Good morning. My name is Ellen, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the AutoNation Third Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. During the call, if you would like to register a question, please press Star followed by one on your headphone keypad. I would now like to turn this call over to Derek Fiebig, Vice President of Investor Relations. You may begin your conference. Thank you, Ellen, and good morning, everyone. Welcome to AutoNation's third quarter 2023 conference call. Leading our call today will be Mike Manley, our Chief Executive Officer, and Tom Szlosek, our Chief Financial Officer. Following their remarks, we will open up the call for questions. Before we begin, I'd like to remind you that certain statements and information on this call, including any statements regarding our anticipated financial results and objectives, constitute forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks that may cause our actual results or performance to differ materially from such forward-looking statements. Additional discussions of factors that could cause our actual results to differ materially are contained in our press release issued today and in our filings with the SEC. Certain non-GAAP financial measures, as defined under SEC rules, will be discussed on this call. Reconciliations are provided in our materials and on our website located at investor.autonation.com. With that, I'll turn the call over to Mike. Yeah, thanks, Derek, and good morning, everyone. Thank you for joining us today. I'm gonna start on slide three, and I'm gonna provide some opening remarks before Tom takes you through the third quarter results in greater detail. So as we all know, there continues to be mixed economic signals in the economy, but despite concerns over affordability, consumer demand for vehicles remains relatively healthy. And during the quarter, partly because of improved new vehicle supply and stable used vehicle inventory, we saw double-digit year-over-year growth in new vehicle sales and strong sequential growth in used vehicle volume. And, frankly, this is the first time in eight consecutive quarters that we've seen growth in combined new and used vehicle volumes for AutoNation. So I think that's very positive. We also continue to see significant benefits of our clear focus on aftersales, which delivered a record quarter for revenue and margin, and as a result, AutoNation delivered a solid performance in this evolving operating environment. I'm just going to quickly look at the performance by business, and I'll start with new vehicle sales, where volume was up 12% in total and 9.5% on a same store basis. As forecasted, new vehicle margin was down sequentially in the quarter, but remained above $4,000 a unit. Now, during the quarter, we did see some mixed impact on our margin, and that was driven by significant year-over-year volume growth in our import franchises, which benefited from improved inventory flow, releasing some of the pent-up demand for those brands. I'll touch on the inventory numbers in a minute, but basically everything that we got, we sold. So we saw quite a large increase in our import dealerships volumes in the quarter. But I would say, you know, our sales teams tend to look at every potential deal in a very balanced way, and you'll see our combined margin performance across new and used, which included CFS income, held up very well. In fact, relative to the industry in the quarter and remains well above pre-pandemic levels. I mentioned earlier, inventory levels, let me touch on that. Obviously, they've increased from a year ago, but they remain less than 35 days supply. But we have a lot of variation, frankly, amongst brand and categories. We have 51 days of domestic brands. So that probably answers one of the questions about what's happening in my previous hometown. So we have 51 days of domestic brands as we sit, 33 days of luxury and 17 days of import brands. Now, moving on to used vehicles. As you'll recall, at the beginning of the year, we spent some time talking about the fact that used vehicle inventory would be harder to source and obviously critical to success this year. So knowing that we've made continued investments to maintain and grow used vehicle inventory, I think the team in the quarter did a good job sourcing retail quality used vehicles. And to facilitate this, we've increased our investment in We Buy Your Car marketing and infrastructure, which you're obviously going to see in our SG&A. In addition, we have our teams looking at every potential sale in a much more holistic way, considering not just the vehicle margin, but also the income from CFS and additional consideration if the sale yields a retailable trade. Now, as a result, used inventory has been stable, which has helped us post a sequential used vehicle sales increase of over 5%, which would not be possible without the daily focus on vehicle sourcing. Which, by the way, resulted in over 90% of our total used vehicles being self-sourced in the quarter. Now, as you know, vehicle volume, new or used, is important for many reasons, but a key one for us is our industry-leading performance in customer financial services, which again, continued to deliver in the quarter. I think the team has done a great job to overcome a significantly higher interest rate environment and lower finance penetration by continuing to maintain and grow product sales per unit sold. Now, moving on to after sales. Here, the business continues to be one of our brightest