Good day, ladies and gentlemen. Thank you for standing by. Welcome to Rollins, Inc. fourth quarter and full year 2023 Earnings Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. If you have a question, please press star followed by the one on your touch tone phone. If you'd like to withdraw your question, please press star followed by the two. If you are using speaker equipment, please lift the handset before making your selection. This conference is being recorded today, Thursday, February 15, 2024. I'd now like to hand the call over to Lyndsey Burton, Vice President of Investor Relations. Please go ahead. Thank you, and good morning, everyone. In addition to the earnings release that we issued yesterday, the company has also prepared a supporting slide presentation. The earnings release and presentation are available on our website at www.rollins.com. We have included certain non-GAAP financial measures as part of our discussion this morning. The non-GAAP reconciliations are available in the appendix of today's presentation, as well as in our earnings release. The company's earnings release discusses the business outlook and contains certain forward-looking statements. These particular forward-looking statements and all other statements that have been made on this call, excluding historical facts, are subject to a number of risks and uncertainties, and actual results may differ materially from any statement we make today. Please refer to yesterday's press release and the company's SEC filings, including the risk factors section of our Form 10-K for the year ended December 31, 2023, which will be filed later today. On the line with me today and speaking are Jerry Gahlhoff, President and Chief Executive Officer, and Kenneth Krause, Executive Vice President, Chief Financial Officer, and Treasurer. Management will make some opening remarks, and then we'll open the line for your questions. Jerry, would you like to begin? Thank you, Lyndsey. Good morning, everyone. Fiscal 2023 was an outstanding year for Rollins as we achieved the milestone of $3.1 billion in revenue. Demand from our customers remained strong throughout the year across all major service offerings. While full year revenue increased 14% versus last year, we grew earnings per share by over 18% and adjusted earnings per share by 20%, reflecting consistent execution of our operating strategies and a commitment to continuous improvement in our business. We finished the year with a strong fourth quarter and observed sustained strength in the pest control markets we serve. We also continue to drive share gains in our markets by leveraging a multi-brand, multi-channel approach at scale to differentiate ourselves competitively. Digital marketing, cross-selling, service bundling, and door-to-door sales methods help us reach new customers and enhance engagement with existing customers to support organic growth. We have also strategically allocated resources to the commercial side of our business to capitalize on opportunities within key verticals. Most notably, we have grown our sales force and invested in training and tools to enable their success. Our service quality is high, and our offerings are customized, which helps new sales professionals gain confidence and become successful quickly. Additionally, we are leveraging the scale of our Orkin brand across North America to effectively serve commercial customers coast to coast in both the U.S. and Canada. While we're still early with respect to our efforts in this area, we see good results, as demonstrated by approximately 11% commercial revenue growth for the year. Investments to drive organic growth are complemented by strategic M&A, and in 2023, we welcomed 24 new businesses into our company through acquisition. This includes the addition of Fox Pest Control, which was the second largest acquisition in our company's history. Our synergistic approach to integration has gone well, with the Fox team exceeding the financial targets we outlined last April. Additionally, during the fourth quarter, we divested certain non-core businesses, most notably our lawn care business, which includes insect, fertilization, and weed control for turf grass. We recognized a pre-tax gain on sale of that transaction of approximately $15 million. The decision to divest this asset aligns with our strategy to focus on profitable growth in core pest control operations. Operationally, we remain committed to developing exceptional talent and investing in our teams. The hiring environment improved in 2023 as we put a lot of energy into onboarding the right people in both support functions as well as the customer-facing side of our business. Effective sales and service staffing levels help us capitalize on continued demand and deliver solid results for the year. 2023 was also an important year with respect to continuous improvement, and safety was a key area of focus for us. During the year, we implemented an app that monitors driving behaviors once our vehicle is in motion. The app detects unsafe driving maneuvers associated with acceleration, braking, and speed, then converts data collected into a driver safety score. I'm pleased to report that by year-end, our average driver safety score for drivers that we monitor increased over 30% from the beginning of the year. But we aren't stopping there. Improving a safety culture isn't something that is done overnight, but we are proud of the progress we have made and have set ambitious goals for ourselves to encourage