things really help in the mid-market. When you move down market into the SMB segment, this is where we think the cross-selling magic has a lot of opportunity. So as you know, we closed on this acquisition of a company called Roger a few months back. And they provide bill payment to small businesses. So they do full invoice capture, approval workflows and then actual bill payments, domestic and international for small businesses. And we have hundreds of thousands of small businesses in our fuel card portfolios here in the U.S. and other hundreds of thousands internationally. And so the big idea is to take that bill pay solution and cross-sell it to that fuel card base. And so we're in the process of kind of testing that now. What we want to do is bring that UI together, so it's a seamless experience for someone. I want to manage my spend. I want to pay bills and such in kind of one holistic experience. So we've been working hard on that regard, and we're in process of actually plugging in that bill pay back-end solution to our fuel card UI like right now.

And I guess just keeping with the corporate payments, I guess, some of the softer areas kind of cross-border and virtual card. As you kind of see the recovery playing out, how should we kind of think about the levers there and kind of the recovery in those businesses? And I think, in particular, you've talked about kind of the T&E card revenue was up quite a lot. I think we're kind of just wondering how much of that is kind of tied to the T&E-related spend categories versus some of the others?

Yes. So 2 things. On the cross border piece, a lot of that is for international trade, right, in between countries and such. And so where we're seeing some sluggishness is around, as you've heard, the supply chain. It's getting kind of clogged up. And so we're seeing some of that as well in that business. As that loosens up, that business will also benefit. On the virtual card side, keeping in mind that this is a mid-market thing. So it's a couple of thousand, several thousand clients. We've got a handful of them that do play pretty heavily in travel-related spaces. So whether they're cruise operators, they're hotel operators, they may be travel booking companies, whatever it may be, they use our virtual card to either buy things for their business or to even do settlement between them and certain partners or providers. And so those companies, although a lot of things have come back from COVID, a lot of those travel-related companies, particularly if they're focused on international travel where borders aren't fully flowing yet, has been sluggish to come back. And so that's really what's been holding that virtual card business from fully recovering to where we want it to be. So like I said earlier, that's optionality. Our business is performing well, right? But there's further optionality for continued improvement with a rebound in cross-border kind of travel.

Got it. And I guess just kind of moving on a little bit to the fleet card segment, which is almost half of the revenue. The Fuel segment grew about 19% last quarter. You talked about the digital sales obviously helping there. Can you just discuss kind of where we are in the recovery of kind of that OTR versus the white-collar segment and kind of what you're expecting going forward there?

Yes, I'd say on the OTR side, we're pretty much recovered. There's a little bit of noise in the U.S., particularly around labor. So we're having some -- a bit of a driver shortage that they're working through. But I'd say in the main, our OTR business is largely back around the world. In terms of more kind of white-collar fleets, we don't have too many here in the U.S., but we do have a fair amount over in Europe. And that has been slower to recover, as office workers basically haven't returned to office yet. Companies continue to delay the mandate to return. And so people are working from home, they're not commuting in. And so that volume continues to be a bit lower than what we've seen historically. So I'd say there's still recovery upside to come, but it's not nearly as large as our blue-collar business.

Got it. That makes sense. And you guys -- you obviously talked a lot about, in particular, kind of moving to the digital sales capabilities. I think they accounted for like 60% of the fuel card sales last quarter globally. And the digital advertising is driving kind of 50% more visitors to the website. I guess what we're trying to figure out is all those solutions, how does that -- does more visits translate into more sales? What's the conversion there? How should we kind of think about how that converts going forward?

Yes, this is really, really exciting for our business, and so let me explain what we've done. So one, we've really focused more top-of-funnel advertising. So if you come and you want to buy a fuel card and you search online, you're going to land at one of our sites, and we'll convert you quite easily. If you're not quite sure what a fuel card is or you're just floating around from an expense management type solution, we didn't really capture you in our net. But we're doing more and more advertising now to get you into the funnel, and we're doing that in really, really smart ways. And what I mean by that is we have dynamic bidding processes. So when you appear, I already know, through all my analytics on the back end, I've tracked, looked at customers that look just like you, your size segment, your geography, et cetera, et cetera. I know what you look like. I know how much to expect in value, therefore, I know how much I should bid. So it's a dynamic kind of acquisition cost based on expected value from who you are. So we're doing that real-time dynamic bidding, and so we're getting higher quality in as opposed to just bidding $10 for every word. I know I'm going to bid $50 because you're a high-value client, whatever it may be. So that's been great. It's been optimizing the spend. To your point, through all that advertising, we're getting more people through. We've also spent money on people, process and technology to optimize the funnel to tracking the journey. When you come in, what do you look at, what you don't look at, where do you drop off? How easy is it to follow through our journey? We've made end-to-end processing. So I don't need humans involved. I can do real-time credit check and all that stuff, make it easy for you to get through the application and get onboarded as quickly as possible. Again, a good customer experience, which leads to more conversions. The great news is that as we've invested more, we're seeing the same, if not even better, return on that investment. So it's not degraded, with incremental investment. It's staying stable, which means I can pour more money in and scale sales very, very quickly. That's different when I joined this company, it was mostly field sales. Hard to recruit and train and get people productive. Over time, we shifted to more telesales where it was easier to control, but you still have to recruit, train and retain. With this digital and end-to-end capabilities, I can turn the faucet on and generate a lot more sales. Now of course, I need to still work through service and other types of things and make sure I can handle that volume. But for now, what we're seeing is all the increment is closing at or better types of rates, and that's quite exciting.

