Welcome to our first quarter earnings call. This is Al Nahmad, Chairman and CEO, and with me is A.J.

Nahmad, the President, Paul Johnston, Barry Logan, and Rick Gomez. Before we start our cautionary statement.

This conference call has forward-looking statements as defined by SEC laws and regulations that are made pursuant to the safe harbor provisions of these various laws. Ultimate results may differ materially from the forward-looking statements.

First quarter results point to improving stability now that the transition to A2L products has matured. We expect a more simplified business environment this year, but it is still early in our selling season, but so far so good.

We're also excited to announce our agreement to acquire Jackson Supply, a legendary market-leading Sunbelt distributor with $230 million in annual sales. We are fortunate to know many great entrepreneurs in our industry.

Jim DuRee, Jackson Supply owner, and his talented group of leaders, all of whom will be remain with the company, certainly meet the definition of great entrepreneur. Our relationship with Jackson dates back more than 20 years, and we are grateful to Jim for entrusting us with his company's next chapter.

Jackson will expand our Sunbelt presence by 25 locations and provide diversification of brands and products given their strong presence in parts and supplies. As I mentioned and is our culture, Jackson team will continue to operate and grow the company with our full support.

In addition, our community of leaders along with Jackson will collaborate and learn from each other as is also our culture. We expect to close the transaction sometime in the second quarter.

Within our existing business, we continue to build and expand our technology platforms, which provide us an immense long-term competitive advantage. E-commerce sales increased 16% during the quarter, well outpacing overall growth rates.

OnCall Air, our digital platform that helps contractors present and sell solutions to homeowners, increased customer sales by 20%, reflecting a rich sales mix of high-efficiency systems. We expect the gross merchandise value for OnCall Air to exceed $2 billion this year.

Let me say that again. We expect sales of OnCall Air to exceed $2 billion this year.

We feel like this is a good start and expect more progress as adoption by contractors gain momentum in years ahead. Turning now to our first quarter results.

Sales increased 2% in US markets, reflecting a mature mix of A2L products as well as an improved mix of high-efficiency systems, offset by lower unit sales. Unit volumes stabilized as the first quarter progressed.

Gross margins remained largely intact, reflecting good execution by our leadership team to sustain price and competitiveness. We continue to execute on several ongoing initiatives to enhance gross margins with the long-term goal of achieving 30%.

SG&A remained flat as improved operational efficiency offset incremental technology investments and new locations. We expect overall operating efficiency to further improve, and our technology could now show its mettle in a simpler operating environment.

Our balance sheet continues to be strong, and we remain debt-free. Let me repeat that.

We remain debt-free. As I mentioned, we continue to invest in innovation and technology to separate us from our competitors, and we are making incremental investments to enhance our competitive position and help our long-term growth and margin profile.

For example, we are developing new innovations aimed at capturing more sales to large institutional customers, which is set to launch during the second quarter. We are accelerating the use of our pricing optimization tools to make further progress towards our long-term target.

We have launched a new initiative to compete and grow sales in a highly fragmented parts and supply segment, which comprise almost 50% of the industry's market share. We have begun to harness the power of artificial intelligence, offering the potential to further transform our customer experience, improve operating efficiency, and create new data-driven growth strategy.

These investments, along with our scale, entrepreneurial culture, and a capacity to invest, are unmatched in our industry. With that, let's turn to Q&A.

Morning, Ryan. Ensure

Can you hear me?

Yes,

Okay. Hey, everyone.

Congrats on the deal and a good start to the year. I wanted to start high level.

Al, can you just unpack your comments about improved stability as we head into the summer and what's changing and are you seeing April positive in terms of year-over-year growth at this point?

Let me turn to our expert in that sort of thing, Barry Logan.

Oh, he just

messaged

me saying he dropped off the call. Please let the operator know.

Operator, can you please get Barry?

Rick, do you want to jump in there?

Sure. I'll take a stab, and then Barry can backfill and enhance it.

Ryan, good morning. Look, I think if we just look at the first quarter in isolation, and then I'll turn to April.

We saw what was the full maturity really of the A2L product transition, units still weighing a little bit and which means that the market is not yet fully healed. There's no inflection point here.

Things did get incrementally better as the quarter progressed. We exited the quarter nicely with March up high-single digits on a same-day basis.

Far three weeks into April, I can tell you that that momentum has sustained itself. We are seeing incrementally more stability in April than we did to start the year.

