HP Inc. (HPQ) Earnings Call Transcript & Summary

[Audio Gap] and we continue to think that the second half will be stronger, driven from the consumer side on stronger seasonality that we see every year and then some recovery on the commercial side, driven especially by window refresh, the age of the installed base that we know -- what we expect is going to be a tailwind for us through the second half. So that's kind of the summary of what we reported. We also shared that we have started -- restarted our share buyback program. We bought about $500 million of shares, which is aligned to what we have been saying, and investors should expect that through the year, we stay active every quarter. It may be different quarter by quarter, but we will be active every quarter and return 100% of free cash flow with the 2 caveats we always make and as better opportunities arise and while we stay within our leverage rate of below 2%. Exactly.

[indiscernible]. I would say PCs are top of investors' minds today. You guided the PC market to, let's call it, low single-digit growth in fiscal '24. And you kind of mentioned this juxtaposition of near-term kind of federal and large enterprise caution, but there are a number of factors, I think we can agree, that support an upgrade cycle, the age of the installed base, the size of the installed base, AI PC launches, Windows 10 refresh. So maybe my question is like what do you believe is the catalyst that unlocks this spend and gets these larger enterprises to shift from caution to we're going to turn the spigot on and start investing in these new devices or refresh...

Yes. I think there are multiple factors. And also, the situation is not consistent country -- region by region. For example, we reported that in Europe, we saw growth on the overall PC category. We also, in the commercial space, where we acknowledge that the enterprise and the -- space were weaker. We also said that the SMB space and the education space has been more stable. So clearly, we are not looking at a homogeneous market. We see differences, segment by segment and also region by region. I think the key driver for the recovery in the second half is really the continuous aging of the installed base. We start seeing funnel to improve towards the second half, which is a good indicator. And this, combined with window refresh that will be happening in the coming quarters, which is also a strong driver of refresh on the commercial side, this gives us a confidence on the projections for the second half and probably to highlight that this is not our projection. This is what the analysts are saying. Most of the other key players have a very similar analysis. So it's fairly consistent across all the players in the industry.

Perfect. Perfect. And then maybe if we just ask and bifurcate that one level deeper, just consumer versus commercial. Historically, I think about commercial entity is upgrading on a bit of a regular cadence versus consumer. It's driven by promotions or new model launches. Do you think the shape of the recovery looks different for commercial versus consumer this year?

I think commercial will be driven by the 3 things we were talking before. Consumer, we -- market has started to be closer to normal seasonality, and consumer sales are always stronger in the second half than the first half. So this is what will be driving the consumer side. But in terms of Windows refresh, always, we see a more predictable behavior on the commercial side as you were saying.

Right. Okay. So let's talk about maybe the hottest topic in PCs today, which is AI PCs. We met in January, when you guys launched the Spectre 360. How do you think about an AI PC from the perspective? Is this a consumer tool? Is this a commercial tool? Why -- what are the use cases that we should be thinking about initially that kind of drive the answer to that question?

Yes, we think it's both attractive, both for consumers and for professionals. Within penetration, it would probably start faster on the commercial side, but there are many applications in the consumer side for which AI PCs will be very relevant. An AI PC is a PC that has built-in capabilities to run large language models locally. So what this means is you can take advantage of a model that has been trained in the cloud with a huge amount of data and then take that model, bring in -- install it in your PC and run this model combined with your local private data that kind of, in essence, what one of these PCs is going to be. And for consumers -- or for professionals has 3 major advantages. One is security. You don't need to upload your data to the cloud, you can run everything locally. And if, for example, if you are a small company that wants to run a large language model using your own sales data or your own private data, that's the easiest and cheaper way to make it happen. Second big advantage is cost. It is much cheaper to run these models locally than having to either pay for a Copilot license or create your own sandbox in the cloud. That's a much, much cheaper structure. And finally, it's latency. And latency for example, is what will make many of these products attractive for consumers. If you're running a gaming application and the gaming application takes advantage of AI running locally, you will have a much faster response, a much better experience, if you find everything local.

Right. Okay. And then, again on this topic, how do we think about the cadence of launches because as we understand it, we should be able to get more and more powerful PCs as kind of the year goes along into 2025. And so from your perspective, what is the cadence? And what kind of processing power, however you want to kind of quantify that, but what kind of processing power is really needed to drum up interest in these devices?

