PHINIA Inc.PHINNYSE
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Operator: Good morning, and welcome, everyone, to the PHINIA Inc. Fourth Quarter 2025 Earnings Call. Today’s conference is being recorded. After the speakers’ remarks, there will be a question-and-answer session. To ask a question, please press 1 on your telephone keypad. If you would like to withdraw your question, press 1 again. At this time, I would like to turn the conference over to Kellen Ferris, Vice President of Investor Relations. Please go ahead.
Kellen Ferris: Thank you, and good morning, everyone. We appreciate you joining us. Our conference call materials were issued this morning and are available on PHINIA Inc.’s Investor Relations website, including a slide deck we will be referencing in our remarks. We are also broadcasting this call via webcast. Joining us today are Brady Ericson, CEO, and Chris Gropp, CFO. During this call, we will make forward-looking statements which are based on management’s current expectations and are subject to risks and uncertainties. Actual results may differ materially from these statements due to a variety of factors, including those described in our SEC filings. We caution listeners not to place undue reliance upon any such forward-looking statements. I will now turn the call over to Brady Ericson.
Brady Ericson: Thank you, Kellen, and thank you to everyone for joining us this morning. I will start with some overall comments on the fourth quarter and full year, discuss financials at a high level, and then provide some thoughts on our outlook for 2026. Chris will then provide additional details on our fourth quarter 2025 full year financials and discuss our 2026 financial outlook. We will then open the call for questions. We delivered a solid finish to 2025, with full year results in line with our expectations despite a dynamic and often uncertain macro and industry environment. What stands out to me as I look back on the year is the resilience of our business. Our diversification across regions, customers, end markets, and products continues to serve us well, with no single end market and region that defines PHINIA Inc. Our balance allows us to perform consistently even as conditions shift around us. Before we get started on numbers, you will notice some changes as we recast some numbers between the Fuel Systems and Aftermarket segments. As we have been driving operational efficiencies, a significant portion of the original equipment service, or OES, sales will now be distributed from the Fuel Systems segment and not the Aftermarket segment. We have also further enhanced our end market breakdown and have separated out our off-highway, industrial, and other sales, which includes construction and agricultural machinery, vocational vehicles, marine, industrial applications, power generation, aerospace and defense, and all other. Finally, we have also updated our calculation method for free cash flow conversion to be more in line with industry standards. There is no change in expectations around the strong cash generation of the business. Now let us jump into the fourth quarter results on Slide 4. For the third consecutive quarter, we delivered year-over-year growth in both the Aftermarket and Fuel Systems segments. Total net sales in the quarter were $889 million, up 6.7% from the same period of the prior year. Excluding FX impacts and the contribution of SEM, revenue was up 2.3%. We reported adjusted EBITDA of $116 million for the quarter, up $6 million and a margin of 13%. Total segment adjusted operating income was $112 million and a 12.6% margin. The Fuel Systems segment delivered a strong quarter with sales of $560 million, up 7.9% and adjusted operating margin of 10.7%. The Aftermarket segment had sales of $329 million, up 4.8% with adjusted operating margin of 15.8%. Adjusted earnings per diluted share, excluding non-operating items, was $1.18 for the quarter compared with $0.71 in the same period of the prior year. Our balance sheet remains solid with cash and cash equivalents of $359 million, and $859 million of total liquidity. We have reduced our debt by $24 million and our net leverage ratio came down from 1.4x to 1.3x, all while returning $40 million to shareholders via dividends and share repurchases. The fourth quarter performance underscores the durability and resilience of our business amid a complex and uncertain operating landscape. It reflects the advantages of being a diversified industrial company by serving a broad mix of regions, customers, end markets, and products. Moving to Slide 5. We continue to win