Thank you for standing by. This is the conference operator. Welcome to the Element Fleet Management second 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 prepared remarks, there will be an opportunity for analysts to ask questions. 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 AIS, 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 statements, MD&A, supplementary information document, quarterly investor presentation, and today's call include references to non-GAAP measures, which management believes are helpful to prevent 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 Laura Dottori-Attanasio, President and Chief Executive Officer of Element. Please go ahead. Operator. Good morning, everyone. We are pleased to be here to discuss Element's second quarter performance, which includes record results driven by commercial wins and client growth. We continue to deliver a superior client experience in all five countries we serve, we're successfully executing all five drivers of our revenue growth strategy by retaining 99% of our existing client base, expanding our share of wallet with those clients, earning market share from our competitors, converting self-managed fleets into new clients, and securing government and mega fleet mandates. To put this into context, this quarter, we earned market share in welcoming 23 new clients. We converted 25 self-managed fleets, we continued to expand our share of wallet with 124 pre-existing Element clients. These wins represent a potential addition of over 20% more vehicles under management than what our global commercial team accomplished during the same period in 2022. In addition, an important part of our performance was the impressive $2.5 billion of new vehicles that we were able to originate for our clients. This was a function of steadily improving OEM production capacity, which of course, is great news for both our clients and our shareholders. As we communicated last quarter, our backlog of orders continues to remain at elevated levels and is expected to carry us well into 2024, with $2.6 billion of contractually committed future origination volumes. Moreover, our clients' demand for new vehicles continues to be strong as they placed $4 million of orders, a record in the first half of this year. Now, pivoting to ESG, we published our third annual report in June, containing full disclosure of our scopes one, two, and upstream scope three greenhouse gas emissions. We're currently working on the establishment of science-based emission reduction targets and expect to share those with you in 2024. That said, we've already been taking action to reduce our environmental impact. We achieved a 55% reduction in scopes one and two emissions in 2022, and that's relative to our 2019 base year, and it's thanks to our internal fleet electrification efforts and decreased energy usage at our offices. Regarding electric vehicles, we launched and guided numerous client pilots across our global footprint with a full suite of Arc by Element services. Our strategic consulting capabilities in EVs continues to garner strong interest from clients and prospective clients, particularly in the self-managed space. Now, before I hand it over to Frank, I want to thank our entire team at Element for your continued dedication and hard work. Without you, these record results would not be possible. Now, looking ahead, we continue to have lots of opportunity to grow and further improve our performance with planned and paced investments in our business and with the continued execution of our strategy. This is an exciting time for Element, and we're looking forward to sharing future successes with you. Over to you, Frank. Thank you, Laura, and good morning, everyone. It's great to be demonstrating Element's ability to deliver on our client value proposition and generate strong results across the business. Two things before I take you through these, those results. First, we disclosed this time last year, we earned $8 million of non-recurring net revenue in Q2 2022. Excluding that from year-over-year comparison shows the organic growth of the business, so I'll be citing growth on that basis. Second, the growth measures I cite will also be in constant currency, because strengthening of both the US dollar and Mexican peso benefited our Q2 results as reported. After normalizing for those factors, our second quarter growth was still near the high end of our long-term guidance ranges and very strong in absolute terms. We grew net revenue 8.4% year-over-year to $323 million for the quarter. Adjusted operating income grew 4.5% on the same basis, despite increased investment in our commercial capabilities, which I'll come back to shortly. Operating margin was 55.1% for the quarter, consistent with our guidance. Adjusted earnings per share were $0.33, which is a 10% improvement year-over-year. Free cash flow per share was $0.46, which is a 22% improvement year-over-year. It's worth noting that Q2 free cash flow benefited somewhat from the timing of cash payments and cash inflows from originations in the first half of this year. Normalizing for those items, free cash flow per share would have been approximately $0.42 in the second quarter, and the incremental $0.04 would likely benefit the second half of this year equally. For certainty, we reaffirm our guidance of $1.58-$1.63 of