Delta Air Lines, Inc. (DAL) Earnings Call Transcript & Summary

Good morning, everybody. My name is Jamie Baker. I cover the U.S. airlines and aircraft leasing companies at JPMorgan. And it's my pleasure to welcome you back to yet another JPMorgan Industrials Conference. I'm joined by my colleague and good friend, Mark Streeter. And we have an absolute murderers' row of senior managers that are going to be presenting throughout the day today. Obviously, pretty interesting times. Hopefully, our conference can draw some attention to just how inexpensive airline stocks are at the moment. To wit, on a forward PE basis, the big 3 are trading 16 turns inside of the market at the moment. And you'd have to go back to the recovery period following the financial crisis to find a derating of that magnitude. And of course, since that time -- in fact, even during the RASM crisis of 2015, we didn't see this much of a disconnect between airline valuations and that of the broader market. And since that time, I mean, international returns have only grown stronger. The premium market has exploded for lack of a better term, loyalty returns significantly higher. And perhaps most importantly, the big 3 have ceased the margin high ground from the low-cost carriers, the LMAs, really for the first time since industry deregulation. So I'm happy to be here, but if it sounds like I'm frustrated with current multiples, it's because I am. Mark, anything you want to add to that before we kick things off with Delta?

I would just say we have several credit investors in the room, and I don't think they're necessarily complaining about where credit prices are right now because the credit market definitely has a different views than the equity market. And that sometimes tells you something. So pay attention to that today as we talk about the balance sheet repair process and where we are just in the industry's recovery from COVID. The other thing I just want to mention is that this completes this conference sort of the conference gauntlet that Jamie and I have been on. We started out the year in Ireland in Dublin with the lessors. We moved on to our high-yield conference in Miami, followed by the ISTAT Conference in Austin. Now we have the Industrials Conference today. We're going to host a wrap-up webinar Thursday at 1:00 p.m. If you're not on our distribution list, and you don't have those details, reach out. We'll make sure you get that. We'll wrap up everything from not only this conference, but those prior conferences, what we've learned about the market as we set the table for 2024 performance. So with that, Jamie, do you want to introduce that?

Absolutely. I have had the pleasure of doing 17 prior times. That's excluding our 2 virtual conferences. Let me turn the stage over to Delta Airlines. We've got Ed Bastian, Glen Hauenstein, Dan Janki and Julie Stewart. Well please join us on stage and take over.

Is there something to advance the slides or is that on?

Yes. There is it. And there's 1 over here.

You're going to be doing it?

No.