spots. Revenue was up 12% and our gross profit was up 14%. The greater complexity of vehicles is leading to higher values per repair order, and we've also been keenly focused on growing our technician workforce, which is allowing us to serve more customers. I was also pleased with the operating cash generation in our business. It was another great quarter of cash conversion relative to net income, which Tom will no doubt talk more about later.... Okay, but aside from the solid quarter from a financial perspective, there are a few other highlights I'd like to touch on before handing over. Our 11 million plus customers are our core focus, and we're extending our product offerings and reach into more recurring revenue streams, and we're adding new customers every day across all of our channels. During the quarter, we increased the penetration of AutoNation Finance at our AN USA stores, where we're now financing roughly one in four AN USA vehicle sales, and we have also expanded into our franchise stores. AutoNation Finance continues to be integrated at a thoughtful and measured pace, and is in fact ahead of where we thought it would be, which is why we expanded it to our franchise businesses. We're also actively launching supplementary products and services to meet our customers' needs, which supports consumer vehicle usage and also attracts new customers to us. We launched a micro-lease business called AutoNation Mobility and an e-commerce parts and accessory platform called AutoNationParts.com. These businesses, along with AutoNation's recently acquired mobile repair service, complements our traditional dealership model while expanding our reach into the transportation industry. We expanded our AutoNation USA footprint with our 17th store on Hilton Head Island, and this was the fourth opening of the year, and we expect four more openings in the fourth quarter, including our Fort Myers facility, which opened this week. Now, as you can imagine, it's not an easy task to get these greenfield businesses open and up and running, and I'd like to congratulate and thank the teams that continue to work incredibly hard on this. I'm also pleased to say that so far, these businesses are selling ahead of plan and are showing considerable growth year-over-year. And by the way, since with this project with AN USA was started, they've now sold over 70,000 vehicles, so that's not bad for organic growth, I think. So moving on. The exceptional service we provide to our customers did not go unnoticed, as AutoNation was recognized as the top public franchise dealer group by Reputation in 2023 Automotive Reputation Report. Now, that's an honor that we have held four out of the last five years. And of course, that is only possible because of the 24,000-plus dedicated AutoNation associates who work tirelessly in our business and whom I would like to thank. Thank you all if you're listening, and I'll thank you in person as I get out into the business more. Finally, we were named Best Companies to Work For list by U.S. News & World Report. You can see customers are at the center of what we do. We are focused on growth, outstanding customer service, and operational excellence throughout our business, and we're also looking to the future, how the industry will evolve and what the needs of our customers will be. There is clearly an opportunity for AutoNation to capitalize on our strong brand and footprint to retain and reactivate customers, and provide them with more value and garner a larger share of wallet over a longer period of time. Now, Tom will take you through the financials in greater detail. Tom? Yes, thanks, Mike, and good morning, everybody. A more detailed outline of our Q3 highlights is on slides four in the materials. New revenue vehicle was up 11% up to $3.2 billion. Volumes in new vehicle were up 12%, including, as Mike mentioned, 25% on imports and 5% on domestics, with luxury roughly flat, volume-wise. Same store volumes were up 9%, and revenue per vehicle retail was stable. Used vehicle revenue declined 10% year-over-year, with unit sales down roughly 4% and revenue per vehicle retail down 6%. Importantly, as Mike mentioned, though, used vehicle sales improved unit-wise by over 5% compared with the second quarter. So, the efforts of our investments are starting to pay dividends. Plus customer financial services revenue increased 2% to $370 million. This reflects the increase in total retail volume from 2022 and fairly stable CFS revenue PVRs. After-sales was up 12% to $1.2 billion in revenue, the result of both higher value repair orders as well as improving volumes. After-sales gross profit margins were up 14% in the business. Third quarter earnings per share were $5.54, down 8%. While operating income was down 16% and interest expense up $44 million, our EPS was favorably impacted by a more than 20% decline in the share count, which obviously is a reflection of our ongoing share repurchase actions. Cash from operations, Mike mentioned, was very strong through September. It's up seven. We're at $763 million, which resulted in conversion on net income of more than 95%. So the company has really impressed me in my first few days or first few months, in terms of doing the right thing to drive cash generation, including the management of working capital. Mike also mentioned the integration of AutoNation Finance. This is still a pretty small business for us, with roughly a $400 million portfolio, but we expect significant growth as we increase the penetration of financing in our stores. As