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Operator: Welcome to the HEICO Corporation Fourth Quarter 2025 Financial Results Call. My name is Samara, and I will be your operator for today's call. Certain statements in this conference call will constitute forward-looking statements, which are subject to risks, uncertainties and contingencies. HEICO's actual results may differ materially from those expressed in or implied by those forward-looking statements. Factors that could cause such differences include, among others, the severity, magnitude and duration of public health threats such as the COVID-19 pandemic, our liquidity and the amount and timing of cash generation; lower commercial air travel, airline fleet changes or airline purchasing decisions, which could cause lower demand for goods and services, product specification costs and requirements, which could cause an increase in our cost to complete contracts; governmental and regulatory demands, export policies and restrictions; reductions in defense, space or homeland security spending by U.S. and/or foreign customers or competition from existing and new competitors, which could reduce our sales. Our ability to introduce new products and services at profitable pricing levels, which could reduce our sales or sales growth; product development or manufacturing difficulties, which could increase our product development and manufacturing costs and delay sales; cybersecurity events or other disruptions of our information technology systems could adversely affect our business and our ability to make acquisitions, including obtaining any applicable domestic and/or foreign governmental approvals and achieve operating synergies from acquired businesses. Customer credit risk, interest, foreign currency exchange and income tax rates; and economic conditions, including the effects of inflation within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues. Parties listening to this call are encouraged to review all of HEICO's filings with the Securities and Exchange Commission, including, but not limited to, filings on Form 10-K, Form 10-Q and Form 8-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable law. I now turn the call over to Victor Mendelson, HEICO's Co-Chairman and Co-Chief Executive Officer.
Victor Mendelson: Thank you, Samara, and good morning to everyone on this call. Thank you for joining us, and we welcome you to HEICO's Fourth Quarter Fiscal '25 Earnings Announcement Teleconference. As you heard, I'm Victor Mendelson, HEICO's Co-Chairman and Co-CEO. I am joined here this morning by Eric Mendelson, HEICO's other Co-Chairman and Co-CEO; and Carlos Macau, our Executive Vice President and CFO. As we start this call, Eric and I would like to take a moment to remember our father, Larry Mendelson, whom you all know was long HEICO's Chairman and CEO. As sons, we were beyond blessed to have a unique and loving father who instilled in us from our earliest days, values and life methods based on fairness, on excellence, on quality. And as our father used to say, just doing the right thing. Of course, these values and life methods apply in business, too. And as a businessman, he knew how much these matter, along with a fixation on real earnings, that is to say cash flow. Many of you on this call will remember his unrelenting emphasis on cash flow, not artificial GAAP metrics, although he always lived by those GAAP metrics and enforced them, he knew what really mattered. Eric and I were also blessed to have been partners with our father from well before the three of us became HEICO's largest shareholders and mounted our effort to take over management. And by the way, in a few weeks, we'll mark the 36th anniversary of our taking over here. Working with him to build HEICO day in and day out was a pleasure and an honor that few get to experience. And I can say that through his example, not only were Eric and I imbued with these values, these life methods and his business approach, but more important, all of HEICO, all of HEICO became so imbued. That was his succession plan and was nearly always -- as was nearly always the case with our father. It worked perfectly. Our father is profoundly proud of HEICO. He was also one of the greatest optimists we ever knew. And in his closing days, even after nearly 36 remarkable HEICO years, he was more optimistic than ever about this company's prospects. I can tell you that we and the HEICO team share that optimism. And I can also say how grateful we are for all that we learn from him. Thank you for indulging us for a few moments there. Before turning to our fourth quarter fiscal '25 record-setting results, which capped another exceptional year for HEICO, we recognize our team members' extraordinary efforts. Our team members' dedication to our customers and our endeavors across the organization were the reason for our very strong results this quarter and this year, leaving us quite optimistic about HEICO's future. We and HEICO's Board thank you for all you have done in 2025 and before, and we look forward to an even more prosperous 2026. So taking a moment to summarize our record results during the fourth quarter of fiscal '25, we note, first, that consolidated net income increased 35% to a record $188.3 million or $1.33 per diluted share in the fourth quarter of fiscal '25, up from $139.7 million or $0.99 per diluted share in the fourth quarter of fiscal '24. Consolidated operating income and net sales in the fourth quarter of fiscal '25 represent record results for HEICO, which improved by 28% and 19%, respectively, as compared to the fourth quarter of fiscal '24. The Flight Support Group set all-time quarterly net sales and operating income records in the fourth quarter of fiscal '25, improving 21% and 30%, respectively, over the fourth quarter of fiscal '24. The increases principally reflect strong 16%. Strong would be an understatement, but 16% organic growth stemming from increased demand across all of the group's product lines as well as the impact from our profitable fiscal '25 and '24 acquisitions. The Electronic Technologies Group also set all-time quarterly net sales and operating income records in the fourth quarter of fiscal '25, improving 14% and 10%, respectively, over the fourth quarter of fiscal '24. These increases principally reflect strong organic growth for most of the group's products and the impact from our profitable '25 -- fiscal '25 and '24 acquisitions. Consolidated EBITDA increased 26% to $331.4 million in the fourth quarter of fiscal '25, up from $264 million in the fourth quarter of fiscal '24. And our net debt-to-EBITDA ratio improved to 1.60 as of October 31, '25, down from 2.06 on October 31, '24. Cash flow provided by operating activities increased 44% to $295.3 million in the fourth quarter of fiscal '25, up from $205.6 million in the fourth quarter of fiscal '24. Yesterday, HEICO's Board of Directors declared a semiannual $0.12 per share cash dividend on both classes of HEICO's stock payable in January 2026, representing our 95th consecutive dividend and reflecting the Board's ongoing confidence in our company's strong cash flow generation. We completed 5 acquisitions in fiscal '25, three in the Electronic Technologies Group and two in the Flight Support Group, further enhancing our sales, our earnings and our cash flow. Each of our Flight Support and Electronic Technologies groups recently entered into agreements to acquire two separate and unrelated businesses, one of which Ethos was just announced earlier this week. As of now, we anticipate both should close in the first quarter of calendar '26. Though they are, of course, subject to customary closing conditions, including, among others, antitrust clearance and the sellers complying with typical representations and covenants. So we can't be certain of actual timing or actual closing. We expect these acquisitions would be accretive to HEICO's earnings within the year of each transaction's closing. I'll now turn the call over to Eric Mendelson to discuss our Flight Support and Electronic Technologies Group's fourth quarter results in greater detail. Eric?
