Gentex Corporation (GNTX) Earnings Call Transcript & Summary

All right. Thank you, everyone, for being here. My name is Josh Burke. I'm Jen Texas, Vice President of Investor Relations. I appreciate you all take you as well. We -- just a quick -- a couple of points of housekeeping. We are using the Q&A the webcast. [Operator Instructions] The other thing, and this is an apology for me. We had some AP issues this morning, and so we are presentation off with my computer. So if you see any messages pop up from my why if you did not see them if you see anything up on from GCA, you are now accomplished as seen and I apologize in advance for that. We got a merchants. With that said, thank you again for being here. We're going to have Steve kick off the presentation. There will be some tours later. If you do not have an itinerary I've got a printout here. And if you need anything, just me an email or a text Steve?

Thank, Josh. And if you need to peel off at any point, you need some privacy let us know. Obviously, there's probably more important things that listening to us all day and you may be realized now there's plenty faces we can get your privacy -- once again, it is odd like Josh, as you roaster to understand about gross and what he does to fund, also, I want to turn to store cards for those of you who all get a I have to officially be clear that James, James and half around that Josh Play and I were line. . Also, James is the biggest same bagger in the history of James can verify this too Bigras like, I'm a after, he was 2 under -- so I think there's no other conclusion other than he lives more than Josh -- so no a make a joke about a quiz afterwards. That's not entirely true, but I decided not to make Jateeeither. So most of our presentations today is going to be a little different than what we normally do. You -- everyone in this room and online, you know most of this data. So I'm going to hit a couple of highlights and just a couple of themes real quick because it's really going to drive to the underlying theme for the conference. And that is when we look at the fundamental financial performance that we put up over the last couple of years, especially, we truly believe that the market and we get it right, it's a difficult market to convince investors that any play in automotive is a strong one. But if you look at the fundamentals that we've put up, we believe we can paint a very compelling picture that we are significantly undervalued. And so instead of talking through the data you already know. We're really going to focus on the presentation of that data and take a different cut and look at it both in my presentation. Obviously, Neil will talk a lot about on the product side. Kevin's got a few interesting slides as well that are really meant to drive home why we believe we've separated from the current constraints that we've all known and understand about automotive and how it drives potential revenue growth and obviously, financial performance for us. So just going through a quick of these highlights real quick. If you look at net sales, first half of this year, up about $100 million versus last year. Gross margin up basis points -- 170 basis points versus last year. income from operations, you can see up to $265 million versus $231 million last year. Net income, up $213 million versus $190 million last year, up from $0.16 versus $0.92 last year, and we repurchased 5.9 million shares, about $137 million in the first half of the year. With that performance, we can all see what the stock did and I'm not going to rub a on our faces collectively. So I'm not going to show that chart, but I think we know the story of what's happened with most autos, quite frankly, during that same time period. Just a quick refresher, where are we at? What was our original guidance for this year, where are we sitting today? Revenue is still projected to be $2.65 billion to $2.75 billion for the year. We say it's unchanged. That was from our July update when we posted earnings. We actually increased that about $50 million, both low end and high end in the April earnings call. So it is up versus the beginning of the year. We lowered our operating expenses guidance. Now I will just point out, this is a clear of severance and impairments, but we still anticipate there may be additional severance expense throughout this year. I will talk, and I think we're going to discuss a little bit about the FOX integration, how we've done with that. The next wave of severance will likely come with our ERP upgrades. We're not going to have the efficiencies that you need until you get to that point where systems can help offset some of the manual workload that's existed inside of that organization for a long time. We lowered our annual tax rate guidance for the year, lower CapEx for the year, and one of the things we want to pull out, this is not about us not investing. In fact, today, part of the reason for the tours is to see where a lot of that investment over the last few years has gone. Primary reason why we're able to lower CapEx is maintenance CapEx with a reduction in some of the volumes that we've seen, we have plenty of capacity for our core auto-dimming products. Most of the CapEx that you'll see in experience is really targeted over the next 5 years and the facilities, infrastructure and manufacturing lines it will take to help us grow revenue over the next 5 to 10 years. CapEx obviously down and then depreciation and amortization unchanged. We're still targeting this $2.8 billion to $2.9 billion next year, and that is in light of the second half of runoffs that we started talking about already in Q3 experienced in Q2 heading into Q3. Some of those will still contribute use some headwinds starting in the beginning of '27, we'll more than offset those with growth in other areas of market. This isn't to belabor the point, but this is what's happening in global light vehicle production. And obviously, we've all lived through this. We've seen it -- if you back up, I always like to joke 20-some years ago, when we got in this industry, China was less than 5% of global light vehicle production. You look at it now, they are the dominant player. Unfortunately, for us, that's taken most of that skin has come off the backs of our primary customers, European, North America, Japan customers are really the people who have contributed the of volume declines that allow China to pick up some of that extra volume. The reason why I bring this up is we've seen this coming for several years, the last 5 to 7 years have been very obvious what the future holds as it relates to global light vehicle production, we knew the solution had to be technology. It wasn't going to be a volume game. There's not going to be a volume game to be had, and you're not going to get to where we believe we are capable of getting strictly off of selling more base inside mirrors. And so this philosophy and backdrop really drives a lot of the tech innovation you've seen over the last 3 to 4 years. And where -- why we believe what we have to do and where we'll need to contribute to this business in order to help drive growth on a year-over-year basis. This is a truck that we put together really to help drive this scenario. If you look at this -- this is interesting since really the last 25, 26 years, but if you look at the bar chart, that's global light vehicle production, the line chart on the right is our revenue against that backdrop. And you'll notice a couple of things. There is from the early 2000s really all the way until the mid-teens. Basically, this gap between light vehicle production and our revenue was almost consistent across the board. In other words, if you did the math on what are your average sales on a car build, whether you're on that car or not, you're going to see very similar numbers. In the late teens, you start to see that gap shorten between global light vehicle production and our revenue. And then if you look at the last couple of years, you start to see the potential for break, meaning our ability to outgrow even if the market shrinks, the dollar content on a vehicle build anywhere in the world, whether we're on it or not has continually increased -- in a perfect world and the 1 we're targeting, you'll see global light vehicle production relatively flat, and our revenue line continuing to increase above all that really means is we're less dependent on global light vehicle production to create growth. A couple of key points on this. You go back to [ '17 ], 95 million cars produced, $1.8 billion in revenue, [ '25 ] 93 million cars produced. Now China, even more of a percentage of total LVP, revenue goes up to $2.5 billion. That's not by accident. Clearly, what you're seeing there is in a declining light vehicle production environment, we can still produce significant growth and profitability. Our goal is to continue to lessen our dependence on total vehicles produced and more about our ability to raise the average dollar content that we can sell on any vehicle produced globally. It's another way of looking at it. And this is where we start talking about what about the dependence on auto-dimming inside mirrors and your -- and how does that correlate to revenue. So if you look at this chart, this is actually even more telling in some ways. It was the reason why this correlation was so strong because you you're not wrong. For this entire history, you can see a very strong correlation between the number of units, Gentech ships and what happens to revenue. It's really here in the last 3, 4 years where you start to see that divergence -- meaning units can increase revenues can increase. And this is really the point of when we start talking about tech and that tech investment that we've made, why we believe this trend will continue over the next several years. And hopefully, for the rest of our careers, at least. This is not my accident. As I mentioned before, we reached this conclusion. And later today, we're going to talk about -- we're going to reference a little bit at the end of my presentation, kind of a 10-year plan that we put together, I always joke, we created this as an executive team in like late '18, early '19. 2020 was when we were going to roll it out. But we actually codenamed it Project 2030 at the time. And then somehow, magically, there was this thing called COVID and suddenly, the world got turned upside down. Figure it probably wasn't the best time to start pitching the team internally on a 10-year vision of what we want to be when we grow up and how amazing things will be, when nobody knew if you're going to be alive in 6 months or not. So we put it on the time line of that. And then unfortunately, what precipitated after that was a series of chaos that no 1 could have predicted as it relates to power shortages, labor shortages, and I don't really want to rehash it all because I still have some PTSD from it. But the harsh reality is that we decided in 2022 to roll out this plan internally because the chaos wasn't going to end. And so part of that 10-year plan that we put together was saying, we know that LVP is going to be problematic. We know that inside the base mirrors are never going to be everything. It's going to be part of who we are, but it can be everything. And so we began at that point in time to invest heavily in Newtek internally and externally, JVs, partnerships, Stephen, some tech investments and purchases that we've made and starting to look at a way to diversify not just out of automotive to avoid automotive, but part of this presentation, you're going to see is doubling down in automotive. We believe there's tremendous growth there, but we do believe there's ways to tackle new markets with our core competencies and continue to expand our growth in other sectors and truly start to look at what is a diversified manufacturer look like and our true tech company for that matter. A couple of the ways we've been able to accomplish this. I'm not going to belabor this point. Everybody in the room understands what's happened with FDM. The chart speaks for itself. Quite frankly, this is our first great tech investment we had made in quite some time. Really, I think, Neil, we negotiated this deal in like 13, I think, we that in GM's lunch room because that's back then is that's where you were relegated when you were not performing well, which you got to negotiate everything in the freight room. But we shook in on this deal in that meeting. And since then, there's a couple of hard years of engineering, obviously, but the growth has been phenomenal. The reason why I want to point this out is there's a couple of parts of our new tech that we're going to talk about after we get through the morning. When I come back up, we're going to talk through some of the new tech ideas we have and why we think some of them could have a similar growth trajectory to what FDM experienced. I will point out just quickly though, we're a little over -- about 3.2 million units last year. We launched 17 new models in '25. We're on 22 brands, 140 nameplates currently. We expect this year continued growth to 40,000 units this year, an additional 200 to 400,000 units next year. So this is how you start to see what does growth really look like from an FDM perspective and why we believe that could be a strong platform for us. And why every day we wake up trying to find new tech that's consumer facing that can generate this type of growth profile. DMS is the next. One of the things through that 2032 plan when we were talking about strategic -- looking at where we were, we thought there was an opportunity to leverage our geography in the vehicle to embed more tech. This is one of the ideas that came out of that. At the time, we didn't have the play. We did have the tech internally. We made a small acquisition out of Tel Aviv called Guardian Optical. They caught us up and actually put us on the radar inside of the industry using our location for this type of technology. Now when we first started pitching this like most things we do in automotive, everyone looks like we have foreheads and we've fallen out a bed way too many times. The harsh reality is proving that this location is superior in a lot of ways, has helped us win quite a few awards. You see the OEMs that we've launched with already 50 million to 60 million roughly this year is what we're estimating next year, $80 million to $100 million in business focused on this type of technology, leveraging the things we're good at, our geography, our electrochromics, more importantly, cameras, vision systems and now AI learning associated with these types of features. Just a quick 1 on Box. We're going to talk a lot about Fox in a couple of different cross-sections of the Box business today. This one that we're looking at right now is Box is in a total acquisition look at this, right, $196 million, just under $200 million acquisition price. If you look at it, there's 2 things here. The first question is always, obviously, we bought it for basically asset value. And so we saw an opportunity to grow that business, improve profitability and ultimately drive $40 million to $50 million a year in EBIT. Later in the presentation, we're going to talk about this wasn't just a PE play. Obviously, these type of numbers I love. I love stuff for free. And I love stuff for free that generates cash later, and that's what we saw as an opportunity here, and we're well on our way to delivering those results. The harsh reality is if you talk at $40 million to $50 million in EBITDA year, you're not talking about a very long payback period before we have a nice asset that's generating great cash flow and returns. Later, what we're going to talk about is what did we see beyond just the dollars that led us to the point that we thought this acquisition made sense for us. Kevin is going to go into some other details, I do a little bit, but some more details about -- specifically about the pack group. So the premium audio company inside of Box, but we did want to give some quick highlights on this as we look at it. On the discipline side, one of the things I love is post the acquisition, that target was $3.25 to $3.75 a