Q3 2024 Custom Truck One Source Inc Earnings Call
Speaker Change: Hello everyone, and welcome to Custom Truck OneSource Inc. 3rd Quarter 2024 Earnings Conference Call.
Speaker Change: Please note that this call is being recorded. You will have an opportunity to ask questions to our speaker during the Q&A session by pressing star and number one on your telephone keypad. Thank you. I will now turn the call over to Brian Perman, Vice President of Investor Relations. You may now begin.
Brian Perman: Thank you. Before we begin, we would like to remind you that management's commentary and responses to questions on today's call may include forward-looking statements which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially.
Brian Perman: For discussion of some of the factors that could cause actual results to differ, please refer to the risk factor section of the company's filings with the SEC.
Brian Perman: Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during the call in the press release we issued yesterday afternoon. That press release and our quarterly investor presentation are posted on the investor relations section of our website.
Brian Perman: We filed our third quarter 2024 10-Q with the SEC yesterday afternoon.
Brian Perman: Today's discussion of our results of operations for Custom Truck OneSource, Inc. or Custom Truck is presented on an historical basis as of or for the three months ended September 30, 2024 and prior periods.
Brian Perman: Joining me today are Ryan McMonagle, CEO, and Chris Eperjesy, CFO. I will now turn the call over to Ryan.
Ryan McMonagle: Thank you, Brian, and welcome everyone to today's call. Before we dive into our Q3 earnings, I want to acknowledge the recent storms and their impact on the people and communities in Florida, Georgia, and North Carolina.
Ryan McMonagle: Our thoughts are with everyone affected and we are committed to ensuring our equipment is available to support recovery and restoration efforts in these regions.
Ryan McMonagle: In our Q2 earnings report in August, we noted early signs of improvement in our rental KPIs.
Ryan McMonagle: While we were cautiously optimistic about overcoming some challenges in the transmission and distribution in markets,
Ryan McMonagle: We weren't ready to declare a turnaround. Today, I'm pleased to share that we saw continued improvement throughout Q3, in line with our expectations.
Ryan McMonagle: We ended the quarter with OEC on rent over $145 million higher and utilization more than 800 basis points above where we exited Q2.
Ryan McMonagle: So far through Q4, these positive trends persist, with OEC on rent and utilization currently over $1.2 billion and over 79% respectively.
Ryan McMonagle: These trends align with our utility and telecom contractor customers' expectations of increased activity in the second half of the year and into 2025. Additionally, storm restoration work has contributed to this demand, which we'll discuss further later.
Ryan McMonagle: With the utility in-market improving, we now see robust demand across all four of our in-markets, utility, infrastructure, rail, and telecom.
Ryan McMonagle: positioning us well for a strong Q4 and a promising start to next year.
Ryan McMonagle: As we've discussed previously, about 60% of our revenue comes from the utility and market, which includes both transmission and distribution work.
Ryan McMonagle: We are witnessing significant growth in electricity demand driven by AI driven data center development, manufacturing, on-shoring, and electrification trends.
Ryan McMonagle: Recent industry reports project a 24 to 29 percent increase in U.S. electricity demand by 2035.
Ryan McMonagle: nearly double last year's forecast.
Ryan McMonagle: These trends provide strong tailwinds for our future growth. We view transmission line mile completions and IOU rate case approvals as key indicators of utility in-market demand.
Ryan McMonagle: As supply chain issues resolve, interest rates moderate, and regulatory delays subside, we expect to see further improvements.
Ryan McMonagle: Our recent trends and customer interactions confirm that conditions are normalizing, and we anticipate continued improvement through the rest of the year and into 2025.
Ryan McMonagle: Chris will detail our ERS segments performance, but I'd like to highlight some key trends.
Ryan McMonagle: For the first time since Q4 last year, we saw sequential growth in rental revenue in Q3, up 5% from Q2.
Ryan McMonagle: We ended Q2 with OEC on rent just over $1 billion, which improved to $1.17 billion by the end of Q3, and it now stands over $1.2 billion, the highest in over a year.
Ryan McMonagle: With the recovery in our transmission equipment utilization, we're seeing mid-70 to low 80% utilization rates across most of our fleet and in-markets, demonstrating the long-term resilience of our markets.
Ryan McMonagle: We estimate that 20-30% of the OEC on rent improvement since Q2 is due to storm-related work from Hurricanes Helene and Milton.
