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DATE

Thursday, Aug. 6, 2026 at 11:30 a.m. ET

CALL PARTICIPANTS

  • Chief Financial Officer - Kent Yee
  • Chief Operating Officer - Nicholas Little

TAKEAWAYS

  • Revenue -- $576.5 million, a 15.6% increase year over year driven by organic growth and contributions from acquisitions.
  • Organic Sales -- $526.6 million, growing 11.1% year over year when excluding $49.8 million in sales from recent acquisitions.
  • Adjusted EBITDA -- $70.4 million, reflecting an adjusted EBITDA margin of 12.2% compared to 11.5% in the prior year quarter.
  • Net Income -- $28.7 million, up 21.6% from $23.6 million in the second quarter of 2025.
  • Diluted EPS -- $1.76, an increase from $1.43 in the second quarter of 2025.
  • Innovative Pumping Solutions Sales -- $142.7 million, a 52.6% increase year over year driven by municipal water activity and production contracts.
  • IPS Organic Sales -- $95.7 million, representing 13.3% growth excluding $47 million from acquisitions.
  • Service Centers Sales -- $367.9 million, an 8.3% increase year over year driven by activity in the California, Gulf Coast, and Southeast regions.
  • Supply Chain Services Sales -- $65.8 million, up 0.6% year over year as new customer onboarding was partially offset by lower activity from existing accounts.
  • DXP Water Revenue -- $97.3 million, representing the 15th consecutive quarter of sequential sales growth and nearly doubling from the prior year.
  • Innovative Pumping Solutions Backlog -- Energy-related average backlog grew 7.3% sequentially, stemming declines observed in the second half of 2025.
  • Average Daily Sales -- $9.15 million per day, compared to $7.92 million per day in the second quarter of 2025.
  • Daily Sales Trends -- Average daily sales moved from $7.2 million in Jan. to $9.4 million in June, reflecting a year-to-date average of $8.7 million per day.
  • Gross Profit Margin -- 31.8%, compared to 31.6% in the prior year period, reflecting margin expansion efforts and acquisition contributions.
  • SG&A Expenses -- $127.6 million, or 22.1% of sales, improving from 22.4% in the second quarter of 2025 due to operating leverage.
  • Operating Income -- $55.5 million, a 20.7% increase from $46 million in the prior year period.
  • Segment Operating Income -- Service Centers generated $54.2 million, Innovative Pumping Solutions produced $26.7 million, and Supply Chain Services contributed $6.5 million.
  • Free Cash Flow -- $29.8 million for the quarter and $56 million for the first half of 2026, compared to negative $8.6 million in the first half of 2025.
  • Capital Expenditures -- $2.6 million for the quarter, a decrease from $10.3 million in the prior year as spending normalized following software and equipment investments.
  • Liquidity -- $374.5 million as of June 30, including $226.6 million in cash and $147.9 million in availability under the ABL facility.
  • Total Debt -- $842.5 million as of June 30, with a secured leverage ratio of 2.3 to 1.
  • Acquisition Activity -- The company acquired four businesses in the first half of 2026 for total consideration of $135.6 million.
  • Mequipco Acquisition -- Completed on Aug. 1, 2026, using cash and stock to expand the water and wastewater platform in Canada.
  • Credit Rating Upgrade -- S&P Global Ratings upgraded the company's credit rating to B+ from B on July 20, 2026.
  • Headcount -- DXP reached 3,510 employees following recent hiring and acquisition-related growth.

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RISKS

  • Little stated, "The broader economy continues to have volatility from tariffs, inflation, interest rates and geopolitical uncertainty," noting these factors as potential sources of market instability.

SUMMARY

Management reported that DXP Enterprises, Inc. (DXPE +0.39%) achieved high watermarks for revenue and adjusted EBITDA margins during the second quarter, supported by a strategic concentration on technical engineered solutions and water infrastructure. The company completed four acquisitions in the first half of 2026 and one subsequent to quarter-end, establishing a geographic beachhead in Western Canada. Financial performance was characterized by the transition to positive free cash flow, improved operating leverage, and the 15th consecutive quarter of sequential growth for the water platform. The company also improved its financial flexibility by expanding its ABL facility and receiving a credit rating upgrade from S&P Global Ratings.

