Q3 2025 DXP Enterprises Inc Earnings Call
Speaker #1: Hello and thank you for standing by . My name is Mark and I will be your conference operator today . At this time I would like to welcome everyone to the DXP ENTERPRISES INC third quarter 2020 earnings release .
Speaker #1: All lines have been placed on mute to prevent any background noise . After the speaker's remarks , there will be a question and answer session .
Speaker #1: If you would like to ask a question during this time , press power followed by the number one on your telephone keypad . And to withdraw your question , press star one again .
Speaker #1: Thank you. Now I would like to turn the call over to our CFO, Kent Yee. Please go ahead.
Speaker #2: Thank you . Mark , and thank you , everyone for joining us today . This is Kent Yee . And welcome to Dcp's Q3 2025 Conference call to discuss our results for the third quarter ending September 30th , 2025 .
Speaker #2: Joining me today is our chairman and CEO , David Little . Before we get started , I want to remind you that today's call is being webcast and recorded and includes forward looking statements .
Speaker #2: 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 , material effect on our business , on an ongoing basis are contained in our SEC filings .
Speaker #2: Dxp assumes no obligation to update that information . As a result of new information or future events . During this call , we may present both GAAP and non-GAAP financial measures .
Speaker #2: 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 .
Speaker #2: I will now turn the call over to David Little , our chairman and CEO , to provide his thoughts and a summary of our third quarter performance and financial results .
Speaker #2: David .
Speaker #3: Thanks , Ken , and thanks to everyone on our 2020 third quarter conference call . Ken will take you through the key financial details after my remarks .
Speaker #3: After our prepared comments , we will open for Q&A . It is my privilege to share the third quarter results with you on behalf of over 3234 people .
Speaker #3: Congratulations to all our stakeholders and a special thank you to our Dxp people . You can trust . We are pleased to see end market demand and dxp performance continue through Q3 and remain at record levels as we move into the last quarter of 2025 .
Speaker #3: This allows us to achieve another quarter of both solid sales growth and 11% adjusted EBITDA margins. We are pleased to announce strong third quarter results, with sales, operating income, and earnings per share all up over the prior year.
Speaker #3: This is a great way to start the second half of fiscal 2025 . We remain focused on serving our customers , providing products and services that help them save money , consolidate their MRO , spend , manage inventory , and provide solutions to solve their evolving needs .
Speaker #3: Being customer driven and growing sales profitably is our goal . We continue to focus on driving organic and acquisition growth , increasing gross profit margins and increasing productivity .
Speaker #3: Our execution has resulted in physical 2024 and 2025 top line and bottom line growth , both organically and through acquisitions . That said , our growth strategies are working and our acquisition pipeline should add to our results as we close out the fiscal year 2025 and go into the fiscal year 2026 .
Speaker #3: We continue to be excited about the future , delivering a differentiated customer experience , creating and engaging , winning culture for DHH people , and investing in our business to strengthen our core capabilities and drive long term growth .
Speaker #3: Year to date through September 30th , total sales are up 11.8% and adjusted EBITDA is up 17.6% . Last 12 months sales and adjusted EBITDA were 1.6 billion and 217.1 million , respectively , with adjusted EBITDA margins of 11.1% .
Speaker #3: Moving to our third quarter results , total Dxp revenue was 513.7 million and 8.6% and 8.6% increase year over year , with adjusted EBITDA of 56.5 million .
Speaker #3: In terms of Q3 financial results from segment perspective , innovative pumping solutions led the way growing sales 11.9% year over year to 100.6 million .
Speaker #3: Our service centers grew sales 10.5% year over year to $350.2 million. Supply chain services declined 5% year over year to $63 million.
Speaker #3: In terms of IPS , our innovative pumping solution , it bears repeating that we have two broad businesses tied to capital budgets or project work DSPs heritage energy related project work and Dxp water .
Speaker #3: Year to date , Dxp water is 54% of IPS sales versus last year . At this time , it was 47% . As we grow have grown our dxp water platform , we have increased both gross margins and operating income margins for the IPS segment and for Dxp .
Speaker #3: Our energy related bookings and backlog continue to show resilience and perform above our long term averages , albeit not an all time high .
Speaker #3: Additionally , our year to date average remains above our long term average energy IPS backlog . Going back to 2015 , what this indicates is that we continue to feel good at this point in the cycle .
