Gates Industrial Corporation plc (GTES) Earnings Call Transcript & Summary

Get started again. We've got Gates Corporation with us today, which we're very excited about. Ivo Jurek, who's the CEO. Ivo, as I walk over to you, you've been -- I'm going to see at this conference for a long time, which we very much appreciate.

So the temptation to ask you is why is this year different than the last couple of years, right? Like it seems like there's some green shoots out there, maybe even more than green shoots. I think you just reported earnings, so I won't ask you about orders for the last 2 days. But at the same time, I think you talked about 4 of 7 of your major markets growing, only one modestly decreasing, markets such as personal mobility and data center driving you. So it seems like '26 could be a stronger growth year, yet you forecast 1% to 4% organic growth. So maybe talk about the puts and takes there.

Yes. I think it's a good way to open it, Andy, and thank you for having me in Gates here at the conference. Look, when you kind of look back for maybe the last couple of years, I think both in '24 and '25, we have seen some positive earlier incursions of PMI, some sentiment shifting around in both years, kind of ending up with a little bit of a head fake and overcoming some more impediments. So when you kind of fast forward maybe to end of '25 and the quarter that we've just reported, I would say that we have seen a slow and steady buildup in kind of more positive picture across some of our larger industrial OEM markets, commercial construction, less bad behavior in ag, in particular. And exiting '25, we've reported reasonably good strength in order intake, as you indicated. What's really different, I think, in my mind is that for us to see more foundationally based recovery of our business, we need to see an industrial OEM strengthening order trends, and we have seen that. So I think that, that's a good early indicator. I think when you combine that with kind of 3 years of really tough macro background, which is highly unusual, right? You have to go kind of all the way back to World War II to see that type of behavior. And then you start seeing maybe early formation of a little more constructive PMI, it starts to feel like maybe things are improving. I think it's early in the year. As we indicated, yes, our markets are anticipated to be better this year than they were last year. Some of them already are. So you now have more than one data point that would tell you things potentially are forming to be much more supportive in 2026 than we have seen in '25.

And Ivo, when you say like industrial OEMs look a little better, like any sort of examples you talk about?

Yes. Look, we have seen much stronger trends in commercial construction equipment builders. We have seen better ag OEM order trends. We have reported actually our ag business was up high single digits in Q4. And that's taking into account that those OEMs are still reporting pretty negative numbers. So we are doing some things better maybe than the market. So we are outperforming the markets, as we have indicated in our call. And we're certainly quite pleased. Now when you combine that with super strength in personal mobility, we have had really another year of good end market support in automotive replacement side of our business. So the aftermarkets are doing really, really well in the auto side. We still see positive trends, car fleet that is aging, it's still growing. Cars are keeping -- people are keeping their cars longer. They're servicing them better. Nothing that we do is of choice. I mean, if you -- we make critical -- mission-critical applications, support application -- mission-critical applications. So you will have to replace those components when they fail. So those are all positive things that are happening there.

Got it. And we talked on your Q4 call about some distributors having carefully managed their inventory. I think that was specific to your industrial aftermarket business. So maybe comment broadly on how you characterize channel inventory today? And what are you seeing versus sell-in versus sellout and whether you see potential need for channel restocking if PMI were to get better?

Yes. Look, I'm not really concerned with the performance or the behavior of the industrial aftermarket channel inventories simply because it was kind of more seasonal, not really something that is kind of a consistent level of destock. I think that the channel partners they frankly didn't have a great year last year. And so there's no real reason to preposition yourself for '26. You have an opportunity to have a really good '26. And my sense is that as PMI strengthens and frankly, as the industrial OEM businesses strengthen, that benefits nicely the industrial aftermarket channel partners. And so my sense is, as you continue that to recover, as you continue to see the PMI signals to get healthier, I think that you will start seeing that the inventories are getting replenished maybe more aggressively than they have been over the last 3 years, and you should be setting yourself up for a nice rebound in performance in the aftermarket on the industrial side.

Yes, that would be interesting. So I want to go back to your last Investor Day, I think, was 2024, right? And you had talked about sort of various ways to outgrow industrial production. You mentioned then on a baseline of 2% industrial production growth, the Gates could grow 3% to 5% through programs such as eco-innovation, chain-to-belt, personal mobility. So maybe talk about the progress you've had in these areas. We talk about personal mobility a lot. We don't talk about these other things that much. So I'm just curious where you are in this stuff.

