Wabash National Corporation (WNC) Q4 2024 Earnings Report, Transcript and Summary

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Wabash Fourth Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to Ryan Reed, VP of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and thanks for joining us on this call. With me today are Brent Yeagy, President and Chief Executive Officer; Pat Keslin, Chief Financial Officer; and Mike Pettit, Chief Growth Officer. A couple of items before we get started. First, please note that this call is being recorded. I'd also like to point out that our earnings release, the slide presentation supplementing today's call and any non-GAAP reconciliations are available at ir.onewabash.com. Please refer to Slide 2 on our earnings deck for the company's safe harbor disclosure addressing forward-looking statements. I'd also like to mention that you should see a Q&A tab on the lower right-hand corner of your screen. We'd like to encourage investors to submit questions, and we'll do our best to provide answers during the Q&A section of our call. I'll now hand it off to Brent.

Thanks, Ryan. Good morning, everyone, and thanks for joining us today. As we reflect on 2024, it's clear that this has been a pivotal year for Wabash. Building on the record-setting financial and strategic accomplishments of 2023, we continue to demonstrate the improved resilience of our business portfolio during the industry downcycle, and more importantly, we've continued to innovate and invest in a manner that's unprecedented relative to the market conditions. Our ability to maintain a strong balance sheet and stay focused on long-term value creation while navigating short-term challenges has positioned us exceptionally well for 2025 and beyond. We've seen the benefits of a more diversified portfolio of first to final mile solutions, which has been instrumental in stabilizing performance during the challenging market environment. While demand for dry vans has been impacted by freight market weakness, the stability of our truck-buying business has bolstered our broader portfolio. This diversity ensures that Wabash is less exposed to cyclical swings and better positioned to continue executing our strategy across a broad range of market conditions. In 2024, we made significant strides in laying out the strategic groundwork to grow our more recurring Parts & Services revenue streams. A key part of this has been the ongoing development of our Wabash Parts joint venture with HTI, our Wabash Marketplace joint venture with Fernweh Group and the continued broadening of our ecosystem, which includes customers, suppliers, dealers and technology partners. As these initiatives mature, they will allow us to better balance the cyclicality profile of our business portfolio, and they will also transform how we deliver value to our customers from our Trailers as a Service offering to the seamless digital integration of Parts & Services. Together, these initiatives form a foundation for scalable growth as we move toward an exciting future for Wabash. The growth of collaboration across our ecosystem has been a key theme in 2024. By leveraging our ecosystem to navigate shifts and seize emerging opportunities, we're in the early innings of using our competencies as an integrator to develop innovative solutions to industry challenges. As we think about notable examples, I would like to highlight our Trailers as a Service partnership with Kodiak, which is redefining the role of trailer solutions and autonomous logistics. This specific example goes well beyond Wabash to bring together dealer service capabilities and our managed care network to ensure uptime for this differentiated technology partner to focus on making advancements in autonomous trucking. Strategic relationships with key suppliers have secured an access to critical components for high-demand periods and positions Wabash as a leader in supply reliability and operational excellence. Additionally, Wabash is working with Purdue University on an initiative called Smart Crossroads, which is our joint effort to bring transparency to a fragmented logistics ecosystem and rethink how technology in collaboration across our ecosystem can drive systemic improvements. By creating a form of diverse stakeholders to share insights and drive innovation, Smart Crossroads is working to address challenges ranging from data connectivity to operational inefficiencies. As we rethink how business gets done, this initiative lays the foundation for the kind of bold solutions the industry needs. Our goal across these ecosystem partnerships is to move beyond transactional relationships to enable networks of stakeholders to co-create innovations larger than any one organization could achieve alone. But just as important as having the right strategy is ensuring that our employees are engaged and understand how their role supports our strategic focus. We believe that a culture based on respect for people is the foundation of sustained success, and we've taken meaningful steps to empower our team to drive with a spirit of innovation throughout the organization. This commitment is reflected in key personnel appointments such as moving Mike Pettit to Chief Growth Officer, and internally filling that role by promoting Pat Keslin to CFO. I'd also like to take this opportunity to thank our outgoing Chief Commercial Officer, Kevin Page, for his meaningful contributions to leadership and strategic vision during this time with Wabash as he moves on to retirement. Specifically, Kevin's passion for building process that prioritizes greater levels of customer engagement and ease of doing business will lead a lasting impact on our organization. Again, we're fortunate to have built a deep bench of leadership talent over the years, and we have been able to promote Drew Schwartzhoff to succeed Kevin as Chief Commercial Officer. Drew brings exceptional transportation industry expertise from his time in senior roles at C.H. Robinson. Additionally, we have promoted Donald Winston the Chief Operating Officer. Donald brings more than 25 years of manufacturing leadership experience to the role. These are both exceptional leaders who enhance our strategic perspective and strengthen our overall operational expertise and continuous improvement mindset. While these leadership changes will be critical to realizing our strategic path forward, this cannot be achieved without the efforts of every one of our employees doing a part of something bigger by being connected to a sense of unity and strategic purpose to more digital and physical technologies to serve our customers through a connected ecosystem of partners. The path forward is not about small incremental product improvements, it's about rethinking how logistics ecosystems can work together to transform a fragmented inefficient system into a responsive, sustainable and interconnected global network. With that, I'll turn it over to Mike for his comments.

