Good morning, ladies and gentlemen, welcome to APi Group Q1 2023 Financial Results Conference Call. All participants are now in a listen-only mode until the question and answer session. Please note this call is being recorded. I will be standing by should you need any assistance. I will now turn the call over to Adam Fee, Vice President of Investor Relations of APi Group. Please go ahead. Thank you. Good morning, everyone thank you for joining our Q1 of 2023 earnings conference call. Joining me on the call today are Russ Becker, our President and CEO, Kevin Krumm, our Executive Vice President and Chief Financial officer Sir Martin Franklin and Jim Lillie, our board co-chairs. Before we begin, I would like to remind you that certain statements in the company's earnings press release announcement and on this call are forward-looking statements which are based on expectations, intentions projections regarding the company's future performance, anticipated events or trends other matters that are not historical facts. These statements are not a guarantee of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. In our press release and filings with the SEC, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, May fourth we undertake no obligation to update any forward-looking statements we may make, except as required by law. As a reminder, we have posted a presentation detailing our Q1 financial performance on the investor relations page of our website. Our comments today will also include non-GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our press release and our presentation. It's now my pleasure to turn the call over to Jim. Thanks, Adam welcome to APi. In 2022, APi became the world's leading life safety and security services provider with a global platform serving our customers in over 20 countries while delivering record financial performance. Today, we continue to be pleased with the momentum APi is building and with an outstanding quarter to start 2023. We have great confidence in the business and the direction we're heading. The company delivered record Q1 results to start 2023 for net revenues and adjusted EBITDA while delivering margin-accretive double-digit organic growth across the platform. The strong financial results speak to the consistent efforts of our 27,000 leaders and to the strength of APi's recurring revenue, statutorily required services business model. While successfully growing the business with an inspection first mindset, the team has never lost sight of serving our customers safely and efficiently we are grateful for their commitment. As we look at our roadmap for sustainable shareholder value creation, we believe that we can achieve outsized investor returns in the years ahead by focusing on our long-term 13/60/80 value creation targets, which include organic revenue growth above industry average, adjusted EBITDA margin of 13%, driven by our continued focus on generating 60% of our revenue coming from inspection, service monitoring, adjusted free cash flow conversion of 80% a targeted net leverage ratio of 2 to 2.5 times. We look forward to updating you on our progress throughout the course of this year. With that, I'll hand the call over to Russ to walk you through our performance. Russ? Thank you, Jim. Good morning, everyone. Thank you for taking time to join our call this morning. Before we start, I too want to welcome Adam to our leadership team. We look forward to his contributions. Jim mentioned our 13/60/80 long-term shareholder value creation model that you see included in our presentation. We are relentlessly focused on driving the strategy through the organization and have distilled it down to an easy-to-remember and distinct phrase. I routinely speak to our field leaders about how they can help us deliver on this strategy when I'm visiting our locations around the world. Our leaders know what we want to achieve and how we intend to achieve it. Before we provide you with a summary of our record Q1 results, I would like to thank our approximately 27,000 leaders for their unwavering commitment to APi. The safety, health well-being of each of our team members remains our number one priority. We remain grateful for their hard work and effort. We believe that taking care of our leaders results in our leaders taking care of our customers. This is one of the foundational principles from which we will continue to enhance shareholder value. This week marks APi's eighth straight year of celebrating Safety Week, which, like the Kentucky Derby, is always the first week of May. The theme this year is, I am a safety leader. At APi, we believe everyone everywhere is a leader being a leader begins with a daily commitment to safety for ourselves, our teammates, our customers the communities we serve. This commitment to safety drives industry-leading safety outcomes across the organization. At the end of 2022, our total recordable incident rate, or TRIR, was below 1, which is significantly better than the industry average. We continue to strive for zero recordable incidents, our leadership in prioritizing safety makes APi a safer place to work, which contributes to our historically low turnover relative to industry benchmarks. Turning to the Q1, I am pleased with the record results delivered by our global team as we continue to see robust demand across the business. Net revenues grew organically by 12.1%, reaching $1.6 billion for the 3 months ended March 31st, 2023. This represents the eighth straight quarter of organic growth for APi, with all but 2 of these quarterly increases being double-digit organic growth. Safety Services has delivered double-digit organic growth in each of the last eight quarters, with over 20% organic growth in four of those eight quarters. This is a testament to our growth strategy, which includes strategic pricing initiatives, increasing share with existing customers through cross-selling, as well as purposely expanding with new customers in the fragmented growing fire and Life Safety market. This quarter, organic growth in Safety Services was solid at 14.1% in the Q1, with organic growth in U.S. Life Safety remaining strong at approximately 20%. As detailed at our November Investor Day, we are purposely managing our international growth in Safety Services, which came in at approximately 11% on an