That's great to hear for sure. I think -- I guess the next question, you did touch on it a little bit earlier but maybe you could dig in a bit deeper. Just FLT's plans to kind of broaden that UI into a more complete payment platform. How is that going to look? And how will that kind of drive the bill play -- bill pay clients like you talked about?

So today, more than half -- I want to say, 60% or so of our clients, are paying our bills electronically. So they use our fuel cards in the U.S., and then we generate an invoice, and then they get that invoice electronically, and then they go on our portal, and then they're going to pay their bill. And today, they use a certain solution. What we're doing is now we're going to replace that existing solution with the Roger, we call now Corpay One, bill pay system. So now I'm going to go to pay my bill, and pay FLEETCOR, and I'm going to pay electronically. I'm going to link my bank account or other payment mechanism through this bill pay solution. Once you do that, what I'm going to turn to you and say, Korey, now that you've paid your fuel card bill, would you like to pay any other bills? Let me show you how. And so it's a way to basically introduce the platform kind of in a cross-selling kind of way, but introduce the platform because you're already paying electronically, you're paying your very first bill on the platform. Now you're enabled to pay more, should you want to. So it's a super easy way to get people introduced and hopefully adopting that program to pay more bills. And so that's actually in test at the moment. We've selected 50,000 clients that we're targeting to convert, and we're doing small tests. Because we want to make sure that user experience is seamless, right? You used to pay it this way, you're still paying electronically, but it's a slightly different platform. I want to make sure that experience is seamless. So now you're in. I've got my books in that now you want to do more on that new platform. And so we're in the process now of testing it in a small way and then we're going to roll it out to that 50,000.

When is the timing of that, just on the further rollout?

Yes, I'd say we're targeting the fuller rollout Q4 only because we want to make sure that testing is perfect.

Got it. And one of the hot topics that comes up and you guys addressed on the earnings call, but maybe we can dig in a little bit, is just the EV opportunity. I think there's obviously some opportunities and risks there. If you could kind of go through those and how you see FLT positioned to go after that opportunity. And more importantly, as that mix kind of shifts to EV over time, is that going to be kind of a modest drag? Or is it going to be a modest tailwind? How should we think about that mix shift and how that's going to kind of impact the business slowly over time?

Yes. So we are embracing the transition to EVs, and we want to position ourselves as a partner for fleets as they migrate. And so not all fleets will convert all at once, right? It's going to be a transition as they replace vehicles that are coming off of their life cycle. So whatever that is, as vehicles age out, I'm going to replace it with an EV. Or they may do it in terms of vehicle types. I may replace the cars from my sales fleet, but I'm not quite ready to do the trucks for my delivery folks because the technology quite isn't there, okay, great. And so what we want to do is help fleet managers with that transition by providing tools, payment tools that basically mirror the existing processes. So it's around setting up certain policies. Today, we have policies around where you fuel, how much you buy, et cetera. There may be policies in the future around where you charge or even what type of charging you do. Are you a supercharger all the time? Don't do that, you'll wear down the battery. Okay, how is this going to work? So making sure we can help people manage policies, obviously, enabling the payment. So whether that payment is out in the network or someone goes and we pay the charge operator and then build the company so that the driver isn't coming out of pocket and having to deal with expense reimbursement. Or if that charge happens at home, and we don't want the driver to come out of pocket and have to pay the utility bill. So we will pay that on their behalf, and again, charge the company, which just looks like a network site to the fleet operator and the driver is never out of pocket. And it eliminates the whole expense reimbursement thing, which is one of the reasons why people use fuel cards to begin with. So we're trying to mirror that experience for the fleet operator to make their transition as painless as possible while still providing the controls and the reporting to allow them to optimize their fleet. And the reason people -- you do that, it's a couple of reasons. One, they want to maintain costs, but they also need to manage that asset appropriately. So chewing up battery life, it's a bad thing for a fleet operator because the resale value of that goes down over time. And so we want to be helpful in terms of gathering the data and providing that back to the fleet operators in a holistic way.