April has begun nicely. All of that said, we're still not yet in what is the thick of the selling season.

We'll be a little cautious in our tone and our optimism. This is certainly, I think, incrementally more stable, more positive, less complex, and we'll take that in a first quarter.

Okay.

Got it. I'll speak to that too if that's all right, which is if you zoom out even further, look at the history of this industry for 30, 40, 50 years.

It's been a pretty mature, slow growth, steady-as-you-go industry. Then COVID hit, and it seems like all chaos broke loose over the last 5 years.

We had extreme demand as people were investing in their homes. We had extreme supply chain challenges, which constrained the products that we could sell.

We had multiple regulatory changes that changed the products that we sold, almost 100% of the equipment we sold twice in that period. We've had tariffs.

We've had inflation. We've had different tariffs.

We've had constraints or limitations on refrigerant canisters. It's just been kind of one thing after the other for the next 5 years.

Coming to 2026, most of that stuff was behind us. Certainly, the stuff being driven by the industry in terms of regulatory changes and so forth.

We look forward to a more normalized 2026 as we started the year. I think we've got at least most of the way there.

Obviously, there's still some things changing with tariffs and some dynamics, but we're looking forward to a, quote-unquote, "more normalized" environment and getting back to business and hitting the streets and taking care of our customers and growing the business. I think that that's materializing.

Thanks.

Go ahead, Barry.

No, I was going to say I think it's interesting, too, that we see e-commerce sales kind of bloomed this quarter. That tells us the contractor's daily life is kind of reset into a good place to start this year.

I always mention contractor credit as a critical measurement of how the market looks. Again, that is in very good shape.

Also now that the product line is the product line, we saw an increase in higher efficiency systems being sold. Again, as Rick said, it's early, but those are good indicators and it's kind of what we have been looking for as some indicators.

All right. Very helpful.

I'll pass it to others and leave it there. Thanks.

Morning, David.

Morning, Al. Thanks for taking my question.

My question is primarily on the Jackson Supply acquisition. Correct me if I'm wrong, this looks like a Goodman distributor primarily and as far as I can tell, looks like a great fit within the CE, Gemaire, and Baker footprint that you currently have.

Is there anything else you can share with us about mix, margins, growth, what made this an attractive acquisition for Watsco?

This is a relationship we've had for a very long time, and we have seen them succeed in their markets over years. We know that they have the right leadership, we know they have the right strategy, and all we want to do is support it so that they can continue to expand and if they need more capital, we'll provide that.

If they need more technology, we'll provide that. If they need more equity for the leadership, we'll provide that.

It's just a wonderful business to become part of Watsco in every respect. Texas is where they are mostly, and that's always a very good HVAC market.

It resonates on all the points that are important. Mm-hmm.

Yes, sounds good. Then as it relates to the stabilization or normalization theme that we're all kind of looking at right now, when we look at your numbers through the year, the volume comps get easier, the price comps get more difficult.

I don't want to slice this too thin because I know you guys aren't going to do that, but just when we're thinking about sort of normalization through 2026, would we expect sort of a natural handoff just based on where those year-to-year comps are if we're going to have sort of a normal stable year that equipment would go the other way, would grow, whereas price would sort of tail off towards the end of the year? Is that how you're thinking about it?

We certainly are hopeful that we're going to growth, and it seems like we will, but it's too early that we're going to have the gone-up market conditions that we have experienced for so many years. All I can say is what we've already said is that we've seen improvements, and we're pretty sure that we're on the right path, but let's wait and see.

Regardless of what the markets do, we're going to do well. We have a competitive edge over other distributors that we've told you about over and over again.

Sounds good. Thanks a lot, Al.

You bet.

Morning, Tommy.

Good morning, Al, and thanks for taking my questions.

Sure.

To start, I wanted to expand a bit on the year-to-date comments that Rick made. If March exited the quarter in high single-digit growth range and April has continued that momentum, is it fair to infer that your resi equipment volumes are now flat or maybe even a little bit better than flat in those 2 months?

How long has it been since that was the case?

All yours, Rick.

Tommy. We're not going to slice it that thinly for 3 weeks in April here.

Again, we're not yet in the full selling season. I think the prior question got at it a little bit, which is this time last year is when we saw volumes begin to degrade a little bit.

Just on paper mathematically, it stands to reason that looks better. Price obviously, we have pricing actions that took effect last year.

