Greetings. Welcome to the ABM Industries second quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. The question-and-answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press *0 from your telephone keypad. Please note this conference is being recorded. At this time, I'll turn the conference over to Paul Goldberg, Senior Vice President, Investor Relations. Paul, you may begin. Good morning, everyone, and welcome to ABM's 2nd Quarter 2025 earnings call. My name is Paul Goldberg, and I'm the Senior Vice President of Investor Relations at ABM. With me today are Scott Salmirs, our President and Chief Executive Officer, and Earl Ellis, our Executive Vice President and Chief Financial Officer. Please note that earlier this morning we issued our press release announcing our second quarter 2025 financial results and outlook. A copy of that release and an accompanying slide presentation can be found on our website, abm.com. After Scott and Earl's prepared remarks, we will host a Q&A session. Before we begin, I would like to remind you that our call and presentation today contain predictions, estimates, and other forward-looking statements. Our use of the words estimate, expect, and similar expressions is intended to identify these statements, and they represent our current judgment of what the future holds. While we believe them to be reasonable, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially. These factors are described in the slide that accompanies our presentation, as well as our filings with the SEC. During the course of this call, certain non-GAAP financial information will be presented. A reconciliation of historical non-GAAP numbers to GAAP financial measures is available at the end of the presentation and on the company's website under the Investor tab. I would like now to turn the call over to Scott. Good morning, everyone, and thank you for joining us to review our second q uarter results. We achieved several important milestones this quarter. Notably, we returned to organic growth in both B&I and M&D. We significantly improved our cash flow compared to the first quarter and generated $1.1 billion in new bookings during the first half, marking a new record for ABM. Overall, we posted 3.8% organic revenue growth, highlighted by continued recovery in our core commercial office markets, new contract wins, and a diminished impact from prior year client exits in M&D. We also saw solid performances in our aviation and education segments. While growth in ATS remains strong, it could have been even higher had we not experienced some temporary project delays and service mix headwinds that impacted profitability. As we've discussed before, this business can be a little lumpy quarter to quarter based on construction timing, but the market is extremely healthy overall, and we expect ATS to deliver a very strong year. In total, ABM delivered $2.1 billion in revenue and an adjusted EPS of $0.86. Looking ahead, despite ongoing macroeconomic uncertainty, we remain confident in our core markets, particularly high-quality office properties, manufacturing and distribution facilities, commercial aviation, as well as energy resiliency and microgrids. We expect delayed projects from Q2 to resume in the third q uarter and are reaffirming our full-year adjusted EPS guidance. As I noted earlier, we're pleased to see B&I return to organic growth in the second q uarter. Market indicators for prime commercial office space have been improving steadily. CBRE reports that prime vacancy rates declined 50 basis points year -over -year in Q1 to 14.8%, well below the broader office market vacancy rate of 19%. Demand continues to favor high-quality, amenity-rich buildings in well-connected locations. We've been intentional in focusing our strategy on this premium segment. Geographically, the lowest prime vacancy rates are in the Northeast and Midwest, two of our largest markets. Given these trends, we expect to see market improvement translate into growth and account expansion, and that's exactly what's happening. In addition to the rebound in U.S. prime office, our U.K. operations and sports and entertainment and parking businesses continue to perform well. Turning to M&D, I'm pleased to report that the segment returned to organic growth a quarter earlier than anticipated. Our teams have done an excellent job expanding with existing e-commerce clients and winning new business with semiconductor and tech manufacturers. In total, M&D posted nearly $400 million in revenue in Q2, or 20% of total company revenue. More broadly in this segment, we're evolving our service offering from traditional cleaning and maintenance to include ancillary support services like material handling and test and balancing services. These offerings help clients focus on their core operations and deepen our strategic relationships with them. We believe the long-term fundamentals of the M&D market remain strong as companies continue to invest in U.S.