new business across our core and adjacent markets. Throughout the year, this included multiple wins in light vehicle, commercial vehicle, off-highway, industrial, aerospace, and alternative fuel applications. A few key Fuel Systems segment wins in the fourth quarter included securing our third aerospace and defense contract for a post-combustion fuel valve, highlighting our proven capabilities and strengthening our position in the sector; key contract extensions with global commercial vehicle OEMs, reaffirming the strength and longevity of our strategic partnerships; and a new business win in India with a leading OEM for port fuel injectors used with compressed natural gas, underscoring our dedication to lower-carbon mobility and commitment to alternative fuels. Now to Slide 6. The Aftermarket segment remained a steady and resilient contributor throughout the year. Demand continued to be supported by an aging global vehicle fleet and expanding portfolio. Our strong brands and service continue to resonate with customers and distributors. We are winning both new business and expanding relationships with existing customers. Importantly, these wins were across diverse geographies, further strengthening our position in the PHINIA Inc. aftermarket. We also continue to accelerate the pace of expanding our offerings and coverage by adding approximately 5,800 new SKUs across our portfolio. Slide 7 highlights the diversification of our business across regions, customers, and end markets. This is supported by manufacturing facilities close to our customers in all key regions. We also benefit from the flexibility to redeploy manufacturing and human capital across these opportunities. As noted earlier, we provided additional end market granularity by splitting out CV and other into medium- and heavy-duty on-highway CV, and off-highway, industrial, and other. This shows the progress we have made in expanding our presence in this end market as it now represents 6% of our sales. Moving next to capital allocation on Slide 8. We remain disciplined and balanced in our approach to capital allocation while remaining opportunistic about M&A. Since the spin, we have repurchased 9,800,000 shares which is roughly 21% of our original share count. In total, since the spin we returned over $500 million to shareholders via share repurchases and dividends. We accomplished all this while maintaining net leverage below our target level, sustaining robust liquidity, closing on an opportunistic acquisition, and supporting the organic growth needs of the business. We also announced a few weeks ago an 11% increase in our dividend and a $150 million increase in our share repurchase program. Needless to say, our capital allocation decisions will always be based on how we can maximize long-term shareholder value. Moving to Slide 9. We had some significant milestones in 2025: completing our first acquisition, receiving our aerospace quality certification along with our first program launch, and delivering strong financial performance in a volatile market. Also of note, 2025 is the first full year without the impact of PSAs and contract manufacturing with our former parent. Investors have been rewarded with a total shareholder return, which includes share price appreciation and dividends, over the two-year period of 2024–2025, of 140%. Looking forward to 2026, we expect our journey to continue on the path we set from the beginning: differentiating via product leadership, focusing on markets that will support our goal of sustainable growth, maintaining our financial discipline, and remaining focused on delivering long-term value for our shareholders. Finally, I want to thank our team for their outstanding execution through fiscal 2025. Their hard work and dedication enabled us to successfully navigate dynamic market conditions while driving meaningful growth and operational improvements. I will now turn the call over to Chris Gropp to discuss our financial results in more detail and introduce our 2026 financial outlook. Chris?
Chris Gropp: Thanks, Brady, and thanks to all of you for joining us this morning. As a reminder, reconciliations of all non-GAAP financial measures that I will discuss can be found in today’s press release and in the presentation, both of which are on our website.
Chris Gropp: Our fourth quarter and full year results met our expectations even as we navigated a range of challenges, from tariffs and macroeconomic instability to geopolitical tension and a shifting policy landscape. Despite these headwinds, we grew our top line and delivered a solid bottom line.
