Thank you for standing by. This is the conference operator. Welcome to the Element Fleet Management First Quarter 2023 Financial and Operating Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there'll be Pardon me. After the prepared remarks, there will be an opportunity to ask questions from analysts. To join or rejoin the question queue, you may press Star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing Star and zero. Element wishes to remind listeners that some of the information in today's call includes forward-looking statements. These statements are based on assumptions that are subject to significant risks and uncertainties. The company refers you to the cautionary statements and risk factors in its year-end and most recent MD&A, as well as its most recent AIF, for a description of these risks, uncertainties and assumptions. Although management believes that the expectations reflected in the statements are reasonable, it can give no assurance that the expectations reflected in any forward-looking statements will prove to be correct. Element's earnings press release, financial statement, MD&A, supplementary information document, quarterly investor presentation and today's call include references to non-GAAP measures, which management believes are helpful to present the company and its operations in ways that are useful to investors. A reconciliation of these non-GAAP measures to IFRS measures can be found in the MD&A. I would now like to turn the call over to Jay Forbes, President and Chief Executive Officer of Element. Please go ahead. Thank you, operator, good evening to all of you joining us to discuss Element's Q1 results and our improved outlook for the business this year. I would first like to spend a bit of this time speaking to how far Element has come over the last five years, the momentum we have in this current environment, and where the business is heading before turning things over to Laura and Frank. In 2018, a number of us, myself included, saw something quite special in Element. That belief provided us with the impetus and courage to launch a three-pronged strategy to transform the core fleet management business, returning its focus to delivering a consistent, superior client experience, to deleverage and strengthen the balance sheet, and to rid the company of non-core distractions. Not too long after launching this transformation strategy, I started to notice a change. The wind shifted from head on to an angle we could catch. Our momentum began to build in the right direction. While we know that the fruits of transformation would have been born earlier, but for the pandemic and the OEM production shortages, the work we put into transformation and the ensuing pivot to growth has perfectly positioned Element to make 2023 another record year in which we can fully harness the power of the tailwinds that now propel us forward. The positive momentum we have built is readily sustainable. Thanks to the strong commercial capabilities we've developed, the scalability of our operating platform, our competitive differentiators such as strategic consulting, Arc by Element, and most importantly, our client-facing people. Our momentum is sustainable thanks to that best-in-class leadership team that we have in place who are committed to see the existing proven strategy take hold. When I think about our investments in our commercial capabilities and the scalable operating platform, coupled with the favorable market dynamics and consolidation taking place in this industry, I have every reason to believe Laura and the leadership team can sustain and indeed build on the current momentum for years to come. Laura is exactly the right leader to ensure this organization does so. When I expressed to the boards my intention to retire from the CEO role, I made clear that I was not working towards a specific end date. Instead, I wanted to ensure we found the right successor with a strong cultural fit. We needed someone with experience managing a large and complex balance sheet and experience with a B2B commercial strategy. Perhaps the most salient requirement from my perspective was someone that would embrace and be embraced by our organization. It was an exhaustive search, but our patience paid off. We found that proverbial needle in the haystack with Laura. Not only does she possess the requisite capabilities, more importantly, she understands the importance of preserving and enhancing Element's unique culture. Our culture of client centricity, of collaboration, and of continuous improvement is the backbone of this organization and has been foundational to every success we've achieved over the last five years. One of my fondest memories of my time here involves seeing that spirit of collaboration and continuous improvement in action. It was early 2020, and the ANZ leadership team traveled to Mexico to understand the incredible success of the Mexican commercial growth strategy. I'll never forget the humility and curiosity that our leaders modeled, first in listening and then learning, and then importing those learnings to apply them in ANZ in 2020 and later that same year into the U.S. and Canada. This habit of best practice sharing is something that we continue to foster, and it's one of the many benefits of working in a global organization. Our continuous improvement mindset is another example of how far we've come. We are a high-performance organization, and we constantly challenge ourselves to be better, whether it be our employee experience, our client experience, or the business itself. This is especially true in our commercial groups, where we're constantly scrutinizing and evolving our sales and marketing practices to ensure that we can