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Date
Friday, July 25, 2025 at 4 p.m. ET
Call participants
President and Chief Executive Officer — Brent Yeagy
Chief Financial Officer — Pat Keslin
Chief Operating Officer — Mike Pettit
Vice President, Investor Relations — Jake Page
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Risks
Pat Keslin stated, "We are reducing our revenue outlook to approximately $1.6 billion and EPS to a range of minus 1.2 to minus 1.3 for 2025," reflecting a $200 million revenue reduction for 2025 and a $0.55 cut to adjusted EPS guidance for 2025 due to continued market softness and economic uncertainty.
Brent Yeagy noted, "Our own backlog declined to approximately $1 billion at the end of Q2 2025," citing persistent demand weakness and customer hesitation in capital spending.
Gross margins were 9% for Q2 2025, with breakeven adjusted operating margins (non-GAAP) for Q2 2025 and negative adjusted net income for Q2 2025, demonstrating the pressure on profitability.
Operating cash flow year-to-date was negative $16.1 million for the first half of 2025, with free cash flow, excluding Trailers as a Service investment, was negative $31 million for the first half of 2025.
Takeaways
Consolidated Revenue-- $459 million in Q2 2025 consolidated revenue, at the high end of guidance for Q2 2025, driven by 8,640 new trailers and 3,190 truck bodies shipped in Q2 2025.
Gross Margin-- Gross margin was 9% for Q2 2025, with breakeven adjusted (non-GAAP) operating margins for Q2 2025 after excluding legal verdict-related items.
Adjusted EBITDA-- Adjusted EBITDA (non-GAAP) was $16 million, or 3.6% of sales for Q2 2025.
Adjusted Net Income Attributable to Common Stockholders-- Negative $6.1 million, or negative $0.15 per diluted share (adjusted non-GAAP) for Q2 2025.
Transportation Solutions Segment-- $400 million revenue and $13 million operating income for Q2 2025.
Parts and Services Segment-- $60 million revenue and $9.1 million operating income for Q2 2025, with 15% sequential growth in the parts and services segment for Q2 2025 and 8.8% year-over-year increase in the parts and services segment for Q2 2025.
Upfit Unit Growth-- 556 upfit units delivered in Q2 2025, year-to-date total of 962 units as of Q2 2025, with company on track to exceed 2,000 units for 2025.
Preferred Partner Network-- 29 locations added in 2025, the network now exceeds 110 service and parts locations as of 2025, supporting reach and aftermarket growth.
TaaS Fleet Size and CapEx-- Over 1,000 Trailers as a Service units were in service as of Q2 2025, with $21 million invested in the first half of 2025; traditional CapEx guidance is $30 million to $40 million for 2025, excluding TaaS.
Updated 2025 Guidance-- Revenue is guided to approximately $1.6 billion and EPS to negative 1.2 to negative 1.3 for 2025, citing soft demand and third-party trailer forecast declines of about 13% for 2025.
Third-Quarter 2025 Guidance-- Revenue expected between $390 million and $430 million for Q3 2025; EPS guidance is negative $0.20 to negative $0.30 for Q3 2025.
Liquidity Position-- $312 million in liquidity, including cash and available borrowings, as of June 30, 2025, with net debt leverage was 6.2x for Q2 2025.
Summary
Wabash National(WNC 0.89%) reported consolidated revenue of $459 million for Q2 2025, at the upper end of its forecast, yet management lowered full-year outlooks due to persistent end-market demand weakness and industry-wide CapEx reductions. The company highlighted structural revenue momentum in Parts and Services, which achieved 15% sequential and 8.8% year-over-year revenue growth in Q2 2025, despite overall industry contraction. Balance sheet liquidity remains intact, but free cash flow and profitability measures faced ongoing headwinds tied primarily to softness within Transportation Solutions and broader market uncertainty.
Management stated that backlog fell to approximately $1 billion at the end of Q2 2025, indicating ongoing customer caution and deferred capital commitments.
The Parts and Services business is projected to be "20% better than the first half" during the remainder of the year (second half of 2025), and 2026 is described as having further growth potential based on observed trends and recent expansion initiatives, with management expressing cautious optimism for continued growth.
Guidance for 2025 reflects that revenue and earnings reductions are "entirely market-driven" for the full year, according to Pat Keslin, with cost actions providing only a partial offset to the volume-driven profit shortfall for FY2025 (non-GAAP).
The expected need for a 2026 price adjustment was cited, with Brent Yeagy emphasizing, "we expect that pricing for 2026 orders will need to be adjusted to reflect the rising cost environment."
