Element Fleet Management Corp.

Good morning and welcome to Element Fleet Management's second quarter 2025 Financial and Operating Results conference call. At this time, all participants are in listen-only mode and you are reminded that this call is being recorded. Following the prepared remarks, there will be an opportunity for analysts to ask questions. To join the question queue, press star then 1 on your telephone keypad. In the event you need assistance during the call, you may signal an operator by pressing star then 0. Elements wishes to caution listeners that today's information contains forward-looking statements. The assumptions on which they are based and the material risks and uncertainties that could cause them to differ are outlined in the company's year-end and most recent MD&A and annual information form. Although management believes that the expectations expressed in the statements are reasonable, actual results could differ materially. The company also reminds listeners that today's call references certain non-gap and supplemental financial measures. Management measures performance on a reported and adjusted basis and considers both to be useful in providing readers with a better understanding of how it assesses results. A reconciliation of these non-GAAP financial measures to IFRS measures can be found in the company's most recent ND&A. I'd now like to turn the call over to Laura Dottori-Atanasio, Chief Executive Officer. Please go ahead.

Good morning, everyone, and thank you for joining us. Element delivered record results in the second quarter of 2025, extending the strong momentum that we established at the start of the year. These results reflect the strength of our business model, the disciplined execution of our global strategy, and most importantly, the relentless commitment of our team members to serve our clients and create long-term value for all stakeholders. In a macro environment characterized by elevated uncertainty and shifting global trade dynamics, our purpose and values continue to guide us with clarity and conviction. Our commitment to delivering value to our clients and stakeholders continues to be our top priority. We made meaningful commercial progress this quarter and delivered healthy, top-line growth with strong contributions from both our services and net financing revenue. At the same time, we maintained disciplined expense management, which supported our performance. We welcomed 46 new clients in the second quarter, the majority of which converted from self-managed fleets. And this highlights our increased traction in this important growth segment. We also added 265 new service enrollments, a strong continuation of our share of wallet expansion, further strengthening our recurring revenue base. Our strategic advisory services team identified over $390 million in savings opportunities for our clients, of which 43% was actioned. This is up significantly from last year's rate, reflecting how clients are increasingly turning to us to help drive efficiencies in today's dynamic operating environment, reaffirming the element value proposition. Our ongoing efforts have translated into solid year-over-year growth. Our committed order pipeline grew 6% and total client order volumes rose 9%. We also advanced our digital innovation agenda. Last week, we launched Element Mobility, a new strategic division dedicated to shaping the future of intelligent mobility. Under the leadership of Coby Eisenberg, Element Mobility represents a new chapter in how we anticipate the evolving needs of our clients. Our recently announced partnerships with industry leaders Samsara and Modus further enhance our ability to deliver more integrated, tech-enabled solutions for our clients. The creation of Element Mobility and these partnerships signal our intent to lead in intelligent mobility by deepening the breadth and functionality of our platform, allowing us to deliver more value and more insights for our clients. Lastly, we remain committed to advancing our sustainability agenda. Earlier this quarter, we released our fifth annual sustainability report, which reinforces our focus on transparency, environmental and social responsibility, and having a long-term positive impact in all that we do. With that, I'll hand it over to Heath to take you through the financials.