Speaker #3: On energy and water and wastewater related project work . As we have been discussing on previous earnings calls , we have booked a few large projects in both energy and water that have been recognized .
Speaker #3: Some of the revenues in 2025 and will continue in 2026 . We are quoting a lot of opportunities and working hard to convert quotes to bookings .
Speaker #3: As said , Dxp is focus with NIPS will be to continue to manage the demand levels we have , plus finding opportunities in all markets such as energy , biofuels , food and beverage and water and wastewater , and manage pricing and delivery while improving and maintaining margins .
Speaker #3: In terms of service centers , the diversity of end markets , multiple product division approach , service and repair , and our MRO nature within servicers allows us to continue to remain resilient and to continue to experience consistent top line year over year growth .
Speaker #3: A few growth initiatives that are helping Dxp grow percentages at last , over the last several years is technical products like automation , vacuum pumps , new pump brands for water and industrial markets , process equipment and filtration , new markets like water , air compression and data centers need pumps .
Speaker #3: They need water power , cooling and filtration . We have added an e-commerce channel for the generation that wants to buy pumps and parts electronically .
Speaker #3: The service nature within service centers allows us to continue to remain resilient and continue to experience consistent sales performance and continue to find ways to add value for our customers .
Speaker #3: From a regional perspective , regions that continue to experience year over year growth includes South Central California , Southeast South Rockies , Texas , Gulf Coast , and Northern Rockies .
Speaker #3: We have also seen strength in our air metal working and US safety services division , which is also great to see . Supply chain services sales decreased 3.7% sequentially and year over year declined to 63 million in the supply chain services .
Speaker #3: All pricing is electronics , so slow to compressor processes and price increases and inflation and tariffs take longer to implement . That said , SES is adding several new customers and are currently they are being implemented .
Speaker #3: Historically , the latter half of the year is impacted by the holiday season and there being fewer billing days with SES being and also being subject to the customers facility closures and holiday hours .
Speaker #3: Thus , we expect mild Q4 and stronger outlook as we close out Q1 of 2026 . Demand for SES services is increasing because of the proven technology efficiency they perform for all of their industrial customers , and we expect a strong year in 2026 .
Speaker #3: DSPs overall . Gross profit margins for the third quarter were 31.4% , a 50 basis point improvement over 2024 . Overall , I am pleased with our gross margins and our steady improvement over the last two years .
Speaker #3: SG&A for the third quarter increased 11 million versus Q3 of 2024 , as a percent of sales increased , going from 22.5% in Q3 of 2024 to 22.9% in Q3 of 2025 .
Speaker #3: Air A continues to reflect our investment in our people , increasing insurance renewals , technology investments , acquisition support and other growth strategies .
Speaker #3: As always , it is our privilege to share the XPS financial results on behalf of all our people . DSPs . Overall operating income margin was 8.5% , or 43.7 million , which includes corporate expenses and amortization .
Speaker #3: This reflects a 14 basis point increase in margins versus Q3 of 24 . We still feel there is opportunity in our operations to be more efficient , but we have chosen to invest in the business via people and our operations , and we have been focused on growth overall .
Speaker #3: Dcpp produced adjusted EBITDA of 65.5 million in the third quarter of 2025 versus 52.6 million in the same period of 2020 . For .
Speaker #3: Adjusted EBITDA as a percent of sales was 11% for the third quarter . I am pleased with our performance in the third quarter .
Speaker #3: DHH people continued to make great efforts and adapt as we grow and evolve . Into a more diversified and less cyclical business . We call that the next chapter .
Speaker #3: We still have substantial work to do to achieve our efficiency goals , but I am confident that the team will continue to execute and drive sales and profitability .
Speaker #3: We are growing sales more than the market and expect that into the near future . We continue to make progress on our growth strategies and our commitments to our customers .
Speaker #3: As strong we are driving growth and improvements at Dxp , and we look forward to navigating and working through the remainder of fiscal 2025 to continue to build our capabilities to provide a technical set of products and services , and all of our markets , which makes Dxp very unique in our industry and gives us more ways to help our customers win .
Speaker #3: Finally, I would like to thank our people for continuing to maintain 11% plus EBITDA margins, hitting a new quarter. Sales were high in Q3.