Eric Mendelson: Thank you, Victor. Before we turn to the results, I want to pause and recognize the remarkable performance of HEICO's team members. What we are reporting today is the product of extraordinary talent, relentless execution and a culture developed over decades that consistently turns ambitious objectives into real outcomes. Time and again, they have demonstrated the ability to rise to the challenges, adapt and deliver at the highest level. Their commitment, collaboration, determination and creative approach are the foundation of these results and make them especially rewarding. We are all sure that our dad is looking down on us today as we report these outstanding results, and we closed our 36th year with HEICO. As Victor said so eloquently a few moments ago, we are both so grateful for all that we learned from our dad and from all the time that we had with him. Now moving on to the results. The Flight Support Group's net sales increased 21% to a record $834.4 million in the fourth quarter of fiscal '25, up from $691.8 million in the fourth quarter of fiscal '24. The net sales increase reflects strong organic growth of 16% and the impact from our fiscal '24 and '25 acquisitions. The net sales growth reflects increased demand across all of our product lines. HEICO's operations continued to exceed our expectations, underscoring our highly successful combination with Wencor. Customers increasingly recognize the value of our expanded aftermarket parts and repair and overhaul offerings, which has driven strong growth opportunities and continued success across the company. The Flight Support Group's defense business remains a compelling opportunity, particularly as both the U.S. administration and our foreign allies emphasize defense readiness and cost efficiency. HEICO is extremely well positioned to support these priorities by delivering high-quality, lower-cost alternative aircraft parts that help reduce costs for the government and taxpayers while expanding our addressable markets. Our missile defense manufacturing business is also experiencing very significant growth, fueled by rising demand from the United States and our allies, we have substantial orders and backlog to support the continued expansion of this business, and we are committed to providing cost-effective solutions and industry-leading quality to our U.S. military and our foreign allies. The Flight Support Group's operating income increased 30% to a record $201 million in the fourth quarter of fiscal '25, up from $154.5 million in the fourth quarter of fiscal '24. The operating income increase reflects the previously mentioned net sales growth and improved profit margin and SG&A expense efficiencies realized from the net sales growth. The improved profit margin principally reflects net sales growth within our repair and overhaul parts and services product line and a more favorable product mix within our specialty products product line. The Flight Support Group's operating margin improved to 24.1% in the fourth quarter of fiscal '25, up from 22.3% in the fourth quarter of fiscal '24. The increased operating margin principally reflects the previously mentioned improved gross profit margin. Since acquisition-related intangible amortization expense consumed approximately 250 basis points of our operating margin in the fourth quarter of fiscal '25, the Flight Support Group's cash margin, which is before amortization or what we also call EBITA, was approximately 26.6%, which has been consistently excellent and is 160 basis points higher than the comparable Flight Support Group cash margin of 25.0% in the fourth quarter of '24. As I have previously discussed, we are laser-focused on cash generation at each of our businesses. I am very happy with the continued expansion of our cash margins and believe the decentralized operating structure has permitted us to expand these margins while simultaneously delivering high-quality products and services to our customers at substantial cost savings with lightning quick turnaround times. Now I will discuss the fourth quarter results of the Electronic Technologies Group. The Electronic Technologies Group's net sales increased 14% to a record $384.8 million in the fourth quarter of fiscal '25, up from $336.2 million in the fourth quarter of fiscal '24. The net sales increase reflects strong organic growth of 7% and the impact from our fiscal '25 and '24 acquisitions. The organic net sales growth is mainly attributable to increased demand for our other electronics, defense, aerospace and space products. The Electronic Technologies Group's operating income increased 10% to a record $89.6 million in the fourth quarter of fiscal '25, up from $81.8 million in the fourth quarter of fiscal '24. The operating income increase principally reflects the previously mentioned net sales growth and an improved gross profit margin, partially offset by higher SG&A expenses, mainly reflecting increased share-based compensation expense. The improved gross profit margin principally reflects a more favorable mix of our medical and other electronics products. The Electronic Technologies Group's operating margin was 23.3% in the fourth quarter of fiscal '25 as compared to 24.3% in the fourth quarter of fiscal '24. The operating margin change principally reflects an increase in SG&A expenses as a percentage of net sales, primarily from the previously mentioned higher share-based compensation expense, partially offset by the previously mentioned improved gross profit margin. Importantly, before acquisition-related intangible amortization expense, our operating margin was a very healthy 27.3% as intangibles amortization consumed around 400 basis points of our operating margin. This is how we judge our business as that most closely correlates to cash. On a true operating basis, these are excellent margins, and we are very pleased with them. And now I turn the call back to Victor Mendelson to discuss our outlook.
Victor Mendelson: Thank you, Eric. Looking ahead to fiscal '26, we anticipate net sales growth across both the Flight Support Group and the Electronic Technologies Group, driven by organic growth from increased demand for the majority of our products as well as growth through our recent acquisitions. We'll continue to pursue selective acquisition opportunities that complement this growth and our disciplined financial management remains dedicated to creating long-term shareholder value through a balanced combination of organic growth and strategic acquisitions while maintaining financial resilience and flexibility. Acquisition activity, of course, continues to be robust across both operating segments, supported by a healthy pipeline of potential acquisition opportunities currently under evaluation. And as such, we remain focused on identifying high-quality businesses that complement HEICO's existing operations and, of course, further strengthen our strategic positioning. Consistent with our long-standing acquisition philosophy, we will only pursue acquisitions and opportunities that meet our strict financial and strategic criteria that are accretive and have the potential to generate durable long-term value for HEICO and for our shareholders. So thank you very much for attending our call. Those are our prepared remarks, and we ask Samara, the operator, to please open the line for questions.
Operator: [Operator Instructions] And we'll take our first question from Larry Solow with CJS Securities.
Lawrence Solow: Great. I appreciate the comments on Larry, and I'm sure he's smiling down on the really strong free cash flow this quarter. So congrats on that.
Victor Mendelson: Thank you, Larry.
Lawrence Solow: Absolutely. First question, Eric, I guess to you, just on the growth and as we look at it at FSG, I think we used to view you as sort of a high single, low double-digit grower and grew in mid-teens plus on the core business for five-plus years. Maybe the first couple were COVID recovery, but just trying to, as we look at it, it feels like all the positives continue to align in your direction. Can you just help us just kind of bucket these drivers? Clearly, the market's growing nicely, but I don't know if growth has accelerated above historical levels where we are today. But is it just your expanded parts offering? Is it a market share? Is it just more acceptance of your parts? Just trying to, if you could just bucket those multiple positives, I think, driving your business.
