Q4 2025 Element Fleet Management Corp Earnings Call

Speaker #1: At this time, all participants are in a listen-only mode, and you are reminded that this call is being recorded. Following the prepared remarks, there will be an opportunity for analysts to ask questions, to join the question queue, press star, and then 1 on your telephone keypad.

Speaker #1: In the event you need assistance during the call, you may signal an operator by pressing star and then 0. Element wishes to caution listeners that today's information contains forward-looking statements and the assumptions on which they are based, and the material risks and uncertainties that could cause them to differ are outlined in the company's year-end and most recent MD&A and AIF.

Speaker #1: Although management believes that the expectations expressed in the statements are reasonable, actual results could differ materially. The company also reminds listeners that today's call references certain non-GAAP and supplemental financial features.

Speaker #1: Management measures performance on a reported and adjusted basis and considers both to be useful in providing readers with a better understanding of how it assesses results.

Speaker #1: A reconciliation of these non-GAAP financial measures to IFRS measures can be found in the company's most recent MD&A. I am now pleased to turn the floor over to Laura Dottori, Atenasio, Chief Executive Officer.

Speaker #1: Welcome, and please go ahead.

Speaker #2: Good morning, and thank you for joining us. The fourth quarter marked the year of record performance for Element. Highlighting the disciplined execution that we applied in support of our long-term strategy.

Speaker #2: In 2025, we advanced our key focus areas: continued to invest in our capabilities and delivered strong financial results. Our efforts translated into record net revenue and double-digit growth in both adjusted earnings and free cash flow per share.

Speaker #2: Adjusted return on equity was 17.9%, reflecting the strength of our capital light model. In recognition of our cash generation and confidence in our outlook, we increased our annual common dividend by 15% to 60 cents a share.

Speaker #2: Importantly, we achieved these results while successfully navigating a complex operating environment earlier in the year. This performance underscores the resilience of our business model: the dedication of our team and the growing relevance of our solutions-led tech-enabled platform.

Speaker #2: Throughout the year, we saw strong client engagement and building commercial momentum. In 2025, we welcomed 156 new clients. We continued to convert self-managed fleets and expanded relationships with existing clients through more than 1,000 share of wallet expansions.

Speaker #2: Our strategic advisory services team identified over 1.6 billion in cost savings opportunities across our clients' fleets and approximately half of those opportunities have already been actioned.

Speaker #2: A testament to the tangible value that we provide. At the same time, we've been strengthening the foundation of our business. The investments we've made over the past two years are translating into measurable outcomes.

Speaker #2: Our Dublin leasing initiative continues to perform as expected, and we are firmly on track to achieve our previously communicated run rate targets of 30 to 45 million in revenue, and 22 to 37 million in adjusted operating income by 2028, with a targeted 2.5-year payback.

Speaker #2: Electrification is another area where we made meaningful progress in 2025. We increased electric vehicles under management by 36% year over year, to approximately 129,000 vehicles.

Speaker #2: Our charging platform is now live in the US and Canada, and we plan to expand globally in 2026 through new partnerships across our markets.

Speaker #2: Alongside improvements in our core business, we continue to broaden our offering beyond traditional fleet management and accelerate our entry into mobility. Since launching Element Mobility, we've developed a clear go-to-market approach centered on connected mobility including telematics, route optimization, and adjacent solutions.

Speaker #2: The integration of autofleet has been central to our progress. By bringing development in-house, we are lowering structural costs and increasing our agility. Accelerating product cycles, shortening time to market, and responding faster to clients.

Speaker #2: We expect this to be a sustained competitive advantage. We launched our Element One app for drivers in March. And feedback has been very positive, as our adoption continues to grow quickly and we expect a broader rollout throughout 2026.

Speaker #2: Our digital ordering platform remains on track, with the initial MVP targeted for release in the first half of 2026. In December, we completed the acquisition of CarIQ, adding embedded vehicle-initiated payment capabilities that enhance fleet operations and data connectivity.

Speaker #2: Together with autofleet and our partnerships with industry leaders such as Samsara and Motus, we announced earlier in 2025, CarIQ meaningfully advances our digital strategy and our mobility platform.

Speaker #2: Collectively, these actions improve how we operate, enhance the client experience, and support scalable growth. Looking ahead, the steps we've taken in 2025 position us well to capitalize on future opportunities.

Speaker #2: We closed the year having made strong progress on our digitization agenda, deepened client relationships, and broadened our capabilities. The investments we've undertaken have resulted in a stronger operating model, and position Element for sustainable growth in the years ahead.

Speaker #2: And with that, I'll turn it over to Heath to cover the financials and take us through our 2026 guidance.

Speaker #3: Thank you, Laura, and good morning, everyone. Our results this quarter and throughout 2025 reflect a continued disciplined execution of our strategy. We delivered strong performance across key metrics, including record levels of net revenue, adjusted operating income, and margins, and adjusted EPS and free cash flow per share.

Speaker #3: These measures, all finished the year within or above our 2025 guidance ranges. I'll begin with a review of our full-year performance on an adjusted basis and then discuss some of the non-recurring items that impacted our results in Q4.

Speaker #3: In 2025, net revenue was 1.2 billion dollars, an increase of 9% year over year, reflecting strength across all of our revenue streams. Services revenue, totaled 623 million dollars, up 5% from last year, primarily driven by increased penetration and utilization across our client base.

Speaker #3: While VAM increased 3% during the year, the revenue impact builds over time as onboarding and implementation progress. We expect this will support continued service revenue growth in the coming quarters.

Speaker #3: Financing revenue was 498 million dollars, up 11% year over year, driven by ongoing efficiencies from our leasing and funding initiatives, higher gain on sale in Mexico, and growth in net earning assets.

Speaker #3: This resulted in the core NFR yield of 4.73%, an expansion of 35 basis points versus 2024. This indication revenue for the year was 64 million dollars, up 50% from last year, despite a reduction of 1.1 billion in assets indicated.

Speaker #3: This was largely driven by favorable mix: the reinstatement of bonus depreciation and continued demand for our syndication product. Full-year originations were 6.5 billion dollars, down 4% year over year, and below guidance as previously communicated.

Speaker #3: This primarily reflects seasonal softness in client ordering during the summer months, combined with later-year model availability that pushed deliveries into future periods. Importantly, underlying demand remained strong.

Speaker #3: Order volumes reached record levels of 2 billion dollars in the fourth quarter and 6.2 billion for the year, providing good visibility into originations for the first half of 2026.

Speaker #3: As mentioned, our reported fourth-quarter results were impacted by several non-recurring items. The majority of which were non-cash in nature. Most significant items included: a 130 million dollar deferred tax asset adjustment related to updated jurisdictional profit expectations, legacy ordering platform resulting from the continued transition to the autofleet technology platform, and 9 million dollars of restructuring and acquisition-related costs related to the CarIQ transaction, which closed on December 31.

Speaker #3: We do not believe these items are indicative of our underlying operating performance, and therefore have been excluded from our adjusted results. On an adjusted basis, operating expenses totaled 520 million dollars, up 7% year over year, reflecting continued investment in digitization, scalability, and product expansion.

Speaker #3: The combination of solid revenue growth and disciplined expense management generated positive operating leverage of 2.1% and resulted in adjusted operating margin of 56.2%, an expansion of 90 basis points year over year.

Speaker #3: Our performance translated into strong bottom-line results, with adjusted earnings per share of $1.24, an increase of 13% year over year, and adjusted return on equity of 17.9%, up 190 basis points from 16% in 2024.

Speaker #3: Briefly, on the fourth quarter, our adjusted EPS is 33 cents, was up a strong 24% year over year. Underpinned by record quarterly revenue of 313 million dollars.

Speaker #3: Top-line growth is 16%, reflected contributions from all revenue components, including service revenue, which rose 4% quarter over quarter to reach a record level of 163 million dollars.

Speaker #3: Operating leverage in Q4 was a robust 7.3%, and we generated adjusted return on equity of 18.5%. Turning to capital allocation, we repurchased 5.4 million common shares in 2025 at an average price of $32.10 per share.

Speaker #3: In total, we returned 269 million dollars to shareholders, through dividends and share repurchases. This represented 43% of our adjusted free cash flow, and was supported by strong cash generation, with adjusted free cash flow per share increasing 15% year over year, to $1.57.

Speaker #3: Capital expenditures remained well-contained. Totaling 71 million dollars in 2025. In addition, we continue to manage leverage within our target range, ending the year with a debt-to-capital ratio of 76.9%.

Speaker #3: As Laura mentioned, we have enacted a 15% increase in our common dividend to 60 cents per share annually, and have remained active on share repurchases thus far in 2026.

Speaker #3: I will now turn to the year ahead and our 2026 financial guidance. We expect 2026 will be another year of solid financial performance with element.

Speaker #3: Highlighted by revenue growth in the range of 8 to 10 percent and the combination of positive operating leverage and share repurchases driving strong growth rates in adjusted EPS and free cash flow per share.

Speaker #3: Specifically, we expect to deliver: net revenue of 1.28 billion dollars to 1.305 billion. Adjusted operating income in the range of 720 to 745 million dollars.

Speaker #3: Adjusted operating margin in the range of 56.3% to 57.3%. Adjusted EPS between $1.40 and $1.45. Adjusted free cash flow per share of $1.67 to $1.72.

Speaker #3: And originations between 6.5 and 6.9 billion dollars. These ranges provided prior to any material foreign exchange fluctuations or adverse impacts relating to changes in global trade agreements or broader political uncertainty.

Speaker #3: In conclusion, 2025 was another year of solid performance across the element business. We entered 2026 with strong momentum and a resilient financial position, giving us confidence in our ability to continue executing our strategic priorities and delivering value for our clients and shareholders.

Speaker #3: Thank you. Operator, we are now ready to take questions.