Additional legal risk remains, as an ongoing appeal related to a 2019 motor vehicle accident progresses through the courts, but no incremental expense is referenced this quarter.
Industry glossary
Upfit: Integration of aftermarket components or custom modifications to standard vehicle chassis or truck bodies, delivering fully tailored equipment to specific customer needs.
Trailers as a Service (TaaS): Bundled offering in which Wabash provides trailers alongside fleet support services such as preventative maintenance, telematics, asset tracking, and repair management, on recurring or usage-based commerce models.
Preferred Partner Network (PPN): Wabash's strategic network of service and parts distribution locations partnering with third parties to expand geographic coverage and aftermarket support, particularly for TaaS customers.
Full Conference Call Transcript
Brent Yeagy: Thanks, Jake. Before we dive into the quarter, I want to take a moment to thank our incredible team. These continue to be challenging times across the industry, and I'm continually inspired by the dedication, resilience, and heart our employees bring to their work. Whether it's supporting our customers, helping each other, or finding new ways to move the business forward, their efforts are what keep Wabash strong, and we're truly grateful. As we reflect on the second quarter, the broader market dynamics we observed earlier in the year have largely persisted. Economic conditions remain softer than anticipated at the start of 2025, with customers continuing to report increased hesitation in capital making.
The slowdown is creating a ripple effect across the industry, contributing to more cautious behavior and temporary activity levels. Industry analysts have continued to lower their forecast for the remainder of the year, and for this quarter, we saw additional confirmation as several carriers revised their CapEx plans downward. These trends reflect a transportation market environment that remains under pressure rather than any product-specific or segment-driven softness. While the current climate brings headwinds, it also highlights the strategic foresight behind the way we have reshaped Wabash over the past several years. Our organizational structure was intentionally designed to support agility and resiliency through the economic cycles. In our transportation solutions business, we're proactively managing costs to align with reduced demand.
At the same time, we're maintaining momentum in parts and services, which once again delivered year-over-year revenue growth this quarter. This continued outperformance in parts and service reinforces our confidence in its role as a key driver of long-term stability and growth. By integrating these offerings more deeply with our equipment solutions, we believe we're laying the foundation for a more balanced business that can perform through varying market conditions. Even in a softer environment, equipment demand, our parts and services business continue to deliver growth in Q2. I want to highlight a couple of wins in the quarter that speak to the momentum we're building. First, congratulations to our update team for another record quarter.
Their efforts continue to drive significant growth, as we are on pace to almost double units year over year. We also made meaningful progress with our trailers as a service and preferred parts network initiatives, both of which continue to gain traction as we expand our offerings. Mike will share more details shortly, but these developments are strong indicators of how parts and services are helping bring greater balance and resilience to the broader Wabash portfolio as we scale. We continue to monitor inflationary pressures across our supply chain.
While our 95% domestic sourcing and US-based manufacturing footprint helped insulate us from some of the volatility others are experiencing, we're not entirely immune to cost increases, particularly key inputs and services. Today, we've been successful in holding off on price adjustments, and we remain focused on operational efficiency and cost discipline to offset as much pressure as possible. However, based on the current trajectory, we expect that pricing for 2026 orders will need to be adjusted to reflect the rising cost environment. As always, we're committed to communicating clearly with customers and providing as much lead time as possible. We're continuing to deliver the value and reliability they've come to expect from Wabash.
Now to briefly touch on the ongoing legal matter stemming from a 2019 motor vehicle accident, in April, we filed a notice of appeal and posted the necessary appeal bond as we continue to pursue all available legal options to achieve a more reasonable outcome. We want to reiterate that we stand firmly behind the safety and integrity of our products and remain confident in our ultimate legal position. Turning to the broader market environment, demand remains muted across the trailer industry. Industry forecasters have continued to revise their outlook downward, and recent updates now suggest that 2025 volumes will fall well below basic replacement demand.
This prolonged softness is reflected in our own backlog, which declined to approximately $1 billion at the end of Q2. While that's not unexpected given the current landscape, it's clear that customers continue to take a wait-and-see approach to capital spending. For now, we've undertaken a reassessment of 2025 and now expect midpoints of $1.6 billion in revenue and negative $1.15 of adjusted EPS. Even with the revised guidance, we still expect to be near free cash flow breakeven for 2025, excluding our capital investments in trailers as a service. While our order book for 2026 is not yet open, we're actively engaged in conversations with customers and preparing quotes for next year's demand.