Eric Mendelson: Sure. Larry, I'd be happy to do that. And thank you very much for your kind comments. Yes, for sure, dad would be very, very happy with these results. I'm sure he is.
Lawrence Solow: Absolutely.
Eric Mendelson: So you're right. The organic growth has been tremendous, and frankly, it's even surprised us and me. I've always been optimistic, and I've always thought that we would continue to outgrow the market, but we continue to do so in a much more meaningful way. So you're right. Why is that? I think it's a number of things. Number one, of course, we want to be grateful for the rising tide environment in the industry. So that's been terrific, and that's been very strong for us. But I think the other thing that's been really good is the value proposition that HEICO offers our customers. The thing that perhaps I'm most proud about is that we've had 16% organic growth in this quarter and another 5% acquired on top of that for a total of 21% sales growth, but operating income increased 30%. And at the same time, our customers are incredibly happy in getting huge value from us. So we've been able to drive operating income, if you will, primarily off of the organic sales growth, and our customers are still very happy. So I think that speaks to a tremendous sales opportunity that we have really in all of our businesses, whether it's in the PMA parts, repair, distribution, specialty manufacturing, defense sustainment. I'm talking over on the flight support group side, and then, of course, on the ETG support group side, more growth opportunity there. But I really think it's the value proposition that we offer combined with our decentralized and very entrepreneurial structure. I get emails after we announced the earnings from a number of different people within HEICO and basically thanking me for the incredible results. I turn around and say, "No, yes, we've been very good on capital allocation, but they're the ones who really deliver these results. We're just reporting the results that they deliver." And it's as a result of being very intimate with their product line, understanding their customers, the whole competitive dynamic. So I think that as there are more aircraft out there and there's increased demand in both commercial aircraft as well as defense products and missile interceptors, I think that we are just incredibly well-positioned. So look, the organic growth has surprised me. That's one of the reasons why we don't give guidance because we don't know where it's going to be. We just know at HEICO that we've got 11,000 people come to work every day, put their heads down, and work as hard as they possibly can, and frankly, the result of the results. But I do think that the value proposition is tremendous. And I guess lastly, one of the other things that I think we've seen over the last number of years is that other manufacturers are increasing their prices substantially. And I think that just further supports the HEICO value proposition. So I think we're just in a great place right now.
Lawrence Solow: No, I appreciate all that color. No, that was great. Victor, how about a question for you. Just I think you obviously had a little sluggishness last year, but a good year this year. It feels like most of your end markets or if not all of them now are kind of pointing up and to the right, obviously, led by defense. I know the National Defense Authorization Act that was just passed recently, it feels like that was positive. So any just general thoughts on state of the union on your outlook?
Victor Mendelson: Yes. We're projecting growth next year in ETG. As I always do, I guide people to look for on an organic basis, mid- to low single digits organic growth. If we do better, that's great. We'll see where everything shakes out a year from now and over the quarters, but we feel very good about our businesses. We did our budget reviews, our subsidiary annual reviews. And as a rule of thumb, our companies are feeling good. Not every company is going to march ahead next year in the way we'd like to see. But overall, very close.
Operator: We'll take our next question from Ron Epstein with Bank of America.
Ronald Epstein: And again, my condolences about your father. On the quarter itself, let's just a couple of quick things. How are things looking for M&A as we go into 2026?
Victor Mendelson: Very strong. I mean, we're working on a lot of opportunities. I would say each quarter, we seem to feel like it can't get any busier. Our pipeline is busier and busier, but that's exactly what happened in this past quarter and actually in recent weeks since the quarter ended. So we've got a lot we're working on, a lot that we're looking at. Of course, as you know, Ron, it doesn't happen until it closes. And there's a lot of work, a lot of diligence. We're extraordinarily discerning in what we'll buy. But we're fortunate in that we are known as a great home for sellers, particularly entrepreneur founder managers and others who are really going to take care of the businesses, not only honor the legacy, but keep the entrepreneurial environment. So there's a lot of opportunity for us. We'll see what we're able to mine out, but we're cautiously optimistic.......
Eric Mendelson: And Ron, I would also just add to that. So we started really our acquisition program in earnest about 27 years ago. And we really acquired, I don't know, 110 companies, and we really have a track record. It's not just 1-, 2-, 3-, 5-, 10-year track record. It's a very, very long track record in DNA, which is embedded in the company. So when we talk to sellers, I think we're viewed in a very, very different light. And as a result, we've got just a tremendous lot of bandwidth, and we also have a lot of different sellers who really view us as the buyer of choice. So I think we're in a really good position there.
Ronald Epstein: Got it. And how comfortable are you guys leveraging that to do a deal given the balance sheet is so strong?
Carlos Macau: Ron, this is Carlos. So I would say similar to history, we're not afraid of leverage. For the right transaction, for the right deal for our shareholders, we would take on additional leverage. I don't think that our company, the culture and the way we do business would suggest we'd like to have permanent leverage in the 5 or 6 range. But if we had to spike up the 4, 5, 6x to do a deal, and I felt comfortable that within 12 to 18, 24 months, you could get that leverage back down to a manageable number, we would certainly do that if it was good for our shareholders. I think as a sort of status quo, we like leverage to be somewhere around 2x. That's a comfortable spot for us. Right now, we're -- our permanent debt, if you would, or our bonds are sitting at about 1 turn of EBITDA. That's very comfortable. I think we could probably carry 2 turns of debt in permanent sort of financing posture and be very comfortable with HEICO with the cash generation that we have.
Ronald Epstein: Got it. Got it. Got it. And then maybe just one last one for me. And how is it working -- you guys had mentioned last year about doing PMA parts for defense. And how is that going? Is there any progress on that front?
Eric Mendelson: Ron, this is Eric. So yes, there has been progress on that front. But as we always said, it was really going to be more of a medium-term project. As you know, it takes a little bit of time for the government to do all the stuff that they got to do. But we think that there is a very, very big opportunity there for us, and we're quite excited about it.
Operator: We'll take our next question from Peter Arment with Baird.
Peter Arment: Eric Victor, Carlos, nice results. Eric, you talked a little bit about defense and missile defense. And if I remember correctly, defense and space is roughly about a quarter of the FSG segment. Do you see that mix changing much, just given all the growth you're highlighting?