Chris Gropp: In addition, as Brady mentioned, we made meaningful progress on the priorities we set at the start of the year: strengthening our core businesses, entering new markets, and positioning PHINIA Inc. for long-term profitable growth. Fourth quarter financial results were solid and include a full-quarter contribution from SEM. The external environment has not changed dramatically from the prior quarters; however, we saw some strength in Asia and the Americas, partially offset by lower sales in Europe within Fuel Systems. Aftermarket sales were also higher, primarily driven by aftermarket pricing and tariff recoveries, offset slightly by lower commercial vehicle sales in the Americas. Let me now bridge our revenue and adjusted EBITDA for the fourth quarter which you can find on pages 11 and 12 in the presentation. Specifically during the quarter, we generated $889 million in net sales, an increase of 6.7% versus a year ago. Compared to Q4 2024, our top line benefited from favorable foreign exchange tailwinds of $25 million as the dollar weakened mainly against the British pound and euro. Revenue in the quarter also rose on tariff recovery of $15 million. Overall, volume and mix contributed $8 million as we saw strength in sales in Asia and the U.S., with higher LPD sales, partially offset by lower sales in Europe. SEM contributed $12 million in the quarter. Excluding the FX impact and the SEM contribution, sales were up 2.3% in the quarter. Moving next to the bridge on Slide 12. Adjusted EBITDA was $116 million in the quarter, with a margin of 13%, representing a year-over-year increase of $6 million and a 20 basis point decline in margin. Corporate and other costs, primarily R&D savings, were a $6 million tailwind. Net tariff recoveries, supplier savings, and other overhead cost savings measures combined were another $5 million. These benefits were partially offset by unfavorable product mix in Asia and the Americas. Overall results were healthy. The margin percentages were diluted as a result of FX, inclusion of SEM, and negative mix. Let me now bridge our adjusted revenue and adjusted EBITDA for the full year, which you can find on pages 13 and 14 in the presentation. Once again, starting with adjusted sales, where the drivers were similar to the fourth quarter. Total revenue was approximately $3.5 billion, an increase of 3%, excluding the final contract manufacturing sales from our former parent in 2024. FX was a tailwind of $45 million as the dollar weakened mainly against the British pound and euro. Adjusted sales also benefited from tariff recovery of $38 million. Volumes of base business were flat for the year, but boosted with the inclusion of $20 million in sales from SEM. Excluding the FX benefit and contribution from SEM, revenue was up 1.1% for the year. Moving next to the bridge on Slide 14. Adjusted EBITDA was $478 million, flat year over year, with a margin of 13.7%, representing a 40 basis point decline in margin. Supplier savings and other cost-saving measures of $26 million were offset by unfavorable product mix, a slight increase in employee costs, and net tariff pass-through. Margin was negatively impacted by the dilutive impact of both tariff and FX, each of which resulted in an approximately 20 basis point decline in margin. Moving next to discussion of the individual segments’ full year performance. Note that in 2025, we made a strategic decision to shift a significant portion of our OE service business previously reported in the Aftermarket segment to the Fuel Systems segment. This change is a result of creating a streamlined process for the sales structure and distribution of these sales, thereby reducing the related administrative burden. Our reporting segment disclosures have been updated accordingly, including recast of prior periods in all our reported financials. Moving next to Fuel Systems on page 15. You can see that revenue for the full year increased 3.3% with a 40 basis point increase in adjusted operating margin. Segment revenue was impacted materially by changes in FX of $33 million, the addition of SEM of $20 million, and tariff recoveries of $13 million. Full year segment AOI of $244 million is an increase of $16 million with solid supplier savings, partially offset by negative volume and mix. Compared to 2024, our Aftermarket segment sales were up 2.7% for the full year, primarily due to customer tariff recovery and favorable FX. Aftermarket segment margins of 15.2% were down 30 basis points, primarily due to the dilutive impact of tariff recoveries. Moving on to a discussion of our balance sheet and cash flow. We continue to effectively execute our disciplined capital strategy, successfully balancing significant cash return to shareholders with strategic M&A and other investments. Cash and cash equivalents were $359 million while available capacity under our credit facilities remained at approximately $500 million for a resulting liquidity of $859 million. Cash flow from operations was $312 million for the