Hello, and welcome to WESCO's 2024 Third Quarter Earnings Call. I’d like to remind you that all lines are in a listen-only mode throughout the presentation. [Operator Instructions] Please note this event is being recorded. I will now hand the call over to Scott Gaffner, SVP, Investor Relations, to begin.

Thank you, and good morning, everyone. Before we get started, I want to remind you that certain statements made on this call contain forward-looking information. Forward-looking statements are not guarantees of performance, and by their nature, are subject to uncertainties. Actual results may differ materially. Please see our webcast slides and the company's SEC filings for additional risk factors and disclosures. Any forward-looking information speaks only as of this date, and the company undertakes no obligation to update the information to reflect changed circumstances. Additionally, today, we will use certain non-GAAP financial measures. Required information about these measures is available on our webcast slides and in our press release, both of which are posted on our website, wesco.com. On the call this morning, we have John Engel, WESCO's Chairman, President and Chief Executive Officer; and Dave Schulz, Executive Vice President and Chief Financial Officer. I'll turn the call over to John.

Thank you, Scott. Good morning, everyone, and thank you for joining our call today. We had a strong close to our third quarter with sales up slightly versus the second quarter, and this came in at the high end of our outlook range. Accelerating momentum and double-digit sales growth in our data center business was the primary driver. The continued weakness in utility and broadband offset what would have been a return to organic growth in the quarter. Adjusted EBITDA margin was flat sequentially and better than the expectations reviewed during our Investor Day last month, and this was driven by an increase in gross margin. Dave will provide more details on this later in the call along with our outlook for the fourth quarter. Moving to cash flow. I'm pleased with our free cash flow generation of $280 million in the third quarter and $777 million year-to-date and that equates to 154% of adjusted net income. We placed a particular focus on working capital management, and we're beginning to see the benefits. And this is especially and most notably in our Communications & Security Solutions business. Quoting, our bid activity levels and backlog remain healthy. In the fourth quarter, we expect to continue to benefit from double-digit growth in the data center space while the continued weakness in utility and broadband are expected to continue. We are reaffirming our full year 2024 outlook for sales, profitability and free cash flow. If our current run rates of sales and margin continue, we would expect to be within the lower half of our outlook range for sales and adjusted EBITDA margin. As we look ahead, I really like WESCO's leadership position and exposure to the long-term secular growth trends underway in our served markets. While the macroeconomic environment will inevitably present challenges, I strongly believe WESCO will continue to outperform our competitors under all market conditions. Our commitment to and focused on value creation, from the operational improvements, digital transformation and our capital allocation strategy, including the focused M&A objectives we have is clear and resolute as we outlined during our recent Investor Day held last month. Our WESCO team is focused on executing those plans to deliver outsized returns to our shareholders. So with that, I'll now hand it over to Dave to take you through our third quarter results in much more detail as well as our outlook for the fourth quarter. Dave?

Thank you, John, and good morning, everyone. Turning to Page 4. As John noted, our third quarter sales were at the higher end of our outlook range. The economic environment remains mixed as market weakness continued in utility and broadband, but we delivered strong growth in our WESCO data center solutions business. Price contributed approximately 2% versus the prior year, offset by lower volumes. The divestiture of our Integrated Supply business was a headwind of approximately 350 basis points, along with a small headwind from differences in foreign exchange rates. These headwinds were partially offset by the benefit of an additional work day. I'll provide more color on the sales drivers in the next few slides. On the lower half of the page, you can see the adjusted EBITDA impact of lower sales, partially offset by higher gross margin. Gross margin was up 50 basis points over the prior year. As discussed previously, the Integrated Supply business had a lower gross margin than the balance of the company, and approximately 40 basis points of the year-over-year gross margin improvement was due to the mix benefit of the divestiture. I want to point out that our core gross margin, excluding this benefit, was up versus the prior year with stable billing margins and slightly higher supplier volume rebates. Adjusted SG&A increased, primarily reflecting people-related investments, M&A and higher operating costs. Turning to Page 5. On a sequential basis, organic sales were flat, with growth in CSS, offset by lower sales in EES and UBS. There was a slight benefit from foreign exchange rates in our EES and CSS businesses. As you can see on the chart at the bottom of the page, adjusted EBITDA margin was essentially flat with the second quarter, which was better than our expectations for a slight…

[Operator Instructions] Our first question today comes from Nigel Coe with Wolfe Research. Please go ahead.

