Lennox International Inc. ($LII)

Well, good morning, everyone, and welcome back to Day 3 of Oppenheimer's 21st Annual Industrial Growth Conference. Noah Kaye, a Managing Director in Oppenheimer's industrial innovation research practice. We're very happy to welcome back to the conference, the management team of Lennox, CEO, Alok Maskara; and CFO; Michael Quenzer. Gentlemen, welcome to you both. Thank you so much for what promises to be a great discussion today.

Thank you, Noah, for having us. Excited to be here and share our story..

You had a I think, a very in-depth Investor Day, which we attended a few months ago, and you really laid out a comprehensive view of the business through the end of the decade. You talked about a $500 million revenue growth target from new initiatives by 2030. We estimated that, that represented just over 1/4 of the opportunities you laid out across parts and accessories, emergency replacement ducted and ductless heat pumps. And you talked, I think, about 1 point of growth this year from those initiatives on your earnings call. So I guess the question here is really, which of these growth initiatives do you anticipate hitting their targets earliest, which might take more time to play out? And where do you think you left the most room for upside over the medium term?

Sure. I think the -- from our perspective, just as a reminder, one point was total growth impact this year. So roughly about $50 million is what we baked in into the plan across all 4 initiatives. Over the next 3, 4 years, each of them accelerate, so towards the end of the acute planning period, we feel very comfortable with the $500 million number. So think of it's $50 million this year, over 100 next year, and then it keeps rapidly going up. We like all 4 of them. I'll tell you, the largest opportunity for us is in what I would call the attachment rate attachment rate for parts, supplies, services, those are the areas where we have made the 2 acquisitions so far, and we continue to feel we are well positioned to win. We have a right to get more attachment rate, given our 2015 distribution outlets, given how loyal our dealers are, we just haven't made it easy for them to buy those products from us. So that's where we think the largest opportunity for us is going to be Other things such as the JV with Samsung and Ariston, they're also both very important to us. And I think that's going to be taking a little longer to play out because our market share is so low and market share takes a long period to shift. In the short term, to answer your question, emergency replacement is the one that we are seeing the most traction and will likely have the most impact in 2026 itself because we started on that journey 2 years ago with a new factory. We built our sales and distribution position last year, and this is the year we are kind of fully loaded really to go forward. So that's going to have the more short-term impact was with emergency replacement.

That's very helpful. Maybe to put a finer point on the initiative with Samsung and Ariston, you mentioned solid momentum in the first quarter. So I'm curious what solid momentum means for you and your partners in the context of what was a seasonally softer quarter for volumes. How we think about both of those initiatives, at least ramping through the balance of this year.

Sure. First of all, I think in a low quarter percentages look very good, right? So from that perspective, that's momentum. But that's not what we meant when we said good momentum. What we meant is -- for us to succeed in the summer season, we need to be prepared by March, April. And we are prepared versus last year, we were not ready for things like Samsung. We didn't get full inventory position until like June, July when we missed the selling season last year. So that's the momentum we're talking about number of dealer sign-ups, a number of dealers who have tried and tested the product and are ready to go. . Same on the water heater. We have got warehouses now that have appropriate inventory. We are ready for the summer season. On Samsung, just to go back to it last year, it was a very soft year because products was not there, a conversion. We were selling through the old inventory. And this year, we've had a good solid start to a good selling season, what we hope stands out in Q2 and Q3. But we're optimistic on both -- our market share in water heat is clearly 0. So that's an easy one for us to look at it and saying, hey, we're going to build up good market share position going forward. On dockless if it's 10% of the market, it's way less than 10% of our sales, right? I mean we have probably 5x underweight in that. So I think over the next 5, 10 years, we'll get that.

And can you talk a little bit about the preparation of the channel? I mean there's one thing to get inventory into the right hands. It's another thing to kind of arm your dealers and your customers really with the information they need to go out and win the business, win the market share. So can you just talk a little bit about the training initiatives that accompany the rollout.