organic basis. We remain focused on solid growth at the right margin, managing customer and project selection and evolving away from certain customer relationships when appropriate, when margins do not meet our targeted path for improvement. I wanna take a minute to recognize the progress we have made in growing our inspection customer base, continuing to realize benefits from our commitment to have an inspection-first mindset how that mindset has contributed to the outstanding organic growth in Safety Services. Achieving double-digit inspection growth is not by accident. Over the last 5-plus years, we have developed the organizational capability of selling inspections to existing facilities and have built what we believe is the best inspection sales organization globally focused on fire and life safety. To be clear, the growth in inspections driven by our sales team of leaders is achieved by taking shares from competitors. Two weeks ago, we held a company-wide inspection sales leader summit. I had the chance to stop by and speak to the room full of inspection sales leaders in attendance it was awesome to see the sales teams across our operating companies making connections, sharing best practices showing excitement for a common goal. Growing inspections has become increasingly within our control as we see the results of investing in our sales organizations. March was the highest month of inspection revenue on record for APi. As a reminder, we estimate that every dollar of inspection revenue typically leads to approximately $3-$4 of service revenue. On average, inspection service revenue is 10%+ higher gross margin than contract revenue monitoring revenue is 20%+ higher than contract revenue. On top of this, growing our inspection customer base provides a larger installed base where we are often the first call for any repair or other service work. This inspection sales effort is the key pillar to achieving 60% of revenues from inspection, service monitoring, which is a key driver for achieving our 13% adjusted EBITDA margin target for 2025. Back to the rest of the results. Adjusted gross margin grew nicely in the Q1, up 40 basis points year-over-year. After easing up in the second half of last year, we saw inflation come back into play during the Q1 as certain prices rose across our suppliers. In a challenging environment, I am pleased with leadership's commitment to driving gross margin improvements through pricing activities, implementing fuel surcharges, shifting business mix towards inspection, service monitoring, procurement initiatives disciplined project and customer selection. As a reminder, our small project size, averaging $5,000 in Safety Services and a short project duration of less than 6 months for the company, gives us the flexibility to manage inflationary pressures in our supply chain. Finally, adjusted free cash flow came in flat for the quarter, in line with our expectations for Q1 and reflected an improvement of $47 million versus the prior year period. Our international operations continue to perform as expected. At Chubb, I am confident we now have the leadership teams in place to execute our strategy and move the business forward. In the Q1, we continued to accelerate top line growth in that business, marking the fourth straight quarter of organic growth after years of no growth prior to APi's ownership. In November, on our Q4 call, we went into detail on our strategy for Chubb and how we plan to execute our $100 million value capture plan by 2025. We are pleased with the team's progress executing the multi-pronged strategy while delivering solid operational performance. In summary, we are exiting the Q1 with strong demand. The business continues to perform well, our consolidated backlog remains near record highs business activity across both Safety and Specialty Services remains robust. We are starting to see benefits of increased demand for our services, driven by federal funding flowing in the high-tech market within Safety Services and the infrastructure and utility markets we serve in Specialty Services. We challenged the team to remain focused on disciplined project and customer selection rather than growing for the sake of growth. I am pleased that it is beginning to show through improved profitability of projects in our backlog. We believe our robust backlog, variable cost structure, as well as the statutorily driven demand for our services and the diversity of the global end markets we serve provide predictable, recurring revenue opportunities and builds a protective moat around the business in any macroeconomic conditions. We remain focused on capitalizing on the opportunities in front of us while driving leverage to our targeted net leverage ratio of 2-2.5 times, which we expect to achieve near year-end, even with a modest return to bolt-on M&A in 2023. The markets we operate in are highly fragmented. We are excited about the robust pipeline of opportunities for life safety and security services businesses. I would now like to hand the call over to Kevin to discuss our financial results and guidance in more detail. Kevin? Thanks, Russ. Good morning, everyone. I will begin my remarks by reviewing our consolidated results and segment level operating performance before turning to our guidance. Reported revenues for the three months ended March 31, 2023, increased by 9.7% to $1.6 billion, compared to $1.5 billion in the prior year period. Net revenues increased organically for the same period by 12.1%, driven by double-digit growth in services revenues in both our Safety and Specialty segments. In 2022, approximately two-thirds of our growth was driven by price and pass-through of material and labor costs one-third was driven by volume, which we measure through labor hours. This quarter, we saw this mix come in closer to 50/50, although we are keeping a close eye on the price of key inputs like pipe prices, which have been trending up in early 2023. Adjusted gross margin for the three months ended March 31, 2023 grew to 26.8%, representing a 40 basis point increase compared to the prior year period, driven by favorable mix impacts from outsized growth in our Safety segment and services in both segments. These factors were partially offset by inflation, which caused downward pressure on our margins. Adjusted EBITDA increased