Thanks, Brent. I'm pleased to be able to share some key updates on Wabash's growth initiatives and how we are positioning the company for long-term success. Our Parts & Services offerings often sit at the intersection of seamlessly serving our customers, our first to final mile portfolio and our digital transformation. One example of this is our truck body upfitting initiative. In 2024, we upfitted over 1,100 bodies for customers, which provides them with a quick equipment turnaround, combined with location proximity advantages versus a traditional OE sale. This initiative has grown double-digits over the past few years, and we expect that will continue in 2025. I'd like to thank the team that is making this growth possible, and I believe this will be a big part of a significant growth year in 2025 for Parts & Services. One of the most significant areas of progress is the continued expansion of our preferred partner network, or PPN. During Q4, we announced the addition of 14 locations, extending their reach of Wabash Genuine Parts & Services to regions not previously covered by our van trailer dealers. Our PPN now includes partners such as Blaine Brothers, Great Western Trailer, North American Trailer and US Trailer Parts. These partnerships strengthen our aftermarket support, ensuring our customers have access to expert service and maintenance wherever they operate. The Wabash dealer network has always been an incredible competitive advantage for us, and these additions as well as more to be announced in 2025 will simply strengthen a very capable Parts & Service network. In 2022, we launched Wabash Parts to unify and enhance our parts distribution capabilities. This initiative supports all Transportation Solutions product lines, including van trailers, platform trailers, tank trailers and truck bodies. By leveraging a single distribution channel with multiple centers across the US and Canada, we've built a scalable system that ensures superior parts availability and rapid delivery. Our network of service partners locations underpinned by our parts distribution joint venture is designed to maximize uptime for our customers, providing quick and reliable access to parts and services. Additionally, the network is being leveraged to perform maintenance and repair activities for our TaaS program, which I'm happy to say is showing strong momentum in 2025 with the onboarding of new customers. Looking ahead, we're excited about the development of the Wabash Marketplace, an end-to-end digital platform launched in 2024. The platform connects our customers, dealers and suppliers through a network designed to transform their experience by streamlining access to parts, services and trailers. This includes expanding our trailers-as-a-service capabilities to include on-demand trailer capacity at locations throughout the US and a mobile inspection app to aid in damage and expense attribution. Our strategic initiatives in the marketplace and our parts distribution capabilities will enable us to scale rapidly, position Wabash to serve customers at the intersection of physical and digital technologies. While our digital transformation journey prioritizes ease of doing business for our customers, we are also mindful of leveraging digital tools to enhance our employee experience. We believe this positive engagement loop is critical in employee engagement, strategic advancement and customer experience. In closing, we're excited about our progress within Parts & Services and the development work that has taken place in 2024. These emerging capabilities to digitally enable TaaS through our Wabash Marketplace also provide Wabash with the platform to offer customer access to our growing set of value-added services. Additionally, our expanding preferred partner network enhances our capacity for after-sale support of our equipment via streamlined maintenance and repair with a full assortment of parts fulfilled by our Wabash Parts joint venture. With our Parts & Services initiative building momentum into 2025, we believe we're on the cusp of meaningful value creation by building a more significant base of recurring revenue. I'll now hand the call back to Brent.