Speaker #1: And ladies and gentlemen of the audience joining today, analysts who wish to join the question queue, you may press star and then one on your telephone keypad.

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Speaker #1: We will ask you that you please limit yourself to two questions and then if you have anything further, you are invited to resignal. Once again, ladies and gentlemen, that is star and one.

Speaker #1: If you would like to ask a question, we'll pause for a moment to give our audience the opportunity to signal. We'll take our first question today from the line of Vasu Govil at KBW.

Speaker #2: Hi, thank you for taking my question. I guess, Laura, I first wanted to ask about the CarIQ acquisition. I know you mentioned briefly in your prepared comments, but if you could elaborate a little bit on how you think about strategic benefits of owning that asset and bringing some of the payment functionality in-house.

Speaker #2: And I know it's early days, but sort of any color on how you think about the contribution that this business could have over time on revenue and margins and if anything is baked into the 2026 outlook.

Speaker #2: Thank you.

Speaker #3: Yeah, absolutely, Vasu. Thanks for the question. So super excited about the CarIQ acquisition that closed in December of 2025. So CarIQ has this in-vehicle payment solution that effectively enables vehicles to act as payment nodes to help our clients reduce fraud, modernize their billing, and it can really deliver, I'm going to say, scalable solutions to our clients.

Speaker #3: So it's exciting for us in that it's going to enable us to embed payments into our digital ecosystem. It's going to allow us to transform what I'd say is a relatively outdated process into a really strategic one with better margins for us.

Speaker #3: And it's going to allow us to capture more spend. And for our clients, it does many things, including removing the need for physical cards, embedding payments directly into the vehicles in their telematics environment.

Speaker #3: So it's going to be, well, today it can be used for fuel, tolls, violation, and parking, and it has some really interesting future use cases that we're super excited about.

Speaker #3: Our plans to integrate it into our element one, our client portal, into our driver app. We're super excited. I would tell you this is for the years that I've been here, this is the first time we have had a lot of reverse inquiries from prospects and clients that want to access this capability.

Speaker #3: And so exciting when we did our due diligence, CarIQ had one case we saw with a client where they could cut their fuel spend by almost 14% just by eliminating card misuse.

Speaker #3: So we think this has great capability for our clients. We did a few proof-of-concepts ourselves. And with one of the clients, we did this with, it provided such great results that our client told us they didn't want to come off the platform and wanted to continue to use this.

Speaker #3: So we're feeling really optimistic and positive about what this can do, not just for us, but for our clients. And so from a financial impact perspective, I'd say a little dilutive in this year given that this is the year that we need to do implementation and conversion.

Speaker #3: We do expect it's going to have a meaningful impact for our clients as I talked about, so to really help them reduce their total cost of operation for us, it'll be over time that we'd expect it to drive more profitability.

Speaker #3: So we are projecting some, I'm going to say, modest decretion that should come in 2027, and that would be on both an adjusted operating income and free cash flow basis.

Speaker #2: Great. Thank you. That's great color. And then maybe just my second one is on the services, servicing income growth. That's obviously lagged a little bit.

Speaker #2: I know I caught your comments about the WOM growth, and that should help us in 2026. But maybe if you could talk a little bit more about what sort of fell short of expectations this year.

Speaker #2: And then as we think to 2026, what kind of growth should we be modeling for that piece of the business? Thank you.

Speaker #4: Yeah, good morning, Vasu. I'll take that one. So from a service revenue perspective, in 2025, we delivered 623 million dollars. Excluding FX and the one-time items, we have announced it's approximately 7% growth year over year.

Speaker #4: And Q4 reached a record level of 163 million dollars. What we did see in the first half of the year with the macroeconomic environment, including tariff uncertainty, and trade-related concerns, is we did see a slower growth rate in the first half of the year of WOM growth.

Speaker #4: And that did moderate sort of the full-year service revenue expansion. Obviously, in the second half of the year, WOM growth resumed 6%, 3% growth, rather, in the last six months.

Speaker #4: Which gives us good momentum going into 2026. What we do see, though, is typically the incremental contribution of the WOM growth does build over time.

Speaker #4: So as we cross-sell additional products, as utilization on the vehicles increases over time, and also many of the vehicles on board, especially in Q4, only contribute partial revenue for that period.

Speaker #4: So we expect over the medium term, services will continue to remain the strongest part of our growth driver. And we're certainly focused on accelerating WOM, expanding our product penetration, as well as continuing to enhance our product set and Laura took us through the most recent acquisition in CarIQ.

Speaker #2: Thank you very much.

Speaker #5: Our next question today will come from the line of John Aiken at Jeffrey's. s. Please go ahead. Your line is open.

Speaker #6: Good morning, Keith. Just a couple of questions that fall out from the guidance that you provided, which is not an argument. Thank you very much for that.

Speaker #6: But when we take a look at the anticipated originations obviously below the levels of the guidance that you had last year, what's impeding the outlook for originations?

Speaker #6: And then what impact should we expect that to have under vehicles under management growth?

Speaker #4: Yeah, good morning, John. So maybe I'll touch on originations for 2025 more broadly. And then we can talk about sort of impact to 2026.

Speaker #4: So 2025, we delivered 6.5 billion dollars in originations. And that was slightly down year over year. And 200 million dollars below our guidance range.

Speaker #4: It is important to contextualize this against 2024, which benefited from supply chain normalization and the backlog conversion that did elevate origination volumes. What we also saw in Q4 was we had really strong demand.

Speaker #4: So we had 2 billion dollars of orders in Q4. We did see a modest extension in the order to delivery cycle times for vehicles that required upfit.

Speaker #4: And that pushed some of those Q4 orders into 2026, but gives us a good starting point for 2026. So in terms of our guidance, we're guiding 6.5 to 6.9 billion dollars.

Speaker #4: That implies 7% growth at the upper end of that range. And to answer your question on impact in revenue, originations is an important metric, but it can fluctuate based on client behavior.

Speaker #4: And it should be viewed alongside other metrics. So WOM growth, net earning assets, yield, and the latter two are primarily the drivers of net financing revenue.

Speaker #4: And again, in 2025, we saw a really strong improvement across both of those metrics. NEA was up 3%. Our average yield was up 35 basis points.

Speaker #4: And that ultimately drove record net financing revenue of 498 million dollars.

Speaker #6: Thanks, Keith. And then in terms of the guidance, the free cash flow per share growth implied is a little bit lower than what you're forecasting for the UPS growth.

Speaker #6: Should we assume that we're looking at higher sustaining capital investments like we saw in the fourth quarter throughout 2026?

Speaker #4: Yeah, maybe I'll take the sustaining capital fourth quarter question first, and then come back to the sort of the free cash flow growth. So Q4 was elevated.

Speaker #4: There's some timing in there. We continue to target approximately 80 million dollars of spend across both sustaining and growth capex. And nothing has changed from that perspective.

Speaker #4: In 2025, we actually saw slightly lower spend where we spent 71 million dollars in capex across the two. Which is one of the reasons that impacted the free cash flows.

Speaker #4: So when we think about free cash flow relative to EPS, it's really mechanical. So nothing has changed in terms of our ability to generate cash from the business.

Speaker #4: And it is timing. So free cash flow actually outperformed EPS in 2025. And was really, really strong. And we just see that sort of flipping around in 2026.

Speaker #6: Understood. Thanks. I'll read Q.

Speaker #5: We will hear next from the line of Stephen Boland at Raymond James. Please go ahead.

Speaker #6: Thanks. I hate asking accounting questions, but Heath, I'm going to can you explain what updated jurisdictional probability outlook what that actually means on that charge?

Speaker #4: Yeah, no problem, Steve. I love accounting questions. So maybe I'll just give a bit of more color into sort of the key one-off items.

Speaker #4: So the first one, deferred tax asset, we recorded 130 million dollar partial de-recognition of a historical deferred tax asset. I want to stress that this does not reflect any deterioration in the operating performance of any of our geographies.

Speaker #4: And all of our regions continue to perform strongly. So the change really relates to some internal intercompany funding structure changes. As we look to optimize how we sort of fund the business internally, and ultimately from a funding perspective, this gives us increased flexibility to raise more local funding particularly in areas like Mexico where we're seeing strong growth.

Speaker #4: So it's important to note it has no impact on our effective tax rate or cash tax rate. It's a non-cash accounting adjustment. And it does not impact sort of global profitability or importantly, impact our ability to utilize those tax losses in the future.

Speaker #6: Okay. So this is really the jurisdictional is Mexico. That's kind of where it's focused?

Speaker #4: Some of the focus is Mexico, but it's a realignment of our internal funding structures and intercompany funding structures globally.

Speaker #6: Okay. I'm not sure who this question can go to, but I guess when we're a bunch of us were in Mexico, I don't know, 18 months, two years ago, there was a program that was talking about a global review of services pricing and there was going to be a net benefit.

Speaker #6: That was talked about. I won't say the number, but I'm just wondering has that global review been completed and is that kind of baked into some of the results in '25?

Speaker #6: I don't think certainly I haven't asked this question, but and is that I guess is that review completed at this point?

Speaker #4: Yeah. So the pricing and go-to-market strategy is something we continue to refine not only for Mexico, but all locations across the globe. We set up the leasing business and have seen some strong output as we continue to mature that leasing business.

Speaker #4: And the learnings that we have do get applied to Mexico. So yeah, we continue to refine our strategy from that perspective. Across all locations.

Speaker #6: Okay. I'll sneak one more in here. Just Laura, you talked about the and I'm probably a broken record here. The partnership with some Sarah you mentioned in your opening remarks.

Speaker #6: Can you just provide an update? What that partnership is starting to look like? What services are cross-services that you're looking to add, referrals, etc.?

Speaker #6: It'd be helpful, please.

Speaker #7: Yeah, sure, Steve. I guess what we talked about these partnerships with Modus that do reimbursements for vehicle expenses for individuals, and then Samsara, who have telematics, camera, productivity offering.