Yes. We are going to see processing power to continue to improve through the year. We measure processing power in terms of tera operations per second, which is kind of a new metric that the market will start getting familiar with. Today, we are significantly below 40. We think 40 is kind of the threshold to start running some key applications like Copilot, and there will be solutions above 40, starting in the summer. And there are going to be, as we have shared multiple options, we are working with all the key silicon providers to integrate their solutions into our offering. And from the summer to holiday season next year, there will be a continuous release of new products in this space.

Okay. Commercial and consumer...

And it will be commercial or consumer. There will be more commercial than consumer aligned to where we expect the penetration to happen faster. But there will be both.

Okay. So if we think longer term or -- longer term out for PCs, you guys have talked about roughly 50% of shipments in 2026, being AI PCs. I want to push back a little bit just to hear your response, which is half the market is consumer, half the market is commercial today, that could theoretically imply all of commercial entities and no consumers are half and half adopt. And so is that the right time frame? What kind of gives you the confidence in getting to 50% in 3 years? Any different architecture evolutions that could change that trajectory?

Yes. To be precise, what we are saying is 40% to 60% penetration 3 years after launch. So this is how we think about that. Again, majority will be -- we expect it to be on the commercial side because this is where we expect to see use cases to come sooner. But gaming applications, we'll start taking advantage of that as consumers will start getting more familiar to the value of doing inferencing a bit. We think that penetration will also happen on the consumer side.

Okay. Maybe let's shift gears a little bit, go back to kind of the traditional conversation about PCs and touch on pricing, because, one, there's going to be commodity cost pressure. Would you say maybe as you look at the world today, the commodity cost environment is kind of trending in line with your expectations? Or is it steeper? Is it less steep? How are you planning to address these? Will you raise prices to kind of pass those costs off? And are there other kind of tools that you can mitigate that increase? And then ultimately, what does this translate to? How should we think about ASPs this year and then also margins for this business, because obviously, there's a direct relationship there?

So let's see. Looking for...

There's a lot there, I understand.

I'll try to answer all. I need some time.

3 questions in one.

So looking forward, we expect commodity costs to continue to increase. We have seen some increases, and we think this will continue to happen. We will be repricing according to that, we and the rest of the industry. PCs is an industry where repricing happens fairly fast. There is usually a lag of time between price, cost increase and price increase depending on the contract, I mean -- but over time, this happens. And this is one of the reasons where we expect ASPs to increase through the rest of the year. In Q1, we acknowledged that in some areas, costs had increased faster than we were expecting. And we mentioned this as one of the reasons why our gross margin in PCs was slightly below where we expected it to be. But over time, we price for it and the rest of the industry does, which means there is not a huge impact on margins, especially once all the pricing has been executed.

And so for Personal Systems this year, I think we talked about -- or you talked about operating margins kind of solidly in that range. So the long-term range for you is 5% to 7%. Somewhere in the middle of that is how we should be thinking about that.

Exactly.

And sorry, just the ASP growth -- do you expect ASPs to grow this year? Obviously, you're raising prices, maybe we've seen richer configurations and mix shift over time. Should that be a trend we see this year? Or is there like deconfiguring and speccing down at all?

We expect ASPs to increase, both driven by commodity cost increases, but also driven by mix. For example, we -- I talked before, we expect stronger recovery on commercial than in consumer. So this will -- this has a positive impact on ASPs. And also, as we have shared several times, our goal is to grow more in the premium category, which also has a positive impact on margins.

Right. Okay.

Sorry, on pricing.

On pricing, right. And then maybe last question before we shift over to print, which just -- you acquired Poly more than a year ago, ambitions there to accelerate growth, kind of improve margins in that business. It's obviously within kind of one of those key growth areas that you guys have talked about. And so where are you on that journey? How is the Poly asset kind of performing relative to your expectations? How does it sit into that kind of broader mode of the PS business?

