Ladies and gentlemen, at this time, I would like to welcome everyone to the Resideo Technologies Third Quarter 2022 Earnings Conference Call. Today's call is being recorded, and all participants will be in a listen-only mode until the formal question and answer portion of the call. If you would like to ask a question during that time, please press star one on your telephone keypad. If you would like to withdraw your question, please press star one again. It is now my pleasure to turn today's call over to Mr. Jason Willey, Vice President of Investor Relations. Mr. Willey, you may begin. Good afternoon, everyone, and thank you for joining us for Resideo's Third Quarter 2022 Earnings Call. On today's call will be Jay Geldmacher, Resideo's Chief Executive Officer, and Tony Trunzo, our Chief Financial Officer. A copy of our earnings release and related presentation materials are available on the investor relations page of our website at investors.resideo.com. We would like to remind you that this afternoon's presentation contains forward-looking statements. Statements other than historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Resideo's filings with the Securities and Exchange Commission. The company assumes no obligation to update any such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our annual report on Form 10-K and other SEC filings. With that, I will now turn the call over to Jay. Thank you, Jason, and good afternoon, everyone. Q3 was a mixed quarter for Resideo in a dynamic environment. ADI again delivered solid revenue growth and profit expansion driven by strong performance in security and fire categories serving commercial markets. At P&S, we had 14% year-over-year growth in air products, but experienced headwinds across other product areas, particularly in security and OEM components for water heaters. Order rates slowed during the quarter, and customers have begun to normalize inventory as macro uncertainty grows. In the third quarter, Products and Solutions delivered 12% year-over-year growth, and we made significant progress on a number of key strategic initiatives. This includes advancing software platforming work, growing content with builders and service providers across single and multi-family construction, and enhancing our energy management offerings to improve user experience. These initiatives are central to our strategy of expanding the business into attractive growth areas. In the quarter, sales and orders remained healthy in air products, driven by connected thermostat strength in both retail and distribution channels. We see positive demand trends in the HVAC market, supported by sell-through data and conversations with customers. However, these conversations also indicate uncertainty around the macro outlook and a heightened focus on managing channel inventory levels. Within energy products, the OEM channel is experiencing a normalization of order rates after a period of historically high demand. This was most evident in products serving the gas water heater market, where the channel is actively reducing inventory levels. In the boiler and furnace markets, customer indications remain positive for activity in the upcoming heating season. We believe our competitive position across the OEM channel remains strong, and our ability to support customers over the past 18 months is creating new opportunities. Our traditional security business has seen headwinds across several fronts, including product transition in Europe, the runoff of 3G radio conversions, and slower overall activity levels in our North American business. We expect these trends to remain present through at least early 2023. The First Alert acquisition has been an important contributor to our year-over-year revenue growth, and integration is progressing well. The feedback from key retail and home builder customers has been extremely positive. We are encouraged by the opportunities we are already seeing in expanding First Alert products into the HVAC channel and with new residential construction customer wins. These dynamics within Products and Solutions are against the backdrop of ongoing supply challenges with our core semiconductor components. While backlog has moved lower from historically elevated levels, we remain supply limited in certain areas. Supply constraints continue to create inefficiencies within manufacturing and necessitate sourcing components in the broker market, resulting in margin and inventory headwinds. Outside of certain semiconductors, we are seeing signs of improvement in other materials and freight markets. At ADI, revenue grew 5% in the third quarter, driven by commercial sales in North America in fire and video surveillance. Demand indicators remain positive across most of ADI's categories. ADI is executing on key initiatives around e-commerce and private brands, both of which saw over 20% growth in the quarter. As we discussed on our last earnings call, in early July, ADI completed the acquisition of Electronic Custom Distributors, a leading regional distributor of residential audio, video, automation, and telecommunication products. We continue to look at opportunities