I'll remind everyone that our mix of A2L products in the first quarter of last year was about 25%. Like-for-like, the new equipment is at a double-digit price point above where it was last year, but we had some of that in our fourth quarter of last year and it was about 60% of our mix in the second quarter of last year.

The ultimate comparison here is what did it look like versus 2 years ago versus 3 years ago? We'll be in a smarter position to answer that question after the second quarter.

Far so good is how I would describe the start in April.

Fair enough. Al, a question for you on inventory.

There have been some big moves in recent quarters and years. As you enter the selling season for 2026, how would you characterize that inventory position?

We expect, given market conditions, that we will reduce our investment in inventory, which affects our cash flow, of course, because we'll improve the inventory turn. Many changes were occurring recently that it can only get better.

It's hard for it to get worse. We expect our inventory turns to increase and contribute to cash flow for the rest of the year.

Plus we've got our supply chain is a lot more solid than it was in the past. A.J.

mentioned that we had COVID and we've had all these changes in models and products. I think finally, our manufacturers have an opportunity to make a single line of products continuously throughout the year, and I think that's going to also help the inventory turn.

Thank you both. I'll turn it back.

Morning, Jeff.

Hey, good morning, everyone. Maybe just to start, the Section 232 update seemed to bring about questions about follow-on pricing.

I'm just wondering if you've seen any pricing from your OEMs near-term outside of normal course that would suggest upward moving pricing?

I do expect it because of the duties that are being paid now by some of the manufacturers. I can't quantify it yet, but yes, the pressure is on the manufacturer, and I believe they will raise their prices.

We've had a number of price increases to date from several of the manufacturers, which have already become public, they're well known. We are going to have a price increase pretty much across the board, I believe.

We'll just have to wait until, probably in the second quarter, we'll know for sure exactly what those price increases look like.

Great. Then, just on that, there's been kind of increasing questions about price elasticity and the unit costs are getting up, and there was this debate last year about repair-replace.

Was that this A2L transition or was that the consumer kind of being tight? I noticed your non-equipment or other products was up.

Just wondering what you're seeing and how you're thinking about repair versus replace as we go through and into the selling season?

We're happy with both. We're seeing a definite uptick in our compressor sales, which aren't going to offset any, by any material stretch of the imagination, the equipment sales.

We're also seeing a rebound in equipment sales. I think it's going to be kind of a dual market out there for a while where we're going to have an increase in parts, and at the same time, we're going to have an increase, I'm hoping, in equipment.

I don't think it's either/or anymore.

Jeff. Just to expand on that for a second.

Remember that non-equipment for us means a lot of things. It's a very broad basket of goods.

The parts is actually the minority of what's in non-equipment. Yes, it grew, but so did virtually everything else in non-equipment, including supplies, including our small and growing plumbing business, and including commercial refrigeration, of course, which we report separately.

There's broad-based growth there, and it's not necessarily a read on repair versus replace all the time.

To say it analytically, parts sales are less than 10% of Watsco. When we say 30% is non-equipment, that means 20% is everything else, just from an analytical point of view.

Thank you.

Morning, Nigel. Oh,

thanks. Good morning.

Hi, Al. I wanted to go back to your comments on inventory turns continuing to increase.

The 1Q inventory build was a little bit higher than what we expected. Looked actually quite normal.

My initial reaction was that the destocking is behind us. Doesn't sound like that's the case.

I just wanted to clarify that comment. I'm wondering if the inventory build is getting ahead of price increases, slightly better demand, just wondering anything more there.

There's been a shift in the product innovation. When product innovates, we have to carry the existing inventory to support what's been out there.

Then we have to take inventory in for the new changes in the product. That does inflate inventory.

That doesn't bother us. It's just part of the normal thing.

We run a very conservative balance sheet. We have no debt, we can afford to have the swings in inventory perhaps better than our competition can.

Nigel. I'll take a stab at that, too.

I would not call our expected inventory turns enhancement and burn-through of our inventory more structural destocking. That's not what we're talking about.

We're just talking, like Paul mentioned, the supply chain and our OEMs and the whole process is more stable, more reliable than it has been. Now we bought inventory for the summer selling season to make sure that we had the right amount of products in the right places to support expected customer demand.

We expect to return the inventory better than we have been able to because there's less noise in the system.