  • CFO Yee noted that the Innovative Pumping Solutions segment is shifting toward municipal markets, with water and wastewater now approaching 70% of segment sales.
  • Regarding the record 12.2% EBITDA margin, Yee stated, "we do believe longer term, the business easily can get to that 12% on a sustainable basis."
  • Management attributed the 1.5-fold operating leverage to fixed cost leverage and gross margin strength as the company scales its core MRO and supply chain businesses.
  • COO Little identified long-cycle demand from data centers and energy infrastructure as key drivers for the engineering and technical solutions business.
  • The company increased its Asset-Based Lending facility to $225 million and extended its maturity to July 2031 to support future acquisition activity.
  • Yee characterized the June sales acceleration to $9.4 million per day as a "normal quarter end push" following relatively flat performance in April and May.
  • Little highlighted the company's investment in private label branded pumps, noting that DXP continues to invest in proprietary patterns to maintain its position in the rotating equipment market.

INDUSTRY GLOSSARY

  • ABL: Asset-Based Lending, a revolving credit facility secured by company assets such as accounts receivable and inventory.
  • DXP Water: The company's dedicated platform providing pumping and treatment solutions for municipal and industrial water infrastructure.
  • EBITDA: Earnings before interest, taxes, depreciation, and amortization, used to measure core operating profitability.
  • Innovative Pumping Solutions (IPS): A DXP business segment focused on custom pump fabrication, remanufacturing, and engineered packages.
  • MRO: Maintenance, repair, and operating products used in the daily operations of industrial facilities.
  • Rotating Equipment: Industrial machinery that uses rotation to move fluids or gases, primarily pumps, compressors, and turbines.
  • Supply Chain Services (SCS): A DXP business segment providing outsourced procurement, inventory management, and storeroom operations.

Full Conference Call Transcript

Operator: Hello, everyone. Thank you for joining us, and welcome to the DXP Enterprises Q2 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Kent Yee, CFO. Kent, please go ahead.

Kent Yee: Thank you. This is Kent Yee, and welcome to DXP's Q2 2026 Conference Call to discuss our results for the second quarter ending June 30, 2026. Joining me today is our Chief Operating Officer, Nick Little; our Chairman and CEO, David Little, is traveling, and so we will be kind of going forward from that fashion today. Before we get started, I want to remind you that today's call is being webcast and recorded and includes forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. A detailed discussion of the many factors that we believe may have a material effect on our business on an ongoing basis are contained in our SEC filings.

DXP assumes no obligation to update that information because of new information or future events. During this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our earnings press release. The press release and an accompanying investor presentation are now available on our website at ir.dxpe.com. I will now turn the call over to Nick Little, our Chief Operating Officer, to provide his thoughts and a summary of our second quarter financial results. Nick?

Nicholas Little: Good morning, and thank you, Kent. Like Kent said, I'm filling in for David Little, who is having technical difficulties while traveling. I also want to thank everyone for joining us today on DXP's fiscal 2026 Second Quarter Call. We had a very strong second quarter, and I'm proud of how our DXPeople performed. We delivered strong year-over-year and sequential sales growth, expanded profitability and generated quarterly adjusted EBITDA. More importantly, we did it by staying close to our customers, solving real problems in the field and continuing to build momentum across the business.

Let me start by saying that Q2 was a strong example of what happens when our DXPeople stay close to customers, execute locally and bring technical expertise to our customers. We grew sales, improved productivity, generated significant free cash flow and continue to advance our strategy of being customer-driven experts, technical, reliable, fast and convenient for our customers. We are pleased to see DXP's performance continue throughout Q2 and remain at record levels through the first half of 2026. This allowed us to achieve strong sales growth and 12% EBITDA margins. Thank you to our 3,510 DXPeople for your hard work and dedication.

We welcome our new acquisitions as well as all the new DXPeople, DXP continues to invest in and hire for growth. Total DXP sales for the second quarter were $576.5 million, up 15.6% year-over-year. Organic sales increased 11.1% year-over-year, continuing to show the underlying strength of the business. Our acquisitions are contributing, but our existing teams and branches are also winning with customers. Profitability also improved. Gross profit margin was 31.8%. Income from operations increased to $55.5 million. Adjusted EBITDA was $70.4 million or 12.2% of sales. Net income increased to $28.7 million and diluted EPS was $1.76 compared with $1.43 in the second quarter of 2025.

