All right. Thank you, everyone, for being here. I'm Tommy Moll, Analyst here at Stephens for Watsco, where I'm delighted to be joined by Rick Gomez, Vice President of Corporate Development. Rick, thank you for taking the time to come to Nashville and join our conference. Good to see you. Happy to be here, and thank you to Stephens for hosting. It's been a great conference. Thanks, all, for your interest in Watsco. Just a quick programming note, this meeting runs 45 minutes. I have Q&A prepared to run about the first half hour. At that point, by all means, anyone in the audience who'd like to ask a question directly, we'll have a microphone to pass around and make sure everyone gets their questions answered. But I'll try to get, in the first 30, I'll try to give us a good 360 overview of the business for those who are potentially new to the story. As you know, this is a generalist conference, so there may be investors who don't know you as well. Then we'll also get into some of the near-term details and regulatory impacts, et cetera, that are for more the specialist investor. Well, let's just start with a quick introduction, Rick. Descriptive, really, you're the largest HVAC distributor in the U.S., North America, with over 650 locations. You're highly relevant to your OEM partners, in particular with Carrier, given you have a long-time JV with them. So just give us a sketch for the size and scale of Watsco, how you got to where you are, particularly through the acquisitions, and what the competitive landscape looks like. Sure. That'll take the full 30 minutes, so that's wonderful. But no, it's good to be here and good to see everybody in the room. I mean, 34 years ago, we really began an experiment to bring scale to HVAC distribution, and we were a humble, modest, and hungry $60 million company, and today we're a humble, modest, and hungry $7 billion company. Really, our success and our growth trajectory through that period of time is attributable to a number of different things. One of them being, we operate in a highly fragmented, $50 billion-$60 billion distribution marketplace, and it still is, despite, you know, some consolidation over the last three or four years, it still is a highly fragmented industry with over 1,500 independent distributors that comprise that $50 billion-$60 billion of industry TAM. And so we've grown, of course, organically. One of the great things about our industry is that there is a great stability to the organic growth formula. There's unit growth that is driven by population growth and certainly driven by inflows of new residents in the markets that we serve. There's price. I'm sure we'll talk about that. This is a highly disciplined industry from a price perspective. There's mix, as consumers are more conscious of the critical systems in their home and what they do, what they cost, what they emit. There's been generally an up and to the right shift as it relates to mix in our industry, both from an efficiency perspective and just an overall product perspective. Highly predictable, low beta, sort of organic growth story, and complement that then with about 70 acquisitions over the last 34 years, primarily of family-held businesses in our industry, most of whom have dominant market share in some way, shape, or form in the niches in which they serve. That is the unique thing about our industry is that there is no Walmart or Target or Costco that you can go get product from. There are independent distributors that have relationships with OEMs on the one end, and then relationships with contractors on the other end. Those contractors are the ones that you would call if there is a problem with your system in your home. So that's where the distributor sits in our channel, of course, and the more of that scale that you can aggregate and the more of these family companies that you can partner with over a long period of time, that's what takes a 5%-7% organic growth formula over a 30-year period and turns it into a 15%+ total sales growth over the last 30 years, which has been the trend. So as I said, it's been a remarkable journey so far, 34 years in. We feel like there is a tremendous amount left to do. As I said, it's still highly fragmented, and, we'll talk about this, I'm sure, later, but, organically speaking, the most important thing we're doing in our business is really, creating and scaling technology, both at, at the distributor level and at the contractor level, to help us be more efficient, but also to help our customers grow faster and serve their customers better at the end of the day. So we've got this, I think, terrific, you know, terrifically stable industry that we operate in. We've got the, the prospects for additional inorganic growth over long periods of time, and, and we're, we're, we're disrupting ourselves a little bit by introducing technology that heretofore did not exist, and helping our customers, be better and build our moat, with them. Before we dive into some of the particulars about the business, Rick, I also wanna make sure investors understand a little bit about the ownership culture. So your CEO