year in revenue, gross margins, covering around 28% on average. Remember, we closed on April 1 of 2025. So we're going to give some highlights here where you talk about the first year. That first year of ownership actually was 3.55%. So right in the sweet spot of our revenue guidance. Gross margins that were 30.5% versus the 28% at midpoint that we had guided to. Where we sit right now, it's very interesting year-to-date plus our forecast. We're targeting that $360 million to $380 million in revenue but 33% to 34% gross margin. So if you start looking at the gross margin performance of the business, the work we've done on the cost discipline side, on the gross margin line, very impressive. Operating margin is even more impressive. And a lot of the savings that we've accomplished there have been on the R&D and SG&A side and in their business, primarily on the SG&A side. Our preference when we make an acquisition like this is to try to not impact R&D. We know that's the life line. That's how we live, how we live and work in our business. But the SG&A, we wanted to get closer aligned to Gentex type numbers, and we're making great progress in that direction. The next couple of slides before I hand it over to Kevin, we're going to take a step back, less about financials and a little bit more about strategy. And this helps set the stage really for why we felt like this pack investment, especially made a lot of sense for us. One of the things that I feel like we don't talk enough about is the HomeLink business itself. And so I think we added this yet. And so if you look at it right now, it's about $330 million a year revenue associated with HomeLink. And so if you know HomeLink, some people have a lovely relationship with it, but it's 3 buttons that controls garage doors and gate access. So if you think about it, it's the very first original car to home automation tool. We've spent a lot of time since that acquisition working on updating investing in that technology to make it stronger and better. One of the things that we saw is a key role to keep this product relevant. And this is both a defensive and an offensive strategy as it relates to HomeLink. This product could and will be threatened by apps. And so our view was, instead of watching this happen, what if we led the space. So one of the things that we've invested in heavily is what we call home Smart Home Solutions. And it's a series of compatibility with partners, Alarm.com, a lot of home automation devices that are now compatible with our HomeLink device through our whole link. The goal is to create the infrastructure so that on a single button press, it would normally open your garage door, you close your blinds unlock your doors, set your alarm system, do all these things through a same single button press. Through that partnership with Alarm.com, we've created a bridge that we actually supply to Alarm.com that actually creates that Cam unit. So you can plug in a simple device part to your alarm dotcom system and then control your whole Alarm.com system through our HomeLink app or button presses. We've continued to expand that process. But as a way to keep Homelink relevant front and center with our automotive customers, but then ultimately to create this channel. If you're using HomeLink to control your Alarm.com system or even if you're in an Alarm.com system, and you have access to your HomeLink information, we can now start to market products like premium audio, for instance. It creates that channel in connection to the consumer. And as we have continued to move into more and more consumer-type focused products, for instance, the Premium Audio group, our place product. We wanted to help create this channel. And so this was both the defensive side of protecting HomeLink in the future of Olink and also pairing it with this offensive strategy of how we get more connected in the consumer space and drive more consumer electronics into the home through that HomeLink brand. The interesting part is we've also worked very hard on the other side of the HomeLink Smart Home Solutions, which just isn't direct-to-consumer, it's also in the building management. So one of the needs that we found through this process is a lot of multifamily dwelling units and other facilities are looking for the same types of features. They want secure access control, the gates, parking, doors and locks and systems shared spaces. They also want to be able to do traffic monitoring. And where is this data coming and going. How do we help create a more seamless operation for owners and operators of multifamily dwelling units. It also has a play in commercial space as well, whether that's industrial, freight handling, you name it, semis coming and going out of facilities, how do we make that a more seamless operation from a security and access control standpoint. Then we'll jump into some of these other product lines. And we kind of throw these all on here together but it is important. If you look at the revenue over the last 5 years, especially, you start talking about what's happened on the aerospace business. So we're targeting about $25 million to $30 million this year. That business obviously went through a little bit of a rough patch after Boeing had some struggles with, well, pretty much everything, I guess. But if you look at it, we were always -- we launched on the 787. It's 100% content on that plane. We continue to see some strength and resilience in the demand for the 787, which is helping drive the business. Since that time, we've also been fully certified now with Airbus. So we're shipping on the Airbus A350. It is optional content for Airbus but also we've launched on the 777 with optional content as well. If you look at the Fire Protection Group, this is a group that's been dwindling over many years. I mean this is the original founding of the company, was commercial fire protection devices. So I'm sure there are some of them I don't see him role. Yes, they're up here. But that when we launched the Place product, it was really out of that 10-year vision as well. If we have a world-class detector, and it's only focused on commercial applications, what could we do if we went after the residential space, especially on the consumer-focused residential space. And so we launched this product line. And we've talked about it a lot, so I'm not going to go through all the details of each of those units, but it does have a very unique feature set, fully connected and this became part of the impetus to say, well, if we have this new product, how are we going to create the channel to get that direct to the consumer because as a company, we've never really focused on that nor do we have those channels established. Fire protection in place really strong growth over the last 18 months, and we're continuing to see a lot of interest. There are some feature sets inside of that product that we didn't anticipate necessarily being needed. We built them into place for the consumer. There's a lot of co-changes happening in California and Florida that are help driving additional demand outside of direct-to-consumer and connected needs that are helping drive that business as well. Biometrics. We've only talked about a little bit last year at mid last year, we lost on Bionect, it's a small company that we acquired that's primarily focused on point of entry and access control. Really, most of their customers right now are data centers. What's interesting about their business model is very similar to what we do. It's fingerprint, facial rec, ultimately, we believe Iris rec that we've always worked on could be a huge part of this. If you've not been in a data center, security is absolutely imperative especially many of the data centers that exist aren't 1 customer type data centers. So a lot of data centers are generic and they sell out their storage facilities to multiple companies. So now you have multiple players coming in, you need to lock down each rack differently and independently. And so these people are being tracked from the time they get our property until the time they go through the data center and which cages they're coming and going to. And so BioConnect product actually provides that security control. What we really love about their business model was about 30% to 40% of their revenue is recurring based off the software and support that they do once they've installed the hardware. What they're really looking for and some of their customers are looking for, what does that next level, next 10 years of sensor technology that needs to exist in order to make sure you're secured and locked down. We believe this trend is well beyond just data centers, financial services buildings, to large corporations, large buildings in general. We believe this is going to be a trend over the next 10 to 15 years. And this company is very well positioned with our hardware and software platform to help take advantage of that. And then like I mentioned, we're going to get into this a little later. The premium audio portion of that of the Box acquisition is about $225 million to $250 million. And so you start to see, though, we're building out a nice sizable portion of the business that has no tie to automotive, but it has strong ties to our core competencies and what it is we do every day. I presented this at the PAC conference 2 weeks ago. I remember anymore, so all for. But I thought this slide -- we put this slide together to help the pack customers understand why this automotive company was interested in a premium audio brand. And so 1 of the things that I love about it is it just simply walks through the strategy we went through when we decided it was time to make this play. So if you look at this first one, it's clearly obvious to me that those -- that channel that we build out with HomeLink and the HomeLink Smart Home Solutions side, becomes a clear way to help increase pack sales by having additional functionality that we can market and sell through our own HomeLink and HomeLink Spoon Solutions apps. Secondly, we could sell Gentex products through the pack channels. When we talk about the fact that we build this as classic Gentech, we engineer some of the world's best products sometimes we engineer them and sitting on the table and then we're like, "All right, how the heck are we going to sell those things now? Well, you can go out and build a direct-to-consumer channel. It's incredibly expensive, and there's no guarantee the relationships are intact and well. One of the things we got was immediate, like knowledge, relationships and credibility by taking a premium audio brand that their customers know 1 love and saying, here's additional content. And the reason why that becomes valuable is -- and you and I learned about this by sitting and talking with a lot of these folks over the last 5 years at Builder Show and other places. A lot of these folks used to be primarily audio focused, low voltage installs. That means they made a lot of money running Cap 5, Cash 6 lines and low voltage wiring through buildings. Obviously, with the app in a Bluetooth and Z-Wave and WiFi devices, there's a lot of that revenue started to dry up. Those folks are looking for additional revenue features that they can sell to help make their businesses more relevant. More importantly, many of the low voltage installers actually made the jump to high-voltage, 120-volt installed base. Meaning now they're installing things like smoke detectors, fire protection devices and other hardwired areas inside of the building. So we saw an opportunity then to say, how do I take these people that are now making high-voltage installs and 120-volt installs and give them an additional pipeline of new products that they can help upsell their customers. For the most part, this is how this industry makes money. So it's 1 thing to run wires, you can make up some amount of money on that. The actual upsell of new tech is where they can make the majority of their money. And so we think there's a lot of synergies between those 2. In the future, though, what we really saw is a couple of things. Neil is going to laugh because I always say this every time. The first wave of place products, 1 of the features I wanted was an audio play inside of that. We weren't able to pull that off, both from a partnership or a timing standpoint when we started launching that. But imagine a lot of the Gentex devices we make and where we're headache, what we could do with a premium audio type product embedded in our products or at least like partnering with our existing customer base to make that more real. And then lastly, how do we take Gentex Tech and put it into pack products. So if you think about a lot of our strategy, we talk about over the years as we leverage our geography and the vehicle to sell more technology, more content. If you look at what Pat occupies, they occupy premium locations inside of your home. Imagine the combination of what we could do with our camera sensors, biometrics inside of a home environment you already have that geography. And people don't think about this often, but some of the hardest part of building a business like this is getting that geography. Once you have it, the ability to upscale and add additional technology is actually far easier than gaining access to that geography initially. And so if you think about this one, this is kind of an up down left, right type strategy. We've got very fortunate when we saw it, obviously, for us, we felt like the financial side was very compelling and something we could manage very early on and make complete sense out of. But the long-term channel implications, cross-selling opportunities and the ability to embed each other's tech thought set up for a real play for us over a long period of time. So just a quick summary before I turn it over to Kevin. This is kind of the pack summary. If you look at what they're doing, not 1 thing, right, which is kind of funny. We've never had this before, but you have a business all of a sudden that has huge consumer focus, especially around the holidays. So it's kind of while when you're trying to predict a business, talking about the Christmas holiday shopping season as an automotive guy, we've never had to worry about, we usually view the world is like that may be the 1 week where 1 bothers you, if you're really lucky, really cool about this business is not only the financial performance, but you look at that gross margin performance from where that came from pre-acquisition to where it's at now. And that whatever orange shallow line, that is actually net of tariffs. And the reason why we say that and their business is very unique in this regard. Tariffs in the automotive space, we all know the challenges. The tariffs hit you're arguing with your customer base nonstop about reimbursement of it. Now the 1 upside is if you get this figured out well with your customer base, usually it doesn't impact take rates too severely in the short term. PAC has a different problem. You're eating that cost right away. You do control the pricing to your consumer. The question is always how are they going to respond? Does that absolutely destroy your volumes if you raise prices? Does it stay the same? Does it -- you would assume it lessons to some degree. One of the things that we've seen, the new tariff costs when combined with a brand-new product lineup, we've seen great resilience from the consumer based off the new products that PAC has launched. And so one of the things that we're continuing to reinforce and work with them on is this is a different cadence in automotive. Every 18 months to 2 years, you had to have a new product lineup new colors, new features, better performance. And so this is a constant innovation industry and so we're excited because it does 2 things. Number one, gives us in, obviously, the financial opportunities that we know and love. Number two, though, is that a little of the urgency of the consumer electronics space does help make our team internally quicker, more adapt, more agile as we respond to our OEM customers as well. So I'll be back in a little bit, but I'm going to turn it over to Kevin and he is going to lot of you.

