PACCAR Third Quarter 2026 Earnings Conference Call - PACCAR INC

Hello, everyone, and thank you for holding. Good morning, and welcome to PACCAR's third quarter 2026 earnings conference call. All lines will be in a listen-only mode until the question and answer session. Today's call is being recorded, and if anyone has an objection, they should disconnect at this time. I would now like to introduce Mr. Ken Hastings, PACCAR'S Director of Investor Relations. Mr. Hastings, please go ahead. Thank you, Joel, and good morning, everyone. My name is Ken Hastings-Packers, Director of Investor Relations, and joining me this morning are Preston Fite, Chief Executive Officer, Kevin Boehme, President, and Bryce Poplosky, Senior Vice President and Chief Financial Officer. As with prior conference calls, we ask that any members of the media on the line participate in a listen-only mode. Certain information presented today will be forward-looking and involve risks and uncertainties that may affect expected results. For additional information, please see our SEC filings and the Investor Relations page of PACCAR.com. I would now like to introduce Preston. Hi. Thank you, Ken, and good morning, everyone. Kevin, Bryce, Ken and I will update you on PACCAR's excellent third quarter financial results and business highlights. I'd like to start by thanking our wonderful employees all around the world who did a fantastic job of providing our customers with the highest quality trucks and transportation solutions in the industry. Packard delivered excellent revenues of $7.94 billion and net income of $847.5 million in the third quarter. This is 19% revenue growth and 44% profit growth compared to the same period last year. Parts had record quarterly revenues of $1.78 billion, and Packard Financial Services, $138 million in profit, was an increase of 9.4% compared to the same period last year. We estimate this year's U.S. and Canadian Class 8 markets to be in a range of 240,000 to 260,000 trucks, and next year to grow and be in the range of 280,000 to 240,00. The U.S. and Canadian truck market is being driven by economic growth, continued investments in infrastructure, and the general freight market recovery. In Europe, we project this year's above-16 ton market to be in a range of 300 to 320,000 units and in a similar range for 2027. This represents continued truck replacement in a region with steady economic growth. We estimate this year's South American above 16-ton truck market to be in the range of 100,000 to 105,000 vehicles and next year to be up slightly and in the range of 105,00 to 115,000 trucks. PACCAR's premium trucks are performing very well for customers throughout all of Latin America. Based on strong customer orders, PACCAR increased deliveries to 40,100 trucks in the third quarter. volume will increase in the fourth quarter as suppliers become more able to ramp up their production to meet continued strong customer demand. Fourth quarter deliveries are anticipated to increase and be in the range of $41,000 to $43,000. Packard's third quarter trucks, part, and other gross margins were a strong 14.5%. Fourth quarter gross margins should remain high and again be in the range of 14 to 15 percent. We look forward to a strong finish to this year and another very good year in 2027 as our customers benefit from Packard's excellent trucks and new transportation solutions. Kevin Bainey will now provide an update on Packard Parts, financial services, and other business highlights. Thank you, Preston. Packard parts achieved record third quarter revenue of $1.78 billion. This record is a result of investments in parts distribution, growth of the TRP All Makes brand, expanding transportation solutions, and increasing dealer retail locations. We anticipate continued growth in the fourth quarter. PACCAR Financial Services pre-tax income was a robust $138 million with 9.4% year-over-year growth. These excellent results reflect stable finance margins and higher used truck pricing. Similar to Packard Parts, Packard Financial provides steady foundational profitability during all phases of the business cycle. Last week at the American Trucking Association's Truck Conference, Packhard proudly introduced its next generation transportation solutions platform called PACCAR Connect. This system provides a state-of-the-art technology platform and a beautifully integrated vehicle display. PACCAR connect has the ability to bring together fleet telematic systems, PACCAR truck data, customer-specific productivity applications, Apple CarPlay, and electronic driver logs into a fully integrated system. This system will serve as a unifying platform that will enhance customer productivity and create new revenue streams for PACCAR. This year's capital expenditures are projected to be between $650 and $700 million, and research and development expenses will be $440 to $460 million. In 2027, we estimate the company will invest $6 50 to $700 billion in capital projects and $460 million to $500 million in research and development expenses. Key technology and innovation investments include next-generation clean diesel, hybrid and battery electric powertrains, growing the parts business, enhancing manufacturing capabilities, and expanding the connected vehicle offerings. PACCAR's industry-leading trucks, best-in-class parts, and financial services businesses and advanced technology strategy position the company for an excellent future. We