Thanks, good morning gentlemen. Thanks for the question. Just wanted to dig into the mid-single-digit growth in October. I think the PR [ph], the slides mentioned some storm activity in the fourth quarter. Just wondering if there's any sort of measurable impact from the storms in October that maybe doesn't repeat in November, December? And then maybe just address within the UBS segment, we saw a fair amount of backlog erosion and just wondering what that sort of suggests as we go into 2025 for UBS, particularly in the first half of the year?

Yes. Nigel, let me start with the hurricane impact. In the month of September, the hurricane impact on our company was essentially neutral. We saw some benefit within our utility business, but that was offset by a series of our branch locations that were shut down during the storm and obviously, some projects were not going during that period. So essentially, we saw the increase in utility, but it was offset within our EES business. So we have seen some of that pick up in the month of October, primarily from the EES business, those shipments that were delayed out of September into October. On the UBS backlog, given the current market environment, we are not seeing many of the projects that are being planned shift from our opportunity pipeline into the backlog. So we are working our way through the backlog, but it is not being replenished at the same rate. We do think that this is a temporary phenomenon. Over the long term, we still are very confident in the growth of our Utility and Broadband Solutions business.

And Nigel, I'll add one thing that I think is important. I know we've talked about this over the years, but it's particularly important given your question on the backlog to address what that reflects and doesn't reflect. So you saw that we highlighted three recent wins, very large wins. And for UBS, we highlighted a five-year contract extension, and that wasn't a typo, worth over $2 billion. When you think about that contract extension, it's not like that gets laid in the backlog as a one big order, okay? It only shows in the backlog as the orders are released under that multiyear customer agreement. And that's the nature of a good portion of the UBS business. So I think the backlog is one – clearly one indicator. It aligns, as Dave mentioned, with kind of current market activity, think of those as more smaller and day-to-day projects, but the bigger kind of our integrated supply business model with [indiscernible] public power municipals, co-ops and such, we've got tremendous value proposition. We're very well positioned and that business is in outstanding shape. Again, I'll just – I'll end on the point that I'm very, very confident that utility has moved from a GDP industry to a secular growth industry. And the rising power demand curve is substantial and that we're just really at the front end of that in terms of what utilities are facing into.

Great. Thanks, John. And yes, those numbers were pretty big numbers. Just – I think you also talked about large industrial projects and just – maybe just touch on what you're seeing there? And I think the kind of the broader question for my follow-up is, you mentioned some of these projects not moving from opportunity funnel to backlog. And I'm just curious what you heard from customers related to the election and some of the policy uncertainty? And do you think the election sort of clears up some of that uncertainty?

The short answer to that is yes. I think that depending on the election outcome, that will determine kind of a different mix of investment priorities if we're just focused on the U.S. along with the U.S. election. So we think in either case, we're exceptionally well positioned. And net-net, there's – with the government stimulus funds that have been approved through various bills and the CapEx that's increased dramatically driven by big tech. Those are strong drivers of kind of future orders and opportunities in 2025 and beyond. But the election outcome will determine the mix of the, I'll call it, the rest of the industrial base investments, right? It will be more renewable versus oil and gas as an example. So yes, I do think that, that – I know many companies say that, but I think that's an overhang. When we get beyond that, that will provide some clarity for our industrial customers. Dave's comment on the opportunity pipeline was with respect to smaller projects for utility alone. Not seeing that same kind of dynamic. And then – we do have some bigger projects in the pipeline that we'll be shipping in the coming quarters of the so-called mega projects as you start working our way through our business. We talked about that in prior quarters. And that sets us up for next year and beyond.

Okay, thanks, John.

Next question comes from Sam Darkatsh with Raymond James. Please go ahead.

Good morning, John, good morning, Dave. How are you?

Good morning, Sam.

A couple of questions. First off, the pricing outlook as we look into 2025, I think we've seen some price announcements from some switchgear manufacturers and generator folks in the low to mid-single digits going in December and January. What's your feeling right now in terms of your confidence that you might be able to get a little bit of price next year?