by 17.6% on a fixed currency basis for the three months ended March 31, 2023 adjusted EBITDA margin was 9.1%, representing a 40 basis point increase compared to the prior year period, primarily due to the factors impacting gross margins. Adjusted diluted earnings per share for the Q1 was $0.25 per share, representing a $0.02 per share increase compared to the prior year period. The increase was driven primarily by strong organic growth and margin expansion in both Safety Services and Specialty Services. This is offset by an increase in interest expense compared to the prior year period. I will now discuss our results in more detail for Safety Services. Safety Services reported revenues for the 3 months ended March 31, 2023 increased by 10.9% to $1.2 billion, compared to $1.1 billion in the prior year period. Net revenues increased organically by 14.1%. As Russ mentioned earlier, U.S. Life Safety was up organically 20.1%, with our international Life Safety operations up organically 11%. The strong organic growth was driven by double-digit inspection service and monitoring revenue growth within our Life Safety businesses, as well as continued pricing improvements. Adjusted gross margins for the three months ended March 31, 2023 was 35.1%, which was flat compared to the prior year adjusted gross margin, driven primarily by pricing and strength in inspection service and monitoring revenue, offset by inflation and unfavorable mix impacts. Adjusted EBITDA increased by 18.5% on a fixed currency basis for the three months ended March 31, 2023. Adjusted EBITDA margin was 12.3%, representing a 50 basis point increase compared with the prior year period, driven primarily by leverage of SG&A spend across strong organic revenue growth. I'll now discuss our results in more detail for our Specialty Services segment. Specialty Services reported revenues for the 3 months ended March 31st, 2023 increased by 4.4% to $430 million, compared to $412 million in the prior year period, primarily driven by increased demand in the infrastructure and utility markets. Adjusted gross margin for the 3 months ended March 31, 2023 was 13.3%, representing a 120 basis point increase compared to the prior year period, driven by strong organic growth, a shift in mix towards higher margin service disciplined project and customer selection. Adjusted EBITDA increased by 21.7% for the 3 months ended March 31, 2023 adjusted EBITDA margin was 6.5%, representing a 90 basis point increase compared to the prior year period, primarily due to the factors impacting adjusted gross margins. Turning to cash flow. In line with our guidance and expectations, our adjusted free cash flow for Q1 was flat, a $47 million improvement over the same period last year. As a reminder, Q1 is traditionally our lowest cash flow quarter due to seasonality and timing of annual payments. We reaffirm our prior guidance of delivering free cash flow conversion at or above 65% for 2023 on the way to our long-term adjusted free cash flow conversion target of approximately 80%. At the end of Q1, our net debt to adjusted EBITDA was approximately 3.1 times. We remain laser focused on cash generation and deleveraging to our stated long-term net leverage target of 2-2.5 times, with current expectations to achieve approximately 2 and 2.5 times near year-end 2023. I will now discuss our guidance for Q2 and full year 2023. While some might argue the macro became more uncertain during the quarter, the strength of our business, our top line momentum and the quality of our backlog gives us confidence to raise our prior full year guidance for reported net revenues and adjusted EBITDA. We now expect full year reported net revenues of $6.875 billion-$7.025 billion, up from $6.8 billion-$6.95 billion. At current currency expectations, this represents reported net revenue growth of approximately 5%-7%. We now expect full year adjusted EBITDA of $740 million-$780 million, up from $735 million-$775 million, which represents reported adjusted EBITDA growth of 10%-16%. In terms of Q2, we expect reported net revenues of $1.75 billion-$1.78 billion. This guidance represents reported net revenue growth of approximately 6%-8%. We expect Q2 adjusted EBITDA of $195 million-$205 million, which represents reported adjusted EBITDA growth of 11%-16%. For 2023, we anticipate interest expense to be approximately $145 million, depreciation expense to be approximately $85 million, capital expenditures to be approximately $95 million our adjusted effective cash tax rate to be approximately 24%. We expect our adjusted diluted weighted average share count for the year to be approximately 273 million. April marks APi's three-year anniversary of being listed on the NYSE. We are excited to have crossed this mark with a stronger business, stronger leadership team record Q1 results. With this three-year anniversary in conjunction with our filing of our 10-Q, as a matter of housekeeping only, we will also be updating our shelf registration statement later today. This update is not meant to imply any planned issuances of shares or other activity is merely allowing us to have another tool at our disposal now that this window has opened for the company. Overall, we are extremely pleased with the results delivered by our global team in the Q1 and look forward to sharing more updates as we progress throughout the year. I will now turn the call over to Russ. Thanks, Kevin. APi's record Q1 results speaks to the strong momentum, balanced across our global platform. Delivering the margin enhancing double-digit organic growth while improving backlog quality gives us the comfort to raise our full year guidance for the business. As you've heard from all of us, we have great confidence in the business and the direction we are heading despite the macroeconomic environment. That said, we remain agile, adaptive confident in our ability to take definitive and early actions in the face of a worsening of macroeconomic conditions. As we look to the years ahead, we believe we can create sustainable shareholder value by focusing on our 13, 60, 80 long-term value creation targets. These include above industry average organic growth, adjusted EBITDA margin of 13%+ by 2025, 60% of revenue from service, inspection and monitoring adjusted free cash flow conversion of 80%. Coming off a great Q1, I'm