Q3 2025 Earnings Call Transcript

Good day, and welcome to the Altria Group 2025 Third Quarter and 9 Months Earnings Conference Call. Today's call is scheduled to last about 1 hour, including remarks by Altria's management and a question-and-answer session. [Operator Instructions]. I would now like to turn the call over to Mac Livingston, Vice President of Investor Relations. Please go ahead, sir.

Thanks, Angela. Good morning, and thank you for joining us. This morning, Billy Gifford, Altria's CEO; and Sal Mancuso, our CFO, will discuss Altria's third quarter and first 9 months business results. Earlier today, we issued a press release providing our results.

The release, presentation, quarterly metrics and our latest corporate responsibility reports are all available at altria.com. During our call today, unless otherwise stated, we're comparing results to the same period in 2024. Our remarks contain forward-looking statements, including projections of future results. Please review the forward-looking and cautionary statement section at the end of today's earnings release for various factors that could cause actual results to differ materially from projections. Future dividend payments and share repurchases remain subject to the discretion of our Board of Directors.

We report our financial results in accordance with U.S. generally accepted accounting principles. Today's call will contain various operating results on both a reported and adjusted basis. Adjusted results exclude special items that affect comparisons with reported results. Descriptions of these non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures are included in today's earnings release and on our website at altria.com.

Finally, all references in today's remarks to tobacco consumers or consumers within a specific tobacco category or segment refer to existing adult tobacco consumers 21 years of age or older. With that, I'll turn the call over to Billy.

Thanks, Mac. Good morning, and thank you for joining us. Altria continued to build significant momentum in the third quarter with exciting progress across our businesses. For the third quarter, we delivered strong financial performance growing adjusted diluted earnings per share by 3.6%, and we continue to make meaningful progress across our smoke-free portfolio and toward our long-term adjacency goals. on! held steady in a highly competitive environment, and Helix announced plans to launch on!

PLUS its innovative next-generation oral product. Horizon also made important regulatory filings for a joint venture and heated tobacco products. Looking at our long-term adjacent growth opportunities, we announced a collaboration with KT&G to explore opportunities in international innovative smoke-free products and U.S. non-nicotine products. And importantly, we continue to demonstrate our commitment to returning value to our shareholders.

In August, we announced our 60th dividend increase in 56 years and yesterday, our Board authorized an expansion of our share repurchase program. My remarks this morning will focus on results from on! and the launch of on! PLUS, updates on our heated tobacco and e-vapor portfolio, the state of the regulatory environment and our strategic relationship with KT&G. I'll then turn it over to Sal, who will provide further details on our business results, 2025 outlook and our continued commitment to providing significant cash returns to shareholders.

Let's begin with on! and the nicotine pouch category. Oral nicotine pouches continue to be the primary driver of the estimated 14.5% increase in oral tobacco industry volume over the past 6 months. In the third quarter, nicotine pouches grew to 55.7 share points an increase of 11.1 share points year-over-year. Competitor promotional activity was highly elevated during the third quarter, particularly during September driving incremental growth for nicotine pouches.

We continue to monitor how this elevated promotional activity influences longer-term brand adoption. Despite this competitive landscape, Helix was steady in the third quarter, growing on reported shipment volume to over 42 million cans, representing an increase of nearly 1% versus the prior year. For the first 9 months, Helix grew on! reported shipment volume to over 133 million cans, representing an increase of approximately 15% versus the prior year. While third quarter shipment volumes for on! were influenced by trade inventory dynamics driven by promotional activity in the category we remain encouraged by the steady consumer demand reflected in our estimated retail takeaway.

In fact, on! retail share of the total oral tobacco category was 8.7% for the third quarter and first 9 months, demonstrating stability for the quarter and an increase of 0.8 share points for the first 9 months. on!'s retail price increased by approximately 1.5% in the third quarter versus the prior year. In contrast to the balance of the nicotine pouch category, where average retail prices for the category declined 7% nationally and more than 70% in 1 major retail chain. A clear reflection of the intense promotional activity during the quarter. Yet, Helix's year-over-year results continue to be a meaningful contributor to the oral tobacco products segment adjusted OCI stability and adjusted OCI margin expansion in the third quarter.