safe behaviors throughout our organization. We believe these efforts will improve our ability to serve customers, help mitigate potentially negative financial impacts on our business, and most importantly, ensure our people return home safe every day. Our continuous improvement efforts also center on initiatives to modernize our back office and support functions. This is a work in progress, but we took some important steps to upgrade talent and systems during the year. These efforts are aimed at further enabling our growth priorities and increasing productivity as we work to become a better, more effective provider of shared services for our brands. In closing, our performance in 2023 demonstrates the strength of our business model and the engagement level of our team. Our family of pest control brands are driving profitable growth, and we are focused on continuous improvement throughout the business. We remain committed to providing our customers with the best customer experience and investing meaningfully in our team to drive growth both organically as well as through disciplined acquisitions. We're pleased with where our business stands today and the momentum we carry into 2024. I want to thank each of our 19,000+ associates around the world for their efforts and contribution to our success in 2023. I'll now turn the call over to Kenneth. Thank you, Jerry, and good morning, everyone. Our results for the quarter and the year reflect continued strong execution by the team. Let me begin with a few highlights for 2023. First, we delivered robust revenue growth of 14% for the year, with double-digit growth across each of our service offerings. It was encouraging to see organic growth of 8% for the year, while acquisitions continued to be a meaningful part of our growth profile, accounting for approximately 6% of our total revenue growth. Second, we made good progress on profitability improvement in 2023. Full year gross margins were healthy as we were positive on the price-cost equation and saw improvement across several key cost categories. Adjusted operating margin finished the year at 19.7%, improving 140 basis points driven by leverage across the P&L. This translated in the GAAP EPS of $0.89 per share, up over 18% for the year, and adjusted earnings per share of $0.90, up 20% for the year. On an as-reported basis, we generated incremental margins of almost 30% for the year, and on an adjusted basis, incremental margins were almost 28% for the year. Last but not least, we delivered operating cash flow of $528 million and free cash flow of $495 million, both up over 13% versus last year. Our strong cash flow performance enabled us to execute a balanced capital allocation strategy, deploying nearly $1 billion of capital in 2023 with a focus on investing for growth while returning cash to shareholders through a growing dividend and share repurchases. Turning to our fourth quarter performance, the team delivered a strong quarter with revenue up 14% to $754 million. Currencies had a negligible impact on quarterly revenue growth. We saw a good balance of growth between organic and inorganic activities as organic revenue was up over 7%, with acquisitions accounting for the other 7% of growth. Jerry mentioned that we divested certain non-core businesses in the quarter, most notably our lawn care business. The purchase price for the transaction was $18 million. We received $15 million in proceeds during 2023 and recorded a pre-tax gain of $15 million on the sale. This business doesn't provide the growth or profitability profile of our core pest control business. Going forward, we don't anticipate any significant divestitures associated with portfolio rationalization in the foreseeable future. In the fourth quarter, residential revenues increased approximately 18%, commercial pest controls rose nearly 11%, and termite and ancillary was up over 13%. Organic growth was healthy across the portfolio, with growth of nearly 5% in residential, approximately 9% in commercial, and over 11% in termite and ancillary. We normally see a step down in revenue as well as growth in Q4, along with Q1 due to seasonality. Comparing Q4 this year to last year, we saw an acceleration in organic growth across all service lines. Gross margin improved 40 basis points to 50.9% in the quarter. While Fox was accretive to gross margins for the quarter by about 30 basis points, we saw 10 basis points of improvement in organic margins as leverage from people costs and fleet offset pressure for materials and supplies and higher insurance-related costs. Gross profit also steps down in Q4 and Q1, primarily due to lower volume levels associated with the seasonality of our business, I previously discussed. With that said, I'm pleased with the fourth quarter performance as we saw improvement year-over-year and recorded our highest Q4 gross margin level in the last several decades. Quarterly SG&A cost as a percentage of revenue increased by 10 basis points versus last year. Excluding the earnout adjustment for the Fox acquisition, SG&A cost as a percentage of revenue decreased by 10 basis points in the quarter. We saw nice leverage on people costs, which offset increased advertising and selling expense associated with the growth initiatives that Jerry discussed previously. Fourth quarter GAAP operating income was $139 million, up 16% year-over-year. Adjusted operating income was $144 million, up over 20% versus the prior year on 14% total revenue growth. Quarterly EBITDA was $181 million, up 