Ryan McMonagle: Given the extent of the damage, we expect much of this equipment to remain on rent for several months.
Ryan McMonagle: I am incredibly proud of how our entire rental team worked hard to make sure our equipment was ready for the crews heading to help with restoration work for the damage caused by the hurricanes.
Ryan McMonagle: Additionally, our PTA team worked tirelessly to make sure we can not only provide rental equipment, but we also tooled up and delivered hundreds of toolkits to our customers.
Ryan McMonagle: We have seen some rate pressure that has impacted our on-rent yield. This was driven by both the mix of the equipment we put on rent and the market environment more broadly.
Ryan McMonagle: The uptick in rental activity and customer optimism also boosted rental asset sales, marking the second consecutive quarter of sequential improvement with Q3 up 21% from Q2.
Ryan McMonagle: We've leveraged the recent strength in ERS to selectively invest in our rental fleet. At the end of Q3, our total OEC was just under $1.5 billion, our highest quarter-end level of nearly $36 million in the quarter.
Ryan McMonagle: We've continued to invest during Q4 to ensure we have adequate equipment to meet current and projected rental demand.
Ryan McMonagle: It is also worth noting that today our rental fleet is larger than it was when CTAS and NESCO merged in April of 2021.
Ryan McMonagle: In addition, the rental fleet is younger today, OEC on rent is higher, and our on-rent yield is stronger. We are well positioned to capitalize on the growth ahead.
Ryan McMonagle: Our TES segment saw 13% revenue growth compared to Q3 last year.
Ryan McMonagle: Year-to-date revenue is up 8% following over 30% year-over-year growth in the first nine months of last year. We continue to see strong demand in our infrastructure, rail, telecom,
Ryan McMonagle: and Utility In Markets, all contributing to robust performance in TES. The early stages of Federal Infrastructure Investment and Jobs Act funding for infrastructure projects continue to positively impact TES demand.
Ryan McMonagle: These trends combine to result in a 21% increase in net orders compared to Q3 last year.
Ryan McMonagle: We anticipate this will begin to normalize later in 2025. Our inventory investment last year has positioned us to meet strong customer demand for new equipment sales and allowed us to grow our fleet to quickly meet our customers' demand and our core utility in-market.
Ryan McMonagle: We are confident that our inventory levels will begin to decline in Q4 and return to a more normalized level.
Ryan McMonagle: We are closely monitoring upcoming chassis emission regulations from CARB and the EPA.
Ryan McMonagle: We are well prepared for the anticipated demand increase from the new standards between now and 2027. The entire TES team continues to perform exceptionally well and we are proud of the business we have built.
Ryan McMonagle: Regarding our 2024 guidance, based on current trends across our business segments, we still anticipate delivering results within the ranges we previously provided.
Ryan McMonagle: but we are adjusting the top end of our ERS and TES revenue and consolidated adjusted EBITDA guidance ranges.
Ryan McMonagle: Chris will provide more details, but for 2024, we now expect total revenue between 1.8 and $1.89 billion and project adjusted EBITDA between 340 and $350 million.
Ryan McMonagle: In closing, I have the utmost confidence in the Custom Truck team. Their hard work and dedication have helped us navigate recent challenges in the utility and market.
Ryan McMonagle: As we end the year on a stronger footing, we are confident that our current activity levels, combined with strong market tailwinds,
Ryan McMonagle: will drive double-digit adjusted EBITDA growth across our consolidated business next year. We look forward to updating you on our progress on next quarter's call. With that, I'll turn it over to Chris to discuss our third quarter results in detail.
Chris Eperjesy: Thanks, Ryan.
Chris Eperjesy: Where our rental segment KPIs improved in the quarter relative to last year, our third quarter results were significantly impacted by the year-over-year decline in average utilization of the rental fleet to just over 73 percent from almost 79 percent.
Chris Eperjesy: This decrease drove a year-over-year decline in average OEC on rent in the quarter from just over 1.16 billion dollars in Q3 of 2023 to 1.08 billion dollars this past quarter.
Chris Eperjesy: However, average OECN rent in Q3 was up sequentially from 1.04 billion dollars in Q2 of this year, reflecting the improved trends we experienced in Q3.
Chris Eperjesy: The ERS segment had $150 million of revenue in Q3, down from $167 million in Q3 of last year. However, given the improvements in utilization and average OEC on rent in the quarter, rental revenue was up 5% sequentially.