free cash flow per share for the full year. Looking more closely at our second quarter net revenue growth year-over-year, it was driven by services revenue and net financing revenue growth. The first pillar of our capital-lighter business model is services revenue. Consistently delivering superior client services is fundamental to our value proposition. These services result in our clients and their drivers developing a near-daily working relationship with Element, which is the stickiness that enables us to retain almost 99% of our business annually. Services revenue was up 12% year-over-year, driven by share of wallet growth, namely increased penetration and utilization, as well as modest growth in ANZ, Mexico, and Armada services revenue streams. We've quantified the relative value of these contributions in our supplementary information document for Q2 and included further detail in the MD&A results commentary. Net financing revenue grew 6.4% year-over-year, driven by average net earning assets growth of 6.2% and interim funded asset growth of 100%. Each of these asset categories grew as a consequence of our record $2.5 billion of global originations in the quarter. Year-over-year, gain on sale, or GOS growth, also contributed net financing revenue growth. In Q2, GOS moderated slightly in Australia and New Zealand compared to the second quarter of last year. This was more than offset by GOS growth in Mexico on the same comparative basis. I'll turn to the second pillar of our capital-lighter business model, which is syndication. We syndicated $690 million of assets in the second quarter and generated $11.4 million of revenue. That represents 1.65% yield on the assets syndicated, or 35 basis points shy of the 2% long-term average yield we continue to guide for modeling purposes. As we've said before, the continuing uncertainty around interest rates has sustained elevated spreads, which compress available syndication yields. Remember, the biggest benefits to Element of our syndication program are, first, the ready access to off-balance sheet funding for growth. Second, the ability to manage our tangible leverage ratio. Third, the accelerated revenue recognition and increased velocity of cash flow, which we can redeploy for attractive returns. Fourth, the freeing up of excess equity to reinvest in the business and return to shareholders through buybacks and dividends. Our access to capital through syndication remains deep, and we are confident that we can syndicate the volumes implied by our full year guidance. A second-half originations should provide ample inventory for our syndication team to work with. Turning now to operating expenses, we knew the modest increase was coming this quarter as planned, which we signaled in May, and this increase reflects both practical and strategic choices, as well as inflation. Given our confidence in longer, high-- long-term, higher annual organic revenue growth potential of 6%-8%, which is up from the previous 4%-6% run rate outlook, we need to resource our teams to lead, manage, and fulfill this potential. Resourcing prom-- properly means hiring and developing the right talent in the right roles. It means continuously improving our market-leading capabilities, and it means facilitating meaningful client interactions through travel and events as we ex- exit the pandemic era and increase our commercial ambitions. We are also investing in our service delivery model to sustain the growth of our Net Promoter scores and lower our cost to serve. The healthy returns on these OpEx investments are already being demonstrated, for example, in our second quarter results and in the commercial success profile that Laura shared. That commercial success will have lasting impact on our performance over the next several years, such as the nature of our incremental recurring revenue growth model. I want to briefly discuss sustaining capital investments, which we disclose in our calculation of Element's free cash flow in the supplementary. We expect to make between $75 million and $80 million of sustaining capital investments this year, which is more than we have in recent years. This is partly a function of inflation on the $50 million-$55 million in annual sustaining CapEx range we first set out several years ago. However, that range was predominantly focused on IT spend. As Laura mentioned, we've been electrifying Element's internal global fleet, which will impact our sustaining capital investment totals both this year and next year. We will also be optimizing certain of our real estate footprints over the next two to three years, the cost of which will be partially comprised of incremental sustaining CapEx. These and other non-IT sustaining capital investments are forecast to be approximately $18 million in 2023. Turning now to our funding. As you know, Element maintains ready access to diversified sources of on-balance sheet funding from a roster of high quality lenders and investors across all of our markets, and this is evidenced by our activity in the first half of the year. In April, we issued $750 million of asset-backed term notes, which was greeted by strong investor demand, allowing us to upsize the offering from $500 million while improving pricing. In June, we upsized our credit facilities, as well as issuing a $750 million, US dollar senior unsecured note at 200 