capture an outsized share of opportunities in the fleet management market. Whether this is winning clients from competitors or advancing our self-managed mandate, the continuous improvement mindset ensures we have best-in-class commercial approaches across all markets. In short, we built an organization that is experiencing tremendous positive momentum through the combination of investment in our people, processes, systems, and culture, and opportunity with well-established market leadership in three regions that are experiencing very favorable dynamics for organic growth. The strength and stability of the company and the positive outlook we have for its future provide me with both the satisfaction and confidence to bring my time with Element to a close. In doing so, I'd like to take this opportunity to say a heartfelt thank you to the 2,500 strong team here across all of our locations, from the frontline staff to our executive group and board of directors. All of them have done so much to drive our success over the last five years. It has been incredibly satisfying for me to be part of this organization, and I will truly miss the sense of belonging and camaraderie that I've experienced during my time with Element. I've led many organizations through turnarounds and transformations, and none have been as special or as successful as this one. The reason for this success is undoubtedly the people that make up our company, and their willingness to engage and to be challenged in pursuit of the ambitious objectives that we set forth. Watching this play out over the past five years has been the highlight of my career. As I step out of the CEO role and move into my role as strategic advisor to Laura, I do so with great confidence and peace of mind, knowing Laura is as committed to our strategy and to the people that make it a reality as I have been. With that, Laura, the floor is yours. Thanks, Jay. Good morning, everyone, and thank you for joining us on this call this evening. Before we discuss our first quarter results, I do want to express my gratitude to Jay for his leadership and his dedication to our company. Under his guidance, Element has become a market leader and a client-centric growth engine. Our clients, investors, and team members are deeply appreciative of Jay's contributions. Now, during my comprehensive onboarding program over the past three months, I focused on our three strategic priorities. The first, achieving profitable organic revenue growth. The second, advancing a capital-lighter business model. Thirdly, our approach to capital allocation, which really consists of appropriate investments in our business, followed by return of capital to our shareholders. Now, regarding our first priority of profitable organic revenue growth, I did spend time with our clients, commercial leaders, and sales teams in each country we serve to understand how we can expand our share of wallet with existing clients and attract new ones. With our talented team and culture, I do believe 6%-8% annual organic growth is very achievable. Now, regarding our second priority of advancing a capital-lighter business model through services revenue growth and through syndication, I see ample room for services revenue growth within our existing client base and the self-managed fleet markets. As proven this quarter, our access to the U.S. market for vehicle lease syndication remains robust. As you would have seen, our first quarter results are impressive. We had 8.9% net revenue growth, quarter-over-quarter margin expansion, record pre-tax return on equity, and double-digit free cash flow per share growth. I'll leave Frank to provide more details on these numbers. As we look ahead, I'm confident in our strategy and ability to continue generating value for our stakeholders. We have pent-up demand for fleet vehicles that remains strong across our client base. Our order backlog is expected to remain at elevated levels through 2023 and into 2024, and that's despite increasing originations. This is a direct reflection of that pent-up demand from existing clients, combined with the ongoing success of our commercial and operating teams at winning and onboarding new clients. Consumer demand for new vehicles is also relevant because any weakening that could happen there could lead to further OEM allocation to the fleet segment, which of course would benefit Element. Our momentum, coupled with current market dynamics, has us updating our outlook for this year. Not only is our near-term outlook improving, but our clients' and our prospects' continued interest in the shift towards hybrid and battery electric vehicles presents a long-term runway of growth opportunity for us. Through further expanding our Arc by Element services, we'll continue to provide our clients with innovative solutions that meet their evolving needs in this area. With that, I'll turn it over to Frank for more details on our first quarter results and the year ahead. Over to you, Frank. Thank you, Laura, good evening, everyone. Q1 was another record quarter, and it's great to be demonstrating Element's ability to deliver on our client value proposition and generating growing value for shareholders. The recurring revenue nature of our business, combined with our resilient model despite macro and microeconomic impacts, continues to allow us to deliver growth and strong financial results in this environment. As I take you through Q1, I'm going to cite growth measures in constant currency. The U.S. dollar strengthened significantly against the Canadian dollar between the first quarter of last year and this year, which materially benefited this quarter's results. Constant currency eliminates those benefits, making for