Good morning, ladies and gentlemen, and welcome to the APi Group's Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note that this call is being recorded. I will be standing by should you need any assistance. I will now turn the call over to Adam Fee, Vice President of Investor Relations at APi Group. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining our Second Quarter 2024 Earnings Conference Call. Joining me on the call today are Russ Becker, our President and CEO; Kevin Krumm, our Executive Vice President and Chief Financial Officer; and Sir Martin Franklin and Jim Lillie, our Board Co-chairs. Before we begin, I would like to remind you that certain statements in the company's earnings press release announcement and on this call are forward-looking statements which are based on expectations, intentions and projections regarding the company's future performance, anticipated events or trends and other matters that are not historical facts. These statements are not a guarantee of future performance; and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. In our press release and filings with the SEC, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, August 1; and we undertake no obligation to update any forward-looking statements we may make, except as required by law. As a reminder. We have posted a presentation detailing our second quarter financial performance on the investor relations page of our website. Our comments today will also include non-GAAP financial measures and other operating key metrics. The reconciliation of and other information regarding these items can be found in our press release and our presentation. It's now my pleasure to turn the call over to Russ.

Thank you, Adam. Good morning, everyone. Thank you for taking the time to join our call this morning. Before getting into the results, I wanted to thank our 29,000 leaders for their hard work and dedication to APi. The safety, health and well-being of each of our leaders remains our #1 value. We continue to prioritize investing in the men and the women in the field as human beings; and aim to provide each of them with training, leadership development and advancement opportunities. At APi, our field leaders have careers, not just the job. We prioritize this investment because we recognize that our success happens only when our branches and field leaders are successful. This commitment is one of the foundational principles we believe will continue to enhance shareholder value. We remain committed to our long-term 13/60/80 value creation targets. We believe these will lead to outsized investor returns through 2025 and beyond. As a reminder, these include the following: adjusted EBITDA margin of 13% or more in 2025; long-term organic revenue growth above the industry average; long-term revenues of 60% from inspection, service and monitoring; and long-term adjusted free cash flow conversion of 80%. As I mention often with both investors and our team, we are relentlessly focused on driving this strategy with a specific focus of achieving 13%-plus adjusted EBITDA margins by 2025, which we remain confident in achieving. To be clear: We view 13% as our next checkpoint, not the ending destination, in a long-term margin expansion journey. As we move closer to the achievement of this goal, we expect to plan an investor update on our new targets and opportunities in early 2025. During today's call, I will begin my remarks by briefly commenting on our second quarter results as well as our continued progress towards…

Thanks, Russ. Good morning, everyone. Reported revenues for the 3 months ended June 30, 2024, were $1.73 billion, a decline of 2.3% from $1.77 billion in the prior year period. Organic decline of 3.1% against a comparison of 7.6% growth in Q2 2023 was driven by disciplined customer and project selection and project delays in our specialty segment. The result of this was a 9% organic decline in project revenues. This was partially offset by organic growth of 2.4% in services revenue. Adjusted gross margin for the 3 months ended June 30, 2024, grew to 31.7%, representing a 340 basis point increase compared to the prior year period, driven by price increases, outsized growth and higher-margin services revenue; as well as a significant margin expansion in both service and project revenues across both segments. Adjusted EBITDA increased by 13.8% for the 3 months ended June 30, 2024, with adjusted EBITDA margin coming in at 13.4%, representing a 190 basis point increase compared to the prior year period primarily due to the increase in adjusted gross margins partially offset by lower fixed cost absorption driven by lower revenues. Adjusted diluted earnings per share for the second quarter was $0.49 per share, representing an $0.08 per share or 20% increase compared to the prior year period. The increase was driven by strong margin expansion in Safety Services and decreased interest expense, partially offset by higher adjusted diluted weighted average shares outstanding. I will now discuss our results in more detail for Safety Services. Safety Services reported revenues for the 3 months ended June 30, 2024, increased by 4.4% to $1.28 billion compared to $1.23 billion in the prior year period. Organic growth of 1.5% compared to organic growth of 7.3% in Q2 2023 was driven by strength in U.S. life safety, where…

Thanks, Kevin. As you've heard, APi delivered strong financial results in the second quarter and first half of the year. The business continues to perform well with record adjusted EBITDA margin and free cash flow generation. I'm confident in our leaders' ability to generate continued momentum in the business, build on historically strong execution, consistently drive margin expansion and return to historical levels of organic growth in the back half of the year and into 2025. We believe we can create sustainable shareholder value by focusing on our 13/60/80 long-term value creation targets. And we feel confident in our ability to achieve our 13% or more adjusted EBITDA margin target in 2025. With that, I would now like to turn the call back over to the operator and open the call up for Q&A.