is part of a family that controls a significant portion of the company, but there's also a significant portion owned by employees, where there's a long-term incentive plan driving that. So what do you want us to make sure to take away in terms of the ownership culture and, in particular, how that influences balance sheet, conservative debt levels dividend growth, etc? Yeah, it's a great question. We don't get asked about it enough, and we love to talk about it. But yes, there's been a very stable leadership team here, led by our Chairman and CEO, who's been at the company 51 years. And our CFO has been there for 25 years. Barry Logan, who many of you know, has been there for 30-some odd years. And A.J. Nahmad, our president, who is my age, has been there 42 years. Even though that's his age, right? He kind of grew up with the business, right? There is this feeling of we're all in this together for the long run. There's a very important saying in the company that quarters are important, but quarter centuries are mission critical. And that really is how we think about the business. That's how we think about our investments. That's how we think about our people. That's how we compensate our people, which brings me to that equity culture that you asked about. So, it's one of the most unique equity cultures that you'll probably come across in the public company landscape. We've surveyed that landscape. We've done the work, so I can say it's pretty unique. And first, at a high level, what we're very proud of is that we have nearly 8,000 employees at the company. There's about 3,000-4,000 of them that are employee owners of Watsco in some way, shape, or form. And so we have this fundamental belief that when you think as an owner, outcomes are different. And I think our track record has lent some credence to that. The crown jewel of this equity culture that we have is really a restricted stock program that approximately 150 people in the company are a part of. And it's where you have the most unique features of, again, any public company that we've come across. Very simply, it says that one has to be at the company for their careers to really benefit from that wealth creation over a long period of time. And so I joined the company six years ago when I was 36, and my vesting date will be age 62. And so that is the uniqueness of what we've intended to do, which is that today's results are important, but more important is what we're doing today to invest in the business over that five, 10, 20-year horizon. And that is really the mentality. That is really the mindset. So when we talk about technology investments, when we talk about investments in pricing and productivity and people and growth, these are not investments that we are, you know, pinpointing for next quarter to say, "Here's what we think they're gonna deliver." These are investments that we feel we have to make, A, to protect the business long term, sustain the moat that we've built, but more importantly, to sustain that above average, you know, growth rates, growth rate that we've experienced over the last 30 years. That requires investment. And, yes, we measure those investments in the short term. More important is what we think those investments deliver in the long term. But that equity culture, I think, underpins this long-term view of our operating leaders, our corporate leaders. It also influences how we attract and retain talent. So it's a very unique program. We're very proud of it. And as I said, that stability in leadership really allows for that culture to sustain itself over very long periods of time. Rick, moving on to some of the dynamics around your residential business, which is the largest piece of the business at Watsco. 2023, we may see written about one day as the year of the destock. So just situate us as we head into shoulder season and the year-end. I think the consensus among the OEMs is that this is, I don't know, fingers crossed, or maybe it is going to be behind us by the end of the year, but there's a lot of guesswork involved there, and so I'd just be curious on your take. Yeah, I think there is a lot of guesswork. And, you know, I remind people that, you know, we have, we have primarily six domestic OEMs. They all have a view on the market. We have distributors that operate, in some cases, at scale, like us, and in some cases, in very regional niche markets. And no one really knows what next year's gonna bring. And I would argue that the most important actor in that channel is not the OEM, not the distributor, it's really the contractor who we all serve. That contractor is the one making a recommendation to you today, tomorrow, the next day, on what you should do. And it's a bit like when a doctor prescribes you, you know, medicine or whatever, right? You-- Are you gonna get a second opinion? Are you gonna ask about cost? Likely not. You're likely gonna go with the recommendation. And so the contractor is the actor in the channel that really determines a lot of this. So with that said, where do we stand, right? I mean, we should still have a view, even if it's just guesswork. So