T-Mobile US, Inc. (TMUS) Earnings Call Transcript & Summary

Okay. All right. Hi, everyone. I'm Bryan Kraft. So I cover the Media and Telecom, Cable Sectors for Deutsche Bank on the equity side. And before I introduce Jon, I just wanted to take a second to welcome everyone to the conference. It's great to see so many of our clients here, institutional clients and so many of our corporate relationships here. So we want to thank everyone for your support and for coming to the conference and hope that everyone finds its productive and enjoyable time. So thanks, everyone, for coming. Welcome. I'm really thrilled to welcome Jon Freier, who is the President of Consumer Group at T-Mobile. Jon, thanks for coming.

Yes, you bet. Thank you for having me.

And I know Jon wants to start off with safe harbor language to start off.

We do. We got to please the warriors here. We have some safe harbor language, as you can see here. We may make forward-looking statements and refer to certain non-GAAP measures. And please refer to all of our SEC filings at investor.t-mobile.com.

All right. Great. Maybe to start off, if you could talk about some of your observations on the current industry and market environment. What are you seeing in terms of switching activity, industry volumes, competitive promotion activity so far this quarter?

Yes, this is such a great business. This is a business that continues to grow revenues, continues to grow cash flows at the industry level. And then when you look at this business for customers, it's a great business as well because our customers are getting more value than ever on networks that are better than ever. And the competition in this business has been intense, and it remains intense. And I would just tell you that it's been generally consistent for the last several quarters. When you look at our offer set that we had in Q4 of last year, it was very, very similar to the offer set of the promotions that we had in the market in Q4, 2022. And coming into Q1 at this point, very, very seasonal and typical in terms of the Q1 in terms of the promotions that are happening in the market, et cetera. So we're very pleased with the competitive environment that's happening out there. It's very typical for our Q1 environment, as you can see, relative to either postpaid flows and a high-speed Internet business, all of that's very, very typical.

Great. And at the T-Mobile level, maybe you could talk about your key priorities and areas of focus for the consumer business this year?

Yes, you bet. So I would say we have 3 main priorities. #1 is to serve customers better than anybody else out there. #2 is to profitably take share and double down on the formula that's working so well for us at T-Mobile. And then #3 is to generate industry-leading cash flows across the entire business. For us, and we can talk more about this as we go forward is that our formula is working, whether that be in our top 100 markets and the growth that we're seeing there are underpenetrated segments like smaller markets and rural areas as well as our enterprise segments as well. All of that is working exactly as we would like. And as we're looking to drive the overall business, it's all about profitably creating enterprise value and expanding the free cash flow generation that we have laid out for the business.

One of the goals that you established in conjunction with the Sprint acquisition was to grow in smaller markets and rural areas, which I think you've sized at 130 million to 140 million pops. Can you just talk about the progress in executing the strategy in those areas?

You bet. So yes, smaller markets and rural areas. The way that we define it is everything outside of the top 100 markets. So roughly 140 million people, 50 million households, 40% of the entire U.S. population. And we started this whole journey back in 2021 at roughly a 13% share of household number. At the end of 2023, we announced that we're now at 17.5% share. So we've added 4.5 points of market share over the last 2 to 3 years, which is just really phenomenal. And when you look at the overall switching in our win share of the switching in the marketplace, we have win share that's about double our current share of households in smaller markets and rural areas. So it's going really, really well. And what we like is this formulas of expanding our network, expanding our distribution and putting that incredible un-carrier marketing prowess into the marketplace as well as a team that's dedicated to smaller markets and rural areas. It's really an awesome way for us to be thinking about future growth. And the way that we think about it, too, is that we put this commitment out there that we would be a 20% share of households by the end of 2025. We're on track to that. The question now becomes, what can we do beyond that? And now that we have this flywheel move and then we have velocity in smaller markets and rural areas, there's really no reason why we can't achieve our fair share at some point in the future. So there's years and years and years of growth that's ahead of us in this underpenetrated area.

The churn dynamics in those area is similar to the overall base?

They're -- yes, they're improving. What we have to is you always have -- when you look at the churn, you always have tenure, and you have to like age adjust your tenure cohorts. So as we're growing, you have early lifetime churn. But as you look at tenure adjusted cohorts, all of that is playing out exactly how we would like.

