Good morning. Welcome to the Trane Technologies first quarter 2023 earnings conference call. My name is Brent, and I will be your operator for the call. The call will begin in a few moments with the speaker remarks and the Q&A session. At this time, all participants are in a listen-only mode. If you would like to ask a question during the Q&A session, please press star followed by the one on your telephone keypad. If you would like to withdraw your question, again, press star one. In the interest of time, please limit yourself to one question and one follow-up question. Thank you. It is now my pleasure to turn the call over to Zac Nagle, Vice President of Investor Relations. Thanks, operator. Good morning, and thank you for joining us for Trane Technologies first quarter 2023 earnings conference call. This call is being webcast on our website at tranetechnologies.com, where you'll find the accompanying presentation. We're also recording and archiving this call on our website. Please go to slide two. Statements made in today's call that are not historical facts are considered forward-looking statements and are made pursuant to the safe harbor provisions of federal securities law. Please see our SEC filings for a description of some of the factors that may cause our actual results to differ materially from anticipated results. This presentation also includes non-GAAP measures, which are explained in the financial tables attached to our news release. Joining me on today's call are Dave Regnery, Chair and CEO, and Chris Kuehn, Executive Vice President and CFO. With that, I'll turn the call over to Dave. Dave? Thanks, Zac, and everyone for joining us on today's call. I want to begin with a few thoughts on our purpose-driven strategy, which enables us to drive differentiated financial results and shareholder returns over the long term. Our strategy is aligned to powerful megatrends like climate change, which continues to have serious and far-reaching effects on the environment, the economy, and human health. Urgent action is needed to limit global warming and preserve our planet for next generations. That's where Trane Technologies is uniquely positioned to lead. We just released our latest ESG report, which highlights how our innovation is helping our customers decarbonize their operations, save energy, and improve performance. We have reduced our customers' carbon emissions by 93 million metric tons since 2019 towards our goal of reducing emissions by 1 gigaton or 1 billion metric tons by 2030. These bold ambitions drive our relentless focus on innovation, our innovation creates tremendous demand for our sustainable solutions. This enables us to deliver a superior growth profile, strong margins, and powerful free cash flow. The end result is long-term value creation across the board for our team, our customers, our shareholders, and for the planet. Moving to slide number four. Our global team continues to execute at a high level and delivered another quarter of strong performance, showcasing the power of our diverse, resilient portfolio. Organic revenue was up 9%. Adjusted operating margins expanded 140 basis points, adjusted EPS grew 26%. Absolute bookings levels continue to be extremely strong, as evidenced by our book-to-bill ratio of 117% in the first quarter. We added $400 million to our backlog, driving record backlog of $6.9 billion at year-end 2022, up to $7.3 billion at the end of the first quarter. Demand continues to be particularly strong in our long cycle commercial HVAC businesses, where global commercial HVAC bookings were up more than 35% on a two-year stack. In Americas, commercial HVAC bookings were up nearly 40% on a two-year stack. We've been encouraging investors to look at absolute booking levels and backlog in addition to growth rates to gain a more complete understanding of the strength of our business. Q1 is a good example of why that is important. Our enterprise book-to-bill of 117% was led by commercial HVAC in all regions and demonstrates ongoing exceptional levels of demand for our innovative products and services and continued backlog builds. These strong results position us well for continued profitable growth in 2023 and 2024 with improving visibility. Our backlog of $7.3 billion is more than 2.5x historical norms. We expect backlog to remain elevated throughout 2023 and anticipate entering 2024 with backlog in excess of $6 billion. To be clear, $6 billion in backlog is a scenario we believe represents the floor. The intent is to accomplish two goals. First, give investors a high degree of confidence we will meet or exceed the floor scenario. The second is to give investors a high degree of confidence that the floor scenario would put us in a very strong position entering 2024, with backlog as a% of forward revenues significantly higher than historical norms. Our strong balance sheet liquidity and financial position continue to provide us with excellent capital allocation optionality. Year to date, we've deployed $720 million to dividends, share repurchases, and M&A. We expect to deploy approximately $2.5 billion in 2023. On the M&A front, we acquired a leading industrial process cooling technology company in EMEA, and committed to acquire a precision temperature control cooling company in the life science vertical in the Americas. Overall, the first quarter played out essentially as expected and gives us confidence in raising our full year guidance for revenue and EPS growth. We continue to expect free cash flow to be equal to or better than 100% of adjusted net earnings. Chris will discuss our guidance in more detail later in the presentation. Please go to slide number five. Demand for our innovative products and services continued to be broad-based across our segments, highlighting the strength of our global portfolio. Our book-to-bill in the quarter was not only strong at the enterprise level but exceeded 115% in each segment as well, contributing to elevated backlog across the portfolio. Revenues were also robust in each segment, with particular strength across our commercial HVAC businesses. In the Americas, our book-to-bill ratio exceeded 115%, led by commercial HVAC. The commercial HVAC team delivered standout results with strong absolute bookings that exceeded mid-teens revenue growth. Revenue growth was strong in both equipment and services, up high teens and low teens, respectively. Our Americas residential business performed largely in line with our expectations at this early stage in the year. Bookings and revenue continue to normalize as we approach the cooling season and distributors manage their inventory positions. Still, our book-to-bill was roughly flat in the quarter. Sell-through revenues across our channel and our IWDs were flat year-over-year. Our Americas Transport Refrigeration business performed consistent with our expectations for the first quarter, with mid-single-digit revenue growth. We expect this business to outperform the end markets, which are expected to be flat for the year. It's also worth noting that we expect quarterly bookings for both Americas and EMEA transport to be lumpy throughout the year. The timing of order books, customer order patterns, and elevated backlogs. In our EMEA segment, our commercial HVAC business delivered another standout quarter. Bookings were robust and revenues were up more than 25%, with strength in both equipment and services, up nearly 40% and high single digits respectively. Our transport refrigeration business also had a very strong quarter, with revenues up mid-single digits. We expect this business to outperform the EMEA transport refrigeration markets, which are expected to be down low single digits to mid-single digits for the year. In our Asia-Pacific segment, the team also delivered strong results, with revenues up high single digits, supported by broad-based growth in China and across the region. Commercial HVAC was again a standout, with low teens revenue growth led by services, which was up nearly 25%. I'd like to turn the call over to Chris. Chris? Thanks, Dave. Please turn to slide number six. This slide does a nice job highlighting our overall performance in the quarter, which was