INVX

Good morning, welcome to Innovex's First Quarter of 2026 Earnings Call. At this time, all participants are in a listen-only mode, and there will be a question-and-answer opportunity at the end of this call. As a reminder, this call is being recorded. I will now turn the call over to Eric Wells, Chief of Staff. Please go ahead.

Good morning, everyone, and thank you for joining us. An updated investor presentation has been posted under the Investors tab on the company's website, along with the earnings press release. This call is being recorded, and a replay will be made available on the company's website following the call. Before we begin, I would like to remind you that Innovex's comments may include forward-looking statements and discuss non-GAAP financial measures. It should be noted that a variety of factors could cause Innovex's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Please refer to the first quarter financial, and operational results announcement that we released yesterday. For a discussion of forward-looking statements, and reconciliations of non-GAAP measures. Speaking on the call today from Innovex, we have Adam Anderson, Chief Executive Officer, and Kendal Reed, Chief Financial Officer.

I will now turn the call over to Adam Anderson.

Good morning, and thank you for joining us today. I want to start by thanking our teams across the organization for another quarter of strong execution. We continue to operate in a dynamic environment, but our people have remained focused on serving customers. Leveraging our unique platform, and growing our business through relentless innovation, and a commitment to delighting our customers. That commitment is reflected in our first quarter performance. Since the merger with Dril-Quip, we've stayed disciplined in how we run the company. Improving the cost structure, expanding the technology portfolio, and focusing on cash flow, and returns. Core to our success is our no barriers culture, which means we tear down barriers between ourselves, our teams, and our customers. We operate as one team across regions, and product lines, not as a collection of separate businesses. That remains a real source of competitive advantage for us.

On today's call, I'll walk through our first quarter performance. Highlight several important commercial, and operational developments from the quarter. And then turn the call over to Kendal for a more detailed review of our financial results, capital allocation priorities, and outlook for the second quarter. Starting with performance, we delivered a strong start to 2026. First quarter revenue totaled $239 million, which exceeded the high end of our guidance range. And adjusted EBITDA totaled $49 million, with an adjusted EBITDA margin of 21%, well above the high end of our guidance range. These results reflect continued strong operational execution, organic growth from new product introductions, cross-selling across our global platform. We benefited from a favorable mix in the quarter, and we also saw earlier than expected benefits from the exit of the legacy Eldridge facility.

More broadly, the quarter reinforces our view that our subsea business can generate margins above 20%. When operated with the same disciplined cost focus, and a commercial approach that we apply across the rest of Innovex. Our no barriers culture has unlocked the potential of our combined team. I've been particularly impressed by the contributions from our colleagues who joined Innovex as a part of the Dril-Quip merger. They bought into the culture, and are unlocking the embedded value in technology in the subsea portfolio. Commercial performance remained healthy across our core markets. In U.S. Land, we continue to outperform underlying activity levels. Organic growth was driven by cross-selling, as well as new product introductions. As a reminder, we've curated a portfolio of big impact, small ticket products, and services. In aggregate, our offering represents just 2%-3% of total well cost.

Despite representing a small proportion of the cost of a well, our technologies are critical to well performance. Therefore, the purchase decision is driven primarily by performance, not price. Offshore and internationally, we continue to build momentum in subsea. During the quarter, we secured two significant project awards in Asia, each exceeding $20 million in value, reflecting the strength of our specialized technology portfolio. And our ability to win complex high-specification work. These awards span multiple parts of the well system, reinforcing the breadth of our subsea technology portfolio. We also delivered the first subsea wellhead order in Southeast Asia under the OneSubsea alliance. Representing an important milestone in expanding our presence in integrated offshore projects. Beyond Asia, we continue to make encouraging commercial progress across key offshore basins. Where we see attractive long-term opportunities for our portfolio.

More broadly, we're seeing a growing pipeline of subsea opportunities. Which supports our confidence in the trajectory of the business. In the Middle East, first quarter activity was softer than we had anticipated. Driven primarily by project timing, and conflict-related disruptions. We remain encouraged by our recent commercial progress, including multiple offshore awards in the Kingdom of Saudi Arabia. As well as a contract extension for our off-bottom liner systems, and lower completion technologies. We continue to view the Middle East as an important long-term growth market. We recently completed the acquisition of Drilling Innovative Solutions for $16 million, or approximately 4x trailing 12-month EBITDA. This is exactly the type of transaction that we believe drives value. One that is priced reasonably, and offers substantial opportunity for organic growth by leveraging our platform.

DIS brings differentiated production technologies that complement our existing completions offering. Strengthening our U.S. offshore market position, and create additional opportunities to grow with both existing, and new customers. We believe the DIS portfolio has applicability across global deepwater markets, as well as select onshore markets. DIS fits squarely with our model of curating a portfolio of big impact, small ticket products with strong margins, low capital intensity, and meaningful room for growth. Stepping back, our priorities remain unchanged. Gaining share, expanding our technology portfolio, driving innovation, improving efficiency, and disciplined capital allocation. We believe the combination of innovation, execution, and capital discipline continues to differentiate Innovex. And we see a strong pipeline of opportunities across both organic initiatives, and inorganic opportunities. As we move through 2026, we remain confident in the trajectory of the business. And our ability to create durable value for shareholders over time.

I will now turn the call over to Kendal to walk through our financial results, and outlook in more detail.

Thanks, Adam, and good morning everyone. I'd now like to review our first quarter 2026 financial results. For the first quarter 2026, revenue totaled $239 million. Down 13% sequentially from the fourth quarter of 2025 and down 1% year-over-year versus Q1 2025. Adjusted EBITDA totaled $49 million, resulting in an adjusted EBITDA margin of 21% compared to 19% in Q4 2025, as well as Q1 2025. We were pleased to exceed the high end of our guidance range on both revenue, and adjusted EBITDA despite a dynamic operating environment during the quarter. Profitability in the quarter benefited from favorable product mix, and improved manufacturing efficiency associated with a transition out of the Eldridge facility. As we consolidated our footprint, and improved throughput. We saw better absorption, and stronger operating leverage within the subsea business.