Yes. So what you cited, Sam, is spot on. If you look across – think about all our categories, right, the breadth of our portfolio, right, all the various SKUs in different categories, if you were citing kind of specifically a few categories there. If you look at what's happening thus far as we move – as we came through Q3 as we're into Q4, the number of products – and again, we have a look into the first part of 2025 because we're working these things 90, 120, sometimes up to 180 days in advance with supplier partners. The number of products with increasing prices, let's say, the number of various SKUs is relatively stable. So think of that as kind of what is pricing, where is pricing being raised across the entire portfolio. Overall, the magnitude of the increase is lower than it was a year ago, but stable – relatively stable, Sam, with last quarter sequentially. So that is the current, I'll call it, momentum vector for pricing.

And then my second question, if I could sneak actually two quickies in here. First off, Dave, what was the amount of the onetime benefit in September from the rebates? And then what's your goal for inventory days take out for next year? Thanks.

Yes, Sam, let me address supplier volume rebate. So we did a true-up in the month of September. I would tell you that was worth between 10 basis points and 20 basis points. As I mentioned, the thing that we're most pleased with is our billing margins have remained stable. And I know there was a lot of chatter about as inflation benefits begin to subside that we would see that margin erosion. And that would come through on our billing margin. We've not seen that yet. But again, supplier volume rebates, we continue to manage aggressively. That was primarily the benefit that we saw in September versus our expectations coming into the third quarter.

And then inventory days?

Yes. Inventory days, we'll comment on 2025 when we do our fourth quarter call. Clearly, we're disappointed with the progress that we made, a lot of it being driven by the top line, of course. But again, we'll provide you with the specifics for 2025 when we announce our fourth quarter.

Thank you.

The next question comes from David Manthey with Baird. Please go ahead.

Good morning everyone.

Good morning, Dave.

First question on UBS. Could you talk about how significant storm demand is versus planned upgrades and new installations for utility sales? And then, is the UBS mix still heavily weighted towards distribution? I don't know if you can update us on – I think it used to be like 70-30 versus transmission.

Yes. So in terms of the storm impact, we saw a nominal benefit in the third quarter – late in the third quarter and in the very beginning of the fourth quarter, kind of stretched in, for utility to the tune of $15 million range. Very similar, Dave, to what – over the years what we cited the immediate impact. What happens effectively is, we're a first responder with our utility customers. We're running a certain days supply level for all the critical SKUs. Once you go in a storm prep mode, we do it in conjunction with our customers, it does trigger some replenishment orders to make sure as we – as inventory is forward position to support the storm recovery. We didn't see anything meaningful yet in terms of rebuild recovery. I mean that will be a 2025 matter. Relative to the mix of the business. We've not updated that for some time. It's on our list to update that for 2025. So stay tuned. So I won't give you the percentages per se today in this call because we will do that, and that is our plan, when we kind of outline our overall outlook for 2025. With that said, we’re clearly seeing strong growth in the transmission through substation portion of the utility power chain. And given our leading value proposition and our blue chip array of end-user customer relationships directly with the IOUs and selectively with a number of different public power customers, we’re benefiting increasingly from sales and growth in that portion of the power chain. It had been a strategy matter, quite frankly, for us. Jim Cameron and his utility business has been focused on this for better part of a decade to make sure they could – we see the addressable market…

Yes, thanks for that, John. I appreciate it. I'll pass it on.

Thank you.

The next question comes from Deane Dray with RBC Capital Markets. Please go ahead.

Thank you. Good morning, everyone.

Good morning, Deane.

Good morning.

Dave, that 40% growth number in data center is really impressive. And since that far outstrips what we think is like the footprint growth, it makes me want to ask about your mix. Because remember, John, you and I have talked about your interest in doing these services and consulting. And Rahi had a fabulous reputation for that. So just talk about the mix. So how much of that is actually moving boxes versus providing consulting services?