Yes. So I think that -- let me not spend a ton of time on personal mobility because I think that we have demonstrated that, that algorithm is working really well. It's very healthy. We continue to take -- we continue to penetrate much more meaningfully that space, and we certainly believe that that's a long-term trajectory of growth for us. And as we have highlighted over the next 3 years, we anticipate to deliver kind of mid-20s to 30% compound annual growth rate. So that's very healthy from a $140-ish million base. On industrial chain-to-belt, look, we're doing some really good things there. We feel that as we are approaching close proximity to the cost of industrial chain, that opens up the opportunities and I think in a similar fashion that we see in personal mobility. So we are quite optimistic that, that will start adding a really nice growth for us. We have demonstrated a really nice performance in automotive aftermarket. We have grown that business very steadily. Actually, in a way, it was a nice chunky growth in 2025. And we certainly believe that the long-term trajectory of the business remains to be kind of GDP plus in addition to some market share gains around the edges. So that offers a good opportunity for us to add to our growth rate. What I'll say is that during that 2024 CMD, we did take into an account that we anticipated to have more positive end market backdrop. And if you think about it, Andy, while we haven't really delivered exactly at the growth rate, I think that we have grown in line with our high multiple, multinational industrial peer set. On average, we have grown as well as they have. And that is in addition to continuing to do a selective participation in our auto OE segment. So while we continue to grow the business, we are improving the quality of our portfolio, our mix, and we continue to grow at the rate of some of our peer group aspiring competitors.

Yes. And your margins have come up pretty significantly. So that's kind of what I want to ask you about. There was, as you remember, a couple of quarters ago, some confusion around what you were saying about your margin in '27. So maybe let's try and clear it up again here. So if I'm interpreting your '26 adjusted EBITDA margin guidance correctly, it looks like you should be exiting the year around 24% margin. And your '27 target, I think, right now is 24.5%. So like I know growth is a huge variable here, but let's say you deliver the middle of your organic growth range, 1% to 4% in '26, it looks like you set up to well achieve that 24.5%. Anything I'm saying there that that's not right or -- yes.

No, I don't think so, Andy. I think that we have a couple of rather large projects that we have undertaken that are a bit of a headwind for us in the first half of this year. I mean, obviously, we've spoken about the deployment of the ERP in Europe, which has actually gone quite well. We have some footprint realignment projects that we are working on that we anticipate will be completed in the first half of the year that will be a benefit and accretion to second half of the year. We have committed that we will be exiting the year at 23.5% EBITDA margin, which is the lower end of what we have forecasted during the CMD in 2024. But during the CMD, we also have anticipated that over that period of time, we will see 500 to 600 basis points of organic growth through that 3-year period of time. Now obviously, that has not happened because of the end markets, but we have yet still delivered a rather significant margin expansion, and we are hitting the bottom end of our range at that negative kind of end market backdrop. So we are exiting, I think, we are troughing the end market macros. We are exiting that troughing environment at record level of profitability, near record level of margins, and we are very, very bullish about our ability to not only deliver on what we have committed, but frankly, probably overachieve if you take into account that our first 12 months incremental margin opportunities kind of in that 45% to 50% fall-through kind of from the second half of this year onwards.

So I want to ask you about that because I think you've got separate programs, right? One is delivering 50 basis points of material savings from here. I think you've been pretty bullish on that and then 100 basis points of footprint optimization savings. I think they're both supposed to contribute to the '27 target. So I know you said you've got -- you had $10 million so far from footprint work that's going to impact this year. But then obviously, it's got to ramp up from there. So how do you think about these programs?

Yes. The programs are performing quite well. Actually, the material cost savings and some of the efficiency projects like 80/20 and some other restructuring that we have continued to do through the cycle have done, have created bigger benefits than what we have anticipated, taking into account that we have been able to offset that lack of growth through the end market backdrop. So I think that I'm quite pleased with that. I think that our footprint optimization, I think on the call, Brooks has indicated that we feel quite confidently that in the second half of the year, it may be $10 million plus that will ramp up into 2027, and we anticipate that in the first half of '27, we'll deliver another $10 million on that project alone. So we are in a really good shape and '27 certainly -- 2027 certainly should be a year of terrific performance. But we're also quite pleased with what -- how we have framed our guidance for '26. We don't need to skip necessarily over '26. I think '26 is going to be quite an okay year for us.