Thank you, Steve. So before I get started, I do say -- you said one based on core count, but I think there's many ways to measure winning in golf and marketing is one of them and all the balls we were using were Gentex based so Andrew and Yashi and I, we did our part of spreading most of those copies into the woods or around the course. I know hand out from 15 I had a decent day. And I do want to say kudos to Yash for actually first time ever golfing. I think you had enough stones to actually come out there and do it with us. And people only drove on the green once. So we were able to offset that. But it was me with the with the golf car. Yes, exactly. We drove the cart on the green -- but then later, I was like, well, he probably was a little confused because everything is super green out where we're often anyway. . Good job and a good job to Andrew as well. He actually lit it up on the back half, an IFL part. All right. So quickly, I'm going to go through gross margins. Talk about some of the headwinds that we've been experiencing so far talk a little bit about that and then transition a little bit to a little bit of a history lesson on kind of our financial profile. So yes, as Steve said, everybody knows what we printed in Q2, 37% gross margins up 280 basis points from last year's same time. Obviously, a lot of that had to do with the benefits from the IIEPA refunds that we received. So in total, we got a little over $38 million as refunds from previously paid, i.e. PA tariffs. About $18 million, $19 million of that came back through cost of goods sold reductions. The rest of that either reduced inventory or reserved against what we owe to customers, which was a pretty small amount. And that was split pretty much evenly between Gentex and the PAC side. So they had an outsized gross margin improvement because of the size of the business on the PAC side. So the rest of that is really driven based on favorable product mix in our core markets and not to belabor, but to support Steve's point about where the value is from our business continues to be in advanced features and new technology. We talked about it for the last couple of years as we've experienced headwinds in China, with that business being over $200 million of sales and this year ending somewhere closer to $100 million, that the margin profile of that business because it's primarily base interior and exterior mirrors, was much, much lower than our advanced features. And so the case in point is if you look at our gross margin up 50 basis points even sequentially from Q1 to Q2, it's a continuation of that story of weak base mirror shipments which on a headline doesn't look good from a volume perspective, but gross margin expanded by 50 basis points on sales in the automotive part of our business that were down 3%. And I would say over time, if you did that same play 5 years ago or 6 years ago, if we had that same thing happened to us on sales down 3%, margins would have been down, we would had a decremental margins of 40% to 50%. And in this case, you saw margins expand. And so I think it's just a support of our strategy is we're not just taking business for market share's sake. We're looking at every business case, every use of every economic situation of mirror growth and saying, do we want to accept that business to add low margins? Or is there other places that we can put our investments? And so on the operational execution side, that really is driven by our internal team. So we have about 10%, maybe 15% less operational team than we did at the same time 2 years ago. So that -- we have more throughput, more effective throughput, less scrap and more seasoned workforce, which is what really has contributed to that. And then a continued financial discipline of spending appropriately for the size of business that we are. So on the next slide, I'll talk a little bit about the offsets to that. The higher commodity costs, which we'll be experiencing. We have -- for the last 3 years, we've really been pushing our annual customer price reductions down significantly. Well, as you start to grow as your book of business to grow, that stuff starts to come back, but it's still well below what our historical averages have been. And when I talk about historical averages, our APR to our customer base has historically been 2% to 3% as high as 4% to 5% in the mid-20 early 2000s in the last 2 or 3 years, it's been closer to 0 and sometimes increase. So right now, we're still in that -- we're in that 100 basis point range, 100, 150 basis points. And then as I already mentioned, lower revenue from our core automotive business. So -- this is -- we're not trying to make it tariff experts, but just trying to give you a little bit of a scope and we wish we were tariff experts either. So there are several different tariffs, 232s, IPOs were in play. And then once IPOs were rural legal, odd. We stopped expensing them. But then immediately after that, there was these temporary Section 122 tariffs, which effectively, we're about -- we're exactly the same rate as the EPA tariffs that were replaced. And those really took place from end of February till end of July. And during that same time, the government was working on these, what we're calling flip tariffs, which has forced labor investigations on the Southeast Asian countries, basically every country on the planet to then eventually replace the temporary tariffs, which only lasts at 150 days. So as of now, maybe something happened this morning, I'm not sure, but the Lip-301 tariffs have taken place, and those are in the similar range 10% to 12.5%, but there's more countries involved than there were in the Section 122 tariffs. So that's why there's a little bit of an impact to us. I mean, the rates are higher, a couple percentage points, but the broadening of the region. So there's really no word of hide as it relates to moving from China to Vietnam or via onto Malaysia, there's tariffs everywhere. It's just a matter where your volume is coming from. So based on all that, we're seeing about a $5 million to $10 million impact on increase in tariffs. If you were to annualize that on -- so a full year of 2027, we'll have an incremental call it, $5 million to $10 million of tariff impact on our book. And just to put that also in perspective, we have about -- since the beginning of tariffs in 2018 and then the change again in we're carrying about $60 million to $70 million worth of annual tariff expense through our cost of sales today. Now some of that is getting paid by customers through the government programs of getting reimbursed through CBP directly or our increased piece price. But some of that, we're still bearing the cost of. And as Steve mentioned on the PAC side, they've been able to raise prices and not see an overwhelming reduction of demand. But regardless, we're still paying a lot of those tariffs. And as these things start to ramp, these conversations, unfortunately, we've seasoned ourselves on how to get through them and recover them but it is a lengthy process, and it takes a good portion of our commercial team's negotiation and discussions to get some of that money back is metals. This is another 1 that not trying to make you experts on how we make glass elements. But this is the real -- this has been a real headwind really starting in the first part of this year. We always had a little bit of a historically on our rethenium as that has -- is a precious metal there's not an infinite supply of. And so the -- you can see on the chart, it's a little hard to read. But if you look at so gold and rethenium. If I look at the scale of what we use, we use more silver than any of it. And so the escalation silver prices from earlier -- late last year to around $20 a trail ounce to as high as over $100 a trial ounce caused a significant headwind basically overnight for us. The retiniumhas been more of a slow death by 1,000 cuts. We've been using Refinium in our coating stacks since the early 2000s, and we went to that as a result of prior Rhodium. Thank you, Steve. That was -- that had escalated to over $6,000 a Toro ounce at the time. And so we had a benefit of that savings back in the 2000s, but this has continued to escalate as first, hard drive started to use them. And then now with the data centers and all the electronics and there, that's created a scarcity issue on then -- so with that all being said, at one point during the first quarter, we were staring a $40 million headwind in the base. And so our teams obviously went to work. It was one of those things like when the oil price is at $50 a barrel, now 1 is interested in drilling in North America, but when it's $100 a barrel, everybody is interested. So our team scrambled, started working on what are ways to reduce our exposure to both silver rethenium and, to a lesser extent, because we don't use nearly as much gold, but a lot of our competition doesn't use the similar stack up for -- we have the best-in-class reflectivity. And it's because of how we do this. And so they've been really working to, one, use less of it, find ways to reclaim it. And over time, figure out how much of the -- some of these precious metals we actually need in our stack to still be competitive in the market and have the best -- so what I can say today is through a little bit of about 1/3 of that reduction from a $40 million exposure to has been because of those initiatives. And some of the rest of it is because silver and gold have retrenched from their high prices of the year. And we still are actively working on another $10 million to $15 million on an annual basis to reduce the cost, but this is a significant headwind that is kind of embedded in that margin still expanding. Sorry, I said a lot. Electronics. That's the word of the day for everybody. Obviously, everybody knows that with the data center usage, electronics that are under pressure from both on a supply side basis, the scarcity issue, but then the cost side. And so we're going through this right now. People are starting to push to change commodity costs as we're going through lifetime. Most of the time we settle up annual contracts with our supply base. But with the electronics side, they're pushing for cost increases now. And so nothing to share on exact economics, but -- once again, this is similar to the 2022, '23 situation where we're going to quantify the cost we're going to -- we expect to pass these costs through to our customers. And whatever cost it is, we plan to get paid for the day. However, from a timing perspective, usually, there's a little bit of lumpiness, meaning you got to -- you have to secure supply. We have to buy components. And then we go through the work with our commercial teams to quantify that to our customer base. And then they argue in wine and around on the floor and then they don't want to pay, but ultimately, that's their job, and that's our job is to get that reimbursed back. But there's going to be some timing differences as we start to have some of these cost increases impact us in the back half of the year and into '27 and then the revenue that we would get back over time. And so we'll give a little more clarity as some of these things come to fruition.