strong across the board. Organic revenues were up 9%, adjusted EBITDA margins were up 100 basis points, and adjusted EPS was up 26%. At an enterprise level, we delivered strong organic revenue growth in both equipment and services, up high single digits and low teens respectively. Our high-performance flywheel continues to pay dividends, with relentless investment in innovation driving strong top-line growth, margin expansion, and EPS growth. Please turn to slide number seven. We discussed the key revenue dynamics for the first quarter, so I'll focus my comments on margins. We delivered strong margin expansion in each of our business segments and have highlighted the key margin drivers on the right side of the page. In each of our regions, strong price realization, volume growth, and productivity combined to more than offset continued supply chain challenges and persistent inflation in the quarter. As we've highlighted previously, the supply chain is slowly improving. We expect this trend to continue throughout 2023. As an enterprise, we delivered about 6.5 points of price and about 2.5 points of volume in the quarter, which is largely in line with our expectations. We delivered strong volume growth in our commercial HVAC businesses in each region, accompanied by strong leverage, which was partially offset by lower volumes in our residential business as those markets continue to normalize. As we discussed previously, we've earmarked approximately 30 basis points for incremental business reinvestment to accelerate the timing of key projects. This is above our average run rate of approximately 40 basis points annually, for a total of approximately 70 basis points in 2023. While investment spending was less than 70 basis points in the first quarter, it was in line with our expectations based on the timing of projects. We expect to ramp up to 70 basis points in the second quarter. There is no change to our full year guidance of approximately 70 basis points. Now I'd like to turn the call back over to Dave. Dave? Thanks, Chris. Please turn to slide number eight. We presented this slide on our fourth quarter earnings call to help provide color on our key markets. Overall, we had a very strong first quarter, as expected, and our positive outlook for our segments and our end markets is largely unchanged. We see strong core demand for our sustainability-focused solutions continuing. We see the stacking effect of supportive policy and regulatory changes that play to our unique strengths as a leading climate innovator. As tailwinds for either early to mid innings or future multi-year opportunities. We see the effect of tight supply chain slowly but steadily improving, and we see strong execution of our business operating system and unprecedented backlog supporting resiliency and improving visibility into 2023 and 2024. In our Americas segment, our overall outlook is relatively balanced between commercial and residential. We see our residential business continuing to normalize through Q2. Our bias on our prior revenue estimates of the business being plus or minus low single digits for the year is now towards the lower end of that range or flat to down low single digits. While this may present a modest headwind to the second quarter, we see strength in our commercial HVAC business more than offsetting this on the full year. Our transport refrigeration business performed as planned in the 1st quarter. We continue to expect to outperform the market for the year. In our EMEA segment, the 1st quarter was strong and in line with our expectations for both businesses. Our outlook for the year is unchanged. Likewise, for our Asia Pacific segment, Q1 performance was strong. Our outlook for the full year is unchanged. Now I'd like to turn the call back over to Chris. Chris? Thanks, Dave. Please turn to slide number nine. We're off to a strong start to the year, we continue to see slow but steady improvement in our supply chain. Additionally, bookings and backlog continue at high levels, providing us with improving visibility into future revenues. All in, we're confident in raising the low end of our full year revenue and EPS guidance for 2023. We're raising our full year organic revenue growth guidance to between 7%-8%, up from our prior guidance of 6%-8%, reflecting strong results in the first quarter and improving visibility on the year. We're raising our adjusted EPS guidance range to $8.30-$8.50, up from $8.20-$8.50. We're also expecting to deliver free cash flow equal to or greater than net earnings. Other elements of our guidance remain largely unchanged with a few modest exceptions, mainly 1 additional point of M&A and associated impacts, higher interest expense related to debt refinancing in the first quarter, and expected pension expense in 2023. Please see page 18 of the presentation for additional details related to guidance to assist you with your models. As we've highlighted before, we pay close attention to our investment peer group and target top quartile revenue growth, EPS growth, and free cash flow conversion as part of our annual planning process. We monitor our progress throughout the year. We believe our full year guidance places us in the top quartile of the peer group on these metrics for 2023. In addition to our full year guidance, we believe it may be useful to provide a high-level construct regarding how to think about Q2 and the cadence of earnings. For the second quarter, we expect revenue growth in the high single-digit range, which reflects a step down in pricing sequentially, given very high levels of pricing realized in 2022. It also reflects continued normalization and inventory optimization across our residential distribution channels, as Dave referenced earlier. Adjusted EPS is expected to be between $2.50 and $2.55, which includes approximately 30 basis points of incremental investment spend in the second quarter versus the first quarter, as I discussed earlier. This EPS range is also consistent with our three-year average for second quarter earnings as a percentage of full-year earnings, which is approximately 30% at our full-year EPS guidance midpoint of $8.40. Please go to slide number 10. We remain on track to deliver $300 million of run rate savings from business transformation by 2023, including an incremental $60 million in 2023. We continue to invest these cost savings in high ROI projects to further fuel innovation and other investments across the portfolio. Our continuous improvement mindset is an integral part of our business operating system, and it's designed to drive gross productivity each year to offset other inflation. While it's been extremely difficult to realize meaningful levels of productivity in recent years, given the supply chain and other macro challenges, productivity has been improving as supply chains slowly recover and is contributing to our 25%+ organic leverage target in 2023. Please go to slide number 11. We remain committed to our balanced capital allocation strategy focused on consistently deploying excess cash to opportunities with the highest returns for shareholders. First, we continue to strengthen our core business through relentless business reinvestment. Second, we're committed to maintaining a strong balance sheet that provides us with continued optionality as our markets evolve. Third, we expect to consistently deploy 100% of excess cash over time. Our balanced approach includes strategic M&A that further improves long-term shareholder returns and share repurchases as the stock trades below our calculated intrinsic value. Please turn to slide number 12, and I'll provide an update on our capital deployment for 2023. Year to date through May, we deployed $720 million in cash, with $170 million to dividends, $250 million to M&A, and $300 million to share repurchases. We have significant dry powder with $2.9 billion remaining under the current share repurchase authorization, and our shares remain attractive, trading below our calculated intrinsic value. Our M&A pipeline remains active. We have committed or deployed approximately $500 million year to date to bolt-on leading technology acquisitions and equity investments. Two of which Dave