Thanks, Mike. Looking ahead to 2025, we are entering the year with unparalleled strength and readiness. Our continued investments will create new opportunities for our customers and partners. Combined with our balanced and more resilient portfolio, we are poised to capitalize on what the industry environment gives us to further expand our leadership in the transportation, logistics and infrastructure markets. In the short-term, the industry may need to contend with some incremental complexity in the form of tariffs. I believe it's important to mention that the actions we took as an organization in response to the first round of Trump tariffs has held over the past four years and we feel that our supply chain is very well positioned to insulate Wabash from any direct impacts stemming from tariffs on components manufactured abroad. Thinking more broadly about the potential impact of US tariffs, we've already seen near-shoring activity ramp up for multiple reasons in recent years. To the extent that tariffs act as an accelerant to the nearshore in trend, we believe that foreign imports of goods being replaced by North American manufacturing activity has an outside positive impact on dry van trailer utilization. Looking at our backlog generally, I would describe bookings across most of our businesses and aligning well with our expectations. Industry reports have shown slow 2025 dry van order season thus far. This coincides with customers indicating freight market conditions are likely to follow normal seasonal patterns in 2025 with a modest degree of inflection during the second half of the year. Based on this outlook, the feedback we received from our customers is that they are interested in communicating throughout the year as our dry van needs become more clear rather than booking orders in a lump-sum manner that's traditional for the industry. This is significant because dry van specifically tend to be the largest driver of our backlog, particularly during the fourth quarter. We do anticipate dry van orders for 2025 to continue to accrue throughout the year. When it comes to our financial outlook, our initial guidance is for EPS in the range of $0.85 to $1.05. That said, I'd like to be clear about what this outlook embeds and what it doesn't. Generally, we anticipate a year of either stability or growth across most of our businesses. We do perceive more intra-year dry van orders than normal when analyzing industry demand forecasts. This activity focuses heavily on replacement as opposed to fleet growth. We take those industry demand forecasts and compare where our backlog sits currently and assume a conservative fill rate through the course of 2025. Additionally, when it comes to backlog, we have line of sights to positive trends in businesses like Parts & Services as well as truck bodies. Both businesses that typically carry very modest backlogs at any point of the cycle. We're embedding a level of cautious optimism for these businesses and our guidance. While it's easy to understand the greater levels of stability within Parts & Service demand, truck body specifically is benefiting from the accelerated demand for replacement of power equipment ahead of the 2027 EPA mandates. As such, customers are signaling very healthy flow of truck body orders throughout 2025. To conclude, 2024 has been a year of both resilience and transformation for Wabash. We've demonstrated our ability to perform through market headwinds while building the foundation for sustained long-term growth. As we move into 2025, I am confident that our strategy, focus and execution, driven by our enhanced leadership team, will enable us to continue our pursuits of new levels of long-term value creation for our employees, customers and stakeholders. With that, I'll turn it over to Pat for his comments.