That would be interesting. Well, thank you, Jamie and Mark. It is a pleasure. Thank you for reminding me how many years we've been doing this together. It's but it's still a real treat. And good to see all of you that are with us. I'm going to go through a quick update on the compelling in our opinion, investment thesis in Delta. But before I do that, I just want to give a quick update on the quarter. We did file an 8-K last night. Hopefully, you've seen that. We are expecting to come in on the top half of our revenue guide for the range for the quarter. We guided revenues up 3% to 6%. We were expecting based on some really strong demand, strong reliability to come into the top half of that range, which is good because fuel prices have also moved up over the course of the quarter. I think our fuel prices are up about $0.15 per gallon higher than where we were when we gave guidance. So when we always use the market as our guide. So those 2 things offset. And we're expecting our EPS to come in and we're confirming EPS to come in where we set out for at the start of the quarter in that $0.25 to $0.50 positive range for EPS. The quarter is off to a really strong start. The reliability that our team is providing is best-in-class across the industry and leading on every metric that you can imagine, that reliability is actually even better than where we were in the pre-COVID era. So the team is delivering in a very, very nice way. Demand is strong. We've had 9 of the top 10 sales days in our history all within the last 10 weeks. So when you think about the strength of the bookings and the confidence that we have in our outlook, looking forward, we feel really good about demand. And that's setting us on a great platform for continued improvement in the underlying permits of the business. Corporate is also returning. And Glen and Dan and Julie will join me when we go through Q&A, we can talk about that when corporate is 1 of the drivers of that really strong year-end performance that we've seen in the quarter. It's taken another step forward and we expect there is more to go. So we're off to a good start. This is our safe harbor act. I don't know if you can read it or not, you probably can't. But if you do have any questions, you can refer to delta.com and the Investor website analysis. Okay. So we believe quite strongly that we have a very compelling investment thesis here at Delta, and I'm going to walk you through a little bit of that to start the conversation that we'll carry on into Q&A. But the 1 thing I -- before we get into this, I do want to reflect on, it's exactly 4 years to the week when COVID really officially began. The pandemic was declared emergency. This conference was the first conference shut down. We were all wondering where we were and what was happening to us whether this business would ever again be the same. We think about that not just professionally but personally, all the loss that we've gone through. But to get to the back end of this and to be now 4 years beyond that and say that Delta is actually stronger for having gone through this is a testament to our people and the great work that our team is doing, and we are. Our operational performance is better than ever. The demand strength that we see is better than ever. The opportunities for continued improvement are stronger. The industry is continuing to lift at the premium level and Delta is leading that charge. Our brand is transcending this industry, and it's really great to see that Delta difference in action. From a brand standpoint, we talk a lot about the health of our brand as a consumer brand. Airline travel and transportation is what we do. But it's really about the experience on Delta that sets us apart. That's why we generate the premiums that we do relative to the industry. That's why we invest heavily in terms of the improvements to the experience because we are not just the leading brand in the consumer airline space. We're 1 of the leading brands in consumer in total in our country, and we'll talk more about that. Our strategy is returns-focused. We gave, I thought, a great presentation last summer at our Strategy Day in terms of focusing on the metrics and the discipline that are going to continue to make this a great investment for our investors. Return on invested capital at Delta this past year was 13.5%. That's 5 full points above our weighted average cost of capital, and we think there's opportunities for that to continue to improve as margins continue to improve in the business. No airline has -- anywhere has a return of greater than 5 points or anywhere close to 5 points above our cost of capital. We are targeting mid-teens operating margin performance. We ended the year in 2023 at 12%. So we still have a couple of points to go, and we'll talk a bit about where we see that. And we are approaching investment grade to Mark's point. The credit markets are seeing this. We're getting real close. We maintained with Moody's throughout our investment-grade status, and we're just 1 notch below with Fitch and S&P, and we certainly expect at least our metrics will be there by the end of this year in terms of our leverage ratios. And as a result of that, the free cash that we're throwing off in the business is in the Top 10, not the top 10%, the Top 10 of the S&P 500, close to 15% free cash flow yield on our performance. The industry backdrop continues to be great, great for Delta, not necessarily great for the industry. Some parts of the industry, there's continues to be challenges. We do see secular growth, driven by the shifts in generations and whether it's our younger generations wanting to get out and experience the world and they're back with a vengeance, whether it's the baby boomers that felt like they lost a lot of their time and opportunity that are traveling, everyone is out traveling. We're finally seeing the shift from goods to services in terms of the return to service spending, start those lines start to cross for the first time in almost 5 years, where you've seen that. And we're back on approaching, not there yet, approaching the historical trend rates. And I think those trend rates are going to continue to diverge and the experience world and the service economy will continue to be strong. Our consumers are in a very healthy position. Remind you that the Delta Consumer is -- has a household earnings on average of greater than $100,000 a year in terms of earnings. And that consumer, which represents 40% of the consumers in our country accumulated over $30 trillion. That's with a T, trillion dollars of worth, household worth from pre-COVID to where they stand today. So they have the means to travel and they are traveling. It's their #1 discretionary purchase. And when you think about, you put that all together and you couple that with an industry-wide focus on free cash flow generation and returns on capital and discipline, which you're seeing across the board I think we have a really compelling and constructive backdrop. This is a slide we've used before to talk about our brand. As I mentioned, travel and transportation is what we do. The experience is why we do it. It's why people select Delta. They don't select Delta just to be transported. They select it because of our people and the health and the strength of the experience they see on board our aircraft and we're transcending the industry. We're outside of the airline industry, and we're into the top consumer brands in the country and generating those types of returns and premiums is our goal here. We're the #5 U.S. e-commerce retailer in the country. I say that stat and people shake their heads how can that be. Well, we are. It's the strength of the online adoption. We've had 60% of our tickets now are sold through internal channels. We're off the -- largely off the OTA platforms. And if you want the best opportunity and experience and value, you come to delta.com, and that's what we're serving. We were named #11 the Fortune's Most