Helix is positioning itself for long-term sustainable success. Helix recently launched on! PLUS in Florida, North Carolina and Texas, and we are encouraged by the recent actions from the FDA that signal progress toward a more efficient and transparent authorization process for nicotine pouches, which I'll discuss later in my remarks. on! PLUS launched with 3 flavors and 3 nicotine strengths, which we believe are complementary to the current on! portfolio.

We believe on! PLUS is a premium and differentiated product that we expect to appeal to both adults who dip and competitive nicotine pouch consumers. on! PLUS uniquely delivers on 3 desirable attributes for pouch consumers. Comfort, nicotine delivery and flavor satisfaction.

In recent research, we compared on! PLUS MINT against several leading competitive brands. While a small sample size on! PLUS outperformed all competitive brands in the sample. on!

PLUS achieved the highest purchase intent score driven by the comfort of the pouch. In addition, innovation and consumer preferences remain at the forefront of Helix strategy. Helix continues to build a pipeline of new on! PLUS flavors and looks forward to bringing them to the U.S. market.

In heated tobacco, Horizon completed a key milestone on its path to bring Ploom to the U.S. In August, Horizon filed a combined PMTA and MRTPA with the FDA for Ploom and Marlboro heated tobacco sticks. We believe the science and evidence supporting Horizon's applications are compelling and present a strong case for FDA authorizations. Our teams are working diligently on Ploom's go-to-market plans and we look forward to engaging smokers with this innovative product.

Moving to our e-vapor business and NJOY. We believe we have completed the product design of a modified NJOY ACE solution that addresses all 4 disputed patents. Our teams are evaluating the potential pathways to bring the modified ACE product to market. During the third quarter, both NJOY and JUUL initiated new litigation against one another.

JUUL initiated litigation in federal court and before the ITC against NJOY, asserting claims of patent infringement based on sales of NJOY DAILY and on any other products NJOY may be developing that would infringe JUUL's patents. We do not expect a final determination from the ITC before early 2027 and intend to vigorously defend our positions in this litigation. In addition, NJOY initiated litigation against JUUL in Federal Court and before the ITC are certain claims of patent infringement based on the sale of certain JUUL products. As we assess our path forward with ACE and work diligently on our innovative product pipeline in e-vapor, the market remains saturated with flavored disposable e-vapor products, the majority of which we believe have evaded the regulatory process.

At the end of the third quarter, we estimate the e-vapor category included approximately 21 million vapors, up nearly 2 million versus a year ago. During the same period, disposable vapors increased by an estimated 2.4 million to nearly 15 million. We believe that flavored disposable e-vapor products continue to represent over 60% of the category. This remains a significant issue, but we are encouraged by the recent enforcement actions and constructive regulatory dialogue that signal progress.

For some time, we have advocated for stronger enforcement against the listed products as well as for an acceleration in FDA market authorizations for smoke-free products. During the third quarter, we observed notable enforcement efforts targeting the listed products and welcomed positive plans from the FDA regarding the pace of authorizations within the nicotine -- oral nicotine pouch category. On the enforcement front, we continue to see elevated engagement and action from federal agencies and government officials. These actions included coordinated raids executed by the federal multi-agency task force across the U.S., resulting in the seizure of hundreds of thousands of illicit vapor products from retailers and wholesalers and the potential for further legal action.

Ongoing seizures of illicit products, including seizure by HHS and U.S. Customs and Border Protection of more than 4 million units of illicit vapor products with an estimated retail value over $86 million, the largest seizure of this kind and a targeted nationwide operation led by the Drug Enforcement Administration focused on illicit activity at vape shops. These federal actions alongside efforts at the state and local level are signs of progress. However, we believe sustained and coordinated enforcement is necessary to materially impact the state of the market.

We remain steadfast in our commitment to supporting a well-functioning regulatory system. It is critical to unlock the full potential of tobacco harm reduction. These ongoing enforcement efforts are essential to provide adult consumers with access to regulated products that are supported by science and are aligned with public health goals. Beyond enforcement, we have been advocating for the FDA to accelerate product authorizations and establish a responsible marketplace for smoke-free products.

Regulatory speed and clarity are also essential to delivering innovative options that meet adult consumer preferences and advanced harm reduction. In September, the FDA launched a pilot program to streamline PMTA reviews for oral nicotine pouches and Helix was notified by the FDA that applications for on! PLUS are included in the program. We're encouraged by this development from the FDA, and we are actively engaging with the FDA on these product applications.