Chris Eperjesy: In addition, increased overall demand for equipment helped drive a 21% sequential improvement in rental asset sales as well. Both trends resulted in overall revenue growth for the ERS segment increasing for the second straight quarter.
Chris Eperjesy: Adjusted gross profit for ERS was $88 million for Q3, down from $100 million in Q3 of 2023, but up 5% sequentially.
Chris Eperjesy: Adjusted gross margin for ERS was 58% in the quarter, down from just under 60% in the same period last year.
Chris Eperjesy: We maintain rental margins in the expected range for Q3 of the low to mid 70% range and the mid to high 20% range for rental asset sales.
Chris Eperjesy: On-rent yield was over 38% for the quarter, down from almost 41% in Q3 of 2023, impacted by both the mix of equipment we put on rent and the market environment more broadly.
Speaker Change: As Ryan mentioned, we continue to invest strategically in and sell certain age assets from our rental fleet in the quarter. We added equipment in product lines and end markets where we are seeing sustained levels of demand from our customers.
Speaker Change: Net rental capex in Q3 was $57 million, and our fleet age improved slightly to 3.3 years.
Speaker Change: Our OEC and the rental fleet ended the quarter at $1.49 billion, up $28 million versus the end of Q3 of last year, and up sequentially versus the end of Q2 as well.
Speaker Change: A month into Q4, our OEC currently stands at over $1.5 billion, with total utilization at over 79%.
Speaker Change: We expect to continue to invest in the fleet for the remainder of 2024, but as we discussed last quarter, we have scaled back our expected growth capex given the trends we experienced over recent quarters in the utility end market.
Speaker Change: However, we have the inventory to pivot and grow the fleet beyond current expectations to the extent such investment is supported by our customers' demand.
Speaker Change: In the TES segment, we sold $260 million of equipment in the quarter, up 13% compared to Q3 of last year, and up more than 5% sequentially from last quarter.
Speaker Change: Q3 represented our second highest level of TEF sales in our history.
Speaker Change: Gross margin in the segment was slightly over 16% for the quarter down from Q3 2023, but in line with our expected margin range for the segment.
Speaker Change: TES gross margin in the quarter was impacted by mix and improved inventory levels across the broader industry.
Speaker Change: CES backlog continued to moderate, ending the quarter at just under $400 million.
Speaker Change: Strong levels of production and new equipment sales in the quarter allowed us to make headway towards reducing our backlog to a more normalized level, which currently stands at more than four and a half months of LTM TES sales.
Speaker Change: This is down from a peak of more than 12 months in early 2023 and consistent with our targeted historical average of 4-6 months.
Speaker Change: Net orders improved versus Q3 of last year to just over $177 million, which is down marginally on a sequential basis.
Speaker Change: Despite the reduction in our backlog, ongoing feedback from our customers regarding their equipment needs for the remainder of the year and into 2025 provides us with confidence that we will continue to see revenue growth in TES.
Speaker Change: Our strong and longstanding relationships with our chassis, body, and attachment vendors continue to be an important driver of our record TES production.
Speaker Change: Our intentional inventory build throughout 2023 and into 2024 positions us well to meet our production, fleet growth, and sales goals for the coming quarters.
Speaker Change: Our APS business posted revenue of $36 million in the quarter, up marginally from Q3 of last year. Adjusted gross profit margin in this segment was 23% for Q3.
Speaker Change: Overall in Q3, the APS business was impacted by a decrease in rentals of tools and accessories, which were affected by the previously discussed utility and market softness, as well as higher material costs.
Borrowings under our ABL at the end of Q3 were 628 million dollars, an increase of 41 million dollars versus the end of last quarter, primarily as a result of the increase in inventory and the lower than anticipated adjusted EBITDA performance in the quarter.
We expect to begin to see a meaningful reduction in inventory levels in Q4 and into next year, which should contribute to reducing the borrowings on the ABL and result in lower balances on our floor plan lines.
Speaker Change: During Q3, we upsized the size of our ABL facility by $200 million to $950 million and extended the maturity to August 2029.
Speaker Change: As of September 30th, we had approximately $320 million dollars available and over $190 million dollars of suppressed availability under the ABL.
With LTM adjusted EBIT of $356 million, we finished Q3 with net leverage of 4.4 times.