24% versus last year, and EBITDA margin was a healthy 24%, up 190 basis points versus last year. Fourth quarter adjusted EBITDA was $167 million, up 14% and representing a 22.1% margin flat versus last year. While we saw nice leverage with respect to both gross profit and SG&A, adjusted EBITDA margins were negatively impacted by about 40 basis points in the quarter due to lower non-operational gains on property and vehicle sales that were included in other income when compared to the fourth quarter of last year. This impacted incremental EBITDA margins in the quarter as well. The effective tax rate was 25.8% for both the quarter and the full year period. For 2024, we're expecting an effective tax rate of approximately 26%. Quarterly GAAP net income was approximately $109 million or $0.22 per share, an increase of nearly 30% from $0.17 per share in the same period a year ago. For the fourth quarter, we had non-GAAP pre-tax adjustments associated with the Fox acquisition-related items that I mentioned earlier, totaling approximately $5 million of pre-tax expense in the quarter. We also recognized the $15 million pre-tax benefit associated with a gain on the sale of our non-core business. Taking into account these adjustments, adjusted net income for the quarter was $101 million or $0.21 per share, increasing over 23% from the same period a year ago. Turning to cash flow in the balance sheet, operating cash flow increased 24% in the quarter to $153 million. We generated $142 million of free cash flow on $109 million of GAAP earnings, a 22% increase versus last year. Cash flow conversion, the percent of income that was converted into operating cash flow, was well above 100% for the quarter. Debt remains low, and debt to EBITDA is well below one times on a gross and net level. We continued to fund our dividend in the quarter. Going back to the fourth quarter of 2022, we have increased our dividend 45%, and we remain committed to funding a growing dividend as cash flow improves. As we look to 2024, we remain encouraged by the strength of our markets and the execution by our team. We are focused on delivering another year of robust growth and healthy incremental margins, further complemented by a strategic and disciplined approach to M&A. From a pricing perspective, we remain focused on effectively pricing the value of our services to remain positive on the price-cost equation. We have begun to raise prices for 2024 in the first quarter at a rate that is consistent with 2023 levels. We also continue to be active in managing our rate cards. Our focus remains on driving consistent growth, delivering healthy incremental margins, and compounding cash flow that will enable a balanced capital allocation strategy focused on investing in growth initiatives in our core market. Before I turn the call back to Jerry, I wanted to announce that we will be holding an investor and analyst conference on the morning of May 17th in New York City, where we will share more about our strategic priorities and how we are positioning ourselves for continued success in the future. We're looking forward to sharing more details in the coming weeks and months, but for now, please hold the date. With that, I'll turn the call back over to Jerry. Thank you, Kenneth. We're happy to take any questions at this time. Thank you. We will now be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. In the interest of time, we ask that participants limit themselves to one question and one follow-up. One moment, please, while we pull for questions. Our first question is from Tim Mulrooney with William Blair. Please proceed with your question. Jerry, Kenneth, good morning. Morning. Good morning. A couple of questions here. On the rest of the organic growth, Kenneth, you highlighted it decelerated from 7%-5% from the third to the fourth quarter. But you're right. As I look at results historically, I do see a slight deceleration seasonally from the third quarter to the fourth quarter, typically. So could you just talk about what those seasonal factors are, like one-time revenue or whatever else? And if that's the case, could you also talk about how your residential recurring revenue stream looked like in the fourth quarter? Certainly, Tim. I'll start and then turn it over to Jerry for additional comments, Jerry, as well. But when we look at the business, the business, as you so well indicate, has a high degree of recurring revenue. And so as a result, there is a consistent base to the revenue that we enjoy and we benefit from. The one thing that does have an impact on our business from time to time is what we call one-time type of service. And when we look at the quarter, in the fourth quarter, we did see a decline and a deceleration in the rate of growth in those areas of our business. That's probably the largest area of impact on the revenue growth in the quarter. We were really encouraged, quite frankly, with the level of growth that we continue to see from the recurring business. It was a healthy level of growth for us despite being stacked up against last October, you may recall, was more beneficial because hurricane season was pretty tough in September, and so some of that business pushed into the fourth quarter of last year. There's always puts and takes, of course, in this business with weather, but we continue to be pretty encouraged with respect to our growth, especially in the Resi sector. I would add, Kenneth, if I think about residential pest control, every other month in your