[Operator Instructions] Your first question comes from the line of Kathryn Thompson of Thompson Research Group.

Just to get it kicked off. You discussed project delays impacting the top line for the quarter. Feedback in the field from TRG contacts has been that projects are seeing some delays but not cancellations. Could you give more color on whether these projects are just delays or cancellations? And in addition, could you discuss what you're seeing in the back half of the year? Essentially, what gives you confidence for that full year guidance?

Thanks, Kathryn, and thank you for your continued support. It's a great question. And I just -- I want to start by level setting with everyone that we are not a projects-first company, and we are focused on growing our services business. And that's why we're comfortable beginning our -- we were comfortable with beginning our work on customer and project selection last summer to build a healthier book of business. For some context on the quarter: The delays were a mix of funding, permitting and scope changes pushing back the anticipated start times for certain projects across the business, but none of these projects are cancellations. And in most cases, the issues causing the delays have been resolved, and -- but we feel like we're about 90 days behind where we expected to be. And that's why Kevin commented that we are tracking towards the low end of our full year guide for revenue. Regarding confidence. I mean we have really good confidence; like I feel like the business is in a really good place today as we move into the back half of the year, as we work our way through some of these delays. Our backlog is growing. And I mentioned in my remarks that it's increased by more than $500 million since the start of the year, and the best part about it is it's healthier. And so some of the customer attrition and some of the work that we've had to do to raise pricing and make sure that we're working for the right clients, I mean sometimes that's hard. And some of those changes are hard, but I feel like our team and our business has really managed their way through that. And sometimes when you have some of these delays, you still -- you end up still trying to manage what are you going to do with the people and the field leaders that you would utilize on those existing projects. And it makes it more challenging to navigate those waters. And I feel like, like I said, our team has done a really good job, so I feel like we're growing momentum as we are heading into the quarter and into the back half of the year. We're just sitting a little bit behind where we thought we would be last time we talked. So I don't know, Kevin. Would you add anything to that?

Sure, yes. Kathryn, first thing I would say, as Adam pointed out -- I actually misspoke on the call. We brought up the bottom end of our EBITDA range to $885 million. I think I said $855 million on the call, so apologies for that, but our bottom end of our range is $885 million, so our current range is $885 million to $915 million. Yes, Russ talked about the momentum in our business. I would say, even in Q2, as we missed or we're off our -- the midpoint of our guide from a revenue standpoint, we overdelivered at margins. Our margins continue to hang in there and perform really well. And that's what gives us confidence, even as we move into the third quarter here, that we're going to be able to continue to sort -- drive margin expansion year-on-year and sort of outsized performance with respect to margins. Some of the elements that helped us in the second quarter, Kathryn, were the work we did do and we closed out. We've closed out at higher margins than expectations, so the teams continued to execute. Even on what we expect to be higher-margin project work, they're executing above expectations. Also, from a cost standpoint, our international team has done a really good job continuing to manage costs and accelerating their value capture as they move through the year, so that's been favorable. And we expect that to continue. And then we did see favorable business mix impacts at margins just due to the -- our service growing at a higher rate than our projects business. And as our projects business ramps up in the third quarter, we would expect that margin impact to be favorable as well as we move into the back half of the year. So all in, as we said, we feel good about margins and our ability to execute in the back half of the year as well.

Okay, great. And my follow-up question is on free cash flow generation. And you're seeing an acceleration of that in the back half of the year, as you indicated in today's commentary. Balancing where we are from your net debt level, along with M&A, could you give us an update just in terms of your uses of cash as we focus on the back half of the year?

Yes. So just additional color on free cash flow delivery, just as a reminder. In a normal year, we're going to deliver somewhere between 20% to 30% of our full year cash flow conversion due to seasonality in the first half. And we're going to deliver 70% to 80% of our free cash flow in the back half of the year, and that's the expectation this year. As we move through the year, delevering is still a priority as it has been. And we're going to do that as we continue to reduce our leverage from where it is today at 2.7x to inside of 2.5x, but after that, M&A remains a priority. We've closed, as Russ said, on 6 bolt-on transactions in the first half of the year, plus Elevated; spent north of $600 million. And we still have plans, as we've said, to continue to invest in our pipeline and continue to do bolt-on transactions as we move through the back half of the year.