Got it.

In terms of the economics, yes, electricity is cheaper for now because people aren't paying road use taxes, but wait for another day. But the frequency is more. And so we get paid in different ways in our fuel business. So we might charge someone a per month card fee, whether it's a diesel vehicle or whether it's an electric vehicle. And what's that card fee for? It's for account management, it's for reporting and the controls, right? Then we -- sure, we get paid something from merchants in terms of the transaction, but sometimes fleets will also pay us a transaction fee, again, for enabling that transaction on their behalf. On the back end, there are sometimes enhanced reporting type fees and things. So there's different mechanisms already in place. Our revenue is not driven purely by here's a transaction, here's a percentage interchange and here's our revenue. It's not really how it works. And so in an EV world, we can still get paid on a per vehicle basis. I can still get paid on a per transaction basis. There's going to be a lot more frequent transactions. Yes, my MDR from a transaction size perspective might be lower, but we're also finding that the charge operators because of the margins that they make are more -- are willing to give us higher types of, what you might call, interchange rates. So instead of where we might earn 2% to 3% in a standard fuel card transaction, we earn 5% to even 10% or more in a charge operator network. So in balance, our current experience is that in some cases, we make more money on electric vehicles because of subscription fees and the data and such than we do with standard internal combustion engines. How that plays out over time? Not clear. But we feel very well positioned given the products and the services we're providing, and we'll be able to generate consistent revenue streams as people make the migration.

Got it. And you mentioned some investments around getting that up and running. How significant are those investments? And how quickly are you guys investing? You're seeing the trend towards EV somewhat slowly. So how are you kind of positioning those investments? How quickly are you going after this? And how are you kind of just balancing that with the opportunity that you see coming out?

Yes, I'd say we're working hard to get state -- not get, it's actually stay ahead of the curve, right? So I don't want to be playing catch up ever. So what's great is that we're seeing things move a little faster in Europe. And so we can see how it plays out and take some of the best practices and learnings and bring that here to the U.S., which is a bigger market. But nonetheless, we're ahead of the curve. At the moment, we're trialing various programs. We've gone to market in the U.K., we're trialing several things here in the U.S., which are pretty exciting. And so I'd say that we're ahead, we're going to stay ahead. We're going to invest on in the front end, so we're not caught off guard. And to your point, it's moving slower and different segments move slower. So cars go first, and then you get kind of the vans and pickups will move, then the heavier trucks will move, delivery kind of trucks. And then OTR stuff will be the last. Because the battery technology, it's great, but it's just not there. When you add a lot of weight to a vehicle, it just doesn't hold up yet.

Makes sense. And I know that FLEETCOR has a bit of exposure to areas like construction and things like that, that may benefit from the infrastructure bill. I'm just curious, I know you kind of mentioned on the call, but any kind of thoughts there on kind of how we should think about maybe some potential upside coming from that bill for the company?

Yes, I'd say that construction is a big vertical, and it cuts across several of our lines of business. So construction is also a big vertical in lodging. Think of big crews that go out and are building big infrastructure-type projects. They're going to need to stay somewhere as they're working to build those bridges or whatever it may be. We also see it in our corporate payments business. So there, it's a mix of residential and more commercial, industrial-type construction where they're using virtual cars and other tools to pay for supplies. I'm going to buy millions of dollars of cement and steel and other things. And so yes, we do see some potential upside there. There's probably more in the corporate payment space because of the supply that they named in the lodging space. Construction in the fleet space tends to be a bit more residential construction, think trades people and such, which when you talk about infrastructure, wouldn't necessarily benefit as much. We've already seen a lot of rebound in that residential construction space with the COVID recovery.

Makes sense. I guess just switching gears to some of the capital allocation and kind of acquisitions you guys have made recently. I think you've kind of acquired AFEX and ALE in kind of the cross-border and the lodging segment. In particular, what does ALE kind of bring to the insurance side of things? And maybe you can just talk to those 2 acquisitions. And maybe further to that, we can maybe talk about the pipeline of future acquisitions and kind of what the strategy is going forward.