Yes. We have acknowledged that clearly, macro has not helped in the last 12 months. And it is a business that similar to PCs have been impacted by that. But when we look at the opportunities, it opened to us in really positioning ourselves as the leader in hybrid work. As a company that enables hybrid work, it's a very, very important asset. And when we talk to resellers, when we talk to customers, they all acknowledge the strength of the portfolio by having the -- all the pieces together. And for example, I'm flying later tonight to Vegas, where we will have our largest reseller event, and one of the key messages is the opportunity that we have in hybrid and how Poly really helps us to complement their portfolio. And also what is very important for us, this is clearly an opportunity to differentiate and to bring innovation. I think we all have been in video conferencing systems where the experience is not what we would like it to be. And clearly, by having the ability to connect PCs and video conferencing systems to use the same audio system, same video systems, we really have a strong position that we're going to drive both on the Poly side, but also on the HP side.

Right. Okay. Perfect. So let's shift gears and head over to the Print business. We're obviously 4 years removed from the pandemic. I remember sitting here 4 years ago today, wondering what was happening. Just based on your kind of pipeline and customer conversations, can you give us an update on how we should today be thinking about the consumer print world versus the commercial print world? I imagine a bit of different forces. I don't know if they're diametrically opposed or not, but how do we think about consumer versus commercial print today?

Yes. I wouldn't say they are dramatically opposed. I think what we see in the office is through the pandemic, we saw a significant reduction of the size of the market, driven by the fact that people were not in the office. And now given that the return to office has been slow, we see the market smaller than what we were projecting it to be 5 years ago. On the consumer side, we saw a positive spike during the pandemic. And then the market has returned to the level of decline that it had before. But clearly, the pandemic was a positive effect for -- on the consumer side. And then on the industrial side, which is also an important category for us, it was negatively affected through the pandemic because company shutdown, they reduced their overall investment in capital equipment. And now during the last quarter, we have started to see a recovery. And we think that '24 is going to be a very important year for the overall industrial category.

Right. And I realize when we talk about print, it's hard to paint the market with one broad brush stroke, right? Obviously, there's a lot of different parts of the print market. If we think about the way you've talked about the year, which is print market, flat-ish. You've talked about supplies down low to mid-single digits for the year. To get there, you need hardware to obviously outperform supplies, but hardware has been challenged recently. But at the same time, you start to face easier comps as the year goes on. So maybe just help us think about what gets that trajectory of the hardware business to gradually improve and even grow as we -- again, I don't want to put words in your mouth, but as we get further into the year to kind of offset some of those supplies decline to keep the market flat.

Yes, I think on the print side world, our projection is that in the long term, it will be flattish for '24. We expect it to be flattish to a slight decline. This is how we have framed the year in previous quarters. And just saying, we expect supplies to decline low to mid-single digits this year and on the long term. And we expect to start seeing some recovery on the hardware side, both driven by market and also driven by share growth from our side. We expect the office market to start recovering, and we have seen some of them -- some of that. And we expect us to grow share, both in office and in Big Tank. Both categories have higher ASPs than the traditional consumer $29, $49 printer. So this will help on the ASPs to compensate for some of the Unity clients.

Okay. And I think talking about the office is important because you made the Samsung acquisition back in 2018 that helps kind of launch your efforts maybe more emphatically into the office. Is that about -- is that opportunity a share gain opportunity for you? Do you think the market looks any different in office than it does elsewhere? Just trying to understand like the true impetus for that push, that's really a share gain opportunity. Is that the right way to think about it?

It has share gain opportunity. As you know, overall in print, our goal is to grow the number of profitable customers that we have. Office customers tend to be profitable. They bring more than consumers, and therefore, it's an attractive area for us. We also have acknowledged that in the last 2 years, notably for supply chain and operational issues, we lost some share, so is recovering some of the share that we have with profitable customers.

Okay. How about on the pricing front? So the last few quarters, you've talked about a bit more aggressive pricing from some of your competitors out in Japan to take advantage of a weak -- it's been weak for a while, but this -- it feels like this narrative has kind of emerged maybe the last 6-plus months about, but what do you think gets this behavior to change? Is there going to be a point where you're going to have to -- you and the industry as a whole will maybe have to react to this to take more aggressive steps on pricing?

Well, we are actually reacting, and we have shared many times that we have an aggressive plan to reduce our cost structure that will help us to be more competitive and be able to make money as a system selling printers to – in some of these levels. And also, the growth that we expect to see on the Big Tank side will help us to drive – to grow our share and to recover some of the share that we have lost in the [ modeling ] side of the segment. Now there are categories in the consumer space where it's very hard that they will ever become attractive, selling a printer at $29, which is cheaper than the cost of the price of the cartridge, it's really hard to make money. So there are categories where I don't see us really investing and growing significantly. But overall, we expect to – as we will reduce cost, we expect to be able to be more aggressive and make money.