part of these efforts, we've discontinued all third-party originations and are now exclusively focused on the AutoNation business. In September, AN Finance represented roughly a quarter of the loan originations in the AN USA stores, as Mike mentioned. We've also commenced lending in our franchise stores. In the third quarter, as planned, we sold most of our lower credit tier loans from the legacy CIG portfolio, which generated a pre-tax gain of $8 million. Turning to slide five for some commentary on our third quarter PNL. On balance, the strength in new vehicle unit volumes and aftersales, and the stability in customer financial services more than offset the decline we experienced in new vehicle PVRs and used vehicle revenue. In this environment, we're very pleased with the 3% growth in top line from 2022. Gross profit was slightly lower in nominal terms. All in, we were down roughly 90 basis points in gross profit margin to 19%, reflecting the moderation in new vehicle gross profit PVRs. But that was largely offset by growth in the after-sales gross profit, as I mentioned. Adjusted SG&A increased 7% to $823 million, with generally stable core spending and incremental costs related to our growth initiatives, and I'll touch on that a bit more later. Third quarter floorplan interest expense of $38 million was up from $11 million in the third quarter of 2022. That's a reflection of both higher rates and borrowings, higher borrowings, and it's about half and half in terms of the impact. Now for non-vehicle debt, the interest expense was $49 million, which was up from $34 million a year ago. And again, both higher rates and increased borrowings impacted the interest expense as well. Our income tax rate was stable at 25%, so all in, this resulted in $244 million of net income, compared to $336 million a year ago. And as I mentioned, our average shares outstanding of 44 million were more than 20% lower than a year ago. This meaningfully blunted the EPS effects of the net income decline, as you can see. Starting on slide six I'd like to build on the color Mike gave on the performance in our various revenue categories for the third quarter. As you said, new vehicle volumes were up 12%, and this includes, over 25% on imports. Revenue PVRs have remained stable for new vehicles. Gross PVRs continue to moderate, reflecting increased availability of new vehicles, and importantly, as Mike mentioned, our intentionality, in pursuing higher volumes, to drive the other parts of the business. New vehicle inventory levels have increased more than 50% in both units and values from a year ago, and new units have grown from, you know, roughly 13,000 units to, over 27,000 units. In used vehicles on slide seven, we had a modest volume decline of 4%, from a year ago, with the most pronounced decline from our domestic stores, which decreased 10%. Import luxury stores had less pronounced, volume decline. As Mike mentioned, we have seen some nice progress since the second quarter, with used vehicle volumes up 5%, sequentially. And this was more than twice the market's growth. There was good traction quarter-over-quarter in the 40,000 and below pricing tiers. Those tiers comprise more than 80% of our unit sales. And even on the higher priced tiers, greater than 40,000, which, you know, which has better profitability, the growth was also respectable at roughly 2%. So the demand is clearly there, and we're continuing our initiatives to pursue more supply. Revenue and gross profit PVRs in used vehicles were both down year-over-year, mostly reflecting the volume decline and the mix of sales by pricing tier. Used vehicle inventory levels were overall stable at 33 days, with growth in lower priced tiers very strong, offset by declines in the higher priced tiers. We continue to emphasize self-sourcing, including trade-ins, lease expiries, as well as our We Buy Your Car initiative. For the quarter, our self-sourcing represented 96% of used vehicles acquired. Now moving on to slide eight. In customer financial services, we delivered 2% revenue increase, roughly in line with the vehicle sales unit growth for the quarter. For new vehicles, higher unit volumes and stronger penetration of both financed and non-financed products are driving stronger CFS. On the used side, the portion of our sales with finance products declined modestly year-over-year, given the interest rate environment, but still remained very high at close to 70% penetration. On non-financial products, we also had a similar modest decline, but still very respectable penetration. On slide nine, aftersales, as I mentioned, up 12% in revenue to $1.2 billion. Customer pay, warranty, internal and collision all experienced double-digit growth year-over-year, so it was very broad across the entire portfolio. The value per order is improving, and the number of repair orders has also increased. And, you know, we're starting to see the benefit from the investment in the additional technicians that we've made over the course of the last few months. Our gross profit grew 14% year-over-year, and our gross profit margins were up more than 80 basis points to 47%. And again, this is a reflection of those, higher value repair orders, as well as the scale benefits we're starting to, benefit from in terms of the increase in the number of orders. Quick comment on the UAW strike. We obviously hope this is resolved in a mutually agreeable manner. We've been preemptively building inventory where we can in after sales, with the support of OEMs. In the third