mentioned earlier, including a leading industrial process cooling technology business, which closed on May 2nd, and will complement our portfolio and our EMEA commercial HVAC business. All in, we're on track to deploy approximately $2.5 billion in cash in 2023. Our strong free cash flow, liquidity, and balance sheet continue to give us excellent capital allocation optionality moving forward. I'd like to turn the call back over to Dave. Dave? Thanks, Chris. Please turn to slide number 14. The key takeaway for our Thermo King business is that the transport refrigeration market forecasts for both North America and EMEA remain unchanged, and we expect to outperform each market in 2023. Our performance through the first quarter is on track to meet these expectations. The slide shows key data points on the markets and on Thermo King specifically to provide additional transparency and reference information. Please turn to slide number 15. ACT has updated their long-term forecast for refrigerated trailers, and they are projecting strong demand through 2028. The data supports the view we've been highlighting for some time now that this is a strong mid 40,000 unit market, plus or minus a few percentage points. One key takeaway is that ACT has increased their 2024 forecast to 42,000 units, up from 40,000 units, which represents a 7% decline versus an 11% decline. In 2025, ACT forecasts the market to increase 7% and return to 45,000 units, and to continue growing low single digits through 2028. Both our Americas and EMEA Thermo King businesses are poised to continue to outperform their end markets through leading innovation and strong execution. We believe this is a GDP plus plus business for us over the long term. Please turn to slide number 16. In summary, we are positioned to outperform over the long term. Energy efficiency, decarbonization, and sustainability megatrends continue to intensify, driving increased demand for innovative products and services. We are delivering leading technology and innovation to address these trends and accelerate the world's progress, underpinned by our engaging, uplifting culture. Our strong first quarter performance, diverse and resilient portfolio, and unprecedented backlog gives us confidence in raising our full year revenue and EPS guidance, and reaffirming our full year free cash flow conversion guidance. We believe we have the right strategy, the best team, and a solid foundation in place to deliver strong performance in 2023, and differentiated shareholder returns over the long term. Now, we'd be happy to take your questions. Operator? At this time, I would like to remind everyone, in order to ask a question, press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. In the interest of time, please limit yourself to one question and one follow-up question. Your first question is from the line of Scott Davis with Melius. Your line is open. Hi. good morning, Dave and Chris and Zac, and everybody else who's in the room. Good morning. Good morning, Scott. How are you? I'm good, thank you. I'm getting a little beat up by earnings here, but we're near the end. All right. You guys always give a lot of great detail and answer a lot of questions, which is helpful. I haven't really heard you talk about mega projects specifically. When I think about kind of these giant semi fabs and the EV facilities and everything that is on the list, that folks are talking about, is this stuff starting to move into your backlogs? Are people starting to spec out the HVAC needs in those facilities? If so, I'm just kinda guessing these are super complicated. I have to imagine a semi fab requires some pretty incredible engineering to get the cooling right, and perhaps you guys have an advantage in that regard. I'll just open it up to that. Yeah, great question, Scott. The short answer is, look, we're this high-tech industrial vertical, as we call it, you know, we have a lot of strength in that vertical, and we have for a number of years. Yeah, we are starting to see early stages of some big orders coming in, specifically on the fab plant side of things. Again, I think the CHIPS and Science Act is really in front of us, and once that really starts to happen, you're gonna see even, you know, greater closing of some of these big projects. I think a lot of it's in front of us. We are seeing some. We're also seeing some of it on the EV battery plants, and that's certainly been a nice... Again, we classify this all as this high-tech industrial vertical, but it's certainly been a strength to us. You're right. You know, these are sophisticated operations that require, you know, kind of detail engineering. Not everyone is as cookie cutter as you might think. There's always unique things, and our expertise in this vertical really allows us to, you know, have a lot of strength, and we'll continue to execute in the future. That's helpful, Dave. This is a little pie in the sky, but AI, you know, the cooling of the chips, you know, when you start talking about, I think it's something like 5 kW going to 100 kW, and there's a lot of heat there. I'm told there's a lot of white space because Frankly, the cooling of those chips is still, you know, whether we go all liquid or whether it's there's other kind of hybrid solutions. Are you guys involved at all or perhaps working on technologies to be involved at all in some of that CHIP-level cooling? Yeah. Absolutely. You're talking about immersion cooling, and that's certainly on the cutting edge and, yeah, we're very active there. In fact, we made an equity investment in a company called LiquidStack, which is really, that's their expertise. We're partnering with them and, yeah, we're certainly on the leading edge of that technology. Okay. Best of luck. Thank you. I'll pass it on. All right. Great. Thanks, Scott. Appreciate it. Your next question comes from the line of Andy Kaplowitz with Citigroup. Your line is open. Hey, good morning, everyone. Hey, Andy. Good morning. How are you? Good. How are you? Dave, commercial HVAC bookings growth has remained really strong at low teens growth in EMEA, despite maybe a little bit of slowing against tough comps, as you talked about in the Americas. Have you seen any slowing in any of your main commercial HVAC verticals in the Americas, or is it really just tough comps? Would you say the main difference in EMEA is the strength of your thermal management systems build out there? If it is, where are you in that build down, and where are you in terms of bringing it into the U.S.? All right. Well, Andy, I think it's, you know, commercial HVAC has been strong globally for us. You know, I think the mega trends around decarbonization, they continue to intensify. You know, we had a very strong start to the year here in the Americas. You know, order rates were up, you know, low single digits, but the backlog grew, and that's a great thing. If you go to EMEA, I mean, yeah, I mean, the team there is just performing at a very high level, and you hit it, right? Thermal management systems is, you know, we have a differentiated technology and we're winning with our customers. If you think about it, you know, the commercial HVAC EMEA business in 2022 was up 20%. In the first quarter, we were up 25%. Our equipment orders for commercial HVAC EMEA were up close to 40%. I mean, this is great. The team is executing well. The other thing, too, I'd point out is that margins were very, very strong in Europe as well. If you remember a year ago, we were talking about more acute supply chain problems in Europe and a higher cost to serve our customers, and we were, you know, with spot buys and expedited freight. You see that pulling through now with productivity that the team's been able to deliver. Very strong in EMEA, very strong in the Americas. Asia-Pacific also performed quite well. Order rates were up, you know, low teens and really broad-based too. It was both in China and outside of China. Off to a great start here in 2023, and commercial HVAC business is certainly, we're seeing a lot of demand for our products. Helpful, Dave. I wanted to follow up on your comments on sort of the EMEA margin, maybe for Chris. Can you talk about price versus