So let's talk about that because that was, maybe a handful of years ago, one of the biggest kind of pivots that you've talked about on the printing side, which is reduce the number of unprofitable customers, maybe make a little bit more money at the point of sale with the hardware, but really try to rely on driving more supplies attached. So, I think it was 60% of shipments were Big Ink or HP Plus, you've obviously leaned into or you're launching a new consumer-facing subscription. So can you help us understand what inning of this journey is HP on when it comes to transforming the print business into something that's a little more subscription-based, a little more recurring based, more reliant on supplies versus the old model and recurring supplies versus the old model?

Yes. I think we have made a lot of progress during the last 4 years. And as you said, this strategy has multiple drivers. It's not one unique element. For example, we have made a lot of progress with HP Plus, which helps us to secure a share of supplies. We have also made good progress with technology and innovation, improving our share of supplies, both in ink and in toner over the last few years. We have also grown our share and expanded our portfolio in Big Tank that especially for emerging markets has proven to be a very important way to improve the overall system's profitability of the business. And last but not least, we have driven a significant shift of our business to a subscription model. We shared in the call last week that in the consumer side, consumer at micro, but mostly consumer, we have more than 13 million subscribers now. And these are people that pay us every month to print. We monitor the amount of ink in their printers. And when we see they are going to be running out of ink, we send a new cartridge, but they pay us a fixed fee based on the expected number of pages they will be printing per month. About a year ago, we also launched a program to offer paper to these customers. So if you are part of the program and you subscribe to the paper side, you don't need to go and buy a big ream of paper to the stores. We delivered it to your home, and it is great for customers because of convenience. It's great for us because it's more margin per customer. So it's a clear win-win. But it's not cheap paper. It's convenient paper, which means customers are delighted to get it, and we are delighted to offer. And last week, we launched for the first time or we integrated for the first time printers in the program. So if you are in the program, you also can pay a bit more and get a new printer with 24/7 support with a technology upgrade path which is really helping us to continue to expand into this space. As we have shared before, we think that reducing digital friction and making it easy for customers to get technology is an important driver of growth. And clearly, this is a step in this direction. Over time, we will integrate more parts of our portfolio as part of the subscription, but it is clearly a differentiated asset, a platform that we can use now to offer additional services as we did with paper and an area of -- an important way to be able to capture more value over time per customer, which is a big driver of growth value for us.

And does that have any impact on how you guys maybe manage the channel, right? There was -- we talked about this issue, that was maybe 5 years ago, but you've done a really good job at kind of managing the multi-tier structure of your channel. How do we think about channel inventory for the supplies business today? Does -- do your efforts in managing that inventory look any different now that you're trying to shift more of your business to subscription than it did before?

I don't think it has any implications on that. We need to continue to manage very rigorously our multi-tier channel and we have done this over time, and we have invested in systems to make it happen. Subscriptions are good because make the business much more predictable. And in this case, we ship directly to consumers. We can offer them additional services. We can capture more value for them, as I said, with paper. We do this in a way that is channel friendly. We are a company that relies a lot on the strength of our channel, and we do it in a way where we share some of the benefits from customers in this engagement with partners. So they help us to sell the program, and they really amplify our go-to-market efforts. And in fact, the countries where the [ marketed ] program has been more successful are the countries where we have been able to get more support from the channel, and it's a win-win for both sides. But we -- it's a business that we manage direct. We have a direct relationship with customers. We understand what customers are doing, which gives us a strong ability to expand just by having this direct contact with consumers.

Right. Okay. So I think something that maybe the market underappreciates that you've really outperformed on is on the print operating margin side. So nearly 20% operating margins last quarter. Last October, you raised the guide for your Print business from 16% to 18% operating margins to 16% to 19% operating margins. The question I get is, in the face of kind of some of these declines, how were you able to maintain such a strong margin profile for this business? So maybe my question is what are the primary factors that allow you to again, in the face of some market challenges, really drive strong profitability of this business?