Sure. So first of all, we continue to invest heavily in training. Right now, we have about 14 different residential training centers. We have a couple of commercial and we are opening a new commercial one here in Dallas close to our headquarters as well. So that continues to be an area of investment. And I should mention that a lot of training we do now is online as well. So while the physical centers are very important, the online content is very important too. So for the Samsung product and for the Arista, we have set up a whole separate team that focuses on just getting our dealers trained on it, answering technical question through that, giving them the tech support and giving them the value proposition training. So for example, the Samsung products, they work very well with the Lennox Home app on your phone. They are integrated together. We have the same kind of value offering in terms of loyalty rebates, loyalty programs, freight programs that comes with our unitary product, and they can call the same tech support number and to be able to connect and work with the tech support. So we try and make it very easy for our dealers to work with us and the consumers, they love the connectivity of the Samsung product. They love the industrial design of that and how quiet that is, which, as you know, is Lennox's value proposition as well. So we try and match that together. On the water heater something similar, besides all the loyalty factors I mentioned, this to works with the Lennox Home Comfort app and what we try and train our dealers to is when you're down in the utility room, whether it's in the basement or ad tech and you're there to change the filter and do the service call, take a look at the water heater. Is it 10 years over? Is it about to leak give them a value proposition to give them a promotion to say, "Hey, I can send somebody to change it. And by the way, the new one will be more energy efficient, you might get some heat pump rebate and it's actually digitally connected. Not that many water heaters are digitally connected. So that's a train we have gone through it. So we are locked and loaded for the selling season.

It's great color. Obviously, there is a potential for more convergence between the heating and cooling and the water heater industries based off of where regulations are going, but also just based off of labor scarcity and a fair amount of overlap, frankly, in terms of functionality in the field. This is something that I used to do with my family business. And so I guess, as we see that sort of labor scarcity playing out in the value proposition here, where do you think that the cross-sell can eventually get to on water heaters for your business today? I know it's 0 today. But where do you think you can get to over, say, 5 to 10 years?

I'll tell you some historical data on this, just from the industry, not from us, then I'll answer your question. We do surveys every 3 to 4 years with our dealer base. The most recent survey, which we did on 2025 showed that 50% of our dealers are selling water heaters now, 50. I mean, that's a big number. If I go back a decade, so let's say, 12 years ago, it was -- the number was like 15% to 20%. So that number has gone up 3x on the number of folks who are actually actively selling water heaters. And that's true when we hold Lennox Live, our own internal dealer conference. The water heater booth was crowded. There was constant traffic there. We had to, in fact, put more people there because we underestimated the demand there. Now take it forward, I think a decade from now, probably 70%, 80% of our dealers are going to be doing water heaters. It is about labor scarcity. It is also about labor utilization in the nonpeak season. So if you look at summer and winter, our dealers are busy. Spring and fall, they're running promotions on water heaters and service calls, which they can do together. It's obviously less labor-intensive to change a water heater versus to install an air conditioning, but they both require a plumbers license and electrical license offer. So I think there's a lot of synergies there. Technology-wise, the heat pump portion of this makes it much more conducive for an HVAC person to install it versus a traditional plumber. The traditional plumber wants to do nothing to do with electronic control, does not run a program the heat pump, does not want to get trained on it. We said these guys are dealing with heat pump for over a decade. Finally, the technology convergence, Europe being the extreme example where you have one unit which is doing hot-water boiling and your home heating there is technology convergence happening. Once we go to natural refrigerant, there's a high chances there will be one unit that's going to be both heating your home and heating the hot water for your home. So I think -- we are early in the convergence journey, but we believe in that. We believe it's coming, and we are delighted that we'll be prepared with our partnership.

It's a great look into what's coming next. I guess going back to your long-term targets, you had an industry volume outlook for resi of 1% to 3% CAGR. And I understand wanting to sort of be prudent here given what happened last year, but did seem conservative to us, again, given that 2025 base. We've seen you already reduce exposure to margin-dilutive corners of the market, such as in residential and construction. So I guess the question is, if demand winds up being stronger than that 1% to 3% CAGR you talked about, how does that impact your approach? Do you use that to further refine your exposure to particular end markets, do you just sort of ride the wave of growth?