cost benefit in Q1 for the year? I think you mentioned previously, you know, the 2%-2.5% carryover price embedded in 2023. Has that gone up a bit? As Dave mentioned, is it really you're comping against sort of an easier, you know, supply chains are better in EMEA and Asia, and that's sort of the big, you know, reasons why the margins were, you know, much stronger in those regions than versus the Americas? Or are you investing maybe more in the Americas versus those other regions? Andy, it's a great question. I mean, if you go to EMEA margins first, I mean, if I go back a year ago, we saw very acute supply chain issues impacting that region and really unfortunately holding back revenue growth and lowering volumes. It also came with the product we get out the door, a lot of additional cost to serve our customers. You know, a year ago, it was very difficult to get leverage in that region. What you're seeing coming through here in the first quarter, you guys will see this in the 10-Q that gets filed. You'll see, you know, nine points of price in EMEA and about 6.5 points of volume. With that volume came strong leverage, and we're starting to see some productivity come through within a slowly but improving supply chain. I think about the margins around productivity improvements on a year-over-year basis, you know, stronger volume with good incrementals and pricing continues to remain strong in the region as well. Really nice start to that team. I think you mentioned a question on maybe price overall for the company. You know, enterprise-wide on the full year, we're probably still in that 200-300 basis points on a full year price. I would bias our full year revenue growth more to the volume side than to the price side on the full year. Appreciate the color, guys. All right. Thanks, Andy. Your next question is from the line of Julian Mitchell with Barclays. Your line is open. Hi. Good morning. Maybe just wanted to start with the sort of the backlog outlook and orders. I guess one approach is just not report the orders when they're down in quarter. You know, if we look at over the balance of the year, how are you thinking about the sort of the book-to-bill ratio, let's say? Just trying to understand a little bit better, Dave, your commentary around that $6 billion backlog at year-end perhaps being a floor number. Any color as you're thinking about book-to-bill by region or the market in terms of commercial versus transport? Yeah. Look, our order rates for the first quarter were actually flattish, okay? Our backlog increased by $400 million. You know, we thought we had a real high backlog at the end of 2022 at $6.9 billion. It's now $7.3 billion. We will enter 2024 with a very inflated backlog. You know, we're kinda using $6 billion just as a just to demonstrate the strength. You know, if you think about any year we go into, the backlog typically represents about 20% of the forward revenue. We'll be far in excess of that going into 2024. The book-to-bill, you know, if you just do the simple math on where, you know, looking at our midpoint on revenue, yeah, it would come down a bit from what we're seeing right now. I would tell you the first quarter was exceptional, and it was a little bit, you know, a little bit stronger than even we thought, especially on our commercial HVAC standpoint. You know, our commercial HVAC business on a two-year stack in the first quarter is up 35% for orders. I mean, it's very strong right now, and we're seeing a lot of demand. You know, you heard Scott talk about some of the tailwinds that are to come, you know, some of the mega projects out there with the CHIPS and Science Act and IRA as it starts to kick in here in the, hopefully the fourth quarter. That'll be an additional tailwind that we're going to see into 2024 and beyond. That's helpful. Thank you. My second question would just be on the Americas operating margin for the year. I suppose, one, you know, I think some investors may have thought maybe you'd have higher operating leverage in the first half than the sort of mid-20s number, because of, you know, price costs, tailwinds to margins and the last sort of bout of transformation savings, as well as the good volume growth. Understand the sort of investment reference that Chris had made. Anything else going on in that Americas margin? Also, you know, when we're thinking about second half operating leverage in the Americas, does that stay at that mid-20s rate that you've got in the first half? You know, anything sort of moving around there? Julian, it's Chris. I'll jump in. Yeah, the Americas saw a nice margin expansion in the first quarter. You know, 90 basis points op margin expansion, about 50 basis points EBITDA margin expansion, really led by our commercial HVAC business. We saw declines in residential in the quarter, Thermo King was right in line with our expectations, you know, ±. I think it's really just the combination of the mix in the quarter where, you know, residential volumes were down, but we saw very strong growth in commercial HVAC. I think on the guide, you know, as we've guided Q2 and then raised the low end of the guide on both revenue and earnings on the full year, you know, we'd suggest, you know, maybe some leverage that's a little lower second half versus first half. I'll tell you, we're very confident in our full year guide. I think the performance in the first quarter was very strong, and at the same time, we've got a strong backlog entering into the second quarter. As Dave talked out, the guide for the backlog going into 2024 we expect to be very high as well. We have a lot of confidence in the full year guide. The first quarter, it's really our smallest quarter of the year. It is about 17% of our earnings on a full year basis. Let's get into the cooling season, and we'll update you in a couple of months, but we're really happy with where we started. That's great. Thank you. Thanks, Julian. Thanks. Your next question is from the line of Gautam Khanna with TD Cowen. Your line is open. Hey, good morning, guys. Hey, Gautam. How are you? Morning. Doing well, thanks. Hey, I just wanted to ask if you're seeing any evidence of price elasticity in the residential channel, given the volumes are a little bit lower across the industry. Just or any sort of competitive price movements downward? Thanks. Hey, Gautam, it's Chris. I'll start. look, I think pricing continues to be strong, and as we expected in the quarter for residential. we're ready for the cooling season, with the inventory we have on hand, but we're not seeing anything, from a price elasticity perspective that you're referring to. Things remain to be fairly disciplined as we see today, and, we're ready for the cooling season. Just a quick follow-up on the M&A pipeline, if you could talk about what kinds of things you're looking at, and, you know, is it more of what we've seen before with technology add-ons? Anything sizable in the pipeline that might be attractive? Thanks. Yeah. I mean, yeah, Gautam, I'll start on that. You know, at the end of the day, we're gonna get an opportunity to see everything as a major global HVAC player. You know, Or in the first quarter here, we announced MTA. Chris talked about that. It was actually announced yesterday. A great example of what we do really well. This is a technology in industrial process cooling. It's in EMEA. Great technology. At a, at an enterprise level, the revenue is less than 1% for the enterprise. Margins are nice. They fit nicely into the business. With our strong scale, with our strong channel, we're able to scale these acquisitions quite quickly. We'll look at everything. We'll be disciplined. We're gonna continue to execute the strategy that we've been executing to, and we've had a lot of success with it. Thanks, guys. Sure. Thank you. Your next question is from the line of Josh Pokrzywinski with Morgan Stanley. Your line is open. Hey, good morning, guys. Hey, Josh. How are you? I'm good, thanks. much like much like Scott Davis, I think getting the crap beaten out of me by earnings. Yeah, we'll try to keep the momentum going here. Look, we've talked a lot about the backlog. Clearly, the trends there are impressive in terms of, you