Speaker Change: As we complete Q4 and head into next year, we expect that reduced inventory levels and floor plan balances, as well as our returning to growth and the trend towards lower interest rates, will all contribute to increased leveraged free cash flow generation in the coming quarters, which we intend to use to reduce our net leverage.
Achieving net leverage below three times remains a primary and important goal for us.
Speaker Change: With respect to our guidance, despite improvements in our ERS segment KPIs since the end of Q2, we expect to experience the continued year-over-year softness and used equipment sales that we have experienced year-to-date. As such, we are reducing the top end of our ERS revenue guidance by $25 million.
Speaker Change: For TES, while increased production has allowed us to continue to deliver more vehicles and grow revenue in 2024 compared to 2023, some of our customers are choosing to delay certain purchase decisions influenced by both their expectation of lower interest rates and the uncertainty surrounding the upcoming election.
Speaker Change: As a result, we are lowering the top end of our revenue outlook by $75 million. For APS, we are affirming the existing revenue guidance range.
Reflecting those changes, our updated guidance for our segments is as follows.
We expect ERS revenue of between $610 and $625 million, PES revenue in the range of $1.05 to $1.115 billion, and APS revenue of between $140 and $150 million.
Speaker Change: This results in total revenue in the range of 1.8 to 1.89 billion dollars.
Speaker Change: We are projecting adjusted EBITDA in the range of $340 to $350 million.
Also, we now expect to deliver a net leverage ratio that will be flat to a modest decrease from current levels by the end of the fiscal year.
but expect further progress in fiscal 2025 for their stated goal to achieve a net leverage ratio below three times as we see the benefits of recent working capital management initiatives take hold.
Speaker Change: In closing, I want to echo Ryan's comments regarding our continued strong business outlook.
Despite the demand weakness we experienced over recent quarters in certain utility markets, we continue to be optimistic about the long-term demand drivers in our industry and our ability to return to double-digit adjusted EBITDA growth next year.
Speaker Change: Thank you. Thank you. We are now opening the floor for question and answer session. If you'd like to ask a question, please press star 1. Your first question comes from Michael Schlinsky from D.A. Davidson. Your line is now open.
Michael Schlinsky: Yes, hi, good morning. Can you hear me okay?
Yeah, we can hear you. Hey Mike, how are you doing?
Great. I'm great. Thank you. Thanks for taking my questions. Can you provide first some comments on what you mentioned on the used market? Is it pricing or volumes that's affecting that business or perhaps there's just not the right assets for sale that people are looking to buy right now? Just some more comments as to what's holding that back and do you think that the issues will be kind of done with by the end of the fourth quarter?
Yeah, I think we're seeing, we are seeing some demand on use, so I think we are seeing good growth sequentially in the use market there, so I think that's
That's been positive. I think broadly there is a little bit of pricing pressure there Mike Which is what which is what we're managing through and dealing with
Michael Schlinsky: But, you know, I think that it will be, I think the fourth quarter is typically the biggest quarter from a buy perspective there, so, you know, we think it will continue to...
continue to improve in the fourth quarter. And then I also think that's one area that there is more interest rate sensitivity. So I think as rates continue to lower, I think that will be a good trend for the used market as well.
got it and then touching on the utilization certainly it seems like things have been turning in the right direction for quite some time now month or two at least I think you said both you guys in your comments each of you said that that you're currently seeing 79% or even a little bit higher than that
Do you think 79% or 80% is kind of where you want to be at this point? I'm a little bit worried of another 85%, 86% quarter coming up and the challenges that that brings and the expectations that that brings from the market. Just can you kind of tell us a little bit about...
How high do you want it to go and kind of what can you do to keep things in a more reasonable range versus last time around?
It's a great question, Mike. And yes, look, I think the...
The most important point is that we're seeing utilization return, you know, in line with what we expected. So later in the third quarter, which is what's happening, and as we, yeah, I think both of us said, it's holding into October. So I think you're right. I think that high 70s is a very good spot to remain.
And so, you know, which is consistent with where we are now too, so I think kind of that high 70s
Low 80, you know feels like a really good spot to maintain and it seems to be what the markets dictating well, you know, we we can use the levers of the fleet size and and And pricing kind of where that makes sense
to attempt to keep utilization there. But the most important part is that the underlying business and the underlying demand has come back, you know, like we expected, like we expected it to at the end of this year, and we're starting to feel as we said with our comments.
starting to feel pretty good about what that will imply for 2025 as well.