Speaker #7: And all of that was done really to add, I'm going to say, additional services for our clients. We wanted to work with some of the best in the industry, and that's what we're doing.

Speaker #7: And it's going pretty well. Again, early days. But everything's been quite I'm going to say positive in line with what we expected. With both Samsara and Modus, we've already activated units and clients that have come through the referral program.

Speaker #7: And so all looking good. Worth a reminder, we had said that in 2026 that we were expecting those partnerships to give us about mid-single digit revenue.

Speaker #7: And so we're on track for that.

Speaker #6: Okay. Thanks. I'll read Q.

Speaker #5: Our next question today will come from Tom MacKinnon at BMO Capital.

Speaker #8: Yeah, thanks. Morning. Two questions. First, just with respect to share pace. Year to date, you got the preferreds out of the way. Converts out of the way.

Speaker #8: How should we be thinking about share buybacks? Should we sort of extrapolate a little bit about the accelerated pace you've had? And you do have a 10% NCIB.

Speaker #8: That was launched mid-November 2025. And I have a follow-up. Thanks.

Speaker #4: Yeah. Good morning. So in 2025, we paid out 43% of our free cash flow in dividends and share repurchases, so 150 and 120 million dollars.

Speaker #4: For 2026, as Laura announced, we have increased 15% increase in the dividends to 60 cents per share. Which is approximately 28% of our trailing 12-month free cash flow.

Speaker #4: In the first two months of this year, we've already repurchased 34 million dollars of active in share repurchases for the 2026 year.

Speaker #8: Okay. And maybe you can talk a little bit about expansion in the services. Update on insurance services. And how should we be thinking about service attachment rates going forward?

Speaker #8: Thanks.

Speaker #7: Yeah. Thanks, Tom. I'm I'll start off just maybe talking about insurance, and then I'll let Heath take that broader question. Services in general. So you'll recall, and we talked about this, we launched our insurance offering in January of 2025 under the banner of Element Risk Solutions.

Speaker #7: And we did that in partnership with Hub. So our plan was to combine insurance coverage placement. We were going to do that with claims management and safety services and do it in a modernized way.

Speaker #7: As I believe I shared, we did miss the mark on this one in that we had some gaps in our product offering. Some gaps in our go-to-market approach.

Speaker #7: And I guess I'd also say from a lessons learned perspective, we underestimated the complexity of standing up our insurance offering inside of our fleet ecosystem.

Speaker #7: So while we still believe there's a worthwhile opportunity for us in insurance, we remain committed to doing it. We have put it on the back burner.

Speaker #7: Given some of the things we talked about, like our car IQ acquisition that have some real benefits to us in the short term, so an insurance we're making some organizational changes.

Speaker #7: We're working with Hub, and we're looking at how we refine our approach and fill some of those gaps before we come back to market with the relaunch.

Speaker #7: But we are still selling the product. It's just not I'm going to say exciting enough to deliver what our expectations were when we first talked about this ideation and maybe with that, I'll hand it over to Heath to talk about the broader services offering.

Speaker #4: Yeah, absolutely. So we expect the VAM attachment rights to continue to migrate higher. It's important to note, though, that new clients that you onboard, sometimes have a dilutive impact to that migration.

Speaker #4: And we saw that in Q4 where the new VAM we brought on had a lower attachment rate of 2.2 services per unit. Obviously, the car IQ VAM came on, had one services per unit.

Speaker #4: So those items do dilute the broader portfolio. But we expect over time for that VAM per unit to migrate over up over time. Which so increased VAM, increased product penetration, and services per VAM will continue to drive higher service revenue over time.

Speaker #4: And then maybe just to circle back on your previous question on the share buybacks, so we just to close that out, we generally target sort of a 1 to 2 percent of shares outstanding.

Speaker #4: I think we were 1.3% for 2025 and expect to sort of be at the higher range for 2026.

Speaker #8: Thanks.

Speaker #5: A reminder to our phone audience that as Star and One, if you would like to ask a question, moving forward, we'll hear from Munish Garg at CIBC.

Speaker #5: Please go ahead.

Speaker #9: Hi. Good morning, everyone. Just one question for me. So on the off-balance sheet structures, I was wondering if you could provide an update on the progress on the new off-balance sheet structures that you have been working on similar to the Blackstone that was announced last year.

Speaker #4: Yeah, absolutely. Good morning. So during the quarter, we did in person some one-time costs to enhance and expand our funding structure. So we do already have a strong and diversified funding platform.

Speaker #4: But this initiative is designed to provide additional flexibility as we grow the business while optimizing for yield and overall returns. So during the quarter, we made meaningful progress.

Speaker #4: However, we're not yet in a position to formally announce the associated transaction.

Speaker #8: Thank you. I'll leave it there.

Speaker #5: Our next question this morning will come from Graham Ryding at TD Securities.

Speaker #10: Oh, hi. Good morning. Laura, this is probably for you just interested in about the autonomous vehicle sort of area. It seems like it's developing quickly.

Speaker #10: Is this a fleet management opportunity for you and how much of an area of focus is this for you relative to everything else you've got going on?

Speaker #7: Yeah, Graham, thanks. For that question, super important. Which in large part, we started doing all the digitization and automation and acquisition of auto fleet all of that to ensure that we remain in the connected vehicle.

Speaker #7: So I tell you today, autonomous vehicles represents a great opportunity for our company. We're starting to see some of them going from, I'm going to say, piloting to commercialization.

Speaker #7: And we know that in doing so, they're going to have to scale through fleet ownership. So all of that's going to require funding, branding, maintenance oversight, safety reporting, real-time monitoring, scheduling, you name it.

Speaker #7: Those are all the things that we offer today. And that we'll be able to offer to autonomous vehicles. So I would say with everything we've been doing, we are incredibly well positioned to support autonomous vehicles.

Speaker #7: And I believe we'll be able to win in the space just given the operational expertise that we have. So a positive.

Speaker #10: Okay. Perfect. Maybe on more of a sort of competitive macro question, just GenAI and the related competition, it seems to be sort of weighing on the markets and concerns.

Speaker #10: In a lot of sectors, can you talk about the durability of your business, where you could see some competition from AI-related competition or where do you see the business being more durable and positioned well?

Speaker #7: Yeah, absolutely. Look, I think our stock did get caught up in all of that. And AI does have the potential to pretty much upend absolutely everyone's business models.

Speaker #7: That said, for us, I think AI is going to have a meaningful benefit for us, not just from an internal efficiency perspective, but also from a client experience perspective.

Speaker #7: So again, we're super excited about the opportunity that that's going to present. And I talked a bit about it, but we started a couple of years ago.

Speaker #7: To digitize, to automate, and that's where we put all of our pretty much capital allocation. So it's been to transition this, I'm going to say, leadership position that we've had in fleet management to intelligent mobility that we talk about.

Speaker #7: So we could really transform what I'd say has been historically somewhat of an antiquated industry into intelligent mobility. So with auto fleet in 2024, not only did we pick up, again, a phenomenal team of experts, but we picked up a great platform that we're building element off of.

Speaker #7: And that platform, and this is important, and we never really talked about it a lot when we announced the acquisition, but it did come with AI already embedded in it.

Speaker #7: And it has a, I'm going to say, an AI tool in it called Nova. One that can simulate whether it's supply-demand patterns and things in road optimization.

Speaker #7: Improve fleet deployment, reduce downtime, etc. And Nova was actually the first AI-powered large language model that was designed specifically for fleet management. And it's so good that it actually won an auto tech AI innovation of the year award back in 2024 at, I think it was the Auto Tech Breakthrough Awards.

Speaker #7: So we are in a really good place with some of the actions that we've taken over the years. And I just say for element more broadly, we also went out and got AI licenses for our team members did all the training.

Speaker #7: We had all of our functions come up with use cases that could help increase client experience and take out cost. And so now in 2026, I'd say we're moving from that broader experimentation we did in 2025 to a lot more implementation in 2026 that's going to allow us to reduce manual processes and just move even faster in terms of automating how we do things.

Speaker #7: And I won't bore you with I find them exciting, but with different use cases we have and the things we can do. I just say that pretty much every part of our business, when we look at it, AI can help us improve.

Speaker #7: And do a lot better. And that's why we see it as a positive and then when you look at our broader business and we talk a lot over the years about how resilient we are, we benefit from and we don't talk about it perhaps as much, but we've got some of the things that will allow us to continue to win.

Speaker #7: We've got scale with one and a half million vehicles. We've got solid funding capabilities that can support all of our leasing. And again, leasing requires people, requires specialization and a balance sheet.

Speaker #7: And that's almost half of our business. And again, we've got our strong OEM relationships. Where we get preferred vehicle pricing allocation for our clients in an incredibly large network of service providers.

Speaker #7: That also help drive savings for our clients. So all that to say, I think we're really well positioned. From a resiliency perspective, and that AI as it goes is just really going to help further enhance our value proposition for our clients.

Speaker #7: So again, feeling very excited about this one. And looking forward to as we go in 2026, delivering on more capability through our element one platform.

Speaker #10: That's it for me. Thank you.

Speaker #11: And a reminder to our phone audience, if you also have a follow-up, you are invited to signal with star and one for a question.

Speaker #11: We'll move forward to the line of Bart Dziarski at RBC Capital Markets.

Speaker #12: Great. Thanks for taking the question. Good morning, everyone. Wanted to ask around element mobility and the auto fleet. In your prepared remarks, Laura, you talked about lower structural costs and increased agility.

Speaker #12: And just hoping you could maybe help us out with some quantification or numbers around those two benefits.

Speaker #7: Yeah. Happy to talk about both. And I'll ask Keith maybe to clean up my answer because I might not give you the answer that you're looking for.