Maybe just to shift toward the metropolitan markets a bit. I think that's always been a strength for T-Mobile, obviously, up until the Sprint merger. What's been happening to T-Mobile share and sub trends in these larger markets, particularly as your competitors have deployed C-band and presumably up their game from a network perspective.

Yes. So this is the other part of the marketplace. So our top 100 markets, almost 200 million people across the markets from New York City to Market #100 is Winston-Salem, North Carolina. And we've built a successful business here over the last decade. I would say from 2013 to really 2023, that was pretty much the business at T-Mobile, and we built an incredible business here. We built the business early on with the mantra of customers being attracted to us for a great value and in an acceptable network. Now we have the opportunity to go and attract customers, who are looking for a great network paired with that great value. And that's a real game changer for us. That allows us to continue to move upstream and more and more prime customers, who are looking for this incredible network performance. Because once you get into the prime customer base, sure, it's a little bit of value, but what they're looking for is they're looking for network performance. They're looking for speed. They're looking for broad coverage and they're looking for the reliability. And as you look at what we're doing in these markets, we're continuing to still grow here, but not necessarily attracting people, who are exclusively looking for a great value, but more and more expanding our opportunity to attract customers, who are looking for a great network. Our competitors have up their games. Since, they are deploying C-band in those markets as well. That's great for them. But what's happening for us is the biggest un-carrier move of all, we've rolled that un-carrier moves for the last 10 years, a little bit more than 10 years now. And the biggest un-carrier moves of all is not making a trade-off between having the best network and having the best value. And because of this merger that we did with Sprint and we're able to put this network together like we have, we are the only one out there that can offer the very best value and in the cases in the top 100 markets, the very best network.

Maybe you could talk about the strength in the network? How does it and I know you're not the network guy, but I mean, how does it stack up today relative to the other 2 national MNOs and how is that translating into the customer experience and ultimately better KPIs?

You bet. I'm not the network guy, but I do a lot of selling of the network. So give me a shot here. So the breadth and the depth and the advanced network capabilities are truly unique at T-Mobile. When you think about the breadth, we now cover with 5G 330 million people across the entire country. That's 2 million square miles and more than AT&T and Verizon combined an overall 5G availability across the entire country, one. Two, when you look at the 5G ultra capacity, which has taken advantage of the mid-band spectrum at 2.5 gigahertz, we now cover 300 million people as of the end of 2023, now 300 million people. That's a very big differentiator for us versus our competitors. Then when you look at the depth, what we aim to do is to have 200 megahertz of mid-band spectrum dedicated to 5G that's the ultimate goal, 200 megahertz. So there's no comparison in terms of the depth of this network and what we're doing. Then I can probably geek out, but I'll bore you on a Monday morning here with all of the carrier aggregation and all that kind of stuff. We'll talk more about that later in one-on-one meetings, if you'd like on the advanced network capabilities. But we're just really pleased here. This has always been an opportunity for us prior to the merger with Sprint and for us to be able to advance our network's leadership. First was all about creating 5G leadership. And we did that, and I think we are undisputed with that. But what's really great is 5G leadership has now translated into overall network leadership. And what you're seeing is you're seeing third parties continue to validate the unique leadership position that we're in as a company.

How about the brand? How is the T-Mobile brand resonating today, particularly at the higher end of the market? And how is that gaining momentum?

Yes. At the high end of the market, it's going really well. When you look at our overall prime mix, we just feel fantastic about that. One big indicator that you just can't escape is when you look at the higher end of the market and the prime creditworthiness is how is your bad debt going and we look at bad debt as a percentage of total revenues, and that is lower sequentially and year-over-year in our last reported quarter in Q4 of 2023, and it's actually lower than our 2 benchmark competitors as well. So the overall creditworthiness in our base continues to improve. The big indicator for our consumer business, I would tell you, is how it's going in enterprises. Because enterprises don't look at your -- they don't look at any ads that we might have on any social media post and just decide to move their entire corporate account over to T-Mobile. They're not really kind of all that convinced on TV commercials, et cetera. What they do is they go through rigorous testing of the network, and they're not switching to us unless that network is superior to the network that they're using today. And again, the office of the CIO is sure, they'll take a few discounts here and there in terms of life savings, but that's not the primary reason for purchasing and moving their entire company over. And what you're seeing in our business is that in Q4, we had the very best overall net adds for our business segment. And in 2023, it was our overall best year as a company in our business division and that's underscored by the growing strength in enterprise, which I believe bodes well for attracting more and more consumers at the higher end of the market.