Thank you, Laura, and good morning, everyone. Our record second quarter results reaffirmed the strength and resilience of our business model and highlighted the continued progress we are making towards delivering on our financial objectives. We reported solid financial performance underpinned by healthy top line growth and disciplined expense management. This translated into adjusted earnings per share of $0.30 and free cash flow per share of $0.40, representing year-over-year growth at 7% and 8% respectively. Foreign exchange continues to be a headwind in Q2, though the impact moderated relative to Q1. On a year-over-year basis, the Mexican peso depreciated 13% against the US dollar, contributing to a $10 million reduction in net revenue and a $2 million benefit to adjusted operating expense, and a two cent decrease to diluted earnings per share. We anticipate the FX translation effect to continue easing in the second half of the year. Now, let us turn to our Q2 financials, which I will speak to on an adjusted basis. We generated net revenue of $290 million, an increase of 6% year over year, driven by strong growth in both services and net financing revenue. When adjusted for foreign exchange, net revenue grew 9%, outpacing the 7% increase in adjusted operating expenses and resulting in positive operating leverage of 2.5%. Services revenue increased 8% year over year to $151 million, reflecting increased penetration and utilization of our expanding suite of offering. Including a $3 million FX headwind services revenue grew a strong 10% year-over-year. Net financing revenue rose 4% year-over-year to $127 million, driven by the ongoing benefits resulting from both our leasing business and funding initiatives, along with strong gain on sale in both ANZ and Mexico. This was partly offset by higher funding costs associated with our preferred share redemptions and the auto fleet acquisition in October 2024. Excluding the $7 million FX impact, NFR grew a solid 10% year over year. Importantly, excluding gains on sale, our NFR yield for the first half of 2025 increased 20 basis points year over year, a strong outcome, especially considering the funding headwinds from our preferred share redemptions and the auto fleet acquisition in late 2024. Origination volumes totaled $1.9 billion year down 4% year-over-year, with foreign exchange contributing to the decline. Adjusted for FX, originations declined 2%, while on a quarter-over-quarter basis, originations grew 26%. We also saw continued momentum in client activity, with our committed order pipeline of $1.7 billion, reflecting strong year-over-year growth underpinned by resilient demand and commercial strength. Syndication revenue held steady at $12 million despite a $418 million reduction in volume year over year. This decline was intentional, driven by our decision to defer select syndication transactions to the second half of the year, aligning with the reinstatement of 100% bonus depreciation under the new US tax legislation effective early July. As previously communicated, we expect this change to deliver a favourable uplift to syndication yield, which we estimate could drive approximately $25 million in incremental annualised revenue. We do note, however, that our first half 2025 syndication yield has been strong due to client mix, and the uplift expected is relative to the syndication yields generated in 2024. Adjusted operating expenses of $128 million maintained the trend of moderating growth at 5% year-over-year. When combined with our solid net revenue growth, this resulted in adjusted operating margin of 55.8%. We remained focused on driving internal efficiencies and consistently generating positive operating leverage. Our adjusted return on equity rose to 17.5%, up 120 basis points year-over-year. underscoring the strength of our capital light model and discipline balance sheet management. In Q2, we returned $61 million to shareholders through dividends and share repurchases. Year to date, we have repurchased 3.1 million common shares, representing 64 million in capital deployed, reinforcing our commitment to share buybacks as a key pillar of our capital allocation strategy. As of June 30, our debt to capital ratio stood at 76.1% within our targeted range of 73 to 77%. Looking ahead, we anticipate finishing the year at or above the high end of our guidance ranges across all key financial metrics, with the exception of originations, which we expect will improve as macroeconomic uncertainty eases and businesses re-engage in capital planning and allocation. Despite operating in a complex external environment, we delivered a record quarter, achieving new heights in revenue, adjusted operating income, return on equity, diluted earnings per share, and free cash flow per share. We remain confident in our ability to sustain this momentum and continue delivering meaningful value to our clients and shareholders in the coming quarters. Thank you. Operator, we are now ready to take your questions.

Thank you. Analysts who wish to join the question queue may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We ask that you please limit yourself to two questions and then re-queue. We will pause momentarily to assemble the roster. And our first question comes from Vasu Govil from KBW. Please go ahead.

Hi. Thank you for taking my questions, and congratulations on a strong print. I wanted to maybe start by asking about originations. I know that number grows sequentially pretty nicely, but on a year-on-year basis, even on a constant FX basis, it's still down year on year and 2Q is typically your strongest quarter. So it would seem like you're tracking towards the lower end of the guidance range at best. And even to get there, you'd have to see significant acceleration in the back half. So just curious how much visibility you have in that acceleration. Thank you.