are pleased to answer your questions. We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 2 to raise the hand. Press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from Steve Volkman with Jefferies. Your line is now open. Please go ahead. Great. Thank you, guys. Good morning. Good morning, Steve. So, a couple of quick ones here for me, and I'll pass it on. One, Preston, I think you mentioned that you expected sort of supply chain to kind of catch up. And I think your deliveries this quarter might have been slightly less than what you had projected. Are you seeing supply chain constraints that are limiting that, or was that just kind of normal variability? Yeah, Steve, that's a nice observation. Our deliveries in the third quarter at 40,100 were somewhat affected by supply constraints and as we and others are building more trucks, I think the suppliers are trying to get up to speed on that. And so that's kind of what affected Q3 and what we think is improving in Q4 with the guide to 41,000 to 43,000 trucks. But we're working closely with our suppliers to make sure they get the parts to us and we can build trucks. easier to build the trucks and we got the parts okay that makes sense um and then the second one uh i'm curious how you're sort of thinking about or how you were even interacting with customers relative to 27 now because i'm imagining but please correct me if i'm wrong that it's actually hard to sort of price trucks for 27 when we don't know the ncps yet um and so that probably makes it hard to take orders are you taking orders for 27 and if so can you provide any color as to sort of what people are actually ordering or you know relative to uh engines hey steve that's that's great so we made the observation that it's easier to build trucks if you got parts and it's easier to price trucks if we know the cost and i think that the government's doing a very nice job actually of looking at the 2027 emissions regulations and figure out how they should are able to set the ncp levels as you noted they're not finalized yet and i think that does give some customers pause about what their price will be so we've had excellent discussions with our customers you know we've known for many years and at was a great opportunity to sit with a lot of them and talk about what they're needs are for 2027 and ii think they feel everyone we met with feels like they would like to keep buying the 200 milligram engines so they have time to prove out the technology of the new engines the lower knox engines and so i think they are starting to place their orders we're seeing good inquiry and increasing order intake but obviously it'll that'll likely increase as we have certainty around ncps understood thank you so much yep your next question is from jerry revich with wells fargo your line is now open please go ahead Yes. Hi. Good morning. Good afternoon, everyone. I'm wondering if you just talk about the lead indicators that you're tracking for the parts business. What do you expect the outlook to be over the next couple of quarters? Normally, you folks have some visibility a couple of quarters out given contract rates are moving higher. I wonder if you'd just give an update on how you're thinking about the cadence. Jerry, this is Kevin. We look at the parts business. You know, right now in a smaller parts market, team's done a great job increasing volume, growing share. You Know, share is one of those things that we measure. And right now with customers have elevated operating costs, they've got higher diesel prices, they're got an increased number of unseated trucks. And so they're focused on really required maintenance at this point. And so we spend a lot of time working with them. One of our key things we look at is our share of wallet with our customers, and we've been able to grow, share, and increase while they're at elevated costs. And as things return to more normal conditions for them, we anticipate to keep growing. And what do you think that'll be based on what you're hearing? Do you expect an acceleration exiting the fourth quarter? Is it possible to get a sense, Kevin? Yeah, we anticipate continued growth in the fourth quarter, and we have been able to grow share, so that's a key metric for us. I think we really provide ease of doing business with our customers, and so we continue to grow the revenue with them, gain share, and anticipate that to continue. super and can i ask the margin outlook 14 to 15 percent uh for the fourth quarter uh what we're hearing is really good pricing for fourth quarter delivery slots and a sequential improvement from third quarter pricing so does the margin outlet embed some of the uncertainty on the part side versus improved profit per unit on the truck side or can we just unpack the push and the pull there if you don't mind yeah sure i think a simpler way to think about it is when we're building trucks and we have to deliver or build them without all the parts there's a cost adder in that so it has some impact to price cost in the quarter as we think it might occur obviously we're doing everything we can to minimize that i think the parts team is as kevin said doing a great job of getting the market share gains margin growth so we feel positive about how they're doing and then i think as we look at our pricing power, it has been good with our customers. There is a strong demand for the 200 milligram engines, which we think carries into 2027 as