Linde (LIN) Q2 2026 earnings call transcript

Abby, thank you. Good morning, everyone. And thanks for attending our 2026 second quarter earnings call and webcast. I'm Juan Pelias, head of investor relations, and I'm joined this morning by Sanjeev Lanba, Chief Executive Officer, and Matt White, Chief Financial Officer.

Today's presentation materials are available on our website at Lindy. com in the investor section. Please read the forward-looking statement disclosure on page two on the slides and note that it applies to all statements made during this teleconference. The reconsiderations of the adjusted numbers are in the appendix to this presentation.

Sanjeev will provide some opening remarks, and the Matt will give an update on the second quarter financial performance and outlook, after which we will wrap up with Q&A. Let me turn the call over, Sanjeev.

Thanks, Juan, and good morning, everyone. During the second quarter, we achieved record sales and EPS levels, with both growing at near double digit descent, while increasing the backlog by $1 billion to a record $8.1 billion, after securing a new electronic spread in the US. In addition, the backlog project pipeline remains healthy, with several new project opportunities under development.

For the remainder of the year, we're expecting to start up more than 20 projects that add up to approximately $1.3 billion in investments. Even after accounting for these startups, and based on the opportunities I see today, I expect our sale of gas backlog to finish the year with an eight-handle, underscoring the continued strength of our long-term growth outlook.

While these results demonstrate the strength of our core business and the future growth prospects, we are not satisfied with our margin performance for this quarter.

Operating margins, excluding cost paths through, declined approximately 30 basis points year over year, primarily driven by the America segment. Some of this is due to higher equipment and hard-good sales in our package business, which actually I view as a good sign of US manufacturing recovery. But the majority is driven by the US home care business.

Even though we have been actively pruning this portfolio, it simply has not been enough to overcome the continued headwinds led by higher cost inflation and policy changes. We have a series of actions underway, and I fully expect sequential improvement into the third quarter. At the same time, we continue to evaluate the strategic fit of this US home care business within Lindy, both in part and as a whole.

While remaining focused on improving its performance and ensuring it earns its place in the portfolio, might also speak more to the numbers, but I remain confident in our long-term margin expansion story.

Now, I'd like to touch on some growth trends, which can be found on slide three. Consumer related markets grew versus prior and sequentially. Health care and food and beverage grew along with demographic trends and consumption, with stronger sequential growth related to beverage seasonality. As expected, electronics is the fastest growing end market, with the combination of project startups and higher demand tied to hardware associated with AI.

As I mentioned earlier, we added $1 billion of new electronics wins to the backlog to support the expansion of advanced node fabs in Western US. Consistent with other backlog projects, we've already begun constructing the plants under reimbursable LOIs while the supply contracts will find lives. I'm pleased to see this addition to our existing network of plants in Arizona.

And look forward to winning a few more large opportunities that we're currently pursuing. Not included in the backlog are a couple of electronics wins by a Taiwan JV, which will invest approximately $800 million to build, own, and operate ASUs and hydrogen production units to supply to new semiconductor fab and advanced packaging facilities there.

Overall, I expect electronics to remain our largest backlog contributor and one of the fastest growing markets for the foreseeable future.

Moving to industrial related markets, manufacturing remains the fastest growing market. We experienced volume growth across gay back and the Americas, although the US is still the primary driver with both aerospace and construction activity related to data centers. In fact, aerospace accounted for more than a third of the manufacturing growth during the quarter.

Both metals and mining and chemicals energy markets grew low single digits. Metals and mining activity were solid in the US and Brazil. And most of the chemicals growth relates to project backlog contributions in APAC. Aside from these regions, both end markets remain flattish across other geographies.

In summary, we've left the more difficult comps and are starting to see green shoots of growth across certain geographies and end markets. Furthermore, the project backlog reached a new record from the large scale electronics wins and we anticipate some for the base capex investments to support a commercial space customer.

Regardless of the current challenges, you can be assured that the entire Lindy team is focused on being the best performing industrial gas business globally.