We definitely want to ride the wave of growth. We want to be fully prepared. We want to make sure we have enough production capacity, enough distribution footprint, enough stock in our open market. Listen, I'm glad you found it conservative. That was the intent. What we didn't want to do is defend market growth during Investor Day. We wanted all the focus to be on Lennox differentiated growth initiative. You will make your own market growth, as I've said anyway now. So why try and come up with a number that you might think is aggressive. So we wanted to just take that off the table and saying, yes, we're going to give you a number that nobody would say you're being too aggressive. And let's talk about the Lennox growth initiative. Going back to the lower profitability corners of the market, that's a bit of a short-term phenomena, right? I mean, when you make no margin, we don't want to sell into it, but these things go into RFPs every 2 years, sometimes even every year. So I think as those large accounts get experience working with somebody else and see our differentiated value proposition. I'm optimistic that they will see the value of our value proposition, and they would look at why, it is better to work with us even if we are a penny more expensive. So I think that's kind of where we are going to focus on. We provide better service. We are manufactured direct. We provide better support. And honestly, we train the dealers and spend a lot of money training those dealers. So from that perspective, I remain convinced that we have a stronger value proposition. And I feel confident that if not all, many of those customers will realize that and will give us an opportunity again.

And so you would intend to rebid for the next round of RFPs, but with terms that are more attractive to you.

Yes. We'll stick to our margin discipline, but yes, we will.

Very helpful. What about for BCS. You laid out these vectors for secular market outperformance. You talked about the emergency replacement traction, which we're already seeing this year. And then the parts and service attach rate and 1Q, again, a healthy initial proof point. And you're guiding to substantially stronger performance versus peers in light commercial this year. So does that magnitude of outperformance hold a broader industry volumes continue to exceed expectations for the year?

Sure. Michael, do you want to start on that? .

Sure. Yes. So we're really pleased with the start of the year within that segment. We had a little bit of an easier comp last year, so that's some of our performance. But overall, as you mentioned, there's really 2 big growth factors we're focused on the BCS. First is emergency replacement. So it's a bit of a more of a seasonal product, think of the second and third quarter, but we saw some really good record improvement in emergency replacement within the quarter. But the bigger growth factor has really been around national accounts and our ability to get back into that vertical with the health of our factory now in Arkansas to start winning back share. And the stickiness that comes with that revenue and national accounts is that we can build customer equipment from them. We install it through a service offering. We do preventative maintenance with them. We do monitoring, we do end-of-life recycling and reclamation, so really pleased with our light commercial business and the stickiness of national accounts to go back on offensive, but we're off to good start. We saw the industry up a little bit in February. So that was another good indicator after being down for 15 months to see the the industry is starting to come back. But really, it's similar to what Alok said, it's kind of riding the wave of the industry coming back and continuing our 2 growth vertical vector market share wins on both emergency replacement national accounts are off to a good start, and we expect that to continue through the second quarter into the third.

You'd mentioned Stuttgart, the health of the factory. It's been transitioned to primarily configure-to-order facility, right, for the national accounts and you also have been investing, if I recall correctly, in some testing chambers in R&D and those are all sure helpful to product development and conversion. So can you talk a little bit about the the uplift you get off of a configured order unit in terms of profitability versus kind of the larger standardized product that you're doing now in [indiscernible]?

Mike, would you continue?

Sure. Yes. So from a margin perspective, the overall margins are actually very similar from an equipment perspective, from a margin percentage on a national the average sale price is significantly higher in a configured order, but the margins are very similar to emergency replacement. So we like both businesses. Neither one is really more or less attractive. We think we can continue to expand margins on both. But really, that improvement within the test chambers, what that's going to allow us to do to really speed up our innovation cycle. There's a lot of focus on big national accounts moving to electrification, hybrid units for both electrified product as well as some gas. So we're moving to a bit of a hybrid heat pump product within National Council. We're excited. -- within that channel to get those new products launched with the national council and those test chambers, which are part of our $100 million extra CapEx this year will definitely support us there.

I think more I'll just add to that, like in a way, if we felt bad last year, we built a new factory and the market went down, right? But I think that goes down to my history. Every time we build a new factory, we should think of the market going down. What we are already excited is, as the market comes back, we are no longer capacity constrained. We have worked through all the kinks of a new factory start-up. And now it's time for us to use our plenty or abundant capacity to go get new share the team excited you want is just kind of the beginning of that journey. Some of the win back on the national account have exceeded our expectations as Stuttgart became so focused and has got to improve lead time. We are down to like a best lead times ever. So we're super excited about the market recovery. So it compounds our growth, it doesn't change our differentiated growth initiatives.

It's a really interesting dynamic to watch going forward. I want to ask you about distribution, which was a major focus at Investor Day, and we had the opportunity to tour your new facility. So after completing the physical build-out, what are the priorities for driving that improvement in fill rate? How do we think about scaling up the distribution centers and the automation investments that you need to kind of have at the end of the cycle.