know, what that means for the revenue story. I guess I'd like to talk a little bit about how backlog margins have trended. I guess where I'm coming from is, you know, some of what the answers have already touched on is, you know, these opposing forces where supply chain and price costs, you know, seem like they should probably be improving in the backlog. You also have some of these larger projects where I would imagine in commercial HVAC, you know, maybe you're lower margin up front, and you get paid more on that longer tail of things like service. How would you carve that for us, as you're thinking about, you know, the margin and backlog today and maybe where that trends? Hey, Josh, it's Chris. I'll start. We see the backlog is still over 90% non-residential, so that would be primarily commercial HVAC plus our transport businesses globally. You know, price cost, we like the margins and backlog. Remember, that price scenario, that's gonna be a tougher comp as we work throughout the balance of the year. Just to remind investors, we really led with price in 2022, we're gonna have a tough comp as we work throughout the year on incremental price. Our product management teams have done an outstanding job staying ahead of inflation over the last couple of years, and we were price cost positive in the first quarter on a dollar basis and a margin basis. I think that headline price number is going to be a tougher comp as we work throughout the year. We have a lot of confidence in the 25% or better operating leverage on the full year, and that's going to come from multiple parts of the bridge, right? We're confident that 20 basis point-30 basis points of price over cost. The first quarter start gives us confidence on that on a full year basis. We expect to see, you know, good incrementals on volume, some productivity return as supply chain normalizes, and really leverage all parts of the P&L to go drive the performance for the year. Got it. I guess just sticking with the same, you know, kind of follow-up on some of the questions around some of these bigger projects. How do you think about the crowding out between more of the policy-led stuff and stimulus versus private? Obviously, a lot of focus on, you know, the higher interest rates and, you know, maybe tougher liquidity situation coming from the regional banks. I don't know how relevant that's gonna be for like HVAC retrofit, but I guess the wrench can only turn so fast, and we still have labor bottlenecks. Is there a crowding out that you guys think happens on kind of the IRA stuff maybe versus more private demand here over the next year or two? Well, we haven't seen that to date, Josh. It's a good question. At the end of the day, you know, we think they're all opportunities really in front of us. We are, you know, as far as, you know, labor shortages, we've we have so many programs in place now to really train all of our employees at grassroots levels, so that's starting to get a lot better for us. We're not concerned about any crowding out as far as, you know, being able to, you know, meet the demand. Our account managers, our sales team, they're all over this, right? They're, they're well-trained, and they're able to go to the most attractive verticals and really drive demand, and that's what we're seeing right now. You see it in our results. I mean, our order rates are just tremendous right now. I look at our team and what they've been able to do in EMEA right now and all those opportunities there that are, you know, we talk about IRA, but there's other, you know, policy that are happening in Europe right now that are really helping drive demand, and we're able to capitalize upon it. Good call. Thanks. Best of luck, guys. All right. Thanks, Josh. Thank you. Your next question is from the line of Chris Snyder with UBS. Your line is open. Thank you. I wanted to ask on commercial HVAC demand. You know, obviously, orders can reflect a bunch of things, comps, lead times. When you were speaking with customers, do you sense any easing of demand, whether it's the result of macro uncertainty or just higher cost of financing? Yeah. Chris, good question. We haven't seen that yet. In fact, we continue to see very strong demand. I think, you know, the whole mega trends around, you know, decarbonization continue. You know, the world's getting warmer, and we need to take action, and more of our customers realize that. We have some solutions out there right now that can, you know, have a dramatic impact on how we decarbonize the built environment. We have not seen anything slowing down right now. That really is on a global basis for our commercial HVAC business. You know, if you look at the Americas, we play across all verticals. I think there's like 14 different verticals that we track. You know, maybe there's a little bit of softness in office, but there's a lot of strength in, you know, high tech that we talked about earlier. Education continues to be strong. You know, Europe, we've been strong really across many verticals with our solutions there. In Asia Pacific, again, very strong start to the year. We haven't seen any slowing yet, Chris, but it's a great start to the year for Trane Technologies, and it gives us a lot of confidence in our full year guide. Appreciate that. Then, you know, following up on price cost, you know, the company, you know, had been, you know, running ahead or kind of, you know, staying price cost positive. When we see the year-to-date reflation in metal, does that change how you're thinking about incremental price later in 2023 as you try to kind of maintain that staying ahead, on price cost into 2024? Thank you. Yeah, let me jump in, Chris. It's a dynamic market around tier one metals, and, you know, we started the year three, six months ago thinking we could be in a really deflationary environment, and that really hasn't proven through. You know, as I said earlier, our product management team members have done an outstanding job thinking about cost inputs, value to the customer, and staying ahead on price. You know, we remain confident that we're gonna be price cost positive on the year. The start in the first quarter gives us a lot of confidence on the 20-30 basis points price cost spread that we have in the full year guide. We know that pricing gets to be a tougher comp as we work throughout the year, but we remain nimble. If there's a further movement of inflationary commodities or we continue to see some inflation, certainly in tier two around wage and energy, which we have baked into the guide. If things were to become more inflationary, we have the nimbleness in the company, and I think the proven track record that we've priced effectively. We have a lot of confidence in where we're gonna be on the full year and ultimately just staying very nimble to what happens in the marketplace. Thank you. I appreciate that. Thanks. Thanks, Chris. Your next question is from the line of Joe Ritchie with Goldman Sachs. Your line is open. Hey, good morning, guys. Hey, Joe. How are you? Good morning. Doing great. Doing great. Dave, just maybe I'll start on resi HVAC. You know, interesting to see it's flat, but your organic growth this quarter was down to single digits. I'm assuming pricing had to be up. First, do my math right, it seems like volumes were probably down double digits, direct volumes were down double digits, in the Americas. My question is that right? Then secondly, what kind of line of sight do you have to that improving, and what's embedded in the guide? Yeah. Yeah, your math is about right. You know, you think about it, on a revenue basis, we were down mid-single digits. On a unit basis, we were down in the mid-teens. Pricing was positive in the business. It was a little bit less than the company average, which is the first time that's happened in a while. Again, we have some very strong comps here in the resi business. You know, the sell-through, which is really how we're looking at this business right now, was flat, right? We don't see it falling off a cliff. You know, if you look at inventory levels in our IWDs, our independent wholesale distributors, maybe they're a bit high, but that will normalize through