cleaner comparability year-over-year and, to a lesser extent, quarter-over-quarter. As always, we want to be transparent about the underlying business. Even after you control for the impact of foreign exchange, our first quarter results are near the high end of our long-term growth guidance and extremely strong on an absolute basis. We grew net revenue 8.9% over Q1 last year to CAD 304 million, which is a quarterly record. Adjusted operating income grew 7.2% over Q1 last year, despite increased investment in our commercial capabilities to fuel continued long-term growth at our 6%-8% annual net revenue trajectory. Operating margin was 54.4% for the quarter. Adjusted earnings per share were a record CAD 0.31 a share, a 4-penny or 15% improvement over Q1 last year. Free cash flow per share was CAD 0.37, which is a 6-penny or 19.4% increase over Q1 last year. Our capital-lighter business model expanded our pre-tax return on common equity to a record 18.8%. Zooming in on our year-over-year net revenue growth, it was driven primarily by services revenue and net financing revenue growth. Services revenue is a pillar of our capital-lighter business model, and our services to clients are at the apex of our value proposition, driving long-term, sticky client relationships. Services revenue was up 11.8% from Q1 last year, reflecting all three forms of share of wallet growth, which are in order of impact this quarter. First, penetration with existing clients who are increasingly turning to Element for help managing their growing fleet operating costs. In this context, service penetration can improve through increased service attachment rates per vehicle or an increased number of a given client's vehicles being entrusted to Element for service. Second, utilization of our services, in particular, our vehicle maintenance management service this quarter. Maintenance management entails working with clients to undertake more proactive vehicle maintenance in order to avoid the costly downtime they would otherwise suffer having to perform reactive repairs to their vehicle on an unplanned basis. Third, inflationary increases in the cost of parts and labor benefited our services revenue in the first quarter. Beyond share of wallet, there were two additional contributors to service revenue growth this quarter. The first was the services side of our business in ANZ, driven by growth in our fuel and roads ide assistance product take up, as well as improved supply terms with existing and new partners in our network. The second was the ongoing growth of our relationship with Armada in the U.S., which includes developing innovative new products and services for them. There remains growth opportunities for us in our relationship with Armada, both within and outside the U.S. In the latter category, there's Mexico, where we began working with Armada last year and officially hit the road this quarter, meaning Q2 of this year. Of course, there's ANZ, where we won the mandate last quarter to work with Armada. We anticipate the first Armada vehicles in that region being onboarded by our Custom Fleet business in approximately 3-4 months. Net financing revenue grew 6.6% year-over-year, driven by strong volume as we took advantage of continued gain on sales strength in ANZ, and to a lesser extent, Mexico, as well as average net earning assets growth as we benefit from the superior economics of holding certain assets on book for the near term. Now we'll turn to the second pillar of our capital-lighter business model, which is syndication. We syndicated CAD 690 million of assets in the first quarter and generated CAD 14.9 million of syndication revenue. That represents a 2.2% yield on the assets we syndicated, which is moderately better than our targeted 2% yield, which target should be kept in mind when modeling Element syndication revenue. The current environment of higher interest rates may create more variance in syndication yields quarter-to-quarter. Notwithstanding, we transacted on over 50% of the assets that we syndicated in Q1 within the last two weeks of the quarter. While this is somewhat typical, it also illustrates the depth of this funding source for us and the attractiveness of our assets to syndication investors. In all economic environments, banks and insurance companies need to put their deposit bases to work. With corporate debt and lending slowing, they're providing less supply, the risk profile and tax benefit of our assets are very compelling to financial institutions. As the rate environment stabilizes, we will likely increase our syndication volumes over the next 18 to 24 months to keep pace with originations. As stated in our press release on access to cost-effective capital last month, Element maintains ready access to diversified sources of funding from a high-quality roster of lenders and investors across markets. We are very pleased with the fleet ABS markets reception to our term note offering last month, which was materially oversubscribed and shows the enduring strength of our name in the market despite the high interest rate environment. We are equally pleased with our lending syndicate partners' appetite to expand their funding capacity commitments to Element. Returning to our quarterly results, I want to touch briefly on operating expenses. While costs were down quarter-over-quarter, the year-over-year increase is a practical and strategic decision. First, we are out of the COVID pandemic for all practical purposes, which was not the case in Q1 2022. The current environment has allowed us to connect with our clients and our teams more effectively face to face. With line of sight to materially more long-term organic annual growth than we originally thought