basis points over the relevant treasury. We're very pleased with this pricing for our third-ever U.S. bond deal given the market at the time. With a strong outlook for originations over the next several quarters, we continue to evaluate funding options to optimize both our on and off-balance sheet mix and, of course, lower our cost of capital. This is an exciting time to be looking ahead at Element's prospects because there's so much positive momentum in our business. Our record profitability continues to validate our strategy and the organization's cohesive approach to delivering that consistent, superior client experience. Over time, this growing profitability, combined with recent and contemplated global tax legislation, is likely to drive increasing cash tax expenses. That said, we expect cash taxes to remain below the accounting provision for tax that is a function of our effective tax rate. Before we take your questions, let me officially reaffirm the full year 2023 results guidance we provided the market in May, which remains unchanged. We commit to revisiting this guidance since November as part of our Q3 earnings release. We also expect to be in a position to provide you with full year 2024 results guidance at that time. For now, I'll turn this call over to the operator for your questions. Thank you. We will now begin the analyst question and answer session. In order to afford all analysts the opportunity to ask questions, Element kindly request 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 will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. The first question comes from John Aiken with Barclays. Please go ahead. Good morning, Frank. Just first off, a quick clarification on your commentary around the free cash flow. You said this quarter benefited by $0.04 from the pull forward, but I think you said that $0.04 will also benefit the second half. Did I get that correct? No, what, what I said, John, was, had we not had that pull forward, that that would have affected. I wouldn't call it a pull forward. It's really driven by both the timing of the originations that we saw, so the strong originations, and then also by the timing of cash taxes, which were lower in the quarter. Had we not had those two impacts, that $0.04 would have likely benefited the second half instead of coming in in the second quarter. Thanks, Frank. That makes a lot more sense to me. I guess my second question is, admittedly, this commentary came from at least two generations of management teams ago, but when we originally, there had been some commentary around interest rates and when, if I remember correctly, interest rate sensitivity for clients hit around 11% or 12%, and we're at that level now, at least in general. Are you seeing any rate sensitivity with your clients in terms of what you're charging, or is the environment just so different today because of the impact we saw through the pandemic, that there's basically no sensitivity? I just any commentary would be appreciated. Yeah, no, I think the way I would phrase it is, are we seeing any impact on demand, right, and client demand? We are not. Remember, it's the aspect of the mission-critical nature of these vehicles, the fact that the clients need to replace them, and the fact that the aging fleets, because of the supply chain, is helpful, but not in driving that. It's just the overall mission-critical aspect of those vehicles. Overall, all funding for our clients, whatever markets and whatever their uses are up in this environment. We're in that same vein, obviously up higher because our, our contracts are based on base rates at the time of the origination. No, we see demand as, as still very good, and I just point you to $2.1 billion worth of orders in the quarter, which was very, very strong from our, from our perspective. Thanks for the color, Frank. I'll requeue. The next question comes from Geoffrey Kwan with RBC Capital Markets. Please go ahead. Hi, good morning. Frank, I had a question on the syndication yields. It's varied a little bit at certain times over the past few years. Just wondering, how should we think how the yield gets impacted by, you know, interest rates, the higher funding costs and tighter conditions for the regional banks, and any other factors that we need to be aware of? Also, how are you expecting that yield to trend over the next couple of quarters or next few quarters? Yeah. I think you will continue to I'll answer the last question first. I think you'll continue to see yields kind of depressed from that 2% level over the next two quarters as we continue to be in this interest rate environment that we currently are in. That being said, what is driving that is twofold. One is, obviously the increasing spreads that we've seen, but more importantly, the increasing hurdle rates at the banks, as they have, they have, gone through this year. That impacts their ability to, or the pricing of, of our product into their investment portfolios. That's an important consideration from that perspective. That being said, I would say we continue to see significant depth in that market, and feel very strongly, as I commented in the prepared comments, that we are on target for our guidance range, which would mean the second half will be stronger than the first half in regards to syndication volume. That's really benefiting from the supply