I'll share just a couple of thoughts. First is, we, as a distributor, we're sort of that tip of the spear, because if a contractor doesn't have anything to do today, then we have less of a chance of selling something today, right? So it's a fairly real-time barometer of what's going on in the market. And at the distribution level, you know, we've said this over the last four earnings calls, I believe: We've been normalizing. We've been returning to more historical replacement demand levels now for over a year. And so if you just follow those trends over you know from beginning third quarter of last year to what we just reported, you'll see that those trends have been slowly returning to more historical low levels. That's okay. That's not a bad thing. And so 12, 15 months into that normalization, yes, I'd like to think we're on the back end of that curve, and I'd like to think that there's some point next year where there's an inflection to growth and that returns back. When that is is anyone's guess, and I'm not and I will not be the one to make a call on that. But I do think that, you know, when we said publicly that the trends throughout the year have gotten better from a unit perspective. And I think it is. I think growth next year is plausible. I think a flat market is probably okay, too. Thank you. You kind of moved on to next year, and I did have a follow-up for you there, Rick, before we get into some of the regulatory drivers. Has there been a precedent in history where the industry has seen two big years in a row of volume declines? And, you know, notwithstanding a lot of the points you just made, is there some scenario where we may look up a year from now and be in year two of this process? Or are there some factors you would point to that would suggest otherwise? Well, has the industry seen it? Yes, it has. When you look at, you know, 2008, 2009, those were years where there were, you know, consecutive annual declines of. So it was a big event called the Great Recession. Now, here's what I would point to, though, just as a way to frame that and contextualize it for you, which is that the bookends of risk in our industry are narrower than they are in most other industries. So what I mean by that is this, that 2021, 2022 were the best years of our industry, best years of most people's, you know, careers, right? Most companies' life cycle. Unit volumes those year were up, those years for us were up 9% and 10%. So let's go to the other end of the spectrum, which was, you know, Great Recession, doomsday. Nobody knew, you know, nobody knew where it would end. And as best as we can gauge, replacement units were down low double digits, 10%, 12% in those years, 2008, 2009, with RNC being obviously a steeper decline, leading to more total unit declines, but just on replacement alone. And RNC was a much bigger part of the industry back then than it is today, just in sheer unit numbers. So that's what I mean by the bookends of risk. Euphoria is +9 and +10. Doomsday is -10. And within that very narrow band is where we travel. That's where we spend most of our time. We like that stability. We like the fact that we're not dealing with, you know, +30 and -40. So regardless of whether it's another year, six months, 18 months of this, you know, of this normalization trend, the magnitude of that, the severity of that, is not as severe as it could otherwise be. Now, what will influence all of that next year is, of course, all the regulatory changes that we have seen and will continue to see. You asked, has there been a period of time where you've, you know, where we've seen all this regulatory change at once? Not really. I'll add a third layer, right? So we've gone through a product transition in 2023 that raised minimum efficiency standards for the vast majority of products that we sell. In 2024 and 2025, we'll undergo another transition regarding A2L and refrigerants. And oh, by the way, on top of all of that, we have federal and state incentives in place to a degree that we haven't seen in a very long time to incentivize the consumer and to help the consumer navigate all this transition. So no, we've never quite seen this level of, let's call it, external influence, regulatory, you know, demand-driven influence in our industry. It's remarkable. You know, another, I think, point worth making here is that we are, I think, one of the lucky few industries where regulatory change, first, is rather predictable. It happens every 10-15 years. And secondly, it tends to be good for business. It helps the product evolution of our industry. It helps consumers install more sophisticated products. It helps energy consumption at the end of the day. So that regulatory thread in our industry for a long time has been a positive force, really, for us and the industry in general. So the crystal ball on volumes next year may still be a bit hazy. It seems like from a price and mix standpoint, though, the outlook's a lot clearer, where you have multiple OEMs who have talked about cumulative double-digit increases in price mix impact the next couple years. In particular, your largest