Admired list of the top 500 companies in our country, Delta is #11. For a company that's still getting through COVID. It's quite a statement. Wall Street Journal, once again named us top airline, Best Airline of the Year this past year. Cirium named us the Most Reliable Airline in the World again this year. Forbes where it just came out was #5 Best Large Employer in the Country as Delta. So all these validations are good. It's always great to see the awards, but what it really tells me is the health of the brand and the experience that we have here. And just last week, Air Transport named that Delta will be declared at the IATA conference in Dubai in early June, the Global Airline of the Year, #1 Airline in the world. And a great, great testament to the people of our business. And the health of our loyalty program continues to stay strong. The co-brands' spend on the Delta American Express credit card is approaching 1% of U.S. GDP, which is a pretty lofty number when you think about that. And you look at our card, the credit card business last year, billings were up about 7%, 8%. Our card spend, even though we're the largest card, at Amex, grew double that. So consumers are continuing to look for the Delta travel proposition in the card space as well. One of the changes that we've made over this last decade that's leading to some of these results is the diversification of our revenue stream. Economic volatility in our business is 1 thing that historically has kept investors away from our stock. And when you look at the change, and this is just a snapshot over the last 10 years how this company has shifted is pretty remarkable. Premium revenues, as Jamie mentioned, are killing it. I mean, they're going to continue to gain strength. Premium revenues on Delta are this past year of '19, close to $20 billion. That's about over close -- pretty close to 40% of our total revenues are coming in the premium space. It's the highest margin that we produced, and it's the fastest-growing part of our cabin. And the American Express remuneration, as I talked about, when you look at where we were 10 years ago to where we are today, we've more than tripled that growing at a double-digit clip. We expect this year that number in terms of cash in is going to be $7.5 billion for '24, and we're on our way over these next several years to a $10 billion target that both [indiscernible] and Amex have set for ourselves. And consequently, the industry profit share continues to move Delta's way. Back 10 years ago, we represented 30% of our industry's profits. This past year, we are at 40% of industry's profits. Now having a bigger share of industry profits relative to a 20% market share is not necessarily the thing I'm telling you. I think the industry needs to collectively do well, and that was going to be the Delta's benefit as well. But we put out 20% of the share, and we're generating 40% of the overall profitability in this industry. Our returns-focused strategy that's disciplined has been our hallmark. And while we've been on this cape for the last decade, COVID set us aside. But just think about what we did during COVID. Only airline that did not dilute its shareholders at all, did not raise $1 of equity during the entire crisis, we respected the investment that our shareholders said. We went into it with a relatively strong balance sheet that enabled us to get through COVID in a stronger light. We did not furlough a single employee in the airline as a result. The only major airline that can say that, that statement, by the way, around the world. So it speaks to the loyalty that our people have to this brand. This chart looks at where we are on return on invested capital. I think, it's 1 of the most important metrics that we continue to use in the company to drive performance, 13.4% in '23, as measured against an 8% weighted cost of capital. Our target is to get to the mid-teens and some of the things that's going to help us get there to continue moving that bar are the margin opportunities that we have around efficiency, around optimization, around improved revenue diversity and improved premium as well as the health of the balance sheet that will continue to contribute that. We've been very disciplined on our investment strategy. If you're going to have these types of returns and performance, that means you're disciplined about how you spend your capital. We've been targeting for the last decade, somewhere between 8% to 10% and of our sales going into CapEx, and that's still where we are today. By the way, that's where we were during COVID. We continue to take aircraft during that time frame, and we continue to stay there today. So we're going to spend this year, CapEx around $5 billion, and I expect that level of spend to continue for each of the next several years. So you know what you can expect when you look at close to $10 billion of operating cash flow, the type of cash that this company is going to continue to yield over the next several years. We have some in the industry that are spending a lot on CapEx, almost all of their operating cash flow. We have some that aren't spending much at all because they felt like they've spent in the past. At Delta, we're investing and continuing to keep our product in our fleet in great shape, and we'll continue to do that while we generate free cash flow. And the health of the balance sheet continues to be important, as I mentioned, any cash flow, free cash flow that we have, top priority is to continue to pay down the debt. To get to that investment-grade metric, we expect by the end of this year, we're going to be about 2.5 turns of leverage, at which point we think we're going to start to be approaching investment-grade metrics. And once we get to that point in terms of investment grade quality on the balance sheet, that then opens up the opportunity to consider other forms of cash and capital deployment. But for now, our capital is clearly going into the health of the business at 8% to 10% of sales to keep it going and paying down debt. And over the next couple of years, hopefully, we'll be able to add a few more tools to the toolkit here. And this is my last slide, how we've mapped out our plans and progress over the course of COVID. These are numbers that we put forth in December of '21. Here in New York when we had our Investor Day, it was still in the height of COVID. In fact, Omicron was just coming on to the scene. And people said you're going to give a 3-year plan. I don't think people paid a whole lot of attention to these numbers, but I'm really proud of what we've done in terms of delivering on our commitments. EPS, we've been outperforming each of these -- the numbers that we -- the numbers we put here are better than what we told the market in both '22 and '23. '24, I expect EPS to be in the $6 to $7 range and personally, I think $7 is -- I know that's my target within the company. I know that's this team's target to get north of that $7 EPS target, and that's what we shared with our shareholders back in '21, and we're very focused on that. Free cash flow getting into the $3 billion to $4 billion range and then staying there, if not growing in the years following and getting our adjusted debt-to-EBITDA down to investment-grade levels of 2x to 3x -- 2.5x by the end of this year. So that's our overall thesis. We've got a tremendous amount of momentum that we've created in the business. There's a tremendous amount of demand and interest in our product. We're seeing some of the fastest opportunities for growth, whether it's in loyalty, whether it's in international, whether it's in business that continues to improve, that we've seen here in quite a long period of time. And we feel really good about the outlook, recognizing that this is a very different airline that you're looking at compared to the past, and we expect to continue to grow in that manner. So thank you for your time and we'll pause here, Jamie, and we'll open it up to any questions anyone has.