year, and adjusted free cash flow came in above guide at $212 million, enabling us to continue returns of capital to our shareholders through regular dividends and buybacks. Share repurchases represented a primary use of capital totaling $30 million in Q4 and $200 million for the full year. We paid $10 million in dividends in Q4, bringing full year dividend payments to shareholders to $42 million. We remain confident in our ability to generate strong free cash flow to support our future capital allocation priorities. This is evidenced by the strong performance of the business in 2025, enabling dividends back to shareholders, share repurchases, a small bolt-on M&A transaction completed solely with cash, and the settlement of $24 million in debt. We made meaningful progress on lowering our tax rate in 2025, moving from a full-year adjusted effective tax rate of 41.5% in 2024 to 32.5% in 2025. Cash taxes paid also reduced to $61 million in 2025 from $94 million in 2024. Although it should be noted that there were one-off reductions in 2025 cash taxes paid. Without these one-off items, we would have expected a cash tax outlay in the approximately $75 million to $85 million range. While we expect improved trends to continue in the coming years, rate of improvement and rate of change is not linear for either ETR or cash taxes paid, and, therefore, we expect rates and cash outlays to change at differing levels each year as various structuring projects are enacted. Before moving to Slides 17 and 18 for a discussion of our 2026 outlook, I also want to take a moment and thank and congratulate all our employees for delivering great 2025 results. Despite any market turmoil or chaos that ensues, our teams understand how to calmly assess situations and react appropriately. Let me briefly discuss the drivers behind our outlook for 2026. Industry volumes are expected to be flat to slightly down globally, inclusive of battery electric vehicle sales. We expect to offset these market changes through continued share gains in Aftermarket and increased gasoline direct injection products, off-highway, industrial, and other end markets. Taking these factors into account and at the midpoint of our net sales outlook of $3.5 to $3.7 billion, we would expect an increase in sales in the mid-single-digit range, inclusive of FX. Excluding expected FX, our growth is projected to be in the low-single-digit range. We are therefore guiding adjusted EBITDA to be $485 million to $525 million with an EBITDA margin of 13.7% to 14.3%. We believe the business is well positioned to continue generating meaningful cash flow, and our 2026 outlook for adjusted free cash flow is, therefore, $200 million to $240 million. The adjusted effective tax rate should be in the 30% to 34% range. Overall, we expect to deliver strong results in 2026, as we continue to drive operational efficiencies and search for new areas of growth for both segments. Note that our outlook does not include any possible impact related to future policy changes by any government, which could affect our operations or technical centers. This includes additional tariffs, tax, or any other policy that could inflate or deflate revenue or affect our cost base. Fiscal year 2025 was marked by complexity and resilience—a tale of navigating global headwinds while making strategic progress. We are entering the next chapter of growth and look forward to continued success in fiscal 2026 and beyond as we continue our focus on revenue growth, product innovation and new markets, business wins, disciplined capital allocation, and delivering shareholder value. We want to thank all of you for joining us on the call today. Operator, please open the lines for questions.
Operator: If you have dialed in and would like to ask a question, please press 1 on your telephone keypad to raise your hand and join the queue. We will take our first question from Bobby Brooks at Northland. Hey, good morning, guys. Thank you for taking my question.
Bobby Brooks: The first one I had just on guidance—Chris, you gave a great breakdown of the guidance, and I was just curious, that Slide 17, when you are talking about mid to upper single digits for commercial vehicle for Europe, right? Is that the industry overall, or is that what you are expecting to see?
Chris Gropp: That is the industry overall. I think down below, you will see kind of what our expectation is. I mean, we have seen, I think it is part of the from the October S&P kind of update. And, again, we saw that commercial vehicle kind of ended last year in Europe relatively stable. And we are also seeing some positive signs from our customers in that region as well.
Bobby Brooks: Thank you for clearing that up for me. And just sticking with the guidance, turning to adjusted EBITDA margins. I would have thought if revenues would grow 6% that you would see a bit more margin expansion. So I just wanted to maybe double click in here what might be sort of the hurdles preventing more robust margin expansion with better growth?