-based manufacturing, and we're investing accordingly in technical sales and industry-specific capabilities. As mentioned earlier, we booked $1.1 billion in new sales in the first half, + 11% year -over -year and a new record. A key highlight was securing approximately $190 million in new business from a major big-box retailer for the next phase of their microgrid build-out. This reflects their confidence in our electrical engineering expertise, technology, and client-first approach. Beyond that, ATS secured a large battery energy storage system project supporting renewable thermal hybrid energy centers, helping communities achieve ambitious sustainability goals. In aviation, we won a $25 million contract at Miami International Airport and also had a large cabin cleaning win at the Dallas Fort Worth Airport, two of the nation's busiest by passenger volume. Our team continues to do a great job on building on the successes at O'Hare, LaGuardia, and JFK to showcase our differentiated tech-enabled solutions that drive favorable client outcomes and are truly resonating in the market. We also secured other high-profile wins, including new contracts with two major investment banks in New York City, several top technology firms, including a global autonomous driving company and a memory and storage leader, as well as with well-known semiconductor and aerospace manufacturers. These wins reflect our strong reputation among sophisticated clients with complex needs and rigorous standards. Increasingly, they're turning to ABM to leverage our scale, integrated capabilities, and tech investments, and we're raising our game accordingly in talent and execution. We've made important progress on our ERP implementation this quarter, reducing operational friction and setting the stage for continued improvements in the second half, particularly in cash flow. Our teams are fully aligned and focused on driving this initiative to completion with strong coordination and a shared commitment to delivering lasting operational benefits. Let me now give you a brief update across our segments. In B&I, according to JLL, U.S. office leasing activity in Q1 2025 grew 15.3% year-over-year to 50.4 million sq ft, 89% of pre-pandemic levels. Prime office space continues to outperform with over 2 million sq ft of positive net absorption and a 14.8% vacancy rate compared to the market average of 19%. This plays directly to our strength in Class A urban properties. With regard to M&D, we're benefiting from strong industrial activity. The Semiconductor Industry Association reports over $200 billion in U.S. semiconductor investments since 2020, driven by AI, automotive, and cloud sectors. E-commerce also continues to grow, with Q1 online sales of 6.1% year-over-year reaching $300.2 billion and 16.2% of total retail. This macro data, coupled with our new business pipeline and expansion efforts, positions us well for the future. Turning to aviation, domestic air travel remains strong. TSA data shows daily screenings frequently exceeding 2.5 million in May. Our technology-led offerings, especially ABM Connect, and wins like the $25 million Miami International Airport contract give us confidence in outpacing sector growth. Our education segment remains a stable contributor of earnings and cash flow. According to Gordian, 27% of higher-ed institutions are modestly expanding some portion of their facilities. We continue to focus on large school districts and universities, maintaining high retention and cost efficiency while pursuing new opportunities. Finally, in Technical Solutions, our microgrid business is strong, and total segment backlog now sits at $700 million. We're also positioned to benefit from accelerating demand in data centers. JLL projects global data center capacity will grow 15% annually, with construction expected to hit record levels in 2025 and significantly more in the future. These positive market dynamics strongly reinforce the strategic course we've set over the past several years. Our focused investments in talent, technology, and go-to-market execution, combined with targeted M&A, have positioned ABM to capture outsized opportunities across our portfolio. Whether it's capitalizing on the resurgence of prime office space, supporting the expansion of high-growth sectors like semiconductors and e-commerce, or leading the energy transition through our technical solutions platform, we believe our capabilities and our strategies to enhance them are fully in line with where demand is going. As a result, we remain highly confident in our ability to sustain healthy top-line growth and expand margins over time. With that, I'll turn it over to Earl to walk through the financials. Good morning, everyone. Before we review the Q2 financial results, I would like to highlight a recent update to our financial disclosures. After communications with the staff of the Securities and Exchange Commission, we have revised the definition of our non-GAAP financial measures, including adjusted net income, adjusted earnings per share, adjusted EBITDA, and adjusted EBITDA margin, to no longer exclude the positive or negative impacts of prior year self-insurance adjustments. These adjustments reflect net changes to our self-insurance reserve for general liability, workers' compensation, automobile, and health insurance programs, specifically related to claims for prior year incidents. This definitional change has been applied to our Q2 2025 results and retroactively to all prior periods presented to ensure comparability. Importantly, there was no impact to our current quarter's results. However, the updated Q2 2024 figures now include an unfavorable $4.3 million or $0.05 per diluted share from prior period self-insurance adjustments. Now let's review the 2nd Quarter results, starting on Slide 6. Revenue grew 4.6% year-over-year to $2.1 billion, driven by 3.8% organic growth and contributions from our 2024 acquisition of