Speaker #7: But from an auto fleet perspective, and I know this isn't what you're looking for, but from a payback period, from where I stand, this paid back in spades already, like almost from the first month.

Speaker #7: So for auto fleet, very specifically, the company is a standalone. It's ARR was up, I think, almost 50% over last year. So that's a positive.

Speaker #7: But more importantly, it's really everything it's been doing for element or what we're calling element bring in, and I had some of that in my prepared remarks, but bringing in all of our development in-house or a lot of it, I should say, we're just much more agile and we can bring products to market sooner.

Speaker #7: So just shorter time to as a sustained competitive advantage for us. And that it's got I'm just intrinsic value that is hard to quantify, although Keith is doing a pretty good job of that.

Speaker #7: Where we're looking at the amount of cost avoidance we have, savings and reduced cycle times and whatnot. And that's what allowed us to create this element mobility that we talked about.

Speaker #7: And so it's really an umbrella, or if I could call it a division that's meant to drive innovation across our fleet landscape. And so sitting under this, if I can call it an umbrella, we have things we've talked about, our innovation lab that's going to be focused on next wave technologies, so that'll include some of the things we talked about earlier, whether it's autonomous vehicles, AI, we'd also look at robotics.

Speaker #7: So all the things that are really going to dynamically transform, I'd say how businesses manage their fleets. And so that would sit there, would have our intelligent routing, ride-hailing, telematics in vehicle payments, etc.

Speaker #7: And so in setting that up for sort of what comes next, we think that'll allow us to lead on, I'm going to say, transformation without losing focus on execution and the day-to-day stuff that we have that we do so well when it comes to leasing and different services that we provide.

Speaker #7: And so for mobility, there is no real number as we sort of put things under this umbrella. And we're going to take 2026 to think through what that looks like and I know I've overtalked, but I'll hand it over to Heath to see if he has what you're looking for, which are numbers.

Speaker #13: Yeah. Good morning, Barton. I'd probably break it down into two components. So the first one would be from a CapEx perspective, and the spend that we had to incur to deliver some of our key projects that auto fleet have delivered.

Speaker #13: We saw a meaningful reduction in the cost of those. So a number of those projects we had scoped up with external parties, prior to the transaction.

Speaker #13: With auto fleet taking them on, we saw upwards of a 60% cost reduction and that was partly or one of the reasons why we saw reduced CapEx spend of 71 million dollars for the year, relative to the 80 million dollar target.

Speaker #13: So that is one benefit. The other benefit is on the operating expense side of the equation. You do see in the investor presentation, we break out the 9 million dollars of efficiencies achieved during the year.

Speaker #13: What I would say is that most of spend is really focused on digitization, product expansion, and focused on growth. But that does have an added benefit on automating sort of internal processes and those sorts of things that do have an OPEX benefit as well.

Speaker #13: And I think you saw that in 2025, where our expense rate normalized from what was a double-digit expense growth rate in prior years to 7% in 2025.

Speaker #13: So looking forward, we expect our expenses will continue to grow as we do invest in the business. So new products, new capabilities, digitization. But we expect that those efficiencies will continue to drive positive operating leverage.

Speaker #12: Awesome. That's very helpful, Connor. Thank you. And then one thing that jumped out this quarter was we saw continued VUM acceleration. Despite origination's declining.

Speaker #12: And so I think there's an underlying trend there where maybe you're not as reliant incrementally on originations needing to drive VUM growth. And if that's the case, where are you seeing some other benefits or wins, if you will, on the VUM side?

Speaker #13: Yeah. So it's a great question. The VUM and the originations don't necessarily move in unison. We can grow VUM by bringing on service-only VUM and we can also have origination growth without actually driving VUM growth, where it's just clients returning an old vehicle that and taking out a new vehicle at a higher cap cost.

Speaker #13: So they are somewhat decoupled, but over time, we expect growth in both originations and VUM. And as I sort of spoke on the top, we did see a slow start to the year on the VUM growth with macroeconomic environment.

Speaker #13: But pleasingly, we saw a strong increase in the back half of the year. And with things like Laura has spoken about, so auto fleet, motors, Samsara, car IQ, we expect that those things will also help us drive VUM growth and service revenue growth into the future.

Speaker #12: Great. Thanks, Heath. That's it for me.

Speaker #14: Our next question will come from Jaeme Gloyn at National Bank Capital Markets.

Speaker #15: Yeah. Thanks. Good morning. Just wanted to maybe dig in on the syndication a little bit. Another quarter of Is that something we should kind of expect here going forward?

Speaker #15: Or are there some other factors that's driving that for the past couple of quarters? And then in terms of the volumes, thinking back to 2024, it was well over 3 billion.

Speaker #15: But outside of that, it's kind of in that two and a half range. So just kind of want to get a sense as to how that we should expect that to flow from originations through to either average earning assets or syndications.

Speaker #13: Yeah. Good morning, Jaeme. So I'd kick it off by saying syndications first and foremost is a balance sheet management tool. So we ended the year at a debt-to-capital ratio of 67.9%, which is at 76.9%, I should say, which is in our targeted range of 73 to 77.

Speaker #13: And well below our debt covenant, which is 80%. In terms of the volume in 2025, we were deliberate in pacing syndications as we deferred transactions while we waited for the reinstatement of bonus depreciation.

Speaker #13: Since that's come in, we've seen sequential increases in volumes in both Q3 and then in Q4 again. What we also did in 2025 is we really prioritized client-level funding optimization, which coupled with bonus depreciation has seen really strong results in syndication yields.

Speaker #13: Having said that, client mix does contribute to the strong yields. And we expect from an ongoing run rate perspective, it'd probably be more in line with the full year average as opposed to what we saw in Q3 and Q4.

Speaker #14: Okay. Great. And then as we think about the auto fleet I guess penetrating more of the element business, there was a ordering platform shuffling this quarter.

Speaker #14: What other are there other aspects of the business here that are right for that auto fleet to overtake? And I guess maybe a little bit of color on some of those.

Speaker #14: Potential items that we could see down the road.

Speaker #1: Well, maybe Jaeme, I'll kick it off and hand over again to Heath just for some numbers and to talk about the write-off. But with auto fleet, as I mentioned, we bought not just I mean, we have great people there with sort of innovation, but the platform that we're looking to put all of our capabilities onto just given what a great platform that it is.

Speaker #1: And so as time goes, that is the expectation that we will be on one platform. And it's all going to sit on auto fleet as the direction that we're headed on.

Speaker #1: And so for maybe this piece, Heath, if you want to talk just a bit about what we've done.

Speaker #13: Yeah. So when we announced the auto fleet acquisition, part of the rationale was no doubt to enhance to acquire an enhanced tech platform, which would drive sort of client experience and those sorts of things, which Laura has touched on.

Speaker #13: So the announcement today really to move away from our legacy ordering platform, really just reflects the efforts of the auto fleet team and the continued adoption of their tech technology.

Speaker #13: So we took a one-off write-down of a historical amount, $52 million, non-cash impairment, as we really moved to a new technology that will drive meaningful improvements in the client experience and our business.

Speaker #13: And that's a one-off item that we don't expect to happen in the future.

Speaker #15: Yeah. I guess what I'm getting at is this is the ordering platform today? Is there what I guess the entire element business now on the new auto fleet ordering platform is maybe if I kind of extrapolate a little bit, is there a mobile app where something similar we see everybody move over to that new mobile app?

Speaker #15: Something along those lines. Is there any additional color you can kind of dig into on that? Or am I just getting a little ahead of myself?

Speaker #1: Yeah. Well, no, it's great. Look, I want everything for yesterday also. But we're moving everything onto this new platform. And so parts of ordering are going there.

Speaker #1: We do have other platforms. So we've written this one off. There are smaller other things. So I don't want to say never from a other write-downs perspective, although we wouldn't expect anything like this I'm going to say size into the short term in the future.

Speaker #1: But yes, everything would move on to this platform eventually. And so we would have our element one client portal and there is an element one driver app.

Speaker #1: And the two speak to one another. And so the both the portal and the app and as our app is out there, our portal will be releasing soon.

Speaker #1: It has taken some time because we do have some existing technology that's out there. And we wanted to ensure we were very thoughtful about how we were coming up with a new platform.

Speaker #1: So essentially, all the change we've done have sat on both, I want to say, old and new platform. And that is to ensure integrity of data and information that we have so that when the new platform, if you will, is being utilized, that no information no data integrity is compromised, etc.

Speaker #1: And so that's why this has taken us longer. But I think that's your question directionally. Yes, everything is going to sit in this one place.

Speaker #14: Perfect. Thank you. And another reminder to our phone audience that if you have a question or a follow-up, simply press star and one. We'll hear from Stephen Boland at Raymond James.

Speaker #15: Thank you. Sorry. I'll be quick here. Just in terms of the car IQ, you mentioned that there has been some test cases with existing clients.

Speaker #15: Is the plan to just introduce this to new clients or start rolling out to the existing client base as well? Sorry. I just want to clarify that.

Speaker #1: Yeah. Stephen, our plan is to offer it to our existing clients. And to our new clients. So we're going to be looking at both.

Speaker #1: Well, I'd say we could do a forced conversion. That's not how we operate. Our plan is to offer it to our client base and we will allow our clients to determine what they would prefer if you will to use and so when I think of our partner there, WEX, we have had a long-standing and a really successful partnership with them.

Speaker #1: What we're doing here, it's I'm going to say we're really focusing just on making sure our clients are in the if I could say in the right solution.

Speaker #1: For them. And so I think of it kind of as forgive this a grocery store. Where you think that you've got both trusted brands and your own high-quality store brand.

Speaker #1: And so that's sort of what our approach is going to be. And so we're really going to be providing our clients with choice. And putting them in what we believe is the best offering.

Speaker #1: And as you know, all clients are different. And so for some, it'll be one option. For others, it'll be a different one. But I just say that our priority is just going to be to ensure that we put our clients in the best offering for them.