OEM partner has talked about the potential for 15%-20% cumulative over the next couple years. So if you'd like to quantitatively bless this outlook, we'd be delighted to provide you that opportunity. Absent that, perhaps you could speak qualitatively about the building blocks of price and mix over the next 24 months. Sure. I'll opt for the qualitative answer. Yeah, I think multiple industry participants, not just our primary OEM, have commented on this recently. And, you know, the framework is valid and logical. There's multiple things that will influence the trajectory of price in the industry here for the next, you know, 6-24 months. The first is a curtailment of production capacity of existing refrigerants that are used in existing systems. That curtailment in capacity will happen, another one will happen on January first of 2024, where capacity will go from 90% of baseline to 60% of baseline, so effectively, a third incremental capacity comes out. And that will have an impact on equipment pricing, beginning of next year in some way. I will let the OEMs announce what that is when they're ready, but that will, that seems to be the consensus. And then at some point later next year, in anticipation of the transition in refrigerants, this is separate and apart now from the curtailment of 410A capacity. Sometime next selling season, back half of the year, there will be new products introduced in the channel. Those products will have a higher cost, and that's not, you know, that's not an OEM community deciding that, "Hey, let's raise price." There are meaningful investments being made in these products to comply with these new regulatory standards. Sensor technology, leak detection technology, these systems are also at lower decibels, by the way. They're far quieter systems. That takes investment. All of this is investment that the OEMs are making in the products. That's price that needs to be defended in the channel. That's what distributors are generally very good at, and that's what contractors are very good at. So I think that, you know, logic of double-digit price increase over a 2-year period is perfectly logical. And we will begin to see some of that and test some of that in the market, you know, here in the next few months as it relates to the first round of it. But again, I stress two things: one, there are real investments being made and costs that need to be factored into all of this, driven by the regulatory changes. And secondly, you know, whatever the OEMs think and whatever we think, again, I stress it's the contractor who has to deliver a very compelling value proposition to you, the homeowner, as to why this is the right thing for you to do. The more, the more educated, the more trained, the more sophisticated these contractors are, the better that, you know, process will happen from and from start to finish. So that's why some of the technology that we've invested in to help the contractors achieve that level of sophistication is really, really important in this discussion. So we'll get to that, I'm sure. But, again, the pricing intentions, I think, are valid, and every intention at the distributor and the contractor level is to make that a successful rollout of those new products in the channel next year. Let's talk about it from the homeowner perspective for a minute, Rick. What's the risk that, that the homeowner looks up and after another round of substantial price increases, there's an affordability question? Sure. Consumers more stretched. How does all that impact what's ultimately achievable for those in the OEM and distribution community? Sure. I mean, look, at some point, you will. At some point, elasticity will rear its head. And you know, it's one of those things where I think it was a Supreme Court justice who said, "We'll know it when we see it." But there's no perfect elasticity model out there that tells you, you know, here's the most you could do, or here's where the danger zone is. I think that's you know, when the contractor's in your home, these are savvy people. They're reading you, they're seeing how you react, and they're smart actors in the channel. So, no, I think you know, the affordability question is top of mind for most people in the channel. First, I would say that, in some ways, in anticipation of that affordability question, there is, again, as I said earlier, more state and federal incentives today available to the consumer than there have, than there have ever been to deal with this affordability question. So, so at its most basic level, there's a 25C tax credit that helps to the tune of $2,000. And then on the very upper end of that scale, there are rebates to low and moderate-income households that can comprise up to $8,000 of an installation. So those are the bookends, and, and, and that, I think, is, is gonna be an important contributor and contributor to how this plays out in the market over the next two years. Our industry did not have the clarity that it needed to have those incentives really impact this selling season. We got clarity on types of products that would qualify and whatnot in August, I