Q4 2024 Cargojet Inc Earnings Call
Once again, please continue to stand by. We thank you for your patience.
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Speaker Change: Dhillon, Unknown Executive, Scott Calver, Jamie Porteous, Ajay Virmani, Dhillon, Unknown
Speaker Change: Dhillon, Unknown Executive, Scott Calver, Jamie Porteous, Ajay Virmani, Dhillon, Unknown
Speaker Change: All participants, please stand by. Your conference is now ready to begin. Good morning, ladies and gentlemen, and welcome to the Cargo Jet Conference Call. I would now like to turn the meeting over to Mr. Martin Kerman. Please go ahead.
Speaker Change: Good morning everyone and thank you for joining us today on this call. With us on the call this morning are Parline Dhillon, Co-Chief Executive Officer, Jamie Porteous, Co-Chief Executive Officer, and Sanjeev Mani, our Vice President of Finance.
Speaker Change: After opening remarks about the quarter, we will open the call for questions.
Speaker Change: I would like to point out that certain statements made on this call, such as those relating to our forecasted revenues, costs, and strategic plans, are forward-looking within the meaning of applicable securities laws.
Speaker Change: This call also includes references to non-GAAP measures like adjusted EBITDA, adjusted earnings per share, and return on invested capital.
Speaker Change: Please refer to our most recent press release in MD&A for current assumptions and cautionary statements relating to forecasting information and for reconciliations of non-GAAP measures to GAAP income. I will now turn the call over to Jamie.
Jamie: Thank you, Marty. Good morning, everyone, and thank you for joining us on the call today.
Speaker Change: As we've done in the prior quarters, Pauline and I will share our prepared remarks and then we will open the call up for questions.
Speaker Change: We are extremely pleased to be reporting exceptional overall revenue growth of 32% for the fourth quarter of 2024.
Speaker Change: This is in stark contrast to a subdued Q4 that we experienced in 2023.
Speaker Change: As I noted in prior remarks, in the fast-changing landscape of supply chains, we have been successful in identifying and then executing on new market opportunities that are yielding strong results.
Speaker Change: During the quarter, we continue to opportunistically allocate capacity to high-demand areas, including ACMI and charters, and it is certainly paying off.
Speaker Change: It is part of the reason that we made the proactive decision last year to expand our fleet and currently have four 767-300 freighter aircraft on delivery and or in the conversion process and expected to be delivered in 2025.
Speaker Change: We will also be returning our last leased aircraft at the end of April 2025, leaving a net increase of three aircraft to support growth and our increased maintenance requirements for a fleet of our size.
Speaker Change: At the same time, I recognize that there is a lot of concern and anxiety in Canada about potential tariffs and the related dislocations in the supply chains and the potential impact on our business.
Speaker Change: Let me share a bit more context on how CargoJet fits into the North American supply chains.
Speaker Change: Much of the commodities that are carried between Canada, the U.S. and Mexico travel via truck and rail.
Speaker Change: Consumer products arriving from Asia and entering Canada, much of that tonnage moves on ocean freight from Asia to Canada. These products then get shipped to domestic customers in small packages from Canadian warehouses, benefiting our Canada Overnight Network.
Speaker Change: Our scheduled charter services from China to Canada were specifically and deliberately targeted to serve the Canadian market, leveraging our domestic network, avoiding the U.S. market and any potential tariff restrictions.
Speaker Change: As manufacturers across the globe plan shipments directly into Canada to avoid any potential U.S. terrorists versus routing them through Mexico and the United States, it may present new opportunities for cargo jet although this remains a very fluid situation that we are continuing to monitor closely.
Now for some financial highlights for the quarter.
Speaker Change: We achieved ACMI revenue growth of 29% and All-in Charter revenue growth of 136% versus the same quarter last year.
Speaker Change: As I noted earlier, this clearly demonstrates the core strength of our entrepreneurial business model through the deliberate allocation of capacity to growth areas.
Speaker Change: Although we posted a modest growth in our domestic network revenues, it is worth noting that Canada Post was on strike for almost the entire peak holiday shipping season, dampening some of the volumes that would otherwise have flown on our network.
Speaker Change: Q4 adjusted EBITDA of $91.7 million grew 12.4% versus the prior year. With a block hour growth of 16% in Q4 on, as I note, the same fleet size, we had higher startup costs including crew costs as we ramped up to meet the growth. We expect these cost pressures to subside over the longer term.