While the pilot only applies to certain nicotine pouches, we hope it signals broader FDA efforts to increase the speed of regulatory decisions across all smoke-free platforms. As we pursue the smoke-free opportunity within the U.S., we remain committed to our long-term adjacent growth goals. In September, we took another step forward when we announced a new collaboration with KT&G. First, we are jointly exploring opportunities to grow global demand for nicotine pouch products, including the potential expansion of the on! portfolio into select international markets.

As part of our initial steps in international modern oral, we entered into an agreement with KT&G to acquire an ownership interest in Another Snus Factory, the manufacturer of the LOOP Nicotine Pouch brand. LOOP is currently available in a range of strengths with unique flavors. Our research shows that complex flavors are driving growth for modern oral in international markets and we are pleased to add our investment in ASF to complement our portfolio of on!, on! PLUS and FUMI to effectively compete across all modern oral product segments.

Second, our collaboration includes the exploration of opportunities in U.S. non-nicotine, specifically in the energy and wellness space with KT&G's Korea Ginseng Corporation, leveraging their product expertise and our commercial capabilities. In addition, as part of our relationship with KT&G, we're exploring ways to improve operational efficiency in traditional tobacco with the potential benefits for both companies in our respective home regions. We believe this collaboration further supports our enterprise goals and may strengthen our capabilities relevant to international nicotine products. We're excited about our new relationship with KT&G and look forward to providing updates on our joint efforts.

In summary, Altria continued to build momentum in the third quarter. Our core tobacco businesses remained resilient. We advanced our smoke-free portfolio, and we opened new pathways for long-term adjacent growth in international modern oral and U.S. non-nicotine innovation. These efforts support the commitment to our vision and enterprise goals.

I'm confident in our strategy, energized by the opportunities ahead and thankful for our team's continued dedication to delivering long-term shareholder value. I'll now turn it over to Sal to provide more detail on the business environment and our results.

Thanks, Billy. Altria delivered strong third quarter and first 9 months financial performance. Adjusted diluted earnings per share increased 3.6% in the third quarter and by 5.9% for the first 9 months. In the smokeable products segment, adjusted operating company's income grew by 0.7% to nearly $3 billion in the third quarter and by 2.5% to $8.4 billion for the first 9 months.

Adjusted OCI margins expanded to 64.4% for the third quarter and first 9 months, representing impressive margin growth of 1.3 percentage points and 2.7 percentage points, respectively. Smokeable products segment reported domestic cigarette volumes declined by 8.2% in the third quarter and 10.6% for the first 9 months. When adjusted for trade inventory movements and calendar differences, the segment's domestic cigarette volumes for the third quarter declined by an estimated 9%, slightly above the estimated 8% volume declines at the industry level. For the first 9 months, when adjusted for calendar differences and trade inventory movements, the segment's domestic cigarette volumes declined by an estimated 10.5% and by 8.5% at the industry level.

PM USA continues to execute on its strategy of maximizing profitability over the long term. While maintaining its focus on Marlboro and the premium segment, PM USA recognizes the opportunity to compete within the discount segment, guided by data-driven strategies. Within the highly profitable premium segment, Marlboro maintained its long-standing leadership in the category. In the third quarter, Marlboro expanded its share of the premium segment by 0.3% to 59.6% versus the prior year and by 0.1% sequentially.

At the same time, PM USA continued to strategically invest behind Basic, appealing to a price-sensitive cohort of adult smokers within the discount segment. Many adult smokers continue to face discretionary spending pressures resulting from a variety of macroeconomic headwinds, including the compounding effects of inflation. Leveraging PM USA's data analytics and robust RGM tools, Basic grew 0.9 share point sequentially and 1.4 share points year-over-year for the third quarter. The discount segment of the industry expanded by 2.4 share points year-over-year with Basic capturing over half of that growth.

Importantly, our data show that most of Basic share gains came from adult smokers already within the discount segment, with limited impact on Marlboro. As a result of the combined efforts across the PM USA portfolio of brands, cigarette retail share increased sequentially for the second consecutive quarter to 45.4%, growing 0.3 share points in the third quarter. Cigars also continued to be a meaningful contributor to our smokeable products segment results. For the third quarter and the 9 months, Middleton reported shipment volume increased 2% and 1.1%, respectively, as Middleton outperformed in the large mass cigar industry.