possible, we want to ensure our commercial teams are appropriately resourced to take advantage of this trajectory, which means getting in front of prospects. We have already seen the fruits of this initiative pay off in Q4 and Q1 wins, which will manifest themselves in the second half of 2023 results, 2024 results, and beyond. Also illustrated in the supplement is our continuing success growing vehicles under management. We expect our vehicles under management for Q4 2023 to demonstrate healthy year-over-year growth for 2023 as a whole, based on the growing number of commercial wins we are securing. That said, we are likely to see a modest decline in VUM, or vehicles under management, next quarter. We have ended our provision of white label services to a competitor, and we'll see the related vehicles come out of our vehicle under management count in the second quarter. While commercial additions will be strong, they may not be enough to offset the departing vehicles. The economic impact to our business will be immaterial and has been factored into all our 2023 full-year results guidance we've provided. Regarding our order backlog, last year, we were of the view that our backlog would begin to get worked through in the second half of this year when OEM production capacity returns to historically normal levels. Our view has evolved, it's good news. As Laura said, we now anticipate our order backlog will remain at elevated levels through the end of this year and into 2024, despite increasing originations. This is a direct impact of the commercial success we have had in winning and onboarding new clients, as well as the strength in order patterns of our existing clients. We're still gonna originate record volumes, which we have been consistently forecasting for 2023. Q1 originations were up 24% year-over-year before foreign exchange. We anticipate full-year volume to be up between 15% and 23% on a constant currency basis, with upside if consumer demand for new vehicles weakens and further production is shifted to the fleet segment. What has evolved is our appreciation of three things. First, the scale of pent-up demand across our client base. We have always known there's unquantifiable demand for replacement vehicles beyond the volumes reflected in our formal order backlog. As this gets quantified in the form of irrevocable orders, we are seeing upward pressure on our order backlog. The second reason that the time horizon on our excess order backlog has lengthened is the extent of our commercial team's ongoing success of winning new business. The third thing blamed our order backlog outlook is new vehicle price inflation, which on average is up 6% in 2022. Finally, our increased full year 2023 results guidance encompasses both the fundamental strength of the business and the current favorable FX environment based upon the average foreign exchange rates for all currencies in Q1. I want to be clear that we do not forecast currency and encourage you to make your own assessment of same in deriving your forecast. We do not hedge currency as it represents predominantly translation impacts and not economic impacts of foreign exchange. However, the growth rates implied by today's guidance allow you to understand our fundamental growth outlook regardless of currency, i.e., constant currency growth rates. Given the strength of our Q1 results, our momentum and commercial success, trends in service revenue, and ongoing efforts to drive scalability, we expect to generate CAD 1.24 billion-CAD 1.26 billion of net revenue, implying approximately 6.5%-8.5% year-over-year growth on a constant currency basis. A 54%-55% operating margin resulting in CAD 675 million-CAD 700 million of adjusted operating income or 7%-10% year-over-year growth in constant currency. This AOI range translates into between CAD 1.26 and CAD 1.31 of adjusted earnings per share, which is 12%-16% growth year-over-year, and between CAD 1.58 and CAD 1.63 of free cash flow per share for the year, which is 13%-17% growth. We continue to expect the same volume of originations this year as we expected when we last spoke to you in March. The reason our originations volume guidance has increased by approximately CAD 500 million is solely due to the strengthening of the US dollar and the Mexican peso in relative terms. I wanna be clear about the fact that we do not try to forecast foreign exchange. We do not have a view on what the US dollar or the Mexican peso or Australian dollar will be worth relative to the Canadian dollar at any future point in time. We generate our internal forecasts using the most recent period's exchange rates. Our guidance effectively assumes that FX will remain constant to that prevailing at the time of the forecast. With that, let's open the line to your questions. Thank you. We will now begin the question and answer session. In order to afford all analysts the opportunity to ask questions, Element kindly requests that analysts limit themselves to two questions in live dialogue with management. Should an analyst have additional questions, please rejoin the queue. To join or rejoin the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, press star then two. Our first question is from Geoffrey Kwan with RBC Capital Markets. Please go ahead. Hi, good evening. First off, Jay, I just wanna say congratulations on your time as CEO and wish you the best in your retirement. Thanks, Geof. The first question I had was just with the new guidance that you've got on the EPS, you know, outside of the FX, like, what would be some things that would drive, better than expected on your, on your new guidance, and commercially, you know, where it might come in below what your new guidance is? Yeah. Geof, as