Okay. Great. Maybe shift gears a little bit. You've been successful in growing postpaid phone ARPU over the past few years through mix and offering new premium plans like Magenta MAX and more recently Go5G. What does the growth opportunity for consumer postpaid phone ARPU look like over the next few years? And what are the drivers there?

Yes. So our overall consumer postpaid ARPU is growing, which is fantastic. And you have to be careful about ARPU as a metric because it's a mix-driven metric, meaning that when you look at enterprise ARPU, that's lower. But when you look at the overall CLVs of enterprise, those were fantastic. So what we try to do is we keep an eye on ARPU, but what's increasingly important in our business is ARPA. So Postpaid Average Revenue Per Account. And our strategy has been a land-and-expand strategy. How do we grow the number of household relationships, how do we land those accounts, move them to T-Mobile and over time, deepen those relationships and expand the average revenue per account. When you look at what's happening in our consumer business on Go5G Plus and Go5G Next the premium plans. That's about 60% of our total new accounts that are switching to T-Mobile are landing on those premium plans. That's upfront but change, obviously. So that's continuing to grow and continue to do well for us. We have no intention of ever giving up our value leadership position. That's something that we're going to continue to defend. We have a superior set of assets. We have a superior cost structure. We can continue to defend that. But is there ways that we can offer more value and potentially optimize our customer base and be able to grow that over time? Sure. And that's something that we're very much focused on in the business.

What about pricing power? How much pricing power do you have? And what is your approach to utilizing it. I mean it's been a very healthy pricing environment for the industry over the last few years?

Yes. And what I said at the very beginning, too, is when you look at what customers are getting for what they pay, there's never been a better value proposition in this industry than right here right now for customers. And for us, as we think about that, like I said just a few moments ago, we're going to continue to be the value leader. We have 0 interest in giving us the value leadership position. And so that's what we're famous for. That's a strong heritage of ours. That's what drives the overall momentum in our business. But again, do we have opportunities to provide more value for our customers, can we streamline and simplify our operations from time to time? Sure. I'd give you a couple of examples on that. One is some changes that we made with our AutoPay discount. We streamlined and simplified that more, that has an opportunity to enhance overall shareholder value. We simplified and streamlined some Netflix offerings most recently back in the beginning of this year, again, simplify and streamline grab a little bit about operational efficiency, make it better for customers and hopefully create even more value for our shareholders.

You debuted the Magenta status loyalty program right before Super Bowl weekend last year. What's the customer response been like so far? And how effective do you think it will be in contributing towards your KPIs?

Super Bowl is always a fun time of the year for us because hopefully, you all saw that we do 2 or 3 spots during the Super Bowl, and it's always a fun time. And what we did this time was debuted Magenta status right before the Super Bowl, kind of announced it and then had some spots during the Super Bowl to highlight it. And Magenta status is really about giving what we call VIP treatment on the brands you love to all of our customers. It's really kind of a build on T-Mobile Tuesdays. We introduced T-Mobile Tuesdays back in the summer of 2016. So it's almost 8 years now. And that's just a rewards program for just saying thank you for being a customer. You don't have to do this or do that. You just get thank every Tuesday. And what we wanted to be able to notice has been very, very powerful for us. And what we wanted to be able to do is to partner with other kinds of brands and be able to extend that value to all of our customers. A couple of examples. One is Hilton. We have a partnership with Hilton on Magenta status. Just for being a T-Mobile customer, you get 15% off of any Hilton property worldwide. And that's an exclusive discount to T-Mobile. You can't get that anywhere else. When you think about Dollar Rent A Car. And one of the things that's always the hardest thing if you're renting a car is that frantic rush to the airport, trying to find the gas station, so you don't pay $8 a gallon to the rental car companies and trying to top off the tank. You can bring your Dollar rental car, right back and we got the [ pennies ] on us. And so those kinds of things, whether it'd be entertainment or travel or any of the kind of benefit, it gives us a platform to have more durable differentiation and uniqueness to this T-Mobile brand. So it's been really exciting. It's just the start. We're going to continue to expand and change and enhance this overall platform. But a big reason why we want customers to switch and stay is because of the incredible benefits that you get with Magenta status.

