Stella-Jones Inc.

Good morning, and thank you for standing by. Welcome to Stella Jones' second quarter of 2025 earnings call. At this time, all participants are in listen-only mode. Following the presentation, we will hold a question-and-answer session. To queue up for questions by phone, please press star 1 and a motivator will contact you. If anyone experiences difficulties during the conference call, please press star 0 for operator assistance at any time. I would like to remind everyone that this conference call is being recorded on Thursday, August 7, 2025. I will now turn over to David Ellison, Vice President, Investor Relations of Stellagons. Please go ahead.

Thank you, Ina, and good morning, everyone. Earlier this morning, we issued our press release reporting our results for the second quarter of 2025. Along with our MD&A, it can be found on the investor relations section of our website at www.sella-jones.com, as well as CR Plus. As a reminder, all figures expressed on today's call are in Canadian dollars unless otherwise stated. Please note that the comments made on today's call may contain forward-looking information, and this information, by its nature, is subject to risks and uncertainties. Actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, please consult the company's log-in filings on CBR+. These documents are also available in the Investor Relations section of Stella Jones' website at www.stella-jones.com. Additionally, during this conference call, the company may refer to non-GAAP measures which have no standardized meaning under GAP and are not likely to be comparable to similar measures presented by other issuers. For more information, please refer to the company's latest MD&A, available on Stella Jones' website and on CDAR+. Lastly, we have prepared a corresponding presentation, which we encourage you to follow along with during this call. I'll now hand the call over to Eric Vachon, President and Chief Executive Officer of Stella Jones, for a strategic business update, followed by Salvina Travolini, Senior Vice President and Chief Financial Officer of Stella Jones, who will provide a more detailed financial overview for the quarter. Eric, over to you.

Thank you, David. Good morning, everyone, and thank you for joining us today.

Our future results reflected the disciplined execution of our strategy for value creation supported by the scale and reach of our extensive network. Though volumes were softer, we focused on sustaining a strong EBITDA margin and generating healthy cash flows while executing on our strategy to broaden our infrastructure offerings. With the acquisition of Lockwell, which was completed in Q2, we now have a presence in the steel transition structure market and the platform to further expand our reach and share of wallets as we leverage our robust customer relationships. The integration of Lockwell into our business and the operational investments to increase production capacity are well underway, and we are already seeing the benefits of this addition to our network. I will now turn to a performance overview of our main product categories before moving to the outlook for the remainder of the year. Starting with utility poles. Since the end of Q2, we've seen a pickup in courting activity, particularly in the sunny yellow pine region in the US, and we have started to benefit from new customer agreements stricter last year. While utilities continue to acknowledge the need to upgrade the grid and expand capacity, in the current economic environment, certain utilities have maintained a more cautious purchasing pace, with this trend being particularly pronounced in Canada. Although sales volumes were lower when compared To the strong shipments reported in the same period last year, volumes were above those seen since Q2 2024, and we expect continued improvement in the second half of the year. Based on the lower level of demand experienced since mid-2024 and the expectation of a return to a mid-single-digit growth only toward the end of 2025, we have reduced our utility pole sales outlook for the back half of the year. We now expect sales growth for utility poles for the remainder of the year to be in the low single-digit range versus 2024. Our extensive network and strong offering utility pole positions us well to benefit from the meaningful investments required by our customers over the long term to replace aging infrastructure and increase grid resiliency. Timing of these investments will continue to be influenced by our customers' capital expenditure programs and their capital deployment strategies. In July, there was a fire incident at a Briarfield, Alabama, utility coal-treating facility. We are pleased to report that no cellulose employees were injured. The fire impacted the site's oil-treating facility, but its CCA treating, peeling, drying, and cleaning capabilities remain unaffected. Within hours of the incident, the team developed plans to leverage our network to reallocate the facility's orders. As a result of this excessive agility, we do not expect any significant impact on our capacity to fulfill customer orders. The swift turnaround following the fire incident highlights the strategic value of our extensive network and the capabilities of our experienced management team. I'm very proud and appreciative of all the employees involved for their mobilization and dedicated efforts. For railway ties, sales in the second quarter continue to be impacted by Class 1 customers now treating more of their railway ties internally. This shift follows this customer acquisition of the only Class 1 railroads that operated its own treating facility. We expect this volume loss to provide a headwind for the remainder of the year. While we anticipate recovering some of the volume shortfall with more commercial sales in the second half of the year, certain project starts are taking longer than expected. As a result, we are now forecasting a low single-digit year-over-year decline in railway tie sales. Railway tie customers continue to look to Stella Jones to deliver solutions to address their evolving needs and optimize their business model. This allowed us to achieve a mid-single-digit sales growth over the last three years. Over the long term, we continue to leverage our customer relationships to deliver low-tinger sales growth for this business. While Red National Lumber's performance this quarter remained relatively stable, we are encouraged by the improved volume performance we noted in June. We anticipate demand for the remainder of the year to trend favorably, and we remain optimistic about achieving sales within the $600 to $650 million target range for this product category. As we enter the second half of 2025, we have adjusted our revenue outlook for the year, but remain confident in the long-term sales growth trajectory of our infrastructure product categories. For 2025, we now expect to generate approximately $3.5 billion of sales, including the contribution from Lockwell versus our previous outlook of approximately $3.6 billion. We are maintaining the same level of profitability with the EBITDA margins over 17%. Our commitment to return more than $500 million to shareholders cumulatively over our outlook horizon while maintaining leverage within targeted levels remains unchanged. With that, I will now ask Silvana to provide a more detailed overview of our second quarter financial results.