excited about the opportunities for the rest of 2023 and our ability to execute on our strategic plan in the years to come. With that, I would now like to turn the call back over to the operator and open the call for Q&A. At this time, we will open the floor for questions. If you would like to ask a question, please press the star key followed by the one key on your touch tone phone now. If at any time you would like to remove yourself from the question queue, press star two. Again, to ask a question, please press star one. We'll take our first question from Andrew Kaplowitz from Citigroup. Russ, obviously strong growth, in your core America Life Safety business. When you talk to your customers, any sort of signs of any vertical slowing? When you mention that you have improved backlog quality, maybe you could give us some more color on what that means and your visibility going forward. Yeah. Thanks Andrew. I appreciate you joining us this morning. You know, I mean, you've heard me say this before end markets, you know, without question, matter. I was recently at an industry association meeting where I was able to interact with a number of different CEOs, you know, in the space. The folks that are, you know, in semiconductor, data center, healthcare, aviation, you know, are seeing, you know, I'd say manufacturing specifically, you know, pharma and... Food and beverage, those end markets are continuing to just rock and roll. But if you're in Chicago and thinking about building a 50-story, you know, condo tower, that project's dead in the water. You know, you're seeing, you know, developer-led opportunities, you know, really get pushed to the right or, you know, get canceled. For us, we're very fortunate that developer-led project-related work is typically price-driven. We've never competed very well in that space, it's not a large exposure to us. But the end markets that we play in, you know, I didn't even mention infrastructure and utility, which continues to be really robust as well. You know, it's really all about the right end markets. As it relates to our backlog, everybody knows how I really don't like backlog as a real benchmark for us because of the disciplined approach we take to project and customer selection. We have visibility into our backlog and to the estimated gross margins associated with that backlog. We feel like the quality of the backlog has really improved, really over the course of the end of last year and into the first parts of this year. We continue to be diligent, when we're reviewing, larger project-related proposals in the work programs associated with that. We have, we feel good about that. If you remember last year, we talked a little bit about our efforts to burn off some of the lower margin, project-related work in our HVAC business that wasn't able to keep up with inflation. We feel good that we've really worked our way through that as we continue to even though we continue to work off some of that backlog this year. Very helpful. You mentioned the increase in infrastructure and utility spending. I just wanted to ask you about specialty. Can you sustain that sort of mid-single-digit growth that you did in Q1 in that business? Are you seeing any impact from fiscal stimulus out there yet? Maybe just, you know, what's going on in telecom? Is that a more difficult environment, this year? Yeah. Well, you ask a lot of questions in one question. I'm good at that. I think most of your peers are pretty good at that, too. You know, I think you're seeing dollars flowing into the system, like, really from a rural broadband perspective we've seen some opportunities, you know, in our businesses that perform that work. That part of it's been positive. You know, most of those dollars are allocated to the states the states are figuring out how to utilize those dollars. It's kind of state by state on what our business leaders are seeing. Kevin and I were just out actually visiting one of our businesses that does that work just, like, 3 weeks ago we had actually a pretty good conversation about what they're seeing there. They're seeing, like in Minnesota, they're seeing opportunities. There's work, you know, happening there. As it relates to the infrastructure bill, you know, you're seeing those dollars are starting to flow into the system. A lot of that work takes design effort and engineering effort, you're not really seeing the robust opportunities. Regarding, you know, telecom, you know, I know, you know, a number of the large telecom providers have, you know, reduced their CapEx budgets, they've reduced their CapEx budgets from ginormous to enormous. The work plans that we do, we haven't seen any slowdown in our business with that, it continued to provide opportunities. Ultimately answer your question. There's plenty of opportunity in front of us to be able to sustain, you know, the organic growth that, you know, we showed through the Q1. For us, it's more about, you know, really we want the business, our business leaders to be super disciplined and focused on gross margin and ultimately EBITDA margin. That's how we're gonna achieve our 13% goal is being disciplined. The growth and the opportunities are 100% there. We just need to make sure that we're picking the right opportunities for the business. Just one quick follow-up for Kevin. You know, you mentioned you're watching pipe prices. You know, have you put in maybe, you know, rising commodity prices into your guidance? Is that the reason why you raised EBITDA maybe a little less than revenue for the year? Yeah, pipe prices are one of the critical elements that we purchase. We did see a run-up here in the Q1. I would say that our guide generally in the back half of the year, we are not yet taking a position on inflation. That is not baked into our guide, any sort of significant inflation and therefore pass-through of that from a revenue standpoint would flow through. Got it. Thank you. Our next question comes from Julian Mitchell from Barclays. Hey, this is Kiran Patel-O'Connor on for Julian. I just wanted to ask on Chubb, you know, how the integration's proceeding and any updates to the synergy expectations for fiscal 2023 and the cadence through the year? Thanks. Well, we basically looked at Chubb and our international business together. I would answer that by saying we couldn't