believe. And so really, this will be sort of a next year event, and this will be impactful as it relates to the contractor having that conversation with you next summer, Fourth of July weekend, when your unit's down. And if you have sticker shock, he's gonna be very quickly to tell you that, you know, you have anywhere between $2,000 and $8,000 of help on the way. All right, so that's one element of it. The other element of it, too, I think, is that, unbeknownst to many of us who, you know, aren't in this, or many of you who are not in this every day, equally important to some of these federal incentives are the state-level incentives that have been in place for years to help drive a lot of this upgrading of infrastructure. States like Massachusetts, and New York, and Illinois have had state-level programs in place, all of which, again, are meant to drive some level of or bring some level of affordability to the equation and to make that upgrade decision-making on the consumer's part a little bit easier. So those are still there. Next year, we hope to have more of the broader IRA and tax benefits available as well. Those will be important offsets, I think, to you know the price increases that we that are likely to occur. Last point I would make is that financing in our industry is severely underpenetrated. When I say financing, I'm referring to the structured point-of-sale financing that you would experience if you go to an auto dealership or if you go to a furniture store. And if you're renovating or buying a new car, yes, there's a cost, and very quickly after that, there is a way to deal with that cost through the form of financing, consumer financing. That has been somewhat underpenetrated in our space. Only you know as best as we can measure, only about 25%-30% of the transactions in our industry take place through some sort of point. You know, that kind of point-of-sale financing, and it can and should be higher. So we're working on that through OnCall Air, which is our customer-facing digital selling platform. And that, too, is an important ingredient to the affordability discussion here that I'm sure more contractors and consumers are gonna have. Rick, I have a couple questions for you on margins, and then we'll turn it to the audience for any direct questions. But a short-term and a long-term question for you on gross margins. Starting on the short-term, where in the investor community, trying to guess your gross margin in any given quarter is one of the great parlor games at the beginning of each earnings season. So just a couple questions: if you wanted to guide this, could you? And what are some of the many factors that we actually could pay attention to on the outside to better underwrite those near-term dynamics at Watsco? Yeah, I mean, first, I'll take half a step back and then get to the question, which is: Look, I think our margins have been fairly predictable for a very long period of time. And they've been predictable before COVID and after COVID. They've been predictable before inflation, after inflation. And so we deliberately manage that very carefully so that it's not volatile, and so that you guys shouldn't think of it as a parlor game before every earnings season. So I said this on our earnings conference call, this third quarter, which is that on a year-to-date basis, 'cause there is some seasonality that I think, you know, it makes the quarterly comparisons very tricky, harder to navigate, but nonetheless, still within a band. So if we just zoom out and look at more than a 90-day period of time, our margins this year are within 20 basis points of where they were last year. That is a wonderful outcome in a scenario where unit volumes have worked against you, right? So I would argue that the margin stability of the business is really not that different than it used to be. I think what's different is that more people are focused on it, and that's okay. We'll accept that and have some fun with it. So quarter to quarter, hard to gauge sometimes. There are things in mix, whenever... I'll unpack mix in just a second, but there are things there that could, you know, make a difference up or down every quarter. Things like, how much residential equipment did we sell versus commercial equipment? What were those growth rates like? Things like, what did equipment grow as a total category versus non-equipment? Things like, what are the small amount of commodities that we sell doing in any given day, in any given quarter? That's short-term noise and, you know, important, but, you know, what matters really is what is the trend and what is the aspiration? And what we've said publicly is that, 27% is a reasonable gross margin target to underwrite in the near term while we work on things that aspirationally get us to something higher than that. So I'll leave the parlor games, and I'll leave the guesswork of all of that to the investor community. Our aspiration and the way we think about it in the business is really over a much longer period than 90 days. And again, if you'll indulge me in looking at a nine-month period, which is still not long term