Those are strong results, and I want to be clear that they start with our DXPeople taking care of customers. A special thanks goes to our sales professionals, operations teams, branch leaders, service technicians, engineers, supply chain teams and corporate support teams. DXP works because of DXPeople you can trust. Our customers rely on us to solve problems quickly and provide technical solutions, keeping their operations running and making doing business with DXP fast and convenient. That's what being customer-driven means. From a growth standpoint, we continue to like where DXP is positioned. Customers in water and wastewater, energy infrastructure, general industry, air compression, data centers and other technical markets need reliability, responsiveness and expertise.

Those are DXP's strengths, and they create opportunities for us to earn more of the customers' business and drive revenue and margin share. Across DXP, growth is coming from several consistent themes: expanding our technical and engineering solutions, broadening solutions around pumps, automation, filtration and process equipment. Leveraging our decentralized model to pursue local growth opportunities and cross-selling across platforms and integrating acquisitions more efficiently. Our strategy has not changed, and that's a good thing. We want to grow DXP organically and through acquisitions, diversify the company, expand our capabilities and service customers with solutions that are fast, convenient, reliable and supported by DXPeople. We are not chasing growth just to get bigger.

We are focused on profitable growth, strong cash generation and customer relationships that last. The broader economy continues to have volatility from tariffs, inflation, interest rates and geopolitical uncertainty, but the work our customers do is mission-critical and the products and services DXP provides are essential to keeping plants, facilities, municipalities and industrial operations moving. That gives our business resilience and it gives our DXPeople a chance to show why DXP is different. During the first half of 2026, our service centers and Innovative Pumping Solutions businesses generated $967.3 million in sales, up 14.3% from prior year. That growth reflects both organic execution and recent acquisitions, especially within IPS and our water and wastewater platform.

Innovative Pumping Solutions again led the way in the second quarter. IPS sales increased 52.6% year-over-year and 20.3% sequentially to $142.7 million. This growth was driven by water and wastewater activity, increased production contracts and strategic acquisitions. Our IPS teams continue to show what technical expertise looks like in the field, solving complex customer problems, delivering engineered solutions and helping customers move important projects forward. IPS continues to be a strong example of DXP's growth momentum. DXP Water grew to $97 million in the quarter, nearly doubling year-over-year. Municipal infrastructure investments, regulatory requirements and customer demand for reliable pumping and treating solutions create an attractive long-cycle opportunity for DXP Water.

DXP Water generated $175.5 million in sales for the first half of '26, up 85.6% year-over-year, underscoring the momentum we're building in these markets. These markets where our customers value expertise, reliability and know-how. Many IPS projects are long cycle in nature. And when customers choose DXP, they are choosing DXPeople who understand the application, the urgency and the importance of getting the solution right. Backlog within IPS also remains an important indicator of the momentum we're seeing in the business. During the second quarter, average IPS backlog remained strong and increased compared to both prior period and the first quarter.

That growth reflects continued demand for engineered pumping solutions, water and wastewater projects and production-related work with customers who rely on DXP for technical expertise and execution. The average backlog levels we saw throughout Q2 give us confidence in the durability of customer activity and support our positive outlook for the remainder of 2026. Service centers also performed well. Sales increased 8.3% year-over-year and 8.9% sequentially to $367.9 million. Organic sales increased $40.9 million compared to the prior year quarter. This is the heart of DXP's local customer-driven model. Our service center teams are close to the customer, they understand the market, and they know how to respond quickly when customers need us.

That local presence is what allows DXP to be fast and convenient while still bringing technical expertise to our customers. Supply Chain Services increased modestly to $65.8 million, up 0.6% year-over-year and 1.2% sequentially. SCS continues to onboard new customers and related facilities, although that growth was partially offset by lower activity with existing customers. This business is a great example of why being customer-driven experts because we are not just selling products, we are helping customers improve procurement, manage inventory, reduce complexity and make their supply chain faster, more convenient and more efficient. Acquisitions continue to be an important part of DXP's growth strategy, but we are disciplined about it.