Ed, I'll kick this off. On the last slide, you showed the credit metrics, and we have pretty good line of sight into where the balance sheet is headed at the end of the year. And by some other metrics, you're even going to be ahead of where you were pre-COVID like unencumbered assets and so forth. So when you think about the next phase here, you have 1 competitor Southwest, if we want to call them a true competitor to you, that has a fortress balance sheet in the industry. So when you're sort of thinking about do you want to just stop getting back to where you were and we can argue you're even going to be ahead of where you were when you think about capital returns, what's sort of the debate amongst you and the team when thinking about the opportunity you have? Because that free cash flow, if you execute, it's going to allow you to take the balance sheet to a place. It wasn't even stronger than where it was before, but also the stock is really cheap. So how do you weigh the 2?

Well, I think, we'll address that when we get there. We've got another year or 2 years to go to being in that kind of position to consider those options. We did launch the dividend last year in which we expect to continue to grow into the future. And we have a -- we realize that the more that we derisk this model, this business model, that debt paydown is going to -- should accrete to the equity holders as well. So we'll see. But we -- this company throughout the last decade was very clear about that once we get our balance sheet in a really good position that an outsized amount of the free cash should go to our owners and to the same management team standing here today.

Ed, so 1 area of pushback that I've received and more at the industry level than Delta-specific is that the ability to further expand margins is hampered. Demand is good. I think the market understands that. We'll put fuel prices to decide, but labor costs are meaningfully higher, a lot of supply chain issues as you're obviously acutely aware, what are the buckets that you can identify at Delta that gives us the confidence in your stated margin expansion target? Where is it going to come from?

Well, we have a number of levers and all I'll ask Dan and Glen to jump in to answer the question as well. At a high level, we're still recovering. We're recovered from COVID, but the cost of the recovery is still pretty significant. So across the board, we now have 10% more employees in every work group than we had back in 2019, yet basically the same size fleet, the same level of overall production capability in the airline. And that was a function of needing to get out ahead to try to because this demand was coming back far faster than capabilities, and we had to hire an enormous amount of people. One out of 3 employees at Delta are new just within the last 3 years. And so we've overhired to try to get on the other side of that. And then now that we're there, now that we're delivering world-class reliability at a level never seen before, we're going to be able to take -- to grow into that higher headcount and start to focus on the efficiency and the productivity and the opportunities to reduce the reserves and reduce some of the places where we can actually become more productive. Optimization also sits on the network side. We have a lot of assets that are still not flying at the same level that we had. It's whether it's the regional flight, planes were still have close to 50 regional jets that are not fully utilized in our network carrying the cost, but we're not utilizing them. We have our core hub structure still not even at 100% yet in places like Atlanta and Detroit, Minneapolis that we're continuing to invest in and grow those will all yield outsized gains. We have the balance sheet opportunities. We have maintenance. Maintenance, we know has been tough for the industry and supply chain. That's going to stabilize as we start to get out ahead of it. So we have quite a few levers that we see to get us from that 12% to that mid-teens, you only need a couple 2 to 3 points to get there. And I think we have a pretty good arsenal of opportunity there, not the least of which, and Glen, you should talk about this, is the fact that we have a much better view of how consumers fly, what they want to experience, who's traveling on Delta than we've ever had before. And now -- and our opportunity to continue to fine-tune that going forward is going to be an opportunity.