Great. I also wanted to touch on the Class 8 vocational truck demand pattern that we're seeing out there. I mean, from an industry perspective, I think orders are at an all-time high. We're seeing some of the best demand we've ever seen in that business on an industry-wide basis. I'm curious if Custom Truck is also making...
You know, pretty big orders here for next year. As you guys know, you're among the biggest, the biggest Class A truck buyer out there.
Speaker Change: Normalized Order Pattern. So just anything you can kind of tell us about, you know, chassis supply, orders for 25 for the chassis would be appreciated.
Yep, no, it's a great question and we're obviously very close with all of our OEMs as it comes to
or orders, especially around Class A chassis. But it feels like there's good availability right now, heading into the beginning of 2025. We think that later in 2025, you could start to see some of the pre-buy dynamic. And so, look, I think that's where our great relationships with our OEMs on the chassis side.
I think will be valuable, but right now it feels like there is good availability.
And, you know, we're listening closely to what, when the pre-buy will really begin and what will be the mix between the vocational trucks and the freight side to understand kind of what that dynamic will mean for us later in the year, next year in 2025.
Just to kind of clarify, what's currently happening, the very strong water is across the sector in Class VIII vocational trucks. Isn't necessarily the pre-buy happening already. Maybe there is some customers out there that.
about capacity for their regular growth business. I'm trying to make sure that...
There's no giant order that Custom Truck made that would require us to work in capital in the first part of 25 and that Custom Truck is the reason why we see such strong industry-wide orders. Is it you?
Yeah, no, I, we're not planning on a.
a significant pre-buy at the beginning of 2025. We're still seeing good availability with our partners there. And so, as we said, we're actually seeing inventory come down through Q4 and think that trend will continue and normalize right in the beginning of 2025 as well.
Outstanding. I'll pass it along. Thanks so much.
Great. Thanks, Mike. Thanks, Mike.
The next question comes from Justin Hawk from Baird. Your line is now open.
All right. Good morning, guys.
Justin Hawk: at the end of 2023 going into 2024. I'm just trying to understand kind of the revenue expectation for the TES segment and if that's going to be down, what are the kind of the factors that drive the double-digit adjusted EBITDA growth for 2025?
Speaker Change: Yeah, no, it's a great question, Justin, and thanks. And look, we are...
Michael Schlinsky: We are still seeing growth on the TES side of the business. We'll have formal guidance, obviously, out.
when we report Q4 in March. So we'll, by segment, but we're still seeing good demand on the TES side. So backlog has normalized, that is true. You know, over the history of Custom Truck, having backlog in that four to six month range has been historically.
where we've been and we've delivered growth with that. And so we think that will be the case. So we think Q4 will be a growth quarter.
four to six month time period. I think where we said that there was some pressure was on pricing. That's true on both the rental business when we talk about our ORY.
that is down a little bit. And it's also true on the TES business where we mentioned that gross margin is down a little bit. So we're seeing that, you know, on both segments, we're seeing that as a function of mix.
in terms of what we're selling and who we're selling to, but then we're also seeing a little bit of just margin or pricing pressure, too, just from the overall market as inventory has continued to build in the third quarter and into the fourth quarter as well. Does that help you, Justin?
Yeah, I mean, I guess if I can summarize...
you know and obviously you're not giving 25 guidance but you know all sequel as you stand right here you would assume that you will grow off of this these levels in the TES segment in 2025 with the backlog you have right now
Michael Schlinsky: Yes.
Okay, and then I guess my second, thank you for that. My second question is just on the ORI, why in the lower rates, when you say mixed,
I don't really know what you mean by that. Is that some of the storm work that came in that was one time that's lower margin maybe relative to your equipment or what? What is that?
Speaker Change: Yeah, that's a good question. And yeah, I think mix for us means just the mix of equipment that is going out on rent, Justin. So, you know, I think we've talked about in the past that some of our distribution equipment is at a lower ORY than some of our vocational equipment, as an example. And so there's just some inherent mix between distribution and even transmission that is a slightly higher ORY. So some of it is just that, some of it is the customers that we're renting to as well. But when we talk about mix, it's both of those things.
And, you know, some of that is, it just occurs kind of during the course of the year as well.
Justin Hawk: That's all I've got for right now. Thank you.
Great. Thanks, Justin.