I think it's the combination of what we have been talking before about optimizing our business model in multiple ways from better supplies, going to create more profitability per hardware when we sell Big Ink, a transition to subscriptions and also is a strong focus on operational excellence. We have been driving our cost structure down, our fixed cost structure or our permanent cost structure down over the last years. We continue to see opportunities to do it this year and do it next year. And this has really helped us to maintain or to improve our margins. And we have done this for print. We have done it also for PCs. Four years ago, our projection for PC margin was 3.5% to 5.5%. We raised it to 5% to 7%. And this reflects the ability or the focus we have put on cost structure and improve our cost structure, especially on the margin side, on the cost side. We think -- and we have done a good job, and we continue to see opportunities there.

Right. Okay. And I'll ask you a little bit more detail about future ready, so you can get into some of those details. The last question I want to ask you on print is just if we go back a handful of years ago, you had talked about kind of seeing value in print market consolidation. Since then, a lot of your competitors and yourselves have gone through a number of cost measures. How -- can I take your -- can I kind of gauge your interest in print market consolidation today? Do you still see value in that? How do we think about M&A in this space?

Yes. And just let me say, no matter if I use a slightly different word than other time, our position has not changed. So don't read anything new. So we continue to think that consolidation in this industry is going to happen. The market is flat or not growing. There are multiple players. And at some point, we expect that in PC, in print, it will happen something similar to what happened in PCs over a long period of time. So it's going to happen. It's going to take longer because companies are still making money because of the print business model, but we think at some point will have -- and at some point, we may participate in that, as we did with Samsung. At this point, our -- M&A is an important part of our strategy, and we think we can create more value by focusing M&A on the growth areas, which is what we have done during the last 3, 4 years and what the market should expect us to do. But as I have said many times, I will never say never because there is, again, on the long term, is an opportunity to create value.

Okay. Okay. So shifting to the cost side, I do want to give you kind of the opportunity to talk about future ready because it's another big initiative from you guys, multi-years, more than $1 billion, I think there's $1.6 billion of cost takeouts gross that you expect to do. So maybe the question is, what are the main areas of cost savings that we should be thinking about over the next 12 to 36 months? What is like truly structural versus maybe something that might be a little more near term or opportunistic? And how does that feed broadly into the way that you've talked about the world from each of your segment margins?

Sure. First of all, one clarification. Future ready is both an initiative to drive cost, but it's also an initiative to invest in the areas where we see growth. And we have made clear that some of the savings are flowing through the bottom line and the improvement in margins for both businesses in a declining market is a reflection of that. But we also think it's important to continue to invest in the areas where we see long-term growth. Subscriptions is one of them, workforce solutions is one of them. Hybrid systems is one of them. So we see that we need to continue to have this balance of aggressive savings and some investments in the opportunities where we see growth. Going now to the question on savings, there are 3 big buckets. One big bucket is portfolio simplification. Especially through the pandemic, we made our portfolios more complex and more complete. Given the shortages in components that we were seeing, we have been converging those and we still are converging those to reduce the number of platforms and also to integrate our demand into fewer suppliers, so we can have better business models with better cost and better business models with them. Second big area of focus is overall digitization of the company. We still have many processes that are manual that require a lot of human intervention. We have embarked over the last years in a process to simplify, to digitize. And now with AI, we can go even further. And this is one of the reasons where we increased our goals about a year ago. And we're making good progress in multiple fronts, so supply chain, demand supply matching, customer support. Really, we have opportunities across the board. And last area is overall process simplification and optimization. Think about real estate. We have been driving the cost of real estate down. We have been simplifying our structures in multiple departments. All this continues to be a source of savings. And I always say this, and you have heard me say this many times before, in a company of our size and complexity, there are always opportunities to be more efficient. And one day, you see I can do this. And once you have done this, you realize that you can go even further. And that's the approach that we have, constant optimization, and this is how we run the process.

And then maybe just nearer term before we get into maybe capital allocation before we end is, there's a lot of different forces kind of counterbalancing one another this year, meaning higher commodity costs, maybe mix shift towards PCs as they recover, print supplies down low to mid-singles. But then you also have, obviously, future ready and obviously, the performance that you've had on the print margin side. So when we bundle these all together, should we think about gross margins down year-over-year? How do we think about the trajectory of gross margins this year relative to last year just because there are a lot of forces kind of going after one another?

Well, I think for the 2 segments, we have said we expect them to be solidly in the middle of the range. This is one data point. Second data point, if you look at the midpoint of our guide year-on-year, it's growing versus the midpoint of last year, and some of this is driven by margin -- overall margin growth for the company. So this gives you 2 anchor points to see how we think about the company.