We are looking for businesses that fit our culture, strengthen our technical capabilities and help us serve customers better, faster and more conveniently. During the first quarter of 2026, we acquired 3 businesses. And during the second quarter, we acquired one additional business. These acquisitions expand our water and wastewater platform, enhance our capabilities, extend our geographic reach and reinforce our position as a leading distributor of rotating equipment in North America. For the first 6 months of 2026, acquisitions were $90.6 million compared to $55.7 million in the prior year period. We are pleased with how recent acquisition businesses are contributing.

At the same time, our focus is integration, cross-selling, retaining great people and making sure each acquired business becomes a part of the DXP culture. We also completed the acquisition of Mequipco on August 1, 2026, funded with cash on the balance sheet and DXP stock. We are excited to welcome these new DXPeople to DXP and look forward to supporting their customers with the broader capabilities of our company and growing DXP Water in Canada. Cash generation improved meaningfully in the second quarter. Free cash flow was $29.8 million for the first 6 months of 2026 (sic) [ Q2 2026 ].

Free cash flow was $56 million compared to negative free cash flow of $8.6 million in the first half of 2025. Our balance sheet liquidity position gives us flexibility to continue to invest in organic growth, fund acquisitions, support working capital and manage the business through different economic environments. We want to keep growing, but we want to do it the DXP way with disciplined customer focus, cash generation and returns that make sense. Overall, I'm very encouraged by our second quarter results and the progress we're making. We delivered strong sales growth, improved profitability, expanded adjusted EBITDA margins, generated strong free cash flow and continue to build DXP through strategic acquisitions. But the real story is our people.

Our DXPeople continue to show up every day for customers and for each other. I want to personally thank all of our DXPeople for their hard work, customer focus and execution. We continue to build the new chapter of DXP by being technical experts, providing customer-driven engineered solutions while continuing to be fast and convenient. This is how we win. This is how we earn trust, and this is why customers continue to rely on DXP. As we look forward, our priorities remain unchanged: drive organic growth, expand margins, grow our water and wastewater platform, execute disciplined acquisitions, generate strong free cash flow and increase shareholder value over the long term.

I would like to thank all of our employees for their commitment to serving customers and delivering results. Their dedication continues to differentiate DXP in the marketplace. With that, I will turn the call back over to Kent.

Kent Yee: Thank you, Nick, and thank you to everyone for joining us for our review of our second quarter 2026 financial results. Q2 financial performance reflects continued execution across DXP with strong sales growth, improved profitability, additional margin expansion and excellent free cash flow generation. Additionally, our results also highlight the continued success of our acquisition strategy and the growing scale of our water and wastewater platform, as Nick mentioned. Our results demonstrate the continued benefits of diversified end markets, the resilience of MRO and supply chain solutions and the meaningful contribution from engineered solution capabilities.

As it pertains specifically to our second quarter, DXP's financial results reflect sales growth of 15.6% year-over-year to $576.5 million, including $49.8 million of acquisition sales, organic sales growth of 11.1% year-over-year, reflecting strength across our core business, continued strategic progress in water and wastewater, supported by organic growth, project activity and 3 water acquisitions through Q2, operating income growth of $9.5 million or 20.7% to $55.5 million and adjusted EBITDA of $70.4 million with adjusted EBITDA margins improving to 12.2%, a new high watermark for DXP. In terms of our detailed financial results, total sales for the second quarter increased 15.6% year-over-year to $576.5 million.

Acquisitions that have been with DXP for less than a year contributed $49.8 million sales during the quarter. Excluding the impact of acquisitions, organic sales were $526.6 million, representing 11.1% organic growth compared to the second quarter of 2025. Average daily sales for the second quarter were $9.15 million per day versus $7.92 million per day in Q2 of last year. Adjusting for acquisitions, organic average daily sales were $8.36 million per day versus $7.53 million per day in Q2 of 2025.

As is typical, sales accelerated throughout the quarter with average daily sales increasing from $9.07 million per day in April to $9.4 million per day in June, reflecting a normal quarter end push, but highlighting strong acceleration coming into quarter end. In terms of our business segments, Innovative Pumping Solutions grew 52.6% year-over-year, followed by Service Centers growing 8.3% and Supply Chain Services growing 0.6% year-over-year. Innovative Pumping Solutions sales increased $49.2 million or 52.6% year-over-year to $142.7 million. This growth reflects increased activity in our Water and Wastewater division, increased production contracts and strategic acquisitions within IPS. Recent acquisitions contributed $47 million of sales during the quarter compared to $9.1 million in Q2 of last year.