Allow us to go all over the mat to walk through our financial results.

Thanks, Sergio. Please turn to slide four for the consolidated results. Sales of $9.3 billion rose 9% from prior year and 6% sequentially. Versus prior year, FX was a 2% tailwind while acquisitions and engineering each contributed 1%. Cost passed through rose 1% on higher power in all segments but was partially offset by lower natural gas for US hydrogen.

Excluding these items, underlying sales rose 4% split between higher volume and price. Almost half of the volume increase relates to project startups in APAC and Americas. The remaining is driven by organic growth in the US, China, Korea, India, and the advanced materials business.

While aerospace and electronics continue to lead, industrial end markets are improving in select geographies and especially the US. The price increase of 2% was broad based across all geographies and generally tracked with local inflation.

Sequentially, underlying sales increased 4% from 3% volume and 1% pricing. More than half of the volume increase relates to seasonal factors with the remainder of being organic.

Operating margins of 29.5% decreased 60 basis points from prior year or 30 basis points when excluding the impact of cost passed through. As Sanjeev mentioned, the US home care business negatively impacted the Americas. Excluding this, margins would have increased. But regardless, actions are underway to improve.

Separately, US hard good sales are up double digit percent from prior year. And while this mix is deluded to margins, it could bode well for US manufacturing recovery.

Finally, the APAC erosion is mostly due to lower margin equipment sales for electronic customers. Overall, we expect many of these margin headwinds to be temporary and thus recover in the coming quarters.

Operating profit rolled down to an EPS of $4.50 or 10% over prior year from a combination of net income and lower share count.

Slide five provides an overview of capital management. The operating cash flow trend shows moderate year over year growth as higher earnings are partially offset by unfavorable timing in the engineering business.

Recall that the first half results are seasonally lower. So we expect the second half to step up like prior years.

Available cash flow, which we define as operating cash flow, less base cap X remains at healthy levels, enabling significant excess cash for secured growth and shareholder distributions, which could be seen in the pie chart.

Year to date, we've deployed $6 billion of capital, split evenly between business investments and shareholder returns. $1.9 billion of secured growth represents capital deployed for acquisitions and the project backlog.

When considering the record $8.1 billion sale of gas backlog, continue roll-up acquisition targets and project pipeline opportunities, we expect this number to remain a significant use of capital for this foreseeable future.

I'll wrap up with guidance on slide six. Third quarter guidance range is $4.45 to $4.55, or 6% to 8% growth.

This assumes no currency impact from prior year, but does assume a 1% FX headwind sequentially. Consistent with prior approach, the range assumes no economic improvement at the midpoint.

We updated full-year range, the $17.70 to $17.90, or 8% to 9% growth, excluding a 1% FX tailwind assumption. This range raises the prior bottom end by 10 cents, but leaves the top unchanged.

While base volumes showed some recovery in the second quarter, we'd like a few more quarters under our belt before incorporating this trend into future guides. Therefore, we're leaving the back path guidance assumption the same as before.

The Q2 to Q3 sequential EPS trend is projected to increase five cents at the midpoint when excluding FX, which reflects some of the actions being undertaken.

Of course, this is merely a guide. How we perform is what matters most. We know our owners expect more, and the organization is committed to delivering on those expectations.

And I'll turn the call over to Q&A.

Thanks, Laurent. So I think in the slides itself, we've laid out the fact that the America's business, X, the US-owned carol linkage business, would be up 20 basis points on margin, X pass through as we normally do. So that is a reflection of the gas business doing well. As we said in the remarks as well, that there is a bit of a mixed effect, which actually, to be honest, I see the gas is business doing well. I will take the hard goods, double digit hard goods sales that we're seeing in the business.

It's a good signal of manufacturing recovery in the US. Yes, it has a small, little impact on margin, which is temporary. And then of course, we talk briefly about sale of equipment elsewhere, particularly a pack, where there was that impact as well. But from our perspective, not happy with where the margins are. Actions are aggressively on the way to essentially attack the issues that we've identified in the Lincoln business.