Enough about the mechanical side. This is kind of that history lesson that I wanted to point out and talk about from a valuation perspective. And the thing that's really never changed for Gentex is our cash generation. So if I just quickly look at -- start from the top chart, revenue. And I picked 2020 just because it was a good point and otherwise, it would be way too busy. Revenue in 2020 was about $1.7 billion. If I look at our gross margins there, it was peak margins as well. And then -- but then if I look at EBITDA and operating cash flow, we were a little over $500 million in EBITDA, about $450 million in operating cash flow. And then if you trail down to the from an earnings per share basis, we are about $1.41 EPS. And at the time, the stock was traded at $34 a share. And this is where the valuation starts to come in on an EBITDA or even on a PE basis. If you look at that, we were trading at almost 17x EBITDA and about 25x on a PE basis. And so what we've done since then is grow from a sales perspective. This year, if you look at a trailing 12 month, $2.6 billion in sales. And as we alluded to, our guidance shows $265 million to $275 million from an annual basis this year. So we're going to land somewhere in that $2.7 billion range, EBITDA trailing 12-month basis, over $600 million, $620 million. And we estimate that we're going to land somewhere in that $650 million from an EBITDA maybe a little better than that. And then operating cash flow is right around $600 million. We have very little differences between our EBITDA and our cash flow just based on depreciation and CapEx cycle. And then EPS on a trailing basis of almost $2. And then this year, we expect it to be around. So what that ends up being is the stock price has traded down. Obviously, everybody is here not to belabor it again to $24. So we're trading at half the multiple that we were even 5 years ago and probably at the lowest that the company has seen in some time. So what that lends itself to and we'll get to the next slide is what do we do with all that and this is a busy chart, and we talked about it and we showed it in our investor presentations. But to put this into perspective, that 10-year run on operating cash flow was $5.2 billion. This slide represents $4.2 billion of it. So 80 -- over 80% of our operating cash flow, we returned to shareholders through dividends and share repurchases. And obviously, if we prefer from our vantage point, the dividend has been in place since 2003. It's when it was more tax efficient to do so. But at one point, it was almost 50% of our operating cash flow. Now it represents less than 20%, and we like that. But we also are -- as net income does grow on a pure net income basis from our high. We're dedicated to looking at that from a -- do we increase that. But right now, given the stock price, the yield is actually quite attractive. So over 80% return to shareholders in a 10-year period. And I should add a little bit more color to that. This really took off here, and this is as a point in time prior to this, Steve was the CFO, Chief Operating Officer, a list of 27 different titles, but he didn't really have rains over the capital allocation philosophy at the time. Since 2018, when he took over, this was part of a briefing for us. This is how we operated. This is -- we knew that we needed to return excess capital to the shareholders because if you go back to the 2013 time frame, we were sitting on over $600 million with liquidity on the size of sales move were. And we didn't really have a strategic way to articulate what we were doing with our capital. And so it wasn't a very straightforward policy. And so since Steve has taken over the reins and we got this leadership team, it's been core to what we do as part of our strategy from a growth perspective. So I already mentioned it, but our priorities -- we don't talk about it in this list, but research and development obviously runs through the income statement. So it's not part of our capital allocation per se, but running at R&D at twice really what any other automotive supplier is to continue to feed that funnel for growth into the future is one of the main priorities, but capital expenditures to support that -- those new products we've talked about before. And I think when we start talking about some of the new business ideas, EC mirrors and LED and SAD and all the things and the new products that we're advisers, they're very capital intense. And so we end up spending anywhere from $75 million to $150 million a year in capital to support the growth that we have. Dividends, as I already mentioned, and then M&A. So we're few and far between M&A targets. We look at things that are of value. I mean the Fox acquisition was a perfect acquisition. We paid for it with its own -- with the own book value of its assets, and we're starting to see a return from that. We like things with shorter return period so that we can start to actually make money on our investment sooner and estar repurchases. I already touched on all of it, $4.3 billion of return capital. And then we still have about 30 million shares left in our allocation -- in our available plan that we plan to spend over the last next 2.5 years. And so what does that translate to? As we start to go into next year and '28, '29, and '30, and we start to see sales growth that in that 500 to 700 basis points above market or getting high single-digit growth pure and with our financial discipline, meaning if we can hold margins or expand margins -- gross margins and we can hold our operating expense growth below sales growth, which has been our target all along, you start to bring that income growth to, call it, mid- to high single digits. While at this rate, 30 million shares over 2.5 years is a 5.5% reduction in share count per year. Now we have about 1% a year of dilution from our equity plans. So call it 5% -- 4.5% to 5%. If I can give you -- if we can print 6.5% or 7% net income growth every year, 4% to 5% EPS growth, we're talking about double-digit earnings per share growth. . And that's the formula that we've been talking about for 10 years and everybody owns about. But regardless, it's the repeatability of it because we continue to present high levels of cash flow, and we could turn that 80% of that back to the shareholder base. And so that's part of the story is we're going to continue to do this over and over and over again. And then as we start to print higher revenue, we think that there's a turning point from a stock price perspective. So with that, I'm going to hand it over to Neil to talk about what's going to make that happen.