to expand ADI's presence in adjacent categories of audiovisual and data communications. ADI's execution remains best in class. Digital and system investments made over the past two years are significantly enhancing ADI's omnichannel capabilities and ability to serve customers. The business is well positioned to continue to grow sales and expand margin. As we manage the day-to-day challenges of the current environment, we remain focused on positioning Resideo for long-term success. A key aspect of this is our ESG efforts. Many of our products are designed to help address the environmental challenges facing our planet. Resideo took an important step in our ESG journey with our inaugural ESG report published last week. This report is the culmination of a company-wide effort to identify our most pressing ESG priorities and opportunities. As we look forward, we are focused on providing greater transparency to our stakeholders regarding our ESG journey. The report is available on our investor relations page, and you can learn more at resideo.com/sustainability. With that, I will turn the call over to Tony to discuss third quarter performance and outlook in more detail. Thank you, Jay, and good afternoon, everyone. Third quarter revenue of $1.62 billion was up 8% compared to Q3 last year. Excluding $135 million from acquisitions and approximately $50 million of negative foreign exchange impact, revenue increased by approximately 3%. Gross margin for the quarter was 26.6% compared with 28.1% in last year's third quarter. Consolidated operating expenses grew by $21 million or 8% due entirely to $26 million of First Alert operating expenses. Operating income of $155 million declined 7% compared to last Q3, and diluted earnings were $0.42 per share compared with $0.46 in Q3 of 2021. Included in our third quarter results was an $8 million benefit associated with a tax indemnification accrual release and $17 million of costs related to a litigation matter that arose prior to our spin-off from Honeywell, as well as the impact of the sale of ADI's India operations. Products & Solutions third quarter revenue of $707 million was up 12%. Excluding $112 million from acquisitions and approximately $30 million of unfavorable foreign exchange impact, Products & Solutions revenue declined by approximately 1% compared to last Q3. Price realization added approximately $60 million to revenue year-over-year, while aggregate volumes declined by approximately 10%. Order activity slowed across Products & Solutions as the quarter progressed as some customers and channels worked to reduce inventory levels. We believe channel inventory normalization has further to go, and this is reflected in our fourth quarter outlook. Products and Solutions gross margin in Q3 was 36.2%, down from 41.5% in the third quarter of 2021. Persistent inflationary pressures, the need to source material from brokers, and the effect of lower volumes on factory efficiency all negatively impacted gross margin in the quarter. In addition, the inclusion of lower margin First Alert revenue reduced gross margin by approximately 200 basis points in Q3. Products and Solutions operating profit was $124 million, or 17.5% of sales, compared with $157 million, or 24.9% of sales last year. Operating expenses for Products & Solutions were up $27 million year-over-year due to the $26 million in First Alert costs, as well as planned increases in R&D investment, offset by lower other SG&A. We are actively managing operating costs while ensuring we continue to invest in key growth and innovation initiatives. First Alert contributed revenue of $112 million and operating income of $4 million in Q3. Like the rest of Products & Solutions, First Alert gross margin was negatively impacted by inflationary cost pressures. We remain on track to exit 2022 at an annual cost synergy run rate of $10 million and to achieve run rate annual cost synergies of $30 million by the end of 2023. ADI continued its strong performance in Q3, with revenue up 5% to $911 million. ADI again saw strong activity in categories serving commercial markets, including fire, video surveillance, and access control. $23 million of revenue from acquisitions and approximately $22 million of unfavorable foreign exchange impact effectively offset each other during the quarter. ADI gross margin in the third quarter was 19.3%, up from 18.6% last year, reflecting improved product line margin, increased private brands contribution, and the strong pricing environment. ADI Q3 operating profit of $78 million was up by $5 million or 7% versus last year. In October, we completed the sale of ADI's operations in India, which comprised all of ADI's APAC business. Proceeds from the sale were immaterial, and the transaction generated a $4.5 million goodwill impairment that was recorded in other expense in Q3. Corporate costs were $47 million, down from $63 million in the prior year. In Q3 of 2021, impairment charges on our former headquarters added $9 million to corporate costs, while this year's corporate costs benefited by $8 million due to a tax indemnification accrual release. Excluding these items, corporate costs