Quality Uptime Services. Revenue growth was a gain led by Technical Solutions and Aviation, which delivered 19% and 9% growth, respectively. As Scott mentioned, we also saw both B&I and M&D return to organic growth, + 3% and +2%, respectively. Education posted steady performance with 1% growth. Turning to Slide 7, net income for the quarter was $42.2 million or $0.67 per diluted share, compared to $43.8 million or $0.69 per diluted share in the prior year. Adjusted net income was $54.1 million or $0.86 per diluted share, up slightly from $52.3 million or $0.82 per diluted share last year. The increase was primarily driven by higher segment earnings and lower corporate costs, particularly from the absence of unfavorable prior year self-insurance adjustments. These gains were partially offset by higher interest expense. Adjusted EBITDA was $125.9 million, compared to $121 million last year, and adjusted EBITDA margin was flat at 6.2%. Now let's turn to segment performance, beginning with Slide 8. B&I revenue reached $1 billion, + 3% from last year. This performance was driven by expansion with existing clients, improved conditions in the U.S. prime commercial office market, strong retention, and continued strength in our U.K. sports and entertainment and parking businesses. Operating profit rose 7% to $83 million, and margin improved 40 basis points to 8.2% on the back of higher volume and strong cost controls. Aviation revenue grew 9% to $260.1 million, supported by positive travel trends and new wins with both airport and airline clients. This includes core cleaning services at Miami International Airport, which will ramp up in the third q uarter. Operating profit for aviation was $16.5 million, + 26%, with margins + 80 basis points to 6.3%. These results reflect volume growth and a favorable contract mix. Turning to Slide 9, M&D generated $398.1 million in revenue, a 2% increase year-over-year. The return to organic growth was driven by new contract wins, expansion with existing clients, and a reduced impact from a client exit. Operating profit was $39.9 million, with a margin of 10% compared to $43.6 million and 11.2% in the prior year. The year-over-year margin decline reflects investments in technical sales talent and capabilities to drive growth in key sectors like semiconductors and data centers, along with strategic pricing on new select contracts. Education revenue rose 1% to $227.8 million, supported by favorable pricing and stable retention rates. Operating profit increased 19% to $13.8 million, with margin expanding 90 basis points to 6%, primarily due to improved labor efficiency and tight cost control. Technical Solutions delivered 19% revenue growth to $210.2 million, with 10% coming from organic growth and 9% coming from the acquisition of Quality Uptime Services. Continued growth was driven by strong demand for microgrids and mission-critical and power services. Revenue growth and profits would have been even higher had we not experienced some delays in mechanical and electrical project execution during the quarter. Operating profit was $13.4 million, with a 6.4% margin, down from $17 million and 9.6% last year. The decline reflects project timing and service mix shifts, particularly within microgrid, where more revenue last year came from higher margin design and engineering work. Margin was also impacted by higher amortization costs. We expect margin to improve in the second half as delayed projects move forward and mix normalizes. Now turning to Slide 10, we ended the second quarter with total indebtedness of $1.6 billion, including $29.7 million in standby letters of credit. Our total debt -to -performance adjusted EBITDA ratio was 2.9 times. Available liquidity stood at $657.8 million, including $58.7 million in cash and cash equivalents. Free cash flow for the quarter was $15 million, an improvement of $138 million over quarter one. This reflects progress in reducing operational friction from our ERP conversion. While working capital remains ELEVATEd year-over-year, we're encouraged by the momentum and expect billing and collections to normalize in the second half. Assuming continued progress, we believe we're positioned to meet our full-year normalized free cash flow target, with sequential improvement expected in both Q3 and Q4. As a reminder, normalized free cash flow for the full year is expected to be in the range of $250-$290 million. This forecast excludes $30-$40 million of ELEVATE and integration costs and any portion of the RavenVolt earn-out payment that will be recorded as operating cash outflow. Interest expense in the quarter was $23.9 million, up $3.3 million from last year due to higher average debt balances. We expect quarterly interest expense to moderate over the second half of the year. Turning to our outlook on Slide 11, as Scott mentioned, we are reaffirming our full-year guidance for adjusted EPS to be in the range of $3.65-$3.80 and an adjusted EBITDA margin between 6.3%-6.5%. Going forward, we will highlight any material impacts resulting from the inclusion of prior year self-insurance adjustments in our non-GAAP results. Finally, we are maintaining our interest expense forecast of $80-$84 million and continue to expect a normalized tax rate before discrete items of 29%-30%. With that, I'll hand it back to Scott for closing remarks. Thanks, Earl. Before we wrap up, I want to extend my thanks to the entire ABM team for their continued focus and