be more pleased with how the integration efforts, you know, really are progressing. As I mentioned in my remarks, we feel like our leadership team has really come together, you know, across all aspects of the business. So we feel really good about that and where we're at and where the business is going. We shared some, you know, information on, you know, organic growth, you know, internationally. We don't plan to do that, you know, on a quarter-by-quarter basis we wanted to just give some color on, you know, really the really solid progress that leadership, you know, in the business has been making. you know, we feel really good about the $100 million of value capture opportunity in front of us. We've guided to $55 million-$65 million this year, with most of it happening in the second half. we feel like we're 100% on track with that. I mean, the long and short of it is that we feel really good about where we're headed with that business going ahead. Just a point of clarification that, you know, there's really no update from a restructuring or synergy timing standpoint from our last call. The $55 million-$65 million that Russ referenced was restructuring charge that we anticipate this year for the work we're doing there internationally we would expect that charge to be later in the year. Therefore, any value capture opportunities that come from the charge to also be back half loaded really into 2024. Understood. Thank you. My follow-up question was just on the comments you made on returning to bolt-on M&A later in 2023. What gives you confidence to return to, you know, this bolt-on M&A? Is it this, you know, strength in the cash flow later in the year? Should we expect the size of the deals to be, you know, relatively small and financed by cash on hand? Would you be willing to take on any additional debt to, you know, for the right deal? Thanks. Yeah. We're focused primarily from a bolt-on M&A, smaller transactions that are accretive to our existing business, primarily in North America. You know, we want our team internationally to really stay focused on the integration work that's in front of them. That doesn't mean that if the right small opportunity came along with the right leader that had the capacity to handle it, that we wouldn't take a look at it. I don't wanna say that it's, you know, 100%, you know, not gonna happen. The focus is primarily in North America, where we feel like the existing leadership has the capacity to integrate it. We've modeled in, you know, some dollars, so to speak, into our cash flow forecast. Even as we talked about, you know, getting de-levered to that 2.4-2.5x by year-end, we've modeled in a modest amount of dollars for bolt-on M&A. Essentially, we would do that with cash on hand. I suspect that, if the right, you know, larger transformational opportunity would come along, I suspect that we would take a look at it. It would have to be, you know, another kind of center of the fairway type transaction for us that really made a lot of sense. I would tell you that we're very excited to kind of turn the bolt-on M&A faucet and get it going again. We have some really nice opportunities that we're digging in on right now. Got it. Thank you. Thank you. Our next question comes from Kathryn Thompson from Thompson Research Group. Hi, thank you for taking my questions today. This is just first is a bigger picture question. We look at four big secular trends impacting the U.S., in particular reshoring, nearshoring, population shift, increasing and, you know, focus on environmental and then government support or construction spending through IIJA, you know, function, Inflation Reduction Act and CHIPS Act. When you look at those four big trends in the U.S., how does APi Group capitalize on these trends? In particular, you know, we're hearing other comments from peers and related companies, focusing on how they're already seeing benefits in fire and life safety. Well, Kathryn, I mean, I think that the, you know, the fire and life safety space specifically to a certain degree, I think security evolves with it, even though it's not as statutorily required. All of everything that you're seeing and you're talking about enhanced code and increased, you know, regulation in the space is a positive, you know, for our business. You know, when I look at things like the CHIPS Act, the semiconductors were already in process of reshoring the $30 billion that's been allocated for that is just a drop in the bucket. Really, I don't even know if I would put it in the category of being necessary. The spend was really, you know, over the top, you know, from that perspective. I think for us, you know, centered on our culture and purpose of building great leaders. When we think about, you know, that investment and what that means from an ESG perspective the difference that we can make, you know, in the communities we serve, we feel that in a tightening labor market that that only, you know, benefits our company and our organization and positions us, you know, to continue to grow the business. I think that businesses that are really focused and centered on a people-first mindset are ultimately going to win. All the other stuff just becomes, you know, a byproduct to a certain degree noise to a certain degree, you know, for your efforts as you continue to look to build your business. When I think about ESG and some of the things that are associated with that, I really like where our business is positioned because it's positioned around people first that includes diversity, equity, inclusion other aspects like that. We think that we have some real... From a sustainability, we have some really good opportunities in front of us that will make a difference for our customers and will only add to, you know, some of the efforts that they've already started to put forward. I really think that our company is because we're so centered on our purpose of building great leaders, we're positioned to take advantage of kind of these secular, you know, tailwinds that you talked about. Then a follow-up question I have more relates to the Chubb acquisition, you know, you're anniversarying that. One of the areas that you're focusing on is that inspection first mindset with Chubb. Where are we today versus with that when you first acquired the company? How far along in that