it relates to earnings per share, you know, what really has driven that increase in guidance outside of FX, so going from that 7%-12% previous growth to 12%-16% growth in EPS under the new guidance. We see just the fundamental momentum that we have, particularly in the services revenue, as we look forward on the business. Again, strong double-digit service revenue growth from that perspective, and the NFR, solid NFR growth that we've seen in the first quarter. Additionally, we continue to anticipate and drive to a scalable operating platform, and watch that net revenue growth over the course of the year will outpace the increase in operating expenses, therefore allowing us to expand our margins over time. That is a critical aspect of driving that growth that goes down to AOI. Lastly, I would just point to modestly lower tax rate than initially assumed. We originally were in the 25%-26% range, as we typically are, and I would guide you closer to the 24%-25% range for this year. Okay. Just my second question was on the self-managed opportunity. Can you kinda talk about how that progress is today versus, say, 2 quarters ago? Or there's some examples you can give of how you're making progress on this front? Yeah. Geof, as you know, it's a longer lead cycle time or lead time cycle to do that. That being said, we have continued to focus on the effort for the self-managed fleets and believe it's progressing well with again, a significant focus there. As we've said in the past, you know, one of the benefits that we have seen more recently with the improving capabilities of the organization, both from the NPS scores and how clients perceive us, is our ability to win share via steals in the marketplace. That continues to be prevalent in what we see here, and in fact, winning back clients who left us back in the 2018, 2019 timeframe, back from other competitors who come in and see this opportunity to come back to Element that looks very different from a client experience than when they left us. So we're leaning into those opportunities as we see the competitive dynamics landscape lay itself out. We don't hesitate, and we continue to lean heavily into self-managed fleets, and we'll continue to do so and believe that that will continue to pick up and be additive to both the share of wallet, and many of the other levers of growth that we have. Okay. Thank you. The next question is from Paul Holden with CIBC. Please go ahead. Thank you. Good evening. Also first have to congratulate Jay. Very very successful career, obviously at Element. Well done and enjoy the well-deserved time off. Thanks, Paul. First question from me is regarding your expectation for OEM production in the second half of the year. I think sort of listening to, you know, a couple of the important OEMs, I think I'm getting a sense that maybe there's potential downside to production. They seem to be, you know, because of weaker consumer demand, do you think there is a realistic risk that production doesn't ramp in the second half of the year as expected? Or maybe you have better indicators than I on why it still should ramp. Yeah. Hi, Paul, it's Laura. I'll take that one, and Frank, you can add on. We actually are feeling positive about that. For as much as we expect, our backlog to remain elevated into 2024, we still have, as I mentioned in my prepared remarks, we still have a lot of pent-up demand on the fleet side. We're still seeing high demand on the consumer side. If you imagine for a moment that the consumer demand starts to fall away or weakens, that just would mean that more production would likely be diverted to the fleet side, which would be good for us. We've got good momentum in the business and good results, notwithstanding that, there are higher backlogs. We see, I'm gonna say, some real opportunity for future growth if that does start to come off. Laura, I would just add, you know, as we've said before, we have very good relationships with the OEMs. They're in constant dialogue, as a major buyer, there. Our discussions with them lead us to believe that we're pretty spot on in regards to the production volumes, and as Laura suggested, that consumer weakness could provide upside in originations for us. Got it. Okay. Thanks for that. Second question is related to your disclosure on VUM. I can't recall if this question's come up in the past, but I'm gonna ask it anyway. If I look at the 1 Q-2023 number versus 3 Q-2021, there's virtually no growth in the serviced and financed VUM. Virtually all the growth has come from serviced only. I guess first part of the question is kind of what explains that divergence? 'Cause I'd expect growth in both. Then two, is that what we should expect going forward? Or should we expect growth in both going forward? Let me answer the second question first. You should expect growth in both going forward with the caveat of the white label service that we provide to a competitor which is very low margin, and has really no implication whatsoever for when we end that service to them in this coming quarter. You will see that in a flatter or maybe even a modest de-decrease, but from a profitability perspective, no impact to us in regards to that. Sorry, Frank, just to cut in there. Is that a serviced only or is it a serviced and financed relationship? That is a serviced only. These are vehicles that are managed by another FMC who has co-contracted with us for a service that we had done historically for them. We are no longer going to provide that service going forward. It was, again, not really no major impact to the P&L. It's very low margin business, very small from a revenue perspective as we look at that. Understand. Then the sort of the historical explanation of