Your next question comes from the line of Andy Kaplowitz of Citigroup.

Russ, maybe you can talk about the overall macro environment that you see. Obviously, leading indicators are all over the place in nonres construction, but your backlog, as you said, is growing, so can you talk about the verticals that are driving that growth and update us specifically on what you're seeing in the data center market or how APG is playing in that market?

Yes. So the data center market obviously is an end market that we're very active in. It's screaming. Every place you look, you hear more and more about the opportunities in data centers. And again our focus is leading on the inspection and service side of data centers. And we want our inspection and service relationships to lead to our project-related work, and there's been just countless. It's like opportunity after opportunity in the space. One thing I would do to just level set a little bit is that -- when you think about a data center expansion: We're focused on the fire life safety piece of that expansion project opportunity, which is going to be significantly smaller than the, say, mechanical and electrical packages. And those data center projects are probably north of 80% mechanical, HVAC and electrical. And the HVAC -- or the life safety opportunities are smaller. We're also seeing really robust opportunities in the semiconductor space advanced manufacturing, which would include pharma as well as the electric vehicle/battery space. Health care remains really robust. And in some instances for specific businesses of ours, we're seeing opportunities in the aviation space as well as in the sports and entertainment space.

Helpful, Russ. And maybe you could talk about the confidence you have, if organic revenue growth does remain a little light, that you continue to offset lower growth with higher margin. I think Kevin talked about it a little bit, but is Chubb value capture actually trending higher than that $125 million that you previously gave us? And then maybe the new $500 million of backlog that you mentioned, Russ, is that coming in at materially higher margin than your current revenue?

So Andy, it's amazing how you wrap like 3 or 4 questions into 1 and..

Ye, pretty good at that.

Yes, no, that's good. That's that cagey veteran in you.

Yes.

I would say -- well, I mean I -- in my remarks, I talked about margins. And I talked about the 13% margin as our target for 2025, and that's obviously the goal that we stated. And I also said that we think that we can continue to expand from there. And so I feel really good about the opportunities in front of us as we kind of continue to grind through the course of this year. So we've shown that we can grow and expand our margins, and we will continue to grow and expand our margins as we work our way through the back half. The $500 million of increased backlog is, without question, healthier. And when you look at it, it's like -- it would be hard for me to tell you that there's 250 basis points of margin improvement in it or whatever. Directionally, that would probably be somewhat correct, but for us it varies by business. And so the mix is important in what that backlog looks like, but it's -- without question, it's much healthier. And I feel like I missed 1 of your 3...

The Chubb and sort of what's going on over there.

Yes. Well, we're not going to raise the value capture target, the $125 million. I mean we're on track with that. And we have plans in place to deliver that and we feel good about where we're at. I mean we track it and we need to continue to track it. My brain is kind of like we're more getting to business as usual and -- mode in that business and focusing on growth. And we just had a -- I had a Board meeting. And we had a number of our international leaders here. And with some of the work that our international sales leader has done kind of transforming his sales team and everything else -- he's sitting by me, so I'm just kind of -- I'm having a little bit of fun with it too, but the work that they're doing to transform our sales team and starting to lead with service and inspection work in the markets that they serve, I mean, we're going to really start to feel the rewards of that work really as we move into the first parts of next year, so I'm really excited about it. And I feel like we're in a really good place with Chubb and our international business just in general, as it relates to integrating them.

Your next question comes from the line of Julian Mitchell of Barclays.

This is Jack Cauchi on for Julian Mitchell. The implied Q4 EBITDA is up slightly sequentially versus historically being sequentially down. Can you explain what assumptions, macro drivers are driving the difference versus prior seasonality?

Yes, sure. This is Kevin. I'll take that. The primary driver of that this year is the fact that we expect our project business to accelerate in the back half of the year off sort of the numbers that Russ referenced earlier, and so our expectation would be that our growth rate in projects accelerates in the back half of the year. Traditionally our projects flatten out and are slightly down Q3 to Q4, but we -- this year, we're expecting our projects business, with the backlog coming on that Russ referenced, to actually sequentially step up. So that's the largest driver in it. We also expect margin expansion in the back half of the year, but that -- traditionally that's going to happen year in and year out, so it's really the acceleration of the project business.