Yes. We’ve not given that mix yet. We will do that, Deane, because you and I chatted about it. But I will tell you, again, if you were engaging with our front-end sales team in CSS, our global sales teams that are working end user customers, it is absolutely the differentiator and the catalyst. What’s happening here is and – it’s just timing of everything in life and business. Our direct end user customers, the hyperscalers, even MTDCs and enterprise, and we had growth with all three types of data center customers, the captive enterprise customers as well. They’re looking at consolidating their supply base. And we have unmatched capabilities and the complete solution, as mentioned. And we really – we really put in the spotlight at our recent Investor Day. So we owe you all that. I will make this comment. I was disappointed with the growth in the first quarter of data centers. It was low to mid-single digits. In the second quarter, we were high teens. As we mentioned to you, this is great to see. This is absolutely a very strong accelerating growth momentum vector. And what’s really – I look – I ask you to look at the plus 40% growth in conjunction with the backlog growth because that’s also inflecting up dramatically. And again, for overall CSS, we gave you the numbers, but heavily driven by data centers. So I am really feeling good about the momentum vector. We’re at the front end of this. And these Gen AI-driven data centers have substantially more content because of the power demand, power draw versus a traditional data center or AI-driven data center, let’s say. Furthermore, we owe you some expanded disclosures as well on what progress we’re making in the gray space. This number is a white space number, but we are seeing very strong growth off a much smaller base in the gray space that is actually higher than this number, so – in the quarter. Now it’s a lower base to start with, but we’ve talked about that in prior quarters. So I’ll put that out as a look-forward to kind of framing that properly for you as we give an outlook for 2025.

Got it. And then can you just – on the data center backlog, just give us a sense of what that visibility takes you out? How far is that? You’re in discussions, but what has hit the backlog? Is that a couple of quarters? Is it a year? Just if you could share that with us.

So it will vary by customer, Deane. But as an example, if you take – I’ll answer it this way, between – because we serve directly the magnificent seven-plus. So if you take them and look at what they’ve been public about in terms of their CapEx spending and their multiyear data center builds, okay? And they are multiyear global data center builds. That is the time phasing of these opportunities because we’re essentially securing these programs, multiyear contracts. It’s very – we’re very akin to our model, was let’s do what we did in the utilities, with these utilities. Let’s do that with the other – with all other end user customers, starting with hyperscalers. If that’s helpful?

That really is helpful. And just – I know we could go on this. I just want to get the – my follow-up question. Just the idea here, John. If you just share with us what jumps out at you as meaningfully different in your stock and flow business and the mix in the quarter. I mean, we’ve gone through the individual segments. But I was like to hear from you about what you see, your read of the tea leaves, how the quarter played out, stock and flow and mix?

Yes. Overall, stock and flow performed better as a relative portion of the mix. I’m not sure Dave really highlighted that in detail, but they performed better, Deane, in Q3 than it did in the first half. Now the only area that was not the case was industrial, but I think that’s completely a function of the overall industrial end market, let’s call it, sluggishness. I’ll use that word in Q3. But actually, I feel really good about the fact that, that was kicking back into gear on a relative sense. And so we did expect that would happen at some point, hopefully in the second half, but it did start in Q3.

Great. Thank you.

Next question comes from Christopher Glynn with Oppenheimer. Please go ahead.

Yes, thanks. Good morning. So a couple of questions on UBS. Trying to understand the destock visibility, your assessment of duration, of inventory normalization. And also, what types of projects are getting delayed? Is it weighted to IOUs or smaller? Is it weighted – we usually think that distribution is more stock and flow, but you said transmissions and substations very strong. So trying to reconcile that with project delays.

Yes, Chris, good question. I mean, the dynamic’s similar to last quarter, okay? There’s no real change in dynamics. I remember we’ve said now for a couple of quarters running, given the higher interest rate environment, given the regulatory approval cycles for the rate cases that utilities are facing, that – and this inflation on current projects that were underway, squeezed out dollars to – that prevented the – kind of impacted the utilities in a way where they kick – delayed the start of the new projects. So think of these as various grid modernization upgrade projects, just a whole series of stuff that fits right into our wheelhouse. These are still going to get done, it’s just they got pushed out to the right a bit. So in terms of how broad based this has been the destocking. I do think the earlier question from Nigel, the election overhang is one factor. The interest rate environment, there’s a delay between cause and effect. And that clearly has impacted the utilities across the last 1.5 years-plus. Now the interest rates are projected with the first 50 basis point cut reduction, it’s expected that will continue. That sets up a completely different set of conditions for utilities as we enter 2025. But it’s been broad-based. This is actually very important. Think about our position in the utility market in the U.S. and Canada. And again, in the third quarter, similar to the second quarter, we saw spending down on 2/3 of our utility customer base, very consistent across those two quarters. It is why we revised our guide as part of the Q2 earnings release in terms of the second half. And so now let me look forward a bit to 2025. The timing of the recovery in our utility…

Appreciate the emphasis and detail, John. Second question, just if we pan out on the CSS margins, curious how to think about runway. I know E&I mix is a factor. So in terms of some of the E&I mix dynamics and some of the stock and flow there, are those sequential mix trends pretty consistent with the first half...