Yes, another way to ask it would be do you expect sell-in and sell-through to equalize now going forward just cuz obviously we've seen a big divergence in the past? Then maybe just with these price increases, which it doesn't sound like they've been formalized at this point, you had a big uptick in gross margins last year in 2Q versus 1Q on the price increases.

I'm wondering if you expect that still to happen this year with the price increases coming through?

I think that'll probably be a second Yeah, go ahead. Yeah.

Let me refresh the conversation about that. We have a target of 30% gross profit margin, and a lot of things go into that.

We're not going to get there overnight, but we have a plan to get there. That involves pricing technology, which we're getting really good at.

I'm sure that the sophistication pricing system that we have is superior to anything else on the market. That'll help gross profit margins.

Our ability to consolidate purchases across the whole company from vendors, manufacturers will also help improve gross profit margin, if that helps that explanation.

Okay. Thanks, Al.

Thank you.

I want to go back to the inventory discussion, just to again try to be educational about it. Because I think what Rick said is important.

This is not a structural further reduction in inventory. That's not what this is.

That's not the goal. The goal is to own less inventory on average throughout a given year.

That's the equation of inventory turns, right? Cost of sales divided by average inventory.

Just have less load in the branches over a period of time in order to keep our customers exactly happy every single minute of the day. As some of the metrics with the manufacturers improve in terms of lead times and on-time delivery, things like that, as that improves, it lets us moderate the amount of inventory we carry.

It's much more subtle than the big stick we took to inventory last year. This is the subtlety of improving inventory turns over a period of time and frankly, going back to where they should be and where they had been for many years before all these changes.

All

right. I'll add one more note to that, which is that with our new Hydro system, which we talked about thoroughly in our Investor Day, we can also increase product assortment at each branch while still carrying less inventory because we can turn that inventory faster.

Seems like we disconnected. Are we disconnected?

Yes, go ahead.

Morning, Stephen.

Good morning. I guess he wanted you to think about it before you took my question.

So,

Yeah. We reserve the right to change our mind, Stephen.

Feel free.

Understood.

Most of mine have been answered, but I have a kind of a bigger picture one. Back in the before times, which I'll define as pre-COVID, there was often a fairly meaningful difference between announced price increases and what was actually realized in the market.

I'm just curious how you're viewing that these days, because of course we've seen a number of those announced year to date here and some whispers about more coming. Yet, the demand environment is still not great.

I'm just curious how you think that plays out as the year progresses?

If I can make a stab at that, one thing that I think you realize is that we've got a very diverse market out there, both geographically as well as the type of customer. Obviously, the announced price increase does not always apply completely to certain segments of the market, to some of the people that have longer-term contracts with pricing.

What we end up with is we end up with an announced price increase and then we end up with a realized price increase, and it's generally less than what the announced price increase is.

I would add to that, though, Paul, which is that the software that we've brought online to help our businesses, not only with analytics and pricing and making sure we have the right price for the right customer, it's also about administering those price increases. If you think about every time there's a price increase from an OEM, it's touching thousands of SKUs and for thousands of customers and just the number of permutations and the administrative work associated with that, which used to be done essentially, call it by hand, was overwhelming.

That was a lot of work for a few hands on keyboards. Now with the tooling, one of the benefits is that we can appropriately adjust the pricing for all customers for all the SKUs that have new pricing.

It's not actually instantaneously, but I'll say instantaneously so that we don't have the risk of a lag of price increase where we otherwise did have that risk and sometimes missed making changes that needed to be made, if that makes sense.

Yes, good point.

That's

interesting. I appreciate that.

Then maybe almost a segue there, A.J., is that it feels like you guys are almost talking like there's an inflection here in your e-commerce platform. I don't want to put words in your mouth, but assuming that that growth in that platform is accelerating, does that have an impact on your gross margin target?

Is that a tailwind, or is it just more sales?

Yeah. All the above.

We do realize a higher gross margin with our online sales than our offline sales, and e-commerce sales are increasing and we expect that trend to continue. Also our cost to serve is lower with our online sales, and customers are using that tooling because it helps them, too.

It helps them organize their business and how they go to market and how they procure product. It's a win for all of us, including and especially the customers.

We very much expect to invest in our e-commerce technologies and our tooling for our customers, and we expect the adoption rate to continue. Just to give you a sense of what's possible, we have markets, and when I say markets, I mean the state of Florida which was like an $800 million business for one of our subsidiaries where almost 70% of their sales go through the e-commerce tools.

