Hey. All right, thanks everyone for joining us on day three of our 2024 Global Technology Conference. My name is Ruplu Bhattacharya, and I'm a director with the equity research team at Bank of America, covering IT, hardware, and electronics manufacturing services companies. Today, we have one of the largest distributors in the world, Avnet, here, and we're honored to have CFO Ken Jacobson here with us. Ken has a lot of industry experience. He joined the company in 2013, and he was appointed CFO in 2022, but even prior to that, he's worked at other companies like, First Solar, and he's been at PwC. So lots of experience here. We also have, Joe Burke, Vice President of Treasury and Investor Relations, with us. So we hope to have a great discussion. So Ken and Joe, thanks, for being here today. Thanks for having us, Ruplu. Thank you. Maybe, Ken, I wanted to start with a high-level question. Just talk about the macro environment. If you can talk about what you're seeing from a regional basis, you know, North America, Asia, Europe, what are the demand trends like? And the same question on a vertical basis and market basis, what are you seeing? Yes, maybe I'll start with the regional kind of view, and we've really been down in Asia and China for the past several quarters. So I think we're seeing signs of stabilization there. We're not overly weighted to China. We're about 10% of our business is China, but you know, we have a big business in Taiwan and Japan and then the rest of South Asia. So we're saying we're seeing pretty good signs coming out of the Lunar New Year of you know, stabilization. You know, still underlying weaker demand, but we're not seeing it get worse, and we're actually seeing a little bit of sequential growth that was implied in our June quarter guidance. As we kind of shift to the West, you know, Europe has been kind of our strongest region, even as this past December still hit record numbers. So now we're seeing a little bit of fallout of demand coming out of Europe, you know, and seeing kind of double-digit declines here implied in our guidance, and then, kind of similar in the Americas. So starting to see the demand soften in the West. From a vertical standpoint, you know, clearly, defense is still holding up pretty well. You know, our Americas business has a decent-sized defense business. Europe's smaller, but we're seeing some traction there with things that are going on, unfortunately, in the world. And, you know, industrial is really our strongest market overall, including in the West, and we are starting to see that soften a little bit, and then transportation is another big market globally, and that's, you know, softer, but still holding up relatively well. So it's kind of mixed across the globe, but some of the markets that we're strongest, even as this past December, are starting to soften a little bit, but generally still there's demand, and we see some of that softness being, you know, from inventory corrections and excess inventories at our customers, you know, with some of it being driven by underlying demand declines. Got it. In this environment, how long a forecast do you get from your customers? And overall visibility, based on those forecasts, do you think that visibility is better than what you had 90 days ago? Yeah, I would say visibility is more the same. You know, and we'll talk about lead times a little bit, but as lead times have come down, customers are giving less, you know, firm, firm orders. If you can get stuff in 13 weeks, right, they tend to order in those time frames. So we're seeing less longer-term visibility. When lead times were pushed out over a year, we had a lot more. But what we are seeing is the fact that lead times are stable and, you know, we see normal level of cancellations. You know, in our business, we're always having some level of push outs, pull-ins, you know, and tweaks there with the day-to-day forecasts. But, you know, I think in general, our backlog's down year-over-year, but, you know, the level of visibility is consistent. But that backlog being down is some by-product of, you know, lead times coming in and then the softer demand, so you would expect some decline in backlog, right? But that also is helping the book-to-bill as we start to see more orders coming in. As the billings go down, you start to see that as a driver for some of the uplift in the book-to-bill. Got it. So, since you talked about book-to-bill, can you talk about how book-to-bill is trending across different regions? Yeah, I would say, you know, it's... We talked about Asia kind of stabilizing, so we're seeing it trending up higher in Asia. Still not at parity, but getting closer there. You know, still softer in the West, but we are seeing, you know, for example, as semi stabilized, that's starting to improve, but we are seeing IP&E book-to-bill is getting near parity, which is, you know, consistent with what we're seeing in terms of, IP&E being pretty, pretty stable market and starting to see some demand increases there. Right. Ken, you talked about China. What is the game plan for China? Do you see your revenues, your investments in China increasing? And overall, at a higher level, can you talk about where your investments and where your focus is on a regional basis? Where do you think there's maximum growth for the company? I think, you know, talking about China specifically, I would say, you know, a few years back, we were under invested there, and so we've been intentional about trying to invest more in broader-based demand there. Transportation's a really strong market, but also just the mass market there in China. Seen a lot of