Sure. I'll start by just reminding ourselves and everybody that -- at the end of the day, our goal is to make manufacturers margin plus distribution margin, like we need that plus in between. And we have delivered 300, 400 basis point margin growth over the past 4 years. And we think we are still a lot more room to go to get to the final math. It's been a long journey. Glad you had the opportunity to look at our new distribution center, which makes it truly more of a hub and spoke versus the, I would say, a random walk through our distribution centers that we used to have. The payback on that investment is very quick. Michael and I were just reviewing that recently, and we are pleased with the playback on that large investment. You would even notice it in our P&L in a negative way. So I think that's positive. There's a lot more to be done. AI is playing a very critical role in how we take this forward. Now that you can't get the physical infrastructure, a lot of this is purely around demand planning, inventory deployment and make it easier for our contractors to order parts and accessories as part of the overall purchase. So we can put a whole kit, including core [indiscernible] from AES. So the next big 2 or 3 phases is continue to build out our regional network, which is not done yet. So from both residential and commercial. We are still working through the cascading, the hub and spoke into different areas, like we just did something new at Sacramento, got more capacity. We're doing something new in Florida. So region, by region I got to get the right capacity in there. add on Samsung and restart to the distribution network, so they are additive to it. And on commercial, continue opening the local stocking points to be able to make that work. So we sit think we're early in the journey. But we've been very disciplined, very thoughtful and it's working as we intended and the payback has been very good. I wouldn't think of any big capital investment required there. because an autonomous truck is pretty straightforward and better for lift is pretty , these are not millions in capital like they are smaller within a regular CapEx budget. The big CapEx is what Michael and I called out which is going to be around our true testing facilities, R&D and innovation, but we've called that out already.

Yes. I guess, on the competitive landscape in distribution, it includes large public peers, there's active PE players Home Depot subsidiary recently entered the market. how do you see competitive dynamics in distribution evolving? What do you need to focus on to grow your share and achieve your target margins?

Sure. In quite a few ways, we welcome the professional distribution approach that's happening with SRS and Home Depot entering that market. We have seen Watscos put a lot of technology investments in there. So we welcome that because the industry needs more efficiency, needs more larger player. And as the product gets more sophisticated, to get the product information management cascaded through the channel is the right thing for the industry to do. So, a, we welcome that, right? B, it makes it appropriate for us to challenge ourselves to up our game I mean going back a few years, we were at 75% fill rate. I mean, just terrible, right? -- these folks will all fit. So we have to get to 98, 99. Now we closed last year at over 90%. So we made huge improvement, and we will continue to do that. Good news is with everybody making investment, there's no shortage of vendors, whether for automation or demand planning and everybody helps the manufacturers and distributors like us to go through it. So I welcome the opportunity there. You have to realize, though, distributors don't often switch brands. So if you think about it, there's one distributor [indiscernible], very much take in favor Watsco Carrier until they do acquisition, which is kind of non-carrier. Rheem and [indiscernible], us and train kind of who they're owning our own. So that remains. So I think in the future, what you will see is every manufacturer will need to excel in distribution to continue winning market share. Folks who own their own distribution like us and to a large extent, train, we'll just have an easier time doing that because there's no friction cost of dealing with a third party in between.

Yes. And you can also, I think, align your offerings and the way in which you tailoring the product suite to the end customer, right? Probably also get an advantage around just the information that you're getting back through the system, the visibility. And maybe that's where some of these kind of AI tools play in. Can you talk about that a little bit, how you've improved visibility into kind of the customers' real-time needs, both from a product fit and an availability standpoint?

