SBA Communications Corporation (SBAC) Earnings Call Transcript & Summary

Well, good morning or good afternoon to everyone. Thank you for joining us for day 2 of the 2021 Bank of America Media, Telco Conference. I'm Dave Barden, I head up telecommunications services and communications infrastructure research for the bank. And we're really pleased to be able to kick off day 2 with the battle of the Cavanaghs. If you're not aware, we have Mike Cavanagh from Comcast I think on the other feed, and we're here this morning with Brendan Cavanagh, who's the Chief Financial Officer of SBA. Thank you for coming, Brendan.

Yes. Absolutely. Happy to be here. Hopefully, it's an alphabetical contest because I think I can beat that way.

The -- I was supposed to have welcome remarks this morning, and we just decided that there wasn't much to do with the welcome. Ordinarily, we would be in Los Angeles. Anyone here on the feed would have probably seen Brendan hitting par at the LA Country Club golf course. We would have had our wine tasting last night on the roof-deck of the Beverly Wilshire. So hopefully, we're going to do that next year. And so I'm looking forward to all of that. But thank you, guys, everyone, for joining us again.

So Brendan, I think the place to jump off here would be the stock has had an amazing run from March until now. And I think a lot of that has to do with the optimism that companies like yourself, Jeff and such on the 2Q call called out the relatively aggressive level of activity that's happening in the wireless marketplace. And activity doesn't necessarily mean revenue generation just right away, but it means activity. And so I was wondering, obviously, maybe the place to start would be based on what we heard in the second quarter, have you guys seen kind of persistent, consistent levels of wireless carrier activity in the marketplace? And we'll start there.

Yes. So well, the answer to your question is yes. We continue to see very strong U.S. activity levels since we reported, which hasn't been that long ago. But we're continuing to see good application, backlogs growing. We're continuing to sign up more business. So I would expect to continue to see that activity throughout the balance of this year and into next year just based on the backlog sizes. Obviously, I don't want to get too far ahead when we think about next year, but we're feeling very good about it right now. To address kind of the concept that you were talking about there, activity levels, when we speak about it, really is referring to the amount of new business that we're signing up. So through new leases and amendments, we're signing up a certain amount of dollars of revenue. But the commencement of that revenue sometimes is delayed a little bit from the time it is signed up because it's usually tied to the commencement of the installation work at the tower sites. We are starting to see that happen now more. I think a quarter ago, we were seeing a lot of stuff signed up, and it hadn't yet begun commencing revenue, but that's starting to shift. And the more that we sign up each quarter, there'll be some lag, obviously, until the time that it starts to generate revenue for us. But what it does signify is that that revenue is coming, and I think that's why people have been excited about the potential for the future for us.

Could you kind of refresh how we think about the activity, the search ring, the potential for the services revenue related to the contract signing, related to the revenue commencement? I think that people are trying to get a bead on as we see strong services-related revenues come through the business when we can try to calibrate when that's going to start to come through on the macro leasing.

Yes. So a lot of time, services for us with -- obviously, our history was as a services company. Before, we were a tower company even we were in the services business. And there's different components of services, of course. You have stuff that's more on the site development side. So site acquisition work, the kind of prework before a carrier would actually be out installing the site, helping to locate sites, et cetera. And then you have the real construction work. And so when you're looking at what's an indicator of leasing potential for us, in the past, we've had more of a mix of work being done on our sites and on third-party sites. So it wasn't always necessarily as clear, but the vast majority of the work we're doing today in services is on our own tower sites. So it actually is a little bit more correlated. So we've seen a lot of work in the site development area where carriers have kind of been doing that initial phase of getting sites located, approved and so forth, all the permits, all that kind of work that gets done ahead of actually installing a site. So that's an indicator that they're kind of in the process, but it's not a one-for-one correlation with when revenue is going to start. As we shift into a little bit more construction work where they're actually starting to do work to install at a particular site, that is tied more closely, certainly, with when leasing revenue picks up. And we're starting to see that shift. The second quarter, we had more construction revenue than we had in previous periods, and I think that's continuing right now. So I guess the way to think about it when you think about the cycle is that we get initially an indication from a carrier to our services group that they are looking to find the right sites to install it, they want to go through the process of helping to design their network. Our teams work with them to do that work. Assuming that there's a good fit with our sites, then they will come along and submit an application for either an amendment, if they're already on a site, or a new lease. That application is what goes into our backlog. When we talk about backlogs on leasing, that's what we're really talking about, applications, indications of interest from carriers for wanting to do work at one of our tower sites. And that gives us an idea. When we see that application backlog expand significantly, we know that ultimately, that's going to come through the pipeline and at the end of it, generate a lot more leasing revenue for us. So that's -- it's anecdotal evidence, but it's not specific at that point in time. Once they've gone through that process and we priced out an amendment or a lease and we've signed that agreement, now we have a document that's locked in. The question is just how long until it starts generating revenue. Typically, we're looking at somewhere in the 90 to 180 days. It depends on the situation. It could be a little bit longer than that, but how quickly they're going to move to actually installing at the site, but usually, it's in that time frame. And once that starts, we not only have the construction revenue that starts, but we also typically have the leasing revenue that kicks in from that lease or amendment that we signed. So there's a process that probably takes -- depending on what they're doing, can take somewhere from 90 days to 9 months, depending on the situation. But we're in the midst of that initial uptick in activity that's kind of in the middle of that cycle. And so the second quarter was the first time we talked about a significant uptick in new business being signed up, that activity level we talked about. And that will continue to drive higher leasing revenue contributions in each of the next couple of quarters and, particularly, I think as we get into next year.