Yeah, good morning. So certainly, While the origination number for Q2 was down 2% year-on-year, FX adjusted, it's important to note that excluding Amada, Q2 was actually the second highest quarter of originations in the company's history, only behind Q2 of last year. And last year did have some tailwinds, I guess, from the supply chain normalization and pent-up demand going through the system. So a $1.9 billion that we delivered in Q2 still remains really strong in absolute terms. Importantly, it's also important to note that our committed order pipeline is actually up 13% year over year. So that gives us confidence of our ability to have strong originations going into the future. We saw Mexico was particularly strong, up 13% year over year. and 33% quarter over quarter, which is an important sign of that region, which has been impacted by macroeconomic uncertainty. So for all of those reasons, we're confident that we'll still have strong originations. And then the only final point that I would make is, while originations is a very important metric, it can be heavily influenced by the timing of client orders and client ordering patterns. And it should be probably viewed alongside the net earning asset number, which again was very strong for Q2 and drove strong net financing revenue.

Thank you very much. And just a quick one for you, Laura, on Element Mobility. Congratulations on its launch. I know it's really early days, but anything you can share on what type of interest you were seeing within your base of fleets that may sort of bode well for the cross-sell opportunity there?

Great. Thanks, Vasu. We're very happy with our record quarter. So on Element Mobility, what we were really doing there is, I'm going to say, setting up a blueprint for organization. So it's our commitment, if you will, to shaping the future of fleet. What we stay grounded in, I'm going to say, delivering value today. So Element Mobility is going to be our dedicated platform to drive innovation and So with our innovation lab, we're going to be focused on whether that's advancing next-gen technologies, whether it's forming strategic alliances like you saw where we announced our partnerships with Samsara and Modus. So we'll be looking at things from AI-driven analytics, advanced telematics, autonomous fleets, robotics. So the division's really going to be focused on, I'm going to say, solutions that can fundamentally reshape how fleets are managed. What's important as a takeaway here is that element mobility, and as I said, it's like a blueprint, so that's going to lead on the transformation piece without our losing focus on execution. So element mobility is going to effectively drive what's next, while the rest of the organization is going to focus on doing what we've been doing, which is delivering exceptional service to our clients and looking to continually improve how we service them. The partnerships we think are going to be wonderful for us. We're super excited about them. And maybe if I can, just a word on them, because for us, again, we're all about delivering a real, I'm going to say, end-to-end fleet offering for our clients. So taking on Modus, so they're the market leader in vehicle reimbursement. So that's solutions for people who drive their cars to work. Samsara, they're recognized in the market for their AI-powered video telematics, the equipment tracking they do, and all of their operations workflow tools. So these partnerships allow us to, I'm going to say, integrate what we see as best-in-class solutions into our broader ecosystem. So that just further strengthens us, and it really does what we're looking to do, which is be that client-first mobility solutions provider for our clients.

Great. That's great, Galar. Thank you so much. Thank you.

The next question comes from Stephen Poland from Raymond James. Please go ahead.

Morning, everyone. Lord, maybe you could just follow up a little bit, especially Cemsera, you know, because, you know, they are well-known. Is this just... a solution that Samsara is offering into your fleets, or is there like a counter there that you have access to their client base as well to offer other services that they don't provide? I'm just trying to, is this a one-way partnership that they are just providing a solution to the million and a half vehicles that you have under management? And what, I know you're not going to give me very much specifics on this, but Obviously, there's a split in revenue. I'm not sure how much disclosure, I couldn't find it on Samsara, but how much disclosure that if they're offering video in vehicles, what they charge per vehicle, what the split is now between them and you.