Absolutely. I mean let's start with the most basic thing like thermostats. If you look at thermostats, in the olden days, none of them were connected. They were a little mercury dials on the top, right? Now almost all of them are connected. Among the manufacturers, -- we sell the most thermostat that a smart thermostats, our own brand through our own stores. And we have launched now lower price point thermostats to get even more mass market. That data is extremely valuable to us for multiple ways. One is for our own product, we can see warranty issues way before it happens, for example. So I think that's one information for us. And we can talk about run time versus pending demand or replacement versus this. We just get a lot of intelligence out of that. Second part of that is we make it very valuable to a contractor. They have a dashboard, which the penetration is increasing that they can see service issues. So before they spend $250 on a truck roll, they know what part to take there and what needs to be fixed. So I think that's something we highly encourage. And finally, for the homeowner, the connected home experience, hopefully, they have a Lennox water heater, Lennox HVAC, Samsung Ps. And hopefully, they have Samsung smart things in their homes. So their TVs and all everything connects together. We make it easier for them to connect through that. AI, which we used to call machine learning earlier makes a role in each of them. For homeowners, we can do geo-fencing with their phone. So it automatically turns it on and off depending on how your phone is far away or detects audio and just things. And we are very proud of our sensors that you can put. So you can have on each side of your bed 2 different sensors and kind of control temperature accordingly. So there's just a lot of cool things we are doing with AI for the homeowner. Same for the dealer, we can do predictive and preventive maintenance, which is huge for them. If they can route optimize their truck and they know that the motor is vibrating and they need to change it within the next 2 months, it's just a lot better for that, right? And for us, it's a gold mine of information and just a gold mine of information that we use across because we are homegrown and haven't done tons of acquisition, we have been now going back 100 years. And we put on our data lake, we use it all together. And when a dealer goes to -- a contractor goes to Lennox Pros, we can actually tell them what your purchase behavior. Here are the accessories you should add on. Here's a compatible unit that matches AHRI and make it really easy for them to do business with us. So all throughout the network, AI is becoming like software, right? I mean every software that we use now is AI-enabled.

It's a great example of some of the channel strength that you have. I just want to turn to more general demand questions. Obviously, the 1Q volumes were down in resi as expected. You previously talked about these deliberate R&C exits being a 2-point volume headwind to HCS. You talked about just in this discussion how that might moderate in future years, but does it sort of moderate sequentially as we move into coming quarters? Or is it pretty ratable throughout the year?

The R&C exits are pretty ratable throughout the year because, again, the kind of annual contracts in that. We do obviously see that impact no more than what we had called out. It might be even less than what we had called out, given some of the earlier dynamics we talked about especially with some of the 232 tariffs, that contracts become a little messy to work with. So I think from that perspective, it's no worse than what we had called out. What we are side about is just the overall momentum. I mean there's lots happening in the case where -- we remain convinced that the biggest issue last year was too much inventory in the channel, which is connected and our contractors lagging confidence in the new product. There's some impact of consumer, but that's like a tertiary impact, not a primary and secondary. So we feel good about where we are and sort of despite building in the price increase impact of 232 derivative tariff, we kept our volume commitment the same. Now it's a bit of a seasonal bases. So it's easy for me to do all this. I mean June is when it really starts making a difference.

To that, I think the housing starts were up over 10% in March. Yes, at this point, are you seeing any signs of sustained improvements into the quarter -- and just sort of how much lag you would expect between housing starts and an uptick in your own revenue?

Housing stats typically have a 6-month delay, like 6 months later, they bring the indoor units. 9 to 12 months, they bring the outdoor unit. So that we can see pretty in a very predictable fashion. And as you know, they are big builders, small builders, medium builders. So we still have good opportunity to continue growing through that. . What we're also seeing is from a consumer perspective, right? So new -- existing home sales are also good opportunities for us because that's when people think about renovation, changes, modifications. In general, the repair versus replacement demand, I think we are going back to the more traditional where consumers make the right economic decisions and that's replacement for a unit that's 10 to 12 years old. So I wouldn't change anything, but I continue to have the same confidence we had when we talked about Q1 earnings in a much more stabilized in phase versus continuously declining phase than we were last year.

Well, certainly, the dealers are more familiar with the new refrigerant. But we've also seen HELOC and home equity loan rates come down year-to-date, and curious how sort of financing and affordability are maybe translating here to some of the improved repair versus replace dynamics you're seeing?

Clearly plays a role, clearly plays a positive impact. I think as you know, you can't really finance repairs. But if you couldn't finance replacement either, they were an equal footing. But now you can go back to financing replacement at a reasonable level, replacement goes up, right? So yes, I think that's making a positive impact. .

For existing home replacement, how often and how typically is this just financed via one of those types of mechanisms versus outright cash? Do you happen to have that data?

About half these days used to be 30%, 40% financed. It's running at about half finance. It's not always through us. Some of the financing is true in HELOC. Some of the financing is through third party. But I would say about half and half of the half, a quarter, a little more than quarter would be through our partners because we do partner with financing companies and offer financing to our contractors. But we don't directly play a role besides enabling them to connect with appropriate providers. .