Q2. Nothing alarming. You know, this is a business that we have a lot of innovation coming through. We have some great brands, some great products, great distributors, and a great management team. It's early in the year. It's the first quarter, so, we'll wait to see how the cooling season starts. You know, we don't see this business falling off and, you know, falling off a cliff. You know, we have this guide in our guide, okay? It gives us confidence in our guide with what we have projected right now. Okay, great. That's, that's helpful. Going back to the margins in EMEA, I mean, just, I know that you had, you know, an easier comp because of some of the issues that occurred last year, but still, you know, 17% margin in the business to start the year is pretty darn good. I guess my question is that kind of like the jumping off point now for the rest of the year? I'm assuming, you know, revenue/volumes are gonna be higher through the remaining 3 quarters, and so is this kind of like the floor for margins in EMEA for the year? Hey, Joe, it's Chris. look, our expectation for the region would be that they'll deliver 25% or better, leverage on the full year, organic leverage on the full year. Q1's off to a nice start. As you said, and as we commented before, it's really an easier comp versus some real challenges we had in the business a year ago. supply chain, got better as we got to the end part of 2022. The fourth quarter, we saw a strong revenue growth in EMEA, from our commercial HVAC business, and they were really hurt first and hard with the supply chain challenges. We have a lot of confidence the team can deliver this year, and, the backlog continues to grow their innovative products. let's see how it kind of plays out. We're confident we're gonna deliver strong margin improvement on a full year basis for the region. You know, keep in mind, TK EMEA, markets there are expected to be, you know, down low to mid-single digits. We expect to outperform. You know, all in, we expect to have a strong year in the EMEA segment this year. Joe, you're right. Joe, again, you have just a great start to Europe. It really is. I'm so proud of what that team's been able to deliver, fantastic. All right. Thanks, guys. See you next week. See you. Sounds good. Your next question is from the line of Steve Tusa with J.P. Morgan. Your line is open. Hi. Good morning. Congrats on the execution on the quarter. Appreciate it. Thanks. Good morning. You had 9% price in EMEIA. I know we can, you know, wait for the 10-Q, but what was it in the other two segments? Steve, it's Chris. It was a little over 6 points in Americas. Think of that as 6 points of price in the Americas, pretty much in line with the enterprise. EMEIA, we said 8.9 points of price, and Asia was around 4 points of price in the quarter. Okay. Just in the back half here, there's like kind of, strange comps from last year. You had, you know, the China dynamics. You know, Europe had a, you know, pretty good second half as well on volume. How do we? You know, I know you don't like to kinda guide by quarter, but, like, you know, you guided the high singles, you're running, you know, in the first half, at high singles, you know, so far, are there any comps in the back half that are, you know, volatile, or is it, you know, pretty smooth? Maybe just help us out with the non-U.S. businesses and how you expect organic growth year-over-year to play out in 3Q and 4Q. I think as we get to the fourth quarter. Let me start with Asia, right? Given the lockdowns in the second quarter of 2022, we saw muted growth in Q2 a year ago. The business was able to recover very nicely in the third and fourth quarter last year. You know, Asia may have a little bit of tougher comps in the second half just given the cadence of how earnings played out and the lockdowns from COVID played out in China a year ago. I mentioned this earlier, in EMEA, for commercial HVAC, the business really through the third quarter of last year had some very acute supply chain challenges. We're not out of the woods yet, but that continued to get better in the fourth quarter, and we saw that getting better here in the first quarter as well. I think, we're, you know, fingers crossed that that continues to be a nice tailwind for the business in a year-over-year. As you get later in the year, I think you'll see a little bit of a headwind as we get to the fourth quarter there. TK, if I go to the Americas side of the house, you know, the back half of the year for TK Americas, that'll be a bit of a tough comp. A very strong growth we saw in the third and fourth quarter in the Americas last year. Yeah, there's a little bit of tough comps coming in the second half in a few of the businesses, but we have such strength in the commercial HVAC businesses as well that we're really confident in the full year guide. Okay. I just want to clarify some of these resi numbers. You said, rev's down mid-singles. The sell-through comment being flat, is that revenue or is that units? That'd be revenue, Steve. That'd be revenue. Yeah, revenue. Oh, okay. That makes more sense. Basically, like, through your independence, you know, your volume was down probably more like, I don't know, like 20% or something like that. Yeah. Just through the independence. They certainly normalized their inventory in the first quarter. We've been seeing that happen. You know, like I said earlier, inventory may be a bit high, but it really depends on how the cooling season kicks off. You know, it's the first quarter, right? Yeah, the quarter. As you know, this is the smallest quarter. We'll wait till the cooling season starts, and hopefully it starts real soon. How's April so far? I think it's the cooling season hasn't started, we're still in that shoulder you know, part of the year. We'll see. May it's forecasted to get real warm here in May, we'll see how it goes. All right. Rely on those weather forecasts as always. All right. Thanks, guys. Really appreciate it. All right. Take care, Steve. Thanks. Your next question comes from Jeff Sprague with Vertical Research. Your line is open. Hey, thanks. Good morning, all. Hey, Jeff. How are you? Hey. Doing great, thanks. Hey, just one follow-up on resi, and then just a different topic on the M&A from you. Just the price in resi below, you know, the 6.5% range, a little surprised to hear that given the SEER change and the mix effect associated with that. Maybe you're not including mix when you say price or perhaps you're still selling a lot of older units in the quarter. Could you just maybe clarify a little bit what's going on there? Jeff, you're right. We're not including the price benefit from the SEER change in that price number. We consider that as part of volume. This would be more pure on a year-over-year basis. Okay. Put that as mix, Jeff. All right. We'll call it mix. Thank you. Then just on the deals, you know, a 2% revenue impact right on the $16 billion, you know, revenue base last year. That's $320 million of sales you're guiding for the partial year on deals, right on $500 million, you know, expended. That sounds like a pretty good chunk of revenue for that, you know, that amount of dollars spent. Maybe just a little color on, you know, the margin rates in these businesses. You know, do I have that math right? You know, what percentage of the year do you expect, you know, what you just announced to actually be in the year when does this stuff close? Jeff, it really is the contribution of three acquisitions that's leading to that roughly 2 points of revenue growth from M&A in 2023. You know, one relates to the AL-KO acquisition we closed in October of last year, so you've got about nine months of that revenue coming through in 2023 that we're calling out as inorganic. Fourth quarter would be a comp, would just be part of our organic results. Dave just mentioned we closed on MTA just yesterday. It is a industrial process cooling business in EMEA, so we'll start picking up the revenues from that business. A partial year. Think of that as, okay, eight months of revenue this year. The pending acquisition that we've announced in the life sciences vertical in the Americas, that's not closed yet. We expect that