well. So it feels pretty positive from that standpoint. It's really just about those efficiencies that we'd have to deal with in the fourth quarter. And I think the other part of it is, you know, it's always a function of there's a lag factor between pricing a truck and your backlog. And so that sits into the factors as well, but I appreciate the discussion. Thank you. Yeah. Great. Good talking to you, Jerry. Your next question is from Tammy Zakaria with JP Morgan. Your line is now open. Please go ahead. Hey, good afternoon. Thank you so much. I'll ask one question today. So I heard you comment about some delays in how customers are trying to, or there's delays in how they're trying to decide what to order next year but as you um are part of this discussion are you getting a sense that customers are looking to buy the non-compliant engines and planning to pay a penalty on it or is their willingness to adopt a compliant platform even if it comes with a higher cost. So any color on which direction customers are leaning toward at the moment? Sure. I think, you know, one of the things I'd start with, Tammy, is to say that we have very good visibility right now. Obviously, the year is full and we're filling the first quarter, so that's a pretty positive position to begin with. I think the customers are beginning to order, but it's just the beginning of that when they would expect the fleets to be thinking about their capital allocations for next year. So that's kind of a part one of your commentary. And then I would share, and we've said this a lot, is like we have not met with a customer. So every customer we meet with is much more interested in proven, stable technology that they've had time to vet in their operations. And so they're asking for us to deliver to them trucks with a 200 milligram and an NCP because that makes their operations smoother compared to introducing new technology from any manufacturer that they haven't had enough time with. And so that's kind of where the world sits right now. Anderson, thank you. You bet. Your next question is from Rob Wertheimer with Melius Research. Your line is now open. Please go ahead. Thank you. I think Kevin mentioned half a dozen things that could affect parts margin, which was down a little bit year over year this quarter, you know, from mixed to maybe people delaying some purchases to investments. I wonder if you could just, you know, break that down. Is there any kind of price competition that's led to lower margin, or is it other factors? Rob, it's just primarily mixed right now due to the elevated operating costs that we see with the customers. You know, we've got great trucks with a lot of proprietary content. The engine business, I mentioned the connected. So really see as the customer's operating conditions improve, we see a nice balance of that mix back between all makes and proprietary. And Rob, I just add on what Kevin said and echoed in different ways. Like think about the way the enforcement of CDLs went in 2026 and they pulled a lot of trucks out of service. So if the trucks pulled out of a service and they're sitting against the wall, if you will, then that means that there's less miles driven on some of those newer trucks. So it's just postponing parts purchases. We think that'll come back, obviously, and that's kind of what Kevin said with high fuel prices being the other factor. So that's just kind of the way the market is running, and I'm so pleased with what the team's been able to do in terms of growing the parts business in a market which is kind of constrained. So they've done a really nice job in that factor. All right, thank you. And if I may sneak in another one, you mentioned a couple times the launch of PACCAR Connect and potentially even new revenue streams that might come out of it, but what are the biggest kind of pain points, whatever you want to call it, that your customers are feeling that might be solved by this, and how does that evolve over time? I'll stop there. Thank you. Yeah, thanks, Rob. Great question. We're really excited about this. The product is really cool. I don't know if you had a chance to see it, but if you get in one of the new Peterbilt or Kenworth trucks with the integrated system, I mean, what you end up with in today's world is people install third-party telematic systems into their truck, which requires getting into the dash, cutting things, installing hardware, and this eliminates the need to do that. So step one is it gives PACCAR an opportunity on a hardware side, because now we're doing that work for the customer in a much more integrated factory-direct manner. So they're all going to be excited about that. We hear that from them. And then you think they get the choice of the telematic system they want to put in, as we're doing this as kind of an open source system, kind of like you can akin it to an iOS on your phone, an operating system on your smartphone, where you can add applications that can be bespoke to a customer, specific to a consumer, or they can be PACCAR applications, and those applications can be revenue-accretive to PACCAR. They're also really beneficial to our customers. And you think about how it builds into the parts business in the future, as we understand what the truck is doing. It gives us the opportunity to do predictive maintenance on the truck or direct it towards our dealerships. So integrating our businesses with our customers in a way that's beneficial