we're getting from the higher originations, as we, as we look there. Longer term, so going out past a quarter or two, we would anticipate that those yields would start to rise again, in particular as interest rates, number one, stabilize. Number two, when interest rates start to come down, we will benefit, in particular, on our fixed rate product. Historically, and I've said this before, we tended to sell more fixed rate and less floating rate. In the current environment, over the last year or so, we actually sell slightly more floating rate than fixed rate, because it is much more agnostic to the volatility in interest rates. That being said, it tends to, because floating rate notes do, carry lower yields when sold. Got it. No, that's, that's very helpful. Just my second question was on the, w hen thinking about the reported backlog and, and what you think is maybe your, your shadow backlog, how long do you think it will take for all your clients to have their fleets fully, call it, up to date? But in particular also is, like, how do you think that backlog normalizes in terms of what it means from the OEM side? In other words, is it that them, increasing production allocations to fleets in terms of that shifting market share to fleets? Is it adding an extra production shift? Is there new plant openings? Just trying to understand how you think about that path to normalization. Yeah. First and foremost, increased production, right, is always the best way towards it. I know the OEMs have been focused on increasing production and getting there. Obviously, they've done a significant, significantly good job doing that and being able to originate the $2.6 billion that we had this quarter. That's been a very, very big plus to it. You know, to us, the gravy is to the extent if there is any shift towards the fleets versus retail, that's really a flat out how strong is retail demand for vehicles? Because obviously retail is an important component of their business as well. We don't count on that, but we do think we'll see benefits should the retail demand slow down in any way, shape, or form. In regards to the backlog and when it normalizes, you know, our crystal ball, you know, isn't better than anyone else's. That being said, we think it will carry, you know, meaningfully into 2024. We think we'll end the year with a still a strong order backlog that is above normalized levels and will take some time through 2024, assuming continued improvement in production as we move through the year. That, that also includes our, our perspective that orders will remain strong because of the demand that we see and the need for our clients to continue to replenish their fleets. Okay, thank you. The next question comes from Tom MacKinnon with BMO Capital Markets. Please go ahead. Yeah, thanks very much. Just a follow-up question with respect to free cash flow. Even if I normalize for the $0.04 that you talked about, it still looks like free cash flow is up, maybe closer to 12%. You know, this is, excluding currency adjustments versus your adjusted EPS, that's up 10. We do have sort of free cash flow, even X, the items you talked about, growing faster than adjusted EPS, or modestly faster. Why might that be, and what would be the outlook for that relationship as we move into 2024, just given some of the sustained CapEx investments that you've been talking about? If you could shed a little bit of color with respect to that answer about, recent discussions then to drive an increase in cash taxes and how you might think we should take that into account as well. Thanks. Yeah, I think the first and foremost that I would point to, Tom, is that, you know, originations in general and even, even normalizing a little bit for that, they're very strong in the quarter. As we've said, going on for the last couple of years, originations are very good. Both from a revenue perspective, but from a free cash flow perspective. We really enjoy the improvement in originations. We know our clients enjoy the improvement in originations, and we're glad that that is starting to come through from that component of it. As we look going forward, as I've said, we believe we will continue to have a material spread between our free cash flow effective rate, free cash flow, cash tax rate, and our effective tax rate. You'll continue to see a nice spread between those two, and hence why we focus so much on free cash flow as we look overall at the business. You know, lastly, again, I'd point to in the future, you know, the strength of originations and just, you know, how strong cash flow drives from that, regardless of the AOI component, is an important component of why we see that differential. You talk about investing in your service model. Can you elaborate a little bit on that? Are you looking at expanding your service proposition? Can you just shed a little bit more color with respect to what you're doing with your service model? Sure. You know, we, we, we have a we have a significant operating leverage in our business, but it is not, you know, absolute operating leverage, right? When we see this level of originations, as we grow clients and as we increase our vehicles under management, there are certain aspects of the business, whether it's FPS or our Maintenance Service Coordinators or others, that can service a set number of vehicles. As we grow