The T Life app seems like a particularly interesting aspect of the Magenta status program. What are you seeing in terms of the app downloads and usage among customers at this point? And how impactful do you think the app could become in the context of your product strategy and customer engagement?

Yes. So the un-carrier that we birth back in 2013 was all about solving customer pain points. And we unintentionally may have caused one with lots of benefits and lots of services fragmented across many digital properties. And before you know it, when you grab customers' phones, they have a T-Mobile folder with lots and lots of apps and that were kind of contained in the folder. And so what we want to be able to do with T Life is further concentrate our digital assets into 1 app. And we're on this journey. We've made some concentration and some movement here already, but we have a lot more work we want to be able to do. Because ultimately, what we want to be able to do is to drive more participation and more engagement digitally. What we've seen with T Life so far is really good participation, strong engagement. It's very early innings. We've got a lot more here that we got to do. We can concentrate all of our digital engagement increasingly into one place, then that's going to bode well for us in terms of how we service customers, how we can further deepen relationships for customers, and it will give us a lot of great basis to be able to serve customers in a 24/7 by way.

It's interesting. I think the first we've seen any carrier really come out with something like that. Just maybe to shift gears a little bit, upgrade rates have been very low across the industry for a while now, especially in 2023. What do you attribute that to? Do you see it changing at all this year for one reason or another?

Yes. The upgrade rates have been lower for us and really across the entire industry. When you look at our principal competitors, they've been lower as well. And that's a trend that's absolutely persisting into Q1. And I would tell you a few things are going on. First of all, the overall upgrade cycles are lengthening, one. And two, we're being more targeted, more surgical in our proactive customer outreach on upgrades, targeting customers who need to upgrade versus those who think about...

Or it will [indiscernible]?

Right, exactly. And so we're being in the natural demand of this overall space though, in terms of upgrades, but it has been lower. And that's okay, though, like when you look at 2023 for us, we had our lowest postpaid phone churn rate in company history at that 0.87%. So if you could take a lower churn and a lower upgrade rate that bodes well for us, and that's the trick. And for us, what we're seeing is I can't speak for all of our competitors. But what we're seeing is we're seeing customers that are staying with us because of the incredible value, the incredible network, the overall experience that they're getting and not just staying because they're getting a new free phone. And so that's really, really great for us. So like I said, that's a trend that's been happening and unfolding for several quarters now and it's absolutely a trend that's persisting into Q1 of 2024.

You mentioned churn being so low. What's your confidence in being able to sustain churn at 2022, 2023 levels going forward?

Yes. This is always one of those things that I just -- I still pinch myself on the churn rate because if you ever would have thought for those of you who've been covering our company for a long time in our space, if I ever told you that the combination of T-Mobile and Sprint and put them together at some point in the future, we would have less than 1% churn, you would have called that a piece of fiction. And so what we've been able to do in this overall space is pretty extraordinary. Like I said a few moments ago, we finished 2023 at 0.87% churn. That was our lowest postpaid phone churn performance ever in the history of the company, which is fantastic. We have an ambition to be the leader here. That's going to take some time over several quarters perhaps several years. But we have a leader to be in this -- or we have an ambition to be the leader. And we should have that ambition if we believe, which we do, that we have the very best value and we have the very best product in the form of the network, and we have the very best experience, then there's no reason why we shouldn't be the leader in this space. So that's our ambition. There's going to be some quarters where we might be the leader. We might be slightly behind. That will be the case over the next year or so. But over the long term, we want to make sure that we're the leader. While we're also doing that, and I mentioned a few moments ago, we also have some optimization within the base that we can do. And any time you're doing optimization or streamlining, that could have a temporary artifact of some increased churn from time to time. You shouldn't be too concerned with that because the overall value creation is stronger. But over the long term, we have an ambition very much an ambition to be the leader in postpaid phone churn.

Very clear. Let's talk about conversions for a second. We're seeing some of your competitors, especially the cable companies go to market with converged mobile and home broadband service bundles. If companies with wired broadband networks continue to drive this convergence into the market, how does that lead to the mobile position to compete?