for their profitability and ours feels like just an exciting time. Yeah. I'll just add to it. It allows us to stay connected longer with the customer through their operating cycle And so ease of doing business around the parts business will really help. Thank you. Perfect. Your next question is from Louis Merrick with B&B Paribus. Your line is now open. Please go ahead. Yeah, good morning, everyone. Thank you for taking my question. Just one from my side. A quick one on tariffs. Are you able to confirm there was still some one-off benefit from tariffs during the quarter? If so, how much, and should we expect there to be further one-offs benefit coming in for Q? And is 1Q then the point where we sort of get to a clean sort of point from a tariff perspective? You know, Lewis, what we've seen is there's been – the tariffs have gotten a little more stable. We've still seen tariff costs that we incur as we're importing. We've had some benefits as well, but it's really not been material to the results of our performance, and so it's just kind of in the mix. Okay, so just to be clear, there wasn't any sort of one-off benefit in 3Q? No, it's kind of like it's continuing as we sort through the tariff process and work with the suppliers and work avec the government and try to get clarification on it. Yeah, this is Bryce. A comparable, and I think we mentioned in the second quarter as well during the call, comparable kind of activity. Okay. All right. Thank you very much. Your next question is from David Rasso with Evercore ISI. Your line is now open. Please go ahead. Hi. Thank You for the time. You used to speak to gross margins as the third quarter guide and then further increases in the fourth quarter. Just so we're clear, the change and now the third the fourth quarter gross margins are more flattish as a base case. Is that more because the truck margins aren't going to grow sequentially the way you would have thought due to the supplier-related inefficiencies? Or is it also related to the parts margins being less than you thought? Then I just had a quick follow-up on truck margins more broadly. Yeah, David, good to talk to you. I would say that your first comment is more accurate than your second comment in that it's just the cost of production right now is having some impact. We are seeing great truck pricing, but it is just that uncertainty there. Well, that's what I wanted to back into the second question. So the profitability per truck was the highest since the fourth quarter, 24, and you did it with 3,800 less trucks delivered, right? So it appears very impressive. You did have more U.S.-Canada mix this quarter than back then. Price cost was negative back then, I'm not sure if you commented if price cost was still positive this quarter. quarter like last, so maybe you can confirm that. But I think we're all just trying to level set, all right, maybe the supplier issue doesn't extend it to 27, but what do I do with the fourth quarter margin as a launchpad thinking about 27? I know there's a lot in there with penalty revenues on the trucks in 27 and how that dampens the margin. But again, just trying to think through this margin performance and how to think of the fourth quarter launch for 27 thoughts. Thank you. Yeah. David, like usually you give these great questions. It's fun to talk with you. And you bring up a very important point is if you think back at just a year ago in September of 2025, net income was 590 million. And this quarter it's 847 million. So the teams have just done a fantastic job each quarter, increasing total profitability. And they've done that through truck pricing and through discipline, operating performance like PACCAR always does. And it sets us up really well for the future. It puts us in a very strong position to look forward into things. Obviously, the more stable the market is and the more clean the production costs are, the easier it gets for us. I think you asked, or you mentioned, which I think was kind of an ask, about price cost, and price costs remain favorable in the quarter. And that was mostly due to, on the price side, the favorable price realization we're getting on our truck price. I guess I'll ask the question without asking you for guidance for 27 truck margins. Would you look at this fourth quarter then with, again, the drag of maybe pass-through revenues with not much margin on the penalty, but assuming less supplier issues? Just how would you want us to think about 27 truck margins versus this third, fourth quarter kind of run rate? Yeah, great. That's a great way to think of it. about it. If you think about 2027, we're calling the market up and we're doing it without having the certainty of what the cost structure will be in 2027 which means we're pretty bullish. We remain in our bullish position on 2027. We think that any of the uncertainty will show up in the first part of the year and then clarity will be through the second, third, fourth quarter and then as we get towards the end of theyear we would expect it to even strengthen. So I think our general sense is the uncertainty'll dissipate and the market will become stronger as the year passes. Okay, I appreciate the time. Thank you. You bet. Thanks, David. Your next question is from Chad Dillard with Bernstein. Your line is now open. Please go ahead. Hey, good afternoon, guys. Hey, Chad. So I wanted to go back to the parts business. Can you update us on what the outlook is for 