Wow. Okay. That's super helpful. So there really is a tangible -- now that we've got that construction-related revenues coming through the services line, we know now that there's activity on the ground that's really going to translate into meaningful improvements in that leasing revenue. And that's a multi-quarter effect that kind of extends out. So let me ask this question as a follow-up, do you sense that this construction revenue is kind of bursting out of the gates for C-band deployments and the DISH build and other things and it's going to settle down into some more normal level? Or are we in kind of an extended period of this kind of activity?

It's a little bit hard to say because each carrier is in a little bit of a different spot. So the activity with DISH is really just starting in terms of true construction. We've had a lot of activity from a lease-up standpoint signing up agreements. But in terms of the shift to them actually starting to commence work, that's -- that has started to happen. So we are starting to see that now where we really hadn't when we spoke publicly the last time on our second quarter earnings call. So we'll have to see where that goes, but that's very much at the beginning stages. T-Mobile has been very active for some time. Verizon has started to increase their activity levels, but I still think there's -- we expect to see that continue to grow as well as they start to deploy their C-band, and that's definitely an uptick from where they've been historically. And AT&T is really still at the beginning stages of that, I would say. So I think there's opportunity to see more there. But all of that has to be put into context of how much capacity there is to actually do the work, too. Beyond SBA, there's a certain amount of capacity. When you have all 4 carriers being very active at the same time, we've seen in the past that there are some resource restraints on that, that I think constrain it. So the guys that are out there ahead of the pace a little bit I think do have some advantage among our customers. But we'll see how it goes. I do think, though, that for some time, we should be able to see some sustained activity levels in our services business and certainly in our leasing business as a result.

Okay. That's super. All right. So I did want to kind of talk a little bit about DISH, and that was tough color that you just shared about moving from kind of the signing of the leases to actually the building of the leases. I asked Jeff at the second quarter call, based on DISH's kind of public statements about launching the Las Vegas network here coming up in the fourth quarter, how concentrated the demand from DISH seemed to be. And his answer was that demand was actually quite broad, that it was fairly widely distributed. We actually talked to Uniti Fiber last -- yesterday, who has a publicly announced agreement to be a fiber supplier to DISH, it means that they've seen a lot of activity and that DISH is very serious. And they're very much concentrated in the Southeast, which is the opposite of where DISH is kind of launching their first network. So would you be able to elaborate a little bit? I mean is it -- do you sense that this is -- and there's a lot of skepticism out there, right? I mean a lot of people wonder if Charlie is really serious about this. And it -- from all accounts, it does seem like this is really happening. And I guess what kind of color could you share, if any, about how serious you believe it really is?

Well, I can only speak from what our interactions are with them and the work that we do with them and I would say, very serious. They are very busy. I don't know how to say it other than they're extremely active. We've signed a lot of agreements with them. I mentioned just a second ago that we're starting to see the actual commencement of the deployments around those agreements that they've signed. And every conversation that we have with them, every discussion around each individual site in our services business on all fronts, they are full steam ahead and it seems to align very well with their public comments. So all I can say is that there's no indication that they're planning to slow down at any time, and I expect that they'll continue to be pushing strongly ahead. So we're excited about it. It's turned out -- I would say, from my perspective, it's turned out better than I would have thought in terms of their activity level, not just the size of it, but the pace at which they've hit the ground running has been much faster than I think anyone really could have thought would have been the case going back even just 6 months ago.