Speaker Change: In terms of our capital allocation strategy, we generated strong operational cash flow of $103.6 million in Q4 versus $31 million last year. Our full year adjusted free cash flow ended up at $183.7 million versus $64.4 million in 2023.
Speaker Change: We erred on the side of higher growth CapEx in Q4 given the growth opportunities we are pursuing versus our previous guidance.
Speaker Change: More importantly we maintained our net debt to adjusted EBITDA leverage ratio at 2.3 times as at December 31st 2024 versus 2.6 times at the end of 2023.
This is well within our stated targets.
Speaker Change: We achieved this strong leverage ratio despite continuing our share buyback program.
Speaker Change: During 2024 we bought back 1.1 million shares under our NCIB program for a total cost of $128.8 million.
Speaker Change: We are very confident that we will continue to identify new opportunities for Cargojet as we navigate shifting global supply chain demands successfully.
Speaker Change: Our direct exposure to U.S. tariffs is very limited, and we remain optimistic about our future.
Speaker Change: We will continue to leverage our unique mix of Domestic Canada Network, ACMI, and all in-charter segments to maximize aircraft utilization and direct capacity to growth areas as required.
Unnamed Co-CEO: This was a tremendously successful first year in our roles as co-CEOs and I want to thank Pauline for being an outstanding partner and collaborator. Together we look forward to continuing to grow the business and provide outstanding value for all stakeholders.
Thank you, Jamie. And good morning, everyone.
Unnamed Co-CEO: To start off, 2024 has been an incredible year marked by many successes.
Unnamed Co-CEO: including a historic milestone for CargoJet, reaching $1 billion in revenues for the first time in our history.
Unnamed Co-CEO: This has been a remarkable journey for a small team that started under the entrepreneurial dream and vision of our Executive Chairman, Ajay Virmani, with just two cargo aircraft.
Unnamed Co-CEO: This achievement is a true testament to the driving force behind Cargojet, our incredible and dedicated team.
The solid growth across each of our business lines
We are not just operating, we are operating smarter.
Unnamed Co-CEO: Our strategic focus on maximizing asset efficiency and empowering our people has resulted in a game-changing 16% boost in block hours flown from our existing fleet.
Unnamed Co-CEO: This isn't incremental improvement, it's a fundamental shift in our operational capabilities.
Unnamed Co-CEO: Every single member of the Cargo Jet team rose to the occasion throughout the year.
Unnamed Co-CEO: delivering an outstanding 99.1% on-time performance, well above our customers targets, even in the face of demanding weather conditions.
Unnamed Co-CEO: Labour disputes created a significant dislocation in the parcel market, requiring us to swiftly adjust our network and operations across the country to align with the rapidly evolving ground networks of our customers.
Unnamed Co-CEO: This strategy has resulted in a 136% growth in all Charter revenues in Q4 versus the prior year.
Unnamed Co-CEO: As we move forward in 2025, one of our key goals is to continue building new capabilities in information technology to keep pace with our growth.
Unnamed Co-CEO: We're also focused on strengthening our finance team, adding new talent to support a disciplined approach to pricing, margin management, and overall financial discipline.
Unnamed Co-CEO: This combined effort will ensure we remain agile, efficient, and financially robust.
Unnamed Co-CEO: Rapid growth often comes with short-term cost increases, which was the case in Q4. But as we streamline processes and build staffing and scheduling for the new higher level of revenue, we expect these one-time costs to normalize.
as the rest of 2025 unfolds.
Costs continue to be a priority for us.
Unnamed Co-CEO: As Jamie noted, we are closely monitoring the geopolitical and trade and tariff developments and remain prepared to adapt our business to new trade flows and new supply chains.
Unnamed Co-CEO: Those with the available fleet capacity will be able to take advantage of these dislocations versus those with no flexibility at all.
Speaker Change: It is indeed a privilege to be partnering with Jamie on this remarkable journey. As we complete our first year as co-CEOs, hitting the $1 billion revenue milestone has made this year both historic and fulfilling.
Speaker Change: This achievement is a reflection of the dedication, resilience, and commitment to excellence that defines Cargo Jet. Every takeoff, landing, and on-time delivery is a testament to the strength and the passion of our team.
Speaker Change: The only constant seems to be change, and we see no shortage of opportunities.