opportunities in, you know, some of the renewable kind of spaces, so solar, wind, some of those types of things. So we do see it as an important market. I think we're happy that it's not overly concentrated for us. You know, again, 10% of total revenues and, you know, roughly 25%-30% of Asia revenues. So, you know, we see that as a long-term market, even though there's some softness there. I think, you know, one market we have definitely continued to invest in is Japan. It's a very fragmented market, right? None of the global players have a significant presence there, but, you know, we see that as a good market. It's got a little bit higher margins in China as well than, let's say, Taiwan or Southeast Asia. But, you know, Japan's another market that we see is very good, and our business there is performing well. Some more opportunity there. Taiwan's just always been kind of our strength in Asia, and we're seeing that, you know, see signs of starting to recover, and that's, you know, about 40% of our Asia business is out of Taiwan, and so that's getting healthier, and we're optimistic we start to see some growth there, in the near term. Got it. I'm gonna come back to Europe a bit when we talk about Farnell. Maybe that's a better time to talk about that. Let's. You know, you also mentioned backlog. What is a normal level of how many months of backlog do you typically have, and how is that running? And do you think there is any double ordering happening at this point? I mean, I think backlog, in many ways, is a byproduct of lead times, you know, and so although we have customer forecasts and we do a lot of demand planning and supply chain type forecasts, you know, we typically don't get backlog until, you know, customers need to order the product. So I'd say the trends with backlog are generally normal as it relates to lead times. You know, getting into the overall picture, I would say we are seeing pretty normal trends in terms of, you know, what was happening is, as lead times extended, customers were having to place orders, and Avnet was having to place orders and kind of be stuck with those orders. We call them non-cancellable, non-returnable, and so there was a lot more restrictions on when you placed orders that you couldn't cancel it, even if your demand changed. We're seeing a lot of softening and normalization of those kind of trends. We feel very good about, you know, the ordering patterns and the kind of the rules of ordering with our supplier partners are kind of back to normal. You know, we always have some level of non-cancellation. You're 30 days out from when you need to take an order, you know, suppliers aren't gonna let you cancel because they've already built the product. So that, that would be normal levels, and we, we were saying we're kind of behind or through all of the kind of strict terms and conditions that were in place. You know, I still think there's opportunity to build up buffer stocks, and we'll talk about supply chain services, but there is still some need for customers to build up safety stock and things like that, to make sure they get protected, you know, if things start to tighten up or, you know, if natural disasters happens or another pandemic, that they're kind of protected with critical parts. So there's still opportunities there, and there's still some, you know, things going on between suppliers and OEMs to kind of strengthen that, you know, assurance of supply. Just on cancellation rates, is there a normal level of cancellation? Is there a certain percent that is normal and that you typically try and keep that under? Well, our rule of thumb is, in any given day, you have 25% change in your overall ordering between push outs, pull-ins, you know, cancellations. What I would say is, you know, cancellations still remain normal. Some cancellations are good because when we know there's not underlying demand, we're gonna adjust the backlog accordingly. So, you know, some of the cancellations we've seen in the past, let's say, six months have been our own doing to make sure we've got the appropriate picture of what inventory is coming in. I would say, you know, oftentimes stuff changes with our customers in terms of demand, timing, but we don't see any unusual patterns in cancellations right now that would be of a concern, that would indicate anything more than what we're seeing is just some softness, due to overall demand, plus the elevated inventory levels of customers. Got it. Ken, what investors are looking for in this space is to time the upturn. There's an inventory correction that has impacted this market. How do you see that trending? I mean, how many more quarters of inventory correction do you see happening? Yeah, I would say we still have some work to do. That's one area where we're disappointed that we haven't been able to convert the excess inventory into cash. And there are a lot of times with Avnet, you know, one of our benefits is the countercyclical balance sheet. So as demand starts to go down, you start to burn off receivables and inventory and generate a lot of cash, and we had a good cash flow quarter last quarter, but it's been slower than we would've liked it to have been. What I would say, it's still gonna take a few quarters to work through some of these things. Customer inventories are still elevated, so that impacts our ability to get through some of our inventory, but at the same time, we think the inflows coming in from the suppliers are very well controlled and, you know, not creating additional headwinds there. But, you know, as the underlying demand environment has declined, right, that's causing more time. But I think our