Chris Gropp: Well, we are showing margin expansion of 20% incremental, which for us is a good rate to go through. And it is actually higher than that if you take out some of the FX and the tariff. We are assuming that we are also going to grow on tariffs and FX, which are basically hollowed out. There is not going to be a big increase in the tariffs if they stay stable from last year. But there is a, you know, a reasonable amount of FX in there. But 20% is really a good number, we feel.
Bobby Brooks: Got it. I guess I was not looking at it like that. And it was really exciting to hear you guys won your third aerospace and defense supply contract. And I was just curious to hear, is this with the same customer from the first two, or is this a new customer?
Chris Gropp: Same customer. But there is momentum in other areas as well.
Bobby Brooks: Got it. And maybe just the last one is, so I know you started production on the first A&D supply contract in the fourth quarter, right? And is not that second project slated to start beginning now in the first quarter? And any insights on when that third supply contract might start to kick off?
Chris Gropp: Start until, I think it is July 2027.
Bobby Brooks: Got it. Alright. Thank you, guys. Congrats on the great quarter. I will turn it to queue.
Chris Gropp: Yep. Thanks. Thank you.
Operator: We will move next to Joseph Spak at UBS.
Joseph Spak: Thanks. Good morning, everyone. Chris, just want to make sure I have it right, because I was doing some of the same math on incrementals, and I think there might be some factors that are, you know, sort of weighing that a little bit down. So it sounds like in your revenue guidance, you are assuming about two points from FX. Anything there—can you give sort of further breakdown, like what the contribution from tariffs or if there are any recoveries or other pass-throughs in that revenue guidance?
Chris Gropp: I mean, we are assuming on tariffs that we will come out even. So that is why it is a bit dilutive on the tariffs. There is not a lot more tariffs. Remember, we had three quarters of tariffs. We are just assuming the carry forwards that you would have additional tariffs in the first that were there last year. So that is additional. But, yeah, overall, we just assume that our tariffs are going to be breakeven, which does not give you a lot of room for growth on margins.
Joseph Spak: Yeah. I mean, so the tariffs are, what, the $10 million to $15 million range, I think, the one extra quarter at no margin. FX is helping.
Chris Gropp: It adds revenue. And most of that is coming in the first quarter because, again, remember the dollar started weakening at the end of the first quarter last year. A lot of that was coming into the first quarter. So that FX is not great conversion?
Joseph Spak: Yeah. So it is basically at margin. So, again, if you take a look at the total number, if you go mid, you know, the 2025 to the midpoint of 2026, you are looking at, what, $130-some million of revenue and $27 million of EBITDA, you know, which is a 20% conversion with those additional headwinds of no conversion on a quarter to a third of it.
Operator: Okay.
Joseph Spak: Yeah. That is alright. So we can start back into what margins would have been otherwise. I guess just on another point, I am curious if, you know, if anything is rebating here as well. Like, we have obviously been seeing metal and other input prices move higher, and they have been a little bit volatile of late. Can you just remind us again of the most important inputs and just contractually how that flows through your financials? Yeah. I mean, we have got mostly, it is copper. Copper and aluminum are probably going to be the two, as well as some stainless steels. But, again, material content, you know, of our overall revenue is not a significant percentage.
Chris Gropp: Yeah, because we are buying nicely already-finished components that have it built in. And where we do have any kind of commodity, we get pass-through. It is not perfect because it is usually an adjustment at the end of the quarter to go either positive or negative overall. But there is nothing meaningful in our guide from commodity pass-throughs or commodity impacts.
Operator: We will go next to Jake Scholl at BNP Paribas.
Jake Scholl: Guys, can I ask about the quarter? Within that, you know, appreciate you guys breaking out the 6% industrial mix. Within that, are there any particularly rapidly growing areas—anything you guys really want to call out in there that should be a growth driver over the next few years?