So it's interesting you say that. So -- because that's really interesting to hear, very positive, obviously, for the tower sector. It's interesting to hear you say that kind of the Verizons of the world are actually maybe not quite as up to speed as they could be, which is surprising because it seemed like they were very hot and bothered to get up and running with prepositioning C-band equipment and such and...

I don't think I said Verizon wasn't up to speed, but I think they are -- because the activity level with them is increasing at a fairly rapid pace. But they really kind of started hitting the ground running in the second quarter, and I think their pace is increasing. I'm not sure that it's fully hit its cruising altitude is the way I guess I'd describe it.

Okay. So that's another -- and presumably, AT&T is in the same spot, so that all bodes pretty well. So we're seeing acceleration from AT&T and Verizon in the right direction. We're seeing better-than-expected performance from DISH in terms of coming to market quickly. Another thing that kind of came up over the course of the C-band auction in this last period here was the idea that there was a shift in resources away from maybe 4G densification, small cells and urban markets and more towards trying to get as much coverage of C-band capability as possible in the macro. Other than simply trying to light up new spectrum, are you seeing -- is there some sort of notable weighted average shift in how you see the carriers spending their money from a densification versus a coverage standpoint? Or is it indistinguishable?

It's not as distinguishable to us as it might be to others that are in different places in the chain here. But we -- at this stage, I would say most of the efforts are focused on coverage since the majority of the carriers are still, frankly, in the early days of their 5G build-out. So by its nature, it's a little more coverage-focused from a 5G perspective. Outside of DISH, who's obviously building a brand-new network from the ground up, the majority of the other carriers' activities, I would say, have been focused on technology upgrades at existing sites. So that -- the way I would define that is that it's more to provide that initial layer of 5G coverage. So I'd say it's more coverage-focused. There are some new site leases that are focused on areas that previously had 4 coverage. So that's obviously coverage-focused as well. And while there may be situations where we've seen new leases that are kind of focused on densifying a particular area, maybe I would say the majority is coverage-based, but ultimately, it's going to follow I think a similar wave of build-out that other past technologies have where they get that coverage done and then they go back and they fill and densify wherever the coverage is weakest.

And I think -- I guess the question -- the follow-up question to that is, to your point, I agree that it does presume -- one presumes that as you kind of do this, it's a coverage and it's a densification kind of an exercise, but the carriers have been worked up about trying to catch up with T-Mobile, for instance, and T-Mobile is trying to get out as fast as it can. Is this a 2- to 3-year kind of cycle before we come back to the densification issue? Or is it like a 5- or 6-year cycle? Or is it a 1-year cycle? Like how do you see it playing out?

Yes. I don't know if I can answer that question for sure because each carrier is going to go at their own pace, which, depending on what that pace is and how it changes over the coming quarters, they may be further ahead or maybe it takes them longer, it's just a longer path. There are certain deadlines that are associated with spectrum that they're using in some cases, that may influence what happens when. And obviously, DISH's situation is very different than T-Mobile or AT&T and Verizon, for that matter. So I don't think I can answer that question for sure, but I do think we're at least looking at a good -- another year and probably beyond that in terms of accelerated activity from the tower company's perspective. But it's just too hard for me to say for sure how long the build-out lasts.

Got it. Okay. So I wanted to ask, relevant to kind of this build-out that's happening and for every carrier now, including DISH and including the AT&T FirstNet build, et cetera, you guys signed a deal, kind of broke new ground actually at the beginning of the year, February, I think, with the PG&E utility deal. And at the time, I -- it was a pretty interesting thing. I think you bought about 700 sites. You got access to like 28,000 additional sites, which is a huge portfolio concentrated in a pretty high population part of the world in the United States. I was wondering if you could kind of elaborate a little bit on how that deal has progressed. And then to the extent it has, has the opportunity or might the opportunity present itself to repeat that type of transaction with other utilities around the country?