the business, we need to invest in those areas. The reason that's absolutely critical is, those are, those are pieces of the business that directly face the client. If we want to continue to maintain high NPS scores, high retention rates, et cetera, we need to make sure that we're providing best-in-class service to those clients, which starts with our frontline people, which is absolutely critical from that perspective. That, that is the service component. Then, obviously, I've talked about investing in the commercial component of it as well. If you look overall, a significant amount of our investment, increase in OpEx over the quarter, really is in our people. Our people drive our NPS, and they drive our client experience, and that's why it's so critical. If I could just squeeze one more. What about orders? How are they trending relative to originations? We saw $2.1 billion in orders, which I believe is a record. They're trending very well. Obviously, we had a very, very strong origination quarter. Probably the high watermark for the year, but we'll, knock on wood, hopefully see strong originations going forward. We feel really good about the order volumes that we're seeing in the business and then the continued ability to originate against those order volumes. Thanks. The next question comes from Paul Holden with CIBC. Please go ahead. Thank you. Good morning. I want to go back to the OpEx investments you're making and make sure I understand the story right. Two parts to the question, I guess. First off, Frank, I mean, you just re- referenced NPS scores. I thought those were already strong, so just want to make it clear: Are you making these investments for enhancing future, revenue potential, or is it really just to bring up service levels that were maybe below where you're aiming for? Two, maybe just remind us of your approach to managing investments versus revenue over time, i.e., margin/operating leverage, and how, how you plan to manage that over, over time. Yeah, it's a good question, Paul. The, the answer to your first question is both, right? We have to support the growth that we have. That's absolutely critical. We have to support the growth we're getting, at least at the levels that we currently have, that provide those high Net Promoter scores. Additionally, you know, in a world where you stand still, that is evolving as quickly as, as our world and our clients' expectations continue to increase, we have to continue to invest to make sure that we're meeting those needs, and in fact, exceeding those, those expectations of our clients, for two reasons. One is, you know, it helps with our retention rates. Second is, it gets out in the market, and it provides our commercial team a very strong foundation to go sell on value. That is absolutely critical to our proposition as we move forward. That's what you're seeing in this near term. I think longer term, you'll see OpEx kind of moderate from the perspective of we will get to a scale and a level in regards to the commercial investment that will start to, you know, level off. Remember, we're coming out of comparisons that are still pandemic or just coming out of pandemic, so that's why you see some of those step-ups on the commercial piece, whether it's travel, meeting clients, et cetera. We will always focus, and have always focused for the last five years, on delivering that consistent, superior client experience, and we're going to make sure that that's something that we don't put in jeopardy, while still maintaining our commitment to driving operating leverage over the longer term. Okay. Last question is with respect to the syndication rates, and maybe it's an obvious answer, but just assuming if they sort of stay in line with Q2 or below 2%, that means a lower proportion of syndication versus what you retain on the balance sheet, and maybe that has some influence on your 2023 guidance. Is that, is that fair? There's, there's no impact on our 2023 guidance. What I would say, Paul, is when we look at a syndication, whether or not we syndicate a lease or, or group of leases, we always look first and foremost of, is it a positive net economic benefit to syndicate that asset, right? If it is a not enough a positive net economic benefit, and it's better to hold on book than syndicate, absolutely, we'll hold it on book, right? We're, we're not gonna give away economic value for the sake of just syndicating an asset. That being said, because of our partners' lower cost of capital, and the tax benefits that we can't use today, but our partners can use relatively quickly, many of our leases are beneficial to, to syndicate from an economic perspective. So we're not seeing the current rate environment driving significant decisions around the volume we're gonna syndicate, and hence why we said our guidance for the year is good for syndication volume. That as by definition, our second half will be more robust from a volume perspective than the first half of the business. I'll point you to when we look at syndication and look at the P&L impact, it is relatively minor next to some of the other key drivers of the, the business service revenue, some of our NFR and what we're doing there. That being said, it is critical, but I'll go back to what I said in the prepared remarks, which is, it is critical funding. It's for funding. It increases the velocity