Speaker #15: I appreciate the color. Thanks so much.

Speaker #16: Ladies and gentlemen, that was our final question from our audience. This concludes the question and answer session. I am pleased to turn the conference back over to Laura Dottore Atenasio for any closing or additional remarks.

Speaker #1: Great. Thank you, operator. And thank you all for joining us today and for your continued interest in Element. I do want to thank our investors and our analysts for their ongoing support and engagement.

Speaker #1: And want to really thank our team members for their dedication because our achievements wouldn't be possible without their focus and commitment. So thank you.

Speaker #1: And we look forward to speaking with you again on our next quarterly call in May.

Speaker #16: Ladies and gentlemen, this does bring to a close today's conference. You may disconnect your lines. Thank you for participating and have a pleasant day.

Operator: At this time, all participants are in a listen-only mode, and you are reminded that this call is being recorded. Following the prepared remarks, there will be an opportunity for analysts to ask questions. To join the question queue, press star and then one on your telephone keypad. In the event you need assistance during the call, you may signal an operator by pressing star and then zero. Element wishes to caution listeners that today's information contains forward-looking statements, and the assumptions on which they're based and the material risks and uncertainties that could cause them to differ are outlined in the company's year-end and most recent MD&A and AIF. Although management believes that the expectations expressed in the statements are reasonable, actual results could differ materially. The company also reminds listeners that today's call references certain non-GAAP and supplemental financial features.

Operator: Management measures performance on a reported and adjusted basis and considers both to be useful in providing readers with a better understanding of how it assesses results. A reconciliation of these non-GAAP financial measures to IFRS, pardon me, measures can be found in the company's most recent MD&A. I am now pleased to turn the floor over to Laura Dottori-Attanasio, Chief Executive Officer. Welcome, and please go ahead.

Laura Dottori-Attanasio: Good morning, and thank you for joining us. The Q4 marked a year of record performance for Element, highlighting the disciplined execution that we applied in support of our long-term strategy. In 2025, we advanced our key focus areas, continued to invest in our capabilities, and delivered strong financial results. Our efforts translated into record net revenue and double-digit growth in both adjusted earnings and free cash flow per share. Adjusted return on equity was 17.9%, reflecting the strength of our capital-light model. In recognition of our cash generation and confidence in our outlook, we increased our annual common dividend by 15% to CAD 0.60 a share. Importantly, we achieved these results while successfully navigating a complex operating environment earlier in the year.

Laura Dottori-Attanasio: This performance underscores the resilience of our business model, the dedication of our team, and the growing relevance of our solutions-led, tech-enabled platform. Throughout the year, we saw strong client engagement and building commercial momentum. In 2025, we welcomed 156 new clients. We continued to convert self-managed fleets and expanded relationships with existing clients through more than 1,000 share of wallet expansions. Our strategic advisory services team identified over 1.6 billion in cost savings opportunities across our clients' fleets, and approximately half of those opportunities have already been actioned, a testament to the tangible value that we provide. At the same time, we've been strengthening the foundation of our business. The investments we've made over the past two years are translating into measurable outcomes.

Laura Dottori-Attanasio: Our Dublin leasing initiative continues to perform as expected, and we are firmly on track to achieve our previously communicated run rate targets of CAD 30 million to CAD 45 million in revenue and CAD 22 million to CAD 37 million in adjusted operating income by 2028, with a targeted two and a half year payback. Electrification is another area where we made meaningful progress in 2025. We increased electric vehicles under management by 36% year over year to approximately 129,000 vehicles. Our charging platform is now live in the US and Canada, and we plan to expand globally in 2026 through new partnerships across our markets. Alongside improvements in our core business, we continue to broaden our offering beyond traditional fleet management and accelerate our entry into mobility. Since launching Element Mobility, we have developed a clear go-to-market approach centered on connected mobility, including telematics, route optimization, and adjacent solutions.

Laura Dottori-Attanasio: The integration of Autofleet has been central to our progress. By bringing development in-house, we are lowering structural costs and increasing our agility, accelerating product cycles, shortening time to market, and responding faster to clients. We expect this to be a sustained competitive advantage. We launched our Element ONE app for drivers in March, and feedback has been very positive as our adoption continues to grow quickly, and we expect a broader rollout throughout 2026. Our digital ordering platform remains on track, with the initial MVP targeted for release in the H1 of 2026. In December, we completed the acquisition of Car IQ, adding embedded vehicle-initiated payment capabilities that enhance fleet operations and data connectivity. Together with Autofleet and our partnerships with industry leaders such as Samsara and Motus that we announced earlier in 2025, Car IQ meaningfully advances our digital strategy and our mobility platform.

Laura Dottori-Attanasio: Collectively, these actions improve how we operate, enhance the client experience, and support scalable growth. Looking ahead, the steps we've taken in 2025 position us well to capitalize on future opportunities. We close the year having made strong progress on our digitization agenda, deepened client relationships, and broadened our capabilities. The investments we've undertaken have resulted in a stronger operating model and position Element for sustainable growth in the years ahead. With that, I'll turn it over to Heath to cover the financials and take us through our 2026 guidance.

Heath Valkenburg: Thank you, Laura, and good morning, everyone. Our results this quarter and throughout 2025 reflect a continued disciplined execution of our strategy. We delivered strong performance across key metrics, including record levels of net revenue, adjusted operating income and margins, and adjusted EPS and free cash flow per share. These measures all finished the year within or above our 2025 guidance ranges. I'll begin with a review of our full year performance on an adjusted basis, and then discuss some of the non-recurring items that impacted our results in Q4. In 2025, net revenue was CAD 1.2 billion, an increase of 9% year over year, reflecting strength across all of our revenue streams. Services revenue totaled CAD 623 million, up 5% from last year, primarily driven by increased penetration and utilization across our client base.

Heath Valkenburg: While VAM increased 3% during the year, the revenue impact builds over time as onboarding and implementation progress. We expect this will support continued service revenue growth in the coming quarters. Net financing revenue was CAD 498 million, up 11% year over year, driven by ongoing efficiencies from our leasing and funding initiatives, higher gain on sale in Mexico, and growth in net earning assets. This resulted in the core NFR yield of 4.73%, an expansion of 35 basis points versus 2024. Syndication revenue for the year was CAD 64 million, up 50% from last year despite a reduction of 1.1 billion in assets syndicated. This was largely driven by favorable mix, the reinstatement of bonus depreciation, and continued demand for our syndication product.

Heath Valkenburg: Full year originations were CAD 6.5 billion, down 4% year-over-year and below guidance as previously communicated. This primarily reflects seasonal softness in client ordering during the summer months, combined with later year model availability that pushed deliveries into future periods. Importantly, underlying demand remains strong. Order volumes reached record levels of CAD 2 billion in Q4 and CAD 6.2 billion for the year, providing good visibility into originations for H1 2026. As mentioned, our reported Q4 results were impacted by several non-recurring items, the majority of which were non-cash in nature.

Heath Valkenburg: Most significant items included a CAD 130 million deferred tax asset adjustment related to updated jurisdictional profit expectations, a CAD 52 million write-off of our legacy ordering platform resulting from the continued transition to the Autofleet technology platform, and CAD 9 million of restructuring and acquisition related costs related to the Car IQ transaction, which closed on 31 December. We do not believe these items are indicative of our underlying operating performance and therefore have been excluded from our adjusted results. On an adjusted basis, operating expenses totaled CAD 520 million, up 7% year-over-year, reflecting continued investment in digitization, scalability, and product expansion.

Heath Valkenburg: Combination of solid revenue growth and disciplined expense management generated positive operating leverage of 2.1% and resulted in an adjusted operating margin of 56.2%, an expansion of 90 basis points year over year. Our performance translated into strong bottom line results with adjusted earnings per share of CAD 1.24, an increase of 13% year over year, an adjusted return on equity of 17.9%, up 190 basis points from 16% in 2024. Briefly, on the Q4, our adjusted EPS of CAD 0.33 was up a strong 24% year over year, underpinned by record quarterly revenue of CAD 313 million.

Heath Valkenburg: Top line growth of 16% reflected contributions from all revenue components, including service revenue, which rose 4% quarter over quarter to reach a record level of CAD 163 million. Operating leverage in Q4 was a robust 7.3%, and we generated adjusted return on equity of 18.5%. Turning to capital allocation, we repurchased 5.4 million common shares in 2025 at an average price of CAD 32.10 per share. In total, we returned CAD 269 million to shareholders through dividends and share repurchases. This represented 43% of our adjusted free cash flow and was supported by strong cash generation with adjusted free cash flow per share, increasing 15% year over year to CAD 1.57. Capital expenditures remained well contained, totaling CAD 71 million in 2025.

Heath Valkenburg: In addition, we continued to manage leverage within our target range, ending the year with a debt to capital ratio of 76.9%. As Laura mentioned, we have enacted a 15% increase in our common dividend to CAD 0.60 per share annually. Have remained active on share repurchases thus far in 2026. I will now turn to the year ahead and our 2026 financial guidance. We expect 2026 will be another year of solid financial performance with Element, highlighted by revenue growth in the range of 8% to 10% and a combination of positive operating leverage and share repurchases, driving strong growth rates in adjusted EPS and free cash flow per share. Specifically, we expect to deliver net revenue of CAD 1.28 to 1.305 billion.

Heath Valkenburg: Adjusted operating income in the range of CAD 720 to 745 million. Adjusted operating margin in the range of 56.3% to 57.3%. Adjusted EPS between CAD 1.40 and CAD 1.45. Adjusted free cash flow per share of CAD 1.67 to CAD 1.72. Originations between CAD 6.5 and CAD 6.9 billion. These ranges provided prior to any material foreign exchange fluctuations or adverse impacts relating to changes in global trade agreements or broader political uncertainty. In conclusion, 2025 was another year of solid performance across the Element business. We enter 2026 with strong momentum and a resilient financial position, giving us confidence in our ability to continue executing our strategic priorities and delivering value for our clients and shareholders. Thank you. Operator, we are now ready to take questions.