to close sometime in the second quarter. We've made an estimate of that here in the full year. All in, it's the combination of those three businesses that's getting us to roughly two points of revenue growth. Look, the contribution margin in year one, it's low just given the integration costs, but we have a great track record of taking bolt-on acquisitions and bringing them into our channels, selling through with our robust sales forces. Ultimately really driving very strong returns in subsequent years. In the year, you know, it's about $0.03 positive on an EPS basis with that leverage. Ultimately, we'll see how it kind of plays out for the year, but it's still positive and slightly accretive on the year. Great. Thanks for the detail. You got it. Your next question is from the line of Nigel Coe with Wolfe Research. Your line is open. Thanks. Good morning, everyone. Hey, Nigel. Hey, Dave, I don't know about, don't know about your neighborhood, but it's still pretty cold up here, so make sure you pack something warm next week. It's warming up. It's warming up, Nigel. It's warming up. It's warming up. It's coming. Obviously, you know, one of your competitors is making a pretty big splash in the European residential markets. You know, how do you characterize the importance of Trane being a player in European residential heating specifically? I'm not saying, you know, a multibillion-dollar deal, but do you see opportunities to be a player there in a smaller scale, perhaps? Yeah, great question. I mean, we really like our portfolio in Europe. You know, you think about it in the commercial HVAC space where we play, we're having a lot of success. We have differentiated offerings that we're able to provide to our customers. You see the results. I mean, our thermal management systems there, you know, we've eliminated or significantly reduced the need for fossil fuel for heating in all geographic climates. You could see the team's results. I mean, like I said earlier, you know, our revenue in 2022 up 20%, first quarter, 25%, equipment revenue, 40%. We're going to continue to execute on our strategy in Europe. We're having a lot of success. The team is high-powered and performing extremely well, we have so much innovation that's coming through the pipeline that I get excited just talking about it. As I said earlier, you know, we get the opportunity to look at a lot of M&A deals being a, you know, a global HVACR player, we'll continue to do that, we'll continue to be disciplined, and we'll make sure we make the right investments for Trane Technologies and our shareholders. Great. Thanks, Dave. Maybe to Chris, you know, we're coming up to the end of the $3 million program transformation savings. Is this it? Is this the end of the, you know, kind of the big productivity move, or do you see the potential for another wave, perhaps, of initiatives? Yeah, Nigel, thanks for the question. Look, we're on really good track to realize the incremental $60 million in savings this year. We continue to deploy that back into the business through reinvestment and innovation in the portfolio. Also gives us confidence on, you know, delivering 25% or better operating leverage on the full year. Look, the company has always prided itself on lean thinking, and I would tell you that as we move forward, there's always gonna be opportunities for us to lean out operations and drive cost improvements. I think another area of opportunity for the company is the ability to claw back on some of the productivity that's been very challenged over the last few years to deliver on supply chain challenges, higher cost to serve customers. Dave's talked in past calls about spot buys and being exposed to those markets and higher costs. Those are really great opportunities for the company to get back to basics, you know, get back to productivity, offsetting other inflation. We're seeing a little bit of that come through in the first quarter with our commercial EMEA business. We'll see how that kind of plays out for the year. I would tell you that we'll update you more as we work throughout the year, but I'm really excited on the productivity side, and I'm excited we still have a lot more opportunities to take cost out in the business. That's great. Thank you. Thanks, Nigel. Thank you. Your next question is from the line of Deane Dray with RBC Capital Markets. Your line is open. Thank you. Good morning, everyone. Hey, Deane. How are you? Doing real well. Thank you. Question about indoor air quality. Has the whole urgency around that theme faded? You know, understandably, you've showcased all the decarbonization benefits and climate change, and that, you know, makes perfect sense. Has the driver of indoor air quality, is that faded at all? 'Cause originally, we're talking about a 200 basis points lift for quite a period of time. Yeah, Deane, it's a good question. I mean, we've embedded indoor air quality into our applied systems. You know, I would tell you that I've been in this industry a long time. 10 years ago, we used to just have the conversation about indoor air quality in the healthcare vertical. We have that now in all verticals. You know, you might not read about it, but I would tell you it's still prevalent. We talk about it with our customers, and they talk about it with us. I mean, I think everyone's been educated on the importance of indoor air quality, the importance of fresh air exchange, the importance of being able to balance that with energy consumption. We've done a great job of helping our customers work through that. No, it's certainly part of our business, it's certainly part of our offering, and it's top of mind of many of our customers. Yeah, I see that with the education stimulus spending, that it's usually one of the top priorities. Absolutely. Absolutely. All right. Second question on the incremental 70 basis points of spending reinvestment. Can you give us some examples of where that's going and, you know, a sense of the returns? Yeah. We really like the digital space. We really like the electrification of our portfolio. We really like optimizing our operations with automation. Just to name a few. Our innovation pipeline is very robust. It's very full. You know, three times a year, I actually get to we have a deep dive on our innovation pipeline. It's the best four hours I spend sometimes in the quarter because it's just so exciting to talk to our engineers and to see what's, you know, what they've invented and the impact that it can have on not only decarbonizing the built environment, but really helping our customers save on energy costs and improve indoor air quality. It's very robust right now. We love to invest in our business. We have a proven track record here, and we're gonna, you know, continue that more in the future as well. Deane, I'd add on the, on the investment side, we had a normal level of investments in the first quarter. Wanted to highlight that into the second quarter, we do expect that level of investments to ramp up to 70 basis points. We still see that being around 70 basis points for the full year, but that will be a ramp up into Q2 as we just continue to see very strong projects as Dave outlined. Let me come back to just to comment on EMEA as well. We know a lot of questions around EMEA margins. You know, maybe just to highlight, in the first quarter, we saw growth both in commercial HVAC and in the Thermo King business. Important to know that the Thermo King markets in Europe are expected to be down low to mid-single%. We're probably not expecting to see that outgrowth in Thermo King each and every quarter of the year. That's gonna be an area we'll see how the year plays out. Nice to see both businesses deliver in Q1. That'll be a little lumpy and choppy as we think about Thermo King for the balance of the year. Thank you. Thank you. Your next question comes from the line of Andrew Obin with Bank of America. Your line is open. Hi, guys. Good morning. Hey, Andrew. How are you? Good morning. I'm good. Just to follow up on institutional spending, can you just chat, you know, clearly key market, you know, schools you've talked about. Can you talk about what's happening with the hospital