Speaker #3: Q3 was another great quarter as we continue to have a successful year in 2025 . We remain excited about the next chapter . And with that , I'm going to turn it over to Ken .
Speaker #2: Thank you . David , and thank you to everyone for joining us for our review of our third quarter 2025 financial results . Q3 financial performance reflects Dkb's ability to continue to successfully navigate through the market and execute and create value for all our stakeholders .
Speaker #2: Our third quarter results also reflect another new record sales watermark as it pertains specifically to our third quarter . Third quarter financial results reflect solid sales growth within IPS , along with an accelerating contribution from Dxp water .
Speaker #2: Record Service Center performance marked by gross margin , strength and stability , and a pickup in sales performance from Q2 to Q3 2025 .
Speaker #2: Consistent consolidated gross margin performance with year to date margins up 89 basis points versus last year . Continued contribution from acquisitions with sales year to date of 74.1 million and consistent operating leverage leading to sustained 11% plus adjusted EBITDA margins .
Speaker #2: Total sales for the third quarter increased 8.6% year over year to a record 513.7 million and 3% compared to Q2 . Acquisitions that have been with us for less than a year contributed 18.4 million in sales during the quarter .
Speaker #2: Average daily sales for the third quarter were 8 million per day , versus 7.92 million per day in Q2 and 7.39 million per day in Q3 of 2020 .
Speaker #2: For adjusting for acquisitions , average daily organic sales were 7.74 million per day for the third quarter of 2025 , versus 6.95 million per day during the third quarter of 2020 .
Speaker #2: For . That said , the average daily sales trends during the quarter went from 7.26 million per day in July to 8.9 million per day in September , reflecting a normal push in the last month of the quarter .
Speaker #2: In terms of our business segments , innovative pumping Solutions sales grew 11.9% year over year and 7.5% sequentially . This was followed by Service Center sales growing 10.5% year over year , and 3.1% sequentially .
Speaker #2: Supply chain services sales declined 3.7% sequentially and 5% year over year . In terms of innovative pumping solutions . We continue to experience strong backlogs in both our energy and water and wastewater businesses .
Speaker #2: Our Q3 energy related average backlog declined 3.3% . This is our first decline in the backlog in ten quarters , but continues to be ahead of all our averages .
Speaker #2: As David mentioned , and as we have been discussing on previous earnings calls , we have booked a few large projects in both energy and water that we have recognized some revenue in 2025 and will continue into 2026 .
Speaker #2: We will be looking to see what happens to our Q4 2025 and Q1 2026 average backlog . The conclusion continues to remain that we are trending meaningfully above all , notable sales levels based upon where our stands today .
Speaker #2: To provide a broader perspective on a nine month comparative basis , our native energy IPS backlog is up 56.2% year over year . We expect this to continue throughout 2025 .
Speaker #2: We also see strength in our IPS water backlog backlog as it continues to grow . Due to a combination of organic and acquisition additions .
Speaker #2: Deep water average backlog is up 7% compared to Q2 . In terms of our service centers , our service center performance reflects our internal growth initiatives along with with our diversified and evolving end market dynamics .
Speaker #2: On a comparative basis , our third quarter of 2025 is now our strongest quarter within service centers . Over the last ten quarters .
Speaker #2: And sets a new sales high . Watermark . Regions within our service Center business segment , which experienced year over year sales growth in South Central California , southeast , North and South Rockies , and the Texas Gulf Coast .
Speaker #2: From a product perspective, we also experienced strength in our air compressors and U.S. safety services divisions. Supply chain services sales performance reflects a 3.7% decrease sequentially and a 5% decline year over year.
Speaker #2: Supply chain Services third quarter sales performance reflects pullback in activity at oil and gas , and our diversified chemical customer sites . Overall , we experienced reduced spending from existing customers by continuing to drive efficiencies and streamlined purchasing that we bring to our new customers .
Speaker #2: Going into Q4 , we expect the next quarter to be impacted by seasonality , with there being fewer billing days as Rs . Customers have facility closures and holiday hours .
Speaker #2: Thus , we expect a mild Q4 and stronger outlook as we close out Q1 of 2026 . However , interest and demand for SCS services is increasing because of the proven technology and efficiencies they perform for all their industrial customers , and we expect a stronger 2026 .