Excluding acquisitions, IPS organic sales grew $11.3 million or 13.3%. Segment operating income for IPS was $26.7 million, up from $18.6 million in Q2 of last year. In terms of Innovative Pumping Solutions backlog, we experienced increases in the energy and water and wastewater bookings and backlog. Our Q2 energy-related average backlog grew 7.3% sequentially and continues to stem declines we saw in Q3 and Q4 of last year. That said, as we have mentioned, we continue to have some large engineered solutions or projects, and we have continued to recognize revenue in Q2. Excluding some of these projects, our backlog is up 10% from Q1.

The conclusion continues to remain that we are trending meaningfully above all notable sales levels, and our backlog has mitigated some declines we saw in the second half of 2025. Our DXP Water platform experienced our 15th consecutive quarter of sequential sales growth with $97.3 million in sales during Q2 and year-to-date sales of $175.5 million, and we will look for this to continue during the second half of 2026. In terms of our Service Centers. Service Center sales increased $28.2 million or 8.3% year-over-year to $367.9 million. Excluding the impact of recent acquisitions, Service Centers grew $40.9 million organically.

This growth was driven by increased business activity across multiple regions, including California, Gulf Coast, Southeast, North Texas, South Central and South Rockies. From a segment operating income perspective, Service Centers generated $54.2 million of operating income in the quarter, reflecting continued strength and consistency in the core MRO business. We are building a larger, more diversified platform with attractive end market demand, project opportunities and recurring service potential. Supply Chain Services sales increased $0.4 million or 0.6% year-over-year to $65.8 million. Performance reflects the onboarding of new customers and related facilities, partially offset by decreased activity with certain existing customers.

Segment operating income was $6.5 million compared to $5.2 million in the prior year period, reflecting improved profitability despite essentially sales being flat. Turning to gross margins. DXP's total gross margin was 31.8% for the second quarter compared to 31.6% in Q2 of 2025. The improvement reflects continuing margin expansion efforts and a positive contribution from recent acquisitions. Our SG&A for the quarter increased $15.7 million from Q2 of last year to $127.6 million. The increase reflects increased payroll-related costs, depreciation and amortization, rent, insurance and professional fees. However, SG&A as a percentage of sales improved to 22.1% from 22.4% in Q2 of last year, reflecting operating leverage as sales increase. Turning to EBITDA.

Q2 2026 adjusted EBITDA was $70.4 million compared to $57.3 million in Q2 of 2025. Adjusted EBITDA margins were 12.2%, up from 11.5% last year. The improvement reflects sales growth, gross margin strength and the fixed cost leverage we continue to see as we scale the business. For the quarter, this translated into 1.5x operating leverage. In terms of EPS, our net income for Q2 was $28.7 million. Earnings per diluted share for Q2 2026 were $1.76 per share versus $1.43 per share last year. The year-over-year improvement primarily reflects higher sales, improved gross profit and stronger operating income, partially offset by higher interest expense and a higher effective tax rate. Turning to the balance sheet and cash flow.

In terms of working capital, net working capital as of June 30, 2026, was $393.3 million, an increase of $31.7 million compared to December 31, 2025. The increase was primarily due to sustained sales growth and acquisitions. In terms of cash, we had $226.6 million in cash on the balance sheet as of June 30. We also had $147.9 million of availability under our ABL, resulting in total liquidity of $374.5 million, providing DXP with sufficient dry powder to pursue acquisitions. CapEx in the second quarter was $2.6 million compared to $10.3 million in Q2 of last year.

For the first 6 months of 2026, capital expenditures were $5.9 million compared to $30.3 million in the first 6 months of 2025. This reflects a more normalized level of capital spending following the elevated investments we made last year. Turning to free cash flow. Free cash flow for the second quarter was $29.8 million versus $8.3 million in Q2 of 2025. For the first 6 months of 2026, free cash flow was $56 million compared to negative $8.6 million in the prior year period.