commentary was a couple of quarters ago, mid-2024 would be where we start to see some uptick there. I think we're thinking more now, you know, late 2024 is where we start to see kind of the inflection point, but we'll continue to monitor it. And again, our view is we'll continue to make progress on inventory, you know, this quarter and the next quarter, and so I think it's gonna take a few quarters, but we see progress coming and, you know, the situation's getting better each quarter. Got it. Maybe I want to talk about pricing. What are you seeing from suppliers in terms of pricing on both the passive side as well as on the semiconductor side? And, are suppliers still raising prices in this environment? Yeah, I wouldn't say we've seen a lot of pricing increases. I would say we've seen pretty stable ASPs, you know, in particular on the high-end semi side. But, you know, in general, pricing is pretty stable. And remember, the reason prices went up, for the most part, was input costs are up, right? The cost to fabricate the semiconductors, you know, the freight cost, all the labor costs, all those costs are up, so a lot of those price increases coming were pass-ons or pass-throughs of price, actual hard costs. We see it pretty stable right now, although, you know, we would argue in commodity-type areas where there's lots of different alternatives, those tend to have more pricing discretion in terms of ASPs, but the more proprietary-type products, you know, ASPs are holding up pretty well. I think where we'd see more pressure on potentially pricing is more the competitive nature is... You know, demand is down a little bit. You know, we've done a good job from our perspective, taking share over the last several quarters. So, you know, there's a dynamic competitive environment out there as demand goes down, trying to fill volume, and so, you know, we could see some normal competitive pressure. We've always had that in our business... and we try to counter that with more higher margin type of opportunities and sales to kind of counterbalance sometimes normal pressures on competitive. But it would, ASPs would be stable, but maybe competitive pressures will have a little bit of pressure on overall pricing. Okay. And if suppliers were to take down pricing, I mean, an investor concern has always been like, what, what impact that's gonna have on the PNL? So, so what are your thoughts on that? Like, what happens when suppliers take down prices? Yeah, I think if you go back a couple of years when all the pricing increase started to happen, you know, our approach to that was we need to pass those on 'cause obviously we can't absorb those costs as a low-margin distributor. But at the same time, you know, we weren't looking to take advantage of our customers with the long term in mind. So we really just passed on those price increases. If something went up $1, we would pass on $1 plus our normal markup. And so I think that worked pretty well from us, and we had success passing all those on. You know, I think right now in the environment, customers have pricing fatigue, right? If you get 2, 3, 4 price increases, you're kind of ready to not have price increases. So I think a lot of that's behind us. I think on the flip side, you know, if pricing started to come down, you know, I think we'd be protected in terms of, you know, the overall margin would stay pretty stable, but you'd clearly have less revenue. If, you know, prices went down a dollar, that'd be a dollar less of revenue. But in general, you know, we don't have exposure to our inventory for the most part 'cause we've got price protections and things like that. So the inventory would correct down to the now market price, if you will, and then we would, you know, work with the customer accordingly. So we'd see that as, you know, some potential negative leverage if that was to occur in a broad base, but in general, wouldn't impact, you know, gross margins significantly. Got it. You also mentioned that you've gained share. You know, a couple of years ago, you had some supplier consolidation that impacted revenues, but I think for the most part, you guys have done a good job coming out of that. So where are you gaining share, in which regions, and how is the line card trending? I mean, have you added more suppliers? Are you happy with the progress you've made? Yeah, I would say we're very happy with our supplier line card. We've got a lot of the greatest technologies out there, and so very pleased with our line card. We're always looking to refine it or improve it where customers have needs, but feel very good about, you know, our line card and, you know, our line card is one of the reasons that we were able to, you know, outgrow maybe some of the other competition there. What I would say is, you know, although we did lose some suppliers in the past, you know, that kind of got us focused on profitable growth, and so, you know, our analog business today is actually larger than it was at the time we had a couple of the big analog guys that we lost. So we feel pretty good about, you know, our recovery and that we solidified a lot of relationships with other suppliers on our line cards, and now we're number one with those suppliers versus maybe being number two or number three in the past. So, you know, we feel we have a very strong line card to go to market with, and we think we can sustain that through this cycle and then start to expand when we get back to growth, start to kind of create that operating leverage again, right? Kind of maintain the negative leverage now, but get back to growth and expanding operating margins as the growth comes back. Got