Eric Mendelson: I think actually, it's going to probably remain pretty consistent because we have so much growth over on the commercial side that they're doing a great job keeping up with the huge growth over on defense. So I think it's probably going to be somewhat consistent going forward. But I do think that there are massive opportunities for us over on the defense side. And as these -- as our customers become more familiar with our broad capabilities. And by the way, not only our long-time large defense customers who we continue to support and have a great relationship with, but also the defense tech community. We're doing a lot of work for those guys as well and delivering huge value. We've got design capability, manufacturing capability across a very wide array of products. We're able to solve all sorts of complex problems for them. And so I think that, that's just going to continue to be a big opportunity for us, along with the launch business. We've grown. We don't -- we're very careful at HEICO. We don't talk about specific programs, specific customers because, frankly, we don't want to give a road map to our competitors on what we're doing. And we say, just look at our results. But I can tell you that there have been very well-known companies coming into HEICO into our Specialty Products group, into our other manufacturing businesses asking to help solve some of this country's major, major problems. And we really -- I'm super proud of our team. So I think there's a big opportunity there.
Peter Arment: Appreciate the color. Maybe, Eric and Victor, you could both comment on maybe Golden Dome, just how you see HEICO's business kind of positioned. Obviously, there's been a lot in the classified circles and behind the scenes, not much public. How do you view the opportunity set for HEICO?
Victor Mendelson: This is Victor. It's a good question. Obviously, we're excited by it. Golden Dome consists of a number of existing programs. And from what we understand because it's not -- I think and intentionally so, it's not entirely publicly defined or maybe not entirely that we can discuss on a public call. But you have the existing programs on which we have great presence and have had for years, some of which Eric is alluding to in his comments, but the same in both -- by the way, both ETG and FSG within the business. And then there's a lot of reconnaissance, surveillance, tracking that's being added to it and networking it together. And a number of our businesses have been told that some of the things they're working on, some of the development contracts they've been getting are related to that without being able to go into the specifics on each one of those programs, of course, and the subsidiaries, we'll take our customers at the word. There is no order that comes in at the top that says Golden Dome department, right? So we'll have to judge as we go down the road how much it will be. But it's definitely additive, and we're definitely excited about it. And we, of course, think it's the right thing to do for the country given the success, for example, of Iron Dome. And a number of our companies have components on a number of the Iron Dome constituent parts.
Operator: We'll take our next question from Ken Herbert with RBC Capital Markets.
Kenneth Herbert: Very nice results. Maybe, Eric, just to start, you've grown FSG margins pretty substantially, about 300 basis points from '21 to '24 or '22 to '25. I can appreciate part of that's been mixed with Wencor. You've also seen some opportunities on pricing in other areas. How do we think about FSG margins into fiscal '26 and beyond? And is there any reason we don't see continued pace of improvement?
Eric Mendelson: Ken, so thank you for your question. And yes, I would -- while we don't give guidance, you're right, we've grown margins substantially. And at the same time, the thing that I'm really proud about is we've kept our customers very happy at that -- while doing that simultaneously. I do think there's continued margin opportunity for us, continued margin expansion as we have basically greater absorption of our, what I'll call our fixed costs, whether it's in cost of sales or SG&A. I do think that we've got additional leverage there. We've made a number of significant investments over the last number of years to broaden our manufacturing and design and distribution capabilities. And so I think we'll continue to see improved margins there. It's hard for me to guess what that is because the truth is I really don't know. As I mentioned, I think, before, we get -- we've got this great decentralized organization, and they all submit budgets, which tend to be on the, let's just say, the very conservative side. So it's very hard for me to predict going forward what it's going to be. But I just know that at the end of the day, they end up outperforming. So I think Carlos may have some additional thoughts on that.
Carlos Macau: You're hiking the football, Tommy? Ken. So here's the deal. I continue to believe that the FSG is going to play between 23.5% and 24.5% GAAP operating margins. And the reason that I have kind of a wide sort of vector there is because we have noticed and talked about some mix impacts on the margin, particularly in Specialty Products and repair and overhaul. So historically, the FSG margin story has always been about volume. So until that mix sort of settles down a little bit, it's kind of hard to tighten that up. But I think you could expect between those ranges. And hopefully, we'll be towards the high end of that, and there will be reasons that are quarter specific if we're not, but I think that's the range you should expect.
Kenneth Herbert: That's helpful, Carlos. And if I could, Eric, just one other question. It seems like each time this year, we have a debate around better deliveries out of Boeing and Airbus and the implications of what that could mean for aftermarket spending. Can you just comment on what you're seeing at airlines today as they think about 2026 around aircraft retirements, obviously, fuel prices are low, continued use of legacy or older assets. Just what's your view on aftermarket fundamentals into 2026?
Eric Mendelson: Yes, it's a great question. And look, we've got the utmost respect for Boeing and Airbus. And we think that -- as well, of course, Embraer. And we think that they're going to get a lot of the supply chain issues worked out. These are phenomenal companies that put out the best products, unbelievable products. And the world really needs them. And they will get all their situation worked out. So then the question is, what happens to the rest of the aftermarket there on the older aircraft? And we think that the older aircraft will continue to be in very good demand. You can see what the retirement rates have been. And again, you've got this older fleet that is a very large fleet, which is continuing to age one year per year and consume a massive amount of parts. So we think that we're in very good position. Again, we're long-term investors, if you will, citizens, residents in this stock. And so if there's a dip, things move up and down a little bit, it doesn't change our view on it. So for us, we don't really look at the, if you will, the quarter to quarter and sort of the micro moves. We're looking out saying the airlines recognize that there's this massive need coming down the road. They need more suppliers. We're there to fill that opportunity on both the independent side as well as the OEM-aligned side. It's whatever our customers want. And so I think we're in good position, but it should remain quite strong to answer your question.
Operator: And we'll take our next question from Sheila Kahyaoglu with Jefferies.
Sheila Kahyaoglu: Maybe if I could start -- and I want to give you guys condolences on Larry, because I think we're also lucky to have known him and he's impacted all of our lives in some way. Maybe going back to the performance for 2025, it's been stellar, the quarter, as well. Eric, I wanted to ask you. I know everybody's harped on FSG growth, and just because it's accelerated in the quarter, if you could give us any detail on maybe the parts of the business that you think will outperform as we head into fiscal 2026. And also, you've announced some pretty neat transactions like EthosEnergy recently and another transaction. So can you talk about how those fit into the broader both Wencor and the broader FSG?