And just to level set, just remind us what you embedded in the guide of the volume guide assuming on new home construction versus existing home sales.

Yes. Yes, generally flat. Not a significant improvement year-over-year.

For both existing home sales and or construction.

Right. Yes.

Very helpful. There were some questions we got after earnings on the sequential inventory build, although honestly, it was pretty modest versus the prior year. Just maybe give us some color on your inventory management and how that might tie to growth initiatives. We know not all inventory is necessarily the same, and it might be for end markets or SKUs that investors might not fully appreciate. So can you talk about that a little bit.

Michael?

Sure. We're actually in a really good spot with inventory going into the season. After the last 2 quarters, we've taken some significant production reductions out to make sure that we've got our inventory in a really healthy position. We did add some inventory in the first quarter, predominantly around parts and accessories as we try to win some growth within that section, it's about a better improved fulfillment. So we're definitely working on making sure we have better fulfillment on parts and accessories. But even with our traditional equipment, we found that 1 of our biggest issues when we hear back from our contractors is our fulfillment scores. -- we need to make investments in finished goods to win that. Now what we're trying to do is offset that with raw materials and accounts payable and better accounts receivable to help fund that finished goods inventory, but it is a tool to help us know our contractors win in their local markets, and we're making the right investments in the right spots. We launched a new distribution center that eventually over time will give us some more inventory turn improvement. But initially, it's about getting that inventory to our contractors win.

Trying to reduce raws exposure and inventory. I just plays into what I want to talk about next, which is management of inflation and tariffs. So can you talk a little bit about that that effort to reduce [indiscernible] inventory and how it relates to price cost management for the year.

Sure. Yes. I mean, overall, it's a very complex environment, as you can imagine, with the tariffs right now. But what we like is the flexibility we've built within our network. We have 5 U.S. factories. We have some in Mexico. So we have a lot of flexibility to try to navigate this complexity -- so we'll continue to work the supply chain to reduce some of the headwinds that we see. But specifically on raw materials, a lot of it is also just working with vendors and cost sharing and figuring out what we can do to optimize our overall cost position in the tariff environment that we're in. So we're in a healthy position on raws, and we think the supply chain is generally in a good shape on almost all components that we're seeing, and we'll just continue to navigate through some of the near-term challenges with 232 tariffs.

And you'd raised cost inflation expectations by 2.5 points, largely offset by price. So just how much of the cost increase is tariff-related versus commodity related?

Sure. It's -- for this year, it's approximately 80% of that additional cost increase that we did, which is about $100 million. Second half of the year is related to $232 million. The rest is related to more core input costs that aren't hedged -- as you get into next year, we still have opportunity to continue to mitigate and reduce some of the 232 exposure. So some of these longer-term programs that love talked about getting engineers on these initiatives to keep that tariff exposure. So we'll continue to reduce that in the next year. And hopefully, we'll see some reduction in the raw material cost, too, as we enter next year as well. .

Could you give us a little bit of early color on those strategies around mitigation, maybe where vertical integration unlocks more opportunities versus peers .

Yes, sure. I can jump in to help. I think a lot of the new Section 232 derivative tariffs depends on the origin of the metal that is being used, right? So if you make products in Mexico that are made using 100% U.S. tar they have much lower nonfreight than they do otherwise. So a lot of our movements are around those aspects. So now we are better of using Mexican steel in U.S. and U.S. Steel in Mexico. And so just moving those around, you'll see a lot more goods truck loaded with steel, just crossing the border back and forth. So some of that is as simple as that. . Others is just leveraging our dual source. 4 years earlier in Investor Day, we talked about dual sourcing and how that was critical. This year, we didn't talk about it because we've done that -- so every time we are dual source, we can now move vendors around and components around to force them to do the same thing is, hey, if you have a U.S. -- you have compression made a U.S. deal, let's do this, you have to made of you. So those are the things we are doing on each of those opportunities.

Very helpful. Well, I know we're just about at time here. As always, I really appreciate the discussion. We are around for the rest of the day. If anyone wants to follow up, and we look forward to [indiscernible] meetings as well. Alok, Michael thank you both for the time.

Thank you.

Thank you, Noah, for having us. Take care.

All right.