All right. Well, thanks for that question, Stephen. And I will give you some specifics So it is indeed a real partnership. So we're not exclusive in that Samsara does have a marketplace and they'll deal with others. Just as we're always open to strategic tech alliances if we feel that it's going to enhance, I'd say, our ecosystem and if it aligns with our client-first platform strategy. So with Samsara, I'd say that our partnership is highly complementary. So as I talked about earlier, they deliver very specialized tech capabilities, and essentially it allows us to embed their tech into our ecosystem. So that just makes it easier for our clients, I'm going to say, to adopt and scale their tools, and they can do it in a more unified, efficient fleet solution. So that way they get, I'm going to say, our deep fleet expertise and some of these specialized capabilities. So it's a two-way street. we refer them to our clients if we feel that that's the right solution for them, and they'll be doing the same with their client base. So without going into the details of the partnership agreement, I'd just say for elements on the revenue side, for 2025, you can anticipate, I'd say, little to no impact on the revenue as a result of this initiative and the MODIS partnership. But in 2026, we'd expect that the partnerships are going to contribute in that mid- to single-digit range. So I'd say what's really important is, again, for us, we're always client-led. We're doing what we need to for our clients, and we do think that these partnerships are going to allow us to create some differentiated value, and then it'll also help strengthen, I'd say, our long-term growth profile. Thanks for the question.

Okay, that's great. Thanks for the call. And then probably for Heath, I'm a broken record on this, but, you know, we talked a while ago about maybe every quarter just about the off-balance sheet securitization facility. Just wondering around the progress of that. And maybe it was in disclosure, sorry, it was a busy night. The Blackstone, was there any Blackstone securitization done in the quarter as well?

Yeah, good morning, Stephen. So to take the second part of that question first, no, there was no Blackstone transaction in the quarter, and the quarter was just standard syndications. In terms of the other off-balance sheet structures that we're working on, nothing to report at this point in time. We are making progress. We've got a term sheet that We're now actively progressing, so hoping to have something to announce in the back half of the year.

Okay, that's great. Thanks.

The next question comes from Bart Zarsky from RBC Capitals Markets. Please go ahead.

Hi, good morning. Thanks for taking the question. Just wanted to touch on core VUM. up 1% year-over-year, and you called out market share gains and conversion of self-managed fleets. So wondering if you could unpack that a little bit more, and then sort of as we go from here, what are some of the initiatives that could lead to that core VUM growth going back to the 2% to 4% range? Thanks.

Yeah, good morning, Bart. So from a bond perspective, it's up 1% year-on-year and slightly down for the quarter. I'd say the quarter-on-quarter movement is more of a reflection of timing and onboard cadence. So for example, we've actually recently signed a large contract for a client and that one client will drive approximately 1% VUM growth alone. And then we have a number of other material opportunities we're actively working on. And in fact, our new business pipeline is very, very strong. And we also think with increased visibility around the trade environment, that should sort of be beneficial for clients and potential clients to make capital allocation decisions and move forward. So our long-term view is still anchored to the 2% to 4% range. And with that large client that we have signed that we'll onboard in the second half of the year, coupled with the material opportunities we're actively working on, we're confident of getting back to that 2% to 4% range in the back half of the year.

Super. Thank you.

The next question comes from Graham Riding from TD Securities. Please go ahead.

Hi. Good morning. Laura, you flagged some self-managed wins driving your – your business this quarter, how would this quarter's number of wins sort of compare to your typical run rate on that front?

Well, thanks, Graham. It continues to represent a good share of our new wins. So I think as we've been sharing, it's about 40 to say 50% each quarter. Just say that that momentum, again, it remains consistent. We're seeing some really strong engagement and activity in the self-managed space, both from a pipeline and a conversion perspective. So I think as we're looking at market conditions that are out there, I think what we're seeing are companies that were previously managing their fleets in-house. I'd say that they're increasingly looking for some expert-led solutions. And, you know, as we've shared in previous conversations or calls, that's kind of right in our, I'd say, right in our wheelhouse where we're really there and can help our clients navigate complexity, deliver some cost-effective solutions for them when times are somewhat, I'd say, uncertain like they are these days. So the self-managed segment is doing really well.