quarter, there was not much of a financial impact, apart from the, you know, slight inventory build. We obviously are monitoring the situation closely. Slide 10, operating income was 6% for the quarter, down from last year, but still much higher than the, like 200 basis points higher from pre-pandemic levels. The decrease from 22 reflects the moderation in new vehicle gross profit per vehicle, as well as higher SG&A. The growth in SG&A reflects investments for growth, you know, including the supporting infrastructure for our AutoNation USA stores, as well as for our aftermarket business. We've also had some increased advertising spend related to acquisition of vehicles via the We Buy Your Car initiative. There's been some inflation and some self-insurance costs for weather-related losses. Overall, normalized SG&A as a percent of gross profit, you know, we do expect to remain lower than pre-pandemic levels. Slide 11, our operating cash flow generation remains very robust. We were at 105%, you know, conversion of net income for the quarter. Our cash flow from operations was $256 million in the third quarter. We increased our non-trade floorplan by $89 million, and our CapEx was $87 million. So together, these have resulted in free cash flow of $258 million for the third quarter. CapEx for the quarter was up around 10%, reflecting a steadily increasing reinvestment ratio. We're now at roughly 1.6 times depreciation. And the principal year-over-year increase in CapEx that drove that 10% has mostly been for growth, including the AN USA expansion, some facility spending for electric vehicles, and, you know, some IT-related projects. Slide 12 shows our capital allocation for the first nine months of 2022 and 2023. Now, last year, our capital allocation focus was on reinvesting in the business and share repurchases. Since the beginning of 2022, in fact, we've repurchased roughly 21 million shares, which is more than a third of our outstanding share count. It was a low interest rate environment. We were enjoying recovery-driven cash flows. The M&A landscape wasn't presenting deals we viewed as attractive, and we had a dislocation in our share price. And while we still believe in the longer-term value that would be great in our share price, over the course of 2023, as interest rates have increased and our cash flows have normalized, we've moderated the level of share repurchase activity. Still, when you look at it as a percentage of free cash flow, the share repurchases are relatively stable, close to 100% of free cash flow. At quarter end, our leverage was two times EBITDA. This is at the low end of our two-three times target. Mike and I are very comfortable with where we sit there. And moving forward, we'll continue to allocate capital to maximize shareholder value. So with that, I'm gonna turn it over to Mike to wrap things up. Yeah, thanks, Tom. I'm just gonna again, before we go to the Q&A session, thank all of our associates in the business. And as I said, I, you know, I think that there's been a, a lot of progress in terms of putting infrastructure in place, building new offerings, products, and services for our customers as well, and that all takes, that all takes tremendous effort. So thank you all. And, with that, let's go to Q&A. Ellen, if you could, please prompt the audience how to get in the queue? Absolutely. As a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. We'll take our first question today from John Murphy from Bank of America. John, your line is now open. Please go ahead. John, we can't hear you. I don't know if you're on mute. Maybe we have to come back to John. Okay, let's move on to Rajat Gupta from J.P. Morgan. Rajat, your line is now open. Please go ahead. Thanks for taking the question. Just had a question first on, you know, parts and services. Clearly, very strong trends there. You know, I think it was the best result amongst your peer group. Would you be able to give us any more color there in terms of any differences you saw across the regions that might have led to the growth? As well as if you could quantify, you know, how much of it might have been driven by, you know, either the traffic or pricing or mix, you know, any way to size that growth and expectations going forward as well? And I have one quick follow-up. Thanks. Yes, well, this is Mike. The growth came from both increase in volume. We saw as we progressed through the quarter, volume increasing as a result of the increase we had in terms of productive technicians. So a combination of that and reaching out into the vehicle park grew our RO count. But then we saw value grow really across our customer pay, our internal work as well, with the growth that we saw in new vehicles and the sequential growth of used and then warranty was up as well. So it was a combination of both of those things. I have not seen a big difference in terms of the geographical distribution of that growth. If I look broadly across the markets, it's roughly in line. So I don't think that there's necessarily anything from a geography perspective that's influenced it. So in summary, just a combination of increased volume, but increased value per RO as well. Got it. No, that's clear. And then just on new cars, you know, helpful color on the slide from, you know, how you're strategizing, you know, the overall profitability there. You mentioned in prepared remarks that, you know, you were selling like all of inventory that was coming in, but with the slide deck, got—you know, but you also suggested that you were