of cash flow. It allows us to go out and win more business and take on more vehicles under management, which carry with those service revenues that, inure to our benefit, as well as upfront originations. The benefits of those upfront originations, whether or not we syndicate it. I think hopefully that answers your question. Yeah, sorry. I do, I do want to follow up because I guess the way I'm just looking at it is, syndication rates are somewhat under pressure, at least they certainly were in Q2, and you're suggesting they will remain under pressure to some degree versus historical norms. Yet, when we look at the net financial margin, you're earning on what you keep on the balance sheet, it's expanding and continues to expand. I'm just curious why that doesn't change the equilibrium between retaining assets and syndicating assets. To me, I would have thought it would. Yeah. Well, again, it goes to that net economic value benefit and the equity, the return on equity we get, in regards to holding on balance sheet versus not holding on balance sheet. Remember, when you're looking at I'm not sure exactly what you're looking for in regards to the yield, but if you're looking at the yield, there's a couple of things that influence yield. The first one is the geographic perspective, right? We are growing assets outside of the U.S., which carry higher yields to them, and those are inuring to our benefit from that perspective. Then secondly, obviously, some of the non-interest component benefits, like gain on sale, continue to benefit us in regards to that as well. Okay. I'll, I'll leave it there. Thank you. Thanks. The next question comes from Graham Ryding with TD Securities. Please go ahead. Yeah, there's, some concern out there, just a potential auto worker strike, looming in September. How concerned are you or, that that could sort of negatively impact production volumes, or would you, at this point, expect that to be a bit more of a transitory-type event? Hey, Graham, it's Laura. I'd tell you that we're watching it closely. We've run different scenarios within the organization. All of it's very manageable. It'd be, let's say, similar to previous supply chain disruptions that we would have had. We'd expect, again, the effect would be we continue to see a good order backlog would be elevated, and it would all be in deferred revenue. I'd say more importantly, as Frank was talking about earlier, we don't expect it to change our previously provided guidance, so we're comfortable with our guidance for the balance of 2023. If it's persistent to 2024, we think it's all manageable. Okay. Understood. Maybe I can just jump to your the services piece. It, you know, looks to me like in the U.S. and Canada, over 50% of your revenue roughly comes from services where it's a much lower mix in ANZ and Mexico. I guess, why is it so much lower in those markets? Then do you feel like there's an opportunity to maybe replicate some of the, the services that you're offering in U.S. and Canada to, to those other geographies and increase that mix? Sure. I would say the number one is maturity, maturity of the market. The U.S. market, we've operated here longer. We've got a much more built-out service network. We've got a much more consistent offering, from just because of the size of the network and from the length of time we've been doing it. It is absolutely one of the biggest focuses that we have from a growth opportunity perspective, is to drive service revenues in Mexico and ANZ, and we have seen considerable growth in those markets on our services business, albeit from a smaller base. As we build out those networks, and continue to add vehicles under management in those markets, we believe that represents a real opportunity to mature those services markets, and gain outsized growth within that service piece, in those geographies. Yeah, it is absolutely a focus and absolutely an opportunity from our perspective. That's it for me. Thank you. The next question comes from Jaeme Gloyn with National Bank Financial. Please go ahead. Yeah, thanks. Good morning. Just wanted to, go back to maybe, right at the top of your opening remarks, Laura, you talked about some of the, the new client wins, you know, stealing market share in the self-managed fleet, sounded like 20 or 25 new, like, clients in each of the, the categories. Just wonder if you can frame, like, the, the revenue, contribution of those clients and, you know, looking at the, the sub pack, it looks like the v- the, the services per volume of these new clients in Q2 were a little bit lower than the, than the broader average. Just curious, like how, how a, how a typical new client starts with like, you know, maybe a couple services and then you land and expand. Like, what's, what's the, the timeline or progression for, for that revenue to kind of flow through? Yeah, thanks for the question, Jaeme. We usually start, as Frank was responding to the earlier question, often we'll start from the leasing side and then look at adding services over time, with services, of course, coming into revenue sooner as we take them in. It's really a question of progression over time. Once you get in and start providing a service, we look to add additional services on. Dependent upon the service, it can take for products, it can take three months to sometimes six months before we see those