Operator: Ladies and gentlemen of the audience joining today, analysts who wish to join the question queue, you may press star and then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset prior to pressing any keys. To withdraw your question, please press star and then one once again. We will ask you that you please limit yourself to two questions, and then if you have anything further, you are invited to re-signal. Once again, ladies and gentlemen, that is star and one if you would like to ask a question. We'll pause for a moment to give our audience the opportunity to signal. We'll take our first question today from the line of Vasu Govil at KBW.

Vasu Govil: Hi. Thank you for taking my question. I guess, Laura, I first wanted to ask about the Car IQ acquisition. If you could elaborate a little bit on how you think about strategic benefits of owning that asset and then bringing some of the payment functionality in-house. I know it's early days, but sort of any color on how you think about the contribution that this business could have over time on revenue and margins and if anything is baked into the 2026 outlook. Thank you.

Laura Dottori-Attanasio: Yeah, absolutely, Vasu. Thanks for the question. Super excited about the Car IQ acquisition that closed in December 2025. Car IQ has this in-vehicle payment solution that effectively enables vehicles to act as payment nodes to help our clients reduce fraud, modernize their billing, and it can really deliver, I'm gonna say, scalable solutions to our clients. It's exciting for us in that it's going to enable us to embed payments into our digital ecosystem. It's gonna allow us to transform what I'd say is a relatively outdated process into a really strategic one with better margins for us, and it's gonna allow us to capture more spend. For our clients, it does many things, including removing the need for physical cards, embedding payments directly into the vehicles in their telematics environment.

Laura Dottori-Attanasio: It's gonna be well, today it can be used for fuel, tolls, violation, and parking, and it has some really interesting future use cases that we're super excited about. Our plans to integrate it into our Element ONE, our client portal into our driver app. We're super excited. I would tell you this is for the years that I've been here, this is the first time we have had a lot of reverse inquiries from prospects and clients that wanna access this capability. And so exciting, when we did our due diligence, Car IQ had one case we saw with a client where they could cut their fuel spend by almost 14% just by eliminating card misuse. We think this has great capability for our clients.

Laura Dottori-Attanasio: We did a few proof of concepts ourselves, and with one of the clients we did this with, it provided such great results that our client told us they didn't wanna come off the platform and wanna continue to use this. We're feeling really optimistic and positive about what this can do, not just for us, but for our clients. From a financial impact perspective, I'd say a little dilutive in this year, given that this is the year that we need to do implementation and conversion. We do expect it's gonna have a meaningful impact for our clients, as I talked about, so to really help them reduce their total cost of operation. For us, it'll be over time that we'd expect it to drive more profitability.

Laura Dottori-Attanasio: We are projecting some, I'm going to say modest accretion that should come in 2027, and that would be on both an adjusted operating income and free cash flow basis.

Vasu Govil: Great. Thank you. That's great color. Maybe just my second one is on the servicing income growth. That's obviously lagged a little bit. I know I caught your comments about the VUM growth, and that should help us in 2026. Maybe if you could talk a little bit more about what sort of fell short of expectations this year. As we think to 2026, you know, what kind of growth should we be modeling for that piece of the business? Thank you.

Heath Valkenburg: Yeah, good morning, Vasu. I'll take that one. From a service revenue perspective, in 2025, we delivered CAD 623 million. Excluding FX and the one-time items we have announced, it's approximately 7% growth year-over-year. Q4 reached a record level of CAD 163 million. What we did see in the H1 of the year with the macroeconomic environment, including tariff uncertainty and trade-related concerns, is we did see a slower growth rate in the H1 of the year of VUM growth. That did moderate sort of the full-year service revenue expansion.

Heath Valkenburg: Obviously in the second half of the year, VUM growth resumed, 3% growth rather in the last six months, which gives us good momentum going into 2026. What we do see, though, is typically the incremental contribution of the VUM growth does build over time. As we cross-sell additional products, as utilization on the vehicles increases over time. Also many of the vehicles on board, especially in Q4, only contribute partial revenue for that period. We expect over the medium term, services will continue to remain the strongest part of our growth driver. We're certainly focused on accelerating VUM, expanding our product penetration, as well as continuing to enhance our product set.

Heath Valkenburg: Laura took us through, you know, the most recent acquisition in Car IQ.

Vasu Govil: Thank you very much.

Operator: Our next question today will come from the line of John Aiken at Jefferies. Please go ahead. Your line is open.

John Aiken: Good morning. Heath, just a couple of questions that follow from the guidance that you provided, which is not an argument. Thank you very much for that. When we take a look at the anticipated originations, you know, obviously below the levels for the guidance that, so that you had last year, what, you know, what's impeding the outlook for originations, and then what impact should we expect that to have under Vehicles Under Management growth?

Heath Valkenburg: Good morning, John. Maybe I'll touch on originations for 2025 more broadly, and then we can talk about sort of impact to 2026. In 2025, we delivered CAD 6.5 billion in originations, and that was slightly down year over year and CAD 200 million below our guidance range. It is important to contextualize this against 2024, which benefited from supply chain normalization and the backlog conversion that did elevate origination volumes. What we also saw in Q4 was we had really strong demand, so we had CAD 2 billion of orders in Q4. We did see a modest extension in the order to delivery cycle times for the vehicles that required outfit.

Heath Valkenburg: That pushed some of those Q4 orders into 2026, but gives us a good starting point for 2026. In terms of our guidance, we're guiding CAD 6.5 to 6.9 billion. That implies 7% growth at the upper end of that range. To answer your question on impact in revenue, originations is an important metric, but it can fluctuate based on client behavior, and it should be viewed alongside other metrics. So VUM growth, net earning assets, yield, and the later two are primarily the drivers of net financing revenue. Again, in 2025, we saw a really strong improvement across both of those metrics. NEA was up 3%.

Heath Valkenburg: Our average yield was up 35 basis points, and that ultimately drove record net financing revenue of CAD 498 million.

John Aiken: Thanks, Heath. In terms of the guidance, the free cash flow per share growth, implied is a little bit lower than what you're forecasting for the EPS growth. Should we assume that we're looking at higher sustaining capital investments like we saw in the Q4 throughout 2026?

Heath Valkenburg: Yeah, maybe I'll take the sustaining capital Q4 question first and then come back to the sort of the free cash flow growth. Q4 was elevated. There's some timing in there. We continued to target approximately CAD 80 million of spend across both sustaining and growth CapEx, and nothing has changed from that perspective. In 2025, we actually saw slightly lower spend, where we spent CAD 71 million in CapEx across the two, which is one of the reasons that impacted the free cash flows. When we think about free cash flow relative to EPS, it's really mechanical. Nothing has changed in terms of our ability to generate cash from the business, and it is timing.

Heath Valkenburg: Free cash flow actually outperformed EPS in 2025 and was really, really strong, and we just see that sort of flipping around in 2026.

John Aiken: Understood. Thanks. I'll recue.

Operator: We will hear next from the line of Stephen Boland at Raymond James. Please go ahead.

Stephen Boland: Thanks. I hate asking accounting questions, but if I'm gonna, can you explain what updated jurisdictional probability outlook, what that actually means on that charge?

Heath Valkenburg: No problem, Stephen. I love accounting questions. Maybe I'll just give a bit of more color into sort of the key one-off items. The first one, deferred tax asset, we recorded a CAD 130 million partial derecognition of a historical deferred tax asset. I want to stress that this does not reflect any deterioration in the operating performance of any of our geographies, and all of our regions continue to perform strongly. The change really relates to some internal intercompany funding structure changes as we look to optimize how we sort of fund the business internally. Ultimately from a funding perspective, this gives us increased flexibility to raise more local funding, particularly in areas like Mexico where we're seeing strong growth.

Heath Valkenburg: It's important to note it has no impact on our effective tax rate or cash tax rate. It's a non-cash accounting adjustment, and it does not impact sort of global profitability, or importantly impact our ability to utilize those tax losses in the future.

Stephen Boland: Okay. This is really the jurisdictional is Mexico. That's kind of where it's focused.

Heath Valkenburg: Some of the focus is Mexico, but it's a realignment of our internal funding structures and intercompany funding structures globally.

Stephen Boland: Okay. I'm not sure who this question can go to, but I guess when a bunch of us were in Mexico, I don't know, 18 months, 2 years ago, there was a program that was talking about a global review of services pricing, and there was gonna be a net benefit that was talked about. I won't say the number, but I'm just wondering, has that global review been completed, and is that kind of baked into, you know, some of the results in 2025? I don't think, you know, certainly I haven't asked this question, but is that, I guess, review completed at this point?

Heath Valkenburg: Yeah. The pricing and go-to-market strategy is something we continue to refine, not only for Mexico, but all locations across the globe. We set up the leasing business and have seen some strong output as we continue to mature that leasing business. The learnings that we have do get applied to Mexico. Yeah, we continue to refine our strategy from that perspective across all locations.

Stephen Boland: Okay. I'll sneak one more in here. Just, Laura, you talked about the, and I'm probably a broken record here, partnership with Samsara. You mentioned it in your opening remarks. Can you just provide an update, you know, what that partnership is starting to look like? What services or cross services that you're looking to add, referrals, et cetera? Any would be helpful, please.

Laura Dottori-Attanasio: Yeah, sure, Steve. I guess what we talked about, these partnerships with Motus, that do reimbursements for vehicle expenses for individuals, and then Samsara who have a telematics camera, productivity offering. All of that was done really to add, I'm gonna say, additional services for our clients. We wanted to work with some of the best in the industry, that's what we're doing. It's going pretty well. Again, early days, everything's been quite, I'm gonna say, positive in line with what we expected. With both Samsara and Motus, we've already activated units and clients that have come through the referral program, all looking good.