Reported SG&A was higher sequentially due to several discrete items. Including legal, transaction-related, and other temporary costs. Excluding these items, underlying SG&A remains well controlled, reflecting our continued focus on cost discipline. During the quarter, we recorded a $49 million legal accrual related to patent infringement litigation. Between Impulse Downhole Tools USA, and Innovex's wholly owned subsidiary, DIS, following the previously disclosed jury verdict. No judgment has been entered at this time. We strongly disagree with the jury verdict, and intend to pursue post-trial motions. And if necessary, appeal any resulting judgment to the U.S. Court of Appeals for the Federal Circuit. From a geographic standpoint, NAM Land remained a source of strength. With revenue holding essentially flat at $137 million. Compared to $139 million in the fourth quarter, despite weather-related disruption during the quarter.

International and offshore revenue declined 24% sequentially to $102 million from $135 million in Q4. As we discussed previously, the fourth quarter benefited from an unusually high level of subsea deliveries. Including approximately $15 million of shipments, that we had originally expected to occur in the first quarter. Creating a tough year-over-year comparison. Lower subsea delivery volumes, softer activity in certain international markets. And modest disruptions related to the ongoing conflict in the Middle East, contributed to the sequential decline. A meaningful increase in activity in Mexico partially offsets this softness. We view quarterly volatility as timing related, and consistent with the normal variability that can occur in offshore, and project-oriented markets. Importantly, underlying commercial momentum remains solid, and we remain constructive on the long-term outlook. Expecting significant subsea momentum in the back half of 2026.

Capital expenditures in the first quarter 2026 totaled $6 million. Down 35% sequentially, representing approximately 2.4% of revenue. CapEx remained in line with Innovex's historical range of 2%-3% of revenue. Despite ongoing facility integration efforts associated with the exit of the legacy Eldridge facility. Free cash flow was $14 million in the quarter, representing approximately 28% conversion of adjusted EBITDA. As a reminder, the first quarter is typically our weakest free cash flow quarter. Due to the timing of certain annualized cash payments. We also saw a temporary working capital build in the quarter, primarily related to the timing of collections, and normal inventory movements. Which we expect to moderate as the year progresses. Our capital-light model continues to support strong through cycle free cash flow generation.

We ended the quarter with approximately $201 million of cash, and cash equivalents. And no bank debt, providing significant financial flexibility. Our balance sheet strength supports a disciplined capital allocation framework. Centered on balancing organic investment with selective high return M&A opportunities, and opportunistic share repurchases. Our M&A pipeline remains robust, including a mix of smaller bolt-on opportunities like DIS, as well as larger opportunities. That said, we will only execute where opportunities align with our big impact small ticket strategy. Can generate high gross margins with low capital expenditures, and can be acquired at reasonable multiples. This disciplined approach remains central to how we intend to create long-term shareholder value.

Consistent with that discipline, we also repurchased over $14 million of our shares at a price of $24.59 per share. Underscoring our confidence in the intrinsic value of Innovex, and our commitment to thoughtful capital allocation. We were also pleased to see Amberjack complete a secondary sale of shares during the quarter. We believe the transaction broadened our public float, and enhanced trading liquidity. Amberjack remains a valued long-term shareholder, and partner. Return on capital employed for the 12 months ended March 31st, 2026 was 12%. ROCE is impacted by our net cash balance sheet. We remain focused on achieving a long-term target of high teens ROCE via margin expansion, high return M&A, and shareholder returns.

Looking ahead to the second quarter of 2026, we expect revenue in the range of $235 million-$245 million. And adjusted EBITDA of $43 million-$48 million. Our guidance reflects a less favorable product mix in the second quarter, as well as the potential for sales disruptions. And higher costs associated with the ongoing conflict in the Middle East. Even with those near-term pressures, we remain confident in our margin improvement trajectory as 2026 progresses. Supported by continued share gains in U.S. lands, improving international activity. And the growing subsea opportunity set that Adam discussed earlier. I'll now turn the call back to Adam.

Thanks, Kendal. We are pleased with our start to 2026. We exceeded the high end of our guidance range. Continued to improve margins, generated positive free cash flow, and strengthened our portfolio through the DIS acquisition. Just as importantly, we continued to build momentum commercially, particularly in Subsea. Where recent wins reinforce the progress, we're making with customers around the world. While near-term market conditions may create some quarterly variability, our priorities remain unchanged. We will continue to focus on gaining share, expanding our technology offering through innovation. Improving operational efficiency, and deploying capital in a disciplined manner. We believe our integrated platform, strong balance sheet, and no barriers culture positions Innovex well to create durable long-term value. Thank you again to our employees, customers, and shareholders for your continued trust, and support. Operator, we can now open the line for questions.

If you wish to ask a question, please press star followed by one on your telephone, and wait for your name to be announced. Your first question comes from the line of Derek Podhaizer from Piper Sandler. Your line is open.

Hey, good morning, guys. Maybe I'll first start on U.S. Land growth from here. Obviously, a great quarter. What are you seeing when you look out in the second quarter, maybe the back half of the year? One of the biggest E&Ps in the Permian just gave the industry the green light to add rigs, and activity, and completion. Maybe just help us understand, your exposure into that. Which specific product lines you're seeing gain the most traction, or have the most potential to grow here, and really take advantage of the E&Ps restarting a bit of work?

Yeah, morning Derek. Thanks for the question. I think up until now, the tone we've largely heard from our customers is, say, on the margin, they're gonna do a little bit of extra work really around like workovers, maybe a couple of incremental DUCs that they were gonna frack. All that would largely benefit our fishing tool, and production accessory business. It does feel like in the last couple of weeks, there's been acceptance that maybe the price signal's a little bit stronger for longer, than people were expecting a couple of weeks ago. I would expect that the rig count ticks up a little bit in North America land the rest of the year. That particular customer, Diamondback is an important partner of ours.

We'd expect to benefit on all of our technologies leveraged to the drilling of new well count. Hard to tell from here. I don't think it's gonna be a big ramp-up, but I think we do see a little bit of incremental addition to rig count between now, and the end of the year.

Got it. [audio distortion].

The other thing I would say is, the benefit of our business models. We don't have to be great at predicting forward activity. We just have to be highly responsive to that activity as it ticks up or down. Feels good right now, but we all know that that can change a little bit in the near term.

Yeah, no, that is for sure. Maybe on your latest acquisition, Drilling Innovative Solutions, interesting here. Maybe just help us understand exactly what they do. Maybe describe to us their product line, their service. Really curious around the commercial rationale with, you know, the platform that you created at Innovex. Driving those revenue synergies, putting it on the global platform, similar to what you've been able to really successfully accomplish with DWS and Citadel. Maybe just some help understand this a little bit better on what you plan to do with DIS here.