And I expect that we will continue to see sequential improvement as we move forward. And thank you. And just as a follow up on the electronic side, I think the contract which we announced have been, I guess, in the pipeline for a while. I was wondering in terms of geographies or maybe some of the key customers, where do you see the biggest opportunities on the electronic side, still in the US, or elsewhere in Asia, maybe in Korea and Taiwan, et cetera?

Well, absolutely. The electronic pipeline, as I said in my remarks as well, is looking healthy at this point in time. And you certainly heard from me say that I expect that we'll end this year on the backlog with the eight handle despite bringing on investments of up to 1.3 billion. So the backlog will go down from the current sale of gas backlog of 8.1 by about 1.3. And we will add back into that backlog. So it has to be supported by a robust pipeline.

Those projects stand the wall, to your point. I see bulk of those projects out in the US, but see strong pipelines in Taiwan and Korea as well. And some in China.

Thank you.

Sure. So why do I start over the quick view? I think I provided a flow overview in my prepared remarks, Patrick there.

Let me just kind of give you a sense of what we think the outlook for the second half looks like. So traditionally our resilient markets, health care, and food and beverage have been consistent. And we continue to expect the same outlook for the rest of the year there, nothing significant to change. Electronics, as you saw, year on year had 18% growth in the second quarter. We expect electronics momentum to carry on for the rest of the year as well. So again, pretty positive in terms of that. And of course, adding to the backlog helps us get the future growth prospects locked in as well. Appoint on electronics worth noting, and I think in APAC in particular, the sale of equipment that we provide to many of our electronics customers is very important for us because while, you know, from margin point of view, not that exciting, the reality is the pull-through on gas sales that happen in the future, I think this kind of ensures that.

So feel good about that as well as we look at the second half. On the industrial markets, in I'd say to you, manufacturing, which you kind of specifically mentioned, looks robust, signals from the US market in particular where the recovery is most prominent, looks good, the feedback from the customer suggests that they see that outlook for the rest of the year as things stand today. Now, within that, you know, the indicators that we look for, and I referenced this again in my remarks briefly, sale in the US package business is a good leading indicator.

Here, the gas side has been growing a bit too high single digit with the hard goods themselves growing double digits. And I think that's where the confidence that the manufacturing recovery they're expecting, or not just recovery, I think the momentum that we're expecting and manufacturing the US likely to continue. We see that also elsewhere, Asia-Pacific sale manufacturing momentum pick up as well, despite the fact that, you know, there are some Middle East related challenges in Asia in particular, but the manufacturing underlying seemed to continue to perform well. So again, the outlook for that continues to be reasonably robust.

Aerospace did provide for more than a third of that growth for manufacturing. So to your point, I expect that momentum to carry on into the second half as well. Chemical's energy, you know, has been a little bit spotier. I think low single digit growth. We've obviously had the benefit of some good backlog contributions coming in in Asia. So I think that's looked good. But I do not see a fundamental shift in the chemical energy piece. Obviously, there's a lot of volatility in the market at the moment.

There are lots of geopolitical events that could impact one way or the other. And in part, you would see from our guidance that we have taken a neutral stand in terms of what's going to happen to the economy. We are happy for our investors to take a view on that because at this point, it's all speculation.

Metals and mining, again, pretty robust in the U. S. and in Brazil, I expect that trend to be about steady. Obviously, in the U. S. with all the build out that's happening with the incentives, et cetera. You know, metals are getting a little bit of Phillips, so that's good. Listening to some of our customers calls over the last few weeks, I've seen slightly more, slightly higher degree of optimism as well on steel. So it'd be good to see that flow through into the next half as well.

So I think that kind of broadly gives you a sense of where we are seeing momentum and what the outlook for second half looks like at this point.

Great, thank you so much.