Laura Dottori-Attanasio: Worth a reminder, we had said that in 2026 that we were expecting those partnerships to give us about mid-single digit revenue, and so we're on track for that.

Stephen Boland: Okay. Thanks. Over to you.

Operator: Our next question today will come from Tom MacKinnon at BMO Capital.

Tom MacKinnon: Yeah. Thanks. Morning. Two questions. First, just with respect to share buybacks, certainly on more of an elevated pace, year to date. You got the preferreds out of the way, converts out of the way. How should we be thinking about share buybacks? Should we sort of extrapolate a little bit about the accelerated pace you've had? You do have a 10% NCIB that was launched mid-November 2025. I have a follow-up. Thanks.

Heath Valkenburg: Good morning. In 2025, we paid out 43% of our free cash flow in dividends and share repurchases, CAD 150 million and CAD 120 million. For 2026, as Laura Dottori-Attanasio announced, we have increased a 15% increase in the dividends to CAD 0.60 per share, which is approximately 28% of our trailing twelve-month free cash flow. In the first two months of this year, we've already repurchased CAD 34 million of shares. We do expect to continue to be active in share repurchases for the 2026 year.

Tom MacKinnon: Okay. Maybe you can talk a little bit about expansion in the services, update on insurance services and how should we be thinking about service attachment rates going forward? Thanks.

Laura Dottori-Attanasio: Thanks, Tom. I'll start off just maybe talking about insurance, then I'll let Heath take that broader question, services in general. You'll recall, and we talked about this, we launched our insurance offering in January 2025 under the banner of Element Risk Solutions, and we did that in partnership with HUB. Our plan was to combine insurance coverage placement. We were gonna do that with claims management and safety services and do it in a modernized way. As I believe I shared, we did miss the mark on this one in that we had some gaps in our product offering, some gaps in our go-to-market approach.

Laura Dottori-Attanasio: I guess I'd also say from a lessons learned perspective, we underestimated the complexity of standing up our insurance offering inside of our fleet ecosystem. While we still believe there's a worthwhile opportunity for us in insurance, we remain committed to doing it. We have put it on the back burner, given some of the things we talked about, like our Car IQ acquisition, that have some real benefits to us in the short term. In insurance, we're making some organizational changes. We're working with Hub, and we're looking at how we refine our approach and fill some of those gaps before we come back to market with the relaunch. We are still selling the product.

Laura Dottori-Attanasio: It's just not, I'm gonna say, exciting enough to deliver what our expectations were when we first talked about this ideation. Maybe with that, I'll hand it over to Heath to talk about the broader services offering.

Heath Valkenburg: Yeah, absolutely. We expect the VUM attachment rates to continue to migrate higher. It's important to note, though, that new clients that you onboard sometimes have a dilutive impact to that migration. We saw that in Q4, where the new VUM we brought on had a lower attachment rate of 2.2 services per unit. Obviously, the CarIQ VUM came on had one services per unit. Those items do dilute the broader portfolio. We expect over time for that VUM per unit to migrate up over time, which so increased VUM, increased product penetration, and services per VUM will continue to drive higher service revenue over time.

Heath Valkenburg: Then maybe just to circle back on your previous question on the share buybacks. Just to close that out, we generally target sort of a 1% to 2% of shares outstanding. I think we were 1.3% for 2025 and expect to sort of be at the higher range for 2026.

Tom MacKinnon: Thanks.

Operator: A reminder to our phone audience, that is star and one if you would like to ask a question. Moving forward, we'll hear from Jaeme Gloyn at CIBC. Please go ahead.

Jaeme Gloyn: Hi. Good morning, everyone. Just one question for me. On the off-balance sheet structures, I was wondering if you could provide an update on the progress, on the new off-balance sheet structures that you have been working on, similar to the Blackstone that was announced, last year.

Heath Valkenburg: Yeah, absolutely. Good morning. During the quarter, we did incur some one-time costs to enhance and expand our funding structure. We do already have a strong and diversified funding platform, but this initiative is designed to provide additional flexibility, as we grow the business while optimizing for yield and overall returns. During the quarter, we made meaningful progress. However, we're not yet in a position to formally announce the associated transaction.

Jaeme Gloyn: Thank you. I will leave it there.

Operator: Our next question this morning will come from Graham Ryding at TD Securities.

Graham Ryding: Hi. Good morning. Laura, this is probably for you. Just interested about the autonomous vehicle sort of area. It seems like it's developing quickly. Is this a fleet management opportunity for you, and how much of an area of focus is this for you relative to everything else you've got going on?

Laura Dottori-Attanasio: Yeah, Graham. Thanks for that question. Super important, which in large part, you know, we started doing all the digitization, automation, acquisition of Autofleet, all of that to ensure that we remain in the connected vehicle. I tell you today, autonomous vehicles represents a great opportunity for our company. We're starting to see some of them going from, I'm gonna say pilots, piloting to commercialization, we know that in doing so, they're gonna have to scale through fleet ownership. All of that's gonna require funding, branding, maintenance oversight, safety reporting, real-time monitoring, scheduling, you name it. Those are all the things that we offer today and that we'll be able to offer to autonomous vehicles. I would say with everything we've been doing, we are incredibly well positioned to support autonomous vehicles.

Laura Dottori-Attanasio: I believe we'll be able to win in this space just given the operational expertise that we have. We're positive.

Graham Ryding: Okay, perfect. Maybe on more of a sort of, competitive macro question, just GenAI and the related competition that seems to be sort of weighing on the markets and concerns in a lot of sectors, can you talk about the durability of your business where you could see some competition from, you know, AI-related competition? Or where do you see the business being more durable and positioned well?

Laura Dottori-Attanasio: Yeah, absolutely. Look, I think our stock did get caught up in all of that, AI does have the potential to pretty much upend absolutely everyone's business models. That said, for us, I think AI is going to have a meaningful benefit for us, not just from an internal efficiency perspective, but also from a client experience perspective. Again, we're super excited about the opportunity that that's going to present. I talked a bit about it, but, you know, we started a couple of years ago to digitize, to automate, and that's where we put all of our pretty much capital allocation. It's been to transition this, I want to say, leadership position that we've had in fleet management to intelligent mobility that we talk about.

Laura Dottori-Attanasio: We could really transform what I'd say has been historically somewhat of an antiquated industry into intelligent mobility. With Autofleet in 2024, not only did we pick up, again, a phenomenal team of experts, but we picked up a great platform that we're building Element off of. That platform, and this is important, and we never really talked about it a lot when we announced the acquisition, but it did come with AI already embedded in it. It has a, I'm gonna say an AI tool in it called Nova, one that can simulate whether it's supply-demand patterns and things in road optimization, improve fleet deployment, reduce downtime, et cetera. Nova was actually the first AI-powered large language model that was designed specifically for fleet management.

Laura Dottori-Attanasio: It's so good that it actually won an AutoTech AI Innovation of the Year award back in 2024 at, I think it was the AutoTech Breakthrough Awards. We are in a really good place with some of the actions that we've taken over the years. I'd just say for Element more broadly, we also went out and got AI licenses for our team members, did all the training. We had all of our functions come up with use cases that could help increase client experience and take out cost.

Laura Dottori-Attanasio: Now in 2026, I'd say we're moving from that broader experimentation we did in 2025 to a lot more implementation in 2026 that's gonna allow us to reduce manual processes and just move even faster in terms of automating how we do things. I won't bore you with, I find them exciting, but with the different use cases we have and the things we can do. I'd just say that, pretty much every part of our business, when we look at it, AI can help us improve and do a lot better, and that's why we see it as a positive.

Laura Dottori-Attanasio: When you look at our broader business, and we talk a lot over the years about how resilient we are, we benefit from and, you know, we don't talk about it perhaps as much, but we've got some of the things that will allow us to continue to win. We've got scale with 1.5 million vehicles. We've got solid funding capabilities that can support all of our leasing. Leasing requires people, requires specialization and a balance sheet, and that's almost half of our business. We've got our strong OEM relationships where we get preferred vehicle pricing allocation for our clients and an incredibly large network of service providers that also help drive savings for our clients.

Laura Dottori-Attanasio: All that to say, I think we're really well positioned from a resiliency perspective, and that AI, as it goes, is just really going to help further enhance our value proposition for our clients. Again, feeling very excited about this one. Looking forward to, as we go in 2026, delivering on more capability through our Element ONE platform.

Graham Ryding: That's it for me. Thank you.

Operator: A reminder to our phone audience, if you also have a follow-up, you are invited to signal with star and 1 for a question. We'll move forward to the line of Bart Dziarski at RBC Capital Markets.

Bart Dziarski: Great. Thanks for taking the question. Good morning, everyone. I wanted to ask around Element Mobility and Autofleet. In your prepared remarks, Laura, you talked about lower structural costs and increased agility. Just hoping you could maybe help us out with some quantification or numbers around those two benefits.

Laura Dottori-Attanasio: Yeah, happy to talk about both and I'll ask Heath maybe to clean up my answer 'cause I might not give you the answer that you're looking for. From an Autofleet perspective, and I know this isn't what you're looking for, but from a payback period, from where I stand, this paid back in spades already, almost the first month. You know, for Autofleet, very specifically, the company is a standalone. Its ARR was up, I think, almost 50% over last year, that's a positive. More importantly, it's really everything it's been doing for Element or what we're calling Element Mobility.

Laura Dottori-Attanasio: It's allowed us to bring in, and I had some of that in my prepared remarks, but bringing in all of our development in-house or a lot of it, I should say, we're just much more agile, and we can bring products to market sooner, so just shorter time to market. So I really see that as a sustained competitive advantage for us, and that it's got a just intrinsic value that is hard to quantify, although, you know, Heath is doing a pretty good job of that, where we're looking at the amount of cost avoidance we have, savings and reduced cycle times and whatnot. That's what allowed us to create this Element Mobility that we talked about.