in our minds, but if you'll indulge me in saying that 20 basis points over a nine-month period is not a whole lot of volatility at the end of the day. Last question from me, and then we'll open it up on the operational efficiencies, which ultimately drives your operating margin. This has been a key area of key focus area for you personally, and so what I, what I wanna make sure you have a chance to explain is the scope of the initiative that, that you're involved with and what are some of the key areas of opportunity you've identified so far. Sure. Well, the good news is that there's a lot of areas of opportunity, and some of it is just we're now a bigger company than we were 4 or 5 years ago, so our scale naturally creates, you know, some of that incremental opportunity. But what we started to do about 1 year ago is really take a holistic end-to-end, enterprise-wide view of productivity. It starts with how we order product from our, you know, from 1,000 manufacturers, how we receive product into 700 facilities, how we move product around our network, and then ultimately, how we get product from our branch to a customer. And it is that broad in scope, right? So when I say end-to-end, that's what I mean. And how much capital have we invested in fixed assets doing all of that? How much square footage do we have doing all of that? And what is the most efficient way of leveraging our scale, now as a $7.5 billion company, in maximizing that total equation, that total productivity equation? So there is a lot involved in that. It touches virtually every aspect of the organization, which is why it's gonna take time, which is why it's a journey. This will be a multiyear effort, and ours is culture of continuous improvement, so, you know, there's no end date, there's no target in mind. We just gotta get better as we go. But as I said, it starts with: How do we get product into our network? So a lot of great discussion happening with OEM and vendor partners on that, on their supply chain, vis-à-vis our supply chain. Then how do we move product around our network? How much of it do we have to do? How much of it do we not have to do? And ultimately then, how does that product get from our branch to that last mile, so to speak, to that contractor's site or to the job site or to the homeowner's, you know, location? Broad encompassing. It touches supply chain, logistics, warehousing, a lot of elements in SG&A. And so I think what we can say is that we expect more, not less, SG&A productivity going forward. We should be a more productive company at our scale today than we were 3, 5 years ago. And I think the other thing that's a reality is that this is further ahead in the journey, but not too far ahead, which is that we have about 50,000 technology-enabled customers. We've spent the last, you know, 3-5 years developing what I think are the industry's most robust technology platforms to help contractors grow and be more efficient. Well, shortly, there has to be, intuitively, one would think, there's opportunity in the form of lower cost to serve for those technology-enabled customers, right? If you think about the banking business, which is where I was in before the HVAC distribution business, you know, today we can all take photos of our checks and make deposits. And what does that mean for the branch, right? Think about that. That's been a 10- to 20-year change in the banking industry. That's sort of accelerating. Well, we're always gonna need branches, 'cause we need to stock product, right? Now, so the question is, but how does all that become more efficient with technology, particularly since you have customers who themselves are tech-enabled? And I would argue that we have this latent opportunity with those tech-enabled customers, who are growing with us quite well. We have a full room, and I'm sure there's folks who'd like to ask questions. We'll pass the mic around as I see hands shoot up. Please don't hold back. Thanks, Tom. Right here. You don't need the mic. Question, Rick. Good to see you. Good to see you. Can you talk a little bit about M&A over the last 18 months in your broadly defined sector? Obviously, it was, as hot a market as it could humanly be for quite a period of time, very high multiples, particularly at the service level. A fair amount of consolidation for a big consolidator. It's no stranger in the distribution channel either. A lot of private equity money flowing into it. Receded, certainly, as you've described this year being a bit more challenged. Curious to get your view on where that may be headed. Sure. For those on the webcast, I'll summarize the question. Really, it's about M&A, the trends we've seen over the last, you know, 18-24 months. What's happened, what do we think will continue to happen? And so, you know, I'll broaden the timeframe just a little bit because, you know, M&A is a longer cycle than 18 months in our business usually. So I'll... Actually, I'll focus on that point for just a second and go back to a wonderful story. So we acquired a company called Pierce Phelps in 2019. Pierce Phelps is a leading distributor in their market, which is, you know, Pennsylvania and that Northeast Corridor. And our first interactions with them began in 1996. 