quarterly service frequency offerings of your recurring base, that's your bread and butter. That is the healthiest indicator of what's going on in our business as we are growing our business, increasing our volumes, and are we ending the year from a positive standpoint in net new customers to start the year? We certainly did that. That quarterly and EOM pest control is your bread and butter, and the one-time is that gravy on top. Sometimes you don't always get that gravy, and that's what's really caused the slowdown. In addition to the divestiture of the lawn care that was about another $1 million on the residential side, that also impacted that number in the quarter as well, Tim. Got it. Okay. So there was a little less gravy in the fourth quarter, which implies that your recurring revenue in that business is above your stated organic growth in the fourth quarter. Am I correct about that? Yeah. Our recurring quarterly, every other month service definitely outpaced our organic overall number. Got it. The other one for me, and thank you for that, is on digital leads. You mentioned last quarter that digital marketing leads were I think the language was flat to down slightly. Correct me if I'm wrong about that. But I was just curious if that trend carried through the fourth quarter or if it moved up or down at all? Yeah. So if we look at the digital queries we saw in the fourth quarter, we saw modest increases in the quarter versus the prior year. But so it did result in some healthy increases in leads, starts, and sales, both from a digital as well as just overall in our business. We did see a lift there. It was certainly better than flat. It wasn't stellar performance, but it was an improvement year-over-year. So we believe we continue to benefit from a diversified approach that we're not overly reliant on all the digital space, and that's a key part of the formula in our organic growth. Yeah. It's interesting, Jerry, just adding on to that. When we look at the business in the fourth quarter, as well as throughout the year, what really proves the point that we're continuing to see good cross-sale and we always talk about additional ways we access the customer. And one area is the cross-sale. And the termite and ancillary business is really representative of that. We continue to see really robust levels of demand on the ancillary side of our business, which is driven a lot by that cross-sale activity that the team continues to execute upon. Got it. Thank you, Jerry and Kenneth. And when my kids turn 16, I might try to hit you up for one of those driver monitoring systems. It's a good idea. You should probably get on it yourself too. Thank you. Thank you. Our next question is from Jason Haas with Bank of America. Please proceed with your question. Hey, good morning, and thanks for taking my questions. I'm curious if you could remind us what level of price increase you'd put in last year? I know it's early in the year, but I'm curious if you're seeing any more sensitivity from customers to the price increase you're putting in this year versus last? So as we had talked about previously, Jason, we had passed along a 3%-4% price increase in the prior year. We followed that on again this year with a similar price increase here in the first quarter ahead of our heavier pest market season, which starts here later in the first quarter. So we're pretty in terms of what we're seeing on the customer side, we monitor that. We assess that. We look at churn. We look at cancellations. We look at rollbacks. We look at a number of different metrics. And we feel like the level that we're passing along is at a very healthy level and is representative of the value of our services. Got it. That's great to hear. And then as a follow-up question, I'm curious if you could just talk about competitive dynamics in the industry. I'm curious how your growth rates in Q4 compared to the industry, if you feel like you're still gaining share, and just if you see any opportunities for further share gains in the year ahead. I mean, we continue to have a highly fragmented market in this industry that remains very competitive. I wouldn't necessarily characterize any significant shifts or changes in that competitiveness. It's always been that way. And while there's some ebbs and flows here and there, we just keep doing what we do, focusing on our business and trying to win at what we do, so. When we look at our growth, Jason, in the quarter at organic growth, which was north of 7%, and we think about how that fares relative to how we've discussed the business and also how we've performed, we're pretty happy with the level of growth that we're seeing come through the business. We also continue to have a high degree of optimism, and we're encouraged about the future growth that we continue to see in this business. We really look at how we're performing relative to our expectations, and we continue to perform at a level that we're pretty pleased with. Got it. That's great. Thank you. Our next question is from George Tong with Goldman Sachs. Please proceed with your question. Hi, thanks. Good morning. Following up on the residential business, can you talk about what recurring revenue growth trends were, how did they perform relative to earlier quarters, and what you see as the key drivers of growth acceleration going forward? Certainly, George. When we look at the growth rates and we look at the recurring revenue growth relative to prior quarters, the business continues to perform pretty