Thanks, Brent. Beginning with a review of our quarterly financial results, in the fourth quarter, consolidated revenue was $417 million. During the quarter, we shipped approximately 6,770 new trailers and 3,010 truck bodies. Gross margin was 10.3% of sales during the quarter, while operating margin came in at 0.9%. In the fourth quarter, adjusted EBITDA was $21.1 million or 5.1% of sales. Finally, for the quarter, net loss was $1 million or negative $0.02 per diluted share. Moving on to our reporting segments. Transportation Solutions generated revenue of $370 million and operating income of $17.9 million or 4.8% of sales. Parts & Services generated revenue of $48.6 million and operating income of $4.5 million or 9.2% of sales. Full year operating cash generation amounted to $117 million, aided by working capital released during the year. Free cash flow for 2024 was $38 million as traditional capital expenditure reduced from peak levels in 2023, a trend we anticipate continuing in 2025. Regarding our balance sheet, our liquidity, which comprises both cash and available borrowings, was $422 million ending December 31. We finished Q4 with a net debt leverage ratio of 1.7 times. Turning to capital allocation during the fourth quarter, we invested $21 million via capital expenditure and invested $6 million in revenue-generating assets for our trailers as a Saervice initiative. We utilized $8.6 million to repurchase shares and paid our quarterly dividend of $3.5 million. For the full year, we invested $72 million in traditional capital expenditures, invested $7 million in revenue-generating assets, allocated $64 million to repurchase shares and returned $14.8 million to shareholders via our dividend. I'd like to take a moment to drill down on share repurchases as we're proud of our consistent track record of repurchase activity. We took out approximately 2.9 million shares during 2024, which equates to a reduction of about 6% of diluted shares. Zooming out further, over the last five years, we've repurchased over 12 million shares, which has reduced our share count by 22%. Our capital allocation framework will continue to prioritize capital expenditure above and beyond our annual maintenance CapEx spend of $20 million to $25 million in order to support our organic growth initiatives. We are also committed to maintaining our dividend, and we'll continue to evaluate opportunities for share repurchase alongside of bolt-on M&A. As you may recall, we recognized an aggregate liability of $462 million in Q3 2024, after a jury ruled against us in the product liability trial in St. Louis. The trial related to a 2019 motor vehicle accident in which a passenger vehicle traveling at least 45 miles per hour struck the back of a near stationary 2004 Wabash trailer. The plaintiff claims that the rear impact card on the trailer was defective, even though the rear impact guard was designed and developed in full compliance with applicable federal regulations. Among other errors committed at trial, the judge erroneously excluded all evidence regarding the driver's intoxication and plaintiff's failure to wear seatbelts at the time of the accident. For these and other reasons, Wabash maintains that the verdict in this case is not supported by the facts or the law. The company has filed post-trial motions available on the public docket and we continue to evaluate all legal options. We did incur an incremental $1 million of legal spend relative to our prior guidance within fourth quarter SG&A related to our activities around this verdict. And we are baking in continued elevated legal spend in our 2025 SG&A outlook. We'll continue to provide regular updates as they become relevant for this verdict as well as call out any deviations in anticipated legal expense. Moving on to our outlook for 2025, we expect revenue of $1.9 billion to $2.1 billion with a midpoint of $2 billion. We continue to expect truck body tank trailers and parts and services to serve as sources of relative strength in 2025. We expect meaningful revenue growth in our Parts & Services segment as freight market conditions stabilize. Additionally, it's worth calling out that our truck body business is poised to benefit over the coming two years from 2027 EPA mandates that will impact engine economics. From an operating income perspective, we expect to generate $80 million at the midpoint or approximately 4% operating margins. We expect to see about $5 million of expense for our Wabash Marketplace joint venture run below operating income during 2025. Assuming a tax rate of roughly 25%, this results in an EPS outlook of $0.85 to $1.05 with a midpoint of $0.95. Moving on to capital deployment expectations for 2025, we anticipate traditional capital investments to be between $50 million and $60 million in 2025 as a result of planned expenditures to support our strategic growth initiatives. We anticipate that investment in our TaaS fleet will increase from 2024, and we'll give further granularity as that figure comes into focus. As a reminder, it's typical for Q1 to be our lowest quarter in terms of revenue and EPS generation. In addition to some SG&A expense that runs through the P&L in Q1, we believe that seasonality will be more pronounced this year as you've likely heard commentary from carriers related to relatively modest first quarter expectations. We believe our demand patterns in 2025 are likely to play out in a similar fashion and we expect first quarter revenue to come in between $420 million to $450 million and EPS to be in the range of negative $0.20 to negative $0.30. As Brent mentioned, 2024 has been an important year for Wabash, both in demonstrating the improved resilience of our business portfolio as well as continuing to generate strategic progress that will allow Wabash to deliver value to customers by combining innovative equipment offerings with a growing set of value-added services. By executing against our strategy, we believe we will be able to enhance the company's financial performance at cycle trough, cycle peak and all phases in between. I'll now turn the call back to the operator, and we'll open it up for questions.

[Operator Instructions] Your first question comes from the line of Mike Shlisky with D.A. Davidson. Please go ahead.

Good afternoon, and thanks for taking my questions here.

Hey, Mike.

Hey, there. I wanted to maybe start off by just a quick thought about the guidance that you just provided. It looks like you've got potentially, at the midpoint at least, a small increase in the revenue side, but then a decline in the margin. I'm curious if you could just give us a little more granular detail as to why that might be taking place. Is some of the investments that you're making ongoing in '25 or mix changes or what might be behind that phenomenon?

Yeah. Mike, Pat here. I will say, if you were to peel back the expense side, and take a look at our SG&A guide, there is going to be a delta year-over-year related to variable compensation expenses. And then, as I just alluded to, legal expenses related to the verdict will also be a headwind for us in 2025 as it relates to margins.

Okay. Great. And then, Brent, as you discussed the freight market being still at a challenging moment, maybe talk about some of the KPIs that you and the team track on a regular basis. I know you're always given us kind of your view, but what KPIs look the most promising right now and which KPIs are maybe the least promising? And what should we be kind of watching for to see when we will start seeing a true inflection in trailer orders?