it. So maybe this is a good segue to talk about the segments. You know, I remember the Analyst Day, which was, I think, in 2022, you gave an overall revenue target of 5%-8%. Obviously, the world has kind of changed over the ensuing years. But how should we think about revenue growth in the medium term and in the long term? How are you thinking about growth now? I think we think about it the same in terms of as we get through this down cycle, when the upcycle recovers, you know, we think that, you know, somewhere in the mid-single digits, growth, you know, up to, let's say, 8% is, is the right figure. You know, a lot of that's based on... You have to remember that we're very diversified in terms of our end markets we served. And when you think about our strength in industrial, our strength in transportation, our strength in defense, those are the markets that, you know, are expected to grow faster than, let's say, the normal market. And so, you know, that gives us comfort that we're in the right areas where the demand is gonna go. You know, a lot of this is the secular trend as well, of the proliferation of electronics. You think about compared to 10 years ago, how much electronics are in, you know, everyday products we use, including, you know, our own vehicles. You know, we see that trend continuing, especially in the industrial space. So, you know, we think we're in the right neighborhoods, similar to some of our EMS partners, you know, and that's the kind of same size growth they're expecting as well. So we feel we're pretty, pretty balanced there. Now, obviously, you have to wait for the market to correct, but it's really the focus on those key verticals that have the most use of electronic components that we're seeing coming in there. Yeah, that makes sense. Just talking on margins, the core business margins last quarter, I think, were 4.1%. So I think I asked you this on the earnings call, but I'm gonna ask it again. Like, what needs to happen to keep core operating margins above 4%? And when you think about the drivers of margins, like, what can you... Let's think about the impact of pricing versus revenue growth, versus FX, versus other. Are there cost measures you can take? Just talk about how you're thinking about core set, core operating margins. I think in our BC business, you know, we're right around the 4% operating margin last quarter, and I think our guidance implies slightly below 4%, but there's still, you know, depending on how things shake out this quarter, still to be at 4%. So I'd say, you know, we kind of need stable revenue levels at the current levels, and that's, you know, right now, the total corporation's about $5.3 billion-$5.4 billion. So we do need revenue stabilization because of the fact that there is, you know, good leverage on the upside, but also negative leverage on the downside. You know, we feel pretty good about gross margins being at least stable. There's lots of opportunities we have in terms of demand creation, IP&E, Farnell, you mentioned, which we'll get into a little bit more. Supply chain as a service, Embedded, you know, those are all higher gross margin type of product sales we have that can kind of overall help the gross margin. But at the same time, we talked about those competitive pressures that may be out there, but we feel pretty good about, you know, some higher margin opportunities balancing out overall gross margins. We did announce some level of cost actions this past quarter, and part of that is really just, you know, some things we need to do to be more efficient on the OpEx side, but we also aren't afraid to invest in OpEx. You know, I think in past cycles, you know, unfortunately, we may have overcorrected as the demand started to go down, you know, we decided, let's go take costs out, and we think long term, the better approach is gonna be hold the line on the OpEx and be prepared and well-positioned to take advantage when the recovery comes. I would say in past cycles, we might not have taken full advantage of the recovery. And I think our view, and especially supported by, by you know, Phil Gallagher, the CEO, as well as, you know, all of our executive leaders, is let's be smart about this one around. Instead of saving $0.10 or $0.15 of EPS, you know, in the short term, we're gonna have to pay a lot of severance. We're gonna have to do things that really, on a cash basis or a ROI, don't make sense. So let's hold the line on expenses, do the right things like we have been over the past several years in terms of managing expense closely, but look to the bottom line. And I think, you know, on the flip side there, part of our profitability is interest expense is up. You know, I think there's opportunities as we generate cash, we can start to pay down some debt as well as return cash to shareholders, and that'll help, you know, overall EPS and things like that. But really the path, I think, is keeping efficient operations and making sure that we're ready to capitalize on the growth. Got it. Just staying on the core EC business for a bit, talk to us about demand creation. I mean, is this a higher margin business for you? I mean, what's this differential in margins between, you know, a demand creation opportunity versus a regular opportunity? And then, I mean, what exactly, like, what type of customers take or what type of suppliers take benefit of your demand creation? Yeah. So I think, you know, at our, at our basic premise as a company, you know, our, our job is to grow customer account and grow sales for our supplier partners, and we're kind of an extension of their sales force as a distributor. But when we help