I think, that was well said. I think everybody thought this year we'd be able to optimize because we had at least 1 year of decent traffic behind us in last year's results. But what we've seen is people continue to change the way they travel and we have another round to go next year. And I always think of January and February is the most important if you're a network plan or those are the most important months of the year because those are where supply exceeds demand to the greatest extent. So going back right now and looking, recasting this January and this February, which I think we did on a relative basis extremely well. But we think looking at the travel patterns now as we go into next year, we're going to do even better. That's 1. The other that I'd call your attention to is further segmentation in the cabins. We're really at the early stages of segmentation and product offerings that are really customized to what people want. And we've been working on that for 10 years. I think that's 1 of the main reasons that we're able to have the legacy carriers lead the way out of COVID in terms of profitability. But there's a lot of room to continue to expand on that and give customers really what they value.

The one in the back.

In terms of your customer segmentation, would you say that it's more getting people to buy up? Or has your customer mix changed as your product has changed and different customers have gravitated to you. And this is like a 10-year question, not just over the last few years.

Sure. Great question. Glen?

Sure. I think it's a bit of both, is clearly the brand and all the work that we've done on the brand has made Delta the airline of choice if you do have a choice. And so we've been able to seize on that opportunity and again, going through the January and February, which traditionally have some of the lowest load factors in the industry. We run a 3- to 4-point premium to our competitive set in the off-peak months. And that's really a combination of 2 things. One is new customers want to come in and continuing to improve our customer base in terms of its demographics and then selling products that we quite honestly used to give away, they were always in our arsenal and making those the huge profit centers of the airline. And I think that's -- the secret sauce that we've had is to say how do you make your premium products, the margin leaders. And then how do you continue to leverage segmentation within each 1 of those premium products moving forward? And that's the part of the journey we're starting now.

Glen, a couple of demand questions that I've fielded this morning from clients. I assume by affirming the high end of your revenue range that domestic RASM did, in fact, invert as you had guided to. Can you confirm that? And should we expect domestic RASM to remain positive for the rest of this year, at least as far as your visibility extends? And then second, 1 of the other presenting airlines today did cite some softness in close-in leisure. Now it's an airline that doesn't have your revenue diversity. So it could very well be that you're also seeing that weakness, but it was more than made up for by premium, by international and so forth. Just wondering if your more egalitarian lower-end consumers were demonstrating any close-in weakness? It's a 2-part demand question.

Yes. Certainly, for the quarter, we guided that domestic RASM would inflect and indeed, that's where -- 2 weeks or 3 weeks to go, that's where we think it will come out. As for the rest of the year, we'll see how it unfolds. As many of you know, there's a little more domestic capacity in the second quarter. That comes down in the third quarter and beyond as it looks today to us. So it's going to be a good year domestically. I'm not going to go out and pontificate whether or not it's going to be positive for the year, but it's going to be a very, very strong year in terms of domestic results. On your other question, do we see close-in weakness? The answer is no. We've actually seen close-in build in the month of March. And of course, that's -- because 1 of the reasons that's behind that is the return of corporate travel, and we're just a shade under where we were in '19 now for intents and purposes, we're calling it fully restored in terms of traffic. And so that's actually been a very good piece of our business for the March and beyond period.

I'll jump in with another one. Ed, and maybe for Dan as well. There seems to be many different schools of thought with how to think about loyalty. We've talked about this a little bit before, but maybe we can revisit it here. Just thinking about using it as a debt product. So figuring out a way to sort of unlock the equity value. Jamie and I look back on what we got right and wrong, looking at COVID in the 4 years and the journey we've been on. The 1 thing we got right was the importance of loyalty and how it's grown and how important it is to Delta. So what are your current thoughts on loyalty as a debt product, loyalty as something that can help prove the valuation and how cheap the valuation is at Delta? How are you thinking about it in 2024?