Speaker #2: Turning to our gross margins , Dksbz total gross margins were 31.39% , a 50 basis point improvement over Q3 of 2024 . This improvement is attributed to strength in gross profit margins within service centers , with 117 basis point improvement from Q3 of last year .
Speaker #2: Additionally , the contribution from acquisitions at a higher overall relative gross margin versus our base business helped drive consistent gross margins within consolidated Dxp .
Speaker #2: Acquisitions continue to be accretive to both our gross and operating margins . That said , from a segment mix , sales contribution , service centers contributed 68.16% .
Speaker #2: Innovative pumping Solutions 19.57% and supply chain Services was 12.26% . This sales mix positively impacts our gross margins as we see an uptick in contribution from IPS .
Speaker #2: In terms of operating income, service centers, IPS, and supply chain services each had operating income margins of 14.6%, 18.3%, and 8.4%, respectively.
Speaker #2: The consistency in innovative pumping solutions reflects the impact of our water and wastewater acquisitions at a higher relative operating income margin and a growing percentage of revenue or sales mix.
Speaker #2: Dxp has water has gone from 28% of year to date sales in Q1 of 2023 to over 54% of year to date sales of IPS at the end of the third quarter of 2025 .
Speaker #2: Total Dxp operating income was 43.7 million . In the third quarter , or 8.5% of sales , versus 39.6 million , or 8.37% of sales , in the third quarter of 2024 .
Speaker #2: Our SG&A for the quarter increased $11 million from Q3 24 and 5.7 million from Q2 of this year to 117.6 million . The increase reflects the growth in the business and associated incentive compensation and dxp investing in its people through merit and pay raises .
Speaker #2: Additionally , this also reflects an increase in our insurance premiums , which we changed our renewal from a calendar year to mid-year renewal .
Speaker #2: Continued investments in technology and our facilities , as well as acquisition costs and growth initiatives , is a percentage of sales increased 36 basis points year over year to 22.88% of sales , and was up slightly over 46 basis points sequentially from Q2 of this year .
Speaker #2: Turning to EBITDA , Q3 2025 , adjusted EBITDA was 56.5 million . Adjusted EBITDA margins were 11% . We continue to benefit from the fixed cost leverage we experience as we grow sales .
Speaker #2: This translated into 1.5 times operating leverage in terms of EPs . Our net income for Q3 was $21.6 million . Our earnings per diluted share for Q3 2025 was $1.31 per share , versus $1.27 per share last year .
Speaker #2: Adjusting for one time items , adjusted earnings per diluted share for Q3 2025 was $1.34 per share . Turning to the balance sheet and cash flow .
Speaker #2: In terms of working capital, our working capital increased $15.6 million from June and $73.6 million from December, totaling $364.5 million. As a percentage of last 12 months sales, this amounted to 18.6%.
Speaker #2: This is an uptick from where we have been and reflects the impact of acquisitions and an increase in dxc's capital project work . As we move into fiscal 2026 , we will continue to grow into the working capital as a percentage of sales in particular , the impact from recent acquisitions in terms of cash , we had 123.8 million in cash on the balance sheet as of September 30th .
Speaker #2: This is an increase of 9.5 million compared to the end of Q1 , and reflects our ability to produce free cash flow while managing growth capital expenditures and remaining acquisitive .
Speaker #2: In terms of CapEx , CapEx in the third quarter was 6.8 million , or a decrease of 3.6 million compared to Q2 and a 2.8 million increase versus Q3 of last year .
Speaker #2: We are continuing to make investments in our business software , our facilities and operations for our employees as we move forward , we will continue to invest in the business as we focus on growth .
Speaker #2: That said , as mentioned during the second quarter , over the short to medium term or the next one to 1 to 2 quarters , we should see CapEx lessen and we'll look for it less in 2026 .
Speaker #2: Turning to free cash flow . Free cash flow for the third quarter was 28.2 million , versus 24.4 million in Q3 of 2024 .
Speaker #2: This does reflect a reflect improvements in profitability , along with elevated CapEx , which is primarily growth oriented and highly controllable . Additionally , we continue to focus on tightly managing our capital projects , which we see as an opportunity to further generate and optimize cash flow .