well. It continues to hold in there. I mean, Q4 always sees a step down in just generally the growth year-over-year, but it's above what we saw a year ago, and it continues to be at a healthy level. So there's nothing that's indicating that there's a significant deceleration in the growth rates or a change in growth profile in the growth rates that we're seeing coming through our business. Got it. You talked about earlier making good progress with bundling, cross-selling, and door-to-door sales. Can you talk a little bit about your priorities for 2024 with respect to these areas and how you expect that to drive volume performance? Certainly. When you step back and you look at the business, George, we look at it across a number of different priorities. When we think about our expectations going forward, we talked earlier about our pricing. We're focused certainly on getting the value of our services through strategic pricing management. And we, again, raise prices, and we'll continue to raise prices and manage our rate cards effectively. So that's one side of the equation. And so that growth rate associated with pricing is, at this point, expected to be in line with what we saw a year ago at 3%-4%. And then secondly, when we look at growth profile across the business, we remain encouraged by our position in our market. We continue to have confidence in our ability to deliver a healthy level of growth going forward that's in line with what we've seen here over the last couple of years. We've all enjoyed the benefit, and you've seen the benefit of our growth rate accelerating post-COVID. We continue to operate at a pretty healthy level of growth in our business from an organic perspective. And then, of course, we saw a really robust uptick in growth associated with M&A in the last year. When we look at the initiatives across the business, the cross-sale is certainly really important. Going after those customers that may have one service but trying to add additional services like mosquito and ticks and other services like that, continuing to focus on the termite and ancillary business is very important. And then last, but certainly not least, is the commercial side. Jerry spoke about the commercial business in detail. We talked about it in the third quarter as well. We continue to place a disproportionate focus on the commercial business and driving growth there. All of those initiatives are coming together to give us optimism as we think about our growth rates going forward. George, I'll add, this is Jerry, when we think about one of the ways I just love our business model is the diversity that we get from our brand strategy. Each of our brands has various different ways to acquire customers, whether it be, say, Northwest and HomeTeam that rely heavily on the homebuilding market or Fox doing door-to-door. And now, for example, we have HomeTeam doing door-to-door and expanding that offering in their business by things they learn from the Fox team. These are all things that we can deploy across and due to the diversity of our brands and what each one brings to the table that we think continues to help us with this solid growth profile for the future. Very helpful. Thank you. Thank you, George. Thank you. Our next question is from Michael Hoffman with Stifel. Please proceed with your question. So the challenge is to how creative can I be to ask four questions and two? Good morning, everybody. Good morning. Things that would help the model, Ken, are specifics that I think you can share, like the three to four and Q1 pricing. What is the dollar amount of the M&A rollover from 2023 so everybody just gets that right? How do you think about the cadence of it in the calendar year so we just don't get that wrong? Certainly. When we look at M&A, we continue to be focused on M&A. We continue to focus on executing that disciplined strategy. We see roughly 2% carryover coming into 2024 from M&A. A large part of that, of course, is here in the first quarter with Fox. We acquired Fox last April, so we still have one quarter of benefit. When we look at the pipeline, we see a healthy pipeline. We were very active to close out the year and then also to start 2024. January activity in deals that we closed are up. So we continue to chart towards that 2%+ level of growth, 2%-3%+ level of growth associated with M&A as we go forward. But the carryover is around 2%. Okay. And then you shared with us that incremental margins on an adjusted basis for 28%-29%, well, both on an adjusted and adjusted 28%-29%. What is the target for this year? And how does non-operating gains influence that? And maybe can you isolate what those gains were in 2022 and 2023 so we can understand how to think about them in 2024? There's my creative question with four and one. Absolutely. Certainly. When we look at the incremental margin profile, there's no reason, I mean, we continue to see and have a confidence level in delivering 30% incremental margins. If you look at the incremental margin the last several years, we've seen it step up. Our focus has been we've been laser-focused on incremental margins and driving improvements on the margin profile. And so when we think about that level, that's the range at 30%. We've seen quarters as high as 35%-40%. So it'll jump around from quarter to quarter, and you're going to see that. But generally, when we step back and we finish the year at 28%-30%, we're pretty pleased. That means we're getting 70 basis points as we did of improvement in EBITDA margins. The