Really excited about the DIS deal. Like you said, it's very similar to the Citadel DWS acquisitions. Really great products that fit nicely with our strategy of big impact, small ticket capital light products. An area where they can help us, and we can help them. What I mean by that is in this case, really strong team, and products that our customers really are asking our salespeople about. Have been doing for a while, so it really helps. We think their team, and kinda that halo effect of their products will help us on the margins. Pull through more downhole tools in their core market, which today is largely the U.S. offshore.

Similarly, there's a home for their products in some of the international offshore markets. As well as potentially on U.S. land that was probably gonna be hard for DIS to realize in the short term on a standalone basis. We can help them there. With respect to their product, they really have two big products. One being the Gatekeeper product, which is a valve run in the shoe track of liners in the U.S. offshore. Fits great with our float equipment business. We're running other products at that shoe track. As well as our liner hanger business, so this is just an integrated part of that portfolio. They've got a valve called the Sentinel Valve, which is a drill pipe Float Valve, used in underbalance drilling applications. Used a lot, again, in U.S. offshore.

There's a variant for the U.S. market that they're just starting to roll out. That, again, fits really nicely with the legacy Innovex, and our Drilling Enhancement business that we got through the DWS business. Yeah, this is, I think, a great deal both for DIS, as well as Innovex. We're really excited about it.

Great, good stuff. Appreciate it. I'll turn it back.

Thanks, Derek.

Your next question comes to line of Don Crist from Johnson Rice. Your line is open.

Good morning, guys. Thanks for letting me in. I wanted to ask about the Middle East. Obviously, there's a lot of talk about it. It doesn't feel like there's that many impacts in the first quarter. Can you just kinda explain whether or not you were running through inventory in the first quarter, and that could have a bigger impact in the second quarter? Just kinda any comments around the Middle East, given that the conflict continues to rage on.

Yeah. We did have some impact in Q1. Expect to have some impact in Q2 as well from the conflict. For us, the biggest areas are some of the offshore markets, particularly, in Saudi, has been impacted the most. Most of the land activity is still going perhaps at a slightly lower pace than it was before. We saw some impact. It's a little hard to quantify precisely. Certainly, our thoughts, and prayers are with everybody in the region. And are pulling for a pretty quick resolution to the conflict for everybody's best interest. I think going forward, the other impact we're gonna see in Q2, that we didn't have as much of in Q1 is just the logistical cost. To your point, we were pulling down.

We were serving our ongoing operations with inventory in the region, to withstand a little bit of disruption in the supply chain. Q2, we're having to air freight some things in that we previously would have sea freighted in. Those, as you can imagine, those air freight rates are pretty high right now. So, we will see a little bit of incremental cost burden tied to that, as well as some other kind of one-time expenses. All that's baked into our Q2 guidance.

Okay. Going forward, it shouldn't be that big of an impact. Obviously, there will be some impact, but you are getting things into the region.

Yeah, for now, that's correct. What's baked into our forecast is we are able to continue to get products, equipment in region, everyone is kept safe over there. That activity levels are kind of what we see today is what we see for the rest of the quarter. And that there's no meaningful change one way, or the other in the region.

Okay. Okay. Just turn it over to the optimization of the businesses, and the manufacturing around the world. Obviously, we saw some good margins in the first quarter. Your goal is to come up a couple quarter more percentage points as we move through the year. Are there any milestones that we're really looking for? Is it Singapore ramping up, or is it Vietnam ramping up or something like that that's gonna drive a lot of it? Is Eldridge enough for it to see a boost as we kinda move through the rest of the year?

Yeah. I think what we're really pleased with in the first quarter was how much progress we made on that. What we had kinda told everyone previously is we're looking to be out of Eldridge by the middle of this year, which is still the target. We were able to make a lot more progress on the manufacturing efficiency side in Q1, than even we had hoped. It's been a core initiative internally, and kinda testament to all the good work that our team's been doing. If you look at the gross margin improvement from Q4-Q1. Rough numbers, about half of that's gonna be driven by product mix, and about half of that's driven by improved manufacturing efficiency. That was a big driver for the Q1 margin performance.

Like we've always said, that's not gonna be a smooth linear thing. We will make the final push here in Q2 to fully exit that Eldridge facility. We'll incur, you know, some moving costs to do that. Not to say it's gonna continue to tick up at the same pace. But I think we've seen a big improvement on our manufacturing cost structure, that we're really excited about through the rest of the year. Like you said, the big domino that has to fall is to fully exit Eldridge. Get all that demand flowing through the other plants, and really realize the full benefits of that absorption.

I think that's what we're really focused on here in Q2. So that back half of the year we're kind of in that consistently north of 20% EBITDA margin range like we talked about.

Okay. If I could sneak in one more. Obviously, a good couple of orders in Asia. Just more broadly, can you talk about the offshore? Is energy security becoming more top of mind, and you're seeing more operators accelerate plans, or get more aggressive on plans going forward? Just kinda any comments around that.

I think there's some talk of that. As you know, that's a really long cycle business in the offshore markets. I We're not forecasting a really robust recovery in offshore right now. As a direct result of the geopolitical situation, we've seen over the last couple of months. We still feel like it probably does tick up a little bit here, later this year into next year. But there hasn't been a massive response at least seen from the customers yet.

Okay. I appreciate the color. I'll turn it back. Thanks.

Thanks, Don.

Your next question comes to the line of Keith Beckmann from Pickering Energy Partners. Your line is open.

Hey, guys. Thanks for taking my question.

Morning to you, Keith.

I was wondering, you know, we talked a little bit about the Middle East, and kind of the 1Q-2Q impact. I was wondering maybe, kind of following a little bit on Don Crist's question. What are the additional potential work scopes do you guys think you may see, following the conflict if activity really starts to ramp? Is there any sort of products or anything in particular you think, could be helpful to maybe a recovery in the Middle East whenever we get to that point potentially?

Yeah. In the Middle East, most of our, as it is true across the world, most of our business is tied to the number of new wells drilled, and the complexity of those wells. One thing we do a lot of in the Middle East, and Saudi Arabia in particular is we do a lot of workover work. Where they're taking existing wells, and modifying them, drilling longer laterals. And we sell a lot of equipment, and solutions into that application. If that were to ramp up meaningfully on the back end of that's probably, where we'd see the biggest near-term tick-up. As we talk about regularly, we have a nice fishing business. A nice artificial lift accessory business, which we do, is a nice chunk of our business in the Middle East, although smaller.