Speaker Change: Thank you again for joining us this morning. We'll ask the operator to please open the lines for questions.
Speaker Change: Thank you. We will now take questions from the telephone lines. If you have a question, please press star 1. You may cancel your question at any time by pressing star 2.
Speaker Change: So again, please press star one at this time. If you have a question, there will be a brief pause while the participants register.
We thank you for your patience.
The first question.
Matthew Lee from Canaccord Genuity, please go ahead.
Matthew Lee: Hi, thanks for taking my question. Maybe just first one on the fleet side, you know, just dive into what opportunities exist that made you decide to add to your fleet? I mean, is there a discrete opportunity that you're looking to get advantage of? Or is this more about, you know, that general demand and flexibility you're looking to have going into your life?
Matthew Lee: We have a customer that's looking for dedicated service and a route to South America.
Matthew Lee: The other thing that we really are concerned about is aircraft utilization. We need the aircraft down to do more maintenance checks. The aircraft are being utilized more. As you can see, we flew a lot more in 2024. The aircraft need to come in. They need to have health checks.
Matthew Lee: So we're really focusing on the aircraft, the fleet, where we're
Matthew Lee: acquiring four aircraft, but one is leaving the fleet, I believe, in April. So we're really just up three aircraft for which we have an opportunity to utilize all of them.
Matthew Lee: And that's helpful. And then maybe some of that great vision contract. I think our maps suggest you're flying, you know, six or seven routes a week this quarter for that contract.
Matthew Lee: Good morning, Matthew. It's Jamie. The answer to your question is yes. During the fourth quarter, we were flying, on average, probably five or six frequencies a week to and from China against a contract that had a minimum of three frequencies per week.
The customer, in fact, as Pauline was noting.
Matthew Lee: has a desire and had a desire in the fourth quarter for us to do up to seven free daily frequencies to China. We just didn't have the aircraft to do it. And that's one of the reasons why we're adding aircraft, just to add to Pauline's comments. I think last year at this time, when we were sitting here, we were talking about.
Matthew Lee: little skeptical or received skeptically by a lot of people that we could grow the revenues by 15% to 20% with the existing fleet in 2024. And we in fact did that. We grew revenues overall by 14%, but if you backed out, I think there was a 20% drop in fuel surcharge revenue, the actual growth was significantly higher than the 15% to 20% with the existing fleet.
Matthew Lee: to the fleet. And as we also noted last year, when Pauline and I first came into the co-CEO roles, that as part of our growth capex,
Matthew Lee: the capability of being able to do daily flights to China.
Matthew Lee: The opportunity with a major customer in South America, the 136% growth that we achieved year over year in ad hoc charters, we want that trend to continue, but we're maxing out the capacity and the capability with our existing fleet. We can't do that without adding more aircraft, and as Pauline said, the increased maintenance requirements for a fleet of our size.
Okay, that's helpful. I appreciate the call.
Speaker Change: Thank you. The next question is from Cameron Merson from National Bank Financial. Please go ahead.
Cameron Merson: Yeah, thanks very much. Good morning. Just to follow up on the I guess the fleet question. I guess maybe two questions here. One, you know, it looks like you're adding a factory built freighter, which feels like maybe it's a departure from what you've normally done. So maybe we can just talk a bit about that. And then how that opportunity, I guess arose. And then secondly, do you have any, I guess, sort of outlook for what your your capex plans are for for 2025 in dollar terms?
Yeah, excuse me.
I'll take the first part of that, Cameron.
Speaker Change: In terms of CapEx, I'll maybe ask Sanjeev to give you a sense of both growth and maintenance CapEx going forward.
Sanjeev: Estimation of cost in 160 to 180 million approximately and this primarily will be due to engine overhauls. These engine overhaul events are based on slots availability and fleet requirement to maintain the high level of operational efficiency.
Speaker Change: Okay, so just to confirm the numbers growth capex 80 to 85 and maintenance capex 160 to 180? Yes. Okay, perfect. Okay, I'll leave it there. I'll pass the line. Thanks very much.
Speaker Change: Thank you. The next question is from Kalai Gupta from Scotiabank. Please go ahead.
Kalai Gupta: Thanks, Javier. Good morning, everyone, and congrats on a great feat in achieving a billion-dollar mark.
Thanks. Bye. Bye.