So that'd be the middle east impact, as you know, and I'll start with helium just to begin with, because I think that's a good place to kind of give a sense of how we've managed and navigated that fairly complex set of issues. But, and then talk a little bit about what happens elsewhere. So starting with helium, I think as far as helium is concerned, you know, I'm really pleased with how our team has navigated this whole set of developments over the last many months, largely because, you know, we've done what we need to do in ensuring that reliable and safe supplies happen to our existing contracted customers. And we've had a lot of positive feedback coming from them because that's what they would expect from Lindy.

But more importantly, our teams have also gone out and they've signed up new customers with long-term contracts as well, leveraging the fact that we have, you know, the confidence in our supply chain due to the diverse, you know, sources that we have supplying into the helium supply chain, the cavern that we maintain, and of course, quite importantly, the capability around supply chain which just takes the terms of tanks, et cetera, all of that played well into, you know, a new business growth that we've seen.

We have had, you know, the pricing move along as well, which has been a good thing. Obviously, you know, a dislocation cost related to helium, the overall recovery probably doesn't quite show through in the margins just yet, but I fully expect that it will over the next couple of quarters. I think equally important to just underscore on the helium piece is the fact that looking ahead, we continue to be confident in our ability to maintain that supply chain despite, you know, the more recent developments in the Strait of Hormuz.

Any change in the Strait of Hormuz and the fact that we restart helium production back in Qatar and get the alignment of all the supply chain elements that need to come together between tanks and shipping and so on and so forth, I think we'll have a lasting impact for the rest of the year. I don't think you will see normalization this year, it will, you know, once those issues are resolved, which of course itself remains a little bit of a question mark today, once they should have resolved, we will see normalization progress at a small, you know, a slower pace than most of us would like and it'll kind of probably take us into the early part of next year.

As things normalize, yes, next year, we should see a more normalized helium market, but at this point in time, you know, seeing the resolution of what happens in the Strait of Hormuz is probably more important than speculating what next year is going to look like. Let me talk about some of the other markets. So where we have seen an impact on the Middle East crisis is the fact that in Asia, countries highly dependent on hydrocarbons coming out of the Middle East have had to scale back industrial activity. And I think, you know, markets like India, some parts of ASEAN, Australia and to a lesser extent, China have seen that.

And I think that that's where the impact over this second quarter, as we've kind of mentioned to you, is probably a little bit more visible. Everybody's hoping for a resolution. Once that happens, you will see that mobilization happen fairly quickly, but each of those countries has been looking at different strategies to manage these issues that they currently contain.

Terrific, thank you.

Hey, Vince, Matt, I could probably answer those. So I think first on helium, yeah, so we left a guidance intact. So by default, that kind of means no material change and helium would also be part of that. So to your first point, we didn't change it. And just kind of building off what Sanji said. You know, when you think about the helium business right now, what we've seen, we are seeing strong price improvement, but we're also seeing higher costs for dislocation, as Sanji mentioned. So the contribution on dollar basis, it is positive. It's not as large as we'd like it, but it's positive. But on a margin basis, that grossing up effect right now is a little bit dilutive.

That should stabilize, it normally does. But as you can imagine right now, meeting our customers and getting new contracts signed is the priority and doing it a positive dollar contribution is happening. It's just the margin gross effect right now is a little bit dilutive on that front.

You know, on the Americas, just to make sure I understand, I mean, prices up 2% over a year, sequentially we're flat. As you know, when we talk about sequential, I tend not to spend a lot of time on sequential just given the different tidings of some of the escalations that are done in the pricing actions. Year over year always is a more important metric for me.

So when I think about that, you know, it is, I'd say, for America's delivering our expectations, you know, obviously you're gonna have, again, we talked about link here, there's not pricing in that business right now, a significant amount. It is probably not keeping up with what it needs to be. So that will be a little bit of a drag. That's been the case though, for many years now.

So I would say pricing in America is on the year over year is tracking where we'd expect and what we wanna see. I hope that answers your question, but just make sure, you know, I don't know if you would follow up on that. Oh, good, thank you.