journey are you in really converting to that inspection first mindset? I would tell you that we're in, like, the bottom of the first inning, really. You know, It's like taking a freighter and, you know, trying to turn it 180 degrees it takes time it takes energy and efforts. I know that our new sales leader inside our international business is on the call today, hopefully, he's listening closely to the importance here. I am smiling about that. You know, it takes energy and time. You know, what was really super cool, Kathryn, is that our leader in Asia shared a story with us that we recently basically won an inspection first contract on. with one of the casino properties on the island of Macau. We celebrated that across the business and across the organization. To me, it's that mindset that we have to change first. You know, I mean, there's still the mindset of, you know, we're gonna go win an installation job then we're gonna at the end of the installation job, we're gonna, you know, we're gonna convert it to an inspection and service contract. You know, it's gonna take some time and energy to change that mindset. You know, celebrating the right behaviors is a big part of it. Well, there is an effort to transform our sales force, you know, going on in our international business right now. I feel very strongly that we have the right leader, you know, looking over the sales organization, you know, in that piece of the business. He's working in conjunction with Courtney Brogard, our Vice President of National Inspection Sales here in North America. We're gaining on it we have a lot of work to do there I'd be misleading you if I didn't tell you that. Okay. Perfect. Thanks very much. Thanks, Kathryn. Our next question comes from Andrew Wittmann from Baird. Great. Thanks. I guess just a technical one to start out with here. Just on the guidance, Kevin, maybe can you talk about what the FX hit is that's implicit in your guidance for this year? I think for the balance of the year, it should be evening out a little bit. Why don't you comment on that? Just a point of clarification, make sure we're on the same page. Russ, you mentioned that there was some dollars on the investment side for some bolts in M&A. I just wanna make sure that the EBITDA guidance, the revenue guidance does not include any unanticipated or unannounced, I guess I'd say, M&A through today. Hey Andrew. Good morning. I'll take them both actually. On the first one, FX was a headwind year-over-year in the Q1. You'll see that when you get through our material. It's probably, you know, cost us somewhere around $30 million top line. As we go through the year, we anticipate that flipping the back half of the year in our reported results and our reported guidance. We see it being more favorable in the back half of the year. For the year, all in, you know, it's gonna be slightly favorable at revenue and therefore very, very slightly favorable at EBITDA. On your question on both on our guidance, traditionally always excludes any contemplated M&A all at revenue or at EBITDA. Yeah. Okay. I guess just Russ, I thought your commentary in your prepared remarks on the sales force and the investments and bringing the team in were kind of interesting. Kinda got me thinking more about that. You know, with the company growing so nicely here, on the Safety segment in particular. I guess I'm just curious, are you still hiring there, or are you expecting the productivity of the existing sales force to continue to drive sales from here? I'm just kind of wondering how you're thinking about investments in a, in a macro that's a little bit more uncertain, although your demand seems like it's pretty good. Yeah, I would say that, we continue to hire and, we continue to build out that sales team. You know, there's, you know, many, many markets that, I would say that we're underrepresented in. I view, I view all of that as just great opportunity, you know, for the business. That, you know, that I know you know this y for those that maybe don't know this, You know, regardless of what's going on from a macroeconomic environment, buildings and facilities and manufacturing operations, those facilities are gonna continue to be required regardless of what's going on. For us, you know, that's an investment into the future and a place where we will continue to invest and build out that sales force. Got it. That's helpful. Then I guess my final question would just be trying to get a understanding of the extent of customers on the Chubb side that you've decided to go a different direction with, that you've exited. Maybe could you help us just understand how much of an impact that was on a year-over-year basis to the revenue line in the quarter? Or maybe what you anticipate that to be as a headwind to the revenue that's implicit in the guidance that you gave here today, just so we can kinda frame what that looks like and what your gross new sales are really adding to the business? You know, you know, I think if you go back to the materials that we had last November, I think we showed in our revenue bridge, I think we showed customer attrition in the 5% range. I would say that the reality of it is it's less than that, probably in that 2%-3% range. You know, as, you know, some of these, so to speak, loss-making or poor-performing, you know, service and maintenance contracts that we had where we were maybe a bit more aggressive on price, we didn't see the attrition that we thought we would necessarily see. That's a, that's a positive to us. We still have some work to do there we'll continue to have some work to do there, probably through this year and maybe even, you know, it dragging into a little bit of next year. It'll continue to be a point of emphasis for us. Got it. That's helpful. Thank you very much. Have a good day. Thanks a lot Andrew. Appreciate it. Our next question comes from Chris Snyder from UBS. Thank you. I wanted to ask on M&A. Particularly the tightening lending standard we're seeing in the market. Has that had any impact on the competition for deals? You know, I would think maybe some of the smaller potential buyers out there in the market could be impacted by that. Yeah, I mean, I think what's, for sure anything that's larger, you're seeing, obviously multiples are potentially coming down. Much more difficult for, say, private