gains on asset sales will come through. They came through in Q3 or I'm sorry, Q4 here. We saw roughly $3 million lower asset sales that came through other income. It's about 40 basis points on the margin line and the EBITDA margin line. That'll come through from time to time. We'll try to isolate that as we go forward for you. Okay. Thanks. Thank you. Our next question is from Ashish Sabadra with RBC Capital Markets. Please proceed with your question. Thanks for taking my question. Maybe if I can ask a clarifying question on Resi. Obviously, good to hear the recurring revenues within Resi continue to do really well, and the digital inquiries are also pretty stable. Just a question there is, have you seen any change, particularly from competitor pushing harder on the marketing spend? Is that changing anything? Did that change anything in the fourth quarter? But maybe importantly, going into 2024, how should we think about the demand environment? You talked about a pretty solid demand environment. I was wondering if you could provide any color on cicadas and the two groups of cicadas coming or emerging in 2024. What would that mean for the demand environment? Thanks. Ashish, this is Jerry. I'll kind of try to take the first part of that statement. I asked our marketing team what was going on in the fourth quarter from a digital spends standpoint. It was a time when we'd like to invest a little earlier in the year in some of the marketing. And it did appear anecdotally that there was a pretty significant uptick in competitive spend in the fourth quarter at a time when we were winding down some of our marketing spend, that there was some pretty significant investment in the market during the fourth quarter. So we certainly saw the competitive environment tick up in that regard where there was more spend into there. Now, how that equated to sales and starts and new customers or one-time work on the residential side, we don't really know. So on your first question, that's. Yeah. And the second part of your question, I think, was around cicadas and new pests. And we continue to monitor new pest activity. Cicadas are one of many pests that we continue to monitor. Jerry, I don't know if you want to add. I'm certainly not the expert when it comes to cicadas. You're probably much better positioned to answer that. Yeah. Well, cicadas typically are not a household pest control problem. They are a nuisance because when they come out in the volumes as they did a couple of years ago, they wreaked havoc from a noise standpoint. I know I have a house in the mountains that you couldn't sleep at night, and it was very annoying. But they tend to just go away over time. But it probably will create some awareness about pests in general and things that bother humans. But it's not as though our pest control companies are going to be out there attempting to eradicate cicadas. So that's seemingly an impossible feat. We're really just out there waiting for them to die off and go away and start the whole process over again. So it'll probably create some buzz in the marketplace, and that's always good for business. That's a very helpful color. Maybe if I can ask a question on the back-office modernization, Ken, if you can just help us understand where you are on that process and how should we think about that contribution to incremental EBITDA margins in 2024 but also midterm. Thanks. Yeah. We continue to be very early on in our journey with respect to modernization, making good progress. We've added a number of new team members across our back office. We've made some significant changes. But we're pretty excited about what's to come. With that said, when we look at the SG&A performance over time, we've continued to see that improve. Going back a couple of years, it was almost 31%. It's come down under 29% here in the quarter. So we continue to leverage that despite having investments in growth initiatives associated with the commercial business as well as other parts of our business. And so we're early on in the journey. We feel like there's opportunities as we go forward to continue to improve the business. Thanks. Very helpful and really strong momentum in commercial and ancillary services. Congrats on that. Thanks. Thank you. Our next question is from Josh Chan with UBS. Please proceed with your question. Hi. Good morning. Thanks for taking my questions. Maybe bridging from the prior question on SG&A, I guess you've done a really good job improving gross margin over the last several years. I guess from an SG&A perspective, is there an expectation that leverage there can increase a little bit over time as some of your initiatives get more traction? Yeah. I think there's an opportunity to improve upon the SG&A performance. And we've said that for some time, and we continue to see improvement in SG&A. With that said, we do have a disproportionate investment in securing customers through advertising and door-to-door and other activities. But with that said, our focus is to continue to improve upon the administrative side of the back office without sacrificing the investments for growth. And so we're hopeful to see improvement as we go forward, just like we've seen the last couple of years here. And the last year or so, we continue to see improvement despite the investments we're making. But we feel like we're well positioned on that front. Okay. Thank you. That makes a lot of sense. On the residential side, you mentioned that the one-time service slowed down a little