sales represent on the revenue side. The, the other thing I would add, Jaeme, you know, what, what is really interesting about new business wins is just the, the tail on which it provides growth. When you think about the lease, we will typically, you know, if they're already with another FMC, the FMC keeps those leases. It takes four years, roughly, three and a half years, to fully ramp up the full lease revenue, and that's before any growth within the client's fleet, which also adds to that in-increasing growth. Then with the services piece, obviously, we typically don't start out with the full suite of services, and so we have that ability to add share of wallet over time. The nice thing about the recurring revenue business is that it's actually a recurring growing revenue business with a new client, because by definition, a win today not only provides value today, but it it provides value in year two, year three, and year four as that growth takes place, and de-risks those future 6%-8% growth rates we talked about. Okay, thanks. Then, you know, thinking about the gain on sale this quarter, a little bit down from last quarter, are you able to break out volume and price contributions? You know, I guess what I think is, like, are volumes higher versus last quarter, and it's, you know, prices are coming down, of course. Maybe a little bit of more color on how that gain on sale is progressing. Sure. We've seen a little bit of pressure in ANZ in regards to pricing within the fleet, but we did see more volume, and which helped to offset it. We also saw higher vehicles that had more depreciation because of the age of the vehicles. Then we also have been growing our gain on sale in Mexico, which is been a benefit to us as we move forward with the business. I think in general, you know, it's down a little. It's relatively stable. We think that, you know, it will decline over time, but at a very modest pace because of many of those offsets we talked about and the growth in Mexico relative to ANZ. Okay. Good stuff. Thank you. Once again, analysts who have a question may press star then one. The next question comes from Stephen Boland with Raymond James. Please go ahead. Good morning. Thanks. Just in terms of originations for 2023, you know, you're at $4.4 billion for the first half. To hit your guidance of, you know, $8 billion-$8.5 billion, and even to the top of that range, you, you only have to do about $2 billion per quarter. We assume that, like, this was a peak quarter in the year, and perhaps originations do slow down in the second half? Yeah, I, I would say that is a fair estimate, and it's very consistent with past experience, where the second half tends to be a little bit lighter, as the OEMs go through the model changeovers in Q3, which they'd have to take the lines down, retool, and then bring them back up to do that. I tell you that, you know, the high end of that guidance range is pretty sound from that perspective, but we'll keep an eye on, you know, that. I, I think you heard the earlier earlier comment in regards to, you know, a potential UAW strike. We didn't wanna go out on a limb in regards to, you know, how we think about the originations in the second half. Okay, that's good. Laura, sorry, can, can you just talk a little bit more on, on the self-managed conversion? I, I know Jaeme just asked the question, but I, I presume that near the tail end, I know some, some of these contracts take a, a long time to come to fruition. You must have been or could have been part of some of these conversations, with these new clients. Maybe you could just talk about what you saw through those discussions? What, what got those, those fleets to convert? Was it pricing? Was it, you know, the additional promise of services? What, in your view, made those, those companies or, or governments or regions, convert to Element? Well, thanks for the question, Stephen. I just wanna start with our people. I've had the opportunity to actually go on some of the sales calls and spend time with the team, and we have a very high quality sales team and account management team that builds really strong relationships, and they create trust from our prospective client base. That goes a long way. We have great people and a really solid value proposition. Not only in what we offer in terms of Total Cost of Operation, where we can help our clients save money, I would say our real differentiator is the strategic consulting value that we bring forward. Again, solid team that offer really impressive insights to our clients, where they can take action and save costs by following the advice that we're given. All that said, it is a longer sales cycle, just given it does take a few meetings, again, to gain trust and get our prospective clients comfortable with entrusting us with these operations. Once our clients do sign on, as you saw with our retention rates, we do a great job keeping them. As Frank alluded to earlier, we've got some really solid momentum in the business, and with a lot of these wins we've seen should carry us from a growth perspective in future years. Okay. Just when you mentioned strategic consulting, that's not just for EV, that's just for the whole product offering? That's right. Is that correct? Product offering, including, EV. Okay, thanks very much. 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.