Let's turn now to the Oral Tobacco Products segment. In the third quarter, adjusted OCI declined by less than 1%. Over the same period, the segment saw improved profitability through impressive adjusted OCI margin expansion of 2.4 percentage points to 69.2%. For the first 9 months, adjusted OCI increased by 3.3%, with adjusted OCI margin expansion of 1.8 percentage points to 69%.

Helix's year-over-year performance was a meaningful contributor to the stability of adjusted OCI in the third quarter and to the adjusted OCI growth for the first 9 months. Total segment reported shipment volume decreased 9.6% for the third quarter and 5.2% for the first 9 months. As growth in on! was more than offset by lower MST volumes. When adjusted for calendar differences and trade inventory movements, we estimate that third quarter and first 9 months, oral tobacco products segment volumes declined by an estimated 5.5% and 3.5%, respectively.

Oral Tobacco Products segment retail share was 31.1% for the third quarter and 32.9% for the first 9 months. In the highly profitable moist smokeless tobacco segment, Copenhagen continued to maintain its long-standing premium leadership. Turning to ABI's financial results. We recorded $157 million of adjusted equity earnings in the third quarter, up 9% and versus the prior year.

As Billy mentioned, our businesses performed well in a dynamic environment during the first 9 months of the year, and we effectively maintained the strength of our core tobacco businesses while investing toward our vision. As a result, we raised the lower end of our 2025 guidance range. We now expect to deliver adjusted diluted EPS in a range of $5.37 to $5.45, representing a growth rate of 3.5% to 5% from a base of $5.19 in 2024. We expect EPS growth to moderate in the fourth quarter as we lap the lower share count associated with the 2024 accelerated share repurchase program and the benefit of the MSA legal fund expiration.

We are also mindful of the challenged state of tobacco consumers and will continue to closely monitor their purchasing behaviors. Our strong financial performance for the first 9 months enabled us to return nearly $6 billion to our shareholders, including $5.2 billion in dividends and $712 million in share repurchases. We remain committed to providing significant cash returns to our shareholders. as demonstrated by our recent dividend increase and share repurchase announcement. In August, our Board increased our regular quarterly dividend by 3.9% to $1.06 per share, marking our 60th dividend increase in 56 years.

This milestone underscores our legacy of delivering consistent shareholder value and highlights the resilience of our businesses through decades of change. And today, we announced that our Board authorized the expansion of our existing share repurchase program from $1 billion to $2 billion, which now expires on December 31 and 2026. Lastly, our balance sheet remains strong. Our debt-to-EBITDA ratio as of September 30 was 2x in line with our target of approximately 2x. With that, we'll wrap up, and Billy and I will be happy to take your questions.

While the calls are being compiled, I'll remind you that today's earnings release and our non-GAAP reconciliations are available on altria.com. We've also posted our usual quarterly metrics, which include pricing, inventory and other items. Operator, let's open the question-and-answer period.

[Operator Instructions]. We will take questions from the investment community first. Our first question comes from Matt Smith with Stifel.

Sal, you raised the low end of the guidance again, which is nice to see here, but the fourth quarter implies a deceleration in the earnings growth. You called out lapping the share repurchase and the MSA legal fee expiration. Are there any other key puts and takes as we think about the fourth quarter and more importantly, the path to growing smokeable OCI again?

Thank you, Matt. No, as you mentioned, we did talk about the share repurchase and the MSA legal funnel. I'll also say we continue to monitor consumer spending, the marketplace remains dynamic. So I would really focus on that, but we feel really good about the ability to narrow guidance by raising the bottom.

We're very pleased with the first 9-month financial performance. And then smokable profitability, again, we feel really good about PM USA's performance, their ability to expand margins for Marlboro remains strong within the premium segment. So we feel really good about the smokable business and happy to be able to provide the guidance.

And as a follow-up, you called out the underlying cigarette industry rate of decline moderating on a sequential basis. Billy, I know you provide the 12-month bridge that shows the macroeconomic factor. But with -- sometimes that 12-month bridge can not move as much on a quarter-to-quarter basis. So when we think about the moderation that we saw sequentially, can you talk about the drivers that you think are leading to that?

Yes. Thanks for the question, Matt. I think when you step back and look at it, you're right, the 12-month doesn't move quite as quickly. I think what you're seeing in the marketplace -- and look, our consumer is still under pressure.