And just a quick follow-up. Margins were solid in both segments. You mentioned earlier raising the margin targets in early 2025. How should we think about that by segment?

Well, I mean, number one, we're not going to tell you what we're going to raise the targets to until -- we need to deliver on our 2025 goals, first, and then we will share kind of where we're going, but directionally, we expect every piece of our business to continue to improve and expand their margins. And if nobody, sort to speak, gets a reprieve and -- the expectations are that everybody will continue to grow. And we want to make sure that we're taking advantage of our higher-margin businesses, obviously, but if you look across our portfolio of companies, every single one of them has opportunities to improve and to be better. And that's the expectation and we'll clearly lay that out early next year.

Your next question comes from the line of Heather Balsky of Bank of America.

This is Eileen Martle on for Heather Balsky. I'm wondering if you could give us some color on what you're seeing on pricing. Are you getting any pushback? And how does that factor into your second half guidance?

Eileen, this is Kevin. I'll take that. So the short answer is we have continued our pricing focus, especially on the service side of our business. We say, year in and year out, we're pushing pricing campaigns that drive margin expansion on the service side of the business. Our teams have done a great job. It looks different as you work around the world, but generally they've -- across our service businesses, especially in the life safety space, our teams have continued to push pricing in the way that it drives margin expansion on that side of the business. We are always in dialogue with our customers around that, but I would say, at this point, our customers continue to appreciate the value we bring. Our pricing continues to work, and we expect that to continue through the back half of this year.

Your next question comes from the line of Jon Tanwanteng of CJS Securities.

Really nice job on the margin, guys. I was wondering if you could talk more about the delays. Was there any specific end market or commonality between them? Or was it several independent headwinds that coincidentally hit Q2? And then beyond that, what is the risk of further pushouts at this point?

Well, I mean I would say, to answer your question, it's kind of across every aspect of it. Like I was -- I'm just reflecting on your question. Like we had a permitting delay with a large project opportunity with one of our infrastructure customers kind of in the Northeast. That's been resolved and we're actually on the site. We had actually a utility client of ours that had kind of a start and a stop to one of their work programs that we have an MSA with. And that, those issues are -- kind of have been resolved and we expect to have boots on the ground here in the month of August. And so that's been resolved. We have a North American safety client who on a project opportunity is making some changes with their general contractors, which has slowed down the forward movement in that. We had some delays in our Asian business which is in the fire and security space, so it's kind of -- it's been a little bit of everything, Jon. I don't think any one -- necessarily one aspect has been 100% immune from it. And that is just -- it's clearly one of the reasons that we're so focused on growing our businesses -- business from a inspection, service and monitoring first focus so that the lumpiness associated with some of your project work doesn't have an impact on the business and the results of the business. So I mean that's the most important thing about our strategy and what differentiates us from some of the folks that we get compared to from time to time.

Okay, fair enough. And then just regarding the backlog -- and I know that's getting away from your inspection and services focus, but just what end markets drove the backlog increase? And how much of that was from the EFS acquisition?

I mean not a lot has been driven by the acquisition. I don't know, maybe approximately 10% of it, maybe a little bit more from the acquisition but not much more than that. And thinking about Elevated, I mean, remember that north of 70% of their revenue comes from service, inspections, repair and maintenance. And really they're not doing, so to speak, new construction. Their project-related work is modernization and upgrades on existing elevators and existing facilities, so one could almost argue that that's service work as well, but that's kind of their version of project work. I would say that it's coming -- that increased backlog is coming in the right space. I probably -- when I was talking about end markets, one thing that I didn't talk about is the infrastructure space and some of the opportunities that we're seeing coming in -- specifically in the infrastructure space. There's a lot of opportunity there, but we're seeing tremendous amount of activity in data. We're seeing a tremendous amount of activity in the semiconductor space. We're starting to see some increase in the warehouse distribution center space. That's been lagging, but you're starting to see some increased activity there. I think people are anticipating interest rate cuts, but -- so you're seeing more activity there, but health care remains robust with a lot of opportunities as well. So really the end markets that I talked about. And the only one I really missed was kind of the infrastructure space.

Your next question comes from the line of Stephanie Moore of Jefferies.