Thanks, David. As you know, our EPS algorithm lays out the fact that between management actions and capital allocation combined, we should be delivering eight to 12%. We're not looking for macro, as long as macro is not taking away from that, you should expect us to look at that eight to 12% range. And I think we will be consistent on that as we look at next year as well. Obviously, any tailwind that we get will be factored straight in, and you will see that improvement come throughout the EPS line.

Now, as you know, this is very early, it's talk about 2027. So later in the year, we'll have an early next year is when our guidance will be more clearer on that. Believe the year, we'll obviously be doing a lot of work planning for next year to make sure that we have a good handle on how the business is going to play out.

And to be clear, Healyam, should be a tailwind next year, is that fair? Healyam will be normalized next year. I think we'll have to wait and see what that means. The complexity of volume and price mix, I think will play a role in what Healyam does next year.

Thank you.

Hey, Josh, it's Matt. I could probably handle those. So starting on the CAPX, yes, you are correct. The CAPX number on the estimate was pumped up. Clearly with the backlog wins, that will drive that. So by adding the new project that Sanjeev mentioned in the prepared remarks, that is contributing to that. And yes, there are going to be more commercial space activities in the base CAPX. That also are contributing to that as well.

So the combination of those two, both the project backlog and some of the base CAPX will drive that. As far as the make versus buy, when you think about our traditional onsite customers, that always is something that has been something we manage for many, many decades, right? A traditional onsite customer would look to buy a plant versus outsourced on a sale of gas model.

And that's something we had always managed through usually a hybrid approach because we haven't capability to do both. I would say with commercial space, given the quantities of propellant they require, you're seeing a similar dynamic, at least with certain players that have comfort and the access of capital to have a desire to vertically integrate. Now this right now is primarily only with certain players in atmospherics. We are not seeing it in the hydrogen side, which is a very, very different dynamic for any hydrolox based engines.

So it's a normal occurrence, I'd say, when you start seeing these kind of quantities it's something that's very akin to how we navigate the onsite for many decades. And we're very comfortable with it. So absolutely I expect you'll see a blend of sale of gas and some sale of plant. Generally those sale of plants can come with what's called an operating and maintain.

So you tend to run it all as a system. You may run customer own plants with your own plants on sale of gas. And that gives the customer kind of the best of both. And it also helps manage our both capital and management of products. So I would anticipate that for certain customers, not all customers. And it also would probably only be on certain atmospheric.

I don't anticipate it at this stage at hydrogen. So that's how I see that develop. The only thing I'd reiterate there would be the fact that we will play for both sale of gas as well as sale of plant. So we do participate in the opportunity even if it is sale of plant in case people want to go to give you an integration.

Hey Matt, Matt. So the revenue to CAPX is always gonna be a function of whether it's atmospheric or whether it's processed gases like hydrogen. So as you can imagine, if you have a more processed hydrogen base that has energy passed through, that might be higher.

But traditionally for us, revenue has ranged anywhere from 20 to 50% depending upon energy passed through or totally. And I would just say of the ones we've won, they're very, very similar to the structure and ones we've already had in place on the first few phases. There's no real difference from that perspective because those contracts follow a very similar construct on both the molecules and how energy is managed.

I'd say that the materials business overall has been doing well. Sitting within that are coding services, atomizers, and some sputtering, et cetera. I think all in that portfolio is performing reasonably well under these conditions driven by aerospace, a little bit of the commercial speed build out as well.

And I think you have put that together. I think it's looking, the outlook, seems pretty robust for the second half as well.

Hey, Jeff, it's Matt. So I think the number is a little higher than what you have. So you're close, but I'd say it's probably higher, though. But you could probably say 30% higher than that number, give or take. So that is the Edwin we have. That's what we're facing. I think when you think about the Americas, it is clearly the largest piece. Now it does not include the institutional portion, which is actually run through our traditional gas business because of the nature of the contracts and the structure. But it is by far the lion's share of the Americas healthcare just given the size of the revenue of that business.