Again, they don't need improvement. They just need consistency. And we've seen a bit of consistency around gas prices, inflation, things of that nature, and we'll see how that continues through the year. And I think we're starting to see some of the -- and I talked about it in my remarks, some of the stepped-up enforcement in e-vapor, it puts consumers back at play.

We would love to be able to keep them in the smokeless category, but when enforcement happens, it certainly puts them at play and they consider other nicotine categories.

And we'll take our next question from Bonnie Herzog with Goldman Sachs.

All right. I guess I have a question first on the nicotine pouch category. The competitive environment has really intensified. So could you touch on what you're seeing and whether I guess you've been happy with the performance and positioning of on! considering the moderating growth.

And then could you talk about some of your initiatives that you're implementing, I guess, to maybe turn the performance around. I guess I'm kind of wondering, do you feel that you need to step up promotional spend. And then finally, could you maybe share early feedback on the rollout of on! PLUS and I guess, assuming it's positive, should we assume you'll roll out that brand nationally.

Yes, thanks for the question, Bonnie. You're right. The competitive environment significantly stepped. I mean when we try to dimensionalize it on! was moving up, call it, 1.5% at retail from a price perspective. while the entire category was down 7% on a national basis, but as much as 70% in a major retail.

So it was a significant shift in promotional spending by competitors. We had that early on with the on! in the marketplace when we launched, and we've talked about how we're bringing the revenue growth management tools over to the category. So we're extremely pleased with the performance where we were moving up in retail price and the category was moving down significantly. I know people get hung up on some of the shipment volume.

I think the encouraging aspect that we see is on the retail takeaway volume. And when you look at that, that's the true demand by the consumer, and that was steady even in that highly competitive environment. Much too early on on! PLUS to really mention, we are certainly excited about the differentiation that product has and research, and we're excited to be able to bring that to market and expand it when it's appropriate.

All right. And then I just wanted to also ask about your KT&G partnership, it was recently expanded and you touched on this, but just hoping for a little more color on the operational efficiencies you see, especially as it relates to opportunities to maybe take advantage of the double duty drawback. Also, could you give us a little more color on I guess, opportunities for alternative revenue streams as well as further expansion internationally given this partnership?

Yes. Thanks, Bonnie. And you touched on 2 of the 3. We really see it as 3-pronged. Certainly, the modern oral initiative, being able to expand on! and on!

PLUS in international markets is something that we'll be exploring. Rounding out our portfolio with the inclusion of LOOP into that, so we feel like that completes the portfolio, and we look forward to continuing discussions with them on how to think about expanding internationally into other markets. The second point is certainly the non-nicotine opportunities. And I tried to highlight a little bit where we would explore working with them.

They have certainly the product expertise in the Korean red ginseng and we would look to work with them based on our commercial distribution strength in the U.S. of what are the opportunities there and certainly, we'll share more when it's appropriate. And the third was the operational efficiencies. And what we saw there was it was the ability to adapt our manufacturing center for cigarettes for items that are specific to international markets, whether that be pack size or trace and tracking and things of that nature. It certainly, to your point, allows us to take advantage of duty drawback.

That's a benefit of it. But it also opens up the door for us to think about international opportunities in the future.

[Operator Instructions]. We'll go next to Eric Serotta with Morgan Stanley.

Billy, starting on on! PLUS, I realize it's very early days, but you did mention it as premium positioning. Could you talk a bit about the price point as you launch in the 3 states where you did a realizing only a matter of weeks or less. But how are you thinking about the relative price point of on!

PLUS relative to on! and relative to competitors, which I realize are moving target at the moment. And then Sal, controllable costs and smokables were up pretty significantly year-on-year, I realize they were down in a year ago. So there was perhaps a comparison issue. But how are you thinking about controllable costs going forward?

Or is there any additional color you could talk about in the quarter? And the smokeable OCI growth was relatively muted at less than 1%. Was that really the controllable cost, or are there other factors that you'd point to that constrain the OCI growth in the quarter?

Yes. Thanks, Eric. So I'll kick this off and then Sal can follow up with the question for him. I think when you think about on!