1996. So it took 23 years, if my math is right. That tells you something about the types of entrepreneurs that we are after, not the types of deals we're after. So I say that advisedly. What we are after, from an M&A perspective, is to partner with wonderful entrepreneurs who want to stay engaged in their businesses. They just want our capital, our scale, our technology to help them grow faster. That is not, you know, 1,500 independent distributors. That's a subset of 1,500 independent distributors. But there are a lot of those in our space. There's a lot of those wonderful family businesses like Pierce Phelps, like TEC, like Gateway Supply, which is the most recent of those acquisitions. These are businesses that have done remarkably well in their own right, and we would be foolish to tinker with what has made them successful. Our job is to support them and help augment what they're doing and help them do what they do at a broader scale. So that's a bit about the philosophy. Now, I'll indulge your question about the trends and what's happened here in the last 18 months. First of all, we've participated in a good bit of it. If I zoom out maybe 4 years, I wanna say there's been 8 or 10 acquisitions and probably, you know, $700 million to $800 million of acquired revenue. So we've participated quite well during that period of time. We did see private equity come in and do their thing and consolidate, you know, what they saw as an attractive opportunity. That's played out in our space before, so that's not a new thing. I think it's quieted down a little bit, and certainly there were some big investments made that will have to be sorted out. It doesn't really change our true north, though, on what we're after, and it has not really altered or fundamentally changed how we go about M&A, which is develop long-term relationships with, you know, the category-leading distributors in these markets. And as I said, I think our culture is one that is supportive of that entrepreneurship. It's supportive of those people. It's supportive of making more people at those companies owners, in this case, owners of Watsco, not owners of the businesses that are there today. So again, very unique. We go about it in a different way than most other. You know, I'll maybe take a point of personal privilege and describe it this way: We're not out to consolidate a fragmented market. We're out to partner with category-leading distributors who have a desire to grow, have a desire to sustain their culture, and they'd like our capital, our tools, our technology, our equity, and our, and our key vendor relationships to help them accomplish that growth. Who else? Who else? Raise a hand if you'd like to ask a question. Otherwise, I'll keep firing away. Well, we haven't talked about commercial today. Sure. Which is a smaller but still important piece of the business and was one of the key contributors in your third quarter results. How would you generalize the demand environment there? And there's probably an important distinction to draw, just because of the backlog, because of the extended lead times and backlogs there. So maybe you can unpack that a little bit, but also just latest indicators of the health of that channel. Sure. Yeah, I mean, commercial for us means three things and three sort of discrete product categories. There's what's referred to as light commercial or unitary or, you know, traditional rooftops. That, for us, is largely, excuse me, an emergency replacement business. And then there's the VRF and the applied space. The VRF is the ductless equivalent in commercial. As ductless has grown in its acceptance and in its awareness in the U.S., so too has VRF. We have wonderful OEM relationships that are expanding in that VRF space, and so we have some organic growth opportunities above and beyond what, you know, backlog and supply chains and all that stuff that Tommy mentioned, which is correct. We've got additional opportunity on top of that through some of our key OEM relationships in the VRF space. And I'm happy to say that today we have more territory organically to be able to sell those products than we did two years ago. So that will be sort of. I dislike the word secular, but that would be sort of- that will be a recurring theme, let's say, I think. And again, VRF is only growing in its adoption. It's only growing in its awareness, and it's an acceptance at the contractor and the engineering level. The other business that we have in commercial is our Applied business. There's a bit of an international tilt to that business, and what we're seeing there that's helping is really the nearshoring of more industries, you know, from Asia towards Latin America, in particular, where we're seeing just a lot of order flows and, you know, large CapEx projects in an attempt to move large-scale manufacturing facilities closer to our hemisphere and our country. And so that has been a driver of growth, and I think it'll be somewhat of a recurring theme as well here