were relatively flat year over year. Our 2022 corporate spending is tracking below prior year levels and below our forecast when we entered 2022. Turning to our outlook for the fourth quarter, we expect revenue to be in the range of $1.55 billion-$1.60 billion. Consolidated gross margin is expected to be in the range of 26.5%-27.5%. GAAP operating profit is expected to be in the range of $130 million-$140 million. For the full year 2022, we now expect revenue to be in the range of $6.36 billion-$6.41 billion, implying year-over-year growth of 9% at the midpoint. Consolidated gross margin is expected to be in the range of 27%-28%, and GAAP operating profit is expected to be in the range of $645 million-$655 million, implying 16% annual growth at the midpoint. Our full year outlook includes First Alert revenue of approximately $340 million and operating profit of approximately $15 million. For the fourth quarter, we expect First Alert to contribute revenue of approximately $115 million and operating profit of approximately $4 million. Included in First Alert's full year outlook is approximately $25 million of costs associated with integration, intangible amortization, and inventory step-up. We continue to actively review our cost structure, including initiating manufacturing optimization activity. These initiatives may result in a charge to our Q4 results that is not included in the outlook provided above. We believe there remains significant opportunity to drive operational and cost efficiencies within our manufacturing footprint. Additional outlook details can be found on page 11 of our earnings slides. I'll now turn the call back to Jay for a few concluding remarks before we take questions. Thanks, Tony. While we are dissatisfied with our Q3 financial results and outlook for the fourth quarter, we remain on track to deliver over 15% operating income growth and earnings per share expansion in excess of 20% for 2022. We believe both ADI and Products and Solutions are performing well relative to competition across almost all key product categories and markets. The work of the entire Resideo team over the past two years to build and reestablish relationships with key stakeholders is paying dividends in our relative performance in the market and positions us well for 2023 and beyond. With an uncertain short-term market backdrop, we are taking actions to ensure we protect profitability and drive improved cash generation. This includes additional targeted pricing actions to offset input inflation, reduction to factory shifts, reduced third-party spend, launch of factory optimization initiatives, and further laser focus on headcount. As we tighten the focus on controllable costs, we remain committed to strategic investments across both businesses to ensure we are positioned to capitalize on the meaningful long-term opportunities we continue to see. I'm excited by our growing momentum on a number of major innovation and technology initiatives. While not all clearly visible externally, we have made substantial progress around software platforming work, intelligent sensor innovation, and positioning the business for long-term energy transition trends around electrification and hydrogen. Much of this work is being driven by our innovation and business development organizations. As we move into 2023, we will have more to share on each of these areas and other work that will enable product and services differentiation. I want to thank the entire Resideo employee base for their efforts in the quarter and a continued focus on delivering for our customers. This concludes our prepared remarks. Operator, we are now ready for questions. Thank you. As a reminder, that is star one if you would like to ask a question. Our first question will come from Ryan Merkel with William Blair. Please go ahead. Hey, good afternoon, and thanks for taking the questions. Hey, Ryan. I wanted to start on the 4Q guide. It looks like sales are gonna miss the street by about 5%, but operating profit is gonna miss by about 23%. Can you just unpack why the fall through is so big to the operating profit line? Yeah. Hey, Ryan, a couple of things. I mean, we talked about the deleveraging effect of lower volumes that we've seen. You know, our FX, our OPEX run rate is, you know, pretty firmly established at this point for Q4. We're not gonna see a dramatic decline in operating expenses during the quarter. I guess I haven't looked at the exact bridge of what you're laying out, but I suspect that those are probably the primary drivers. Yeah, I mean, it looks like if I put a 27% gross margin in there, it looks like OPEX is up, you know, $15 million sequentially. Is that the right way to think about it? Roughly something in that zip code sounds right. Can we talk about the softer orders in P&S? I guess, first off, how much inventory do you expect the channel is gonna destock in 3Q and 4Q? The timing of what we saw in Q3 was, it evolved through the quarter. We've seen more and more of those efforts as we've rolled into Q4. I think it's gonna continue through the quarter. I don't think we have a clear view as to exactly when that's all gonna