Eric Mendelson: Sure. I would be happy to. And Sheila, thank you also for the very nice comment about that, and he always respected you and your fellow analysts and really enjoyed this time very much with you all. And so thank you for that. As far as for the subsectors within Flight Support that are going to outperform, I mean, I'm sorry to sound like a broken record, but I think it's really across the board. It's in everything that we're doing. We're seeing strength across the board. So I wouldn't say that there's one area in particular. We are very excited. You bring up Ethos, and we're very excited about that because they're strong in the IGT market. And of course, you've got all these industrial gas turbines, of which some are air derivatives, supporting the AI power demand. And as you know, there's a massive amount of power that has to be created. And these IGTs, industrial gas turbines, are expected to play a major role there. So we think that we're in very, very good position to help Ethos continue to support their program. And we think that there's just a tremendous amount of opportunity. We like the people very much. They have three different facilities. It's a very decentralized organization, very entrepreneurial. I think there is going to be a big increase in demand on the various components that they overhaul. And we think that it's just a great addition to Wencor. Wencor has been, as HEICO has been, Wencor has been very successful in their markets. And we allocate out the acquisitions according to bandwidth, and who's got time and capacity to be able to take on these acquisitions. But we're really happy that Wencor has got the talent and the technical ability to help drive that business forward. And we think that there'll be very good performance out of it.
Sheila Kahyaoglu: Can you maybe also talk about the Axillon Fuel Containment business? Does that work with Robertson? How do you think about how that will fit into the framework? And can we think about annual revenues in the $125 million range for that one?
Victor Mendelson: Well, so this is Victor. The business is separate from Robertson. It's a supplier to Robertson. So Robertson has been a customer. I think working together, they can bring additional benefits to our customers and to the marketplace and make things, in fact, even more competitive for our customers. There's opportunity there. We'll -- in terms -- we didn't break out the revenue from the business. So I'm being careful, of course, on that. And of course, when it closes, of course, if it closes, right, no deal is ever certain. But that timing issues and approvals and things like that, that we've got to go through will also influence the amount of revenue that we recognize in fiscal '26.
Sheila Kahyaoglu: Sorry, Victor, I forgot Robertson was an ETG.
Operator: We'll take our next question from John Godyn with Citigroup.
John Godyn: I wanted to -- I completely appreciate that we've gone away from annual guidance a long time ago in HEICO. But at the same time, every few years, you guys reiterate that 15%, 20% net income growth kind of multi-year target. And we've had a couple of years of amazing net income growth. And I just kind of offer the observation that consensus expectations are for a very sharp deceleration over the next few years. And I just wanted to kind of revisit this idea, take the temperature. How do you feel about 15%, 20% as sort of a multi-year growth number from here, a target? And is there anything that you're seeing that suggests a sharp deceleration in growth rates is likely?
Eric Mendelson: So John, first of all, thank you very much for your question. This is Eric. I'd be happy to answer that. As you know, the 15%, 20% has always been an aspirational number. The company is designed in a decentralized way, but rolling up into groups. So we can harness the individual and entrepreneurial efforts of our people in the businesses and combine them with technology, market access, capital that the larger groups bring. So I can tell you that all of the subsidiaries have organic growth targets that are consistent with the numbers that you mentioned. And we believe that on the acquisition side, we are in a very good position and continue to be the buyer of choice. Obviously, the important metric for us is EBITDA, which is really operating income plus intangible amortization due to purchase accounting because that's really a made-up number, if you will. But I think in terms of growing our EBITDA, nothing has changed going forward. Obviously, as you get bigger, it may become more difficult. But of course, as we've gotten bigger, we've hit the numbers, and it's become easier. So all I can tell you is we remain very focused. And I think we're in a good position going forward. As far as giving guidance, for us to give guidance, as I've mentioned, it's very difficult because our subsidiaries tend to give very conservative guidance to us. And then we have to add a number on top of that, and who knows what that number is going to be. But I can tell you, Victor and I spend a lot of time out in the field with our businesses. We're aware of all the technology they're developing. Carlos is out there as well. And I think the future is going to be very good. It's going to be very good for us. And we're going to continue to outgrow the market. So nothing has changed with our focus on outgrowing the market, so.
John Godyn: Right. So despite a few great years above that range, it sounds like you don't see it likely that we're below that range for a number of years going forward. It sounds like the algorithm is still intact as far as you can tell.
Eric Mendelson: Well, as I mentioned, look, those numbers are aspirational numbers. I think 15% is a great aspirational number, and we're working very hard to make that happen. Again, we don't provide guidance, so I want to be very careful what I say, but everything here at HEICO is structured to continue this growth.
Carlos Macau: Hey, John, this is Carlos. Let me refer you to history here. We've done for 35 years, compounded our bottom line at 18%. So we've proven that we can do it. Every year, we sit down, we do our budgets, we look at the performance, the atmospherics in the markets, and we shoot for 15%, 20% bottom line growth. And we're capable of doing that. As Eric mentioned, as we grow larger, it becomes more challenging. But as we look out over the next three to five years, I don't see anything impeding those aspirational goals. That's what we target as a group, as a board, and as a company to grow. So I think that's all intact.
Eric Mendelson: And also, I would just add to what Carlos said. When you look at our leverage out roughly 1.5x, I mean, we've got tremendous ability to make acquisitions. I mean, when we generate, what was the number, $934 million from operations. I mean, the cash is really very, very strong. And we're able then to take that cash and go buy other entrepreneurial businesses where people want to be part of HEICO. So there's no change to our program.
Operator: And we'll take our next question from Noah Poponak with Goldman Sachs.
Noah Poponak: Can you hear me okay?
Eric Mendelson: We can.
Noah Poponak: Those were nice comments about your father. It was great to be able to work with him. Just staying on these FSG margins a bit, Carlos, you talked about mix. I guess when we look at the incremental being better in 2025 than 2024, are you able to parse out the pieces of that? How much of it was that mix? And can you tell us what those mix items are and what you expect them to do next year? And how much of it was any change in pricing philosophy?