Based on those early discussions and current industry forecasts, we're cautiously optimistic that 2026 will reflect a return to growth. Of course, our outlook assumes relative stability in the broader environment. If we avoid further deterioration in business and consumer sentiment, we believe 2026 has the potential to align with current growth expectations. As always, we'll continue to monitor market signals closely and stay in close alignment with our customers as planning progresses. I'll now turn the call over to Mike for his comments.
Mike Pettit: Thanks, Brent. Over the past couple of years, we've talked about turning parts and services into a steadier, higher-margin engine within Wabash. The 2025 results prove we are continuing to deliver on that strategy. Parts and services sit squarely between our first-to-final mile equipment portfolio and the connected support that keeps those assets running day in and day out. Think of this expanding parts and services segment as the connective tissue that combines our equipment portfolio with best-in-class partners across distribution, digital, maintenance, and repair. Together, we're not only moving faster, we're layering in entirely new forms of customer value, creating durable improvements in Wabash's financial performance.
In the second quarter alone, the segment grew 15% sequentially and 8.8% year over year, while seeing EBITDA margins return to the high teens, right where we believe this business can perform on a sustainable basis. Keep in mind, this has all been done right into the teeth of a very difficult market backdrop, showing this growth is indeed structural and will provide stability for the enterprise for years to come. One of the clearest proof points behind the parts and services momentum is our Upfit business. Our Upfit offerings let us deliver fully tailored equipment in just a couple of weeks, combining the scale of truck body production with the deep customer intimacy that defines parts and services.
To put hard numbers around that, last year, we completed approximately 1,100 upfit units. This year, we doubled first-quarter throughput to 400 units and added another 556 in the second quarter, bringing the year-to-date unit count to 962 units. On top of that, we are opening two new upfit centers, one in Northwest Indiana and another in Atlanta, giving us capability in two strategic markets and putting us on pace to exceed 2,000 units in 2025 while setting the stage for significantly more growth in 2026. Trailers as a service, or TaaS, is another example of Wabash extending our manufacturing and distribution leadership through business model innovation.
We continue to sign shippers, carriers, and brokers across North America, many of whom bundle the trailer itself with preventive maintenance, telematics, nationwide uptime support, and repair management. The result is customers focused on moving freight, while Wabash handles the trailer, which maximizes customer value and efficiency. As mentioned in the first quarter, our acquisition of ParallelHawk accelerated the technology roadmap inside the TaaS. In June, we rolled out version 1.2 of the TrailerHawk app, enabling shippers to reserve capacity directly on the platform while tracking assets in real time. Coming to the back half of the year, our predictive analytics alerts and automated tracking and billing capabilities will turn raw data into actionable, measurable savings.
We have been continuing to prepare our physical and digital capabilities for the eventual market upturn and will be ready to ramp TaaS when our customers require it. Over the past year, we've also pushed hard on expanding our preferred partner network, or PPN. We brought Dan Millar on board to lead this effort in September, a parts industry veteran with over 25 years of experience. And in less than a year, we're already seeing significant results. With our world-class dealer group as the backbone, the network is extending our reach so that we can grow parts distribution, accelerate repair turnaround, and provide the services infrastructure that underpins TaaS.
Our North Star target is 300 points of service and parts distribution, and today, we're well on our way. The addition of 29 locations in 2025 has grown our network to over 110 locations, with more coming online every month. Each new location strengthens our network and provides after-sales support for our customers. Financially, the rationale behind scaling parts and services couldn't be clearer. While the freight market has continued to put pressure on equipment orders and transportation solutions, parts and services continue to deliver secular growth, stabilizing earnings through the cycle. As this segment expands, its higher margins will play an ever-larger role in Wabash's bottom line and cash flow generation.
But more importantly, we're winning because we found new ways to serve our customers, innovative solutions that extend value far beyond the original equipment sale and well into the life of the asset. With that, I'll hand the call back to Pat for his comments.
Pat Keslin: Thanks, Mike. Beginning with a review of our quarterly financial results, in the second quarter, our consolidated revenue was $459 million. During the quarter, we shipped approximately 8,640 new trailers and 3,190 truck bodies, slightly better than expectations, resulting in revenue on the top end of our $420 million to $460 million guidance range. Gross margins of 9%, and breakeven adjusted operating margins. As a reminder, the adjusted non-GAAP numbers reflect the removal of items related to the Missouri legal verdict. In the second quarter, adjusted EBITDA was $16 million or 3.6% of sales.