Thank you, Eric, and good morning, everyone. Sales for the second quarter were down 4% organically compared to a strong prior year quarter, largely explained by lower railway tie volumes. While utility pole sales were also down, the decrease was modest, and we observed a positive sequential volume trend. Including the contribution from our recent acquisition and relatively stable sales for residential lumber, Total sales were down about 1% for $15 million compared to Q2 last year. Despite lower sales, we continued to deliver a solid EBITDA margin of 18.3%. For utility poles, we generated $476 million in sales in the second quarter. Compared to our strong shipment quarter last year, sales were down 4% organically. While the pace of purchases of some utilities remained slow, incremental volumes from new customers and improved hoarding activity in the thousand-yellow-pine region provided a partial offset. Volumes in the quarter were down 2%, with a corresponding decline in pricing largely attributable to an unfavorable sales mix. Offsetting in large part the lower utility pole sales was the contribution of lockouts. whose results are reported in the utility tolls product category. Lock-off sales were better than anticipated as they had backlog orders that existed prior to the acquisition that were completed during the quarter. Sales of railway ties were down 11% organically this quarter to $214 million. as volumes continued to be impacted by a class 1 customer shooting more of their railway ties at their company-owned facility. While we expected to offset some of the sales shortfall with commercial sales, delays in the timing of major projects and funding grant reviews impacted these recoveries. In the second quarter, all of the sales declined for railway ties was attributable to lower volumes. Residential sales were $246 million in the second quarter of 2025 compared to $243 million in Q2 last year. Sales benefited from the higher market price of lumber, but volumes continued to be soft, particularly in the earlier part of the quarter. As the weather improved, we saw an upward trend in demand towards the end of the quarter. Turning now to profitability. EBITDA declined by $11 million to $189 million in Q2 of 2025. The decrease was largely attributable to lower sales volume and a less favorable sales mix in a utility pole business compared to the same period last year. Despite lower volumes, the company delivered an EBITDA margin of 18.3% for the quarter, and 18.8% year-to-date, excluding the insurance settlement gains recorded in the first quarter. Our strong EBITDA performance underscores the resilience of our business and ability to deliver results in a dynamic environment. During the quarter, cash generated from operating activities was $224 million compared to $177 million in Q2 last year. This improvement was largely attributable to a more significant decrease in inventory levels compared to the same period in 2024. In addition to the typical seasonal decrease in inventory expected in Q2, we reduced inventories as part of our efforts to optimize the higher levels at the start of the year. We continue to expect to end the year with a lower inventory level compared to the beginning of the year. We remained committed to a balanced approach to capital allocation. Over the last 12 months, we generated cash from operations of approximately $500 million, allowing us to invest over $100 million in our business, acquire LockLow, and return $155 million to shareholders. The remaining capital was used to bolster our liquidity. As at the end of June, we returned $417 million of capital to shareholders out of the $500 million that was committed for the 2023 to 2025 period. And yesterday, our Board of Directors approved a quarterly dividend of $0.31 per share. We ended the quarter with almost $700 million in available liquidity. and a net death to EBITDA ratio of 2.4 times down from the 2.6 times at the end of the previous quarter. With a continued focus on profitability and working capital management, the leverage ratio was reduced within the desired target range. We remain committed to maintaining our strong balance sheet, which allows us to execute on strategic growth initiatives and to continue to pursue value-accretive acquisitions core to our growth strategy. In summary, with the breadth of our network, the strength of our business and our teams, combined with our healthy financial position and strong cash-generating ability, Seller Jones is well-positioned for continuous growth and success in 2025 and beyond.