spending? Because I know there was a pullback during COVID because of the budgetary issues. Are we sort of seeing cumulative catch up or are hospitals still in trouble? If you could just talk about that key end market. Thank you. Yeah. I mean, we've been strong in the healthcare vertical for, you know, forever, I think. You know, as I said, we track all 14 different verticals, but healthcare is certainly one that we have a lot of strength in. The reason why we have the strength there, Andrew, is it's a complex sale. Hospitals, they have varying degrees of requirements, especially around fresh air exchange. You're gonna have a different application in a surgical suite versus you're gonna have in a hospital room. We're still seeing strength in healthcare, but to be fair, we've always seen strength in healthcare because our solutions are really built around those kind of more complex situations that we're able to capitalize on. Yeah, just to follow up, headlines on pricing, I think Daikin introduced lower priced product in the U.S. on the resi side. I think we've heard yesterday at a meeting that AAON, you know, it's the first sort of price, they rescinded a price increase actually on the commercial side. As supply chains are getting looser, you know, do you feel that people can get more competitive or you think there's still enough demand there to support steady pricing? Andrew, I'd say, look, demand remains strong. It's an industry that typically retains price and is disciplined on price. I won't necessarily talk about potential pricing actions we may do throughout the year. As I mentioned before, our product management teams, our business units have done an outstanding job taking all the inputs in to lead on price the last 2 years, and a good strong performance here in the first quarter as well. I do think we'll remain proactive and be prudent. I think our track record hopefully speaks for itself that we can really have a lot of confidence on the 20- 30 basis points of price over cost in the year. Thanks so much. As I said, great execution. Thanks, Andrew. Appreciate it. Your next question is from the line of Nicole DeBlase with Deutsche Bank. Your line is open. Yeah. Good morning, guys. Thanks for squeezing me in. No problem. Sure. How are you, Nicole? Good, thanks. Just there's been a lot of focus on the EMEA margins on this call, but the Asia- Pac margins and the operating leverage was also really, really strong. Can we just talk about how you guys are seeing that progressing through the rest of the year? Yeah, Nicole, it's Chris. You know, I would say certainly the second quarter, but even in the first quarter last year, we saw some parts of the China economy in these COVID lockdowns. As we entered into lockdown, it certainly cost a lot more money to keep customers, you know, happy and trying to get products out where you could in limited situations. Now we're comping against a little bit easier comps as we think about the first half of 2023. First off, the demand in Asia remains very strong. We continue to expect very strong performance from the team, and they had a great first quarter. Comps probably get a little bit better in the second half given the partial reopening we saw in the second half of 2022. Look, very strong growth not only in the revenue side, but bookings were up high teens for commercial HVAC in Asia. Services were up nearly 25% in the quarter. I think our innovation and then the verticals that we play in Asia really played through very well in the year, and great job by our team there. Yeah. Thanks for noticing, Nicole. I mean, Asia, sometimes we don't talk enough about it, but what a great leadership team we have there. You know, they really have been leaders for Trane Technologies with innovation, the team just executed extremely well in the first quarter. Great start to the year. And to be fair, all of our segments really executed very strongly in the quarter. It just speaks to the resiliency of our portfolio, and it just gives us lots of confidence in our full year guide. Certainly appreciate the question. Great. Thanks. On the TK order book, are you guys now fully booked out to 2023? I guess what's the status of the order book? Is it actually open to accept new orders? Thank you. Nicole. We opened up the second half of the year order book mid to late March. Orders started to come in a little bit in the first quarter, but we would expect that to really get, you know, filled up in the second quarter. We have a lot of confidence that from what we can see with the backlog entering Q2 and the forward look that, you know, our guide in the full year, we're gonna outperform the markets both in the Americas and in EMEA for the full year. Thank you. I'll pass it on. Thanks, Nicole. Thank you. Your next question is from the line of Noah Kaye with Oppenheimer. Your line is open. Good morning, and great to be joining you for the first time. Thanks for taking the questions. No problem. Would love to actually. Thank you. I would love to dig into the services trend a little bit more. I mean, that 25% year-over-year in China, you know, maybe to the extent that reopening played into that and you can comment. Just the overall trends in services and how you expect that to trend over the course of the year. Yeah. I mean, services is a great part of Trane Technologies. It represents about a third of our total business. If you look at it over a five-year period, we've had a compound annual growth rate globally in our service business in high single digits. In the first quarter, we were double digits. I mean, it's a really strong business. It really differentiates us with our customers. In China, yeah, really strong start to the year. Some of that was obviously the comps year-over-year, just because they had a lot of restrictions still, specifically in China at this time last year. I would tell you, our service business is a very strong business. We invest heavily in our service business, it's just a, it's a great business, and it's very resilient as well. Even during, you know, 2020, COVID, where we didn't have access to many buildings, our service business was flat. You know, these products are more and more sophisticated today, and they require OEM service, and we're able to provide that for our customers. Thanks for the question. I mean, service is a, is a big part of who we are as Trane Technologies. Yeah, that actually ties into the next question. I think in talking about the incremental spend, you called out the digital investment and maybe pulling forward, you know, some of that. Just would love an understanding of, you know, the roadmap to the extent you can share with us and how that plays into the services strategy. You know, are we looking at some meaningful refreshes or additions to the digital suite over the course of the year? No. No. Look, being connected to our assets is nothing new to Trane Technologies. You know, we're connected to over, what the number is now? Well over 30,000 buildings and millions of different assets. We love being connected to our assets. Now, you know, think about the next is how do you even get smarter with all the data that you have? Think about how you could actually have buildings operate more efficiently. When I talk about digital, those are the things that we're working on. It's no longer, you know, the service tech gets deployed when something's not operating properly. It's not operating properly ’cause it's using too much energy. That's the space that we're into here, and we really like the digital space and service, and it really is a tailwind to our service business. All right. Thanks so much. Thank you. Thank you. At this time, I would like to turn the call back to Mr. Zac Nagle for closing remarks. Thank you. I'd like to thank everyone for joining us on today's call. As always, we'll be around to answer any questions that you have over the next, well, today and the next coming days and weeks. We'll also be on the road at a couple conferences, so we'll be looking forward to seeing folks on the road or in person, through a variety of events soon. Thanks, and have a great day. Ladies and gentlemen, this concludes today's conference call. You may