Well, we -- loyalty is important to us, right? It's 1 of the core strengths of our brand. And if you're inferring, are we thinking about a monetization opportunity to kind of capitalize on that loyalty, we're not there yet. We are absolutely using it in our debt structure and it was a very important feature to help us get through COVID without having to tap our shareholders first, any equity, which I appreciated. And that's going to be kind of a living, breathing opportunity now going forward to continue to keep that as a way in which we raise capital, certainly debt capital at a very, very efficient level. We're growing our loyalty. We're growing our brand. We're expanding our brand. And the last thing that we need right now is to stop and get distracted as to trying to figure out who gets what share of what and how to kind of start to take it apart. I'd rather keep growing it and building it and having all of our stakeholders feel good about that the loyalty is we're 100% aligned together with our loyalty partners and with our customers, that Delta is investing in loyalty like no one before and whether it's the actual credit card and the work we do there or it's just the experience that we deliver, onboard the planes. We're -- that's all -- that all goes into loyalty, and it's hard to separate that.

Is there any way, just as a follow-up, I've been dealing with in the credit world, of course, Spirit and they have loyalty back debt and so forth. And you look at their actual loyalty cash flows, it's less than $100 million, right? And you look at your American Express remuneration, not necessarily apples-to-apples numbers, but it's just the magnitude is so huge. I mean, is there any way for your competition that doesn't have the same magnitude of loyalty? Is that the biggest reason why there's been this margin pendulum shift, if you will, towards the big 3 network carriers and a way from what Jamie referred to as the low-margin airlines or the former ultra-low-cost carriers?

I'll speak to Delta. At Delta, it's the strength of our brand. It's the loyalty of our customers that drives that American Express. The fact that our consumers are spending at a higher clip and asking for Delta miles as the principal form of currency on their personal cards as well as how they are actually utilizing the product, speaks volumes for us. And I don't think that, that's something that you can kind of contrast and compare within the industry. I think it really -- there's a direct correlation between the health of the business, the health of your consumer loyalty and preference and where your loyalty revenues go.

I'll throw out 1 more just on international. I'm wondering if you can do a little bit of a walk around the world where you stand with your international partners, specifically in with LatAm in Brazil in light of the gold bankruptcy and so forth, how we should be thinking about that? Does that represent, for example, the goal of restructuring upside potential to your forecast for this year?

Glen, why don't you walk around the international...

A little walk around the world.

Take us a tour around the world.

Sure. Start domestically, I think we talked earlier, it's a very strong domestic market and really the hallmarks there are continued strength in premium products and growing demand for corporate travel and the more traditional corporate travel of Fortune 500 companies. So that's setting up well for second quarter and beyond. Internationally, which I think a lot of people expected unit revenues to be down substantially after last year's Bonanza and the Transatlantic in terms of unit revenues, we see very, very strong demand. It remains to be seen whether or not that will be actually when it all comes to is positive, but it's going to be low single digits positive or closer to flat. So that's -- and I have a big bet on the Transatlantic unit revenues for the second quarter. I'd say they're going to come out positive. Who says they're coming out flat. We'll see who wins.

I hope you win.

We're on your side.

Yes, we're all on my side.

I win either way.

He tends to do that. He wins either way. So the Pacific, which I think we're most excited about is that for many, many years, the Pacific was a drag on our earnings, and we kept telling our investors to be patient with us. We're in a multiyear restructuring and we had to find the right alliance partner, the right alliance structure. We had to get the right airplanes in the mix. We had to get rid of the Narita hub. So that was really a 10-year journey for us. And we're expecting that this summer is Transpacific will be the best returns in our company's history. So very excited about that. And LatAm, of course, our newest partner, we're making great investments with there. And we're looking at unit revenues that are down low single digits on capacity increases that are somewhere between 30% and 50% on a year-over-year basis. So really growing the total revenue in the Transatlantic -- Latin America, Deep South. And we'll put that into harvest mode when we're done developing it. But this year, in the first couple of years, this -- are about developing those bridges that make our positions in South America the best and the most sustainable. So very excited about where we sit there.

That's great. Nothing else from the audience. I think that clock is actually mistaken because we're done.

We're done. Awesome. Thank you, everybody. Appreciate you being here.