Maybe just starting on the M&A front, kind of a 2-part question within that, could you kind of, first, talk about your desired source of funding to source -- to fund M&A deals going forward; and then also your appetite for doing potentially larger deals, maybe a similar size as the Elevated deal or maybe even larger, especially if the transaction would accelerate your recurring revenue targets and/or margin profile targets, et cetera?

I didn't really catch the first part of your question, Stephanie, but the second half of the question, regarding other transactions the size of Elevated: If it was the right fit, I would say, feel like that would be something that would be digestible for us, I think we would have some interest. If -- it's got to fit kind of the profile that we'd be looking for with a high element of recurring revenue in inspection, service and monitoring. The margin profile would have to be accretive. Obviously we'd have to be able to acquire the business at the right price. Regarding larger than that, I mean, you can never say no to anything, but I don't know that that's where our attention is sitting right now. The reality of this is we're really focused on integrating Elevated and bringing their team into the APi family and making that a positive journey for them. We had actually a couple of their key business leaders at our Board meeting and they got a chance to present on their business yesterday. And one of their leaders called us their forever home, and that really stuck with me. And I think that we owe them the right level of effort to really truly make this a forever home so that they feel good about where it's at, and -- but we do have a keen interest in continuing to expand in that space. And Kevin will handle the first half of your question because I didn't hear you.

Yes. On funding our bolt-on campaign, year in and year out, our campaign is going to be aligned with our ability to fund it through free cash flow. That's -- and that's sort of how we tackled it this year and that's how I would expect us to tackle it in years to come. We produce enough cash flow. And we'll prioritize it to make sure that we're able to do the bolt-on M&A that we plan on in any given year.

Yes. I mean, Kathryn, the reality of it is like this tuck-in market -- like we spent 100 million last year. And we've said that we're going to accelerate that in the course of this year. We still have half a year to go, but directionally it will be north -- it will be in excess of 2x of what we spent in -- last year. And we continue -- we plan to continue that drumbeat. And our pipeline of the right bolt-on opportunities is really robust. And we feel really good about the businesses that we're acquiring and the teams of people that we're bringing into the APi family. It's our M&A team is doing a great job.

Understood. And then maybe just following up on some of the margin questions that have been asked thus far and kind of -- well, I guess I asked this, but clearly I think, margin improvement, it remains an ongoing priority this year and obviously into next year, as you noted. Can you talk about how much of the margin expansion opportunity is predicated on kind of the rebound in organic growth versus how much can you still achieve just based on kind of self-help initiatives and synergies and the likes of kind of other tailwinds that you have?

I'll take that, Stephanie. So if you look at, just to level set, over the last 8 quarters: The back half of last year, we expanded gross margins over 200 basis points. First half of this year, we're over 300 basis points. The levers that we've been pulling on there, we've been talking about it, is mixed, which is driving higher growth; and a higher percentage of our overall revenues from inspection, service and monitoring. That's going to be a driver. That's going to continue to have an impact for years to come. We talk about pricing on the service side of the business. That's going to be a driver that has an impact, margin-expansive pricing. That's going to have an impact as we move into 2025 and beyond. I'll say some of the impacts that have been driving the significant expansion we've seen over the last 8 quarters like material costs coming down and the impact that's had, both the headwind on the way up and the tailwind on the way down, that will obviously subside. Also we took -- we tackled a lot of this backlog work and disciplined customer and project selection started last year. So the improvement in the health of the backlog has been significant as we've moved over the last 4 quarters. We're obviously going to stay focused on the project side of our business and improving margin there, but that impact would subside as well. But it's really pricing, continued service mix. And as we move into future years, our ability to continue to scale our operations to drive productivity is going to be sort of the new driver we're going to be focused on. And that too will have margin impacts as we move into 2025 and beyond.

Okay, your next question comes from the line of Josh Chan of UBS.

I was wondering if you could give us the service-versus-project breakdown within the safety segments. And then kind of focusing on the service side of things, which I think it's probably kind of mid-single-digit range, is that the right pace of safety service growth going forward, in your mind?

Josh, I'll take that. So in the first half of the year, if you think about it that way, our service business on the safety side continued to perform at mid-single digits. Our international team as well as our North America team have stayed focused on that. We've continued to have good results. And we expect that mid-single digits growth rate to improve as we move into the back half of the year. Project side, on the other hand, we talked about the work the international team has been doing. That was a drag on the safety segment in the first half of the year, but as we move into the back half of the year, we expect that to improve as well and expect to see growth in the projects business on the safety side of our business as well.