That's the possible. Steve, I think if we look even more long-term, this is one of the most underappreciated aspects that we write about it every quarter and tell you guys about it, but it really is meaningful inside our four walls is the future attrition benefits that we get when we have active e-commerce users.

That is an incredible moat and an incredible stickiness to future revenues and those customer relationships that really, really matters when you look out 3, 5, 7 years.

While Paul has his headset, we also sell more line items per invoice when we sell online versus offline. It's a winning formula to sell more products online, and we're focused on it.

Thank you, all.

Thank you. Hey, I wanted to ask about Q1 inventory.

It was up about 25% quarter-on-quarter, which matches what we saw the last 5, 6 years. The last 5, 6 years, OEM inventory was tight, lead times were long.

This year, it feels like the opposite. I was surprised at how much your guys' inventory came up in that construct.

I guess, is this because you guys feel that demand is turning or there's well-appreciated April price increases coming even before the 232, and there was some building to get ahead of that? Thank you.

Let me answer. First, remember that the composite inventory today is all A2L product.

A year ago, it wasn't. It was a mixture of old and new product.

If you take the inventory increase for equipment, it's all in the mix of price. It's not units.

Actually, we own less units at the end of March than we did a year ago. That sales mix of A2L is still being compared a year ago to a heavy mix of 410A product.

That gets simpler and easier to identify as we get into the second quarter. To keep it simple in my statement, we do own less units at the end of March than we did a year ago.

I guess on that, sequentially, it's kind of the same. Sequentially, the 25% up, Q1 versus Q4 presumably is almost all volume or units.

I guess it feels like you guys were building in Q1 the same way you built the last 5 years. The lead times are a lot shorter, I would have just thought that you guys would build a little bit more cautiously.

I guess just the question was is that a function of demand turning and you're more optimistic there, or there's just very well-anticipated price increases? Thank you.

I think if you look at our March inventory versus our March inventory the year before, you see that the dollars are down. Also, when you sell an A2L product today, you've got to sell an indoor unit and an outdoor unit.

We had to increase our inventory of indoor units to accommodate the new A2L refrigerant. That could be part of what you're looking at there also.

Interesting. I appreciate that.

Then, just maybe following up on the inventory point. Over the last year, it seemed like it was very difficult for the industry, both the distributors and the OEMs, to have a sense of how much product their customer is holding.

I guess just now, it feels like there's another round of OEM price increases coming. I imagine here in the early part of Q2, maybe distributors and contractors are all looking to get ahead of that.

I guess just how do you guys think about those channel dynamics, and is there any thing that the company has done versus a year ago to just have better visibility or confidence in how much inventory the customers are holding? Thank you.

I'll take a stab at that and you guys keep me honest, which is that we, Watsco, did not buy ahead of the expected price increases coming from the 232 tariffs. That's point one.

Two is that, yes, some of our customers hold some inventory, and no, we don't have visibility into what that numbers are. Maybe Paul or somebody can hold me honest, I don't think it's particularly material.

Now I can tell you that there were some customers that bought ahead of the price increases coming now, the 232 tariff price increases. That in the end, and when I mean the end, I mean the end of the quarter, the end of the season, will just be noise because it'll smooth out by the end of the quarter, by the end of the season.

Now most of the contractors

It's not substantial enough to really jolt the picture.

Most of our contractors are not carrying a lot of inventory. They don't have mega warehouses where they put inventory in, Yes, I agree with A.J.

completely.

Yeah.

The reason we have inventory, the reason we have all the convenient locations with as much product variety as they need is because most customers do not carry inventory because they don't know what they're going to sell that day. They go to someone's house and figure out what the problem is and what the solution is, and then they come work with our teams to get the right product out of our stores to go install it in that home or that building.

Yeah.

Thank you. I appreciate that.

I know it's hard to pinpoint, but it did feel like last year there were some unexpected downstream inventories. That's why I wanted to ask.

If I say it this way, it's not one size fits all for any brand that's out there. Our business model with our brands and our customers is to carry it for them in Florida, have 100 locations to take the pressure off of them having to stock anything ever.

That's our value in Florida. There are other business models, other OEM models, factory-operated models that have under 30 branches in Florida.

To get product into the channel, they need their customers to stock product. That's a business model decision.

I'm not saying it's right or wrong. I'm saying it's a business model.