I mean, here is the important point, Chris. And I think we read your pre-earnings call note, too, and I think I figured you had said, it’s with this question. When you look at the first half, when you look at margin mix year-over-year, we have some pressures in CSS, but we were very clear that we were getting very good pull-through on the growth in CSS. Let’s think about what happened in Q3. We talked about data centers, okay? But also security returned to growth. That’s a very big business for us, and we’re very pleased with that relative performance versus market in Q3. We did expect it would return to growth, it did return to growth. Look at the sequential gross margin and EBITDA margin, that's what we pointed you to last quarter. We were very clear that as the growth returned to CSS overall, which it did, and it would be disproportionately driven by data centers that we would get sequential margin expansion, and we got 90 basis points of EBITDA margin expansion for CSS from Q2 to Q3. So I'd ask you to focus on that. That was our view. That's our model. That's how it works. We expect a similar dynamic with EES as it returns to growth. And UBS, even with the sales challenges we've had, it's the highest EBITDA margin business we have, starting with 11 handles still in the quarter. So again, as that growth kicks back in, we have the same dynamics. So I just – that's what I'd point you to, Chris.

Thanks, Dave and appreciate it.

The next question comes from Ken Newman with KeyBanc Capital Markets. Please go ahead.

Hey, good morning guys.

Good morning.

Maybe for the first one, Dave, you mentioned expectations for CSS EBITDA margins to be up sequentially 3Q to 4Q on that stronger operating leverage. I'm curious if you could provide any help on just how to think about EES margins sequentially here? I think the full year guide implies that segment flips back to year-over-year growth here on – in 4Q on an easy comp. I'm just – one, curious if you're seeing that demand there stabilizing to support that? And just how do we think about that flip in operating leverage?

Yes, certainly. So we do anticipate that within CSS, first, to reemphasize that point. Given the sales outlook, particularly around data center, we are expecting to see sequential growth on the top line, but then also some operating leverage on the adjusted EBITDA line. Within our EES and Utility and Broadband solutions business, I would say that the fourth quarter is going to be impacted by sales coming down. We provided you with a fourth quarter outlook that sales would be flat to down slightly sequentially. With CSS growing, we're expecting some slippage on a reported sales basis within our EES and UBS business, again, taking into account that there is one fewer workday. So that is putting some pressure on the margin. But overall, we're expecting that the adjusted EBITDA margin sequentially will be flat to down slightly in Q4 versus Q3.

Got it. That's helpful. And then for the second one here, obviously, pretty strong free cash flow here through year-to-date. You maintained the free cash flow guide for this year. And obviously, you reiterated the $3 billion of free cash flow long term target here over the next couple of years. You do have the preferred coming due for – or being callable middle of next year. I know you're trying to look at prioritizing debt paydown as well as acquisitions as we think about capital deployment. But is there a way to help us think about how you prioritize taking down that preferred debt versus going after potential deals here in the near term?

Yes, absolutely. So we're going to continue to focus on finding the right deals for our company. We outlined it during the Investor Day. We have been aggressively working opportunities. There are some outstanding opportunities and some specific capabilities that we're currently working, and we are imminently hoping that we'll be able to make some form of an announcement on some of the things that we've been working on. But again, from our perspective, it comes back down to what's the long-term value creation opportunity. That's why we're prioritizing the M&A. We are very confident in our ability to generate free cash flow. We will be taking out the preferred. So it will be the balancing between do we use our available cash for some of these more tuck-in type M&A opportunities similar to what we did with Rahi or do we warehouse that cash for the preferred takeout. We always have the opportunity to leverage our balance sheet. And we're focused on the long-term value creation. We'll balance between M&A, warehousing cash for, the preferred and then also buying back shares or delevering.

Understood, thanks.

The next question comes from Patrick Baumann with JPMorgan. Please go ahead.

Hey, good morning. Maybe if we could start off on – well, I guess I kind of have two questions on the EES segment. Can you talk about like the non-res markets, what you're seeing? I think you said something about improving momentum, which was surprising to hear in context of the macro indicators. So I just wanted to check on that. And then you also cited weakness in solar and U.S. project timing as factors for the third quarter. Can you just remind us how big solar is for you and the type of declines you're seeing? And how you see these things kind of impacting fourth quarter results, including that project timing dynamic?