Speaker #2: We have highlighted this in the past as requiring investments in inventory , product and cost and accessibility . That said , we continue to focus on tightly managing this aspect of our business from a cash flow perspective and look to align billings with the to be investments return on invested capital , or ROIC .
Speaker #2: At the end of the third quarter, it was 33% and continues to be measurably above our cost of capital. This reflects the improvements in EBITDA and the operating leverage inherent within the business.
Speaker #2: Additionally , also , it points to our recent acquisitions performance and their positive contribution and accretive impact to both gross profit and EBITDA .
Speaker #2: As of September 30th , our fixed charge coverage ratio was 2.2 to 1 and our secured leverage ratio was 2.3 to 1 , with a covenant EBITDA for the last 12 months of 225.1 million .
Speaker #2: Total debt outstanding . On September 30th was 644 million . In terms of liquidity , as of the third quarter , we were undrawn on our ABL with 31.6 million .
Speaker #2: In letters of credit , with 153.4 million of availability and liquidity of 277.3 million , including 123.8 million in cash . In terms of acquisitions , we have closed five acquisitions .
Speaker #2: Year to date , including two subsequent to the quarter end , and we will look to close at minimum , another three before the end of the first quarter , Dksbz acquisition pipeline continues to remain active and robust , and the market continues to present compelling opportunities .
Speaker #2: That said , we remain comfortable with our ability to execute on our pipeline and valuations continue to remain reasonable . In summary , we are excited about the future in building the next chapter .
Speaker #2: We will keep our eyes focused on those things we can control and what is ahead of us. We are excited because there is still substantial value embedded in DXP.
Speaker #2: Now I will turn the call over for questions .
Speaker #1: We will now begin the question and answer session . If you would like to ask a question at this time , just press star .
Speaker #1: Then the number one on your telephone keypad and your first question comes from the line of Zack Marriot with Stephen Zack . Please go ahead .
Speaker #4: Good afternoon and thanks for taking my questions .
Speaker #2: Good afternoon Zack .
Speaker #3: Yes .
Speaker #4: So sorry I missed the daily sales number for June . If you could just quickly walk through Q3 again and then any color you could share on Q4 thus far ?
Speaker #2: Yeah , no , absolutely . I'll just walk through each month in Q3 and then kind of give you give you our flash look at October for Q4 .
Speaker #2: July was 7.26 million per day , August 7.95 million per day . September 8.9 million per day . And October was 7.59 million per day .
Speaker #4: Much appreciated . Thank you . Looking at EBITDA margins , the last two years , there was a little compression in the margin percentage from 3 to 4 .
Speaker #4: Q. Is it fair to expect something similar this year in Q4 2025?
Speaker #2: Yeah . You know , Zack , actually , I think , you know , last year , which may have been the first time , you know , we started going above 10% EBITDA margins really , really in Q2 , Q3 and in Q4 of last year .
Speaker #2: So point being is , I think a big picture we've said it on on the last couple earnings calls , but that we feel plenty comfortable with 11% .
Speaker #2: Yeah . You know , there may be quarters where it's 11.2 , 11.4 , but but but but really we're trending now I'll call it at a sustainable 11% plus for now as we move into 2026 .
Speaker #2: And we continue to get more acquisitions in , particularly in the water space , we may adjust that . But right now , the 11% is sustainable .
Speaker #2: So hopefully that answers your question around Q4 . Q4 is a lighter , though . I think that's your point . Is a lighter from the number of days in the quarter due to holidays , Thanksgiving and Christmas here in the US and Boxing Day , if you will , in Canada .
Speaker #2: But , but , but we still expect from a profitability perspective to be our mix to kind of get us to that 11% .
Speaker #4: Understood . That's responsive . Thank you . And then corporate expenses aren't something we talk about too much , but there has been some variability just worth asking about today .
Speaker #4: The Q3 number you just reported was just under 26 million . Is that a fair proxy for what we should assume going forward ?
Speaker #4: And what might bias that number higher or lower as you move through the coming quarters ?
Speaker #2: Yeah . So there was a couple unique things in there that I think David and I both called out in our scripts . One , we just and this is the first year we flipped our insurance renewal from a calendar year to a mid-year .
Speaker #2: And so that created July . As when you're paying all the premiums , a little bit of a elevated level on top of that , from an insurance perspective , no different than any other company .