trying to push volume, you know, in order to, you know, monetize, you know, CFS and parts and services. I just wanted to, you know, make sure I'm understanding, you know, both those comments, you know, correctly. You know, did you, did you have to stimulate volumes with some GPU reductions in order to, you know, make sure you still get the F&I, or CFS, CFS income? Just if you could just clarify that a bit, would be helpful. Thanks. Yeah, no, no problem. And by the way, if I will try and clarify, but feel free to dive in and redirect. What we ask the teams to do, we've obviously invested a lot. We recognize. So let me just step back. As I mentioned in my opening comments, we recognize that how we manage our used vehicle inventory as we go through this year and get into next year is going to be critical for us to be able to continue to progress, not just in terms of used vehicle sales for our franchise businesses, but also be able to stock up all of the incremental AN USA stores that we're opening. And we recognize we're investing a lot of money in that, whether it's incremental marketing or incremental infrastructure to support our We Buy Your Car. And what we ask our teams to do is to take a very holistic view in terms of volume in the marketplace. Not to distress sell anything at all, but just to recognize that we have a very good record in terms of CFS performance. We have a very good record in terms of sales sourcing. And as you're looking at opportunities in the marketplace, just make sure you're taking all of those into account, because one of the most profitable sources for used vehicles, as you know, is actually the trade-ins that come on a new or used car sale. So it was really a reflection of us making sure that people were recognizing that there are multiple different sources of profit in an individual sales deal, and just make sure you're reflecting that as general managers, as general sales managers in the dealerships when you're building your month. So it really was, I think, just a logical description of something that we would want them to do and take a balanced approach. The business is multifaceted. Got it. Got it. That's, that's clear. Maybe like, just to finish up on the new, new GPUs. Do you see any benefit of the strike in the third, and do you expect any benefit, you know, from a slower inventory build in the fourth quarter, to the GPUs? Or, or you think, like, you know, the strategy around like CFS and, you know, driving volume will continue to lead to a continued decline, in those GPUs here in the fourth quarter? Thanks. No, there'll be no benefit, and I'll put some color to that. When we saw GPUs rise across the industry, we saw them rise because all of the competitive cross-shop models were in short supply. So you have a situation where every brand was in short supply and therefore prices drove up. If we just have individual domestics in short supply, but the cross-shop brands that consumers are looking at in addition to domestics are not, there'd be no reason... There's no potential for those domestics, in my view, to get pricing as a result of the fact that they may have a few days less supply than the others. And that's just in general. The pandemic was a, as we've said, it was a one-term reset to the industry. And secondly, we sit with 55-day supply on domestics. That's nowhere near the peak that we had before the pandemic, but it's certainly enough to take us through for the next few months. Obviously, what we're looking for, as Tom mentioned in his speech, is a mutual end to the strike as soon as possible. But as we sit today, we've got 55 days. I think we'll be okay. Got it. Great. Thanks for taking the questions and all the color, and good luck. Thank you. Thank you. Our next question today comes from Daniel Imbro from Stephens. Daniel, your line is now open. Please go ahead. Yeah. Good morning, everybody. Thanks for taking our questions. Mike, maybe I'll follow up and start on the new unit side. I think you called out strength in import brands, even as production increased. Can you talk about what you think is driving that? Is it more affordable product, just a strong lineup? Just trying to understand why some of those brands are outperforming so well. So without diving into all of the inventory numbers, if I just think about the last few years, what we saw initially as we came into the pandemic was those import brands were holding up in terms of their inventory, and we saw a kind of delayed effect as their inventory levels got really low, and we were talking about three, four, five days of supply. So a lot of those customers for those brands just couldn't find those vehicles. As we've been able to see flow increase and improve, I genuinely think it is just some pent-up demand that is being able to get unlocked as a result of that, which saw those brands rebound and rebound strongly. I'm convinced that, you know, that is what it was in those brands. Our turn rates are just phenomenal. As you can see, we're still very low day supply, but produced great volume in the quarter, I think. That's great. And then, Tom, maybe a strategy one for you. You guys, I think, you know, put in a bid on a U.K. asset during the quarter. It would have been a big international deal. Maybe you can just discuss where dealership M&A fits. You obviously said that the buyback this quarter. But where a dealership M&A fits in your focus, and maybe is international becoming more of a focus for you guys as you think about the next leg of growth for AutoNation? Yeah, I