Carlos Macau: So the price part of that, we probably get one or two or three points worth of price in our numbers every year. We're basically covering our labor inflation. I mean, raw materials for us is a lower piece of the overall bill of materials. So the concerns we have around here really are labor inflation, and we seem to be getting enough price out of our customers to cover that and still provide them with great value and make them feel like the value proposition is huge with HEICO to do business with us. The components of the mix, so I would say this. We've noticed a nice increase in the gross margin with our repair and overhaul business. And most of that has been attributed to heavier PMA and DER repairs that we've been doing this year. I would say the mix shift there has been a little bit more favorable towards the PMA and DER. We've also expanded our avionics repairs quite a bit this year. So those components there have had a positive lift in the gross margin and the repair and overhaul, which has translated into the overall segment margin. I'd also say that within specialty products, the core of that business, if you spun the clock back five or six years or so ago, it was really a commercial OE play. Pre-COVID, let's say, it was all about seats and thermal blankets and insulation and things like that. What we've noticed post-COVID is a real uptick, and Eric's talked about it earlier, in the defense business we have there, whether it's missile hardware, whether it's drone hardware, and things like that, structural pieces that we're making. That shift towards more of a heavier defense play within specialty products rather than the commercial OE has had a little bit of an improvement on the margin. So I think those two things have helped. And then, of course, our parts business has been off the charts. It's been growing at a tremendous pace, outgrowing the other verticals. And as that business continues to outperform, it absorbs a lot of the fixed costs that Eric's talked about earlier. It does have a little bit of a, I guess, an efficiency play within our SG&A and our fixed cost spend. So those are really the key contributors to the FSG. Most of that is very durable, Noah. I mentioned earlier on the margins, I kind of said 23.5, 24.5. It's kind of a wide spread on my expectation, but it is because the mix can play heavy or light in any one particular quarter, so I'll be able to narrow that down as we get further into next year and the year after and then see how the mixed footprint plays out, but no, it's all been positive. I think it's very durable margin improvements, and as we continue to grow, I think we can eke out small improvements just on our leverage and our fixed costs, 20, 30 basis points a year, something like that, so all positive. I don't see anything that's like one-time or not durable.
Noah Poponak: Okay. That's really helpful color. Yes. I mean, I think obviously you want to have some conservatism in what you're saying about the forward, but the operating margin is still pretty far below the gross margin. So just all else equal, if you're growing volumes, you would have your normal incrementals and be able to just expand margins over time. Obviously, it's not always all else equal, but okay.
Carlos Macau: Well, we don't size it. We don't size it. If you look in our public filings, you'll see that within the FSG, we do break out specialty products in our defense business. You can see how that business has grown, but we, for competitive reasons, don't size it.
Noah Poponak: Okay. And then how do you expect capital deployed towards acquisitions in '26 to compare to '25 size-wise?
Carlos Macau: I mean, Eric and Victor like to buy every shiny object they can get their hands on. So I expect that we'll continue at a higher pace.
Noah Poponak: I don't believe that.
Carlos Macau: But look, we're not capital constrained, Noah, and we have a tremendous opportunity set in front of us. We're able to be very selective at this point in time on what we deploy capital on, which is a good thing. And the basket of opportunities is as big as it's ever been. So I think we probably should have a repeat of what we did last year into 2026 would be my hope and my expectation. But again, you never know. And remember, we are guided by, we want to grow 15%, 20% bottom line. It is a controlled growth strategy. So that guides us, but we do not walk away from extraordinarily good opportunities for our shareholders. So in the event that we outgrow that metric, it's because we had great opportunities in the acquisition front that we just couldn't pass on, right? And so that will also guide our thinking on how we deploy the capital.
Eric Mendelson: Noah, just also to add a little bit of color why we're so optimistic on the acquisition front. I mean, if you look where we're leveraged at 1.5x, so we've got. We're under leveraged.
Carlos Macau: 1.6x.
Eric Mendelson: 1.6x. We've got plenty of firepower. Our businesses generate a lot of cash. Just putting that cash to work is a big task. We've done 110 -- in our commercial, we've done 110 acquisitions. We are experienced. We know what's important. We know how to motivate people. We've got dozens of entrepreneurs for sellers to speak with that explain why HEICO is the best home that they could possibly imagine. And frankly, we've got an incredible acquisitions team, which is out there pounding the pavement, working really hard, making sure that we're in every process and we're constantly talking to people. And we're talking to them years in advance of when they want to possibly sell their company. Somebody may be interested in a liquidity event 10 years from now. That's no problem because there are so many points of contact at HEICO where we can start working with them and connecting them to the HEICO system and help their businesses, help our businesses. And when they're ready, they're ready. So I think we're in really great position there. And if you look, so many of the businesses that we buy, we're not available to sell for other people, to other people. They were not interested in selling. They were only interested in selling to HEICO. And actually, Gables Engineering is a perfect example of that, where this business was sought after by so many people in the industry, and they only spoke to HEICO. And of course, they got a very full price, but they only spoke to HEICO, and they wanted to make sure that they were able to continue their growth, and HEICO was able to do that.
Operator: We'll take our next question from Tony Bancroft with Gabelli Funds.
George Bancroft: And obviously, pass along my condolences to Mr. Mendelson. He really was the best of the best, and he's going to be sorely missed here at Gabelli. With the Ethos acquisition, like you've discussed, it's sort of, in one way, it's sort of going outside your scope of traditional M&A, but another way, obviously, there's a lot of adjacencies. With the backdrop of not a strong growth looking into going forward, is there maybe sort of a new world order or a new outlook on where you would go across aerospace in the sense or maybe other areas of high growth? Maybe you could talk about there's so many opportunities out there, and as a defense budget, you're seeing strength there. Maybe you could talk about anything that could be outside your typical adjacencies.
Eric Mendelson: Sure. Tony, so first of all, thank you very much for your nice comments about dad, and he always enjoyed his time with you and Mario and held you in the highest regard, both of you. And as far as Ethos, we really like the IGT area. We've been in the IGT area through a number of our businesses for a number of years, for decades. And we like growing, as we say, into adjacent white spaces where we understand the technology, whether it's the engineering or the operations of the turbine, whether it's the manufacturing or the repair technology distribution. We think that there's a lot of voice of commonality. It's not -- some of them are aero derivatives, so they're very, very similar to the Aero side. But other ones are pure industrial gas turbines, very, very large machines. And we think that we understand that space quite well. There's going to be a lot of tailwinds for a long period of time. We think we can add a lot of value. Our initial approach there is to go into that market with a very much OEM aligned strategy and try to continue to develop and grow that. But we think it's just another very good business for us to enter.
Victor Mendelson: And Tony, this is Victor. Adding to that, that's really been our history. If you look back over time, when we started out when we took over HEICO, it essentially had one product, right, the combustion chamber and the JT8D engine, the PMA part. That was it for the most part, and it did some machining and milling. And over the years, we've stepped very carefully, but I think very intentionally and successfully into, as Eric would say, these white space adjacencies, and it's worked out very nicely. So our product offering today is vastly expanded. It doesn't look anything like it used to, but it's happened over time. The saying about boiling the frog is in a sense, applicable here that we just do this carefully, slowly, a lot of singles and doubles, no bet the company situations, but we just keep at it. And so I would expect we'll continue doing that. We don't have any other specifics or data that we can share at this point on exactly where we're going, but you can rest assured that they will be sensible and they will be somehow connected to what we're already doing.