generate those leads or that demand, they're willing to pay us a higher margin. So, you know, a lot of our sweet spot in terms of customer is small and medium-sized customers that may have some engineering and product development, but don't have the full suite of development that a large OEM may have. And so, you know, we can help supplement their internal resources and help them, you know, with product selection, product design. And when we do that and we have a supplier's part put into a board, then the supplier pays us a little bit more margin. So on average, you know, we get 400 more basis points for a demand creation sale than it would be just a normal fulfillment sale, where we help influence the design. And so, you know, suppliers like it because of the fact that we're out there generating more demand for them and helping them. Customers like it because we're adding value to them, that we're supplementing their technical resources. So it really gets us in strong, both on the supplier and the customer side, but we do enjoy a higher margin, and so we are focused on growing that as a percentage of our business. What I would say in the shortage markets is what was happening is people were focused on redesigns. You know, what parts are available, let me redesign my product and get something in there. Now we're focused on new designs, that products are more available. So that is a positive sign that we're working with customers on a lot of new designs versus chasing parts and getting to those next revs of their products. Got it. Maybe let's segue into Farnell. So talk to us about what's happening in the catalog business. You know, you talked about high margins at Farnell. I remember, like, they used to be double-digit margins there. So, you know, how do we get from the 4% back to double digits, or are we gonna get there? So just talk to us about what, what, what are the issues facing Farnell, and how do you see margins? Yeah, Farnell is our high service catalog distribution business. The best analogy I'd have for those who aren't familiar with it is you think about, you know, if you go to the gas station or 7-Eleven or Circle K and you want to buy a Coke, you're gonna pay $2 for a bottle of Coke. If you go to the grocery store and buy a 12-pack or a 24-pack, you're gonna get them for $1 a piece, right? That's the kind of model. It's high service, quick and convenient. You know, Farnell did expand their operating margins in the shortage market because, you know, they had parts available. Everyone was chasing the parts, and so they were able to generate more demand along with their competition. And, you know, typically that comes with a premium because they were having more dynamic pricing. So they benefit a lot from the shortage market in terms of, you know, not only top-line sales, but also gross margin. So when we knew that they were kind of overearning a little bit there. And so what's happened of late, as product became more available, is Farnell has a kind of double whammy. Margins have normalized because of the fact that, you know, semiconductors are more available, so therefore, pricing has kind of stabilized on that side of the business. But also now the demand for semiconductors in the high service has come down because of the availability in more of the broad line. So some of the benefits of volume they were getting in the down market have kind of subsided. So those two factors have kind of really compressed gross margin. So although Farnell's sales have generally been holding up through the past several quarters, what's happened is their mix has become more negative. So it's really been a gross margin story. So we've taken certain actions to, you know, restructure that business, but the main premise of the restructuring would be, you know, to try to really bring the Farnell business closer into Avnet. You know, one thing that we have that others don't have is the large scale and scope of Avnet that we can leverage for Farnell into our customer base and really help accelerate some of their sales. So we're getting back to bringing Farnell closer to Avnet to try to drive some more synergies there. You know, we think those restructuring actions are really just a byproduct of that... We're still very excited about Farnell and their opportunities. Again, their gross margin is roughly 3x Avnet's average gross margin, so you can kind of see the size of that. So a little bit of growth there goes a long way in terms of driving bottom line. So our near-term goal, as we get through our fiscal 2025, is to kind of exit fiscal 2025 somewhere in the, you know, 8%+ operating margin range. But, but our, you know, midterm goal is they need to return to double-digit operating margins, and, you know, that's gonna be through a combination of growth and other initiatives to bring them closer to Avnet. So we feel very good about it, although it's not gonna happen overnight. But we, you know, they've been at double-digit operating margins. Their competition's at double-digit operating margins, so we feel there's no reason that they won't return there with some of the changes we've made. Farnell has benefited from commerce sales. What type of investments do you still need to make in Farnell? Like, do you need to hire more engineers, or do you need more CapEx into that business? So how do you see spending on Farnell trending? I mean, right now, we talked about the OpEx reduction, but there are still areas we want to invest in Farnell. I mean, we have invested in Farnell in terms of inventory, in terms of warehousing, in terms of e-commerce capabilities. So I would say, you know, more marketing and