Sure. So let me just start with AFEX, which is closed and we're in the process of our integration plan. It is a very, very similar business to one that we bought several years ago called Cambridge. Both of these are newer cross-border FX players, they have better technology than some of the legacy providers, but they're very, very similar in terms of the segments that they serve and their geographic footprints. And so where Cambridge -- both would serve folks in Canada, the U.S., the U.K., Australia, Cambridge was big in Canada and the U.S., AFEX is bigger in the U.K. and Australia. So it's highly complementary. So very similar businesses, offering very similar products to very similar customer segments with overlapping footprints creates great synergy kind of opportunities. So this is a down the fairway. We know this business. It's in the same place as we are, so we can get great integration synergy from that acquisition. So that's, that. Shifting over to ALE. ALE provides to insurance companies, temporary lodging for policyholders who are displaced from their homes. Every day, all around the country, unfortunately, tragedy strikes and homes burn down, apartment buildings burn down. Obviously, you saw the Hurricane Ida, and what happened with -- in New Orleans and even up in the Northeast, where I grew up I mean, Jersey and such. Flooding, people are displaced, and it could be for months, if not years at a time before they're back in their homes. They may have to be demolished and rebuilt or gutted, whatever it may be. So it's a terrible tragedy, but that's what ALE does. It basically helps the policyholder find temporary lodging on behalf of the insurance company. And it's an area that we didn't play in, in lodging. And so what ALE brings to us is a different customer group called insurance providers, servicing their policyholders. So I have a new customer segment. It also brings me a slightly different network. So while there was overlap, the nature or the types of places where you might want to put a family who's displaced for a couple of years might be a little different than a business traveler, or a blue-collar business travelers on the highway and just needs to stay overnight. And so they tend to be longer-term types of stays, more suites, even rental homes, a network of rental homes. And so it's expanded, yet again, our lodging network, which we can -- obviously, where there's overlap, we'll leverage -- we'll optimize for rates. So we'll get some synergies there. But also provides more utility for all of our lodging clients as our network gets expanded. On the client side and the insurance side, it also opens up the opportunity for other payment products to be used. So when that family is displaced from their home, they might have lost their car. They might have -- all the food is gone. They might have lost all their clothes, right, electronics. There's all types of things that could be covered under a policy to be reimbursed. We can put all those things on our payment products and help facilitate that on behalf of the insurance companies. And so we're looking at that as a subsequent opportunity in the midterm to go back and help them help the policyholders in these difficult times.

Got it. And I'll just kind of wrap up with kind of one overall question. The results last quarter were quite good. The execution has been good, feedback on the company messaging, et cetera, and a good upbeat kind of guidance. So what are investors kind of missing here, I guess, in your opinion?

I think it's just a perspective issue, quite frankly. FLEETCOR, we've been around about 20 years, about when I joined was when Ron founded FLEETCOR and started building out the company. And so since we've been around for a long time, people view us as kind of a legacy-type company. And I'd say that might be true as it relates to fuel, right? We're in the fuel space. We've been in the fuel space for a long, long time, and we do pretty well at it. We serve small businesses. We've got a great sales engine. We continue to grow, so it seems fine. When you shift into kind of the corporate payment space, which has a lot of new entrants in it, we're just one of the new entrants. Our acquisition of Nvoicepay, Roger, et cetera, give us great technology, modern -- super modern technology, even AFEX and Cambridge which, again, are newish FX providers going against legacy FX and banks, quite frankly. And so all that new -- kind of new, new folks, we're one of them, in a space called Corporate Payments or B2B payments that has such enormous TAM and green space that we can run for years before we start stepping on each other's toes, which is one of the reasons why we use our platforms, both our virtual card platform and our cross-border platform to enable some of these other new fintech players because there's so much space for us to go grab. And so I'd say that people don't recognize that it's not one company, and you can frame it as one company. Yes, we're a legacy fuel card provider that's coming up with innovative ways to ride the EV migration. Okay, that's fine. On the corporate payment side, we are the new player going after legacy payment methods and those incumbent providers. And so I'd say it's a tale of 2 cities, maybe. And I wouldn't want people to just paint FLEETCOR in that one light of a legacy provider. The other thing is because of our scale and size and our cash generation, we had that optionality you just mentioned around capital allocation, where whether we're buying companies or buying back shares, whatever it is, we have a way to continue to grow the business, grow organically but also inorganically to create returns for shareholders. And I just don't want people to miss that.

That's great. Well, with that, I think we're out of time. So thank you very much, Charles, for joining us today. I appreciate your time, and that concludes the session.

Thanks, Korey.

Thank you very much.