26? And then I think you talked about seeing some outgrowth, and I recall from the investor day you talked like a $3.5 billion parts opportunity, just any color on, you know, just how fast you're outgrowing and where you're tracking versus that goal. Kevin O' Yeah, Chad, this is Kevin. So outlook for 26, I mentioned the continued growth in the fourth quarter, and we'll finish within the range that we had forecasted the three to five percent we'd given previously outlook for next year is is continued growth you know we see you know as we watch customers operating conditions as preston mentioned we forecast the market increase we've got the connected platform out there and we see the continued growth we mission mentioned in the investor day the opportunity with the second owner we mentioned the parts market down some of the growth that we've seen with our record revenue has come from growth in the second market and so we've grown with our fleet services program and then we've also grown the percent of our trp and all makes and a portion of that comes from the from the second owner gotcha that's helpful um and then in your your north america guidance for 27 implies about a four percent increase at the midpoint i was hoping you could break down how are you thinking about the vocational versus tractor market as you go into next year i would kind of look at the markets and think that we have really run a replace below replacement demand on the fleets i think that they have had some relief from that because of the driver situation but they recognize the high performance great fuel economy low operating costs and driver appeal of new trucks so i think they're very interested in getting new trucks and are starting down that pathway and then i think that the general infrastructure investments that are happening in america are very good for the vocational market for the coming years and since we're the leader in the vocation market with our 40 share there we think that bodes well for us also because those are those are good trucks for us to sell great thank you you bet Your next question is from Kyle Menges with Citigroup. Your line is now open. Please go ahead. Thanks. I just wanted to follow up on Chad's parts question. And I think if I heard you correctly, you're still thinking that parts growth can be in the range of 3% to 5% for the full year. So I think that would imply parts growth of around high single digits in the fourth quarter versus you've been tracking in the low singles through the first nine months of this year. So what gives you confidence in that high single-digit growth in the fourth quarter? I'd say we have a great team of people that are working closely with our dealers and our customers and that the freight market's returning. And so those are the factors that push us into that confidence. Yeah, Kyle, and I just, I'll add that, you know, we've seen a growth in our fleet services program. So that shows is that we continue to gain new customers, you Know, ease of doing business with our parts programs we gain new customers and we continue to increase our share wallet with our current customer base so we are planning for for ongoing growth got it thanks and then and then i also wanted to follow up on on some of the earlier uh q a related to 2027 i mean it sounds like you're thinking second half might be a little bit stronger than first half i'm curious if you think um then that first half of 2027 could be a little bit softer just from a delivery perspective than where you'll be at in the second half of 2026 and then i guess you're expecting the second after 27 to be a bit stronger well kyle i don't know you might be putting a little too many words in my mouth um i think we have to see what the ncp levels are set at i think that'll be very significant to how the market reacts at the beginning of the year. We've seen good interest, but we've seen obviously the customers would like to know what the NCP level is going to be. We know they'd like to buy a truck that's durable, reliable, and proven for themselves, but we need to see NCP levels. And once those become finalized and if they're set at a level which is helpful to the truckers who are already dealing with high fuel prices, then that'll be good for the market in the early part of the years. And then obviously as you get into the latter part of the year and customers get some time, we'll see what their reactions are. It gets a little bit tougher to predict the market in the second half when it's nine months to a year from now. Eric, thanks for the time. You bet. Good talking with you. Your next question is from Jamie Cook with Truist Securities. Your line is now open. Please go ahead. Hi. Thanks for allowing me to ask a question. I guess my first question, Preston, could you just speak to sort of your competitive positioning in the U.S. with Section 232, you know, how you're performing from a market share opportunity relative to your initial expectations? Or do you think in how you are balancing sort of market share for price in this type of environment, can we get the Section 233 benefits dropping to the bottom line? And then I guess my second question, you know, again, sorry to ask about next year, but I will anyway. Assuming the U.S. market outperforms Europe next year. Just thinking from a geographic perspective, the impact on margins can what would North America be a creative or is there just sort of more noise