Yes. Well, first of all, PG&E deal itself has performed very well. We -- it's obviously got a limited amount of time. It's been a little over 6 months since we closed on that acquisition, but it's performed beyond our expectations in terms of activity levels and interest levels from the carriers. I think our timing for that deal was very good from the standpoint -- all the things we just talked about in terms of the carriers, 5G build-out activity levels and DISH kind of coming up as a brand-new tenant. That timing of adding this portfolio of sites into the mix matches up very well with activity levels from our carriers, in general, increasing. And given the locations of these sites, the markets that they cover, the fact that it's very hard to get towers in a number of these locations and so these utility transmission structures are really the only option in a number of cases to cover some of these locations, it's worked out well. It's early stages, obviously. It's -- there's more of a process to go through as you try to sign up new agreements with carriers. You've got to work closely with PG&E on that. And we have a very -- I think a very good process. We've worked very well together thus far, and we're working through that. But based on the backlogs of applications to those sites, we feel very, very good about where that stands and the potential for those sites. So very positive, in general, on that. And I think over the next year or so, we'll have a lot more to be able to say about how that's actually played out as the -- as just, frankly, the time goes by. In terms of other utilities, if we could do something similar to what we've done with PG&E, we would certainly have an interest in that. I think, though, that there are a lot of limitations with many utilities out there in terms of what they can do, where they're located, how attractive the types of assets that they have would be for wireless that make it probably not that likely that there will be too many of these. We've talked to 1 or 2 others about the possibility where we see the potential for it because it has certain characteristics that we think make them a potential fit. But there are other regulatory issues and things that make getting a deal like this done, and I think the set of circumstances around PG&E were pretty special to them. And so I wouldn't see -- I wouldn't expect from your side to see a ton of utility-related deals, but we're keeping our eyes open and exploring a few possibilities. So we'll see.

Okay. Yes. It's just interesting, I mean like the European telecommunications market, everyone's been pushing them to monetize their tower assets. And we're talking right now about Deutsche Telekom, for instance, and it just seemed like PG&E kind of found a pool of money that hadn't existed before. And it seems odd that there wouldn't have been, I don't know, more bandwagon jumping to kind of participate in that. But it's interesting to hear your commentary. So it sounds like the regulatory side of this is an issue. They are heavily regulated utilities. And I guess the argument is they're kind of taxpayer assets in some way, shape or form, and they probably want to go through a process to do this. So I hear what you're saying. All right. So another evolution this year has been the deal with Paradigm and the move into Africa. And it seems like the tower companies -- several tower companies seem to be comfortable these days kind of bringing other parties to bear in creating transactions and having joint ventures and doing things that way. Obviously, the Paradigm guys are all mostly old American Tower guys. They're all people we know. And maybe they just happened to kind of get in early on a particular transaction and there was an attractive opportunity for SBA and this is kind of a one-off. Or is this the beginning of a trend do you think where we're going to see pioneers going into markets, grooming them, creating portfolios of macro sites and then giving the high bidder, the larger tower companies in the world, an opportunity to participate?

Well, first of all, as you said, the JV structure with Paradigm was specifically focused on an acquisition from sites that came from Airtel in Tanzania. And the simple answer on why we did a JV in that particular case is that the opportunity was originally brought to us by Paradigm, our JV partner. So that was -- we were able to bring certain things to that deal that they needed, and they obviously brought the deal to us and actually had some on-the-ground experience there, a certain existing relationship with the carrier that was selling the assets. And so it was just a natural fit. We are the majority partner. And over the long term, we anticipate we'll ultimately have the entire operation one day down the road. And so we, at SBA, have not historically done too many JVs. We are comfortable using the structure when we know our partner well and we believe that they bring a certain value to the project that distinguishes them. It's typically, in our case, not been about capital. It's been more about other things that they bring. For instance, in South Africa, we had a JV partner there that was on the ground, developing sites. And so it was a good fit, and that's worked -- that worked out very well for us. We now own 100% of that. So that's the way that it probably will flow for us in the future. Some of the other JVs that have been done in the industry I think have been more about the size and laying off some of the risk just based on the size of the transactions. In our case, we haven't done anything like that. And I guess we could, but it's not something that we focus on. We try to find good opportunities. If the best way to get that opportunity is through connection with a partner, then we're perfectly happy to do that. And if not, then we do it ourselves.