Okay, great. And then just to follow on your theme of, uh, you know, just your emphasis on, on tech initiatives with, I guess, last year's auto fleet and then your, your SEMSARA partnership and, uh, and others. And then I guess you've launched the element mobility. What should we be looking for in sort of this area to sort of gauge if these investments are translating into growth? Should we be looking for service revenue growth to pick up? Should we be looking for margin upside? Should we be looking for VOM growth? How are you expecting these investments to translate into your business?

Well, I'd like, yeah, I guess I'd like to say all of the above. I guess from, if I could say financial perspective, I'd be looking at element mobility as, I was going to say a natural extension of the investments that we've already been making in things like digitization and automation. So you'll see, I'm going to say returns that we get, like whether that's in client experience where we should start to see, you know, improvement in our NPS scores, operational efficiencies, and margin improvement as we've, I'd say as we've been showing, that would be the expectation. I think we'd also see client retention, again, be better. Services per VUM, that would increase too. So the focus really is on, I'm going to say, the capital light services that we can offer as Heath had highlighted earlier. And maybe go just a bit further because we've talked a lot about what we would look at from an acquiring capabilities perspective. And I think what element mobility will give us is really a more structured way to assess the best approach. So whether that means we build something in-house to go faster for delivering returns in client experience or for our shareholders or whether that's partnering with best-in-class players like we've done with Samsara and Modus or it could be just acquiring capabilities if we think that it makes strategic sense. So it would be all of those and again I guess what I just say is at this point we're going to keep being really selective, we're going to focus on quality And, of course, we're going to want to make sure that it's got some long-term value creation for our shareholders. So, again, not a specific answer, but hopefully one that gives you a sense of the direction that we're in.

Great. That's it for me. Thank you.

The next question comes from Jane Glowing from National Bank Financial. Please go ahead.

Yeah, thank you. First question, just on the servicing revenues, don't want to suggest that it's a bad result when you post 8% growth and 10% on cost of currency, but a little bit slower than maybe what we, I guess, were accustomed to from last year's results. and a little bit of a dip quarter-by-quarter on an absolute dollar basis. Can you shed a little bit more light as to maybe some of the factors that might have been driving that sequential decline or perhaps a little bit slower growth rate in this quarter versus maybe, I guess, what we got used to?

Yeah, good morning, Jamie. So I guess my overarching comment would be we continue to expect that the service revenue line will be our largest contributor of growth for 2025 and into the future. And we still have a lot of white space in terms of new client wins, increasing product penetration with the existing clients, bringing new products and services to market, as Laura has touched on. as well as continuing to sell the products we acquired through auto fleet. In terms of the result for the quarter, so yes, FX adjusted was up 10% year on year. And while it was flat quarter on quarter, we did sort of see the same thing happen last year, driven by a slight reduction in utilization for the quarter. So certainly it's a key focus area of us. And I guess I would refer back to my previous comments on VUM. The focus for us as a business is really converting the opportunities that we've got there, plus those material contracts that we've signed, get them onboarded and continue to sell the products into our client base. And we'll see continued growth in service revenue as we action that.

Okay. And Heath, while I have you here, On the net financing revenue yield, and thinking about this on the core basis, Subpac would suggest an increased almost 20 basis points quarter over quarter, a pretty good result. It looks like it's driven by both the revenue and lower funding costs, but can you describe some of the What's been driving that growth in the top line revenue yield, driving that expansion in margin? Is that geographic mix? Is there something you're doing from a pricing perspective that maybe we talked about in Mexico last year? What's helping to push that ahead?