Operator: And we'll take our next question from Jonathan Siegmann with Stifel.
Jonathan Siegmann: Condolences again to your family and company for your father and Chairman. We look forward to you keeping the legacy alive by preserving the culture.
Victor Mendelson: Thank you. And John, we've known you a long time. He always admired you. Dealt with you and your fidelity, and we appreciate your confidence and your comments.
Jonathan Siegmann: So I wanted to ask, Eric, you've constantly characterized PMA for military as this medium-term opportunity, but there's been lots of executive orders and directives. We had, in particular, a pretty spirited opening statement at AUSA by the Secretary of the Army, specifically about parts. Just can you give us a sense of what's really changing? Is the opportunity for you being pulled forward? Then maybe talk about the difference between qualifying a PMA part for a military aircraft relative to a commercial. Is it longer or more complicated?
Eric Mendelson: So look, the U.S. operates a lot of -- U.S. military operates a lot of commercial derivative aircraft and these -- a lot of these parts and repairs have been approved by the FAA. And there's no reason the government shouldn't be taking advantage of them. We think that sort of big picture, that's where the opportunity exists. As you know, the gap between what comes out, as they say, with the senior people in the "building" versus what ends up getting done sometimes can take a fair amount of time. This administration is very focused on getting that done. We have to get that done. That's why we're very bullish on the opportunity. I hate to provide super detail into what we're working on because we do have competitors in everything we do. And I don't like giving them a roadmap, but we do think that there continues to be very, very good opportunity. And now it's up to the government to really execute on that. And I think that as they execute, the opportunity will be very rewarding for HEICO.
Operator: And we'll take our next question from Scott Deuschle with Deutsche Bank.
Scott Deuschle: Carlos, just to clarify your response to Noah's question, are the Specialty Products gross margins generally higher or lower than the gross margins in the other submarkets of FSG?
Carlos Macau: It's a good question. We don't get into vertical margin profiles. I would say that obviously, our -- we said over the years, obviously, our PMA business is our highest margin business. But the other verticals within the FSG all float around the average margin of the segment. So that's about the best I could do for you.
Scott Deuschle: Okay. And then, Eric, if we were to think about the largest and most established customers for FSG's PMA and repair solutions, firms like United, Delta or Lufthansa. Are those customers generally running flat out in terms of buying essentially everything from FSG that they can? Or is there still a lot of white space with those existing big customers for FSG to be doing even more for them?
Eric Mendelson: Yes. I mean we're -- without commenting on who the largest customers are, they're buying a lot of our product, but there still remains tremendous potential at each of them. And you may ask, well, why is that? Why is it if they're such big customers and they're buying most of your product or a lot of your product, why don't they buy all of your product? And I agree with you, that's very frustrating and something that we talk about all the time. Sometimes they have an arrangement, a contract with somebody else. Other times, it's the time, the inertia that it takes to get these parts approved within the organization. But I can tell you that we continue to have very big opportunities in many areas, and we are conquering those opportunities quarter-by-quarter. I continue to learn great wins with major airlines and products, whether they're parts or repair services that they had not done with us in the past. So that's why I remain very bullish.
Operator: We'll take our next question from Scott Mikus with Melius Research.
Scott Mikus: Eric, Victor, condolences. I wanted to ask, so you operate a decentralized operating structure with many disparate operating units. When it comes to pursuing new business opportunities, whether it be for Golden Dome or other programs, do you ever find situations where your operating units are competing against each other for the same work package? Do you force them to collaborate, or do you let them pursue those business opportunities independently just to give the overall organization as many shots on goal as you can get? Just your thoughts on that.
Victor Mendelson: Sure. It's extremely rare that we find our businesses in competitive situations. It's far more common that they actually have cooperative situations. They can help each other out or sometimes they'll go to a customer together occasionally with a package or something like that. We don't, as a rule of thumb, police our businesses. We don't tell them what they can sell or they should sell. We encourage them to work together. And they're very practical and they do. And I think they find a way to rationalize things where they should. They're always -- I'll tell you the truth, always most focused on finding the most cost-effective solutions for our customers because that's what we're known for and the best solution for the customer. So I have seen it in the rare case where there is something that's a dual offering that they're just happy to let the customer make the decision. And what we don't do is curtail dual offerings. We're very careful to not do that. Right. And we also -- I can tell you in some of our businesses whereby we have multiple locations, customers may want to deal with the location or the business that's typically closest to them because it's more convenient and they may get competing offers from different HEICO businesses, and we're fine with them deciding where they want to send the business. I mean we want to make the customer happy. And likewise, if the customer wants an independent solution with PMA or DER, we do that. If they want an OEM solution, we do that, too. So we're really agnostic. We want to make sure that we're serving the customer in whatever way they want to be served. And we think that it works out quite well to have multiple businesses in the space constantly striving for lower cost, better turnaround, better quality. And that's what makes HEICO such a strong competitor out there.
Scott Mikus: Okay. I'll stick with one question, but I wanted to wish you and your families happy holidays. And Victor, a happy belated birthday as well, it was on the 11th.
Victor Mendelson: Thank you, Scott. I appreciate it, and we wish you happy holidays as well. I'm going to have to find your birthday.
Operator: And we'll take our next question from Gavin Parsons with UBS.
Gavin Parsons: I guess maybe sort of along those similar lines, how integrated are the HEICO and Wencor part and repair catalogs? And how long can that be a growth tailwind from cross-selling?
Eric Mendelson: Well, they are -- we offer a lot of different products across the businesses. There is some overlap, and it's whatever the customer wants. If they want to buy it from one business or the other, that's fine. If they want to work new development projects with one business or the other, that's fine. As I've said, I always use the analogy. There are many different types of food out there, and some people may want Italian food or American food or French food, whatever, and at HEICO, we really don't care as long as we're selling them the product, so I think that there are a lot of additional opportunities to work together, but we've already really taken advantage of those, and we've really helped the various businesses forward, and I think you can see in the results, it's really worked out quite well.
Gavin Parsons: Great. Thanks. Also love a diverse diet.
Operator: And we'll take our next question from Alexandra Mandery with Truist Securities.