And goes...

Yes, it does.

So maybe just digging into 80/20 just a little bit more. Maybe how much more runway do you have in the journey on 80/20? And how do you think about 80/20 in terms of like an annual margin tailwind? Like how do you think about that?

Yes. Look, I think that 80/20 is a long-term journey for us. We -- I think we have done quite a bit of work on the front end. If you think about this project, this front to back, and I think that that's a really right way to think about it. We are just starting -- we're kind of in the middle of a journey for us on taking 80/20 into our factories into the back end. So I think that there's a ton of opportunity to work through there. I do think that going through the ERP implementation in Europe that will give us some incremental opportunities to drive some more efficiency in our European footprint and how we manage our business there in addition to just driving 80/20. So I do think that you have a good runway for a number of years ahead. And when I think about our business, I don't -- somebody asked me this question, when you get to 24.5%, do you think that that's kind of the end of the journey? So no, that's not the end of the journey. That's kind of the next train station that we are planning to stop by and that we'll continue to drive the train forward.

Yes, that makes sense. And then just maybe honing in on this quarter, Q1 '26. I think you talked about 2% to 2.5% organic revenue decline in the quarter. I think 500 basis points of headwind, right, from 2 fewer business days in the selling season and then your ERP implementation in Europe. So being an analyst, I'll exclude it on the go, your underlying growth is pretty good compared to how it's been. So like why is it pretty good? Is it because Europe has been trending better lately as you talked about? You talked about construction and ag and personal mobility. Are those markets starting to really pick up? Maybe what's in that underlying 3% growth or whatever it is, 2.5%, 3%?

Yes. By the way, Andy, thank you for actually doing the fundamental work. So we actually have a very, very, I think, doable guide. We have no ramp-up in second half of the year. If you think about it and you carry forward the 2.5% of our organic growth, that's kind of what it is for average of the year. One would assume that certainly, if our thesis plays itself out, you should start seeing further acceleration in the second half as the recovery takes hold. Presently, again, strong performance in personal mobility, that's almost 100 basis points of growth that we are delivering on the enterprise. You're going to have a little bit of pricing, certainly an improvement in ag and commercial construction in the industrial OE side. Europe has been doing better. I mean, we have grown in Q3 and Q4. Interestingly enough, I think that Europe is performing rather well for us. And I think you certainly sense a degree of kind of relief in -- from the European customers and certainly from our European teams. And look, our Asia business has been doing quite well. We've been growing in China nicely. I think we have probably differentiated our performance versus our peer set. In East Asia and India, I think that they are kind of at an inflection point of delivering some sustained level of growth as well. So things just feel better.

So IvoI don't know if anybody on the stage today said the words Europe and well together. So maybe you can talk about why Europe is performing well for you guys. Is it the market? Is it something you guys are doing?

Yes. Look, I think that our team is executing really well in Europe. And we're focusing on things that are within our control. Look, I don't control what happens in the macros, and they are what they are. We've got to deal with that. But we have had tremendous growth in personal mobility in Europe. I mean our personal mobility in Europe has grown like 75% rate. That's...

They do like to ride their bicycles there, right?

They do riding their bicycles then and the adoption of the Gates drive is rather significant in Europe. I think that we have been doing a really good job in automotive aftermarket in Europe. So that's been performing well. Look, the industrial businesses are recovering. I mean, similar to what we have seen in the U.S., I would say that maybe Europe is a little bit ahead in Ag and commercial construction recovery. Ag has been quite bad in Europe since 2023. So we feel better about what's happening in Europe.

Maybe same question on China, Ivo, because again, I think you've generally been outperforming in China for a while versus other U.S. multi. So -- and I think you expect continued growth in China. So what does Gates do better than peers in China? Is it the same thing there? What's the outlook? I think you talked about the outlook a little bit for the rest of Asia.

Yes. Look, I think we have a terrific team, and we have had a very focused strategy to build our industrial footprint. If you look at our business in China over the last 10 years or so since I have been at Gates, we have very dramatically retooled our portfolio. We have diversified the applications that we participate in. We have been able to take a nice amount of market share. We have built a rather significant automotive aftermarket presence. Today, we are the #1 market shareholder in China of the products that we manufacture in the automotive aftermarket. So our business in China is nicely diversified, and it continues to perform well. It's a large industrial economy, and we like what we do there.