Yes. We don't see convergence in the U.S. happening like you see in Europe. We just don't see that. Now there is discounting that's happening in the marketplace. So you put a couple of products together and you get a $10 a month discount or what have you. And so that's very much a phenomenon. But we don't see convergence happening. What we see is discrete, unique purchase decisions between the wireless product and the broadband product. And if you can put them together and happen to save a little bit of money, that's fantastic. But what customers really want is they want a wireless product that is great and meets their needs, and they want a broadband product that is great and meets their needs. And the way that they're purchasing that here in the U.S. is very much discrete. For us, we're very interested in this space. We've got some wholesale agreements and trials that we're doing, when it comes to fiber, small trials in New York and Minnesota and Colorado. We're very interested in this overall space and has been interested in the space. Our position has been and continues to be that if we were to do anything in this space, it would be a capital-light construct and off-balance sheet construct, when you think about wholesale agreements, partnerships, perhaps joint ventures, we're always looking in the space. The trials that we're doing today, we're very pleased with gives us a lot of confidence. We're very, very pleased with that space. But anything that we would do here has to be a win-win for our company and for the industry at large.

For the trials you're doing, trials where you're building new fiber or are they trials where you're partnering with an existing fiber infrastructure provider?

Partnering, yes. We don't do any -- we're not building any fiber. That's not what we do, but it's partnering with existing fiber players.

Okay. Who are building new fiber, though, or who have an existing fiber operation?

It has an existing fiber operation. Yes. And maybe a little bit of both side. I haven't been into the detail of what they're exactly building, but mostly, it's an existing fiber operation.

Yes. There continues to be debate over the sustainability of fixed wireless as a competitive access technology, just given increasing consumer bandwidth needs. I don't know, maybe you can talk about why you think the skeptics might be wrong there, given that you continue to obviously sell that product and grow that base?

This has been just such a fun business to be a part of. So a couple of years ago, we were basically in a launch product. It was more of a dream than anything else a couple of years ago. And fast forward to today, we're sitting at roughly 5 million, just a little under 5 million fixed wireless access customers as of the end of 2023. So 4.8 million to be exact. And so we've scaled this business and built this business to one of the largest now internet service providers in the entire country as a result of this product. It's been fantastic. Now our position has always been that this is an excess capacity model, excess capacity, [ standalone ] capacity, those terms are interchangeable. And what we wanted to be able to do is to monetize that. So our overall thesis has been that we can grow this business to 7 million to 8 million overall fixed wireless customers, and we're continuing to see that play out very well. What you saw us do -- and earlier this year, as we sunsetted our promotional pricing. We had original promotional pricing when we kicked this off. We wouldn't had took an opportunity to sunset that to be able to -- when you look at the finite TAM associated with this particular offer set because again, we're going to be at 7 million to $8 million. We wanted to go ahead and take some pricing moves that would maximize enterprise value creation, but we wouldn't have had a sunset of that. And when you look at what that might do is we've been running at a run rate of about 500,000 or so a quarter, and we've been consistent in saying, once we did that, we're probably going to be in the 400,000 zone. And what you can see in Q1 is really we're going to come right in line at 400,000 net adds for fixed wireless access.

Is that deceleration due entirely the price increase? Or is it a function of reaching full capacity on more sectors and the network? Or is it a combination of both?

It's about -- I would say it's just about being smarter here, and it really is relative to the pricing, just being smarter with what we're trying to do. And again, this is [indiscernible] capacity and then as you grow closer to 7 million to 8 million, it's a little harder because we're looking for capacity within certain sectors of every single cell site. So hunting for that last 2 million to 3 million gets a little harder than going after the first 5 million. And so naturally, that's just going to slow down just a little bit more. And again, to the tune of about 400,000 per quarter.

Okay. Going to shift back to mobile now. How sustainable do you think the current level of the industry postpaid phone subscriber growth is? What do you see as the underlying drivers of the growth in excess of official population growth we've been seeing over the past few years.

Yes. So the overall industry growth had been elevated during the pandemic. And our position has always been is that, that would moderate over time. And that's played out since the height of the pandemic that you see moderation. And some of what's happening, too, is when you look at corporate accounts, consumers having my census is possibility of any of you have 2 phones, on you. You have your personal phone and your work phone. But you have corporate accounts that are because of the security purposes, issue in their own devices. So that's some of the growth. And then, of course, individuals and consumers having their own personal device. So that's some of it. That's what's happening out there. But also what some players are doing with ad-aligns and you never know what's going on there. It's hard to have insight into exactly that. But our view is that it would have moderated over time. We don't spend a whole lot of time kind of looking in that crystal ball for industry projections. What we're here to do is to sharpen up our playbook and to go drive success relative to our plan regardless of what's happening at the industry level. So if there's a lot of switching that's happening in the market, we have a playbook that goes and takes advantage of that switching and we'll win in that. If it's more muted and after the pandemic and there's lower overall switching, no problem. We have a playbook to go grab our share. And as you can see, our customer guidance from 5 million to 5.5 million total postpaid net adds in 2024, we're expecting our overall growth to continue in '24 as what you enjoyed in 2023.