I think those things would also see a nice boost, if there's really a lot of workover work. Fishing activity, things like this to get existing wells back on production.

Awesome. That's really helpful. On my second question, just wanted to ask around free cash flow conversion. How you guys are thinking about that now? Obviously, we're in a little bit of a different world. How should we be thinking about maybe working capital through the balance of the year? Is there potentially a little bit of a delay on customer payments that, you know, early on that could potentially get reversed into the back half of the year? Just any thoughts on free cash flow.

Yeah, thanks, Keith. It's a good question. Like we talked about on the Q4 call, Q1 is always seasonally our lowest free cash flow quarter. We have a number of annualized cash payments that hit in the first quarter. Not unexpected that cash was down, but as you pointed out. We did see a healthy working capital build in the quarter as well. Some of that's driven just by timing of customer payments that, yes, we would naturally expect to even out, and be a nice tailwind to cash over the next few quarters. We did have some inventory build as well, hopefully gearing up for some increased customer activity. Those two things I would expect to normalize.

You know, as we've talked about, we're not gonna specifically guide free cash flow. Given the kind of market dynamic we're in, we would expect to be you know. On or above the high end of that 50%-60% through cycle conversion that we talk about. Q1, I expect to kind of be the low point for 2026 free cash flow.

Perfect. It is really helpful. I will turn it back, guys. Thank you.

Thanks.

Thanks.

Your next question comes from Blake McLean from Daniel Energy Partners. Your line is open.

Morning, guys.

Morning.

Hey, a lot of, a lot of good stuff on here. I was hoping maybe we could just go back to the M&A stuff, real quick. You guys have talked a lot about, you know, your pipeline, and the potential deals. Both small and large, that are in the marketplace. I was just hoping maybe talk a little bit about how a choppy macro environment kind of impacts. What that pipeline looks like, your ability to move deals forward? Is there anything that changes in a market that feels a little more uncertain?

No, it's a really good question. I mean, I guess I would say a couple things about that one. Is that when we are looking at acquisitions, we tend to underwrite deals over the long term, right? One, kind of building in a lot of room for error on the valuation side. We try, and be pretty disciplined on valuation. Given the dynamic we've been in, where it's just a lot more potential sellers than potential buyers. I think we've been able to benefit from that over the last several years. As Adam mentioned, we don't have to be that great in our business at predicting the future. You know, what's activity gonna do over the next couple of quarters?

We're very responsive to that. The types of businesses we look to acquire are generally more in line with that approach, right? These big impact, small ticket products, very little CapEx. We can kind of benefit, and create value through the ups, and downs of the cycle. I wouldn't say that changes our thinking too much other than, yeah, it's gonna have some impact on how you think about valuation, and bid-ask spreads. Yeah, the other thing I would say is just generally the private markets, where we're mostly looking at acquisitions re-react to news a lot slower. Than the public markets, which tend to be very forward-looking.

A lot of times when we're looking at M&A deals, it's much more of a conversation about. You know, current run rate or trailing 12-month results, that type of thing. It, it takes time for these things to get incorporated. So it doesn't have quite the same volatility in terms of valuation expectations.

All right. That's helpful. The rest of my stuff has been answered, so I'm squared away. Thanks very much for the time.

Thank you, sir.

There are no further questions, so I'd like to hand back for closing comments.

Thanks. This is Adam again. Thanks everyone for taking the time today. Thanks for the questions. Really another great quarter, really exceeded our expectations, and I just have to say thank you to our employees, our customers for all of the good work. I think this is really an exciting time, and we're thrilled with how things are progressing, and look forward to the next couple of quarters rolling out. Appreciate everyone joining us.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, and welcome to Innovex's Fourth Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this call is being recorded. I will now turn the call over to Eric Wells, Chief of Staff. Please go ahead.

Good morning, everyone, and thank you for joining us. An updated investor presentation has been posted under the Investors tab on the company's website, along with the earnings press release. This call is being recorded, and a replay will be made available on the company's website following the call. Before we begin, I would like to remind you that Innovex's comments may include forward-looking statements and discuss non-GAAP financial measures. It should be noted that a variety of factors could cause Innovex's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Please refer to the fourth quarter and full year 2025 financial and operational results announcement that we released yesterday for a discussion of forward-looking statements and reconciliations of non-GAAP measures. Speaking on the call today from Innovex, we have Adam Anderson, Chief Executive Officer; and Kendal Reed, Chief Financial Officer. I will now turn the call over to Adam Anderson.