Your next question comes from Nicole de Blas from Deutsche Bank. Your line is now open.
Speaker Change: Hi, this is Naeem Kaplan on for Nicole. Thank you for taking my question and good morning. So the ERS segment has been... Hi, can you hear me?
Speaker Change: Yes, yeah.
Okay, great. Yeah, so the ERS segment has been challenged this year, and your midpoint revenue guidance implies 27% quarter-over-quarter growth in the fourth quarter. So, I'm wondering how much of this is underwritten by the growth in
Michael Schlinsky: OEC on rent that you've already seen. We're just trying to, you know, understand the outlook here.
I want to make, this is Chris, I want to make sure I understand your numbers. You're talking about ERS segment because I think the low end of our guidance would effectively be flat year-over-year and the high end would be up a couple percentage points. I'm not sure where the 27% is coming from.
unless you want to point to one.
Yeah, yeah, quarter of a quarter.
Speaker Change: Yeah, and so as we talked about we did see a pretty decent rise
Speaker Change: in OEC on rent through Q3, but certainly at the end of Q3, it accelerated and that's continued into October. So, the answer is yes. I mean, it's going to be what we've seen.
Speaker Change: over the past eight weeks on OECD on REN. And then the other thing I'd add to is rental sales. Q4 is typically a strong month, excuse me, a strong quarter from a rental sales perspective. And so...
Michael Schlinsky: We're anticipating that that will be up as well, sequentially.
Okay, got it. And could you comment on what you're seeing in telecom with NTS? Our understanding is that the investment there is pretty weak, but you mentioned continued strength in the press release.
Michael Schlinsky: Yeah
Speaker Change: That's a good question. Look, that's a small segment for us. But we are starting to see a lot more activity in telecom We are seeing some
Speaker Change: larger orders both on the rental side for additional telecom equipment to be rented and we are seeing more sales activity but again for us that's a very small segment it's less than 5% of our revenue and so you know some of that will just be growth from a market share perspective as well.
Okay, thanks. I appreciate it. Pass it on. Absolutely. Thank you.
If you'd like to ask a question, please press star and then one on your telephone keypad. Your next question comes from Tammy Zuccaria from J.P. Morgan. Your line is now open.
Hi, good morning. Thank you so much. My first question is a little forward looking. How are you thinking about
Speaker Change: P&D and market conditions are finally looking up so
Speaker Change: Any thoughts you can share, how you're thinking about it for next year, or maybe next couple of years. You know, there's a lot of talk around power generation, power demand growth. So any color from your side?
Speaker Change: You know, it's a great question, and it is encouraging to see how the T&D market is coming back, Tammy. So I think, you know, we're working through kind of our formal guidance, obviously, for next year now.
But I think numbers that are somewhat consistent with what we've talked about in the past of kind of that, you know, middish single digits from an overall fleet growth perspective, feels reasonable as we're beginning to do our planning for for 2025 and we're watching kind of how
Speaker Change: how demand on T&D is coming back. But we'll have formal guidance, I think, in March, when we announce formal guidance. But it does feel good, and I think the underlying demand drivers there, Tammy, are certainly encouraging, as we think about T&D demand heading into 2025.
Speaker Change: Growth margin came in a little lighter than what we were thinking. And anything to call out there and how to think about growth margin for APS as we look to the next few quarters?
Yeah, hi Tammy, it's Chris. You know, I think we said in our formal comments, you know, we have seen some of the same impact we've seen on rental within APS in terms of our rentals there, which tend to have higher margins, so part of it is mixed.
Speaker Change: But we have also seen, you know, some increase in our overall costs there. I think continuing to model, you know, in that mid-20% to, you know, high-20% is kind of the best way to look at it.
We continue to prioritize as we've talked about in the past.
You know, our service network really to keep the fleet going as opposed to third party service. I think you're, you can continue to expect a lot of that in 25 as well. You know, so while we're expecting growth, you know, I think, you know, that mid 20s continues to be kind of the number I would model.
Speaker Change: We don't have any pending questions as of the moment. I'd now like to hand back over to the management for final remarks.
Great. Thanks everyone for your time today and your interest in Custom Fruck. We look forward to speaking with you on our next quarterly earnings call and in the meantime please don't hesitate to reach out with any questions. Thank you again and have a great day.
Thank you everyone for attending today's call. You may now disconnect. Have a wonderful day.