execution in what remains a dynamic and evolving market environment. I especially want to recognize the dedication and resilience of our team supporting the ERP implementation. As anyone who's been part of the transformation of this scale knows, these efforts are complex and never a straight line. That said, we're confident this investment will enhance our service delivery, improve operational efficiency, and further ELEVATE the client experience, ultimately strengthening ABM's competitive position. To our client-facing team members, your hard work directly contributed to delivering record new bookings in the first half of the year, driving organic growth across all our segments, and advancing our strategic priorities. Thanks to all your efforts, we are confident in our ability to deliver long-term value for our clients, our teammates, and our shareholders. With that, let's take some questions. Thank you. We'll now be conducting the question-and-answer session. If you'd like to ask a question at this time, you may press * 1 from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press * 2 if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the * keys. So we may address questions from as many participants as possible, we ask that you please limit yourself to one question with a follow-up. One moment, please, while we pull for the first question. Thank you. The first question is from the line of Tim Mulrooney with William Blair. Please proceed with your questions. Hi, Earl. Good morning. Good morning. Hey, congrats on a nice quarter, guys. Clearly, some real momentum building in the business this year. This is great to see. Earl, I wanted to start out on the cash flow. Can you remind me what the earn-out on RavenVolt is expected to be? Yeah. The total earn-out for this quarter was, or for this year, is $75 million for last year. For this year, we're expecting right now to be about $30 million. $30 million plus $30-$40 million of ELEVATE? [crosstalk] You're at ELEVATE. Probably about $280 million all in total, inclusive of the original purchase, which was $170 million. Understood. Got it. With your cash flow guidance this year being $250-$290, right, if I pull off your ELEVATE and the RavenVolt earn-out, that's going to get me close to what, like $180 million? Yes. $190 million? Two things. The majority of the RavenVolt payout is more of a financial cash flow or an investment cash flow as opposed to operational. We're still working out that. If you actually back out kind of what we would call one-time things, which really would include our ELEVATE investments as well as integration expenses or cash flow, you'd be looking at a normalized cash flow projection for the year of between $250 million-$290 million. Okay. So that excludes all of that. That is correct. I gotcha. Okay. That's helpful. You guys, in the first half of the year, have done, I think, about - $108 million in free cash flow. To get to + $250 million implies a really strong second half of the year. Can you just help bridge that gap for me? Yeah. No, absolutely. If you look at kind of where we're trending right now from a Q2 perspective, you're absolutely right. We are down. That really is attributable to our go-live with regards to our Oracle deployment for M&D and B&I, where we actually had some challenges in really just getting some of these bills out. Most of that really is due to the fact that we are being very prescriptive in doing a deep analysis and review of all bills before they go out. As a result of that, you saw that impact our Q1 results. Good news is we've actually made some really good progress on getting these bills out. This is really evidenced by the quarter-over-quarter improvement in cash flow, which was about $138 million. We continue to make progress. Based on where we were stacking up, we believe that we're going to have incremental improvements in cash flow for both Q3 and Q4. As a result of that, we will actually catch up to our full-year projection in cash flow by the end of the year, which, again, on a normalized basis, would be the $250-$290 million. Okay. That's helpful. Hey, man, you'd rather get the billing right to begin with than have to go back later and have to deal with the customer that way. I understand. Maybe just switching gears here, Scott, for my second question. I really appreciate you sharing those data points on the prime office vacancy rates. Curious how you're thinking about organic growth in the B&I business in the second half of the fiscal year. I mean, do you hope to build upon that strong growth that we've seen here in the second q uarter, or is that more of an easier comp situation and maybe organic growth steps back a little bit in the second half here? Thank you. Yeah. Yeah. I don't see it coming back. Look, we were excited to bridge this chasm here and get to positive. Could it be a little choppy? Possibly. But we like to believe now we're in positive organic growth territory for B&I from here on out. So it was exciting to get over that hump. Okay. Thanks, guys. Thank you. Thanks, Tim. Our next questions are from the line of Andy Whitman with Baird. Please proceed with your questions. Yeah. Great. Thanks for taking my questions, guys. I wanted to ask on the M&D segment, I guess. There's a couple of things in your prepared remarks that kind of piqued my interest, so I thought I would kind of dig in a little bit. First, Scott, was the comment on how you're offering more