And then I'm going to open it up to the audience in a second, but I wanted to follow up on ERP more specifically. I think you talked on the call about ERP being a 140, 150 basis point drag on EBITDA margin in Q1, 50 basis points in Q2. So can you remind us where you are in terms of ERP implementations in general? So once you get through this European implementation in the first half of '26, what's left or what's next on ERP?

Yes. I think that there was kind of the last large piece for us. We were operating in Europe on very legacy obsolete systems that were coming out of support. We needed to derisk it. So we have decided to go and launch SAP. About 2.5 years ago, we have deployed the SAP finance module. So we felt like we have kind of had at least Phase 1 covered. So we got a good experience with it in Europe. Meanwhile, we have launched a bunch of SAP applications in Asia. Those worked well and ran well. And so this was a rather large-scale project. It was a big bang. We have gone live early in February. Kind of one of these things, right, you kind of push the button and see if the engine starts. Engine started really well. We are taking orders. We are shipping. We are dropping manufacturing orders. We are making things. We are transitioning things from factories to DCs and back and forth. We are invoicing. There are days they are really good. There are days they are less efficient. And so the drag is really more associated with the cost of support to get back to a standard operating efficiency. But presently, we feel quite well about where we sit. The team has done a terrific job. And while there are still efficiency issues to work through, we are able to do all the functions that we need to do and we needed to do as you restart on a new system. I certainly don't envisage that there will be another implementation of any size anytime soon. We got all regions basically operating on reasonably good systems at this point in time.

Got it. It's good to know. Any questions from the audience? No one. No one has questions. Okay. So maybe if I dig into the businesses a little bit more, Ivo. So let's talk personal mobility again. So it was up greater than 25% for you last year. You talked about the business compounding at high 20s to 30% to 28%. So can you remind us of the size of the business today for Gates? And then when you think about these elevated growth rates, I mean, we just talked about Europe. Is that the region that stands out or other regions? Like where does personal mobility have the best traction?

Yes. So look, the personal mobility business is about $140 million business that presently is about 3%, 3.5% of total company revenue. So it's not super large, but it's a nice size. We have committed that we anticipate the business to be about $300 million by 2028. We surely are on the trajectory to be able to deliver that. This business really took off in Europe about 3 or 4 years ago before we start seeing some of the destock with -- post COVID. That business has completely reaccelerated back at those very high growth rates. We see good growth in Asia as well, and we have a ton of opportunity with that business in North America as North America is embracing a little better quality e-bikes in particular. So we feel that for us, it's a penetration story, and we are competing against nontraditional competitor, industrial chain. We think that we have a better technological solution for electrified 2-wheel application. And so now we are getting Andy to a point where we feel we are on a cusp of mass adoption. And we have done that through 2 things. Number one, we have demonstrated this is a better solution than chain; and two, by very focused execution on innovation to drive the cost of our drive to near cost proximity to industrial chain. And we are approaching that level of performance, and you see a pretty broad-based adoption of that solution.

There's still no real competition in belts, right, for personal mobility, correct?

Not real competition. Gates got basically the vast majority of the market share gains.

So it's just conversion from chains out that you need, right?

It's a penetration...

And is that just happening a little faster in places like Europe than the U.S.? Is that?

It is because the solutions in Europe are -- people actually do care about the quality solution. They want low maintenance and the price points have been a little bit higher there. As we are approaching the cost proximity, it opens up doors to much broader penetration. And look, I mean, we do have some interesting applications. I mean, I think if you go for anybody that shops at Costco, you can go to Costco site and you can buy your kids bike with Gates Drive. So we are starting to get to a level where that cost is no longer being...

It's an interesting question, because it's like you are -- I mean, I remember it was the premium product in most respects, right? So how do you balance like competing and I hate to say that U.S. is a lower-cost market, right? But like how do you balance that and still be premium? Can you do it?

No, absolutely. I think that the solution is still a premium solution. I think that the belt drive is a premium solution to an industrial chain. I think what we have done is we have continued to innovate in a way that gives us still a premium capability through development of a new technology. And the technology, I think, is now getting broadly adopted. And you will have an opportunity to support kind of the mid-market products all the way up to the super premium applications.

Got it. So moving on to data centers. I know it's also a small business for Gates, but you seem pretty positive that getting to $100 million to $200 million by '28. Liquid cooling adoption continues to ramp. So if I think about your products, do they need to -- they have to be spec-ed in by customers? Like how does it work? And are there particular customers or regions that you view as better opportunities for Gates within data centers?