Yeah, so it's certainly driven by two key things. And also what I would note is the 20 basis point improvement for the first half of the year is also particularly happy. We're happy with it, given that we also absorbed extra debt from the preferred share redemptions and the auto fleet acquisition. In terms of what's driving the strong performance, it's really two things. One is the leasing initiative that we set up and we are starting to see the benefits of that come through from centralising and standardising our leasing business and really ensuring we're generating an appropriate risk-adjusted return on our leasing. And then the second element will be the funding and we continue to evolve our funding structure We implemented the commercial paper program, which had a significant reduction in our cost of funds. We also generated a really strong result on our most recent bond transaction, reducing the rate by about 247 basis points versus what was maturing. So those types of initiatives are helping to drive down the funding rate. And then the leasing business and all of the focus we've got there is driving the top line growth.

And if I can just stay on that theme, speaking about the gain on sale in Goss, looks like more of a step up in the Mexico region this quarter from gain on sale, also in Australia and New Zealand. Anything in particular in Mexico with, was this just the lumpy quarter for vehicles coming off lease? Was there something else coming through? And how sustainable should we look at Goss where it stepped up quite materially this quarter?

Yeah, absolutely. Strong quarter on the gain on sale. And really it's a function of price and volume. So firstly, on the volume side of the equation, The vehicles we're selling today are generally the vehicles we originated four years ago. So given the fact we've been growing, we are seeing and continue to expect to see growth in the number of vehicles we have available to sell. So that's been a driver and we expect that that will continue to be a driver. In relation to price, the price is partly driven by market dynamics and we still expect that the price will continue to normalize over time on the back of sort of the jump we saw from the supply chain issues. Having said that though, we have put a lot of effort and work into our remarketing processes and optimizing our remarketing processes, making sure we've got multi-channel remarketing platform and driving high-quality vehicles. So, you know, good condition, low-mileage vehicles direct to the consumer where we can command a higher price rather than going through a dealer. So those sorts of things are helping us to offset the price decline from the market normalisation. So in terms of a go-forward position on GOS, we expect that the volume will continue to increase offset by price normalization.

Great. Thank you.

Once again, analysts with any further questions may press star, then 1. And our next question comes from Munish Garj from CIBC. Please go ahead.

Hi. Good morning, everyone. Thanks for taking my question. So first one on Dublin, just an extension from last question on financing yields expansion. So could you please provide some more color on how the Dublin initiatives are benefiting net financing revenue and pricing trends?

Sure. Thanks, Munish. I'll start maybe more broadly and then I'll hand over to Heath if he feels like handing out some specifics. We are firmly on track to achieve our target. So we shared some while back that we generate 30 to $45 million in net revenue by the end of 2028. And that actually we are progressing towards and it's part of what contributed to that increase in NFR. So we started in Dublin or I guess back in August of 2024. I'd just like to say this because we did complete this one on time and below budget, so on track not just for the amount that I had mentioned, but we talked about a two-and-a-half to three-year payback, so we're doing really well in that regard. As Heath had mentioned, some of that relates to our improved pricing discipline by having centralized, if you will, and started to standardize how we service our clients. And it's early days, but we're seeing better client leasing experience. We're seeing, I'm going to say, optimized operations, and we're just getting started. And so that is some of that incremental value for our shareholders that's, I guess, now representing in NFR. But, Keith, maybe you want to provide some details.

Yeah, so I guess the only thing that I would add is the – The margin or the yield rather for the first half of the year was up 20 basis points. And that actually also absorbed approximately $10 million of additional debt costs from the preferred share redemption and the auto fleet acquisition. So that sort of gives you some of the magnitude of the improvements that we've made. Some of that is driven by the leasing business. Some of that is driven by the funding initiatives that we spoke of before. I guess the final thing I'd say is the beauty of our business is we do have a lot of revenue levers. So increasing the yield, working on our funding, driving all of our many service offerings, obviously the syndication and off-balance sheet financing. So we're highly focused on getting all of those levers going in the right direction to keep delivering strong results.

Thank you. Just one more for me. So Element is generating a lot of free cash flow right now. So what would be the top capital deployment priorities in, say, next 12 to 24 months?