Okay. So let's shift at capital allocation because it's kind of a very important point for you guys, returns-based approach to capital allocation. Obviously, for the last year, you kind of pulled back on that because your leverage was above that 2x kind of high end of where you'd like to be. You brought that down now. And obviously, as you alluded to when we started, you bought back $0.5 billion of stock in the first quarter. So -- and I'd imagine with your stock -- the valuation that your stock is trading at, kind of the confidence you have in your story, you see a lot of value in there. So talk to us about the capital allocation priorities today as you see them.

Sure. So as you just said, we continue to think that HP shares are undervalued, and therefore, buying shares is a good investment. And this is why when we look at our capital allocation approach, our plan is to continue to return 100% of free cash flow over time, unless opportunities with better return M&A that we really think has better return than that arrived and when -- always when our leverage stays below 2 because we think it's important for us to stay investment-grade rating, especially in a period of uncertainty as we see now. So that's kind of how we think about that and what investors should be expecting us to do in the coming quarters. We think this is an important reason or important driver of value for investors. This has been part of our story for the last 4 years, and it will continue to be, going forward.

Okay. And then lastly, on the M&A front, we talked about print. So we don't need to rehash that. But just in terms of like big picture, when you think -- when you look at potential targets today, are there more or less than there have been historically? Do you have to get a little bit more creative? Are valuations more or less attractive? So maybe the bigger picture question is like when you think about M&A today, how should we kind of frame the opportunity set -- the potential opportunity set for each of this?

First of all is, what are the spaces? We have said that it's going to be related to our growth areas. So...

And that's for growth, not cost necessarily.

Exactly. So which can be consumer services for workforce solutions, hybrid systems, gaming. We haven't talked about this, but gaming is an important growth area for us. And then industrial print density. This is -- these are the areas where we -- that we monitor regularly, and there are always -- we are always evaluating opportunities, but we have a very rigorous process. We need to see alignment on the strategy. So whatever target we look at needs to support the strategies that we have. Second is to have strong financial returns, better, of course, than buying back shares. And then third, we need to be sure that we will be able to execute operationally because buying companies and integrating is not as easy as it looks on paper. So we need to make sure we can put the right plan in place to execute. These are kind of the filters that we use within, of course, our capital allocation constraints. So if I look back forward, investors should expect -- if we do things, that will be similar to what we have done during the last 3, 4 years.

Okay. And before I get to the last question, you made a good point that I just want to touch on, which is gaming. Obviously, you acquired HyperX years back. You've leaned into more of this hybrid work kind of peripherals market. So is -- how do we think about that business in the context of the rest of Personal Systems? That is clearly one of the growth levers. But is this maybe like a full frontal in terms of you are really going after share in these markets? Is it any different this time than it has been historically?

I don't think it's different. And our goal is always profitable share. So one of the reasons why we think gaming is attractive is in the premium space of the category -- of the consumer side. Also, it's attractive because it helps us to continue to attract the younger consumers, new consumers to the brand, which is also important for the short term and for the long term. And I don't think you should expect any radically different, but continuous progress in this category. There are countries in the world where gaming is one of our largest businesses, and we need to -- you will see us continue to drive this going forward.

Okay. Okay. So we only have about 30 seconds here. So I just kind of want to give you the final word and help maybe the audience and those that are listening to the webcast or reading the transcript online, to understand what your final message is here, right, kind of low double-digit free cash flow yield, kind of high to mid-single digit PE today. What is the opportunity going forward with HP to you?

Yes. I think it's not different from what we said in our Investor Day, 6 months ago. Our expectation is to grow the revenue of the company between 2%, 4%, operating profit to grow faster, EPS to grow faster than that even by capital allocation and to maintain what we consider an investor-friendly capital allocation approach, returning 100% of free cash flow with the caveats that we have discussed before, and really a strong confidence from our side in being able to execute our plan. The combination of operational discipline that we have, but also the opportunity that we see in the market to drive innovation, to really integrate AI into our portfolio to create better experiences for customers, makes our plan very exciting. And I think the potential financial reward is very attractive.

Beautiful. We'll leave it there. Thank you so much, Enrique.

Thank you, Erik. Thank you, everybody.