Finally, adjusted net income attributable to common stockholders was negative $6.1 million or negative $0.15 per diluted share, beating expectations due to slightly higher revenue and cost containment actions throughout the quarter. Moving on to our reporting segments, Transportation Solutions generated revenue of $400 million and operating income of $13 million. Parts and services generated revenue of $60 million and operating income of $9.1 million. We view the sequential and year-over-year revenue growth in the parts and services segment as particularly positive. Despite challenging market conditions, we have been able to execute on our strategy of building out more resilient and recurring revenue streams to our parts and services segment.
Year-to-date operating cash flow was negative $16.1 million as timing of revenue within the quarter created a drag on working capital in Q2. Regarding our balance sheet, our liquidity, which comprises both cash and available borrowings, was $312 million as of June 30. We finished Q2 with a net debt leverage ratio of 6.2 times. On capital allocation, during the second quarter, we directed $6 million to traditional CapEx, invested $700,000 in revenue-generating assets to support our trailers as a service initiative, utilized $10.4 million to repurchase shares, and returned $3.4 million to shareholders via our quarterly dividend. Our capital allocation priorities remain disciplined and growth-oriented.
We continue to invest above our $20 million to $25 million annual maintenance CapEx to support organic growth initiatives. At the same time, we remain committed to our dividend and will evaluate share repurchases and strategic bolt-on M&A opportunities in a balanced return-driven framework. I'll provide additional color on our 2025 capital deployment plan shortly. Moving on to our guidance for 2025, we are reducing our revenue outlook to approximately $1.6 billion and EPS to a range of minus 1.2 to minus 1.3. From previous midpoints, this represents a reduction of roughly $200 million in revenue and $0.55 of EPS. Ongoing economic uncertainty continued to weigh on our customers' capital expenditure plans and contribute to a softer overall market environment.
In Q2, third-party trailer forecasts dropped by roughly 13% for 2025, and our updated guidance reflects this sentiment. The most significant changes from our prior outlook come from a reduction in volumes within Transportation Solutions, flowing through to a decrease in gross profit equivalent to about $0.8 in EPS versus our prior guidance. This is partially offset by continued cost containment actions taken that recoup approximately $0.25 of EPS. In a continued environment of soft demand, our ability to stay agile and disciplined in cost management remains critical. I'm proud of how our team is executing. In Q2, they responded quickly and effectively, delivering strong progress on our cost containment initiatives.
We expect the same level of focus and execution to carry on in the second half of the year. As for the third quarter, our updated guidance implies third-quarter revenue of $390 million to $430 million and EPS of minus $0.2 to minus $0.30. Moving on to capital deployment expectations for 2025, given the updated outlook, we have reduced our anticipated traditional capital investment to be between $30 million and $40 million. As mentioned on previous calls, our capital expenditure plans are flexible, and capital outlays will continue to adjust as the market dictates. The same goes for the rest of our capital allocation priorities.
I would say that, generally, we have flexibility with regard to how we allocate capital in 2025, depending on how market conditions evolve. While our first-half free cash flow, excluding investment in trailers as a service, was negative $31 million, we expect to be near breakeven by the end of the year as we rightsize working capital to the current needs of the business. While 2025 has brought its share of challenges, we remain focused on disciplined execution and advancing our long-term strategy. Our teams have shown strong resilience and sound judgment, particularly in managing costs and maintaining a healthy liquidity position to navigate the current environment.
As we work through the cyclical trough, history reminds us that the rebound often comes stronger than expected. We're positioning the business to be ready when that inflection point arrives when market conditions stabilize and businesses regain the confidence to reinvest. I'll now turn the call back to the operator, and we'll open it up for questions. Thank you.
Jeanne: At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. And your first question comes from the line of Mike Shlisky with D.A. Davidson. Please go ahead.
Mike Shlisky: Yes. Hi. Thanks for taking my questions. Brent, just looking at 2026 or the overall trailer cycle, just update us on what you're watching today. What has to happen for order rates to pick up? Are you hoping that or taking that post might be entering the trailer fleet market and making the market a little smaller for those who are left? Just better rates and volumes. Just give us a sense of maybe the two or three key things that you're watching for currently.
Brent Yeagy: Yeah. So great question. So when we think about 2026, I think it really comes down to capacity coming out of the market being really the only factor right at this moment that we would be looking at in the context of the forecast that the third parties are putting out there at this moment in time. Now that's echoed by our customers as well. Who, when you really talk around the horn with them, they believe that enough is starting to exit as long as nothing else changes in the environment.