in Q4 and may be a little slower in Q1 as well. Is there anything to interpret from that, from perhaps a macro perspective or any other reasons that would drive that to be a little slower for the upcoming quarter as well? Yeah. Really, what we saw was a slowdown in some of the residential bedbug one-time work and also on the wildlife side, which often involves some rat type of rat and rodent type of work, a slowdown there. Those are the main drivers of that, whether that's seasonal, whether it's something that's changed in the weather or a change in demand. We're not completely certain of any of that. But bedbugs, for example, being down has always been something that has fluctuated from quarter to quarter and year to year on some of the ups and downs. And it was just more significantly down for us in recent months. When we look at that question, Josh, because we've looked at that as well because we deal with consumers, homeowners. When we look at the business and we assess more of a macro level, we look across our business. We look not only in the residential pest control that Jerry just spoke about, but we also look at the termite and ancillary. That ancillary business is normally some high-ticket items. If that continues to grow the pace it's growing, it's indicative that the consumer is pretty healthy. With that said, we were proactive in the end of last year at tightening credit down in a number of different areas just to ensure that we don't run into any issues from a credit perspective. So in our Acceptance Corp, we raised the minimum level for credit, just trying to be proactive in today's market. But from a demand perspective, we're certainly not seeing any major deterioration in growth profile with our customers. Great. Thank you both for the really good color. Good luck in 2024. Thank you. Our next question is from Toni Kaplan with Morgan Stanley. Please proceed with your question. Thanks so much. I was hoping you could give us an update on labor, namely your salespeople. We're seeing higher employee retention right now versus normal. I know you mentioned deploying some sales tools and wondering if you could talk about other initiatives as well. Yeah. So the labor side of it is we have been very good at hiring, onboard, and training our sales teams, especially on the well, really, on the commercial and residential side. And we're talking specifically a little bit more about the commercial side. But one of the things that you learn on the commercial side where you typically have a longer sales cycle - it takes longer from the time, say, you have a lead or create a creative lead to get a deal closed - you really have to get those salespeople productive and selling and finding success early on. And that's what helps you with keeping people in the long term. The more they're successful, the more they're winning, the longer they stay, and the more money they earn, they go to our President's Club events, those types of things. I'm really proud of the sales team that we've built both on the commercial and residential side. It's a team of very high-performing people that we've enabled that through how we hire, how we train, how we invest in them, how we give them those tools to be successful. And that's ultimately what drives retention. That's what makes them want to stay. So we have a lot of momentum in that space that I just feel really good about as we head into 2024. Terrific. Wanted to ask a big picture around footprint. Are you happy with the current coverage and portfolio of geographies that you're in, or are there other geographies that you'd like to gain further density in? Thanks. I would say we are pretty happy. We have very broad geographic coverage under the Orkin brand in North America. And when you look in the US, mainly the area that we don't have the second bite at the apple brand strategy is fully built is really probably in the Midwest where we have some opportunity where we would like to continue to add and invest in M&A. And then when you think about international, we're very happy with our Australian operations growing and healthy. And we're going to continue to build out Australia, the United Kingdom, and Singapore where we currently operate. But we really haven't put a lot of effort or energy behind expanding outside of those areas. We like where we are, and we're going to continue to build and focus on those countries where we've expanded internationally. Terrific. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. Our next question is from Stephanie Moore with Jefferies. Please proceed with your question. Hi. Good morning. Thank you. Good morning. I was hoping you could touch a little bit on maybe what you're seeing on the unit cost inflation side, some key areas. You talked a little bit about labor, but maybe just across the board, labor, materials, equipment, the likes, and kind of expectations for 2024 versus what you saw and experienced in 2023. Thanks. When we look across the cost structure, we look at our people costs. We look at our materials, supplies. We look at our fleet. Those are the three major drivers of cost in addition to insurance and claims, which sometimes can be less controllable - not completely controllable as much as some of the other areas - but we're pretty pleased with the leverage we saw on the organic side of our business across those three cost categories. We continue to benefit from lower gas prices, slightly lower gas prices, lower oil prices. That's definitely beneficial on the fleet