Yeah, it's a great question. As you can imagine, over the last, I'll just say a decade, we've had a lot of opportunities to think about what are leading indicators and things that we can look at to try to be better predictors of what the future brings. As we sit here today, Mike, I would say one of the things we're really focused on is the underlying subsegment generators of freight within the overall carrier landscape. So, what I mean by that is there are arguably 40-plus different subsectors of freight-generating activity in the United States. Some are much more important than others in terms of where it creates, we'll call it overall freight volume, regional freight volume and its effect on rates in general. And what you're seeing right now and what we're looking for is that there should be a subset of those subsegment freight drivers that are beginning to move in a positive direction, and we're seeing that. Those were not moving. They actually were going in the opposite direction this time last year, right? And that's a fundamental difference from where we're at today than where we were a year ago. So that gives us underlying -- what I want to say, we'll call it conservative optimism in terms of the market beginning to turn because that's really where the market starts to turn is there. And then, those carriers that are more exposed to those subsectors will tend to do better first. And we can somewhat see that by the conversations that we're having with our customers. And we think that's a more straight-line linkage to what really drives the market than some of the lagging indicators that we have tended to use that we would see like tonnage numbers and even the rates themselves are a tail-wagging dog in terms of what really gives you first indication of the market moving. I hope that helps.

Absolutely. I appreciate those comments. Maybe one last one for me. I appreciate, Pat, your comments about the seasonality in the first quarter. Can you give us a little bit more granularity about the rest of the year, specifically, what just took place in the fourth quarter? It was one of the lowest quarters for the industry in quite some time. You also had a challenging quarter on your shipments, too. Do you think at least you can see a positive quarter in the fourth quarter? And would you anticipate potentially other quarters of the year being up at this time?

Yeah, let me try that one. I would say, in general, yeah, we absolutely see that we'll call it air being put in the balloon over the course of 2025 as the market begins to gradually pick up steam. And so, I'm not going to go as far as trying to do year-over-year at this point, but I would just say momentum should build throughout the year. The fourth quarter of 2024, so let me reiterate, 2024 was a very specific event relative to a declining market that just could not sustain itself moving into the fourth quarter. We should be at a different place going into 2025 for the reasons we just talked about. So, I would not anticipate the amount of tail off or tail off in general that we saw in '24. That should not happen. And so, just kind of to the previous statement, I think it's just a general glide up throughout 2025, and then it's all setting itself up for 2026 as people begin to move into full replacement and incremental growth based on what we see starting to show in proverbial green shoes that we really do see right now, and there's a real dichotomy going on out there between what carriers are saying and doing. They want to be very positive. Many of them know it's more positive than it was this time last year, but they don't really want to say it, because they got burned so hard last year. And believe me, I understand that one. But there really is a level of quiet optimism that we're seeing the right things turning.

Got it. I appreciate all those comments, Brent. I'll pass it along. Thank you.

Thanks, Mike.

Your next question comes from the line of Jeff Kauffman with Vertical Research Partners. Please go ahead.

Thank you very much. I was wondering if we could get a deeper dive on the fourth quarter and what happened to profit margins, because not just in the core trailer business, but also in the parts business. It just seemed like a much weaker fourth quarter than one would have expected given the revenues you put on the board.

On parts specifically, Jeff, we had a couple, I'll call it, one-time activity event that happened in Q4 that won't repeat. And as I think about the full year, I have been talking for the last year about we would expect Parts & Services to be high-teens EBITDA margins. I think we're about 18.5% full year EBITDA. I expect that rate to pick back up in 2025. So, it was -- there was a couple of things that happened towards the end of the year that we would not expect to roll in 25%. So, we'd be back on that high-teens type glide path for 2025 for Parts & Services as far as the whole...

Yeah. Just overall, it really does come down to the volume leverage there, where fourth quarter was our lowest in the Transportation Solutions segment, both in trailers and in truck bodies. So that certainly impacts margins.

Well, yeah, I would think as new units aren't being purchased as much, older units would need a little more parts. So, I was just a little surprised by that. Mike, how big is the cost fleet right now? And where do you expect that to be at the end of next year?

Yeah. So, right now, it's still -- I'd say it's in between 500 and 1,000, it's in different phases of full service capabilities that we've been rolling out for the last couple of years. It will grow, we believe, relatively significantly this year. It's going to trend, obviously, with some of the dynamics that Brent was talking about. In terms of the -- early indications are that they're going to need -- if our customers need capacity, we would expect TaaS to be one of the first levers they pull. And we've got several customers now that have a small number of TaaS units in their fleet, but what we're excited about, we have a growing customer base that has some TaaS units in their fleet. So, as they see the capabilities of those, we could see that hit an inflection point mid-year. We're not giving official guidance on unit count for 2025, but we would expect to update that as we see the market unfold in Q1 and Q2. We'll give -- we'll provide a little greater guidance on the next couple of calls what we think that will be.