To see where they can look at, we'll call it, directional capital deployment in line with those expectations, which is really nothing more than getting back to a replacement level of capital deployment. And then eating into the debt slightly, the deficit that they've created by the undervalue over the last couple of years. So I think that is the main thing that we're looking at right now. And then the secondary thing that we'd be looking at is the fundamental freight-producing subsectors of the market, which is really what would be the truly more positive precipitating event that we're all looking for that really changed the game going forward.
Mike Shlisky: I want to follow up with that question, Brent. Just asking a little more broadly. If you could sense that the industry is quietly being able to do a bit more with fewer assets these days, has the industry gotten more efficient over the last couple of years? Have you used AI or more efficient load boards? Is there anything to tell us there? Is the national fleet just shrinking because of technology and not due to volumes of freight?
Brent Yeagy: And I don't have any there's nothing that I see at this moment that would say there's anything happening at scale around substantial efficiency that's moving into the market through technology deployment right at this moment. I would say the net inefficiency is still greater than efficiency being created. Now that doesn't mean that there's not inroads happening at the fleets, and it doesn't mean that they're not building platforms that ultimately show promise. But when you integrate all of it happening right now, plus the disruption that's happening in logistics, I think it is much more of a market-related situation as we sit here today.
So I do not I would not expect to see as the market unfolds over the next three, four, five years, a depressing element relative to efficiency gains. Not in my calculus right now.
Mike Shlisky: Got it. Thanks. And maybe just lastly, can you give us just a little more detail on the parts and service growth? That was pretty impressive. I am curious. Do you think the trajectory that business is on, that you've still got growth tailwinds into 2026? And what might be behind that, whether it's offerings or extending the network, etcetera?
Brent Yeagy: Yeah. I think we hit on that a little bit, but it's up 50 big piece of it. Obviously, our parts initiative that we've been doing now for about three years is starting to get some traction with our PPN expansion. We believe the second half can be 20% better than the first half. And that which we can see on the top line revenue. We think we can grow in 2026 as well. So we don't expect there's a long runway ahead of us. We're just getting started. So coming off of a lower base, but we're now hitting some levels that I think are meaningful from the top and bottom line that are starting to move the enterprise.
And that's just going to keep going as we go forward. And so we resegmented in 2021. We're at this point now where I think we're finally starting to see that sustainable growth and at levels that really will start to move the needle.
Mike Shlisky: Super, Mike. Thanks so much. I'll pass it along.
Jeanne: Your next question comes from the line of Jeff Kauffman with Vertical Research Partners. Please go ahead.
Jeff Kauffman: Thank you. Good morning, everybody. Couple of questions. That $30 million to $40 million in CapEx does that include the investment in Trailers as a Service?
Pat Keslin: It does not. That would be just our traditional CapEx.
Jeff Kauffman: Okay. And so where is the TaaS fleet right now? And how much incremental investment went in 2025 to TaaS?
Pat Keslin: So in terms of dollars that we've spent through the first half of the year, it's roughly $21 million. I'll let Mike expand on where we're at in terms of total trailers and deployment. But that's the spend right now is about $21 million through the first half of the year.
Mike Pettit: Yeah. The total fleet is still directionally in line with what we said it was in Q1. It's over a thousand. We've added a few total. And I would say that we would expect it to grow in the second half. Obviously, that's market-driven, but we would expect to see a move up in the second half from where we've been the last two quarters in terms of our total fleet and TaaS.
Jeff Kauffman: Okay. Thank you. Brent, in your comments, you talked about the need for a price increase in 2026 to handle inflation. At least on my numbers, I'm calculating average sales price in the transportation business dropped by about 9% sequentially from 1Q to 2Q and is down about 13% year on year. What is driving that? Is that a mix change? Is that because of the way contracts are structured? How should I think about that? And then how should I think about that moving forward to March?
Pat Keslin: Yeah. The sequential ASP is almost entirely mix-driven, Jeff. So if you were to do the percentage of the total trailers that are dry vans first quarter and second quarter, with the increase in that percentage, it's a drag on our ASP across the transportation solutions group. If you were to look at it on a like-for-like basis and exclude that mix, ASP would be relatively flat to what it was in the first quarter.
Jeff Kauffman: Okay. So less tanks, more dries? It's kind of more what's driving it?
Pat Keslin: Yep.
Jeff Kauffman: Okay. And then the delivery number for 2Q8640. Congratulations. That was a lot higher than I thought it would be. You mentioned in your comments a timing issue. Is that what happened here? Did we have more trailers that went in 2Q that maybe won't go in March, 4Q?