I will now turn the call back to Eric for his closing remarks. Thank you, Sylvana.

While our lower sales guidance reflects some near-term softness largely associated with ongoing macroeconomic conditions, the mid- to long-term market dynamics remain intact. As such, we maintain our confidence in the growth prospects of each of our infrastructure businesses. We are encouraged by the progressive improvement in utility pole volumes, and we are positioned to further capitalize on the growing North American infrastructure demand. For Railway Guys, we're focused on exploring opportunities that will mitigate some of the near-term headwinds and leverage the evolving Railway Guy landscape. Our customers view SellaZone as a partner that is capable of delivering impactful business enhancing solutions and we are fully committed to fulfilling that role. Enhancing our growth through acquisitions remains a cornerstone of our value creation strategy as we focus on expanding our offering and strengthening our market position. We are dedicated to pursuing acquisitions that are accretive and complementary to our current infrastructure portfolio, further strengthening our overall business resilience. We expect to continue to maintain EBITDA margins above our 17% target, reflecting the strength of our business. Compared to our original guidance from 2023, where we projected a 9% EBITDA figure For the 2023-2025 period, the impact of CAGR is now expected to be closer to 11% despite softer sales over the past year. We look forward to providing further insight on our growth strategy at our next Investor Day, which is planned to be hosted in November. Thank you for your continued support and trust in Stella Jones' vision of connecting communities through stronger infrastructures. This concludes today's report of prepared remarks. I will now open the lines to questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. As a reminder, should you have a question, please press star followed by the one on your telephone keyboard. You will hear a phone that your hand has been raised. And should you wish to cancel your request, please press star followed by the two. If you are using your speakerphone, please click to answer before pressing any keys. One moment, please, for your first question.

Thank you.

And your first question falls on the line of Hamir Badal from CADC Capital Markets. Please go ahead.

Hi. Good morning.

Eric, if you start with the pole side of the business, the 4% organic decline in Q2, how much of that was pricing versus weaker volumes?

Roughly half and half, you know, 2% on pricing and 2% on volume.

Okay, great. And then in terms of the outlook for the remainder of the year, low single digits, organic growth in polls, what's the pricing and volume assumptions underlying that? And can you speak to what you're seeing in the spot market for poll prices?

Right. So I would say, you know,

Pretty much all volume for the back half of the year, progressively growing now. Moving forward, as I said, very encouraged to see the steady trend of increasing volume year over year. So to answer your question, all volume, I think we have much of the pricing headwinds now behind us.

Okay, and then in the spot market and in the past, you've pointed to some pockets of weakness. Is that still the case, or have things stabilized?

Compared to last year, it's slightly not so compared to last year.

You know, luckily for us, the largest percentage of our sales are through the long-term contract, which is around 75%, so that has been mitigating that impact, but yes, we're seeing the spot market being softer.

Great. And just a last question I had, Eric, with respect to Lockwell, did you speak to how the integrations have been going over the past two months, and how are you feeling about your plans to sell through the capacity expansion that you have planned over there?

Yeah, certainly. We obviously spent three months now. I would say the integration has gone extremely well. I just want to say it's pretty much behind us. We've committed to the capital investment to expand the capacity, but I would announce that $15 million, you can expect by the end of this year, we'll have spent a first charge of, let's say, $9 to $10 million of that capex. And delivery of equipment is expected between, well, some equipment is actually going to be delivered in September, and then the balance will be early next year. So that is progressing well. Happy to... inform the listener that we secured a five-year commitment from a large North American utility to produce structures which will take up or utilize a large part of that area or a big part of that capacity. So that's very encouraging as we're making this investment. I'm confident now for the next five years, you know, we've got a solid a solid book of order, and we're actually quoting a lot of long-term projects right now that span between the two to five year horizon, and there's actually some discussions about quoting the period from 2030 to 2035, so it's an interesting environmental transition world as projects get planned over, you know, a much longer horizon, the seven to 10-year timeframe. So, but things are looking very well. Thanks for the question.