Alexandra Eleni Mandery: This is Alexandra Mandery on for Michael Ciarmoli with Truist Securities. In terms of your PMA portfolio, what is the exposure like in terms of new entrants, including the LEAP, GTF, GEnx? And do you see that as an opportunity, including first-time shop visits on the PMA front?
Eric Mendelson: Yes. So we normally don't get into details about specific product types or competitors. But in general, I can tell you that when an engine is new, it tends to be under warranty. And that's not a big opportunity for us over on the PMA side. It may be more so over on the repair side. And it's as those platforms age and customers want alternatives, that's when it sort of comes into focus with us. So I would just sort of leave it at that. But I can tell you that our technology that we use to be able to engineer parts is consistent across all engines, all components. And we're very confident about our ability to technically develop the current generation and next generation. It's as far as we're concerned, all within our wheelhouse.
Alexandra Eleni Mandery: Great. That makes sense. Can you provide any additional color on general trends in ETG, given the portfolio being well-suited for space and defense tech, including next-gen systems and where you see bookings going?
Victor Mendelson: Yes. So this is Victor. I think that the trends that we talked about a little bit earlier in the call and the optimism for our various markets is intact and for some of the reasons that you mentioned. By the way, not all of every market is good, and not all of every market offers opportunities. So in space, there's a lot of opportunity, but there's a lot of profitless opportunity there. And I think we've been pretty good at avoiding those situations and really going where we can add particular value to our customers and get recognized or be recognized for that in terms of profitability and market position and so on. And the same applies in defense. There's opportunity, which we take advantage of in the more established segments of the market, as well as some of the newcomers in the defense tech sector. So we sell to both and are proud to do so. And we also believe that the market will continue to evolve such that there will be very important places for both, that one won't necessarily just replace the other. So it's important for us, in a sense, to be everywhere. And I know our businesses have been particularly successful at doing that for a long time. One other note on defense. As we look at the government's focus on cost and we look at the government's focus on speed, and particularly somebody earlier in the call mentioned the comments from the army secretary. HEICO has always been based on speed. We're not a cost-plus-fixed-fee company. Overwhelmingly, we have very little, a tiny amount of revenue in the cost-plus-fixed-fee column. It's all on our dime. We develop it. It may be developed to specification. It may be developed to something else, but we develop it on our dime and sell it. And it's based on doing it and doing it quickly and responding very quickly to our customers. So we are used to doing that, and we are extremely well-situated for the environment should it evolve to more of that.
Operator: We'll take our next question from Gautam Khanna with TD Cowen.
Gautam Khanna: My condolences, Larry was a fantastic kind of a legend in the industry and always very generous at this time. I just had a couple of quick ones. One, I remember asking Larry probably like 7 years ago on an earnings call, how we viewed the Class A stock and just what that -- if there's ever going to be a desire to remove it and just get the common. What are your opinions on that?
Victor Mendelson: At the moment, I believe it's status quo. We've talked about the issues over time with that, and of course, the idea of collapsing them requires an exchange value, and were we to do that at one-to-one, then we'd have perhaps upset common holders, and if we did that at current market prices, we'd have upset Class A holders, and as you know, the two classes are identical in all respects except for voting, so identical, the dividends, the economic benefits, the share of earnings, everything, so they really belong ultimately at the same price. There have been times over the years where they've converged. We do believe at some point they will converge and that the Class A is really sort of a screaming value. In fact, you may notice that when we recently bought shares, our directors, purchase shares every year equal to a certain portion of their retainer. When they bought the shares, they all bought, I think, Class A common shares. That really is a screaming value. I think over time, a rational market will recognize that and push them together.
Gautam Khanna: Got you. Okay. And I wanted to ask also just in terms of demand by region, other companies in the sector have said like China may have bought spare parts, pulled forward some purchases. Have you seen any sort of trends that would suggest anything to that of prebuying or of the PMA parts?
Eric Mendelson: No. We see strength in all of our areas. So I would not say that we've seen that. It can be lumpy a little bit because people may buy parts a couple of times a year for each part number, and therefore, it can be a little lumpy. But no, I wouldn't say that we've seen any region particularly stronger than the others.
Gautam Khanna: Okay. And then just my last one. In terms of pipeline of new PMA parts that are going to be introduced, typically, you guys have given a range to be as many as 500 in a given year. What does the pipeline look like for '26 in terms of what you're introducing to the market?
Eric Mendelson: I would say it's consistent with what we've done historically. Really no change there. We're very happy with the number of parts that we've come out with. We've been at a similar number for a number of years. It went up when we bought Wencor. But I think you can see from the numbers that I think our decision has been quite good in that regard. And so I wouldn't see any substantive change.
Operator: And we'll take our next question from Cashen Keeler with BNP.
Cashen Keeler: This is Cash on behalf of Matt today. I guess just going off that last question, I just wanted to ask on PMA. How supportive has the FAA been regarding parts approvals there? It seems like everything related to FAA approvals, whether it be interiors or new aircraft has just taken longer. So has that had any impact on your pipeline of new parts?
Eric Mendelson: No. We've got a great relationship with the FAA, and we interface with them in many different ways. And I would say it's really business as usual for us. We -- no change there. All is progressing very well for us.
Operator: And we'll take our next question from Louis Raffetto with Wolfe Research.
Louis Raffetto: Victor, maybe for you, maybe I missed this, but could you give the end market growth within ETG for the quarter? I don't know how defense versus electronics?
Victor Mendelson: We did not break that out publicly, Louis.
Louis Raffetto: Okay. I'll take a look in the 10-K. Maybe, Carlos, for you, CapEx, you guys aren't one to really spend, but you spent a little bit more in the fourth quarter. Anything you could sort of point to what that extra spending went to?
Carlos Macau: No. I think it was sort of business as usual where we had around year-end, you wind up getting projects accelerated sometimes because you get year-end deals as the calendar year closes out. So we still spend around, I think, 1.5%, maybe 1.6% of our revenues on CapEx. That's about where we've been historically on the CapEx spend side, and I think as we look into 2026, it should be in a similar range, 1.5, 1.6x revenues or something like that.
Operator: And at this time, I will turn the conference back to the management team for any additional or closing remarks.
Victor Mendelson: Thank you very much, Samara. We appreciate your coverage of the call for us. We wish everybody on the call a wonderful holiday season, and we thank you for listening today, and we look forward to talking with you on the next call or if not sooner. Thank you very much.
Operator: And this concludes today's call. Thank you for your participation. You may now disconnect.