equity firms to get the leverage that they would potentially be required. On the smaller transactions and specifically the types of businesses that we want to acquire, the typical seller's not really interested in selling to private equity. The sellers and the companies that we're looking for, are really more interested in finding the right home for their people and for their team. We stay super focused on culture, values and fit. I think that the potential sellers are focused on the same thing as us. We really, you know, find that we're still able to buy these businesses, you know, from an economically fair perspective, you know, someplace between 5 and 7 times, I suspect. We have robust opportunities, you know, in that space. I would answer it's a little bit of a both and the types of companies and the types of sellers that we're looking for, you know, really aren't interested in selling their businesses to private equity. We have, I think, a totally different story and I think a much better story to tell. Thank you. I appreciate that. Then just kind of following up on those bolt-ons, is it fair to, you know, just assume that the bolt-ons from here will all be focused on life and fire safety? Is there any appetite to maybe add bolt-ons in adjacent building services markets, you know, 'cause where you can leverage the sales force, or sorry, the workforce and kind of expand the total addressable market on the back of that? Thank you. I would say that as we think about our M&A activity, again, our focus is, what I would say, is life safety and security again, primarily in North America. Regarding the question on appetite for adjacencies, I would say there's appetite for adjacencies I don't know that that adjacency would we would want to be comfortable that there's the opportunity for us to scale, you know, any sort of adjacency that we move the business towards. You know, like in the past, we've mentioned interest in the elevator and escalator space. Buying a, you know, one-off $6 million, you know, elevator maintenance company in Paducah, Kentucky, probably doesn't make a lot of sense for us. If there was an opportunity for us to, you know, enter into the space with, you know, as more of a platform leading type business, there would probably be more, more interest in that. You know, we're gonna make sure that we're staying, you know, laser-like focused on what our core capability is, as we continue to look at, you know, adjacencies, as well. Makes a ton of sense. Thank you. Our next question comes from Ashish Sabadra from RBC. Hi, this is David Paige on for Ashish. Congrats on the good results here. I just have one question around, you had mentioned at the beginning of the call some of the new business wins. Are you taking market share from maybe competitors, or are you just growing share of wallet there, or just maybe some more color on how you're attacking some of those new business wins you mentioned? Thank you. Well, when you think about inspections and, you know, our growth in inspections, obviously there's, you know, we're raising our prices in our inspections, obviously. Essentially, the inspection growth that we're getting is all volume and all share. All right? We're taking that. It's the already existing built environment that, you know, our sales teams pounding the pavement and calling on those types of customers that's essentially we're taking volume. I mean, yeah, are we still converting, you know, new building installations and things like that? For sure. Most of that is truly volume and share. We obviously continue to try to focus on, you know, taking wallet as well with our existing customers wherever that's possible. That's why you see us so focused on growth in inspections and because we continue to build out, you know, our customer base. A lot of the, you know, one of the advantages that we are going to have from the Infrastructure Bill is more indirect for us than direct. What I mean by that is that as those dollars flow into the system and creates, you know, project-related opportunities, our competitors will, you know, start to move their business towards those larger project-related opportunities, which will open up opportunities with our existing customer base for us to take more share with our existing customers. It should also bring the opportunity for us to raise our prices, because of less competition, you know, in the space. It's, you know, there's obviously price involved we are continuing to take, volume and share. Great. Thank you. Thank you. Our next question comes from Andrew Obin from Bank of America. Hi, this is David Ridley-Lane on for Andrew Obin. As you've gotten more experience with Chubb security business, how are you know, kind of thinking about that service line's characteristics, returns, et cetera? Is that an area for investment for you? Well, it's 100% an area of investment for us. I mean, like, we've said this from day one, that it's the center of the fairway deal for us. We feel that same way today. We feel like we're the 100% right owner in the right home for that business we wouldn't have bought it if we weren't going to invest in the business. For us, it's just really a matter of getting the business, you know, optimized and stabilized. We feel very strongly we need to have a really rock solid foundation, in order to, you know, start putting those building blocks and growing that business as we move forward. There's the markets that they serve are as fragmented as, you know, North America when we talked about that market as well. We 100% plan to invest in it. There's other opportunities inside that business, you know, as well. Like, Chubb has very strong security capabilities. We're less strong, you know, in North America from a security perspective. We feel that there's an opportunity for us to take advantage of some of that expertise, you know, in our existing business here. Same thing for our business is, you know, has much greater capability and strength from a sprinkler perspective. On the mechanical side of the life safety space, we think that we can bring that level of expertise to that business. There's places for us to invest from, probably an M&A perspective. There's places for us to invest and grow the business from, in an organic perspective. There's also ways for us to continue to