side of our business. The interest rate environment certainly is less favorable from a leasing perspective. But we continue to focus on pricing the value of our services so that our gross margins will continue to improve and step higher. We were pleased with the 50 basis points we saw this past year on the gross margin side of our organic side of gross margin. We're continuing to focus on leveraging our cost structure in a similar fashion going forward. Stephanie, I would add that we do have some concerns about truck prices rising. Some of the fleet vehicles' costs are going up. As Ken mentioned, there's always the wild card is fuel prices and fluctuations we have there. On the M&S side, we just completed an RFP on our insecticides and termiticides, trying to ensure our pricing is in line on that and trying to generate some savings or at least offset as much as we can some of the price increases that are being passed along to us from some of our suppliers. So those are all things that are top of mind for us that we'll keep focused on through the year. Great. No, that's helpful. And then, I mean, I guess just as a follow-up, I'm just trying to kind of piece together the idea of similar price increases in 2024 versus 2023. But it sounds like there's overall inflation is supposedly coming down here in 2024. So I guess what you're saying is it's probably still a little too early to tell if the inflationary side will step down materially in 2024. Is that kind of the right way to interpret that? Yeah. That's what I'm hinting at is there's some unknowns, and there may be still some costs that we don't know. And you look at the inflation data that demonstrates that it's not necessarily slowing as fast as we all would probably like it to. So we're cautiously optimistic there. Great. Then just lastly, on M&A and kind of M&A activity, any changes in terms of pipeline or willingness of sellers that you've seen as of late? Thanks. I don't think there's any significant change. There's still good deal flow out there. There's good businesses that are out there for sale. And from on a quarter-to-quarter basis, there's some ebbs and flows to that kind of volume that we get to see or look at. But there's still plenty of good businesses out there that are potentially worth acquiring. So we've gotten off to a good start already in January. Feel good about our pipeline. We're actually a little ahead of where we were last year in that regard. But last year, if you keep in mind, in January, February, we announced the Fox deal. And in April, we were heads down working on the Fox deal. So we put a lot of stuff aside to focus on that. So now we're back to kind of business as usual and looking at normal deal flow. Great. Thank you guys so much. Thank you. Thank you. Our next question is from John Mazzoni with Wells Fargo. Please proceed with your question. Good morning. Good morning. Maybe quickly. Yeah. So maybe quickly just to touch on the price-cost spread. Looking at the kind of improvements in the driver safety score and that KPI, could you just help us understand how that can flow through to kind of lower insurance-related costs going forward? And what's the typical timing or delay? I mean, this is probably not going to be a kind of near-term item, but could we expect it in the back half of the year, or would it be something that has a longer variable lag? Thanks. Yeah. It's a hard thing to predict, John, when you look at that trend line because it does take quite a while to work its way through. The last 12 months or so, year-over-year, insurance and claims costs were negative for us despite not having large payouts, large claims that we settled like we did a year or so ago. But with that said, we're hopeful that it will improve. When we look at safety, it's not just about the financials either. It's about our people. And so when we think about our people-first culture, we want people to be safe. We want them to return home each and every night. That's really the focus here is how do we make sure our drivers are safe and the communities that they continue to work in remain very safe and they can get home each and every day. So we're focused on the people side. By doing the right thing, ultimately, the financials will improve. That's the focus here is we think about the future, the next several years that we'll continue to see improvements on safety. People will be safe, and we'll see the benefits of that coming through our financial statements. Great caller. Thank you. And then maybe just the last one is around kind of a preview of the investor day. Anything that we could kind of look forward to maybe around technology or cap allocation, or should we just stay tuned? Thanks. Yeah. I would say stay tuned. We're really excited to get back to New York and to spend time with our investment community talking about our growth prospects, our strategic priorities for the future, talking about how we will continue to expect the investments and growth initiatives. We're just really excited to spend the day talking about the future of this great company. Sounds great. Looking forward to it. Thank you, John. Thanks, John. Thank you. This concludes the Q&A portion of the call. I will now hand the call back to management for any closing comments. Thank you, everyone, for joining us today. We appreciate your interest in our company, and we look forward to speaking with you on our first quarter earnings call in a few months. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.