Pat Keslin: Yeah. So the timing issue specifically that we mentioned was just around cash collections. We did have a very big June shipment. So as you know, they can straddle between June, July, and Q2 and Q3. But that comment was specifically related to where our net working capital was at the end of the second quarter because we did have higher shipments in the quarter in that third month.
Brent Yeagy: Yeah. I'll give a little qualitative feedback on that, Jeff. I was overall pretty happy, all things being considered, with second-quarter revenue. Specifically in the context of all of the, we'll call it, tariff noise that jumped into the mix at the end of the first quarter. Right? So think about that affecting everything from incoming orders, pushouts, and cancellation risk. When I step back and look at what the industry did, through what was called feedback on the street and through our supply chain, Wabash weathered that extremely well. Extremely well. Let me say that again. Extremely well. In terms of continuity of production. And not having maybe the disruption that others have seen.
And I think that's going to show in market share numbers when the year is all said and done. Helped us dramatically in being able to leverage also cost reduction efforts because we've managed a much, again, relatively more stable platform than maybe some of the rest. We hope maybe that we can take advantage of that when we go into 2026 as well. So just yeah. The big numbers, you know, are not what we'd like. But pretty happy with the way we're running the show right now when it comes to running the shop floor and making choices on how best to navigate this thing.
Jeff Kauffman: Alright. Can I follow that point? Because you did have a great quarter. And the delivery is above what I expected. You know, profits better than expected. As I look to the 25 guide of a loss of 1.15 at the midpoint, a $1.6 billion in revenues, how much of that is the operations of the business that's coming through? And how much of that is a drag on the P&L because of some of these new projects and new businesses that you're funding?
Pat Keslin: Yeah. So I would say it's market-driven. For sure. We do have some SG&A expenses related to our investments that we're still going to continue to invest in future growth of the business. But for the most part, I mean, you could do the math on the top line drop from guide to guide. That's entirely market-driven. And we've taken actions on the cost side that we feel are prudent given the market reality of what our top line is going to look like. And that's what's implied in the guide that we gave you.
Jeff Kauffman: Alright. So one final question, and I'll pass it on. So year to date, we're looking at an operating earnings number of about a $0.73 loss. The guidance is for, let's say, $1.15 for the full year, so we're implying about a $0.40 loss for the second half of the year. As I turn to the discussions for the New Year, as I turn to the benefits from the big beautiful bill and what that might mean for the industry, is your sense that we're in the darkest part of the trailer cycle right now and that you had mentioned in your comments you were hoping for a better 2026. Until the orders come in, we don't know.
But can you talk about this new activity and what gives you enthusiasm that maybe we're seeing the darkest days right now?
Brent Yeagy: Yeah. Well, Jeff, I would like to say we're in the darkest days. There's nothing that says that we're not. The only thing that changes that statement is what happens in the future that we don't know. Something has to act. We're probably on the market for that to change the outlook of that. And your guess is as good as mine of what that may or may not be. When I talk to customers right now, I just had a discussion yesterday with one of the big ones, and being below replacement is a big deal now.
And the more prominent, well-managed carriers are doing the best they can so that they can maintain so they can leverage margins going forward. Right, when this thing goes. Right? They're not getting behind the curve too much right now. But they don't have much further they can go before they are going to have to spend not only to get to replacement, which will be a bump from 2025, but they've also got to start catching up some. Which, you know, I'm kind of repeating myself. But that's a very broad discussion that's happening out there right now. And the general consensus that I've gotten is, hey.
If they can just hold what's going on right now, and we get a and it just gets you know, a couple tenths of a percent of spot rate right now is not a bad thing. Right? You gotta go, not very much. In the world we're living in, if they can just knock off a few of those, that's enough. From what I'm getting for them to have to and want to spend a little more in 2026. And I think that's how I think about it. And from where we're at, hey. That's a good story from being, like you said, in the darkest days.
Because all you gotta then have happen is another the next shoe to drop, and this thing will take off again.
Jeff Kauffman: Well, thank you for that perspective, and best of luck.
Brent Yeagy: Thank you. Thanks, sir. Thanks.
Jeanne: There are no further questions at this time. I will now turn the call back over to Jake Page for closing remarks.
Jake Page: Thank you, everyone, for joining us today. We'll look forward to following up during the quarter. Have a great day. Thanks.
Jeanne: Ladies and gentlemen, that concludes today's call. Thank you for joining. You may now disconnect.