Over the last 4 quarters, DXP has produced $118.7 million in free cash flow, creating a new fact pattern for DXP, consistently averaging $29 million in free cash flow per quarter while also growing the business or sales per business day. This improvement reflects increases in profitability, stronger operating cash flow and a meaningful reduction in capital expenditures. As of June 30, our fixed charge coverage ratio was 2.97:1, and our secured leverage ratio was 2.3:1 with a covenant EBITDA for the last 12 months of $267 million. Total debt outstanding on June 30 was $842.5 million. In terms of acquisitions, we acquired 4 businesses during the first half of 2026 for total consideration of $135.6 million.

These acquisitions are directly aligned with our strategy to expand our water and wastewater platform, extend our geographic reach and support our position as a leading distributor of rotating equipment in North America. We continue to see acquisitions as a disciplined, repeatable growth lever for DXP, particularly where we can add strong teams, technical expertise and market access in attractive end markets. As Nick mentioned, subsequent to quarter end, we also completed the acquisition of Mequipco Limited, which is based in Western Canada and provides DXP with a beachhead to expand DXP Water in Canada going forward.

The acquisition was funded with cash on the balance sheet and DXP stock, further demonstrating the strength of our pipeline and our ability to execute. On July 2, 2026, we entered into a new restated loan and security agreement, increasing our ABL to $225 million and extending the maturity to July 2031. This further enhances our financial flexibility as we continue to invest in the business organically and through acquisitions. Finally, on July 20, S&P Global Ratings upgraded DXP's issuer credit rating and first lien term loan ratings to B+ from B with a stable outlook.

We view this upgrade as external recognition of the progress we have made strengthening the balance sheet, diversifying our end market mix, scaling EBITDA and executing a disciplined acquisition strategy while maintaining financial flexibility. In summary, we are pleased with our second quarter and first half performance in 2026. We delivered strong sales growth, expanded margins, improved adjusted EBITDA and generated significant free cash flow by continuing to execute on our acquisition strategy. The quarter reinforces that acquisitions and water and wastewater are becoming increasingly important contributors to DXP's growth profile. We believe DXP remains well positioned to continue creating value through our resilient MRO and supply chain solutions, engineered solution capabilities, disciplined acquisitions and exposure to secular trends.

We are excited about the future. We look forward with confidence to sustained growth and market outperformance. I will now turn the call over for questions.

Operator: [Operator Instructions] Your first question comes from the line of Zach Marriott with Stephens.

Zachary Marriott: Congrats on the solid quarter. I want to start with daily sales trends by month. Can you please fill in the gap for us in May for Q2 and then share what color you can for Q3 thus far?

Kent Yee: Zach, thank you. Yes. I'll walk through the sales per business day. I'll really just go through Q1 and Q2, so you just are clear on the full first half of 2026. January was $7.2 million per day; February, $8.4 million per day; March, $9.2 million per day; April, $9.1 million; May, $9 million; June, $9.4 million. Year-to-date average, just if you just want to average that out, that's $8.7 million per day for the full year-to-date average.

Zachary Marriott: Understood. And on EBITDA margins, you have been in the 11% range pretty consistently and just reported at 12%. As you look into Q3, is it more likely you'll stay at 12% or head back closer to 11%?

Kent Yee: Zach, part of that is obviously mix. The thing I'd point out within the IPS segment is water and wastewater is approaching 70% of the segment sales. And while we had great profitability on both sides of the business, meaning the energy side as well as the water side, that increased contribution and an overall average higher operating income margin in water and wastewater would suggest we have a chance of repeating that. This is our first quarter at 12%. So I don't want to promise anything. And as you know, we don't give direct guidance, but we do believe longer term, the business easily can get to that 12% on a sustainable basis.

But this is our first quarter hitting it. So...

Zachary Marriott: Understood. And last one, if I could, on CapEx. I heard you that this year is a more normalized level compared to last year. Could you please just touch on what those elevated investments from last year entailed?

Kent Yee: Yes. No problem, Zach. And big picture, just in terms of CapEx, there's very little for us of maintenance CapEx. That said, just in terms of your specific question, last year, we made investments in software facilities, equipment, a lot of different things as we often do when we get in a growth prospect. Additionally, on the rotating equipment side, we invest in patterns and different things because we do source and make our own branded private label pumps. And so those were the investments we were making that continue to help us to be the leading rotating equipment provider in North America.

Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.