why the serviced and financed hasn't grown? Yeah. I think as you, as you look at the business over time, you know, some big components of it are, you know, OEM supply shortage to some extent is an overhang on that. As some vehicles can come off road need to get replaced. We feel very comfortable that you will start to see that grow more over time. It's also a relic of what we've talked about in the past, which is some, again, some very low profitability business that we've moved off the books from that perspective in Q3 and Q4, I believe, of last year. The proof is to some extent when you look at the revenues per VUM, you see those either consistently increasing over time, relatively strong in the last quarter. I would say I wouldn't expect that type of growth in the future 'cause we as we onboard some of these big wins, they do take time to ramp up. The VUM comes on quicker than the revenue. Again, you'll see growing VUM and then over time, revenue per VUM as we move forward, in history. Hopefully that answers your question, Paul. That's helpful. Thank you. Have a good night. The next question is from John Aiken with Barclays. Please go ahead. Good evening. I guess, Jay, I'll wish you well in your retirement as well, and we're sorry to see you go. Laura, happy to have you on board with us this time around. I guess, Laura, I'd like to extend my first question to you that, as an outsider coming in, I know it's only been three months, but it does sound like you've been able to go around and see the entire operations. Is there anything about Element that has actually surprised you that you didn't realize coming in? Good, bad, ugly, doesn't matter. Thanks for the question, John. I did a lot of due diligence prior to arriving, and I would say for the three months and I have been put through quite the onboarding from Jay. It's been tougher than being at university. A lot of learning. It has been, as Jay told me, he did say to me, "You'll see when you arrived, everything is as advertised." I'm happy to report that everything is as advertised. From what I've seen to date, again, a company with some really strong business fundamentals, solid strategy, which has really impressed me. I'd say really a high performance organization that is continually improving. Very strong culture, very competent people, who really know how to execute on their strategies. I think that's what we're seeing in the results. You can see really good results. So, I'm actually left feeling very optimistic, that we'll be able to generate more value for our stakeholders over the long term, so as advertised. If I may as well thank Jay again for his leadership on behalf of everyone in this organization. Thanks, Laura. I guess my second question, if I can switch to Frank. Frank, you'd mentioned in your prepared commentary that you're developing new services for Armada. Are you able to give us any sense in terms of what these services are? Regardless of whether or not these are state secrets, are these services that could potentially be deployed through your broader customer base at some point down the road? Yeah. I think the thing we love about working with Armada is they always challenge us, and they take the concepts of efficiency and how they can more efficiently use their fleet. Again, remember they have, you know, different cycles throughout the course of the year and say, "How can you help us manage our fleet to increase utilization, to drive more productivity, to have more flexibility in the utilization of that fleet, et cetera?" It's those type of challenges that we love because it makes us better, and we come up with them in with answers to those challenges that we then work with them to implement. They move at a relatively fast pace, which is, which is good. I would say that the learnings we get from working with a mega fleet, regardless of who it is, can always be transported into our broader operations, to the extent that there are good learnings, from those. Obviously modified in many cases, but again, it just those type of learnings, those type of exercises make us better. When they make us better for one client, they make us better for all clients that are deployed. Thanks for the color, Frank. Yeah. The next question is from Tom MacKinnon with BMO Capital. Please go ahead. Thanks very much. I wanna congratulate Jay on on all your great work at Element and all the great work you did at the previous companies you worked at before Element. Enjoy the next phase of your of your continuing to or of your continued career. The question is with respect to the gain on sale of equipment under operating leases. This was up significantly year-over-year and even more so quarter-over-quarter. Was there anything special driving that? How should we be thinking about that going forward? I have a follow-up. Thanks. When we look at our gain on sales, obviously, you know, predominantly, A and Z, we saw a couple of things. One is that market has remained very robust from a pricing perspective on gain on sale. We took a strategic perspective of making sure that we took advantage of where that market is and moved the volumes that we had available into that market. You saw kind of across the board on our gain on sales, one, the larger impact was volume, but yield was up or rate was up as well in those markets. Given our view that originations will continue to start to come in, we wanted to make sure that we made hay while the sun was shining, and took advantage of those very strong markets, and the demand appetite that was out there. That being said, we continue to believe that those markets will remain strong over the course of the year because of that dearth of demand. Our volumes will probably not