Thank you. Good morning. still awake. All right, outstanding. I get to talk about fun stuff. So we had a little bit of discussion around cost increases, components, ruthenium, other materials you've probably never heard of or don't care about. One of the areas that we target a lot. Unfortunately, we're looking this 5 years ago, it is component shortages, costs go through the roof. We learned how to get really efficient at doing redesigns or finding ways to pull that cost out. What you'll see here is the areas that we're really focused on, right? Kevin hit precious metals. We have a lot of work going into how do we use precious metals. We never thought about silver as a problem, silver at 20 trims, who was inexpensive that quadruples we had to find ways to get rid of eliminated. The team has done a phenomenal job. We're 1/4 of the way to where we need to be, but we've got plans on how we're going to get that cost out, which even as silver comes down, will still benefit us in many, many ways. Some of the other areas, olememory. This is one of my favorite DDR, right? You can see the space, what's changed in the market. We've got some really cool products coming on, FDM4, I'll talk about it a little bit, that has no DDR. For the other ones, we've got multiple supply channels that we're working on, right? There's the big one we use today. Their costs are going to go up continuously. We kicked off 50 weeks ago and supplier another 70 weeks from now another one comes on board. So we have plans on how to design out and drive ultimate sources to mitigate the cost but also keep the supply chain moving forward. So we've got a lot of activity in here. We're doing this all within the current R&D teams, research teams. It's just more of who we are today based on the last 5 years of evolution, again, unfortunately, but it is what it is. We've got a lot of good products. Innovation is lifeblood for us. The chart showed you earlier, volumes decreasing. The revenue side is increasing, it's all the product. It's product and content. Full Display Mirror. Again, we've talked a lot about that, significant launches. One of the things we're pointing out here is we're actually now the 250 at Ford, started in more of an accessory. And we've been working with Ford for a few years on that. We're currently in the transit, transconected forward. This is the Bronco. This is kind of the first expansion for Ford into more of their high volume -- so we're really excited about that. We see some great growth potential there. But continues to expand even beyond where we thought it would initially. We talked a little bit about its growth curve. I think you'll see, as we talk about other features like Pfizer, how we see the potential for those products as we go forward as well. Driver monitoring, we talked about this in the last quarterly call for IKEA, BMW initial vehicles are launched. The thing hopefully you've seen with us from Full Display Mirror and other technology platforms. It's not just one vehicle. We don't do a technology that goes on a car and never deploys on other vehicles for that customer. It's usually a rollout strategy, not just driven by us, but driven by the customer. These products are architecture-driven, you can't just add it really simply because you got cabling, you've got communication to the vehicle itself. So it's got to be a planned strategy. So as we see these, and Steve showed the chart on driver monitoring growth this year and next, you'll see the continued deployment of the 4 platforms that we've executed over the next couple of years. One other thing that super excited about, right? This is all about innovation. It's about technology. We're a finalist for the PACE award, which is an automotive award for technology and what's driving technology. 1 of 32, you're going to see this line today. It's not running full production because we're in the early stages. Our product goes to market at the end of '27 will be our first launch. But you'll see that we've got the capital in place got 1 last piece of equipment that comes in, in December. Otherwise, that line is ready to run and build product. We'll be validating in the first part of the year, and we'll be ready to ship production at the end of the year. But really excited about where this technology is adviser, the interest adviser. And again, we'll show you a chart when Steve wraps up. The interest in this has exceeded what we thought it would be. It started off slow. We got some initial interest but once we got the product at CES and people started seeing it in cars and we started demonstrating the actual use case and the value proposition, the interest really increased. And we're excited to get that first 1 deployed late next year. We expect a couple more customers within the next 2 to 3 quarters that we can get on board. Premium Audio. So that's our automotive side. We also talk a lot about non-auto. These guys have been doing a great job executing new product strategy. Since last year, when we acquired the company, a lot of investment, a lot of support capital to do new product lines, conversion of products to refresh the brand, hiring of resources to make this a successful execution, just great execution by this team and you've seen it in the charts on the growth side of it, launches. These are -- I'm not going to read through them, but this is a very different space from our standard automotive. It's actually a space we're excited about because it creates a very different channel, like Steve said, a different product portfolio. But from a development side, we're learning a lot on how consumer products are executed that actually can help drive on how we execute faster in the automotive side. Speed is becoming extremely important, right? We're really good at it when it gets into component shortages, execution there where you can customers pushed or forced to execute quickly. You learn a whole different channel when you start working on the consumer side and that's really helping us to reevaluate how we can execute to become more efficient. We have to get faster in all parts of our business. Another part, you're going to see some tours today. Just a couple of pieces on machinery equipment. As we work on how we automate bring product back to the U.S. in manufacturing. We'll talk about this a little bit from electrical manufacturing, even with our core technology manufacturing here in West Michigan, Automation is a key part. Labor rates aren't going down, right? We need to be thinking that 24/7 manufacturing capability to leverage the capital that gets put in place. We'll walk you through again on the tour. You'll see some of our larger device adviser processes and infrastructure we put in place. We'll walk you through our wet coder makes films for larger devices. We'll show you what we put in place and why. We're doing a big move right now as we get ready for the electricity factory process that we want to implement right contract manufacturing. We're combining a couple of our mere final assembly plants to free up some space but also to optimize shifts. We have a lot of plants working in first shift, second shift, we're continuing a big consolidation here in the next 6 months to try to leverage first, second and third one, so that as we implement automation and material handling robots, we can leverage that capital have greater in one facility than trying to do it in multiple at the same time. And again, multiple automation processes and mobile robots. I've got a little video here for you that I'll talk to as it's playing. This is one of the things I'm VAVE or value-add value engineering. What you're seeing here is we used to buy small pieces of glass from a supplier. They were precut for us to handle. We now barring large TVs to put robots in place to come down. That was a significant cost savings for us on world class. These are some of our robots doing some more glass and element products. This is the material handling robots. Normally, we'd have people pushing these cards down the aisles. And so what we've got is the system where these robots are connected, they know where to go into warehouse, what rack to pick up, which line to take it to. And it reduces the amount of people that are pushing cards, but two, it actually puts those people back into the warehouse where they're getting material ready versus blocking material out to the mine. It's a really simple automation. And as we bring these as I mentioned, bringing these final lines into a single facility, leveraging those robots and setting up the plant to be more automated, is will be a key to the success of how we execute that. Sorry, it's a really quick video. So I'm going to play it in just because it's kind of this is the large sheet again, pulling large sheets at a strip cutter, it cuts it great cost savings on bringing in gas plus opened up our supply base for glass because most suppliers have been providing big sheets. These are, again, robots to be used in all of our automation processes glass processing cutting, grinding, polishing and then there's the automated robots material handling robots, moving material around the plant. All right. That's the best part, right? That's cool. That's good stuff because at the end, automation is really important to be competitive. If we can automate, we can compete against anybody. Touch on this. So we talked about this in our last call. It's really -- this model, if you're familiar with our Gentech Shanghai facility and how we set that up to be a finalist simply operation back many years ago, this will be a very, very similar process we'll do here. Leasing a building, setting it up to do final assembly glass elements. So our core part of our business will still be produced here in West Michigan and then shipped to Morocco to be assembled into final years of various technology levels. The big part about Morocco is they have some great relationships with the EU. And based on content, the amount of content you add, you can actually change country of origin to be Morocco instead of being state time. That's critical for 2 reasons. One reason we're doing this is we had a lot of customers in the European side that as we talk to tariffs and geopolitical stuff, they are not excited about all manufacturing in the U.S., not knowing what tomorrow is going to bring, what new tariffs is going to happen, what type of conflict is going to be created. So in order to get -- got it up on the top, some of the first RFQs, we needed to have a footprint in that market to support that business. So Morocco has chosen under long search and looking into Eastern Europe and other parts of where did we think we can set it up, support, supply product to supply product from and get the great benefit of for the smallest amount of capital investment. We talk here about 10 to 15 to get started leasing a building, we've got capital here from final assembly lines that we'll refurbish and that will be actually providing and sending over to support the buildup of various products, everything from our lowest end base mirrors to the potential of all the week going up the full display mirror to support that market. A couple of really fun things that we do. Steve is a big driver of these next couple of items. This one here was driven by COVID come out of COVID 2020 and 2021 lack of resources like labor, could find people to work, drive the process of West Michigan, we have a large Hispanic community. And part of it problem when getting them into the workforce is they're not comfortable with English. So we started a program called limited English proficiency the drive was to find people that wanted to work, what's maybe struggled or comfortable speaking English. So we set up a whole program were on Spanish-speaking ultimately add up to 200 people in this process where we change the lines and the work instructions and want to be in Spanish to help them be comfortable to execute their job. We put managers over them that were buying noble that could help them bridge the process. This was a financial project and success for us, and it's still strong today. 4, 5 people were actually really good at speaking in just more comfortable. Once they got into the process and we burn, we actually were able to other parts of the position to be able to fill their spots with others that weren't comfortable. So this has been a really great program for us. it really was driven out of necessity to find bodies, but what we've gotten the benefit of it was far exceeding that. Another one is our preschool coming out of go, but hard part is finding workers. Single moms, single parents, single families had an issue in finding day care. So our day care was so expensive that they couldn't go to work, it was cheaper to stay home than payday. So we actually worked with a local company to do an outdoor learning base, nature-based preschool of sorts where we built the facilities, we offer it to our employees this other business runs it for us and it's a great benefit for our team that helps put people into day care situations for our employees, which actually helps the community even more because it frees up big care positions in other parts of West. Summary, we are a product and innovation company. We touched on it just briefly. And hopefully, as we do the tours, you'll get a better feel for how we drive that innovation. Our innovation is what's driving our growth. As volumes are dropping, mirror volume drops, you are seeing sales and profitability growth because of the technology and the features that we've invested in, in the last 5 years. We don't see that change -- that's our philosophy. That's where we are, and we're going to continue to do that. Q2 is our highest level of nonautomotive revenue, right, 14% of our revenue was driven by nonauto. Obviously, premium audio was a big portion of that. But we see that separation as a big part of our strategy as well. And Steve will touch on this more as we see the overall pie of our business grow, we see how that separates out and that nonauto is an important part for us to keep some good balance. And the last one is we're growing -- we see our business growing in automotive, right? It's not that we're going to give up on automotive. It's not that we're pushing the side. Automotive is going to grow. We're going to drive growth through innovation and technology in automotive. We're also going to grow in our non-auto. So the overall pie of our business is going to continue to evolve and grow. And with that, trying to get us a little bit closer on time here and hand it over to Steve.