solutions to those customers than you have before. I think you mentioned helping out with material handling and the test and balancing. So I'm just trying to maybe get a little bit more color on that. How many customers are using that, or is that just for one particular customer? How evolved is this strategy? Ultimately, I think the question everybody's wondering about is how much opportunity still resides there? I mean, can this be a meaningful portion of your M&D segment results? I guess it's just, I guess it's probably more applicable just to those big warehouse customers, probably more than others. Maybe you could just talk about that somewhat, please. Sure. Look, we think this is going to be an emerging trend for us internally to do more and more outside of the core janitorial. This happens in way more than just one client, Andy. The way to think about it, let me give you a picture of this thing that's always been helpful to me too. If you picture a semiconductor facility as an example, right, and think about in the middle of that semiconductor facility, it was almost like it was a bullseye. In the middle of it would be the fabrication center where they're actually making the semiconductors. Traditionally, our work has been outside of that bullseye where we've been doing the janitorial, the engineering, but have not gotten into the fab. The work that we're starting to do is to get into the fabrication facility and do more of the mechanical work, do more of the cleaning inside. That's kind of the pathways that we're talking about when we talk about materials handling and testing and balancing. It's like breaching that core of that bullseye. We love that because it's more strategic. It's more sticky with the client. You're going to see us talking more and more about leaning into those areas from a service line perspective where we feel like we'll get more stickiness. Those are also higher margin. We think there's just a lot more opportunity in the semiconductor space and the automotive space even. Any of these pharmaceutical, the key sub-industry groups that we're working in within manufacturing and distribution all have really good pathways. That's where we're spending our focus. I see. Okay. That's helpful. Also related to that, I just want to kind of dig into some comments you made on that segment. I mean, obviously, the M&D segment has been a very high margin, your highest annuity segment margin, frankly, for some time. I think there's a comment there that you had on strategic pricing for new accounts. I was just wondering if that market is getting more competitive or if this is just a continuation of some of the comments that you've been making over the last few months, just recognizing that some of the customers in that segment have been competitive already. I just wonder if there's an incremental change either way here for the broader market, or what does that comment have to—what are you saying with that comment, I guess? We had a couple of things that were particularly acute in this quarter. One is we're starting to invest in more sales assAPS. We're investing in M&D because you've been hearing us talk about this segment for a couple of years now or more. We're putting some muscle behind it with sales assAPS. We did talk about the rebalancing last year of that client, a bigger client. As part and parcel to that rebalancing, we had to tighten some of our pricing. We think of it as strategic pricing because we do see a pathway back. Those were the couple of impediments. I don't think that there's this massive overall trend towards margins going down in that business because of competitiveness. It was just those couple of things that are affecting us. Again, especially as it comes to the salespeople, that's going to be an investment that will pay dividends over the next few years. Yeah. Even with a little margin pressure, not a bad result for the quarter on the margin profile, certainly compared to the other stuff there. I guess that makes a lot of sense. Okay. I'm going to sneak in another one. I know I was asked for one and then one follow-up, but if you don't mind. I wanted to ask about the $1.1 billion of awards that are obviously nicely up year-over-year. I was just hoping you could help us understand how much of those new, I mean, you quantified the $190 for the big box. It feels like there's a decent portion that's in the project business. Maybe, Earl, could you help us understand how that total number breaks up between annuity business and project business and how each one of those compare year-over-year? Just the decomposition of that, I think, would be helpful for us all to understand. Yeah. I mean, I could take that one, Andy. I think there was nothing real monumental within that that was a big shift. You pointed out the $190 million, which is a big chunk of that. When you normalize to the $190 million and look at that other, call it, $900 million, I would say it was pretty evenly paced across the board between the percentages of our normal business. It was good across the line, which we're always encouraged by. Okay. All right. Thank you. Thanks, Andy. Our next question is from the line of Faiza Alwy with Deutsche Bank. Please proceed with your questions. Hi. Thank you. I wanted to ask about APS and just where we are in terms of the project delays. You mentioned that there was a margin impact from the delays as well. Give us a sense of when do you think what's driving