ultimately play out. One of the things that's important to recognize is we haven't yet seen a significant downtick in the point of sale data that we've been able to see. Now, that's not comprehensive. At our point of sale and our conversations with customers, the sale at the end customer level continues to be strong and continues to grow in many areas. We do feel like the overall demand dynamic is probably being understated right now because of this destocking effort that's going on. Yeah. I would just add that, you know, when you do get changes in the market like this, which we all understand, you know, pretty good idea of what's going on from the standpoint of the macros and inflation, what have you, then it's just very natural, you get into an inventory correction standpoint. To your question, you know, when that will be, you know, we're not 100% sure yet, but I think, you know, it's definitely going to continue in through Q4. Okay. Let me just sneak one more in, if I could. It sounds like the POS is actually decent. Is the channel destock more about taking out safety stock because lead times have improved? Is the destock mainly water heaters, or is it impacting air and security too? It's fairly broad-based. I wouldn't say it's everywhere. I mean, clearly the OEM channel and the water heaters market is one of them. I think pretty clearly people are pulling in the reins on inventory and not wanting to feel like they're out over their skis. I mean, one of the things I want to comment on too is, this isn't unexpected. You know, we got questions going all the way back to, you know, all the way back to Q1 when interest rates started to tick up, and conversations around, you know, a potential recession started to crop up. You know, we talk to investors about the reality that, you know, if interest rates double or more, which they've done, that's likely to impact the behavior in some of our markets. I think that's a fair bit of what we're seeing. We can never predict the timing exactly, but the expectation of the way things have played out, I guess from that context, I wouldn't put it in the surprise category. You know, the other dynamic is, you know, I mean, in many companies in the electronics industry in particular, with their customers dealt with the supply chain constraints. As part of that, they were driving as much as inventory as they thought was necessary to protect themselves. When you get the change in the market demand, this is what naturally happens. You know, as I indicated in my remarks, the supply chain still is a challenge. It's better in certain places, which I'm pleased about, but there are semiconductor suppliers of ours that are still problematic and will continue into 2023. Anyway, it's interrelated to that. Now the various customers of ours are going into an inventory correction. My experience in the past is that in this type of situation they may be a little extra conservative to start with and watch the market, you know, move forward after making those corrections. Ryan, I'll make one more comment, too. I know this wasn't the root of your question, but I really want to make this point. We're not surprised by this destocking activity. We were not able to predict the timing exactly, as Jay said, but we're not surprised by it. We're doing what we said we were going to do. We're tightening our belt on spending. We're focused on reinitiating some of the cost initiatives around factory optimization that we had delayed because of the dynamics in the supply chain market. We're continuing to invest for the future. There's no change to our view of the long-term or even intermediate term opportunity at Resideo. It feels to us like we're picking up market share in this difficult market. What we see is a cyclical event driven by, you know, a rising interest rate environment and, you know, some economic uncertainty with some of our customers that really is, we think, temporary. Yep. Makes sense to me. Thanks, guys. Yeah. Thank you, Ryan. Our next question comes from Amit Daryanani from Evercore. Please go ahead. Yep. Thanks for taking my questions. I guess maybe to start off with, can you just sort of help understand the divergence that you're seeing between security products, which seems to be down a fair bit, versus energy? Maybe you can just talk about ADI in terms of how that's stacking up as well on an organic basis, because I think the up 14% might include First Alert. Yeah. You know, what we called traditional security doesn't include First Alert. You know, the two biggest drivers are we had a, I hate to call it a tough comp, but we had a significant level of sales of 3G radios because of the 3G radio conversion in Q3 of last year. That dropped off pretty dramatically in Q3 of this year, which was expected. We're also in the middle of a product transition in Europe that has caused our European traditional security business, if you will, to be soft as well. Those are the two biggest drivers. I just add to that. If you remember, the cut over, the sunset out there on the 3G piece, you know, had been debated. They weren't exactly sure when that was going to happen. It was scheduled