I felt that, just exactly -- just make it worse than I'm backing up. So I showed this at the PAT conference because they were trying to figure out who we are and their customers. . So you start talking about the culture of the company. I pride myself very much on being financially fiscally conservative organization, right? I mean if you look at the bottom half of our income statement, we have a very executive team, very thin management team, very proud of that fact. This is one of the few times in my career, I got scope creep. If we're going to go over to what we call our North Riley campus, a couple of hundred yards pass the building here and being is where this is located. This is one, like not very many things want me to go back and have kids again, but this is pretty cool. But each one of these play areas that you see here are designed around a 1-year gap. So 0 to 1, 1 to 2, 2 to 3, they're separated. They have their own play areas. My son actually went to this before we built ours and their whole concept is you're outside all the time. I think what is it if you're above 20 -- Kevin, you're on the board, there if you're above 20 degrees, I think you're outside -- rain, snow, whatever you're outside. How here, there's pass through the woods. -- just outside of this area, you can't see, there's fishing ponds. This is a greenhouse where the kids grow plants, vegetables, their own stuff. So each of these are separated for these kids. That's pretty funny. These are outdoor learning areas. There are little blocks of wood as built into an outdoor environment where all the kids can sit, teachers can teach them, inside learning areas, obviously, play areas that are age specific. This is funny about this, right? It's like you go out there the 1 to 2 years, like there's the old tools, the picking tables are all this size, it's kind of hilarious, what's really going the center part on really, really bad weather days, there's actually a big interior building with like a rock formation and a livestream kids are inside now in a replicated outside environment. We offer this all a discount to our employees. And so we help cover the cost of day care for the employee base. Kind of interesting when we were having the labor shortage, we announced this. We had some in Michigan, go right, environmental group, and they always slow things down drastically. But we had a lot of employees leave their jobs to come work for us just because they wanted first access to this when it did come online. So really, really cool. It is a world-class facility, a little on the expensive side. But honestly, it's worth it. The one thing I think that was incredibly innovative, I don't know of anybody in the state or region that actually did this. When we started down this path, though, we were adamant that it was going to be offered on 2 shifts. So we offer both our first and second shift employees child care. The question you always get, which is a fair one, which is, okay, walk us through how do we get from '26 to '27 and the revenue guidance that you suggested. We covered this a lot in conference call, so I'm not going to belabor it too much. you break the world down into the 3 biggest buckets that are going to help us get there, $50 million in FDM growth, $50 million in invest growth and $50 million in growth from other areas. I mean that's kind of the baseline. . And so if you look at those numbers, there are some puts and takes inside of each of those, obviously, but we're still bullish on is we think we have the track record and the forecast from our customer base that supports that level of growth. And this is in spite of some of the volume challenges. We talked about the first -- the second half of this year, really starting in Q2, there are some volume challenges on the base IC side. '27 is going to have some continual declines in total unit volumes, but it's still going to produce a net growth year based on the dollar content associated with electronic features. And then obviously, at the very end, Neil mentioned this at the end of '27, we'll be launching our first Pfizer application. So as I flip to this next slide, and this is the type of data you've not seen out of Gentex before, right? I always joke, we're pretty Midwestern algos in tight, we tend not to all talk about the products. We tend not to put a vision out there too much. We want to do a better job today, especially, I'm talking about where we've been over the last few years. I think Kevin's slide, if you look at that on pretty much every financial metric feel like we've hit our targets and accomplish what we meant to. There's no doubt the industry has had challenges, but we persevered in pretty much every area despite that. I always joke a few -- I was talking to a couple of guys last night, one of our philosophies in life is this is not a football game. Like there is no end zone in this world. It's a series of treats a treadmill forever. And one of the things I think the last 7 years have taught us is that the challenges we've learned and Neil talk about a skill set that God forbid, we actually had to learn, which is how do you deal when there are no components when there are no people when they are nonstop tariffs or other challenges. Unfortunately, we've developed a skill set, but none of us thought we needed 7 years ago. And unfortunately, it becomes just like anything else that does define you as a core competency at some point saying we're actually good at dealing with chaos. I mean, I would love to see what we could do if there weren't okay us, but the harsh reality is is the world we live in, it's not going away. And so one of the things we're looking at and we talk about this chart, and I talk about this. So think of this as an in plus chart. So in is the day the year at SOPs. So for advisers in this case, 2027 would be in. And then you start talking about, okay, what does a 10-year growth trajectory advisers look like? So we're trying to book in here a low end case and a high-end case of what we think advisers will look like over this next 10-year period. And I say it this way because I was talking about a 10-year vision that started 2022 and it was going through 2032. This is different. This is like once you SOP a new product, what could that growth look like? So we modeled a couple of different scenarios here. For Adviser, you're looking at $100 to $150 each, if you're talking about baseline Pfizer, and you'll see that Neal and I are driving the same truck and I do have for safety reason, just in case somebody gets mad at me, there's a 50-50 odds I think it's me and I get new instead. But he and I have been drive advisers in our trucks. And I would tell you one of the things I was a little concept of this product years ago, I loved. I was not sure the efficacy and how valuable it would be to a consumer. We've been driving it for 9 months now or so, I don't know when I installed that. I would tell you, in my pickup, I almost never -- I leave it down all the time. day and night, whether it's sunny or not, it is a really, really cool product. And once you get comfortable with it, the concept we jump in another car when it doesn't have one, I might instincts like I missed my Pfizer. We believe the value here could be very similar and growth, very similar to what we experienced over the last 10 years with FDM. So we want to book it in that. What does that mean? Well, the baseline adviser, the 1 Newman driving is actually a higher in version of baseline adviser is just dimmable. You can control the light aperture of it, you can manually control what state it's in, how clear to how dark, the one Neon and I have is actually the 1 that also includes the embedded mirror, which is a polarized reflector. We are first year at C as we showed this, 1 of the things we love about Seaman CES as you get this kind of feedback, which -- the engineering side of us goes absolutely the zirc over. All the customers are like, well, what about the vanity mirror. And we're like, who gives a rim up on a vanity mirror. You have a phone, if you want to look at yourself, take a selfie for Godsikes, -- what are we doing here? But we bring it back, the engineering team comes up with a new concept. The polarized reflector is really cool. Literally, with a push of a button is another layer in chemical stand, the technology stack that goes into the adviser, pushing a button, the entire surface actually turns into a mirror. And so that 1 obviously is a different price point. And you'll see the difference when we talk about these different price points, $100 to $150 each or $200 to $300 per set down here, you'll see a high inversion, what about a $200 ASP. That's if you want the vanity Mirror application. So our first launch in '27 is just Viser without the vanity mirror, but we see a lot of interest. And as we refine that technology, we believe there's customer interest in that as well. So if you walk this through, we talk about 2 million units. Think of about 1 million cars. There is an outside chance that somebody choose to do just the driver side. We think from an aesthetic standpoint, though, it's probably unlikely just from a symmetry and a design philosophy standpoint, most OEMs are probably not going to -- the polyether going to do 2 or do 0, right? And that's kind of the way they think of the design of the car. But you start looking at what could that mean? 2 million units at $125 ASP kind of paint you around the bottom end, the high end, you start looking at some of these potentials, $200 to $300 per set the same type of volume. There's no doubt in our mind that typical it's probably slightly above Gentex's corporate average margin profile on that type of revenue, pretty exciting business opportunity LAD. So when we're talking LED, we're primarily talking about summer execution. So one of the things John points out on this slide is we're not talking about side windows right now. That's a separate opportunity. We're really talking about overhead and what could that look like from an LAD standpoint. So if we model out same thing, we're talking N plus 10 here. So we don't have the in yet. We thought we would be -- we thought we'd be there by next year, late this year, next year. We did have a customer delay in terms of wanting to launch. And so we're working and you're going to see where we're at in that process today. And what you're going to see is this is not just R&D. When we go on this tour, I think we moved that to this afternoon. But when we go to that -- when you see that tour, you're going to see not 100% production ready, but way closer to production-ready process than probably what you're expecting. A lot of the work in R&D and capital that we spent over the last 3.5 years has been focused in this space. We believe this creates a growth opportunity that even as far superior overall in a longer period of time because of the time it takes to integrate this with multiple Tier 1s. But the total growth opportunity of this is actually far larger than Viser and when you look at the numbers associated with it, it becomes very exciting. If you think about the modeling of this, typically on the substrate -- the reason why we're talking substrate, what you're going to see today on a manufacturing is thus making the entire sunroof. Our first program or 2, we're going to be low volume executions, where we're going to do the glass lamination. We want to sell literally an entire sunroof because we know with our technology, and what we want to do with it eventually, which is sell you a roll of film that different integrators can then take guys are already making Sunroofs, can buy that from us, laminate it into their product and then we don't have the capital footprint associated with molding, forming glass all over the world. Instead, we can send roles of bars clinical substrate to them and work with them on how to integrate it. The problem is that you can destroy our product very easily and as we found many, many ways. But we want to perfect that integration here first on those first couple of low-volume programs. That way, we know how to train, teach and also work with other Tier 1s. So we don't have to have that capital footprint associated with making sunroofs and all the geographies all over the world. So when the economics we're talking about here isn't what you're going to see today from a full sunroom standpoint, it's saying what are the economics of us selling a role of our electrochromic substrate? Now from a technology standpoint, the reason why this is taking in a long time is we actually have a dual path different forms of technology, but there's a couple of different factors we had to drive. Why adviser is quicker? Is it a solution phase of electrochromics like what we've used in mirrors and what we used in aerospace windows for the last decade. Now we still had to create some new chemistry and some new coating stacks but it's far easier than getting to what we're doing in the large area device. Large area device was our first time. And the reason why our reason why it's electrochromics have always been on glass is because it does -- it's oxygen. It's not oxygen permeable and it keeps our humidity. We know the concept had to be -- we had to be able to sell this on a plastic substrate in order to work with the forming and what needs to happen in the industry. So imagine the entire history of us doing electrochromics. It's always been encapsulated in glass. It's always been solution phase. Now we need a thin-film coating version of this that can exist on plastic and won't get destroyed by oxygen or moisture right away once it's encapsulated. The other part of this is incredibly difficult and one that I think we all probably underestimated a little bit was one of the beautiful parts of why our chemistry works in aerospace so easily is it's only dark in when it's accepting power. If you remove power and defaults to clear, which is a perfect safety feature for Aerospace. The problem is in automotive, one of the desires from the customer was to stay in the dark and state even when the car is off. So when you park at an airport, you wanted to stay dark, hopefully, to prevent sun loading into the vehicle while you're away. Obviously, our chemistry has never done that. So not only are we trying to get the chemistry and having to reinvent it to get it on the plastic. We've also been having to recreate a technology that would include what we call memory or memory you see so that it would stay in a given state without any power consumption once it reaches that state. These are all chemistry and applied materials problems. And I would say we're not 100% of the way through, but we're probably 85% of the way through the engineering and invention phase and moving on and what you're going to see here shortly is how do we actually vertically integrate. Our process throughout this entire time because it's chemical coding process is something brand new for us. We've been using third-party toll coaters, part of our R&D expense that you've seen over the last several years is us flying our chemistry down to these locations, taken time and running time on their machines with our team to try these coatings out to try to perfect that process. And then obviously, the testing side. The 1 thing I will point out, when you start testing these types of products, what's wild about it, you're talking about 2,000 to 2,500 hours of thermal cycling to verify that it's robust. If you can do the math on 2,000 hours. Our first products have failed within a couple of hours. It was -- that was at least nice in that you knew right away, you had a problem when you go to work. As we advance this technology over the last couple of years, you're 1,500 hours in the cycling before you even know you have a problem. And now you have a failure, now you have to go try to solve it, fix it, reinvent something and then, unfortunately, throw it back in a thermal cycling for another 1,500 hours to see if it gets through that gate. I think we're up to -- most of our stuff is closer to the 2,000 hour magic 2,000-hour magic number where you're -- it's an advanced cycling, it's a very rigorous process, really close to what we think an OEM would require in order to have something that we believe would be production ready. Now the upside. You start looking at this, $100 to $300 per square meter of a substrate is what we think the market can absorb. You start talking about what this means from a high-end standpoint, 2 million units, you're talking about anywhere from $200 million to $500 million as a potential revenue just off of that volumes. And so one of the things you are looking at here is we're talking about fairly small versions of this right now. As you start thinking about panoramic roofs and you start talking about side windows, this number excludes in terms of potential. One of the interesting factors here is the initial interest was driven by EV. And the reason for that is batteries going underneath the car. The car gets the seats move up, the headliner moves up. Now it's only your range drops from an EUV standpoint especially when you start talking about everyone has movable shades and things to try to get to the real dark environment. And so what our product offered was the ability to remove sling shades and then save an inter se of headroom out of that vehicle, meaning you could drop the roof line on the whole car by an inch so that you could have a fully clear, fully dark environment, which is what the consumer was after. And so that was the initial drive -- well, obviously, with the slowdown in EV execution and no transition, though, it's driven by autonomous. The concept of what this creates, like greenhouse effect where you and a fully autonomous vehicle, regardless of powertrain, we have the ability to control what is light aperture into that space. If you want it fully clear, you can have it, if you want it fully dark, you can have that as well or any state in between. And so we believe this rollout ties really well with both the EV space and the fully autonomous space. In the near term, the motion is driven purely by sunroof and side window execution. And in this model, we're not talking about silent at all. It's purely just the traditional summer of execution. So a lot of growth opportunity. You've heard us talk about it a lot. We want to show you today that we're closer than ever and feel really comfortable where we're at from getting this ready for, I always call it big time, but getting it ready for Showtime as it relates to full deployment with our customers. So you heard us talk about this a lot. I'm going to fast forward real quick. I'm going to show you a quick video. It's really just showing you what we do. We build a lot of circuit boards. We've always done this. Today, we're not going to spend a lot of time walking through it. I'm going to show you this video instead. If you really want to see it -- at the end of this hallway is 1 of our 3 EA facilities. This video does a quick -- I didn't know you guys did this, which was funny, but I drive fly over inside of the facility, which -- I don't know, hopefully, you were driving that, Josh, because I know you think you're a gamer, but... we already built over 40 million PCs Obviously, the first step in this was some of the reduction in volumes, we do have some capacity that's been opened up because of the reduction in volumes. More importantly, there is a huge drive from several OEMs and other industries to look at onshoring electronics manufacturing. It just so happens we have and are committed to a capital footprint in the U.S., especially not just North America, but especially in the U.S. One of the big conversations is the risk factors around USMCA and where does that all go and end. And so there's a lot of attention, not only on the national security side, but also on just de-risking of electronic supply to have that in the U.S. market. And then number 2 is the tariff situation actually creates a little bit of an offset to some of what you're seeing. Typical industry, you got 20% to 30% markups over bill of material that is the value-add portion of doing electronics assembly. If you're doing the value-add in the U.S., obviously, you don't pay a tariff on that incremental 20% to 30% of value add you're creating. And so you might have the same tariff exposure on the raw components at least you save the tariff on that portion that you're doing value add in the U.S. market. So this is a quick video, just a double click, Josh, proudly. So this is 1 of our 3 facilities to in her -- so when we talk about the contract manufacturing piece, you'll see on that backlog, a lot of it is not all of them, but a lot of our flags. This is what we're looking at right now as taking advantage of and executing in the space. We believe in the Q3 conference call, we'll be ready to announce that first program award and have that one locked and loaded. There's a lot of interest in the space right now. So we're excited about what this is. There's been a core competency of the company for a long time, and we're looking to expand that. So rolling all together, what do we see -- and we paid this out like what does the next 10 years look like for us? As a business, this is what we believe we can accomplish. And I always like to joke like you see on the bottom end of that is probably a little too midwestern of us. But at the high end, what you'll see is what we believe the potential of this company truly is. And honestly, it could be even higher than that. But we are in Silicon Valley. We are sitting in nowhere Michigan. So it's kind of our approach to life. But if you look at this $2.5 billion to $3 billion core automotive business, I believe that that PCB business will be $1 billion to $2 billion without breaking a sweat -- thimble advisers, large area of prices that we are already covered. We also believe there's a great growth opportunity for the PAC team, having been underfunded and underdeveloped for a lot of years, we believe there's a lot of brand opportunities that Klibanonkio brands are very powerful. The Integra brand is extremely powerful in the commercial application side. And so we think there's a lot more opportunities ahead for the PAC team. And then the -- this other category that Neil spent some time on aerospace, fire protection, biometrics, consumer -- this is an overly egregious or outlandish estimate of where we think we can go. And if you look at where we're at already, we're I'd say we're 40% of the way there with our current product lineup. We believe there's a lot more opportunities outside what we're doing today to be a more consumer electronics-focused company as well. So roll it all together, $4.5 [ billion ] to $7 [ billion ]. And you see you start to deemphasize even though we're doubling down in the automotive space, you start to see exposure into other industries that will hopefully drive a more appropriate manufacturer tech company-type valuation. So I want to end quickly with just a video that we gather for the presentation. [Presentation]