Yes. If you think about EES as being three kind of operating groups within it. We have construction business, Patrick, we've got industrial business, we've got an OEM business. So momentum vector wise, I think Dave touched upon it earlier in the call, but I'll come back to it. Our momentum versus prior year and sequentially improved for both construction and OEM in the third quarter or EES. That's a good indicator. Industrial, though, we saw slowing – a slowing in momentum and that ties to the kind of industry-wide sluggishness in the industrial markets in the U.S. principally. We saw a materially better results in Canada for both construction and industrial versus the U.S., a very good position there. That economy is performing a little differently than the U.S., and we had very nice results there. For EES overall, also, Dave mentioned, I'll highlight, backlog actually grew sequentially. And that's not typical for EES. Typically, EES' biggest backlogs in Q2 and you start to eat the backlog as you go through all the construction season through Q2 into Q3 and early Q4. So that's kind of the overall momentum vector. Again, we – remember, we're not a residential construction business. We're a non-resi business. So everything other than resi, we have all those types of projects. And it's just – it's a big composite when you think about our construction business. So – Dave, I don't know if you want to add? Maybe solar is – what we saw is we're comparing against some challenging comparables from 2023 last year – excuse me – and if you look, we had some large solar project business in the first three quarters of last year. So that's not a new dynamic or a new driver, Patrick, in Q3. That was also the case in Q1 and Q2. And our solar business like-for-like year-over-year is down double digits, strongly down double digits. But that's not dissimilar to others in the space, right? If you go and look at others who have reported, I think it's being called out by a number of other companies as well. And look, I still think there's renewables growth in the U.S. There's no doubt about it. Depending on the election outcome, that will determine the mix, as I said earlier. But think of 2024, just given the project timing for electrical distribution as being some challenges, some more of a down year for solar.

Yes, I'll just frame it up for you. So the solar business within EES is roughly 5% of sales. And as John mentioned, we've been seeing the last couple of quarters that, that business has been down 25% plus depending on the specific quarter. So it has been a significant drag to the overall EES results. Again, we had a nice run up with solar. But clearly, given the economic environment, that business has turned down.

Helpful. And then on industrial, can you remind us your exposure to automation there and the conditions you're seeing in that market?

Yes, certainly. So again, automation resides within our Industrials business within EES. We do have very strong relationships with some of the key suppliers. I don't know many of you are familiar with the relationships that we have. And we've been seeing some challenges there. And again, I think it goes back to just some of the overall industrial slowdown that we've seen across the end markets that we serve. Some are still very favorable, but we've seen overall a general downturn obviously impacting our automation business as well. Secular trend wise, though, I'll add, when you think about IoT and automation, it's a clear secular trend in the U.S. When these mega projects as they get executed, as the infrastructure build-out occurs, the content that represents these new builds is going to have higher electronics, higher automation content. And so that – I think the secular trends will be what rules the day effectively, I think, for both industrial and including automation portion of industrial as we look into the out years.

Thanks for that. Dave, any – how big is automation for you guys? Have you ever sized that?

We haven't sized that one specifically for you.

Okay. All right. Thanks a lot. Best of luck.

Okay. Look, I think we've addressed all your questions. But before I bring the call to a close, I'll make a few comments. We typically do not provide our outlook for 2025 until we – or for the next year until we announce our fourth quarter and full year earnings. That is our plan, again, consistent with history and our past that we will do that again. With that said – and it's a bit early to give a robust outlook for 2025. With that said, I think it's important to at least lay out a view of kind of current conditions and on how we're starting to think about next year. First, I would say, we're clearly going to return to growth as an enterprise. I'd point you to our Investor Day where we gave kind of what our outlook is over the long term. So we expect to return to growth in 2025. The sales will be a bit more weighted to the second half. I made some comments on utility already, relative to the markets, the current state and the recovery. I will ask you to keep in mind the first quarter of the year in a normal market and value chain for utility is always the weakest quarter for utilities. So broadband, we clearly expect a recovery in broadband and return to growth in 2025. So that supports UBS next year. For EES, you see where nonresi been performing. They got a little slight improvement in the momentum vector here as we got through Q3. And I think the short-cycle industrial markets that have been a bit soft in the short term, that sluggishness we're seeing continue through the fourth quarter. The mega projects start to kick in increasingly over time. And I think that again,…

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