Brady Ericson: Yeah. I mean, I think we have seen it in some of the press releases or in our earnings calls as far as the new business. I think you will see a lot of marine applications, some off-highway, some gensets in there, ag and construction. So I think it is obviously aerospace and defense. And so it is all been growing really good for us, and we have had a nice uptake in customers there. Order of magnitude, I think we will give some more color on the details and those markets at the Investor Day later on in a couple weeks or two.
Jake Scholl: That is great. And then, you know, you guys finished the year hopefully within your leverage range. You are generating strong free cash this year. How should we think about your capital allocation priorities? Are there any areas where you are looking to build out your portfolio through M&A? Or do you expect to, you know, keep deploying most of that towards buybacks? And then just quickly, can you quantify where you expect the transaction costs within the free cash to adjusted free cash bridge to fall out? Thank you.
Brady Ericson: I think I will hit the first question—capital allocation. Right? I mean, as we kind of told you, we are always going to sit down every quarter and kind of take a look at where we are on cash and where some M&A is and where our share price is, and try to make decisions that we think are in the best interest to maximize shareholder value. And so, obviously, with share price appreciation and our multiple going up, it may make M&A look better. But, again, we are not going to force ourselves to do M&A. You know, we still think that, you know, our business is made up of—and the diversity of our business makes us look very much like a diversified industrial, and we kind of know where some of those comps are. So we still think that share repurchases are still going to be part of our cap allocation policies, which is why the board also came out and increased our share repurchase program to give us some additional flexibility there, and continue to be opportunistic. We like our business. We like the portfolio of our products right now. And we like the trajectory that we have. So, you know, we upped our dividend as well, 11%, because our share count keeps coming down. And so we will continue to make those decisions to maximize shareholder value. Now on the cash conversion, I think it was your question there. Can you reframe that one again, Jake? Because I did not even type—
Chris Gropp: I think both of us got a little confused.
Jake Scholl: A quick question on the transaction costs to bridge from, like, you know, traditional free cash to adjusted free cash?
Chris Gropp: Oh, I mean, we are just going from doing it from net income, which we felt was a little bit odd and squirrely, and moving it to adjusted EBITDA.
Jake Scholl: Why did it go from net to adjusted cash flow? To adjust—We say adjusted cash flow. It is net. Yeah. Like, credit—Is that your question?
Operator: Yes. Thanks, Jake. So, like, on Slide 25, in the adjusted free cash bridge, there is the separation-related transaction costs. And that is the only difference between what you guys report as adjusted free cash, but some things. But, you know, what is true, like, kind of traditional free cash flow number? I am just trying to bridge that. Separation.
Chris Gropp: Are you asking what the separation costs are? I mean, that still relates back to the original spin transaction. And those go down. There is still a little bit of noise coming out of that from the settlement with BorgWarner and the finalization of some of the old transactions as we clear out some of the old statutory things. So those are the numbers that are there, and you can see it on page 25 in the bridge.
Brady Ericson: I think those will continue to come down.
Chris Gropp: That will come down. Yeah. I think it will, as we get through that.
Jake Scholl: Thanks, guys.
Operator: We will take our next question from Bobby Brooks at Northland.
Bobby Brooks: I guess, you know, kind of broad question, but a lot of good things happening in the business. You guys are doing a great job expanding outside of just being an auto supplier. You have got your Investor Day coming up in two weeks. You know, just kind of wanted to give you the floor to what might be the focuses of the Investor Day and maybe just any hints of what is to come. Thank you.
Brady Ericson: Sure. I think one of the things we are obviously going to do is we are going to go through a lot of our technology and the products and services that we think differentiate us and give us strong relationships with our customers that makes us a good partner for them. From our products to our services and support and software and calibration, we will take you through that. We will go through and deep dive each of these end markets that we have now highlighted and kind of share with you some of the applications and technologies and the market opportunities that we see in each of those markets. And, finally, we will kind of give an outlook on where we think we are going to be in 2030 and beyond as we continue to shift our business more and more towards, you know, commercial vehicle and off-highway and service applications and how that is going to further support our growth beyond 2030. And so we will have some nice displays there as well as some of our unique manufacturing and proprietary processes that we have in our manufacturing facility that also helps put some walls up around our business and protects us from kind of individual players out there. So we think it will be a nice deep dive. And in some ways, it is going to be, you know, more of the same. We are going to continue to be financially disciplined. We are going to continue to lead with product leadership. And we are going to continue to allocate capital in the most efficient way possible. And so it is just a continuation of the journey for us.