in the near term. Maybe a little bit of volatility and noise around, you know, the first part, which is that unitary emergency replacement commercial business. That's not because you should be worried about it. It's because we've had, you know, quarters of 15%, 20%, 25% growth. At some point, that will, you know, that will normalize again, but that's a good problem to have. Yep. We haven't talked too much about the technology investment strategy. You've alluded to it a couple times, but in the two or three minutes that we have left, I wanna make sure folks come away with some understanding of the genesis of that program, roughly how much you invest in any given year and what some of the key platforms are. Sure. Yeah, it's the most fun topic, and I won't do it justice in 2-3 minutes, but I'll give it a try. I mean, we started really 5 or 7 years ago to say, I mentioned earlier, we chose to disrupt ourselves a little bit, and I think we're a better company for it. It certainly helped us during the pandemic, and it certainly helped us coming out of the pandemic, in ways that we could not envision 5-7 years ago. But we started back then, really with a basic idea, which was: How do we help our contractors become more efficient? If you think about their day-to-day, their hourly flows, their business processes, there's a lot there, right? It's do you have this in stock? What price? You know, how far am I away from the branch? Is this thing under warranty? What are the bill of materials? You know, I'm not sure about this wiring diagram. So what we decided to do, first and foremost, was develop a digital ecosystem where contractors can engage with us to access that content, right? And fast forward, we now have, you know, 50,000 average monthly users accessing and engaging with us digitally in that way. Now, that led to the development of an e-commerce platform that is now roughly 35% of the business and $2.5 billion of our $7.5 billion in sales. But it's not the e-commerce platform that is the end-all, be-all. It is that digital ecosystem where those contractors operate their businesses, essentially, and e-commerce is a byproduct. It's a good result of customer engagement on those platforms. So those customer-facing digital tools and our HVAC Pro, HVAC Pro+ HVAC Pro mobile apps, those are what we're most mature at from a technology perspective. And again, that's where contractors are interfacing with us every day in ways that, you know, humans and branches could not possibly keep up with in terms of scale and velocity. So the second leg of the technology stool followed after that, which was, if we're gonna have a world-class front-end experience for our customers in the form of that digital ecosystem, we need a world-class system internally to help us, you know, with the pick, packing, and shipping of 10 million-12 million orders, with the receiving of, you know, hundreds of thousands of SKUs, et cetera. And so we invested internally in technology for the warehouse, for our business unit leaders to just, A, have that world-class internal experience. I would, I would bucket our, our pricing technology into that, into those internal investments. That pricing technology platform and engine today is a critical, critical ingredient to the margin profile of the business, both today and I would argue, more importantly, going forward. Those internal investments have been made. And then we've also. The third bucket and the third leg of the technology stool is technology that we've developed to help the contractor maximize their chances of success when they're in front of you at the proverbial kitchen table. So when I talked earlier about OnCall Air, this is our digital selling platform, where a few thousand contractors will quote and price and recommend and give you solutions in a way that, you know, before you would probably get in some sort of, you know, three-ply Office Depot, carbon copy type paper. It is a 21st-century selling experience for those that use it. And importantly, there are some outcomes from that. First, the customers that tend to use these platforms, their growth rates are higher than customers who don't. Secondly, their attrition rates come down dramatically, which means we've succeeded in creating more stickiness with that customer long term. I would argue that's very important to the margin profile of the business today and going forward as well, by the way. So those are the three, you know, stools, legs of the stool, I would say. It amounts to about $50-some-odd million of SG&A expense. Like, the Mastercard commercial, the benefit is priceless. Today, that's very much a cost of doing business, because I don't know of any company in our space, I don't know of any distribution business, certainly one that's growing, I don't know of any, any business that will rely less on technology five or 10 years from now than they do today. Certainly not in distribution and certainly not at the contracting level either. Rick, we appreciate your time. Thanks for joining the conference. We'll see you soon. Thank you. Happy to be here. Thank you all for your interest.