associated with NCPs and supplier constraints and stuff like that? Thank you. Looking at your first question, I would say probably the easiest thing to do is look at truck margin since December 2025 until now and say that it's gone from $240 to $570 million. And I think that kind of answers the question of the positioning of what's happening and holding market share as a relatively flat position. Jamie, and just the comment about Europe, we still forecast Europe to remain strong in that 300 to 320. DOS has done a great job maintaining its position and seen an increase in order activity in the back half of this year, and we've increased build commiserate with the increased orders. So good forecast in Europe for next year. Thank you. Thanks, Jamie. Good talking to you. Your next question is from Steven Fisher with UBS. Your line is now open. Please go ahead. Thanks. Good morning. So you were able to maintain or hit your margin targets despite the lower deliveries in the quarter. So I guess I'm just curious what kind of helped that along. Was it just some general conservatism at the beginning? Were there any particular mixed dynamics in there? I think you already said that the tariffs were not sort of a material benefit to it. So just curious, what drove that hitting the margins despite the low deliveries? You know, Stephen, the simple answer, and it's really true, is amazing people. We have a great team of people around PACCAR, and you've had the chance to be in our factories. You meet the people that work there. You watch what they do every day and how well they can perform in spite of complications. It's super impressive, and It happens at every part of the business, the financial services business, the parts business. So those are the contributors more than anything else is to the performance in lieu of lower deliveries, and they just keep doing a great job. And so that's probably the biggest thing. Okay, thank you. And then, obviously, there's a lot of talk about supply chain challenges on the call. Just curious how broad those challenges are. Is that mostly within domestic markets? Is it related to imports? Is it just a few, or is it more broad? Any help you can give on that? Thanks. Yeah, I think the easiest way to think about it at the macro level is build rates have gone up significantly, and they've gone up rather quickly, and that just puts a tax on the system. We have great suppliers. They do a good job of working with us. It's just expecting them to go up this quickly in support of the total industry has been, you know, created some work for them and a few misses, and all you have to do is miss a single part on a truck, and it becomes impactful. So almost all of them are performing really well, but all it takes is one or two missed parts to make it meaningful, And so our teams are working closely with them, and we're making great progress. Hence the guide for higher deliveries in Q4. Thank you very much. You bet. Good talking to you, Stephen. Your next question is from Angel Castillo with Morgan Stanley. Your line is now open. Please go ahead. Hi, good afternoon, and thanks for taking my question. Preston, I wanted to ask a little bit of a bigger picture question around autonomous. So clearly the trucker here is under quite a bit of pressure, you know, ranging from drivers to high fuel prices. Just was curious if you could elaborate or at least comment, I guess, in terms of what you're seeing in terms of, you Know, customers appetite for perhaps autonomous trucks, given your work with your partners and, you know more perhaps more specific to PACCAR, you know, as you're seeing the market evolve and all these pressure points on your on that trucker any changes as to like your appetite or the pace at which you want to move in terms of some of these investments to develop autonomous solutions here that you might be able to deploy to both gain share but more importantly help your customer solve some of those issues. Yeah, great. I love the way you ended the question, Angel, and thinking about helping our customers because that's kind of what we try to do every day. And if we have the opportunity to develop safe, reliable technology that helps our customers and then we see autonomy being able to do that, then that's the path we're on. We're developing our own proprietary autonomous vehicle platform which will make it easier for autonomous systems to be integrated into the truck in the factory. We think that's a significant advantage for the future going forward. Our pace of play on this is really about safety first. These are 40-ton vehicles. We want to make sure that they are completely capable, fully validated with production parts, just like any new program we do, and that's determining the pace of our introductions. We have good partners in Stack, Aurora, and others as we work forward with our customers and how to deploy that. We obviously think the deployment will happen somewhat gradually in lanes, in weather climbs, and then it will roll out in a progressive way. And I think the other instructive thing to think at the macro level is it's got to be a win for our customers, it's Got to Be a Win for the developers, and it's GOT to Be A Win for PACCAR. And so when all those parties are winning and we have a durable, reliable, safe system, then that's when it'll begin to deploy at scale. So that feels pretty good. I think the other thing that we look at in that is macroscopically