Yeah. Nothing has changed in terms of key priorities. So priority number one is to continue to reinvest in the business for the long-term growth of the company. And that number hasn't changed of the $80 million that we refer to. So that is the key focus for us to sustain our performance over the long term. In addition to that, we've obviously got our dividends that we pay out. And then we have been active in our share repurchases during the period. So we have repurchased 3.1 million shares for the first half of the year, and we expect to continue repurchasing shares over the coming quarters and for the rest of the year. And then, obviously, we also need to manage our leverage and make sure that our leverage is within our targeted range to continue to have our investment grade rating, which is critical from a funding perspective.

Thank you. That's all for me.

And the next question is a follow-up from Jane Gloin from National Bank Financial. Please go ahead.

Yeah, thanks. Just wanted to follow up on the MODIS announcement. And if you could just sort of dig into what that market looks like, the market for vehicle reimbursement. This is something that would be new for Element. How many players are in there? How many vehicles potentially? What size of that market may be compared to the traditional fleet management market?

Yeah, sure, Jamie. I can give you some of, I guess, some of that information. So, motives in vehicle reimbursement, they play in the market that we refer to as gray fleet. So, really, for those who want to bring their cars to work, which is not an area that we actually play in. And so, when we looked at, you know, is this something that we want to build on our own go out and buy something or set up a partnership, we did go out and look at the market. It's a, I'd say, pretty solid market and it is growing. We looked at a lot of the players there and there are, of course, some really good players. What we thought would make the most sense, not just for our company, but more importantly for our client base, is if we partner with someone like Modus, who is the market leader in this particular space, so we can bring the the very best to the client that they require. And we're seeing, I would say, probably more thought that's being given to this space just given, you know, the macroeconomic landscape. And we work with clients, like we see some of them just, and we do this with them, whether they want to reassess, I'm going to say, the reimbursement route versus acquisition strategies and fleets. And so normally we would advise on where to go, and now we have the ability to do that all, I would say, within the ecosystem with this partnership with MODIS. So we would expect to see some growth in this space, and I'm sure if you spoke with our partner, they would confirm saying that they see space. And I just say that this partnership, like the other one, SAMSARA, it's a two-way partnership where we will each be referring one another's clients to each other. And again, all with the purpose of offering the best solution for a client for their needs. We do have a whole lot of information on TAM, et cetera, that I'm sure we can share with you or anyone who's of interest afterwards. Maybe not on this call because it would make for a very long call.

Fair enough. And then if I just go back to your comment around the partnerships with Samsara and Lotus, I believe you said that it could add mid-single digits to revenue growth in 2026. I just want to get some clarity on that and make sure I understand I'm not maybe getting too over my skis. Is that something that we would think of as incremental to the traditional six and a half to eight and a half percent revenue guide that we're used to? And then I guess, you know, what would be the makeup of that? Is it mostly Samsara or, you know, is there a bit of a split you can share?

Yeah, maybe I'll take that one. So I think what Laura was referring to was from a dollar perspective, so not a percentage perspective. So I don't think you should take mid-single-digit percentage and overlay that to the 6.5% to 8.5%. It's a dollar number. That makes more sense.

Thank you.

This concludes the question and answer session. I would like to turn the conference back over to Laura Dottori-Telnazio for closing remarks.

All right. Thanks, Jason. And thanks, everyone, for joining us today. So as we look ahead, our strategic priorities will remain unchanged. We're going to deliver sustainable growth, deepen digital leadership, and provide exceptional client experience, all while we stay true to our purpose and values. So I'd like to thank our global team members for their commitment and their contributions. And I also want to take this time to thank our shareholders, our analysts, and our broader stakeholders for your continued support and your interest and element. We look forward to reconnecting with you at our next quarterly call in November.

This brings today's conference call to a close. You may disconnect your lines. Thank you for participating and have a pleasant day.