Makes sense. So speaking of that kind of the idea that some of these partnerships happen because of capital requirements for larger investments, I wanted to kind of come back to the comment I made earlier about how well the stock has performed. A portion of the AFFO per share growth that you guys have generated has come regularly from share repurchase. But now that the stock is trading at kind of record valuations, does that mean that now these acquisitions, other places relative to buying back your stock are that much more attractive? Like has this -- has what the stock has done changed how you think about capital allocation in the business now?

Not -- well, I mean it's always been a matter of comparing our different investment alternatives. And so stock repurchases is kind of a default alternative to investing in new assets, whether it be acquisitions or new builds. Our preference would be if all things were equal from a valuation perspective, I think it would be to invest in new assets and grow that way. You also have to have enough opportunities to do that as well. And I think if you look at our history, we've had a good mix of adding new assets and buying back our own stock. I don't really want to get into commenting on the valuation of our stock and whether it's high or not. I mean it's higher than it's been at certain times in our history, but we think it's appropriately valued certainly and even has the potential certainly for growth when we see the things that are out there ahead of us. But it's really a matter of what are the options to invest in assets. If you think about our capital allocation priorities, the first thing, of course, is the dividend, but there's a lot of capacity after the dividend today. And so we're going to look for ways to be creative and find opportunities. The Tanzania investment, as an example, the PG&E investment, 2 things we already talked about, are things that are a little bit different than the norm that you may see out there, but, yes, we think drive material value and are good examples of our ability to be creative and selective in places to allocate capital, and we're going to continue to do that. And I think if we find enough of those opportunities, then we probably won't do many share repurchases. But if we're not able to fill up our pool of capital use with opportunities like that that we like, then share repurchases are still attractive and we'll try to be opportunistic with those repurchases, which is the way we've handled it in the past. Whenever we see a dislocation in a stock, even if it's minor, but when sometimes it happens temporarily, we typically will take advantage of that.

And let me ask the -- kind of the mirror image question, which is part of why the JVs and the partnerships are being created is because there's just so much capital out there that is willing to accept minority positions and maybe returns that would be below what traditional tower investors might want in the form of pension funds and other things. So on the one hand, yes, your stock has done well and yes, it trades at a premium valuation to maybe other historical times. But also, there's a tremendous amount of money chasing what assets are out there in the world today. Is it more challenging to grow the portfolio? I mean is this why we're watching SBA go from Florida to Tanzania in order to find growth?

Yes. It's certainly a little bit harder. There is a lot of money chasing towers for sure. In some cases, it's not that disciplined either, that money. That's not everybody, but there are cases of that, and that does affect valuations and sometimes causes valuations that, in our view, don't make any sense. So we've participated in auctions of assets that we've not won and -- not just not won, sometimes we've not won by a margin that we find just completely confusing.

Shocking?

Yes. And so when you see those situations, it certainly influences how you think about things. But that's why I believe that we are valued as highly as we are and are thought of as highly, frankly, as we are because of our history of being able to be disciplined and find the right opportunities, find opportunities sometimes that others haven't seen or hadn't really thought of to be creative in doing that. And when we stretch for assets, we will typically do that in a situation where we have confidence that our abilities to operate those assets will drive out more value than maybe others saw in it, but we're not just going to jump on something just because there's an auction and say, well, we've just got to get bigger. That's never been our focus. As you know, we're not the biggest tower company, and we don't need to be the biggest tower company. We just want to be the most valuable. So where we deploy that capital is what makes that difference. And so -- yes. Is it a challenge? Yes. But it's also a high-class problem in the sense that the business that we're in is a very valuable business. And even if we did nothing, our core business is obviously extremely valuable and I think, in our humble opinion, the best tower portfolio in the world. So that's a good place to be and we'll just have to work a little bit harder and be a little bit more creative when we're adding assets. That's all.

Okay. So that would have been a great question to end on because that was a good speech. I liked it, Brendan.

Good.

But...

Look, I've [ got a good speech ]. So it's okay.

I've got -- I have more housekeeping questions. So...

Yes.

Number one would be, obviously, we've had a lot of weather events in Louisiana, the fires out West, even in New York here with the hurricane hitting. Is the business, the portfolio, the services business, everything fine? Or did have -- did you have to put -- are things on hold? And what impact, if any, is -- are all these crazy things having on your business?