it's very good for PACCAR because trucks are still going to need maintenance and they're still going to need taking care of and it's going to involve our dealers and support systems for those trucks because now there won't be a driver at that point. So, the PACCAR Connect system and all of the information we have on trucks will integrate us more to the vehicle. Very helpful. Thank you. And then we've had, I guess, a lot of discussion around the P&L, but we're hoping to kind of pivot it to maybe the cash flow a little bit. Can you just talk about what your expectation is for cash flow from operations and pre-cash flow for, I think, or just cash flow for operations for the year, and to the extent that you kind elaborate a little bit more on kind of the third quarter and year-to-date cash generation is that kind of as expected are there any puts and takes there that um that may be surprised or that we should be mindful of as we think about cash for generation uh for you know for the remainder of the year and the third quarters that may or may not uh have kind of potentially caused it to be a little better like just any again more color that you can provide on cash for regeneration this year that'd be helpful sure angel this is bryce i would just tell you we feel pretty proud of the cash we generate we generate cash in that through not the nine months of 2.5 billion which is greater than our net income and a lot of companies can't say that so it's very high quality of earnings so we're pretty proud about that result um and for the year we would expect a similar kind of scenario where the income would be generated through the cash from operations being that income is the biggest driver and if you're commenting about last year's number it had a one-off kind of a large effect because our wholesale dealer flooring inventory was down so So that was kind of a one-off, not a typical thing where dealer flooring changes that much in a given year. Very helpful, thank you. Your next question is from Scott Group with Wolf Research. Your line is now open, please go ahead. Are you out there? Okay, Joel, I think we maybe can leave it there. Sounds good. It looks like, oh, it does look like Scott has tried to dial in one more time. Would you like me to put him onto the stage? Sure. Yes, please. Great. So this is Scott from Wolf Research. Your line is now open, Scott. Hey, guys, can you hear me now? Yeah, we got you, Scott, glad you got in. All right, fantastic. Thank you. So it sounds like you guys were at ATA last week meeting with customers. Just wondering sort of the tenor of the conversations, truck rates going up a lot, driver market tight. Are you hearing about fleet growth? Is it just replacement? And sort of how you think that plays out and maybe what you thinkthat means for the used market going forward as well? I think we're sitting at a transition point where the fleets would like to be growing. they're still managing cash flow. They've seen costs be high with fuel, so fuel increases the cash flow problem for them. They're managing driver costs. That's a cash flow impact to them. If they'd like to be growing their businesses, some of them are starting to see that ability, but it's really just beginning to be there. There's been some consolidation over the past few years that's taking some absorption of fleet size into the market that's now, I think, finishing. So it makes it feel like they'll begin to see increases in fleet size in the coming quarters. Okay, that's helpful. And just, you know, on this like idea of all this like very near-term uncertainty, I don't know if you guys can give any color, like what percentage of 1Q is like sold out now? And, you Know, it sounds like pricing is really good in Q4. Does that logically take a step back in Q1 if we have less stuff sold at this point, just any sort of near term thoughts there? Thanks. Yeah, great question. I think when we look at it, just having the year filled as we sit here and it's been filled for a little bit gives us confidence that there is demand that's strong out there. And now I think that as we're filling the Q1, it's pretty early. You think a lot of fleets come into ATA, we were talking about ATA and they're just starting to decide what capital to allocate and how they're going to do that. So it's pretty early days for Q1 to have a real look yet. I think we'll get a better view of that in the coming four to eight weeks here and obviously getting certainty of NCPs. And if they're at a low level to support our customers' wishes for the proven product, that will be advantageous to the fill of Q1. Okay. And then just like last thing real quick, when do you actually think you're going get that certainty on ncp is that is that in the next four or eight weeks or could that get pushed out to next year even i don't even know yeah i i think four day weeks feels like a good number obviously we don't make those rules so we just receive them and we continue to have a great working relationship with the government trying to sort this out for the betterment of the industry but the timing isn't uncle is unclear at this point thank you guys yeah have a great day there are no other questions in the queue at this time are there any additional remarks from the company thank you joel and thanks everyone for joining the call ladies and gentlemen this concludes pat carr's earnings call thank you for participating you may now disconnect Thank you.