Speaker #2: You know , our insurance overall premiums have gone up slightly . So , so , so so that's what you're seeing from July going forward .
Speaker #2: If you will . And so in Q4 , I think you will see , you know , from a percentage basis very similar .
Speaker #2: The other thing we experienced was just higher . We're self-insured and we play on the claims basis from a health insurance perspective . And we had some unique claims come through , if you will , in Q3 that I can't forecast right now whether that will happen in Q4 or not , but that created an elevated level of cost , if you will .
Speaker #2: That's rolling through that corporate G&A number . And then once again , we're acquisitive , as everyone knows . And so just more so timing than anything else .
Speaker #2: But we've been we've been busy here , if you will , in Q3 from an acquisition standpoint . So our professional fees , if you will .
Speaker #2: And costs kind of were elevated here in Q3 . That will continue . We have a very robust pipeline , but that will continue in Q4 and into Q1 for sure .
Speaker #2: Just given , given our pipeline from an acquisition standpoint . So , you know , hopefully that gives you a color there on that line .
Speaker #4: Yep . Thank you . Last one for me . Can you please touch on any data center exposure or opportunities you guys may have ?
Speaker #3: Sure . I'll take that . We we you know , we're we're we're looking at a lot of a lot of different avenues based on the products that that we represent .
Speaker #3: So we we represent pumps . We represent water . Represent filtration . And so all these data centers are and we also represent power and equipment that handles gas and , and other things .
Speaker #3: So so we have an opportunity there . We're , we're trying to best we can to figure out how to tap into to that market .
Speaker #3: we are getting a little bit here and there , but it's not been a big market for us . We feel like it .
Speaker #3: It can be from and and so we're we're attacking it pretty hard . It's pretty diversified across the country . So trying to get on top of all the projects and try to get some , some credibility , I guess with with the fact that we can do a lot of things is , is what we're what we're doing .
Speaker #3: But really at this point , I'm going to tell you that it's it's not been a big win for us . And , and yet , I think it's a great opportunity .
Speaker #4: Thanks for the color . I'll turn it back .
Speaker #1: There's no further questions at this time . I will now turn the call back over to David for closing remarks . David .
Speaker #3: Yeah . First , you know , let me let me thank all our DCS people for certainly setting record sales . I think that's that's awesome .
Speaker #3: I think as we manage the company , the hardest thing we do is satisfy customers and get get bookings and sales . So , you know , expenses , you know , they were they were a little surprising .
Speaker #3: But but they were really for all the right reasons and for the things that are necessary for us to be a growth oriented company .
Speaker #3: So I'm not I'm not concerned about that . There's nothing really broken about Dxp . Where we we had acquisitions , expenses and the dollars are certainly going up , but it was a little a little concerning that , that the expense percentage went up .
Speaker #3: So so we're not crazy about that . But but it's certainly a lot easier to fix than sales . I also want to thank , you know , our suppliers .
Speaker #3: It seems like they're doing a much better job with deliveries and they're trying to manage their costs the best they can . And keep us competitive in the marketplace .
Speaker #3: And we pass on those those . Those increases . But and that seems to be working all right . I'm pretty proud of the fact that we've got our gross profit margins up slightly .
Speaker #3: And , and and maybe a better statement . Is there certainly holding . So I feel good about that . Of course , thanks to our shareholders and and thanks for everybody supporting Dxp .
Speaker #3: You know , in summary , I think you can just say , well , you know , we just had record sales , gross profit margins or are good in holding up expenses .
Speaker #3: Were a little higher than expected . But they were for all the right reasons . Free cash flow improved at 28.2 million , which is great .
Speaker #3: We continue to hit adjusted EBITDA margins of 11% . We're we're excited about that . If we if we're have any negatives , it would be a little bit in the in the booking side .
Speaker #3: And that we trace that back to kind of our smaller piece of oil and gas that we have today that markets still still struggling as far as growth is concerned .
Speaker #3: And but but they tell me even there that quoting activity is up and doing well . And we just got to get from the quote to , to the bookings .
Speaker #3: But anyway , so we're not we're not concerned about any particular markets . We're not concerned about tariffs . We're not concerned about our government as it affects the SP .
Speaker #3: And so we feel good , you know , about our future . And so thank you for joining our call today . And look forward to talking to you next .
Speaker #3: Next quarter . Thanks .