Yes. So first of all, it's a brand-new set of applications for our company, right? We really have not participated in that part of the technology. And so we had to start with developing a technical expertise in what problem are we trying to solve. And I think that we have not only understood the problem, I think that we have developed a specific set of solutions that differentiate us from our main competitors. And we have developed a front-end sort of professionals in the commercial applications as well as the engineering applications to be able to go and work across the spectrum of customer base to get our products designed in. So to your questions, look, we have projects with hyperscalers. We have projects with server manufacturers and design products into server cooling and racks. We have projects with the large infrastructure providers. We have projects that we supply our hoses and our couplings. We have projects where we supply our water pumps. And we have projects where we supply our water pumps and our hoses and our couplings. So full spectrum of portfolio. And look, we have talked about a business that we won with a hyperscaler that's being fulfilled through an Asian ODM. We have a number of nice project awards with large server manufacturers for integration. We're working on specs that will get us into the critical infrastructure. So it's quite positive. We talked on a Q release about the fact that our sequential order growth rate in this segment in the data center segment grew nearly 400% sequentially, 700% year-on-year. Our revenues have increased 5x in 2025, and we anticipate the revenue to grow in a multiple of 2025 in 2026. So we continue to demonstrate the trajectory of that growth. And I think as a team, as an organization, we are quite confident that we will get to that $100 million to $200 million of revenue by 2028.

Yes, that's great to hear. So maybe to some of your larger businesses, industrial off-highway, second largest business behind auto aftermarket. And we talked about it a little bit. I know commercial construction is driving and things like that. Is it global? It's getting better? Like is it more construction than anything else? Like you said ag was a little bit better in Europe. So any more color there would be helpful.

Yes. Look, we started to see a little better performance in commercial construction kind of towards the end of Q3. We have seen continuation of that trend in Q4. So I think commercial construction is recovering. Ag, as I said, has done reasonably better in Europe. We have now started to see inflection in North America as well. Ag has been actually quite okay in Latin America in 2025. So if you have kind of 3 of the larger economies that are doing okay, I feel a little more optimistic about it not being a drag in '26 and being accretive to our growth.

Yes, that's good to know. And then auto aftermarket, it's always kind of a steady Ivo. It's your largest end market. So maybe talk about the trends you're seeing there. Obviously, the global car park continues to get older. That should be helpful to you. So level of visibility and anything you're doing differently in that vertical to outperform the markets?

Yes. Well, we have been outperforming the markets over the last several years. That is a large important market for us. The trends, as you indicated, are very good, right? The car park grows, the car park is aging. People are trying to take care of their cars more or better, I guess, is the right choice of words. So that's an opportunity for us to continue to deliver the GDP plus growth. But Andy, while we represent this business as GDP plus business, we are not satisfied with GDP plus performance even in this market. We want to outgrow the market materially. And we've demonstrated we can do that. I mean we have onboarded a large customer in the U.S. in '25. We believe that we still have opportunities globally to continue to add nice chunks of revenue. And so if we can just grow kind of 2x GDP, I think we will be quite satisfied. We're going to be able to do that every year? I don't think so. But we will have years where we're going to get some chunky meaty wins.

Are there prospects out there like that for '26 or?

Yes, there are prospects like that in '26, but we also -- we have added that new account that we've added in '25 there was meaty, but I think that there's a large opportunity to continue to scale that participation. So I think that there's still a lots of opportunity in automotive aftermarket.

Got it. And then maybe diversified industrial has been a little hard to get a read on. It's pretty big, too, almost 20% of your revenue. So maybe -- I know you're expecting growth in the market in diversified industrial for '26. So maybe talk about what's driving that growth in '26. I think you might have been down in the 4Q.

Yes. So look, diversified industrial, I think, is really well torque towards PMI. And when you start hearing anecdotes, I mean, even from our peer set, right, whether it's Rockwell or Parker indicating pretty good strength in factory automation. Those are all drivers of of our revenue sources as well. So we are certainly closely monitoring the PMIs. We believe that the market is improving as well. But I would like to see more validation on the PMI side before we kind of go and declare victory on strength in diversified industrials.

I know at OEM, it's just going to be like high single digits of the company and kind of being...