for February of 2022, and there had been some you know, discussion on whether that was going to get pushed or not. The bottom line, it was not pushed. Everybody in Q3 of last year and even in Q4 were driving as much of the radio as they could to get the conversions completed. As Tony said, then the comparison to this Q3 is one of the big drivers of that change. Got it. Okay. That's helpful because the traditional security did look down a fair bit, but that helps. You know, in terms of this inventory correction that you're seeing, channel optimization. Yeah, I'm curious. I mean, you said it started in Q3, should happen in Q4. I mean, how long does that extend? Or at least historically, if you have a perspective on how long these corrections have happened or how much extra inventory you think the channel has. Anything over there to understand the timeframe of this inventory correction would be helpful. Yeah, you know, what Tony said before, I probably pretty much stay consistent with that. I mean, it really started in Q3 at an increased pace of these inventory corrections that we spoke of. It'll take, you know, I don't know, we don't have a good number for you in terms of what's traditional, especially in all the dynamics that have happened in this market over the last year and even really the last two years. It's gonna definitely continue through the rest of Q4, I think, in terms of getting it to the correction through. Then we'll see where it goes from there. By the way, I also didn't answer your question about the air business. I guess the point I wanna make there is our connected thermostats business is doing really well. We're seeing very strong performance in that business and, you know, that's one of the indicators that I'd point to in terms of our view that the work that we've done over the last couple of years is bearing fruit even in a, you know, what is now a more difficult environment. Got it. If I could just sneak in one more, I guess. You know, it sounds like maybe I'm reading too much into this, but it sounds like you're gonna look at doing some sort of cost optimization, cost control initiatives, towards the end of the year. I'm wondering, does that change your framework around some of the fiscal 2024 operating margin targets you have talked about at all? Thank you. No, not at this point. I mean, we're. You know, we had a conversation about that at our last earnings call. You know, we're focused right now on responding to the market dynamics that we're seeing, without compromising our long-term outlook. That's the balancing those two is our critical sort of focus right now. I would agree with Tony on that. The other thing I'd add, Tony kind of alluded to it, you know, there were some things in the factory optimization side that we've had actually on our drawing board for a while. Between the managing through the supply chain issues, so we didn't get caught ourselves with not enough supply as we managed through this, the crazy time of the last 18 months, and also some COVID-related things going back 18 months ago. We waited. The good news is we have plans in place to do some of these types of things, and now we can move forward on it. I think we would've moved forward on it. Matter of fact, I think we would've moved forward on some of these in either case. With the situation at hand, we're accelerating some of those. Perfect. Thank you. Thank you, Amit. As a reminder, star one to ask a question. Our next question will come from Erik Woodring with Morgan Stanley. Please go ahead. Hey guys. Good evening. Thank you for taking my questions. Maybe just to ask about the inventory side of things. Again, maybe, you know, if we look at 3Q, you know, you missed the midpoint of your guide by, call it $77 million, all on the P&S side. Maybe if we use that as the starting point, is there any way that you can help us understand what the headwinds were, or to size the headwinds kind of between any incremental FX impact that you hadn't assumed versus just like truly slower demand versus inventory correction? Maybe just to better understand if some of these more temporary factors like the inventory thing were large. Yeah A larger part of that headwind or a smaller part. I have a follow-up as well. You know, like I said, we don't have, you know. As you know, Erik, we've got a pretty broad array of markets, so we don't have comprehensive kind of sell-through/point of sale data. But frankly, pretty much every data point I've seen at sell-through, not every one, but almost every one, showed pretty healthy activity at point of sale. You know, up mid to high single digits, some even up in the double digits year-over-year. You know, I think the inventory behavior change is, you know, from the standpoint of if you look at it purely, probably the totality of those two buckets. It's hard to pull it out, but, you know, I think that's probably the totality of it. Sorry, what was the other part of your question? Oh, FX. No, no. Yeah. Yeah, exactly. We gave the numbers in terms of the year-over-year change. Compared to our guide, it wasn't a particularly significant driver, though. You know, you had really nice