Good morning, and thanks for joining us today. First off, I want to recognize our team, which has worked tirelessly to deliver margin improvement, organic share growth, improved on-time performance and strong free cash flow since the merger with Dril-Quip in September of 2024. We've asked a lot of the organization, and I'm proud of what we've accomplished. In 2025, we made tangible progress against the goals we articulated at the time of the merger and the results we are discussing today are a direct reflection of the commitment and collaboration of our global teams. A defining characteristic of Innovex is our no Barriers Culture, the belief that to drive the best outcomes for our customers and shareholders, we must tear down barriers between ourselves, our customers and internally across the entire company. This mindset of working effortlessly across product lines, geographies and functions has enabled us to build a leading global oilfield service company from a standing start less than a decade ago. Our fourth quarter and full year results demonstrate the power of our no barriers approach. On today's call, I will discuss our fourth quarter and full year results and highlight the key developments shaping our performance, starting with continued market share gains, synergy capture from recent acquisitions, customer-led product innovation and progress against our key operational initiatives. After these operational and commercial updates, I will turn the call over to Kendal, who will discuss our financial results and provide more detail on our balance sheet, capital allocation priorities and our outlook for Q1. Turning to performance. We delivered a strong finish to 2025, exceeding the high end of our fourth quarter revenue guidance while generating substantial free cash flow and further strengthening our balance sheet. Fourth quarter revenue totaled $274 million, up 14% sequentially. That performance was driven by higher-than-expected subsea deliveries, continued momentum in our drilling enhancement and well construction portfolios and revenue synergies from recent acquisitions. Strong Q4 revenues reflected some pull forward of subsea deliveries that were previously expected for Q1 2026, which will impact sequential comparisons. As a reminder, we recognize revenues from those large subsea projects upon customer delivery, which can drive quarter-to-quarter volatility. Despite a softer macro environment, we grew market share across U.S. land, offshore and international markets. We continuously invest in innovation across our portfolio of big impact small ticket products. While our products represent just a small portion of the wells cost, they are critical to a wells function. And therefore, our customers' purchase decision is driven more by product performance than achieving the lowest possible price. We've curated a portfolio of primarily single-use technologies, which allows us to operate in a capital-light manner. We leverage a diverse and nimble supply chain, which combined with our product portfolio keeps CapEx low, historically less than 3% of revenue, which allows us to convert a significant proportion of our adjusted EBITDA to free cash flow. We generated strong free cash flow, which we plan to redeploy into disciplined M&A, customer-led innovation and shareholder returns. Operational execution was strong across the platform. In U.S. land, we outperformed underlying activity levels by realizing revenue synergies and introducing new technologies. The integration of Citadel and DWS provides a clear example of this execution in action. We acquired Citadel for its strong cultural alignment with our no barriers philosophy and its portfolio of highly engineered single-use technologies designed to reduce our customer cycle times and improve operational efficiency. At the time of the acquisition, we noted limited customer overlap between our legacy Innovex business and Citadels, creating a clear opportunity for revenue synergies, which we are now beginning to realize. Our drilling enhancement product line, which largely came to us through the acquisition of DWS has also driven cross-selling opportunities across the customer base. Together, these integrations demonstrate exactly how our M&A playbook is designed to work, disciplined acquisitions translating into execution, revenue synergies and market share gains. In offshore and international markets, execution remains solid. During the quarter, we delivered our first products under our global alliance with OneSubsea, validating the strategic importance of our partnership. The alliance enables us to supply OneSubsea with industry-leading wellheads for EPCI or bundled contracts, increasing our addressable market for subsea wellheads and improving OneSubsea's competitive offering. During the quarter, we also completed our 10 successful XPak expandable liner installation in Brazil's pre-salt fields. XPak is a differentiated technology that we acquired from Dril-Quip, which we believe has broader applicability across offshore basins. We also leveraged this technology onshore, an example of how we create value through innovation, customer relationships and distribution. In the quarter, we successfully delivered our first onshore XPak Express installation for a major independent in U.S. land, adapting this offshore expandable liner technology to support some of the most technically complex wells in the Permian. In Mexico, we substantially completed deliveries of subsea wellheads and large-diameter tubulars for a major offshore development, reflecting strong project execution and coordination across our global supply chain. In Saudi Arabia, we increased revenue sequentially and strengthened our local content position with the inauguration of our manufacturing facility in the Dammam industrial area. Overall, we exited 2025 with strong momentum, a differentiated and expanding technology portfolio and a clear runway for continued execution. I'm excited about the trajectory of our Subsea business with new orders in Q4 and at the start of Q1. We have been awarded significant projects for subsea wellheads and associated specialty items in Asia Pacific and the Mediterranean. In Brazil, we signed a landmark subsea contract with an IOC we have not worked for in over a decade. We have additional significant opportunities in the subsea pipeline we expect to win this year, setting up a strong outlook for our Subsea business. We plan to build on our commercial momentum this year while remaining focused on improving margins, enhancing the customer experience and unlocking long-term value for our shareholders. Our execution in 2025 gives me confidence that we're building a platform capable of delivering value for our employees, our customers and our shareholders. I will now turn the call over to Kendal, who will walk through our financial results and outlook in more detail.

Thanks, Adam, and good morning, everyone. I'd now like to review our fourth quarter and full year 2025 financial results. For the fourth quarter of 2025, revenue was $274 million, which is a 14% sequential increase from the third quarter and a 9% increase compared to Q4 2024. Adjusted EBITDA for the quarter totaled $52 million, resulting in an adjusted EBITDA margin of 19% and free cash flow for the quarter was $43 million. Our strong Q4 performance was driven primarily by our Subsea business, which over the past several years has seen a seasonally strong Q4 followed by a weaker Q1, an effect further amplified this year by some deliveries occurring prior to year-end, which we previously expected to fall in Q1, a credit to our team's ongoing efforts to improve manufacturing on-time delivery. From a geographic perspective, NAM land revenue increased sequentially by 5% to a record level of $139 million. Our NAM land business continues to outperform underlying activity levels, driven by market share gains, strong execution and increased cross-selling across the Innovex platform. Customers increasingly deployed multiple Innovex solutions together in the same wellbores, reflecting the value of our integrated sales approach and supporting strong margins and cash generation. We do expect slightly lower NAM land revenues in Q1 due to the impact of weather on U.S. land activity, but we continue to improve our market position and feel very positive about our organic and M&A growth opportunities. International and Offshore revenues increased sequentially by 25%, benefiting from significantly higher subsea deliveries during the quarter, including approximately $15 million of deliveries we previously expected to fall in Q1 2026. We want to thank our team for the incredible effort to meet our customers' needs in Q4, and we remain pleased with the long-term outlook of our International and Offshore business with significant orders building for late 2026 and 2027. As expected, Q4 margins were impacted by the completion of several lower-margin legacy subsea projects as well as costs associated with the ongoing exit of the Eldridge facility. These factors will continue to weigh on margins during the first half of 2026. Importantly, the planned exit of the Eldridge facility, which we expect to complete by the end of the second quarter, is a foundational element of our margin improvement plan. Our reduced manufacturing footprint, improved on-time delivery and more disciplined bidding practices are expected to drive meaningful margin expansion as we progress through 2026. Selling, general and administrative expenses for the full year 2025 were $129 million, representing 13% of revenue. This is a significant decrease from our 2024 level of 18% of revenue. This improved efficiency comes as a result of our focus throughout the year on fully realizing synergies from all recent acquisitions and improving our cost structure wherever possible. As a result of these cost savings, despite a challenging product mix in Q4 and ongoing Eldridge exit costs, adjusted EBITDA for full year 2025 was $188 million, resulting in margins of 19%. Capital expenditures in the fourth quarter of 2025 totaled $9 million, representing approximately 3.3% of revenue. Full year 2025 capital expenditures were $35 million, representing 3.6% of revenue. 2025 CapEx was slightly elevated relative to Innovex's historical range of 2% to 3% of revenue related primarily to facility integration efforts, and we expect this slightly elevated spending to continue through Q2 2026 as we complete the exit of Eldridge. However, we believe significant efficiency gains and long-term margin improvement will be unlocked by these onetime investments. Free cash flow was $43 million for the quarter and $156 million for full year 2025. We converted approximately 83% of our adjusted EBITDA into free cash flow in both the quarter and full year 2025, a phenomenal result, well above our normalized conversion target of 50% to 60%. This performance reflects our countercyclical cash conversion profile, which we have previously discussed. During periods of slower activity growth, we typically convert a higher percentage of our adjusted EBITDA into free cash flow as working capital unwinds. Conversely, during periods of accelerating activity, we see the opposite effect as we build inventory to meet growing customer demand. In addition to this dynamic, 2025 benefited from harvesting cash from the legacy Dril-Quip balance sheet, driving further outperformance. As a reminder, we do typically see our lowest seasonal free cash flow in the first quarter of each year due to timing of certain annualized cash payments. I'm thrilled with our cash flow performance in 2025 as our high free cash flow conversion reflects the through-cycle strength of our capital-light business model and our disciplined working capital management. We ended the year with approximately $203 million of cash and cash equivalents and no bank debt, providing significant financial flexibility. Our balance sheet strength supports continued execution of our disciplined capital allocation framework, including selective high-return M&A opportunities and opportunistic share repurchases. We continue to see numerous opportunities to enhance our portfolio and drive market share growth through accretive acquisitions of businesses that fit our big impact, small ticket engineered product thesis, and this remains our top capital allocation priority for 2026. Return on capital employed for the full year 2025 was 10%. While this remains below our long-term target, we expect ROCE to improve as margins expand, lower-margin legacy projects roll off, integration benefits are fully realized and we utilize cash for high-return M&A or return it to shareholders. Looking ahead to the first quarter of 2026, we expect revenue in the range of $225 million to $235 million and adjusted EBITDA of $38 million to $42 million, with the sequential decline in revenue driven by seasonality and delivery timing in our Subsea business and some weather-related impacts on U.S. land activity. Our ongoing share gains on U.S. land, further recovery in Saudi Arabia and Mexico as well as the subsea wins Adam mentioned should drive further growth in 2026. While subsea mix and remaining transition costs will continue to impact margins early in the year, we remain confident in our margin improvement trajectory as 2026 progresses. Our M&A pipeline also remains active with several high-quality capital-efficient businesses that align with our strategy under review. I'll now turn the call back to Adam.