Okay, great. I appreciate the color. That's all I have.

I'll turn it over. Thanks. Thanks, Amir.

Thank you. And your next question comes from the line of James Matarago from RBC Tactical Markets. Please go ahead.

Yeah, yeah. Good morning, and thanks for having me on. You know, this is something that's a change in guidance. Can you just elaborate a little bit on, you know, some of the primary challenges that that you're seeing at the customer level, you know, I guess, kind of what changed with those conversations between Q1 and Q2, and I guess, you know, just what underpins your confidence in achieving that, you know, that group at the utility pool, the guidance in the second half of the year?

Well, thanks, James.

You know, what encourages me and what we're seeing is that there's a constant And, you know, in recent discussions with shareholders, you know, I mentioned what's important for me is to see that trend and, you know, for me, it will continue into 2020. So, also, this was something that I had pointed out. We're seeing some classes in the Canadian market. So, Canadian studies have definitely taken a more prudent approach to projects. But that being said, you know, we're still confident about seeing that volume growth in the back half of the year. It's just a slower pace, as I mentioned in my notes.

I appreciate it, Collin. Thanks. And then you alluded to QM&A in your prepared remarks. You know, I guess, you know, can you just remind us how you're viewing your balance sheet capacity right now and, you know, any color that you can provide on, you know, your recent acquisition of Lost Wealth and, you know, any potential opportunities that might have opened up in the U.S. for you. And after that, I'll turn the line over.

Thank you.

Thank you, James. I still have to point it out. We have a lot of availability on the credit facilities right now, around $700 million. Our leverage is sitting at 2.4 for this time of the year, both very well. And, you know, typically we actually leverage down in the second half of the year. So I think from a financial perspective, we have a lot of dry powder to go at it and, you know, on acquisitions. And for that extent, we are working on a few projects that are related to the wood-treating industry and also related to, as I had qualified in the past, adjacent businesses. Now, to the point of the law quell question, we definitely executed on that transaction with the intention to use it as an entrance to this market, which we've qualified to be like five billion dollars Canadian in annual sales, which would be lattice and two billion whole. But that being said, our intention is definitely to keep pursuing M&A in that space in North America.

Thank you. Thank you.

Thank you. And your next question comes from the line of Matthew Fitzgerald from National Bank Financial. Please go ahead.

Hi. Good morning. How are you?

Thank you.

The first question, actually, I just wanted to follow up on Lockwell. And your whole process, as you learn more about sort of the lattice market and the capacity to expand organically in the U.S., what are your thoughts there? And can you provide maybe a little bit of an update there in terms of what's happening in that market specifically?

Yes, certainly. So, you know, thank you and happy to provide more details. So, you know, the last two months, our sales team and the Lockwell team have been, you know, meeting with customers, introducing the new, you know, joint forces of the two businesses and definitely introducing Lockwell to the potential customers. It has been widely welcomed by all our customers and, you know, the The same question you have or customers have for us now is that, so what are your intentions? Are you guys going to acquire something in the U.S.? Are seller zones going to expand? And so there's a lot of interest for us to do so. So we're definitely putting some time behind analyzing that possibility. So I think right now there's a very positive feedback from our customers, which is usually the hardest part of a project is probably the scope of the commercial aspect and the the ability to penetrate the market. So I think that is indicating very positive for us right now. The balance of executing on that comes back down to, you know, CapEx, which obviously we have a lot of financial means, know-how, which we now have with the Lockwell team. And to say that this team at Lockwell is definitely very high on the idea of expanding, you know, the division and, you know, becoming the largest lattice manufacturer in North America. So, yeah, I would say we're definitely exploring those old avenues.

Okay. Do you have a sense of potential, you know, timing to kind of, you know, making a decision? Is it 2025, 2026 timeframe? Or is it too premature to talk specifics?

Well, we've got specifics. Obviously, you know, We do have governance and discussion with the board. We need to structure a project. But I guess I want to say that we don't want to drag our feet. I think there's an opportunity and, you know, being personal market is key in my mind. So it's too early to talk about this timing, but it's definitely, you know, something that's, you know, on my priority list.