performance on the ADI side, e-commerce growth, I think you called that was 22%. Private brand sales grew 23%. You know, is there any way that you can help us kind of better understand how big those opportunities are in terms of you know, what percentage of mix either one of those are for ADI and maybe where those were, you know, one or two years ago, just to kind of understand how that each of those efforts have progressed over the last few years? Jason, keep me honest. We do give the e-commerce sales number. That was it +24%? +22% for the quarter. Yeah. Erik, it's Jason. Yeah, you're right. e-commerce grew 22%. It's 18% of total sales now runs through the e-commerce channel. I mean, that's up from, you know, last year at this time it was around 15, 16%. If you go back, you know, 2 years, it was, you know, very low double very low double digits. It's been a nice acceleration, particularly since the beginning of 2020. We haven't broken out specifically the private brands, you know, as a percentage of the total business. I think we have kind of indicated it remains a single digit, you know, mix as part of ADI. It has, you know, grown very nicely off of a small base as you've seen from the growth rates in the last, you know, 18 months or so. And we- Th-the thing- Sorry, go ahead. No, go ahead. We've approached that, the private brands business strategically and carefully while also trying to be aggressive in terms of the growth opportunity that's there. We're going effectively product category by product category, focused in areas that are, you know, relatively low tech, relatively straightforward for us to bring a brand in without creating, you know, meaningful disruption kind of across all of our third-party brands. Yeah. I was gonna add to that. As part of their strategy, you know, it is an important part of the future and they're making good progress as you pointed out. They're being very careful in their selections and I think that's paying off too in terms of picking the right types of categories for private label. Okay. That's super helpful, and maybe I'll sneak in a third one as well, and just any incremental comment or color you can share on how to think about, you know, P&S growth versus ADI in 4Q. Obviously, you have a tailwind in P&S from First Alert, but any incremental color you can share would be super helpful, and that's it for me. Thanks. Yeah, I mean, we haven't guided to the individual segments historically and we won't. You know, we'll see good growth again at ADI and, you know, the growth at P&S is gonna be driven by the acquisitions. Okay. Fair enough. Thank you, guys. Thank you. Erik. Thanks, Erik. Our next question will come from Ian Zaffino with Oppenheimer. Please go ahead. Hi, great. All right. Thank you very much. Just wanted to ask you a question just on margins. As you think about, like, as revenues come down, if they do, given the macro environment, what do you think like maybe a decremental margin might be? You know, and then how long until you could maybe stabilize that margin? Meaning, I know you talked about some of the optimization of the business, et cetera. How long does that tend to kick in, let's just say after maybe a sales decline of a certain amount? You know, and if we do see some type of decline, you know, what type of margins are we looking at? Maybe it's a trough and then maybe a sort of a midpoint. Thanks. Boy, Ian, I wish I had all those details to give you and be able to forecast the world that accurately and predict exactly how it's gonna unfold. A couple of things you gotta bear in mind about our margins. I mean, there's again, with the breadth of products that we have and the breadth of factories that we have, you know, it's hard to just sort of look at it from the standpoint of, you know, one straightforward analytic that's gonna give you kind of a decremental margin, a decremental margin number. You know, we haven't yet finished our budgeting process for 2023, so it's really kind of difficult for us at this point to have any commentary in terms of what we see from a margin perspective. I think there's more to come on that, but I can't give you just a kind of a, you know, an algorithm that drives a decremental margin dynamic for us. It's not just on the cost side either. I mean, like we were talking about factory optimization and a variety of other things that Tony and I talked about there, but also it from the long range plan standpoint that we've provided to all you guys, it ties a lot to also what we're doing on our NPI roadmap with our products. It's a combination there, and I agree with Tony. You know, we'll be able to share, of course, much more when we talk to you guys next about that. Okay. Thank you very much. Our next question will come from Brett Kearney with Gabelli Funds. Please go ahead. Hi, guys. Good afternoon. Thanks for taking my question. Yeah, you bet, Brett. Provide a lot of helpful commentary in the prepared remarks. Was just curious if you could, I guess, elaborate a little more. You know, probably been about seven months, with the team from First Alert at Resideo, how that's progressing integration-wise, and then