Thanks, Kendal. To close, I want to again recognize the Innovex team for their execution and commitment throughout 2025. We strengthened our foundation, delivered strong financial results and positioned the company for the next phase of growth. We're building a business that can perform across cycles, leveraging our strong balance sheet, disciplined capital allocation and a differentiated portfolio of technology-driven, high-return products. As we move into 2026, we remain focused on continuing to enhance customer experience, capturing additional market share and driving sustained margin expansion towards our long-term target of 25%. Thank you once again to our employees, customers and investors for your trust and partnership. Operator, we can now open the line for questions.

[Operator Instructions] We'll take our first question from Derek Podhaizer at Piper Sandler.

Maybe just to start, hoping to unpack the first quarter margin guide a little bit further. You've talked about the Subsea margins weighing on company margins, these low-margin projects continue to weigh first half of the year. I know you have the exit costs associated with Eldridge. You talked about optimizing your bidding process. I'm just trying to get an understanding of what happened, what's causing these margins to be weighed upon? And how should we think about the improvement over time and just thinking about any structural headwinds to that long-term 25% target that you've laid out?

Derek, thanks for the question. So first, I would say, hey, point you to Q4, and we had a really strong result in the quarter. Some of that was a result of pulling forward. Some of the subsea deliveries that we were expecting in Q1 got pulled into Q4, which I think on balance is good for us, but makes Q1 a little bit lighter. We'll still have a couple of low-margin subsea deliveries Q1, Q2 that will weigh margins down a little bit. And then as you know, we're working on a lot of things around improving margins. The single biggest of that is the Eldridge exit, which has pushed back a little bit like we were originally forecasting that probably early-ish in Q1. That's probably going to slide into Q2 as we finish out some customer orders here for the Western Hemisphere. So I think all in all, like a very good Q4. Yes, Q1 is a little bit -- we're seeing a little bit of seasonal decline there and a little bit of that pull-through effect we mentioned earlier. But I don't think any of this impacts how we're thinking about the long-term margin progression, both seeing a little bit of improvement as you particularly as you get in the back half of this year as well as in '27 and beyond.

Got it. Okay. That's encouraging. I appreciate that. And then I guess on the integrated cross-selling opportunities, I mean, this is pretty exciting, just given this shows the unique platform that you guys have as far as bringing on these acquisitions and putting them on the larger Innovex platform. Maybe could you help us provide some maybe real tangible examples of how you've been able to expand the drilling enhancement well construction with DWS and Citadel because it feel like this sets the playbook for your future M&A opportunities that I know you guys are focused on as we move through the year.

Yes, I agree. I think we're really excited about that, both what we've accomplished in the couple of those really great acquisitions we've done over the last 1.5 years or so as well as our pipeline of M&A opportunities. So if you look at the drilling enhancement product line that came to us through the DWS acquisition, that business is performing great. And then we're seeing both benefits in U.S. land, where that team has some really strong relationships with a couple of larger independents Innovex historically hadn't worked for that we're seeing some product pull-through already. So that's exciting. And then conversely, we're seeing really good adoption of those products into the Middle East, which is going to be very difficult for that business to go attack on a stand-alone basis, like we're seeing really good uptake in Oman, UAE. We're doing some good work there with some of those independents coming in to do unconventional work there in the Middle East. And then a similar story, albeit a little bit earlier with respect to the Citadel deal, another business that's performing -- was performing great in the acquisition has continued to do well. And then we've seen some cross-selling opportunity in North America. And then we're really excited with what those -- that product set can do internationally and the likes of Argentina. We're in the middle of a trial test right now in Saudi with the trench foot wet shoe product that came to us through the Citadel acquisition. So yes, we're seeing a lot of good early tangible benefits from those deals, which gives us more confidence not only in where those deals are headed, but also executing on the string of other -- of really other attractive businesses that we see in front of us. And to be clear, we normally don't bake any of these revenue synergies into underwriting new deals. We look at them on a stand-alone basis and any kind of revenue synergies, we usually keep as upside.