Bobby Brooks: Great to hear. Really looking forward to it. I will turn it to you.
Operator: We will move next to Drew Estes at Banyan Capital Management.
Drew Estes: Hey there. Good morning. So my question is about 2026 volume assumptions. We are seeing what seems to be a refocus on ICE and hybrid vehicles among OEMs, especially in the U.S. And you are still assuming light vehicle volumes to decline low single digits in the Americas. And I am just curious, what would it take for light vehicle volumes to turn positive in the Americas for you all? Thank you.
Brady Ericson: Okay. This is the market numbers. It is kind of the latest and greatest is that North America, the Americas, is going to be relatively flat to down a little bit—not a whole lot, I mean, from the number standpoint. And that includes, you know, EV or battery electric vehicles in that number. And so we do still see some battery electric vehicle penetration kind of flat to maybe a little bit of growth. But for us, we have got a good market. We continue to see market share gains in GDI. Penetration rates increasing. Again, the GDI goes across both hybrid and plug-in hybrid applications that have combustion engine in them. So that is a good thing for us. You know? So for us, in general, the market may be flat to down, but we continue to see good penetration rates for our business. As we kind of highlighted there on Slide 17, the overall global internal combustion, which includes hybrids and just standard combustion vehicles, you know, is going to be flat to down next year for us. But we are still showing growth. And that is because of our continued market share gains. And so we are outgrowing the market by maybe, you know, 400 basis points, 500 basis points, you know, on a year-over-year basis based on our market. And that, I think, is a testament to our technology and a lot of new business wins that we have been announcing over the last few years. So, you know, from our perspective, you know, the down 1% or 2% is kind of noise. And we will continue with our market share gains. We will continue to see growth.
Drew Estes: Okay. Thank you. And just a quick follow-up on that. You know, a lot of your competitors had de-emphasized, you know, their GDI platforms and anything ICE-related. Are you seeing any change in their behavior? Maybe a refocusing on some of those programs, or have they not really changed anything?
Brady Ericson: No. Not really. I mean, there are still, you know, there are just two other major players out there other than us. We continue to gain share. I think the smaller players have already kind of started to wind down things. So there is not a huge change there.
Drew Estes: I think you will continue to see—
Brady Ericson: —ours first to market with a 500 bar type system. We are doing a lot with alternative fuels, both natural gas, E100s, that I think puts us in a strong position. And we continue to launch, you know, more hybrid applications with GDI as well. So, again, what we benefit from is that, you know, we are truly focused. It is our key market for our company. Where some of our competitors, it is just a small percentage of a very big company. And they are allocating their capital, and they are focusing on a lot of different things. So I think there are benefits for us being a little bit smaller and more focused and dedicated to this space.
Operator: Okay. Thank you. And that concludes our Q&A session. I would like to turn the conference back over to Brady Ericson for closing remarks.
Brady Ericson: Great. Thank you. We really feel we delivered a solid finish to the year. 2025 results were in line with our expectations, reflecting the resilience of our diversified portfolio. The progress we made during the year underscores the strength of our strategy and successful execution, and has us well positioned in the coming year. With our strong foundation in place, we are excited about the opportunities ahead and remain confident in our long-term growth outlook and our ability to create long-term value for our shareholders. And as mentioned earlier, we are going to be hosting our Investor Day on February 25 at the NYSE. Please go to our Investor page to sign up to join us either in person or via livestream. So, again, thank you everyone for joining us this morning. Have a great day.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.