Okay, great. And then just one quick question around TICE. I mean, now that we're seeing, you know, speculation around additional consolidation in the rail space, do you have a sense in terms of if there could be some slow results in terms of insourcing, or do these companies don't have their own, you know, treatment capacity, just any colors they want to put?

That's a good question, Max. It's a question that has come up several times in recent months, though. To clarify, there was only one Class 1 that had a treating facility, and they emerged with another Class 1. So there's only one Class 1 that owns a treating facility, and now they're using it in person. So all the other customers do not have this capability. And I would say, if I were to personally comment, I don't think any of them are interested in owning those assets. You know, we have customers talking to us about doing treating services where there would actually be, you could own the size, but you leverage our network. Some of us are talking to us about expansion projects, so they're definitely wanting to service them better in certain geographical regions. So we do have, you know, some of these discussions with our customers, which indicates to me that this is not a trend in the industry of, you know, of seeing, you know, the railroads start investing in these assets, which are, you know, not their core business.

Yeah, makes sense. Okay, that's great. Thank you so much. Thank you, makes sense.

Thank you once again. That is our new one. If you have a question, then your next question comes from the line with Manuel Perreira from Ligerdine Capital Markets.

Please go ahead.

On the rail side, could you maybe provide an update on the rail side customer project that could help compensate for the volume shortfall we see with this last one?

Yeah, yeah, certainly.

So, you know, as I said in Fred's remarks, we're looking to compensate some of the headwinds with some commercial businesses. There was a bit of delay in the first half of the year with federal funding in the U.S. After the programs got reviewed and there were some delays in those funds being made available to our customer base, but now we've been quoting and got awarded contracts here in the second half of the year, which supports my view that we'll be able to compensate some of the lost volume that had in the first part of the year. you know, once we get into next year, obviously the, you know, the, this heading of this class one will be behind us. So it's like a once and done. And then I do believe, as I said, we're going to continue growing our business at that low single digit pace. But, you know, I also see some opportunities with certain of our customers looking towards us for some capital investment so we can enhance our business with them. So, you know, More to come in, you know, obviously it takes a bit of time, but let's say in 26 and 27. But, you know, we'll put this behind us, and I think, you know, the future looks good for the railway side of this.

Okay. And could you talk a little bit about the upcoming contract renewals to come with the Class 1? How many might we see in 2025? And should we expect this to be more a positive or a negative catalyst, Ehek?

So, without naming them, one is behind us and another one to go this year, which is renewed at the end of October. Obviously, we're renegotiating these contracts. We're looking to adjust pricing fairly for us in the sense that we need to catch up on some cost increases that we've seen over the last few years. These contracts are for the long term and still, in certain cases, feel the pain of cost increases through COVID, which has not receded and has maintained. So, you know, as we execute on these contracts and look for adjusted pricing or, I would say, favorable triggers or incentives on good pricing, and by that I mean, if someone wants to give me more volume, I can definitely be more flexible on pricing, you know, I think it looks favorable for us, you know, in for the balance of the year, obviously, but I think we've got renewals now in 26 and 27 also, so it'll gradually sort of make its way in our results over the next 24 months.

Okay. And moving on utility polls, when we look at the U.S. electric companies, they've asked $29 billion in rate increase for this year, which more than doubled their request for the first half of 2024. American Electric Power also competed some of the future equity issuance. So it looks like that the fundamental is quite strong, although we see still elevated interest rates. Is it still going to put some pressure on spending, or would you say that utilities now realize the importance to spend despite the elevated interest rate environment? Any thoughts about the fundamentals for utility folks?

Well, thank you, Mario. I think you described the fundamentals very well, because what you just stated is what we observe as well. you know, red base increases, you know, have been allocated to several customers. We see some customers that are adjusting their capital structure to be able to move forward with their investments. And, you know, I associate that goes back to, you know, what we expressed in seeing our volumes picking up here in the second half of the year. And, you know, I'd like to think we'll keep doing so in the year 26. There's no doubt about the investment being required in the grid as a whole. And I think no matter what the interest rate environment does at this point, I think our customers have adjusted to traditional reality. I mean, if the interest do drop in the US in the next several months, it would only be favorable, I would say. But at this point, I think our customers have found ways to move forward.

Okay, and just looking for residential lumber, it's been flat. We've seen, obviously, the housing starts down, home renovation also down, home prices are down. Although, any thoughts whether it was more driven by rain or any thoughts about what we should expect from residential lumber in the second half of the week?