mean, that, yeah, thanks for the question, Daniel. I mean, when you, you know, I'll let Mike answer the specifics on, on Pendragon. You know, when it comes to, you know, capital allocation in general, you know, the first thing I look at when I look at AutoNation is that we have a lot of cash or capital to allocate. In other words, you know, the cash generation is very strong, so we've got a lot of optionality, which I really like and which is what, you know, attracted me to join the company in the first place. You know, we can either reinvest in the business, you know, through CapEx and M&A, and even delivering. I don't actually definitely think we need to. As I said, we're comfortable with our where we are at debt levels right now. And we also can, you know, return cash to our shareholders through dividends, which we don't have, and share buybacks, which, you know, as I said, has been, you know, one of our primary emphasis on the last couple of years, given the, you know, the low interest rate environment. You know, things moderate over time. And, you know, we have to be mindful that our number one objective is just, you know, maximizing shareholder value, and we'll do that thoughtfully. Obviously, we'll continue to, you know, reinvest in the business. And, you know, where we think there's opportunity, we'll also be thoughtful about returning shareholders through, you know, share repurchasing. So on the M&A front, I do think that, you know, the opportunities are abundant. You know, the trick is finding the ones that we think are good for our shareholders and where we can run them profitably and add value to the business. And we're very active in looking at all sorts of different opportunities. So I'll let Mike, you know, comment on the Pendragon one in particular. Well, by the way, I think that was a great answer to the question. I'm sure there's much more to add on Pendragon. I mean, when we made our primary offer on that, obviously compared to the offers that were out there at the time of that, we felt it was the appropriate thing, and we think they were good assets. And we did our diligence and decided to not formalize an offer at that point. I think there's nothing much to say except to close as, let's continue to do exactly as you described. Yeah, that's, that's really helpful. And I'm gonna squeeze in one more just quick model clarifier. Tom, I think you prepared remarks, and you mentioned that the sale of CIG loans this quarter was an $8 million pre-tax gain. And if so, where was that in the P&L? Is it an SG&A offset, or, or is it getting reported below the line? Just where is that $8 million gain? Derek, can you help me with that? I think it's, I think it's embedded in the, Yeah. Yeah, you can see it. It's in other... It's footnoted within the, in the financial statements, you'll see it there. Look at the financial statement, footnote one, Daniel, and you'll see it there in the press release. Right. Great. It's included in there. It's, it's net of other things going on, so. Great. Thank you. But, but the number was $8 million. Was that right, Tom? Correct. That's, that's correct. Pre-tax gain, $8 million. Yep. Great. Thanks so much, guys. Thank you. Our next question comes from Brett Jordan, from Jefferies. Brett, your line is now open. Please go ahead. Hey, guys, this is Patrick Folan for Brett. Thanks for taking our questions. Could you talk a bit more on, on the used sourcing environment during the quarter? It sounds like you guys successfully increased spend there. Do you see further room to grow through additional dollar spend, or, or is that pretty close to the optimal run rate? It's a great question. I think, I think the balance that we, that we struck in the, in the quarter is probably optimal going forward, Eddie. The only additional thing that we have to factor in, which we're not seeing a lot in the scheme of things, is the four new openings of AN USA, just to make sure that we have incremental inventory for those. But I think we've got a good balance now in terms of We Buy Your Car, what's coming in in trade, and as I said, we're looking at each deal and giving credit if there's a, if there's a really good trade there to make sure that we can get not just the sale of whatever we're selling, but also get a second sale out of the trade. So I would say optimal balance at this moment in time, and if we're able to continue to get sequential growth, we'll obviously need to get more inventory. But, I'd say balanced right now is the best answer I can give you. Great, that, that's helpful. And then switching to the new side of things, are you guys seeing any mismatch between higher content units in your inventory versus demand for a more affordable, lower trim units? I don't think I'm seeing any mismatch. Obviously, we look, as everyone does, at our turn rates across different models. I think one of the things that's happening in new that we saw in the quarter, at least, you know, I mentioned in my opening comments that I thought the team did well, even though finance penetration levels were down. The reality is, on new, total finance penetration on new for us remained stable, but it moved from what I would call just straight paper into leasing. And as it does that, that can help quite a lot with higher content of vehicles, obviously. So I think that was beneficial for us on the new side. And as I said, on the used side, that's where we saw penetration rates drop. So nothing that stands out to me. When I look at inventory, the only differences