the project delays at this point? When do you think things normalize? How should we think about the normalized margin in this business going forward? Yeah. I'll start off with that. If you look at the delays, part of them are just approvals, getting the customer approval for certain jobs. Again, if you look at APS, it naturally is a back half of the year. A lot of activities really start in the back half. We expect this timing shift that we actually saw in Q1 or Q2 to actually revert in the back half. When we look at the margins, again, we expect that margin to be very similar to what they have been in the past, which would be kind of like your 9%-10% margins. Got it. Thank you. I just wanted to ask about the education segment. Maybe give us some color on what you're seeing from the underlying market. There are concerns about higher education just broadly from a macro perspective. I think you might have, there might be more renewals that happen in the back half for new business. Give us a sense of what you're seeing from a new business perspective and then how you're thinking about the underlying market there. Sure. So it's pretty normalized in the education. We have some good growth. We have a really good pipeline going. Interesting you bring up renewals. We've been having a very strong year this year in terms of renewals. I guess what we're encouraged by, Faiza, is that there's a fair number of our clients that are investing into their facilities. You go and see some of these, you go to some of these campuses, and you see cranes everywhere and buildings. We're seeing some good tailwinds in the industry. As you know, education is not a double-digit grower for us. It's a GDP grower. It's really steady, great cash flow. We have a tremendous team that are working really hard as we shift towards bigger contracts and contracts under what we call our APS offering, which is the integrated offering where, rather than just doing a single service, we try to bundle services. In 2024 and even at the start of 2025, we're getting a lot of traction in that bundled offering because it provides so much more value when you can go to the facility manager and say, "Look, we can kind of handle all your needs. The majority will self-perform, but we could also subcontract stuff on your behalf as well." That's been going okay. All right. Great. Thank you. Our next questions are from the line of Jasper Bibb with Truist Securities. Please proceed with your questions. Hey. Good morning, guys. Maybe following up on our earlier question, the organic revenue growth for the quarter was 4%. I think you popped a working day in there too. Do you think mid-single-digit organic growth is possible in the second half, or how should we think about the trend there? Thanks. We obviously do not guide towards revenue growth. I think what we should all be focused on, at least we are internally, is that every one of our industry groups now is back to organic growth. We could have easily been sitting here thinking that M&D and B&I were still not in that territory. We are enthusiastic about that. In terms of projecting revenue growth, it is just hard to tell right now. The trends in each of the industry groups are solid. Fair enough. Hoping you can maybe give us a bit more detail on the battery energy storage contract win. Can you maybe frame for us how big that business is within ATS today or what you are seeing in the pipeline for that service offering? Yeah. I mentioned in the prepared remarks, we have a $700 million backlog, which is our highest we've ever had. It's a historic high in terms of backlog. We're still on a good pace. We were a little nervous at the start of the tariff discussion as to what that will mean. I think we had mentioned in prior calls that not a tremendous amount of the gear that we buy is produced overseas, but there is a portion of it, and it could affect the economics of a project. So far, we've still been seeing green lights from our clients to move forward on these projects. The only caution we have is there's a provision in the new budget bill to repeal some of the tax credits on energy projects. We still don't believe that it will affect the feasibility of these projects because of such high margin. With that being said, it's still something out there that we're monitoring and watching closely. The microgrid business is just doing really well for us. Understood. Thanks for taking the questions, guys. Thanks. The next question is from the line of Josh Chan with UBS. Please proceed with your questions. Hi. Good morning, Scott, Earl, and Paul. I guess on your ATS margins this quarter, of the roughly 300 basis points headwind you saw, was the bigger impact from the project delays or was mix the bigger headwind? I guess related to that, when you say the project delays are going to be recouped in the third quarter, did that kind of already happen in May? Yeah. Let me go back to the margin question. Part of it was the project delays, and part of it is just the mix in business. The way you may want to think about these big microgrid or energy projects is that there's—and I'm really going high level here because there's certainly more than two phases—but I would ask you to look at it in two phases. One is the design and the engineering of the job, right? These are highly sophisticated engineered projects. There's the design and the engineering, and then there's the actual execution in the field. The design and