other type of e-commerce capabilities is an area of investment. You know, really looking for the right tools to help drive demand there. And over time, you know, warehouse footprint and things like that would make sense. So what I would say, though, is I don't think it's something incremental outside the normal expectations of CapEx and investment that we've had. So there's nothing magic. Even if we're investing in their IT systems or their e-commerce capabilities, it's nothing that would be unusual relative to our kind of normal $100 million-$120 million a year in CapEx. Got it. Talk to us about your inventory expectations for cash conversion cycle, free cash flow? Yeah, it's elevated, and so it's been a drag on, on cash flow, that was what I would say, and so I think we are making progress. Again, I talked about the input costs or the input of inventory coming down, and, you know, we're working to reduce the excess levels, start to turn the inventory faster. So I think we're making good progress. The progress is mixed, depending on the region. You know, doing a little bit better in the West than in, than in Asia, but still making progress. So, you know, we see what we did this last quarter. We would continue to say we're gonna need to have a streak of quarter after quarter of, of, of reductions there, and that will benefit cash. So I still think it's gonna take a few quarters to get through, but I think we're on the right path and, you know, the team is definitely focused on it. So that's one of our number one focus is to generate more cash from inventory. Got it. Can you talk about supply chain services? How do you see revenues from that? You know, supply chain services, this is where we would step in. Let's say the normal relationship would be a supplier sells directly to OEM, and, and the supply chains are getting more complex, and OEMs are demanding more resiliency in their supply chain. Someone like Avnet could step in and help, facilitate, you know, warehousing services, logistics services, broad supply chain visibility to all your parts. A lot of times, these OEMs use a lot of different partners, and they can have visibility of what's at one partner, but not all the partners. So we really can aggregate and give more control towers across their supply chains to understand what inventory they have, what inventory they need, and, and kind of, the overall scope of their supply chain situation. So we're seeing lots of opportunities to partner with our suppliers and OEMs to step into those supply chains. And that's what we call supply chain as a service, because the inventory model is a little different in terms of, you know, we might be holding the inventory, but it's not our inventory. We're not taking the risk on the inventory. We also have discretion with the pricing in terms of the pricings are negotiated between the OEM and the supplier, but we get a fee for service for, you know, moving the product, holding the product, and some of the visibility we give. So we view it as a high-margin opportunity. We see it as a good growth engine, although when you talk about services revenue on a $25 billion+, you know, revenue basis, it's hard to move the needle in terms of revenue, but we see it as a stabilizing force for our gross margin. Got it. And we see that these, you know, issues that happened during the pandemic and a lot of the supply chain disruptions that happened, you know, really brought people back to see the value that someone like Avnet can provide, and so we're seeing lots of opportunities coming out. That's kind of the silver lining of everything that happened, is people now value supply chains. They've talked about it all the time, and someone like Avnet, especially for OEMs that, you know, have not traditionally used a lot of semiconductors or electronic components, right? We have the expertise there to help them in their supply chain, so we're very excited about the future prospects, although it's scaling slower than we'd like, you know, we're still seeing the opportunities there. Got it. So we have about a minute left. I wanna talk about your thoughts on an issue, which is shares have, for the longest time, traded at tangible book value, and now over the last month, I think, you know, they were up 17%, and you're still at book value. So what are your thoughts on that? I mean, how do you see receivables? You know, are there any asset write-downs that you're expecting? So what is the market missing, and what would you say about to tell investors why this is a good time to invest? Yeah. Thanks. I'll take that, Ruplu. I think the market is starting to appreciate. That's why you'll see appreciate the value of Avnet brings. You know, when you talk about the receivables, you talk about the assets that we have, like inventory. We reserve very well for our receivables. They've done a great job in keeping sure that even as we get inventory down, receivables have come down. That's one thing to note in the Q3 that just closed. So, you know, again, you know, we've been Lisa and I have been talking to a lot of investors. We're screening very well, being under book value, and it's looking like, you know, there's been a renewed appreciation for where we are in the cycle at this point in time, and that, you know, if the market starts moving up, if and when it starts moving up again, we're very well positioned to, you know, take advantage and bring that revenue leverage down to the bottom line. Great. So, you know, we've touched on a lot of different things. I've got a lot of questions, but we're out of time. So, so Ken, Joe, thank you for coming. Really appreciate all the details.