Just in kind of evaluating the answer and listening to your question, there is a different answer if we go across brands and OEMs as well in that equation.

That's a good point. Good point, Barry.

Thank you. I appreciate that distinction.

Thank you, Barry.

Good morning.

Morning.

I know it's early in the season, but wondering if you guys have a view on what you think unit sell-through will be this year?

It'll be better than last year.

Good answer.

There wasn't anyone that was jumping to answer that question.

Yeah. No, we're obviously shy to answer that question.

Sorry, go ahead.

Pat, I've said this for my career in April, I think. The question is, if I ask it back to you, is do I feel better or worse today?

I feel better today, for sure. The other equations of the answer, existing home sales, new home sales, consumer spending, consumer confidence and contractor confidence ultimately is who actually sells the product in someone's home.

I would say again, it seems like a better situation, but time will tell.

Did you see any regional disparity in performance in March and April? Just asking in context of what seems to have been a really hot start to the year from a weather perspective in certain areas.

I would say in the northern market, you had some severe winter. You had a bunch of closed locations, a bunch of lost business.

We really either blame or compliment the weather in our discussion, but the northern markets had a bit of disruption in the quarter that resolves itself as time goes on, too. Because of what I just said, the Sunbelt outperformed the north, I think, for those reasons.

That's just the first quarter

and

not something to draw an inference from over the longer term.

That makes sense.

It's good to be geographically diverse so that all that just, again, becomes normalized over time.

Yep, of course. Then my final question, I was wondering if you could opine on Home Depot's acquisition of SRS and kind of how you see that impacting acquisition opportunities for you?

Are you seeing valuation multiples go up in the industry at all after that deal, or anything else to point out on how it might impact the competitive landscape?

We competed with the business they bought for a long time, and we're not threatened by it at all. In fact, I think I'm not going to say what I really think because it wouldn't be nice.

No, it's not something that we worry about at all.

Yeah. Also we've known the Engeldorf family for a long time and wish them well and that business well.

It takes two to tango, especially in our business model and our formula, which our Chairman started 50 years ago here, is the family needs to want to join our family and be here and run their business and use our tools and our technology and our capital and so forth to do what they do and do more of it, continue to grow. If that's not in their interest, then it's not a good fit.

If it is in their interest, and there's mutual trust and respect, then it's a wonderful fit. We'll keep doing what we do, and we've done it successfully for a long time.

I don't think we're short of opportunities in the future.

Makes sense. Thanks a lot, guys.

Best of luck.

Thank you.

Hey, guys.

Just a couple follow-ups.

Hey, just on gross margins, you held the line pretty well, and I know you got some price benefit in 1Q last year, so that was good to see. Just wondering how you think you got a particularly tough comp in 2Q.

Just wondering how you think gross margins trend? Then also, just separately, can you give us what commercial HVAC equipment was in the quarter?

I'm not sure if I missed that.

That's a big question.

Paul? Yeah.

I can take a stab at it, Jeff. On the commercial side, really, we didn't see a whole lot of divergence between what was residential and what was commercial.

The biggest divergence is what we mentioned in the press release about domestic versus international, but resi and commercial traveled very close together. On margins, I think, look, if you go back 10 years in time, you can see that and if you just take second quarter and third quarter as one thing, you can see that in most years, there's a modest retreat in margins only because, historically, first quarters are the ones that have some OEM pricing actions, and the cooling season and RNC mix and all of that typically influences the second and third quarter margin versus an off-season margin.

That's what history would tell you. Last year did not follow that trajectory, of course, because of the price increases, and we'll see what this year brings.

I think in the absence of any new information and we'll see what, again, what the OEMs begin to talk about here in the next few days, I think that's what history tells us is that there's a different profile to margin during season versus out of season. Offsetting that is, and we haven't really talked about this much today, SupplySync is now launching, for example, and so we expect that to be helpful as it scales.

A.J. mentioned Hydros and DCR, its companion initiative around purchasing in non-equipment.

That is gaining momentum and scaling. There's some puts and takes to it.

We'll share more when we know more, but historically, yeah, there's always a little bit of difference between seasonal and off-season margins.

Thanks.

Thanks for listening, and thanks for your interest in our business. We're very excited about the future.

As I said, we're uniquely capable of investing in the industry through acquisitions and in post-acquisitions and that sort of thing. We're in for the long term, and we're happy you're with us.

Bye-bye.