more recently on the other side, the Electronic Custom Distributors, how those teams are kind of integrating into the organization at this point. I would say on the First Alert side, the team integration has progressed quite far at this point. We've functionalized a lot of that organization. We've got it, you know, aligned with a lot of our traditional security business in terms of product development. But we've really functionalized it, and I think the teams are working really seamlessly together. I'll just say it. You know, I mean, we originally had a view that there was an opportunity to take out some costs at senior levels at First Alert. We've ended up keeping more of those folks, and we've ended up keeping them because frankly, they've been really valuable in terms of not just providing insight around First Alert, but really being, you know, an integrated and involved part of the overall Resideo team. You know, we've still got work to do there in terms of the, what I'll call the operational integration and the manufacturing integration and those kinds of things. But I think, you know, I'd argue we're probably furthest along in terms of that culture and team integration. I'd add that, you know, I'm very excited about what they, you know, as they came into the family, what they've done in the business development area, also in terms of innovation and technology. Those are the things I kind of at a very high level mentioned. I'm gonna be excited to be able to share more things with you guys about as we move forward. I think overall though, you know, the business plan that we put in place as part of doing that deal, I think Tony may have mentioned it, you know, I think we're on plan to what we wanted to do for this year and as well as where we believe we'll be by the end of the year next year. on ECD, you know, it's obviously much more recent. That particular business, as most of the businesses that we've acquired in ADI, we've acquired them sort of for their specific capability. ECD brings some specific capabilities that we're working to leverage across the totality of the ADI business. From a team integration standpoint, I think we're more in a learning mode in terms of what their capabilities are so that we can leverage across the organization than it is really bringing them sort of directly into the functional organization at ADI. Terrific. Thanks so much, guys. Thank you. As a reminder, that is star one if you would like to ask a question. Our next question comes from Paul Chung with JP Morgan. Please go ahead. Hi, thanks for taking my questions. Most of them have been answered, but I just noticed a reduction in CapEx. You know, were you scaling back? Is this the kind of right level of CapEx to kind of model moving forward? You know, how do we think about working cap dynamics at the end of the year and overall free cash flow outlook? You know, what are your initial expectations for working cap investments for, you know, fiscal year 2023? Sounds like the pace of inventory spend should come down here. Any initial thoughts there? Thank you. A few things, Paul. First of all, we're not paring back on CapEx. In fact, one of the things that we as a leadership team have tried to communicate is we will fund high return, logical value-creating CapEx. That's not. You know, we talked about doing the appropriate things in terms of cost management in an environment like this versus making sure that we don't, you know, cut muscle in terms of future opportunities. You're right, CapEx is down, but I think that has more to do with the cadence and timing than it does with anything we're doing to pare it back, because we're not, and we don't intend to. In terms of working capital, there's a few dynamics. I mean, as I said earlier, we don't have anything to share with you today with respect to 2023. We did see, you know, meaningful build of inventory in the first half of the year. In Q3, the inventory build wasn't all that big. In some ways, it's kind of interesting what we ended up doing was paying for some of the inventory that we bought in Q2 and Q3, which also had a negative effect on Q3 cash flow because our AP came down. You can see there were a couple of cleanup items and, you know, you get into like other assets and that sort of stuff. There were some cleanup items that we funded through that, you know, probably won't recur. There's you know a little bit of, I don't wanna say noise, but this quarter's cash flow is not representative of what we expect in terms of cash flow conversion. We still expect Q4 to be meaningfully stronger. I would say that we have heightened our focus, particularly on making sure that we're carefully managing inventory, you know, heading into a bit of a softer environment. Okay. Great. Thank you so much. With no further questions, I'd like to turn the call back to Mr. Willey for closing remarks. Thank you everyone for your participation and your questions today, and we look forward to speaking with you over the coming weeks and months. Have a good rest of your day. Thank you. That will conclude today's conference. Thank you for your participation, and you may now disconnect.