Laura Dottori-Attanasio: It's really an umbrella or if I could call it a division that's meant to drive innovation across our fleet landscape. Sitting under this, if I can call it an umbrella, we have things we've talked about, our innovation lab that's gonna be focused on next wave technologies. That'll include some of the things we talked about earlier, whether it's autonomous vehicles, AI. We'd also look at robotics. All the things that are really gonna dynamically transform, I'd say, how businesses manage their fleets. That would sit there. We'd have our intelligent routing, ride hailing, telematics, in-vehicle payments, et cetera.

Laura Dottori-Attanasio: In setting that up for sort of what comes next, we think that'll allow us to lead on, I'm gonna say, transformation without losing focus on execution and the day-to-day stuff that we have that we do so well, when it comes to leasing and different services that we provide. For mobility, there is no real number as we sort of put things under this umbrella, and we're gonna take 2026 to think through what that, what that looks like. I know I've over-talked, but I'll hand it over to Heath to see if he has what you're looking for, which are numbers.

Heath Valkenburg: Yeah. Good morning, Barton. I'd probably break it down into two components. The first one would be from a CapEx perspective and the spend that we had to incur to deliver some of our key projects that Autofleet have delivered. We saw a meaningful reduction in the cost of those. A number of those projects we had scoped up with external parties prior to the transaction with Autofleet taking them on. We saw upwards of a 60% cost reduction, and that was partly or one of the reasons why we saw reduced CapEx spend of CAD 71 million for the year relative to the CAD 80 million target. That is one benefit.

Heath Valkenburg: The other benefit is on the operating expense side of the equation. You do see in the investor presentation, we break out the CAD 9 million of efficiencies achieved during the year. What I would say is that most of our spend is really focused on digitization, product expansion, and focused on growth. That does have an added benefit on automating some internal processes and those sorts of things that do have an OpEx benefit as well. I think you saw that in 2025, where our expense rate normalized from what was a double-digit expense growth rate in prior years to 7% in 2025.

Heath Valkenburg: Looking forward, we expect our expenses will continue to grow as we do invest in the business, so new products, new capabilities, digitization. We expect that those efficiencies will continue to drive positive operating leverage.

Bart Dziarski: Awesome. That's very helpful color. Thank you. One thing that jumped out at this quarter was, you know, we saw continued VUM acceleration despite originations declining. I think there's an underlying trend there where maybe you're not as reliant incrementally on originations needing to drive VUM growth. If that's the case, where are you seeing some other benefits or wins, if you will, on the VUM side?

Heath Valkenburg: Yeah, it's a great question. The VUM and the originations don't necessarily move in unison. We can grow VUM by bringing on service-only VUM. And we can also have origination growth without actually driving VUM growth, where it's just clients returning an old vehicle and taking out a new vehicle at a higher cap cost. They are somewhat decoupled, but over time, we expect growth in both originations and VUM. As I sort of spoke on the top, we did see a slow start to the year on the VUM growth with macroeconomic environment. Pleasingly, we saw a strong increase in H2.

Heath Valkenburg: With things like Laura has spoken about, so Autofleet, Motus, Samsara, and Car IQ, we expect that those things will also help us drive VUM growth and service revenue growth into the future.

Bart Dziarski: Great. Thanks, Heath. That's it for me.

Operator: Our next question will come from Jaeme Gloyn at National Bank Capital Markets.

[Analyst] (National Bank Capital Markets): Yeah, thanks. Good morning. Just wanted to maybe dig in on the syndication a little bit. Another quarter of greater than 3% yields. Is that something we should kind of expect here going forward? Or are there some other factors that's driving that for the past couple of quarters? In terms of the volumes, thinking back to 2024 was well over CAD 3 billion. Outside of that, kind of in that 2.5 range. Just kinda wanna get a sense as to how that we should expect that to flow from originations through to either average earning assets or syndications.

Heath Valkenburg: Good morning, Jamie. I'd kick it off by saying syndications, first and foremost is a balance sheet management tool. We ended the year at a debt to capital ratio of 67.9%, which is at 76.9%, I should say, which is in our targeted range of 73% to 77%, and well below our debt covenant, which is 80%. In terms of the volume in 2025, we were deliberate in pacing syndications as we deferred transactions while we waited for the reinstatement of bonus depreciation. Since that's come in, we've seen sequential increases in volumes in both Q3 and then in Q4 again.

Heath Valkenburg: What we also did in 2025 is we've really prioritized client-level funding optimization, which coupled with bonus depreciation, has seen really strong results in syndication yields. Having said that, client mix does contribute to the strong yields. We expect from an ongoing run rate perspective, it'd probably be more in line with the full year average as opposed to what we saw in Q3 and Q4.

[Analyst] (National Bank Capital Markets): Okay, great. Then, as we think about, the AutoFleet, I guess penetrating more of the Element business, there is a, you know, ordering platform shuffling this quarter. You know, what other aspects of the business here that are ripe for that AutoFleet, you know, to overtake? You know, I guess maybe a little bit of color on some of those, potential items that we could see down the road.

Laura Dottori-Attanasio: Well, maybe, Jamie, I'll kick it off and hand over again to Heath just for some numbers and to talk about the write-off. with Autofleet, as I mentioned, we bought not just, And we have great people there with our innovation, but the platform that we're looking to put all of our capabilities onto just given what a great platform that it is. As time goes, that is the expectation that we will be on one platform, and it's all going to sit on Autofleet is the direction that we're headed on. For maybe this piece, Heath, if you wanna talk just a bit about what we've done.

Heath Valkenburg: When we announced the Autofleet acquisition, part of the rationale was no doubt to enhance, to acquire an enhanced tech platform, which would drive sort of client experience and those sorts of things which Laura has touched on. The announcement today, really to move away from our legacy ordering platform, really just reflects the efforts of the Autofleet team and the continued adoption of their technology. We took a one-off write-down of a historical amount, CAD 52 million non-cash impairment, as we really move to a new technology that will drive meaningful improvements in the client experience and our business. That's a one-off item that we don't expect to happen in the future.

[Analyst] (National Bank Capital Markets): I guess, what I'm getting at is like, you know, this is, this is the ordering platform today. Is there, you know, is the entire Element business now on the, on the new Autofleet ordering platform? Is, you know, maybe if I kind of extrapolate a little bit, like, is there a mobile app, where, you know, something similar we see everybody move over to that new mobile app? You know, something along those lines. Is there, is there any additional color you can kind of dig into on that, or am I just getting a little ahead of myself?

Laura Dottori-Attanasio: Yeah. Well, no, it's great. Look, I want everything for yesterday also, but we're moving everything onto this new platform, and so parts of ordering are going there. We do have other platforms, so we've written this one-off. There are smaller other things. Don't wanna say never from a other write-downs perspective, although we wouldn't expect anything like this, I'm gonna say, size into the short term in the future. Yes, everything would move on to this platform eventually. We would have our Element ONE client portal, and there's an Element ONE driver app, and the two speak to one another. Both the portal and the app, and as you know, our app is out there. Our portal will be releasing soon.

Laura Dottori-Attanasio: Has taken some time because we do have some existing technology that's out there, and we wanted to ensure we were very thoughtful about how we were coming up with a new platform. Essentially, all the change we've done have sat on both, I wanna say old and new platform, and that is to ensure integrity of data and information that we have so that when the new platform, if you will, is being utilized, that no information, no data integrity is compromised, et cetera. That's why this has taken us longer. I think that's your question. Directionally, yes, everything is gonna sit in this one place.

Stephen Boland: Perfect. Thank you.

Operator: Another reminder to our phone audience that if you have a question or a follow-up, simply press star and one. We'll hear from Stephen Boland at Raymond James.

Stephen Boland: Yeah. Sorry, I'll be quick here. Just in terms of the Car IQ, you mentioned that there has been some test cases with existing clients. Is the plan to just introduce this to new clients or start rolling it out to the existing client base as well? Sorry, I just wanna clarify that.

Laura Dottori-Attanasio: Yeah. Stephen, our plan is to offer it to our existing clients and to our new clients. We're going to be looking at both. While I'd say we could do a forced conversion, that's not how we operate. Our plan is to offer it to our client base, and we will allow our clients to determine what they would prefer, if you will, to use. When I think of our partner there, WEX, we have had a long-standing and a really successful partnership with them. What we're doing here, it's I'm gonna say we're really focusing just on making sure our clients are in the, if I could say, in the right solution for them.

Laura Dottori-Attanasio: I think of it kind of as, forgive this, a grocery store, where you think that you've got both trusted brands and your own high quality store brand. That's sort of what our approach is gonna be. We're really gonna be providing our clients with choice and putting them in what we believe is the best offering. And as you know, all clients are different. You know, for some it'll be one option, for others, it'll be a different one. I'd just say that our priority is just gonna be to ensure that we put our clients in the, in the best offering for them.

Stephen Boland: I appreciate the color. Thanks so much.

Laura Dottori-Attanasio: Thank you.

Operator: Ladies and gentlemen, that was our final question from our audience. This concludes the question and answer session. I am pleased to turn the conference back over to Laura Dottori-Attanasio for any closing or additional remarks.

Laura Dottori-Attanasio: Great. Thank you, operator, and thank you all for joining us today for your continued interest in Element. I do wanna thank our investors and our analysts for their ongoing support and engagement, and wanna really thank our team members for their dedication, 'cause our achievements wouldn't be possible without their focus and commitment. Thank you, and we look forward to speaking with you again on our next quarterly call in May.

Operator: Ladies and gentlemen, this does bring to a close today's conference. You may disconnect your lines. Thank you for participating, and have a pleasant day.