I think so. Look, the auto OE business that we have is a really good business. We make good money on it. We will continue to practice selective participation. We don't really spend lots of resources on that business. The business generates a nice amount of free cash flows and good profitability. And while it's there, we will have it. We will not be chasing any business in that set of applications. We are really focused on growing our industrial businesses. And remember, we shrunk that business now to about 8% of revenue, and that's been doing while the industrial businesses haven't done well. So when the industrial business is start reaccelerating, that will naturally continue to compress that participation. And we really have an aspiration to be a broad industrial company, not being necessary, just over torque to [indiscernible].

Got it. So let's shift to cash flow and balance sheet because you mentioned cash flow. I think you had a good cash flow year in '25. You're guiding to 90% plus in '26. Free cash flow does tend to be a little lumpy for you guys at times. So maybe talk about what's different now that supports consistency moving forward?

Yes. Look, I would actually say that our cash flow, while it has been lumpy, it's been lumpy because we have been making significant investments into our business. We are investing in the front end. We are investing in new plant and equipment. We have done quite a bit of restructuring. So net-net-net, I think that we are kind of at approximately 100% free cash flow conversion as a percent of adjusted net income. In 2026, again, we are forecasting 90% plus, and that's why we are spending more on CapEx and more on cash restructuring, right? So as those abate, and we anticipate that those will abate in '26, we have a very high degree of confidence that we'll get back on a consistent trajectory of 100% plus free cash flow conversion. And that just gives us lots of optionality. This is a business that generates a ton of cash. And we are very happy with our performance. And again, I would say that we have yet again outperformed our peer sets in 2026 -- 2025. So I think that just gives us lots of optionality to deploy that cash, whether or not it is through share repos. So now maybe being more thoughtful about M&A.

Yes. So you ended '25 with a net leverage under 2x, 1.85. I think it's the lowest it's been since you became public. So how are you thinking about capital allocation in the current environment? Can we see lean into buybacks more if you don't do deals? Like how are you thinking about it?

Yes. Look, I mean, we have exited the year with over $800 million of cash on our balance sheet. So we have about slightly under $200 million of buyback authorization. We have bought $105 million worth of -- we have returned $105 million of cash back to shareholders through buyback in Q4 alone. We generated a ton of free cash flow in 2026, our forecasted too. So I anticipate that we will be more active. Whether or not the game, it is in buyback. I mean our stock is reasonably inexpensive as a comparison to some of the peers that we comp ourselves against. So I think that, that still is a good opportunity for us to do that. But I will say that we are significantly ahead of the game of what we have committed on deleveraging, the financial deleveraging. And that now gives us that opportunity to look at M&A more aggressively. And there are some good assets available that I think could be very highly accretive to be added to our portfolio.

Could you do a transformational deal? Or are you looking more bolt-ons?

I don't think -- I think that we need to earn the right to do a transformational deal. And I think that we will start with things that we know a lot about, so something that is very near our core business. And gives us a meaningful opportunity to add a decent amount of revenue and profitability. And I don't think necessarily you need to do a transformational deal, but you can still do a reasonably sizable transaction that's actually meaningful to your level of profitability and will be highly accretive in terms of your capability.

For sure. Okay. So last question here, though. So I've asked this every year. What are the top 2 or 3 innovations and structural changes affecting your company over the next 5 years? And are there any emerging industry trends that are perhaps being overlooked in the current discourse?

Look, I'm always surprised at finding new applications through adoption of the core technology that we have developed. So if you think about it, while I don't necessarily believe that the whole electrified propulsion of vehicles have played differently than what I have believed, I think I've been pretty consistent believer that there's going to be room for it, but it will be just another option that the consumer is going to have. We've developed some interesting technology for the application in those vehicles. And we've taken that application, and we are now adapting it into data centers that we would have otherwise not been able to support. We are developing a number of new applications of the technology into personal mobility, where we're going to continue to broaden our ability to become more integrated provider of drive systems. I think that a lot of technology is evolving, but what we're also finding out is that there's fundamental need for our products. And as technologies evolve and new adoptions are being brought to the forefront, it just offers more opportunities for companies that provide foundationally sound technologies that are just required on a daily basis, and we don't really think about them. So I would say that the bigger surprises for me from a technology perspective is how we can continue to branch out and see significantly better future than the past 115 years that we have experienced. I'm really super excited about what's ahead of us. And I do believe that the best times are ahead of our company, not behind.

Awesome. Well, it's a good time to stop. Ivo, thank you very much.

Thank you.