just have 1 slide real quick, then I want to finish with. And this is regardless of that 10-year L+10 stuff -- when we built that 10-year plan in 2022, the identified, we thought was achievable was this. With the products we have in place, the launches we're executing on right now, the financial discipline and the cash generation. We believe 2032, our goal is always to be a $10 billion enterprise value. Now obviously, if you look at what's happened in the last couple of years and a lack of interest in anything automotive, we understand that, the harsh reality is we're going to provide the revenue, the cash flow, the cash generation. So by any form of multiple that you value us by what we wake up every day, chasing. And so that's why you see us very aggressive on share repurchases right now and will continue to be because anything that's not even remotely in that state, we view as a huge buying opportunity. So one of the things you'll see is like about this team, we believe we have the best innovative team in automotive right now. The harsh reality is when we're wrong about the strategic direction of our product or how the market response will be. We are also -- we talk about our values internally, and one of them is grind grid determination. So even when we're wrong, we will force it to become true, whether that's through just brute force or changing direction and then working twice as hard to get there. I think, Josh, with that, you're going to moderate the Q&A or...

I just check them right now to see what we've got -- if we can start with questions in the room. Wants to say that the Spanish acquisition, I think the Spanish acquisition can we never expect it want straight to a Saudi things.

Thank you for the presentation, and thanks for doing the 2027. You hit on a lot of the key themes and the growth drivers pretty specifically TMS, et cetera. Can you talk a little bit more and also go into base. I mean you just spoke a little bit on the earnings call and you alluded to lower LVPs. But are there other risk factors thinking of another thing maybe you do have more than that bridge to overcome some of those like challenges in Europe and just what a potentially more talented VP next year?

Sure. The biggest -- if you talk about '27 specifically, they're pretty well known headwind rate. So if you look at them, we lost -- we walked away from a Volkswagen piece of business that on a volume standpoint, really is about 30%, 40% of the volume drop that we are showing. We have a little bit of more of that that will bleed in just as those programs annualize and some of those losses, that was primarily around the technology that Volkswagen launched around driver monitoring with Magna at the price point they were at, we didn't believe it was a profitable product at all. And there was no path to profitability. And so we chose at that point big business that would lose money. The other 1/3 of that business drop or the headwinds that we're seeing is continuation of the low end side of the European market. If you look at the high-end vehicle side, content is actually holding up there just fine, especially with some of our launches on DMS and FDM we're seeing in the European market. But the base auto-dimming with the lower-cost manufacturers will continue to be challenged. And then the last 1/3 of that is really just kind of the China roll on of the continued decline in the China market, our ability to compete there. And it's really not about cost or pricing. It's much more about nationalism and Chinese domestics desire to buy from other Chinese customers.