Next, we'll move to Don Crist at Johnson Rice.

It's been about 15 months or so since you closed Dril-Quip. And I know a lot of investors probably don't realize the kind of length of order schedule on the offshore side. So just kind of curious as to -- are you fully finalized all of the kind of Dril-Quip initiated orders on the Subsea side now and maybe that's the reason why your margins are coming in a little bit? And kind of when did your sales team really take over after the Dril-Quip merger to where you're actually driving the pencil versus inheriting some of those orders? Can you tell us where you are in that kind of structure?

Yes. Don, thanks for the question. Yes. So to be clear, like I wouldn't -- some of the contracts, these are long-term 4-, 5-year contracts, some of which are very attractive. Other -- some stuff comes in a little bit less margin. We're going to see margin improvement going forward, both through cost structure reduction, for example, not having as many really large under manufacturing plants and really consolidating a lot of that or all of that subsea demand into a singular manufacturing plant is going to be a really big benefit. We do have a couple of specific one in particular subsea project flowing through the books right now that's at lower margin than we expected. And to be perfectly frank, that was bid under our tenure. That was bid post the deal closing. We just made some assumptions we were too optimistic in some of our assumptions there. So we'll see that order still weigh a little bit in Q1, start to bleed off in Q2, and then we're rebidding that as we speak. And would expect both a little bit of incremental price improvement as well as a little bit of cost reduction on that specific one, but that's kind of the broader theme.

Okay. And then can you give us an update kind of on the Far East manufacturing expansion, Vietnam and China and that kind of where you are in that process of kind of moving everything over? I mean, are we pretty much done with the CapEx on that and ready to kind of go full force there?

Yes. No, I would -- I think we're kind of mid-innings. I think we've got two big projects going on there. We're moving a lot of the subsea manufacturing to our existing footprint in Singapore. As Kendal said on the call, we saw some CapEx impact in Q4 of that. We'll probably see a little bit more in the first half of this year. Then to be clear, that's both for some manufacturing footprint in Singapore as well as repositioning our Gulf U.S. offshore operations here, we need some CapEx to probably sustain that as we move out of Eldridge. And then on the downhole world, we acquired a business, a manufacturing facility in Vietnam last year. That's still -- we're ramping slowly into that. I think that's one over the next year or 2, we'll see continued growth there. There will be a little bit of incremental CapEx there, but that's kind of baked -- again, kind of baked into our earlier comments. I think both of those, we really haven't started to see any of the impact of the efficiencies that will come with having lower overall footprint and then a really high-quality but low-cost, high-volume facilities there in the Far East that we can lean on. We'll maintain a pretty robust supply chain in many of the markets we operate like the U.S. We'll always have a pretty good-sized manufacturing capability to respond to our market needs here in the U.S. But as we channel some of the higher volume and some of the Eastern Hemisphere demand into these plants, we'll see some nice benefit over the next year or 2.

Okay. That's very, very helpful as you expand around the world. And just one final one for me. We're -- as analysts, we're talking a lot about the broader Middle East and Northern Africa region. And can you just tell us just broadly speaking, kind of when you get brought into conversations if somebody is bidding on one of those big tenders? Is it 6 months before the project starts? Or is it kind of when the project starts? Because I know a lot of the guys from the U.S. are over there consulting and presumably, they like your equipment here in the U.S., they would bring it over there.

Yes. So it depends a lot based on the project and the operator. For example, if you look -- some of the quickest hit stuff, if you look at some of the IOCs that are putting rigs to work and like a Bahrain or the UAE, we're seeing some benefit from that right now and some guys that we work with in the U.S. have showed up over there, and we're seeing some of that. That's on the smaller side just because that's -- those are smaller dollars. When you look at some of these big, big contracts that are let across the Saudi or Kuwait, some of those, we don't -- the benefit of being these kind of big impact small ticket products is that we're not always included in those big, big tenders that can be pretty aggressively priced. And we have these niche products that are sold a little bit later than those big projects. So it can kind of run the gambit from we get them brought in right away to, hey, we're a little bit more just in time as the rigs are getting stood up and start to go to work.

Okay. But you are seeing demand from friends over there that have moved from the U.S. that like your product?

Yes. Yes. We have definitely seen some of that. I mean to be -- it's not nearly as big. And these IOCs, you're not running nearly the same rig count as some of the big NOCs in the region. But yes, we're seeing a little bit of benefit from that. And then in general, we're seeing some of that reactivation of rigs in Saudi, continued growth in other countries in the Middle East. So we'll start to see the benefit of that as we progress throughout this year and go into '27.

We'll move next to Keith Beckmann at Pickering.

I just kind of wanted to hit around the M&A side of things again. I wanted to know if you could give us a little bit of a better sense on maybe the current M&A landscape you see, whether it's private equity companies in the U.S. or are there even any opportunities internationally? And maybe what areas of the business do you think could be improved? You guys have a lot of products, but maybe is there any areas from an M&A perspective that you think you're missing that could help you improve?

Yes. Thanks, Keith. So as you know, M&A is definitely a core part of our strategy. So we're constantly looking for opportunities to grow and improve the business through acquisitions. And I would say right now, we're very excited about the opportunity set. Our M&A pipeline is probably as active right now as it's ever been. We mentioned on the call, we have multiple opportunities under review. Some of those are progressing nicely. And I think to your question on what are the most kind of actionable opportunities there. We have a handful of things, but I would say the most near-term impactful ones for us are probably going to be add-on style acquisitions where we can add kind of a specific differentiated product or a small portfolio of products to our overall portfolio and then look to grow those through the global distribution network. That could be private equity-backed, could be founder-backed, but generally speaking, more U.S.-based, a little bit smaller companies that have a lot of the abilities to both help us and we can help them kind of allow the DWS and Citadel playbook. I think that continues to be a really interesting space for us to play. We are looking at a few bigger, more transformative, more international style deals as well. But as you know, those tend to be take much longer or harder to handicap what's going to come to fruition there. But overall, I think based on what we're seeing, we really think M&A remains a great way for us to deploy capital in the near term. But as we've always said, we screen these deals against our buyback program and look to allocate capital in a way that drives the best long-term shareholder returns.