be at the levels that they were in Q1 of 2023. You'll see that be moderated as we move through the course of the year, and that's all built into our guidance. Great. With respect to syndication is the second question. I think in the last quarterly call, you talked a little bit more measured about the outlook with respect to syndicating assets. Just wondering how that sort of changed. I think you're guiding to still the 3- 4 in terms of volume. Yep. 2% yields are gonna be lumpy. Is there any way you would change your characterization of the syndication market now versus how you were describing it three months ago? Yeah. I, you know, just to recall back, you know, we've always said the syndication market is very strong for our assets. We think it's very deep for our assets as we built out that capability with, you know, north of 30 partners. I think the strength of that showed through, especially in the last two weeks of March, as there was market dislocation elsewhere where we're able to, you know, syndicate at yields, you know, above our target levels for the most part. Really strong demand there. The discussion around syndication is more around the economic value and the breadth of the opportunity versus holding it on our book and getting better economics in a higher spread world. We will continue to take advantage of that, and we continue to see that depth and breadth of the market. Volume's not an issue if we choose to go into the market with it. I would just add one other piece of information. As we move through the year, we believe that as rates stabilize, i.e., rates going up stop or slow, yields will begin to come in again, therefore offering us a better opportunity to get better economics on the syndication product. As well as driven by the fact that, the supply of other investable assets, think mortgage securities or corporate loans which are down, will be less supplied. Our asset, both from a risk perspective on the top of the pyramid from a safety perspective as well as amply available will continue to be, continue to be attractive. As such, we may actually see some more volume opportunities in the second half of the year. Lastly, as we've said before, in the fourth quarter, typically, the tax benefits, become more valuable because they-their use and time, are more near term. We benefit from that. We feel good about the syndication market. What we saw in the first quarter only gave us more comfort that we've got depth and breadth of funding opportunities. That's great. Thanks. The next question is from Jaeme Gloyn with National Bank Financial. Please go ahead. Yeah, just to follow up on that last question and, hoping, perhaps you can answer this. Have you been active in recent weeks on syndication markets? Yes, we have. Again, those markets, we haven't seen any real noticeable change in tone, as we've been in those markets. We're typically lighter in the first month of any quarter, and a little heavier in the back end of the quarters. No, we've been continuing to bring volume to the market, and had rapid, and ready reception of it, as we move forward. Again, no change in tone, from our perspective for our assets. Yeah. Okay, great. On that, I guess, I don't know, insourcing of a competitor's fleet, does that exist elsewhere in your portfolio of vehicles under management? If it does, can you size it and maybe talk about like the, you know, any other metrics around that in terms of like time or relationship, et cetera? No, there's really no any material, other, components to that, there. Again, this is, you know, this is historical business that we've had, that came with an acquisition we did several years ago in our collision business. So, so they had that business. As we've moved forward and brought it in, obviously now we're a competitor, and we've decided that, you know, the economics of that business were just not attractive to us. Therefore we will be exiting that business in the second quarter. Yeah. Understood. Okay, that was it for me. Thank you very much. The next question is from Graham Ryding with TD Securities. Please go ahead. Hi. Good evening. Maybe I could stick with the syndication theme. You know, you increased, I guess from an FX perspective, your originations outlook, but you kept your syndication volumes unchanged relative to your old guidance. Are you just trying to be... on the other hand, you know, you gave a pretty constructive outlook for, you know, the depths and the breadths of that market. I'm just wondering why you didn't increase your syndication volume outlook, but you did your origination outlook. Yeah. When we reset that syndication guidance from $4 billion-$4.5 billion, we left it at a pretty wide range of $3 billion-$4 billion, Graham. There's a lot of areas to brought to land within that, within that range. We've got, you know, even if those originations continue to go up, you know, you can see opportunities in syndication. It's gonna be more driven though by the rate environment and the, you know, the originations and whether or not we would prefer to keep those on book in the near term until the rate environment gets more attractive to us, and then we syndicate those assets at a later date. Okay. Fair enough. Just broadly speaking, when we sort of look at, you know, the increasing rate environment, are you seeing any pressure at all on your business with, you know, higher variable rate funding? Are you able to pass that on your variable rate sort of NFR? Are you seeing any pressure there at all, or are you able to pass through the higher rates? Yeah, you know, our we always look at the confluence of our funding costs versus what we price our leases at as we move forward. That being said, we have long-term