Yes. I mean from a broad standpoint, everything is fine. I mean our services business, you mentioned, is continuing to go along and perform well. Sometimes there are impacts in certain regions due to weather events. From our -- from a portfolio standpoint, with the recent hurricane that went through Louisiana and Mississippi, I believe we had one tower that went down in Mississippi, and we certainly experienced flooding at a number of our sites in the Northeast. And there's a process that we go through, we're running inspection reports on a number of sites as well that were potentially impacted to make sure that we're aware of any potential maintenance issues or risks that aren't as visible at first on some of those sites so they can be repaired and get ahead of issues. But having said all of that, I think that whatever those costs are, they're not -- they're certainly not what I would consider material to the business. There may be some small costs that are incurred to fix some of those things up. But we're fortunate that our assets are pretty resilient to most of these events. And even from the fires, I don't believe -- we may have had one site that was impacted by the fires out West, but I don't -- that would be it.

Okay. Yes. I mean historically, it's not the first time we've seen hurricanes and other weather events, and you guys have generally survived pretty well, but it seems to be that it was like a little nuttier than normal so far this year. So kind of an unrelated cost question, we're starting to get the input that wage inflation, skilled hands, that there's a limit. You actually referenced this earlier about the ability to kind of go out into the market. You're one services company, there's many others. But there's a finite number of these guys, and they're all in demand all at the same time from all of the carriers all at once for the first time in a long time. So I guess the question has been along the lines of are you guys experiencing wage inflation-related cost pressure that we should know about in terms of that services business or any other part of the entity?

Well, this is probably a similar answer to the storm-related one in the sense that there is a little bit out there, but I would again say it's nothing material. There's certainly some positions that are requiring higher wages. But from an overall perspective, I haven't seen it make a big difference. From an -- for us, our overhead costs, in general, are a pretty small percentage of our revenues. So it's hard for it to be extremely material. But I think all the things you said are right and that there is certainly an impact from that and there will be more probably as the carriers continue to get actually busier. But I don't think it's going to be anything -- at this stage, it's not something we're worried about. I think we've got it pretty well in hand right now. So...

Okay. Another kind of topic we've been addressing has been the supply chain and the ability to kind of get to market. Obviously, you've got this construction effort which would have to be informed by the availability of the equipment itself. You obviously sounded pretty optimistic about that. Are you getting -- obviously, people are -- we've heard AT&T talk about how supply chain issues are affecting their fiber build, for instance.

Right.

Are you getting any kind of sense that guys are going to have to pump the brakes fourth quarter, first quarter, second quarter because, yes, they've got a lot of equipment in the warehouse now, but it's starting to dwindle?

I don't think I'd say that. I do think that there are supply chain issues that are impacting our customers. I know that there are. We hear that from them. Sometimes it delays certain projects that we're doing on their behalf. So it's definitely real. But I don't see enough that says it's going to change the trajectory that materially in the future for us. So we'll keep an eye on it. Obviously, we'll I'm sure have to answer this question again down the road. So we'll update you I think if that changes. But as of today, I don't see it as a material issue for us, but it's definitely there and real and maybe certain of our customers are feeling it more than others.

Got it. Got it. And I guess my last question is just a kind of check in on Brazil and any impact from the Oi restructuring that we can discern yet or anticipate?

Yes. I think it's a little bit early on that. Obviously, we don't -- one of the key things that we don't know is exactly how their assets are going to be split up among the 3 remaining carriers that are buying their -- absorbing their wireless business. So without knowing that when we've got our own kind of guesses around that, but we don't know that for sure. So that makes it hard to do a true kind of detailed assessment. I would say there's some exposure certainly around overlap sites, probably in the $20 million to $30 million of revenue over an extended period of time now because we've got -- I think our average remaining lease, Oi lease term is around 7 years or something. So there's a lot of time that it will be spread out over. And what's not in that equation [ I think, of course ], that's the negative side, but the positive side is having 3 stronger, better positioned carriers I think will be very positive for us. In fact, there's spectrum auctions next month in Brazil that I think will be supportive of incremental spending for those carriers as we get into next year. So we're excited about the longer-term prospects in Brazil.

Awesome. All right. Well, that's kind of our time, Brendan. It sounds like things are going great. The outlook is great. Thank you for spending your time with us, and thanks, everybody, for joining. Good luck with the rest of the year and stay healthy. Thanks, Brendan.

Great. Thank you, David. Appreciate you having me. I hope next year, I'm taking you up on the golf, though.

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