I see in terms of turn rate at the moment are electric vehicles versus other powertrains, where we are seeing improvements in turn on electric vehicles, but they are still roughly, I'd say, twice other powertrains turn twice as fast at the moment. Great. That's all for us. Thanks, guys. Thank you. Thank you. Our next question comes from John Murphy from Bank of America. John, your line is now open. Please go ahead. Hi. Good morning, guys. Can you hear me now? Yeah, we can hear you, John. Sorry, it seems like we're not paying our phone bill here. I apologize. First question, you know, Mike, you mentioned something when you're talking about the used car business, about how you might be willing to accept, you know, lower grosses because there's you can make it up on the CFS side, and there might be a retailable vehicle that comes in trade. It sounds like that's kind of also alluding to that you might go a little bit deeper into maybe the third turn of the vehicle as opposed to just the second turn. Can you kind of maybe comment on what you were getting at there and how institutionalized that process is in maybe accepting lower grosses and trying to make it up or growing the business, if you will, on the CFS and on that third turn? Yeah. Of course, John. What I don't want to do is create any confusion. So what we ask our sales teams to do is to obviously look at the overall growth that they generate. We want them to continue to hold or grow market share for the brands that they represent, but also grow new to used ratios within their business. So I think sometimes, particularly when you've got a high interest rate environment, as you're constructing a deal in the showroom, there's multiple different ways that a sales executive or a sales manager can construct that deal in an appropriate fashion for the customer. So that means that as you're looking at that, you take a lot of things into account. Is it—does it represent CFS income, and also, does it represent an opportunity to get a trade? But one of the big dynamics that we have seen is, and Tom alluded to this, a shift in terms of average mix of used vehicle sales. So notwithstanding the fact that we were up sequentially, that was all really driven by vehicles under $20,000. So if I think about used vehicles, $20,000, $20,000-$40,000 and above $40,000. Under $20,000, still a huge amount of interest and a lot of growth if you've got the inventory there. Broadly, flatter down, $20,000-$40,000, and then $40,000+, down. So as we're thinking about trades, what we're doing is we are, I think, investing more in trades to be able to keep our inventory at that sub-$20,000 level as well. So all of that we take into consideration, because as you know, sourcing a vehicle on We Buy Your Car comes with a heap of costs, right? Not just your advertising costs, not just your commission cost to your sales executives, but the other costs associated with that channel. So as we think about the business in a balanced way, let's just make sure we're maximizing all the channels available to us, while you are making an acceptable total gross profit per unit sold. I think we're very clear with our teams that profit per unit is very, very important, but we also recognize it has to be balanced. Okay, that's helpful. And then just a second question on after sales, and you may have gone into this, but the increased technician headcount, you know, I was wondering if you can quantify that and you know, how are you finding these techs? I mean, it seems like everybody's having a hard time sourcing them. And is there more opportunity with whatever you're doing there to increase the headcount or the tech count even more? Yeah, I said, I can't give you. I would give you, if I could remember, the exact increase, but it's fairly significant in terms of the headcount. So let me, while I try and drag that number out of my memory, let me just tell you how we're doing it and what we're doing it. The first thing is that as we go basically dealership by dealership to understand what the opportunity is, whether that is increased penetration in their vehicle park or whether it's to improve customer service by reducing customer wait times. And I think once you've done that, you understand exactly what you're looking for in terms of productive technicians. And then we have pulled together a group of our more senior service directors with our HR teams to put together what I think is a great campaign for attracting and recruiting technicians. But you're quite right, we have to be... In this area, we have to constantly make sure that our pay packages, our benefits are fully aligned, if not better than marketplace, because you're right, it's an in-demand profession, and you know, it's not just about trying to hire more, it's also about, as you know, keeping the ones that you've got. I'm gonna say, and Derek, you may have to circle back and correct it, but from memory, I think we've added over. I actually remember, yes. 14% Same Store as well. 14 percent. Mm-hmm. Good. Thank you for getting that number for me. Okay, maybe, and on that, I mean, those stalls exist to put those three people into. You're not paying $150,000-$200,000 of CapEx. I mean, there's room to, you know, there's capacity to put them in, so CapEx goes up. Is that a fair statement? Absolutely fair. We, our base utilization is about 55% at the moment. So we, AutoNation has built some beautiful, beautiful dealerships, and one, a part of building beautiful dealerships is they put plenty of capacity in there. We