relationships and long-term agreements with clients, right? As we see rates increasing, we have discussions, but specifically as we onboard new business, we make sure that they reflect the new rate environment that we're in. To the extent that there is a reason to have a discussion on rate with an existing client, we will have those discussions as we move forward. Again, you know, We've been able to continue to finance our business at attractive levels, right? And shown that ample access to capital. Although we do see some rate increase within our NFR, you know, some of that's just driven by as we continue to leg into match funding in Mexico, and the peso, which we've talked about before, is the bigger component of that versus slightly higher rate on a $500 million or $750 million ABS. Remember, our variable funding, you know, relatively stable, our senior lines, our other funding mechanisms have been relatively stable. When we go to market, we go with a relatively small percentage of the overall to term out those type of facilities. We're not seeing a major impact from the rate moves, albeit, you know, the funding that we've done more recently in the ABS market is higher than the one we did in 2021. Makes sense. That's it for me. Thank you. Yeah. I'd also say, Graham, this is important. As overall rates go up, we are completely agnostic to base rates. Our contracts are set, so if the Fed, whether it's SOFR, historically LIBOR, whatever, as those rates increase, our cost to clients actually increase lockstep with those, right? The only exposure we have is just on terming out facilities with, whatever spread increase we have over and above the base rate. This is why we've said many times we're effectively interest rate agnostic because we lock in the economics at the time of the origination based on where base rates are at the time of that origination. That's it for me. Thank you. Once again, panelists who have a question may press Star then one. The next question is from Shalabh Garg with Veritas Investment Research. Please go ahead. Thank you. Good evening. My questions are on order backlogs. Can you share any insights on the mix of electric vehicles within the order backlog? Yeah. If you look at our VUM calculation, we do disclose the amount of EVs in that VUM calculation, and it's very small component of the overall VUM. We are seeing more interest in electric vehicles. On a percentage basis, more opportunity within the order backlog. It's still very small relative to the overall component for several reasons. One is, as we work really closely with clients, the prudent and stepping in manner as they want to do pilots on a smaller scale to understand vehicle in use and best fit for use type of vehicles, and get used to charging infrastructure, which is also a big component of, you know, how they do it. It's still small. It's one of those things that we believe will continue to move over time. As we've said before, we think 40% to 60% of the fleets by 2030 will be electrified. That being said, that means 40% to 60% of the fleets will still be ICE. Someone like us who has capabilities to both have the data and help people migrate to the EV journey, but be able to manage a mixed fleet as those fleets become more mixed, continue to be very well positioned for that migration. Okay, that's useful color. Are you seeing any hesitant from clients because of delivery timelines getting longer for electric vehicles? I think it's too early to say. I don't think anyone's extended timelines. We're seeing more interest from the client base. We're spending a significant amount of our strategic consulting on EVs. It is a topic on every new business and existing client discussion. It is one of the things that I think provides an incredible opportunity for us, not only with our existing client base, but with self-managed fleets, given the complexity of moving to an EV fleet or even a mixed fleet over time. You know, we believe this will be a catalyst to one of the earlier questions, self-managed fleets looking to this because we should have based on our 1.5 million vehicles under management, some of the best data on in-use data for these type of vehicles. What type of vehicle to use, what are the challenges going to be, and then helping people to solve the charging infrastructure component of it as well. Okay, that's helpful. One last one from me. The order backlog there approximately 3x the pre-pandemic level, which we have seen for quite a few quarters. Can you provide a breakdown of that 3x growth into things like number of vehicles, by inflation, by a change in mix towards electric vehicles which are a bit more expensive? Anything on that would be very helpful. I think the reason you've seen it stay elevated predominantly is the strength of the ordering that our clients have. I mean, our clients are looking and their fleets have aged over time. They believe in their business. These are mission-critical vehicles, they cannot generate revenues without these vehicles. There's a real need to control costs, and obviously costs have gone up. We've been a great partner with our clients in trying to help them manage those costs with that aging fleet through preventative maintenance and other products to make sure we're keeping downtime down. They need new vehicles, as these order banks are open up, they have been placing their orders at very strong volumes quarter after quarter, which has kept despite increasing originations, new orders are just backfilling those. Obviously, inflation is a small component, but the bigger component by far is just the demand component of our client base. This concludes the question and answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.