Yes.

Well, I reiterate our views on that, the range of $6 to $650 million, and I think we will be largely inclined to hit the range, the middle of the range, let's say, for this year. You're completely right that we had some headwinds early spring with a lot of rainy weekends and, you know, just unbearable weather, but, you know, The month of June was actually very good. We're seeing positive trend on the volume side right now. We definitely, again, have a great partner on the retail side. It's very aggressive on the pricing and it's dedicated to get market share in Canada. So, that is a real positive thing for us. So, you know, you're right. pick up again, then we'd also be sure to share what contributes positively to the business. But given that at this point, I still think we're dead business at this point.

Okay. Thank you very much for the time. Thanks, everyone.

Thank you. And once again, if you have a question, please press star 4 by the 1 on your telephone keyboard.

Once again, that is for anyone to ask a question.

And your next question comes from the line of Jonathan Golden from Scotiabank. Please go ahead.

Hi, good morning, Tina. Thanks for taking my question. I'm going to ask you a question. On the outlook for polls for the rest of the year, do you assume any rate cuts? What sort of macroeconomic variables are you considering in that value?

we're not baking in any rate cuts. That'd be very difficult for us to speculate on. So we use the information we have today, the current effects or some projections of effects and current interest rates and anything else that happens if there are rate cuts and it's positive. First, it takes a while to scope into our, to trickle back down to us if it's a bleeding indicator of positive for us. But, you know, and we also follow our customers. At this point, you know, if the rate cuts, it might impact next year's plan at this point and probably not as much this year, but it's a good leading indicator for us.

All right. So, if the macroeconomic conditions stay the same, what's your confidence that volumes will accelerate through the back half of the year? And if it's the order book, what sort of visibility do you have on that? And can customers delay orders and push them out potentially further?

That's such a good question. You know, at this point, and you know, I guess, we went through this exercise last year in the third quarter, so we definitely scrubbed the order book and had good discussions with our customers with regard to, you know, what's expected this year. You will notice, you know, the guidance is slightly adjusted, right? It can be expected growth, but it's still a positive growth for the year. To be honest, there's also an easier comp year over the years, and we had a decline last year in Q3 and Q4. So, you know, I'm quite comfortable with, you know, with what's going on right now as far as the order book is, conversations that our team is having with customers. I myself had a couple of discussions with some key customers as well.

You know, I think what we've put out is definitely achievable.

Okay, that makes sense. And then maybe moving to the margin guidance. still the same sort of guy that's above 17%. I mean, that gives a lot to the imagination. You're above 18 for the second quarter in a row now. Why wouldn't we assume that you can do 18%? I mean, spot volumes have been, you know, here for a bit now, and you're still able to maintain that 18% mark.

So, you know, I'll give you the reference. If you look last year, but it's true in many years the second half of the year typically has less volume so the residential longer business sort of you know slows down the maintenance season also sort of for for pulling inside sort of slows down as well so typically the h2 is a bit of a lower volume and even the jump margin is slightly lower than in the first half of the year so if you scroll that in but it pulls us you know a bit downwards from the point we are today on the year today so you know we had 17 before You're right, it leaves lots of imagination. As I like to say, the team is always looking for defenses where I was looking for home runs. I don't let anyone off the hook easily. I'm looking for good performance. But it's always that impact of H2 that would bring us slightly lower than the year-to-date number we have now.

Okay, that makes sense. And if we look at the historical cadence from the first half to the second half in terms of margin, is the last couple years, three years, maybe a good reference point? Or is it better to look farther back to kind of remove some of the pricing dynamics we've seen in the past couple years?

I would say, Jonathan, that in most years it's pretty representative.

Starting last year, I would say probably one of the anomalies that we saw was in 2023. It was a year I probably remember when there was a lot of demand and a little bit of craziness in the market. But other than that year, I think if you go back historically, I think you'll always see probably that gap between the first and second half.

Okay, that makes sense. Thank you for taking my question. Thank you, Jonathan.

Thank you. No further questions. Thank you.

Thank you, Nina. And thank you, everyone, for joining us today.

We look forward to updating you when we release our third quarter results. Until then, enjoy the rest of the summer and stay safe.

This concludes today's call. Thank you for participating in the Audits Connect.