improve the business just from a best practice and a knowledge sharing that will allow us to really increase the performance of the business. We're very optimistic and very bullish on what can be accomplished there. I attribute a big part of, you know, so to speak, you know, I'm looking at Kevin as I make this comment I'm attributing a big part of our optimism to the leadership team that we've built out there. Like, we've built out a first-class leadership team there. You know, it starts with the leadership the leadership will ultimately drive, you know, superior results in that business I have great confidence. Got it. Just a quick follow-up. I think the implication of some of the pricing commentary here is that you're seeing an acceleration in labor hours, just the cleanest metric of volume. Is that the right read here? Yeah, I would say that, you know, it varies across our businesses for sure. In general, as we move sort of back half 2022 into first half or early 2023, I would say in the aggregate, we're not seeing it as an acceleration per se we're seeing sort of the growth that we saw last year in labor hours in the back half of the year continuing in the first part of 2023. Got it. Thank you very much. Thank you. Our next question comes from Steve, Stephen Tusa from J.P. Morgan. Hey, this is Kaushik Patel on for Stephen Tusa. Good morning thanks for taking my question. Are you seeing any impact of higher vacancy rates, particularly in the office vertical? I'm sorry, I didn't hear you. Can you hear me now? Yeah, try me again. Are you seeing any impact of higher vacancy rates, particularly in office? You know, no. I mean, I mean, I think, you know, really, again, the inspections are statutorily required. You know, I think that, you know, we're focused on the already existing built environment, for us, you know, that's an advantage, you know, that we have. Again, we're not involved with a lot of, you know, developer-led commercial office building construction that's being shelved. It doesn't have a material impact, you know, on our business. I think that we stay focused on the proper end market. It hasn't had any sort of a material impact on our business at all. Okay, great. Thank you. Our next question comes from Adam Wyden from ADW Capital. Hey, guys. Thank you for taking my call. No really nice job. You know, obviously, the free cash flow conversion was a lot better and things are sort of normalizing. I had sort of a more of a qualitative question. You know, some people sort of reference APi Group as a construction company, I think some people sort of danced around the issue, "Oh, well, you know, is new construction down or is vacancies down?" I think a lot of building service companies that sell into sort of the end markets that you sell into, like a Watsco or an Otis Elevator, they sort of give 2 numbers. One is sort of recurring service and recurring then, like, what is replacement in nature. I think earlier on in your sort of, you know, IPO go public process, you sort of spoke to the company being sort of 90+% you know, recurring and replacement. You know, sort of stuff that isn't directly leveraged to new construction 'cause, you know, new construction building stock is only growing about 3% a year. Maybe it'd be helpful to sort of give people a sense of sort of how much of your business is sort of contractual service, how much of it is replacement how much of it is really levered to sort of new instant, you know, standing up new buildings so people can get a sense of sort of, you know, the macroeconomic sensitivity. Yeah. Adam, good morning. Thank you for your interest and your support. The 90% that you referred to is really, is directed towards a recurring customer base. Exactly. You know, very much a relationship based business and focus from our team. Ninety percent of our revenue comes from a recurring, basically the same customers, year in and year out we're super focused on retaining those customers. You know, we don't break out, you know, the exact figures as it relates to inspection service and monitoring we're north of 50% of our total revenue comes from inspection service and monitoring. I think that if you peel back the onion a little bit further, probably. You do some math and you say, well, the other, you know, say, 40%, high 40s% would be installation or project related work. I would say of that, you know, probably someplace around... This is a guesstimate, so you can't really hold me to it I would say that it's probably someplace around 20%-25% of that is retrofit and kind of upgrade work that if you wanted to, you could probably bucket it as service work. The way we manage it, we don't. You know, a high percentage of our business, you know, is very, very economically resilient. Again, I just wanna point everybody to the end markets that we serve. Like, we're super focused on being in the right end markets, semiconductor, data center, healthcare, you know, utility infrastructure. Those are the end markets that we have really worked hard to push, you know, our business leaders to. I think there's some work for us to continue to do that internationally. I mean, I would say that from a leadership perspective, we're 100% aligned on the end markets, it's just a matter of executing on that, you know, inside the business. I feel really good about the resiliency of the company. Yeah, I think that's really really helpful. Obviously the resiliency is coming out in the numbers, so thanks for all the work. Appreciate it. Thank you. In, in closing this morning, I would like to again, thank our team members who have remained focused on supporting our company, customers the communities in which we serve. The safety, health well-being of each of our leaders remains our number one priority. I would also like to thank our long-term shareholders, our new shareholders those who've expressed interest in APi. We appreciate your support. We are excited about the opportunities that lie ahead and really look forward to updating you on our progress throughout the course of the year. Thank you everybody, again for taking the time to join the call. We're super excited about what we're gonna be able to demonstrate to each of you as we work our way through the year. Thank you, ladies and gentlemen. This concludes today's conference. You may now disconnect.