We're in the bridge of those because I think you grew $150 million or so at the midpoint. You talked about $50 million of additions. Like where are those headwinds accounted for in the bridge?

Yes. You're talking about probably, I guess, $1.5 million to $2 million units of headwind total at sub $20 ASP. . So you're really only talking $30 million, $40 million roughly in base EC headwinds. So the $150 million is really the net growth rate. So there -- some of those growth are more than that, but they're netted against a couple of losses at the same time. So that would be the net growth rate of those that 50-50, 50 that we show.

Maybe can you tell us up on the gross margin a little bit. I think on the slide you said like 34%, 35% is sustainable, but some of the commentary you've talked about sort of like lasers and electronics and just other things like -- how do you think about gross margins going into next year? And then I guess on top of like, how do you think about sort of longer-term gross margins given the investment business comes on at lower gross margins as well?

Yes. I think as I mentioned, like some of that be a little bit lumpy related to timing of reimbursement. So it's really about what kind of cost increases do you have in the first quarter versus what is your reimbursement cadence. So I think you may have a little bit of lumpiness, but I think we're trying to characterize our overall business on a steady state of like with the addition of the PAC business, the Botox entities, we had previously talked about 35%, 36% as our margin. Now we're blending it all together, and we still feel very comfortable that certain parts of our business are going to run at a higher gross margin and we feel like we have the ability to offset those things. So I think inside of a specific quarter, I think you're going to see some lumpiness as it relates to timing. But that growth profile of the core auto business we feel very comfortable with. But on the contract manufacturing, maybe Steve can focus a little bit -- you can talk...

Is that not going to impact margins until '29. And then the plan there is we're talking segment reporting. And so you'll be able to break out Gentex's core business from the contract manufacturing piece and be able to value both of those separately because that's ultimately what it comes down right? They all operate under the different valuation models. And so we're going to do a much better job of trying to make sure you have an insight into both those pieces. And so the blended yes, will come down, especially as contract manufacturing growth but you'll be able to see what's happened to the core Gentex business, which we continue to believe will be in that 34%, 35% range on core Gentex design products and you know how that contract manufacturing space works. I mean, anywhere from 8% to 12% gross margins typically is what the industry pays. It is way capital-light prison to our core business. The amount of revenue we can drive off a much smaller capital footprint and the contract manufacturing space is very, very different than what -- for instance, we're going to be $1 billion in the EC business, that you're talking probably $1 billion in capital investment to make that happen. If you look at just kind of the basis of where we're at today and what we have invested in the business. If you start talking about contract manufacturing, as long as you have a building, you're probably to drive $1 billion you're probably $150 million in CapEx to get it in this contract manufacturing space.

Got it. I guess like just to '27, I know you gave the sales conform but gross margin, like should we think about that as some of those headwinds you're finding cost set to those headwinds for next year? Or like a midpoint this year, is 35%. Should we think about maybe gross margin next year, like how do you sort of conceptualize.

Yes. I think it depends on the impact or the magnitude of the electronics piece and how quickly we can get those offsets. So I mean I think that's where the lumpiness of timing is. When do these things start to impact us from an electronics price increase perspective and how quickly can we get some of that back. So if it's all contained within a year that I'd say you would have the better opportunity. But one thing to be mindful of is if we have a $10 price increase on electronics, we're going to get -- the goal is to get $10 back so there's 0 margin on that. So you may see some dilution in the margins in the short term.

In the quarter and quarter-to-quarter is going to be lumpy. There's no doubt. -- you're going to get a price increase on the electronic side, it's going to be immediate and you won't even get your customer to respond to you inside of that quarter. So you could have a quarter or 2 where you see a huge headwind on electronics or on a precious metals increase that you just haven't had a chance to negotiate yet. What you've seen over the last 3 years, though, as we boil through those, there's some lumpiness. There's no doubt, and you see a little bit of pressure early on in the quarter when you experience it, you haven't gotten reimbursed yet -- then you see the tailwinds come on later with the offsets start to happen. And that's why we tried out to ever talk quarter-to-quarter because this market has just become impossible to predict. I mean we have electronics guys just e-mailing us last week with demands for price increases like tomorrow. And they've gone with several threats and other things that are probably not for public consumption, but it's part of the industry now. And so we start to inform our customers that, hey, we'll help you in the short term, but we're not going to keep doing this. So if you want to guarantee supply, then you've got -- we've got to shake hands on a deal or you got to go secure components on your own. And so we've got, unfortunately better at having that rough conversation with our customer base.

Can you remind us what are -- what's the size of Gentex's bond costs as it relates to semis? And then for the 35% gross margin this year, that does include 65 basis points of the AEP refund last quarter. So thinking about next year, should we think gross margins like can we get to 35 basis points because that would be because or 65 basis points benefit this year that doesn't repeat?

So I think you have a total bio talking, yes, it's around 60%. I think we alluded to it on the slide. total electronic buy is around 60% of our bill of material, right? So not every commodity inside there is going in the wrong direction. We still have some reductions in some of the content, especially on VAB side, the cost increases from the precious metals are leveling off. So $800 million electronic spirit. And so I think that that's we-- so without tariffs, yes, you're low 34s, that's where our growth in FDM continues to come the DMS piece, while not necessarily at corporate average, it's replacing base mirror business as the low corporate average. And as we start to see some of the foreign markets, base mirrors continue to fall off, that's where some of that commentary of like the margins on that base business continues -- has deteriorated over time. So I think that's where you get the incremental positive margin or contribution margin to help you potentially get to that higher end, not committing to that at this point, but I think that's where the opportunity exists. And those product cores that are growing tend to lead to the tailwinds on the margin. You have the second part of that question?

I was just going to ask about CapEx, how we should think about CapEx over the next few years?

So if you look at -- we came into this -- so we lowered our CapEx budget for this year. If you think our beginning of the year CapEx estimate that was at $135 million to $145 million, I think, -- that's what our way too early, top 25 collectible would say, for next year is probably in that range for CapEx in '27 and that will support all the products you've seen and start to be the first wave of getting ready for that contract manufacturing piece. And honestly, the next 2, 3 years, I think we'll probably be very close to that. The only exception I throw out to that is if some something goes crazy on LED, like in a positive way, then obviously, we'd be more than happy to sit in this room and talk about, hey, we're going to have to expand that or accelerate it. but that comes with good news only. If you look at maintenance CapEx plus our planned launches right now, we feel really comfortable on that CapEx range that we can continue to develop these products, support them and prelaunch and get the manufacturing footprint in place. Yes.

Stock's very cheap today. You've laid a very attractive growth story. What's stopping you from turbocharging buybacks even at the point of advancer taking on debt?

Yes, I would say, honestly, it's something -- it's a conversation we have pretty much every quarter with the Board level now. And is something I -- this is -- unfortunately, this is what I wake up to every night at 3 a.m. running in the back of my head. Is this financial model isn't rocket science. It's really easy. It's simple math. And so the only real hesitancy is a couple of things. Number 1 is if you do this, you're saying no to every other opportunity over the next couple of years. By that, I mean a strategic acquisition or some other opportunity, and then the concept of saying, "Hey, how do you make sure -- how do you make sure you're not just chasing good money after bad instead of taking advantage of the timing. And so that's the second argument, right, instead of doing the ASR right now, what if this paranoia gets worse just slightly and what if you could have bought even better. And so our dollar cost averaging strategy that we use right now has worked fairly well. I mean, fairly well from a buying standpoint, not necessarily from a market response standpoint. But quite frankly, I mean, I've learned a lot from several of you last night that I joke internally that times automotive seems like it's largely uninvestable at least a portion of them -- at least a portion of -- the Street tends to feel that way. And I think that's what we've seen too. I mean if you look at interest in the space and if you look at -- and if you look at, quite frankly, credit turns, they're very similar. In other words, 7, 10 years ago, the amount of turns you could get from a borrowing standpoint in this space, we're very different than the type of leverage you can get now. And I think those are both symptomatic of fear and trepidation around what happens in this space. We look at it and say we feel very comfortable that we've been through downturns and we've been through upswings. And we probably better than most tend to handle consistent financial returns in both of those markets. I believe it's because of our size and how we respond to problems and how we manage differently. We are -- it is something that I will tell you, we have or let's just say we've modeled, it very often and frequently and we understand the type of returns it can produce very quickly without even going crazy. I mean you could do $1 billion ASR and you can model very quickly the impact on EPS. The harsh reality is one of the things we talk about is like, well, it's still -- is it still going to be a big yarn other than getting a lot of shares very quickly at a very fair price, does it actually improve the stock price and return anything to shareholders other than what we're doing. Because at this point, 1 of the things we've seen is with the anti-dilutive effect of our share repurchases, we've taken 80 million shares out of the marketplace and market cap hasn't rebounded the way we thought it would. And so spending $1 billion or more without getting -- without it really bringing value to shareholders. We want to make sure that we try to maximize that return to shareholders in the best way possible that may be additional growth drivers instead of just share repurchases. So we love the concept that we can do it slowly throughout the year and still pull back if there's a better opportunity. But we don't take it off the table ever rest for sure.

One in from online. How do we think about China competition globally within a 10-year market opportunity plan?