Yeah, thanks. First question may be on margins.
Kalai Gupta: It's down obviously quite a lot from last year. But when I look at the individual cost items, you know, be it aircraft or crew or maintenance or ground services or whatever, every single cost item as a percentage of revenue was similar or better than last year. So is this something I'm missing in EBITDA margin calculations? Because, you know, I understand obviously, I'm ramping up, but I cannot see those cost items going up as a percentage of revenue this year.
I'm
Konark Sanjeev here.
and Unknown Speaker 0.0.0.
Speaker Change: EBITDA margin dropped a bit in Q4 primarily due to our incentive payment which was more concentrated in in Q4.
Kalai Gupta: So that you will see in SDMA cost and definitely some cost related to deicing that is a seasonal cost again that happened in Q4. So those are two major contributors of.
Thanks, Andrew, for that.
Kalai Gupta: Okay, then moving on in terms of, you know, the growth outlook. So, I mean, it seems like, you know, you have, you have the China contract. That will be the first full year this year, 25.
Speaker Change: And then like DHL contract also seems to be wrapping up. How should we think about, you know, your overall growth aspirations this year? I mean, you talked about, obviously, Jamie, that the curves are not as applicable to our business as it is, perhaps, for like rail, trucks, ocean, et cetera. So how should we think about, you know, your growth outlook by 2025?
Speaker Change: The Ad Hoc Charter, as we noted, I think we're going to continue, as Pauline noted, you know, we missed out on a significant amount of additional incremental business because we just didn't have the aircraft or crews available.
and then some organic growth on top of that.
Speaker Change: and may even benefit from direct shipments to Canada versus carriers going into the United States. So we'll see how this plays out, but we're hopeful that we see more freight coming into Canada.
Speaker Change: Unknown Hello, everyone. Thanks for joining us. I'm Jamie Porteous. And I'm Scott Calver.
Speaker Change: Thanks for the call, guys. Thanks. And if I can, last one, follow up to the Amazon situation in Canada. Recently, I read some news about Amazon pulling out of Quebec. How does it really matter to your business, Amazon, given you're obviously the carrier for them in Canada?
Speaker Change: From a customer service standpoint, they're not lessening the service delivery. In fact, they're enhancing delivery all across the country with earlier deliveries, 4 a.m. to 7 a.m. deliveries. And we continue to see significantly strong double-digit growth from Amazon in Canada next year and beyond.
That's great. Thanks for the time.
Thank you.
Walter Sprachlin: Thank you. The next question is from Walter Sprachlin, RBC Capital Markets. Please go ahead.
Not a great quarter here.
Walter Sprachlin: Charter, you mentioned, was driven by international, just curious, was there any Canada post in that as
Speaker Change: Morning, Walter. It's Pauline. No, our charters have primarily been all international, trans-border, but no, nothing with Canada Post. Okay, and the South American, is that a new customer? It's an existing customer, new route. Okay, got it.
Speaker Change: And Sanjeev, you mentioned when you were giving us the CapEx breakdown in 2025, I think you mentioned some of the growth CapEx that you just quoted was incurred in the fourth quarter. Maybe I heard that wrong.
Speaker Change: is the, could you repeat the growth cap expectation for 2025, not including what you might have spent in the fourth quarter, twenty-four? It is 80 to 85 million.
Thank you. Bye-bye.
Speaker Change: Maybe this is a question, I'm not sure, for Sanjeev or Jamie.
Speaker Change: is there, when we look at your margins as you add new aircraft, is there going to be a margin impact now in 2025?
Speaker Change: When you bring on you know a little bit, you know a few more aircraft than you normally would
Speaker Change: with adding another frequency in 2025 once we take delivery of the next aircraft being able to do that. There will be a little bit, but not anything material. Okay. All right. That's all my questions. Thanks very much. Thanks, Walter.
Speaker Change: Thank you. The next question is from Tim James from TD Cowen. Please go ahead.
Tim James: Thanks very much, good morning. My first question, the DHL agreement, could you give us a sense for how many aircraft were used for DHL over the course of the fourth quarter and how many aircraft are being used currently and the outlook for that in 2025?