PLUS, we certainly see that as a premium-priced product because of the differentiation and the satisfaction we think it brings in the experience to the consumer. In our research, the consumers choose that as the top product in there from a total experience standpoint, and we think it can demand the premium price at retail. Certainly, in any introduction, you have introductory price promotions. We know as soon as we get it in consumers' hands, they experience that differentiation that I'm trying to highlight to you.

And so we'll certainly have introductory price promotions as we look to expand when appropriate.

As far as controllable costs go, I guess I'd start by saying that I would not look at controllable costs quarter-by-quarter. I think -- I really believe you need to look at the cost over the long term exactly for the reasons you highlighted in the question. There are some comparison issues. Costs are not linear.

There's timing within a quarter. So you touched on that in the question. I think you are right to point that out. As far as controllable costs going forward, I'm going to be careful not to kind of lean into future guidance and things like that.

But I would tell you how we think about costs. Obviously, in a declining category like smokeable and cigarettes in particular, cost management is an important part of the growth algorithm along with pricing. We do manage our overall costs. Obviously, we've shared with you the Optimize and Accelerate program that, that program is not just about effective cost management and cost reductions.

It's also about better performance and speed to market. And we are taking those cost savings and reinvesting that in our future. I'll also share that we spend a lot of time continuing to hone our data analytics in our revenue growth management tools, and that has been extremely helpful. And while it manifests itself as price realization in the P&L, I look at that as productivity because we are better able to use promotional investments to support our brands and PM USA and data analytics team continue to do a terrific job of using data analytics and those RGM tools extremely effectively.

So we're very happy about that. And then OCI for smokeable, I really would look at that over a longer term, again, not a particular quarter smokable is up 2.5% on a year-to-date basis. Very pleased with its performance, especially when you see the strength of Marlboro within the premium segment.

We'll go next to Faham Baig with UBS.

A couple from me as well. Firstly, if I could come back on the duty drawbacks. If we take a bigger look at the at the picture. Altria is likely to make around $3 million in federal excise tax payments this year.

Should this be the amount that we think about the potential benefit from the duty drawbacks. And is this likely to be the sort of key engine that drives group EPS growth to high single digits over the next couple of years to meet the mid-single-digit EPS CAGR to 2028. So that's the first question. The second one, going back to the pilot program that the FDA is running. Does this or could this impact your decision to go ahead with the national launch on on!

PLUS, i.e., you may wait for the decision on this? Or you may take a decision irrespective of the program? And the second one on that is why do you think it's possible for the FDA to accelerate this process on nicotine pouches, but it's not possible to do so in vapor, which is arguably a much larger category and reviews there began much earlier.

Yes. So quite a few things in that question. So if I don't touch on one, please follow up. I think when you think about the duty drawback, I wouldn't jump to a conclusion at this point in time.

It's really about a relationship with international players. How do we think about producing cigarettes for international, some of the other benefits that we get certainly drawback is an additional benefit to that. When you think about the pilot program, I want to be clear that we want a functioning regulatory system. So we're going to always make our decisions based on what's the long-term best interest of the company with an eye towards what is best to get a functioning regulatory system.

I think your question related to pouches versus vapor, I think from comments from them, but just the interpretation of it being called a pilot program, they wanted to start where it made sense to start, and that's in nicotine pouch. It's a fairly set category, even though we've seen some players maybe enter the marketplace illicitly. It gives them a way to thinking about the category in total and then differentiated products and what's different between individual products in the marketplace, which should speed up their review of that. I think when you think about vapor, the marketplace is a mess right now.

And so I think the nature of a pilot program is to learn. They will learn manufacturers, including us, will learn. It's been a very collaborative process with constant engagement through the application review process, which is very different and very encouraging from the FDA we experienced under the previous administration. So I think once you have those learnings, we would hope and encourage the FDA to expand it to other categories.

I guess just a quick follow-up. Could you clarify that the EPS growth is suggested to accelerate to high single digits over the next couple of years in order to meet your mid-single-digit EPS CAGR. Is that still the ambition?

Our ambition is the goal. We haven't changed our goals from an overall CAGR that we stated previously. And that's been our stated goal. So yes, that's the way I would think about how we're going to manage the business going forward.

There appears to be no further questions at this time. I would now like to turn the call back over to Mac Livingston for any closing remarks.

Thanks, everybody, for joining us today, and have a great day.

This concludes today's call. Thank you for your participation. You may disconnect at any time.