are not short of capacity even goes about. Perfect. Thank you very much. You're welcome. Thank you. Our last question today comes from David Whiston from Morningstar. David, your line is now open. Please go ahead. Thanks. Good morning. You mentioned in the slide deck that you increased your tech headcount. I was just curious if you had to do any aggressive spending on compensation or advertising to make that happen? No, as I mentioned before, we obviously check very regularly, market by market, pay and benefit packages to make sure that we are competitive with market. Like everybody else, like everybody else, we offer signing bonuses in the marketplace. And we also do a lot of work, and there's more we can do in this area, frankly, but we do a lot of work in terms of recognition, seniority, tenure, and those things. But it's something that, it's something that, you know, we recognize. It's, as I said, it's a very high demand, in-demand profession, and we just work very hard, as do others. I believe last quarter you were talking about wanting to get more recurring business from your customers. Service would be a big part of that, of course, especially on the customer pay side. I'm just curious, how do you convince consumers who normally haven't been considering using the dealer for service any more than they have to, to start doing so? So let me just... I'm gonna give you an answer to the question in a slightly different way, and it'll help build out some of the things I'm trying to communicate, obviously poorly. But so let's start with the premise that if you've got a car, at some point, you're gonna need it serviced, right? And so what we are trying to do is build out service channels for you that suit the needs for you as an individual. You may wanna do that work yourself, which is why we've now got AutoNationParts.com. We'll provide you the parts. You may not want to use a franchise environment, you may want to use a non-franchise environment, or you may live 30 miles away from the closest franchise. That's why we have AutoNation Mobile Service, the reason we bought RepairSmith. If you do want to use a franchise environment, that's why we have a franchise environment. I kind of look at it that says customers have different ways of getting that service work done, and it's about us giving and providing them channels that are appropriate for them at the right convenience and the right cost. So you're right, there is what-- If you talk to Christian, our head of after sales, there is this, well, what I call a fuzzy line, where customers are making the decision, "Do I stay in the franchise channel, or do I not stay in the franchise channel?" And we obviously target those people very aggressively to say, "Hey, it remains a fantastic channel for you, but if you want something else, then let me introduce you to RepairSmith or AutoNation Mobile Service. Okay, and just one last thing on M&A. You mentioned it's becoming more attractive. Are sellers just becoming more reasonable, or are there other variables at play here for that change? Sorry, you broke up. Can you just repeat that again? I think in the slide deck, you mentioned M&A is becoming more attractive, but... And is that just solely because sellers are becoming more reasonable in their asking prices, or are there other variables causing that change? Yeah, this is Tom. I mean, I'm relatively new to the environment and, you know, obviously, and, you know, as we, you know, we work with our corporate development team on pursuing, you know, lots of different opportunities, you know, whether it's stores, franchises, or, you know, some of the other things that Mike has mentioned. I would say that seller expectations have probably not, you know, moderated in any meaningful way, as you might expect as a seller. And, you know, particularly with, you know, their P&Ls for the last couple of years, being able to sell off of, you know, pandemic level P&Ls, I mean, the expectations are pretty high. The trick for us is, you know, in evaluating the opportunities is, you know, figuring out, you know, what the moderation is gonna be, you know, or normalization, you know, impacts are gonna be. And I think that's the point I was trying to make is that, you know, those expectations have to start, you know, moderating as we cycle out of, you know, what was a, you know, pretty frantic period of time here for, you know, the whole, you know, U.S. and globe, not just in, you know, in the retail auto, but in many other industries. So, that's the, you know, that's kind of the point I was trying to make. Hopefully, that's clearer for you, David. Yeah, um. Okay, thanks a lot. Yeah. Go ahead, Mike. Yeah. No, no, I was, I don't think there's anything I was gonna add in there. I... Did that answer the question, David? Yep. Okay, so I think that was the last question. Yep. Let me... By the way, David, I've been doing the mental math on technicians, and I think your number was wrong, so we probably have to circle back. I'll circle back with you. Because, my recollection is it's something in the order of between 400-500 techs that we've filled on over a period of time, but so just circle back to make sure we've covered that off. But with that, I'd like to bring the call to a close. Thank everybody for being on the call, and we look forward to seeing you in the next quarter. And as I said, thanks to all of our team. Thank you, everyone. Bye-bye. That concludes today's conference call. Thanks very much for joining. You may now disconnect your lines.