Tim James: Okay, that's great. And then my second question, just we've kind of been getting at this a little bit with some of the earlier questions, thinking about the charter revenue in the fourth quarter, you know, I was looking back historically, obviously, some unique things going on in charter this year, and in the fourth quarter. Should we
Tim James: think about this fourth quarter and the sequential uptick from Q3 as being
Tim James: charter isn't as maybe as strong in Q4 relative to other parts of the year because the aircraft utilization is so high in the other parts of the business. I'm just trying to think about how we view this fourth quarter charter revenue on a go-forward basis in the seasonal uptick and how normal this is going to be.
Pauline Walter: Good morning, Sam. It's Pauline. Yes, we do see the uptick. We will have crew and additional aircraft, which we traditionally didn't have before. So the answer to your question is yes, we do anticipate to see continued growth in the charter area.
Great. Thank you very much.
Speaker Change: Thank you. The next question is from David Campo from Cormark Securities. Please go ahead.
Speaker Change: Good morning, everyone. I just wanted to ask Walter's question, maybe a different way.
Speaker Change: I think last quarter you guys called up some elevated training costs, a stronger U.S. dollar and general inflation across the aerospace supply chain.
Speaker Change: To give you an example, an aircraft operating to China that many days per week is probably between 350, 400 block hours per month, where a normal route would probably fly less than half of that. But that should normalize as we go through the year.
Speaker Change: And then in your ACMI business, I think you guys do have some minimum volume guarantees that does protect you somewhat if we do see a full-blown tariff or a weaker Canadian consumer. But I'm just curious, how much is your ACMI business running above those floors? Just so we have some...
Speaker Change: We typically operate all of our major contracts, whether it's ACMI, whether it's
Speaker Change: The minimum take or pay volumes on the domestic network typically run significantly above the minimum volume guarantee, so you'd have to see a significant decrease in demand before it impacted that.
Okay.
Speaker Change: are flying out of Cincinnati for DHL, just given the tariff uncertainty, is DHL pulling any volumes forward ahead of the 30-day pause or the 30-day timeline that Trump set out? We haven't seen any of that.
Nor do we anticipate any.
Okay, that's all the questions I have. Thank you.
Speaker Change: Thank you. The next question is from Kevin Chang from CIBC. Please go ahead.
Speaker Change: are we comfortably, let's say, still growing at a pretty decent clip, even in the back half of 25, just given some of the growth initiatives you've highlighted here.
Speaker Change: Yeah, I think it would be appropriate to expect that, you know, the block hours are going to sequentially are going to increase in the first, at least the first quarter and part of the second quarter of 2025.
Speaker Change: versus 2024. Again, you know, specifically because of the increased growth of frequency to and from China on the ad hoc chart and our ad hoc charters are scheduled, you know, both the scheduled service to China and our ad hoc charters are going to continue strong. I would expect that the ACMI with DHL particularly and the domestic would stay relatively flat year over year.
Speaker Change: Okay, that's helpful. I guess as you think of your ad hoc charter opportunity
Speaker Change: I think one of the ways historically, I guess even today, CargoJet has taken advantage as your fleet has grown, your aircraft positioning has allowed you to take advantage of opportunities that come to light and your ability to respond pretty quickly here. As you think of ad hoc charter as more of a structural growth factor for you, I guess how do you think about your aircraft positioning? Does that come into play as you think of ACMI routes you might do, so you have aircraft
Yeah, no, Kevin, you know, we've
Speaker Change: Up until now, I mean, this is the first year that we're actually adding aircraft to our fleet to specifically address some growth opportunities with our charter business, namely the China business.
Speaker Change: as we, you know, grow the fleet and add more dedicated aircraft will continue to grow the ad hoc charter business. Okay, that's helpful. You know, I'll leave it there. Thank you very much. Thank you.
Speaker Change: Thank you. The next question is from Jimmy James from TD Cowan. Please go ahead.
Speaker Change: Thank you very much. Sorry, I hope I can I can sneak in one one final question here.
Speaker Change: You mentioned the fleet additions, the aircraft coming in this year as a minor headwind, if I can even call it that. I think Jamie has said it was immaterial. Are there any other headwinds or costs that we should think about that, you know, could impede any margin expansion this year? I'm open to sort of any ideas. I was wondering in particular about sort of
Speaker Change: compensation, flight crew compensation, you know, you talked last year about some of the pressures related to what's been going on around the industry and
Speaker Change: and Crew Compensation. Just wondering if you can identify other, if there are any sort of cost pressures in 2025.