Mike, maybe you can give some insight just into, I'll call it, new customer acquisition and early-stage onboarding just in the last 45 days.

Yeah. Just -- yeah. So, it trends with what we've seen in the markets, little -- maybe seeing some early signs of life. We have brought on several new customers just in the last 45 days. Again, it's a small unit count, but new customers that we believe could be much larger users of TaaS. And we're also developing some capabilities and look for some -- potentially some announcements in the next couple of weeks to have additional capabilities that we think will be key to the TaaS offering longer term, how we can help our customers with some of their logistics needs around security and surety of load. So that's -- it's all happened, and it has happened pretty quickly, and we think that will -- it's going to be a positive trend throughout '25.

One more question for Brent. Kind of go back to 10,000 feet and look at what's going around in the market, will we tariff, will we not tariff, not 100% sure, but don't you have less of a footprint in Mexico than most of your competitors that build trailers for a living? And I guess the second part of that is, trailer pools were a big deal a few years ago. That talk went away in the downturn, but listening to some of the trucking companies, they're talking about trailer pools still being a thing. So, separate from kind of what happens if we tariff Mexico and does that change your competitive position, what customers saying to you about tariff or trailer pools right now?

Great. Those are two good questions. So, let's start with tariffs. Yeah, Wabash on two different fronts are extremely well positioned relative to whatever happens from a tariff standpoint. So, let's go supply chain side first. We made substantial strategic changes in our supply chain construct, coming out of the 2018 truck tariff onslaught. And so, we have dramatically, dramatically reduced our exposure to that to make it almost de minimis at this stage. So, we are -- we have built quite a moat around the incoming supply tariff risk. We know our competitors are still substantially exposed to that tariff risk across many different dimensions. So, we feel pretty good about that. From a manufacturing location standpoint, we have one facility that has some leveled exposure to potential tariffs on Mexico. Our competitors have substantially more exposure than we do and we have available capacity in our domestic operations to shift production as needed to minimize those tariff impacts if they were to occur. So, we watch them very closely. We don't know exactly how they will or in what construct or how long. But we know that we have put the right pieces in place to manage it one way or the other. So, we're not overly concerned at this point.

All right. And then, trailer pools, customer discussions, I'm just a little surprised to hear a couple of truckers actually talking about trailer pool and they call it powered by the hour, I guess, but trailer pool is a growth concept, yeah...

Yeah. So, trailer pools as a concept are absolutely still in play. You're right, the rhetoric and kind of the momentum of it stalled as the market began to constrict, but the concept is still there because it's extremely valid in remaking up the, call the asset management model and cost model and the flexibility for these fleets. That's going to continue to go forward. And what we're finding is it is changing the way that we can position the TaaS fleet going forward as many of the inquiries that we're having are from larger shippers and carriers that are seeing now different ways in which they can construct layers of a trailer pool concept. So, we see that still -- we'll see that -- we believe we will see that trend/concept grow and become much more publicly talked about once the market kind of gets into full swing as we approach second half of '25 going in the $26 million. And that's a lot of the inquiries. Again, we've had our people are wanting to experiment around the edges because they see a more efficient model for them, possibly layering in TaaS as part of that solution. Mike, do you want to...

Yeah. I just going to add. So, TaaS can solve a lot of our customers' needs, carriers and shippers, but fundamentally, it really plays well as a solution for a customer that wants to deploy a trailer pool. And that's a place where we think it will continue to grow and scale. And I think some of the same things you're hearing, Jeff, are some of the reasons why I have optimism is we had capabilities to TaaS, it will drive demand for that product to our customers that are looking to deploy.

When Mike talks about things that will drop and capabilities we're creating, just providing a physical trailer in a pool concept what we're finding is not enough. And what you have to do is think about every barrier that it takes to seamlessly agilely, high flexibility and with speed being able to get that asset upon, you call it, declaration of need to revenue producing. So, the ecosystem in the marketplace, what we're doing is constructing this landscape of all pieces that make it easy, frictionless to say, I can create revenue if I just had, and then we can provide the rest of the equation to get them making more money.

Okay. Well, good luck, and thank you.

Thanks, Jeff.

That concludes our Q&A session. I will now turn the call back over to Ryan Reed for closing remarks.

Thanks, Kate, and thanks for everyone joining us today. We look forward to following up during the quarter.

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