the engineering portion is the higher profit side of it, right? There's less bodies. There's people in an office doing the drawings. As you're building, you're recouping a higher margin. Once you get into the field and there's actually bodies out there working, the margin piece is a little lower. If we look at year-over-year, last year, we had a fair amount of engineering and design work, and we had a higher margin. Whereas this quarter, it just so happens that there was more work at this quarter happening in the field, which is the execution piece of it. We had a little pressure there. Nothing systemic, nothing even that interesting, frankly. It was just timing within a project, right? That is why you saw a little bit of a pressure. We have seen some uptick in May, and we think it's going to continue throughout the year in terms of these projects. I think we stated we think ATS is going to have a very strong year this year. Yeah. Thanks for that, Earl, there, Scott. Maybe switching to B&I, could you talk about how you are positioned to win these prime office markets? Because I assume those markets are where everybody wants to go after. Could you talk about your ability to win there and whether ABM can gain share in that market going forward? Yeah. I mean, it's like not only are we positioned to win, we really have been winning. I think so much of it has to do with our execution ability, our relationships, and our resume. That means a lot. If you're—let's use New York City as an example. If you're pitching a headquarters building for a financial services company in New York City and you're going to look at ABM, you're going to say, "Wait a second. They already do nine of the other 10." There is comfort from a client standpoint that we understand how to work in that segment. There is great comfort from a client because they say, "Oh, you know what? If I want to find out what's happening in some of the other financial services companies in terms of how they're building their trading floors, how they're thinking about conference rooms, I know I can go to ABM because they have such a big book of business. I think between our scale, the client base, and our ability to execute, and lastly, the investments we're making in technology, it's really separating us from the competition. I think that's why we've gotten a greater share of the market than our competitors. That's great. Thank you for the color, and thanks for the time. Sure. Our next question is from the line of Marc Riddick with Northcoast Research. Please proceed with your questions. Hey. Good morning, everyone. Morning, Marc. A lot of my questions have already been covered, but I did want to circle back around to the cash usage prioritization. Maybe give a bit of an update, maybe what you're thinking there as well as if you could maybe give some thoughts or views as to potential acquisition pipeline, maybe what you're seeing valuation-wise and as far as levels of attractiveness currently. Thanks. Yeah. For us, we always prioritize, right, internal investments and growing our ability to be organic. The pipeline on M&A is looking real good. We seem to be seeing a little turnaround in companies coming to market, private equity companies looking to monetize some of their portfolio companies. Probably seeing as big of a pipeline for M&A as we've seen in the last couple of years. There are some interesting things out there that are really going to help us to differentiate in some of the industry groups, really consistent with some of the remarks that we've been talking about, even with the Q&A and how you go deeper in places like M&D and start doing things that create more strategic value for our clients and make us stickier. You'll see us have a focus on M&A for sure. Shifting over with B&I, I was wondering if you could talk a little bit about if you're seeing much in the way of regional differentiation of activity levels. Thanks. I mean, yeah. I mean, sure, Marc. We have. And what's interesting, it could even be within one market. You look at L.A., and there's Century City, which is booming, and then there's downtown L.A., which is really, really lagging. We see some differences regionally. A lot of it has to do with back to office. I could tell you we're encouraged with what's going on in San Francisco with the investments in AI, San Francisco starting to come back, which it was a city that maybe 18 months ago, a lot of folks had written off, right? The Midwest is strong, and New York City is, I mean, absolutely booming. Good luck walking on the streets at lunchtime and not bumping into people. We're encouraged by that market as well. We see that down in the Carolinas, there's being more investment now with AI and data centers. That is starting to boom. There are real pockets of growth out there. Great. Thank you. Thank you. We've reached the end of the Q&A session, and I'll turn the call over to Scott Salmirs for closing remarks. Okay. First, I just want to thank our team again for everything they're doing to allow us to post results like we just did in Q2. We're really happy with what we've been able to do, especially considering the macro environment and some of the uncertainty out there. I just want to thank everybody on this call for listening, being interested, and look forward to seeing you again in Q3. Thanks, everybody. Thank you. This will conclude today's conference. We may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.