Great. And kind of dovetailing on that: As the project business reaccelerates, how do you think about balancing that and sort of the margin benefits that you've gotten from mix in the most recent quarters? How should we think about margins as that mix maybe -- benefit maybe potentially lessens?

Yes, it's a good question. I think it's still going to be a benefit in Q3. In Q4 or in any quarter where our projects business outgrows our service business, it could be a bit of a headwind, but as we look in the back half of the year with the acceleration in our service business or even into Q4, I don't see the mix flipping on us from a projects-versus-service standpoint with respect to our margin expansion efforts.

Your next question comes from the line of Steve Tusa of JPMorgan.

Congrats on the execution. It's definitely a choppy environment out there. That's for sure. The -- just the segments, can you just give us some color on how you expect them to -- just relative to the 2Q organic growth rates for each, how you expect them to play out for the next couple of quarters? It's obviously a pretty significant acceleration. Obviously the $45 million is getting pushed into the second half, so that helps the comps, obviously, but it's a little lumpy, so maybe just a little bit of help around or framework around the organic for each of the segments in the second half.

Yes, Steve. This is Kevin. I'll take that. I'll just break it down between safety and then our specialty segment. So safety, again, in the first half of the year, we saw mid-single-digit service growth. We saw low single-digit decline on the project side of the business largely driven by the work we're doing in HVAC and the international teams on disciplined customer and project selection. As we move into the second half of the year, we expect our service to still be in mid-single digits but to improve sequentially from a growth rate standpoint. And we also expect the project side of the business to move from slightly down to low single-digit up from an organic growth standpoint. Drivers of that will be our HVAC business and our international business, which were down in the first half, that we would expect to be up and continue to work through sort of that new backlog that Russ talked about in the back half of the year. On the specialty side of the business, our service there was actually up and showed organic growth in the first half of the year, mid-single digits, yes; and we would expect that to continue in the back half of the year as well. Our projects business was down significantly. I think we touched on it on the call, low double digit, teens. And we would expect that to improve in the back half of the year as well. And we expect that business or the projects on the specialty business to actually get to low single-digit growth as well in the back half of the year.

Okay, so like around the -- do you expect every segment for every quarter to be positive organic? Or will specialty remain negative organic in the third and then flip positive in the fourth, on specialty?

Specialty should be flat to slightly up from an organic growth standpoint in the third quarter.

Okay, that's super helpful. And then just lastly, on the acquisition, the 3% contribution for Safety Services, is that -- should that be relatively consistent as we move through the rest of the year?

Yes. As we annualize against the Elevated transaction, yes, you can think of it about -- as about a 3% impact.

Your next question comes from the line of Ashish Sabadra of RBC Capital Markets.

This is David Paige on for Ashish. I just had a question on the Elevated acquisition. Can you tell us maybe some early learnings that you have from them, some of the positive surprises, anything around -- and then also anything around how [indiscernible]?

Man, I would say that the positives are the quality of the leadership team and maybe the depth of the leadership team. Our North American Safety Services segment leader went on like a 1-week kind of tour with their team and just came back really raving about the quality of the people that he had the opportunity to interact with. He even commented about how -- a young apprentice. He showed up on one of their customer sites and didn't have safety glasses on. And one of their apprentices approached him and asked him to please put his safety glasses on. And so it just -- it spoke a lot to the culture of the company and the investment that they're making in their field leaders, so I'd say that's all really positive. I don't know that I would say that there's anything -- any necessarily surprises. We bought the business from a private equity firm. And I think that some of the things that you would expect when you -- when a sponsor tries to polish up a business and get ready for -- get it ready for sale came through. And that's, I guess, nobody is ever surprised by that. You might be surprised what closet it's in, but you're -- other than that, you're not really surprised. So I'd say it's business as usual. And we're really fired up about the Elevated team joining the APi family.

That concludes our Q&A session. I will now turn the conference back over to Russell Becker for closing remarks.

Thank you so much. And in closing, I would really again like to thank all of our team members for their continued support and dedication to our business. I am truly grateful for what each and every one of you do on a daily basis. And your efforts really truly are amazing. I would also like to thank our long-term shareholders, as well as those that have recently joined us, for their support. We appreciate your ownership of APi and look forward to updating you on our progress throughout the remainder of the year. So thank you, everybody.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.