Speaker Change: Yeah, it's Pauline. Yeah, we are seeing some concerns, minor ones, on engine overhauls.
Still a pilot, we're
Speaker Change: Maybe in Q1, Q2, we're going to see a little bit of pilot overtime, but we are hiring to reduce it and mitigate it as best we can.
Speaker Change: We're also looking at our contract that comes out next year with the pilots. So there might be a little bit of additional cost with the pilots and definitely some increased cost on the engine overhauls.
Thank you, Pauline.
Speaker Change: Thank you. The next question is from Chris Murray from ATB Capital Markets. Please go ahead.
Chris Murray: Thanks guys. Um, you know, maybe turn it back to ACMI, you know, pretty good performance in the quarter.
Chris Murray: So a couple of pieces of this. First of all, with Amazon moving out of the Quebec distribution centers,
Chris Murray: Is there an opportunity to grow the business further with with Amazon and maybe look at additional aircraft?
Chris Murray: And then the second piece of this, you know, again, you know, we're going to see a lot of change in trade flows would be I guess everyone's expectation. Can you see any kind of new opportunities in ACMI over the coming year?
Chris Murray: Yeah, good morning, Chris. I mean, on the Amazon side, I think I answered it that earlier. Yes, we there's growth opportunities I don't know if they necessarily would translate into new aircraft on the domestic network, although over a period of time
I don't think specifically because of the Quebec issue
Chris Murray: opportunity on our domestic network on a block space arrangement that Amazon participates in that will continue to grow as they use other fulfillment centers and warehouses across Canada to supply their customers in Quebec without the fulfillment centers being based there. So that's definitely an opportunity.
Question from the audience.
It can be volatile from time to time.
Speaker Change: What gives you the confidence right now that it's the right time to expand the charter business more and more? Because it sort of sounds like all these new aircraft are really going to be designed for that.
Speaker Change: Yeah, hi Chris, I think, you know, one of the most significant things that's leading us to add
Speaker Change: and I think I've mentioned before that the ad hoc charter business, although it's
Speaker Change: It's somewhat unpredictable. What is predictable is there's always demand for some, for one reason or another. And we've established ourselves, you know, similar to what we've been able to do in the domestic and our ACMI business.
our reputation for
Certainly flexibility, but responsiveness and capability.
Speaker Change: All right. Thanks. I'll leave it there. Thanks, folks. Thanks, Chris.
Speaker Change: Thank you. The next question is from Steve Hansen from Raymond James. Please go ahead.
Steve Hansen: Yeah, guys, thanks. Excuse me. And just a quick one on the CapEx profile. It sounds like the maintenance spend this year will be higher than typical, I guess on some additional engine overhauls. Is that an intensity level we should expect to continue into 26? Or how should we think about that? Maybe it's too early.
Steve Hansen: It is too early to confirm that, but this is the year where we have some engines which are scheduled for overhaul. And based on the slots available, we are trying to put all of them in overall position.
Steve Hansen: This may not be repetitive in next year. So it all depends on how, at what cyclic year they are subject to overall.
Okay, I appreciate the time. Thanks.
Speaker Change: Thank you. Once again, please press star one if you have a question. The next question from Conor Gupta from Scotiabank. Please go ahead.
Conor Gupta: Thanks, just one quick one if I can squeak and, you know, I think recently we've heard a lot of concerns about
Ajay Dhillon, Unknown Executive, Scott Calver, Jamie Porteous, Ajay Virmani
Conor Gupta: You guys tend to use, you know, the older aircraft, but you keep, you know, putting green time on the engines and buy new engines, etc. So can you remind us, you know, like, you know, has the strategy changed at all in terms of how you approach the fleet, you know, given the concerns?
Conor Gupta: We've just had, you're correct, I mean we've always, as most cargo airlines do, unless you're FedEx and UPS and buying factory freighters directly from the manufacturer, we've typically always, you know, our feedstock is made up of older generation,
Conor Gupta: comments that that short seller in London made earlier this year about us having a massive CapEx expense requirement coming up to refleet the entire aircraft or the entire fleet. That's just absolutely not true
Great, thanks for the clarification. Thank you.
Conor Gupta: Thank you. There are no further questions registered at this time.
Thank you.
Conor Gupta: Thanks again to everyone for joining us this morning, taking the time out. We appreciate it. Have a good rest of your day. Thank you, everyone.
Thank you.