Awesome. That's very helpful. And then my second question was just going to be kind of around free cash flow conversion. And I know you guys hit on this a little bit, but the free cash flow improvement, I mean, I think you guys had 83% free cash flow conversion for the year, which is just a substantial structural improvement, along with some help from working capital, I know. But I think you've described 50% to 60% is kind of the normal business run rate conditions. I just wanted to get an idea on throughout 2026, if we should expect some further structural improvement maybe with some self-help still or 50% to 60% is maybe a good way to think about a good chunk of this year?

Yes, it's a good question. I mean we're thrilled with the free cash flow conversion in 2025, and you kind of see it showing up on the balance sheet gives us a lot of capital to go look at some of these great accretive M&A opportunities as well as do some different things. So very pleased with how that's played out. I do think the 83% is probably on the high end, benefited from harvesting some cash off the Dril-Quip balance sheet, like we said. But that 50% to 60%, that's kind of our normalized through cycle number that we target. So in a year like 2026, I mean, we're not giving out full year guidance, but I think it probably in the market feels generally flattish, maybe some areas of growth, some areas of some slow decline. But if you're not expecting a huge ramp-up, we don't need to build the inventory to support the customer needs in that scenario. And I think we'd look to still continue to have a healthy free cash flow conversion. So yes, probably something more akin to that range, but maybe on the higher end of that 50% to 60% target.

We'll move next to Eddie Kim at Barclays.

We don't get too much detail on the magnitude of your Subsea product bookings. But just curious if you could share even just directionally how 2025 Subsea product bookings trended versus '24 levels? And looking ahead to this year, do you expect Subsea orders will be up versus last year's levels? Or do you expect that to be more of a 2027 event?

Yes. Eddie, yes, fair question. We probably in '25 in aggregate subsea orders would have been down a little bit versus '24, but it's pretty lumpy. So the first half was down a little bit. What I would say, though, is in Q4 through the beginning part of this year, there's been a lot of projects that have kind of been a little bit slow to come that we've seen show up in Q4, Q1. So we have a number of big projects in the Far East that we've gotten contract awards on. We got a nice project in the Mediterranean awarded, and then we have a bunch of things we're waiting to see what happens in Asia. So I would think that our order volume for '26 is probably going to be up pretty nicely versus '25. And we're going to start to see a little bit of the fruit of that into this year and as we move into '27. So we're really happy with the trajectory of that, but there was a little bit of a lull there back half of '24, start of '25 on those orders, I would say.

Got it. Got it. That's very helpful. And then just with the exit of the Eldridge facility at the end of 2Q, and the slide in your earnings deck is a good one and an 80% reduction in that footprint. I'm sure that facility was set up for an activity environment far beyond current levels. But to the extent we do get an offshore activity recovery here really in 2027 and for the next several years, how confident are you that your reduced footprint is going to be able to support an increase in subsea product demand?

Yes. We're very confident that we can serve that market even with the reduced footprint that we're seeing here that as you said, that Eldridge a wonderful facility just built for a different time in that market. I think from here forward, we can still sustain a very nice increase in activity levels across the Subsea business globally.

And we'll move next to Josh Jayne at Daniel Energy Partners.

Adam, I feel like you've been one of the more balanced with respect to offshore outlooks as we work through this white space period over the last 12 to 18 months from a rig activity standpoint. But I'm curious if you've seen enough things announced recently with respect to term on some contracts and maybe the subsea tree awards that we've seen where you could provide more of an outlook outside of Q1 on the Subsea side and how you see the business going, maybe an international offshore walk-through sort of through the end of this year and into 2027 would be helpful.

Yes. Josh, Well, yes, fair question. We can be probably qualitative in how we respond to that. We're not putting out quantitative guidance beyond Q1. What I would say is I would -- I think we're seeing some nice project opportunities pop up for us, as I just referenced to Eddie's question that we -- things we've been waiting for a little while that came in, a couple of things that have been a little bit of a nice positive surprise in the offshore award world over the last few months for us that I do think, again, getting back half of this year into '27, we should see some nice growth there in the offshore -- our offshore business, our Subsea business. When you look at the other international markets, I would think the other really important places for us like Saudi and Mexico, which were down in '25, they have started to come back a little bit. They're still probably closer to a trough than a peak, but I think both of those markets will see some nice growth this year. And then we're seeing pockets of other countries in the Middle East that are admittedly smaller for us, but we're seeing some nice green shoots of growth there. So I think in general, yes, probably it will take a little bit of time. But I think, again, back half this year into '27, we'll see some nice overall international offshore growth.

And then if you've referenced this before, I apologize what the cycle times you highlighted. But when you think about shortening your cycle times from order to delivery on the subsea side of the business, could you remind me what your initial targets were? So for example, from the time in which an order was placed right after the acquisition of Dril-Quip closed to ultimate delivery, what that time frame was like? And then how you see that playing out sort of for something ordered middle of this year or end of this year and how your targets on ultimately how much cycle times will compress and since you started this journey, if there was upside to your initial target would be helpful.

Yes. So I think with respect to specifically from the time line from order to delivery, that has not changed too much. I mean it varies to some extent, but rule of thumb, I would say, for a subsea order, we're generally getting that a year or so before delivery, plus or minus. I think the big thing we've really been focused on is improving that on-time delivery in that Subsea business, which we've continued to see really nice progress with that. I think it was very low when the deal started has kind of consistently ticked up and we're around 80% on-time delivery in that subsea product line in Q4 with the target, obviously, of getting that to 95-plus percent. So I think that's the big area we've been focused of really pulling that in, making that run efficiently and consistently hitting that delivery date that we schedule.

The other thing I would point out, and I don't know that we've talked about this a lot publicly, but it's definitely -- when you look internationally, it's definitely you get an order, you build it over x period of time and then deliver it and that model will probably persist. In the Gulf, the U.S. offshore, we're seeing some transition to more of a consignment model where, hey, we have a contract. We are built -- for example, we're building stuff right now against a contract that will really only recognize the revenue once we install it for the customer, whereas in prior subsea cycles, that would have been -- we've been recognizing revenue as we speak right now for that stuff. So that also is going to contribute to a little bit of this lag in revenue versus what you would historically have seen as the Gulf makes this transition, which ultimately will be good for us and good for our customers as we're able to standardize products, build more things in volume across a wider customer base versus just do one-off project stuff, but there's a little bit of an air pocket there on revenue as you make that transition, if that makes sense.

It does.

And that concludes our question-and-answer session and today's conference call. We thank you for your participation. You may now disconnect.