I want to ask you about the satellite coverage. Well, you're planning to launch this feature to provide off the grid satellite coverage to customers through a partnership with Starlink. I think it's later this year. Can you just talk about the opportunity you see there? What the specific capabilities will be and how you see that actually impacting the business?

This has been one of probably the most exciting announcements that we've made in the last couple of years. So at the end of 2022, we announced this groundbreaking partnership with Starlink. That was basically the promises that if you can see the sky that you will have connectivity and it's one of the big pain points, particularly as you think about the vast American West and how much just round there is to cover, you can go for hours and hours and hours and not see a whole lot of people, but people need coverage in those areas. For us, on the terrestrial networks, that becomes a little harder to do, but if we can have a satellite option that provides coverage to customers in those areas, it's just really beautiful. And what we've seen is we had a pretty big milestone here recently with actual live testing with live satellites and the terrestrial networks between T-Mobile and Starlink, and we were seeing those things, those trials happening real time. And what we hope to have happen is to put some actual capability in customers' hands by the end of this year. That would start with text messaging, then likely move to picture messaging. And then ultimately, this will take a little bit of time, but ultimately having voice capabilities as well. Over probably a couple of years, perhaps a little bit longer. But the first capabilities that we want to put in customers' hands is on picture messaging or in text message I should say and then picture messaging later. And then just remember, this is running off of PCS spectrum. So it's not like customers have to go and upgrade their phones. Virtually, almost every customer on the T-Mobile network has phones that are capable of utilizing the spectrum and this overall resource. So it's really groundbreaking. The way that we think about it is that we've got you covered on the ground, in the air, abroad and now from the sky, and we call it coverage beyond.

Okay. Great. Interesting. Want to ask you about prepaid. As a category, it's seen modest declines in subscribers over the past few years. Your prepaid base has grown slightly. But I think there's more going on there underneath the hood. Can you talk about the importance of prepaid to postpaid as a funnel for customer acquisition?

Yes. We've been a leader in the prepaid space, largely through our Metro by T-Mobile brand. For those of you, who have been covering our business for a long time, we acquired MetroPCS back in 2013 and have been accelerating and building that brand since that time. In 2023, we did 282,000 net adds in prepaid. So it's a great business for us. When you look at the overall ARPU profile, you look at the churn profile, you look at this business continuing to grow, we love it. And it's a little seasonal and a little bit cyclical. Sometimes there's a little bit more growth, sometimes it's slight growth, sometimes it's slightly negative as well in terms of the growth cycle on a quarter-by-quarter basis. But the overall trend of this prepaid business for us is unfolding exactly how we planned it to unfold. Now to your question about what's happening more broadly, there is a lot of prepaid to postpaid transference that's handling in the space. I think that's ultimately good for this industry because when you look at CLVs, for postpaid versus your average CLV for prepaid, it's higher. And if you can get more -- customers can get more value by graduating up and getting more value and more services and more capability that's great for customers and it's great for the overall industry as well. But how we plan for it and how we want it to unfold, it's working exactly how we would like for it to work.

You were -- staying on the topic of prepaid. You announced the acquisition of Mint Mobile a year ago. How does Mint Mobile fit into the broader strategy? And how do you plan to manage Mint within the broader T-Mobile complex?

Yes. So the Mint transaction is still in regulatory review. It's a proposed transaction as everybody knows, and it's still in regulatory review. The way that we see it is, it's very complementary to our Metro by T-Mobile business and also our T-Mobile branded prepaid products, very complementary. When you look at what Mint is doing, they've built incredible D2C direct-to-customer capabilities. They don't have stores, they're going right to customers. They have generally pricing like you buy it in bulk every 3 months, et cetera. We see a lot of interesting things there and what we might be able to do. And you think about the scale of our company and what we can do to further serve the underserved is something that we're really excited about, should the transaction be approved.

Great. Why don't we wrap up there? Thanks, Jon. Appreciate it.

Thank you, all. Appreciate it. Thank you.