Sure, Jeff. Look, the challenges that lincare are not new, right? The business has served us well through the COVID period and the immediate kind of couple of years after that. But over the last couple of years, in particular, you weren't heard us reference it as well. It has faced persistent headwinds, right? From labor cost inflation and changes and reimbursement environment.

And I think those have contributed to these penalties that you referenced earlier on. Now we put a new management team in place, their focus is on improving the quality of that business. We've been proving the portfolio. Again, you've heard us say that in a couple of the calls over the last couple of years as well. There are aggressive actions currently in place to look at operational improvements and productivity.

Those actions will create the impact that we're looking for, which is why I expect as we move forward we will see improvements in that business. Now, in parallel to those aggressive set of actions that we put in place, we're also evaluating what the strategic options for this business are. And I wanna make sure that we do that exercise with diligence and determine one way or the other, this business is gonna have a meaningful positive impact on our portfolio.

Great, thank you.

Thanks, James. As you know, the backlog projects take typically between two to three years in terms of execution. By the time they come on, we then typically expect a ramp up to happen across the board. Now, the project that we have in our backlog at the moment, all met our investment criteria. We tend to look at them from a post-tax, double digit, IRR, unlevel IRR perspective. So they kind of hit the investment criteria and therefore are an attractive part of the future business growth that we're likely to see. But they do have a ramp that they go through before they actually hit their final margin contributions that they make. So you should expect that cycle of backlog projects is coming up, starting up, starting to deliver on margin contribution and then through the ramp process, ensuring that that moves up.

So I always expect backlog projects to continue to improve on their margin till they reach their full capacity utilization.

Thanks.

Kevin, I think in part you've already answered your question. There are three components to what is happening in the usual volumes, right? There is obviously base volume, which is positive. There are sale of equipment, significant sale of equipment elements sitting within there for the electronics customers that have had a somewhat disproportionate impact in this last quarter that we're talking about. And last but not least, there are some ramp-ups I was just referencing to James earlier on how we expect projects to ramp up. We're seeing a ramp-up of our backlog projects that were started up and are ramping up and in particular also contributing to that. You put those three together, I think you see that healthy 6% sitting over there.

Okay, and then I want to ask maybe a general question on your backlog. I mean, it seems that the electronics space in particular is quite vibrant and you're winning a fair amount of business there. Does that create a positive mix effect at all? In other words, if you look at your returns, let's say over the last decade, are they any better in the electronic space relative to all of the other end-use markets combined? Or would you say that they're similar?

Hey, Kevin, that's Matt, I could handle that. So as you probably know, and as we said, we make our decisions on IRR, right? That's how we make our backlog and our capital decisions. So it's not really a revenue or a margin kind of view more of an IRR, you know, undiscounted or discounted unlevered view. So from that perspective, I would say all of our projects, whether it's in any end market, electronics, energy, they tend to all fall within a certain consistent range because it's based on the risk and the terms and the conditions of what we're undertaking.

And of course in electronics, you're gonna have more purity requirements and you're gonna have probably more redundancy, which generally means more capital, but your return profiles tend to be consistent nonetheless. So we don't really see much disparity in onsite returns by end market. That tends not to happen. Where you can see different margin profiles is when you get the incremental process gases, rare gases, specialty gases that tend to come with large electronic clusters because those are more specialized, require a lot more effort on purity and manufacturing.

And so that's both on on the after fact, you can create some incremental margin opportunities. But the on sites themselves are very similar across all end markets. And again, IRR is what drives those decisions.

John, I'd say the headline over there would be business as usual reflected in a bit of a change in the mix. It's a clearly strong electronics growth. We talked about the backlog development. We expect the project pipeline for electronics growth in Asia, back to remain fairly robust. And I think that helps with some of the long-term investment profile that you're thinking about where we do see a little bit of a mix effect is where the traditional end markets, you know, for instance, you know, I do not expect to see significant steel investments happen in China, as an example. Now, if you go back a decade, clearly that was the case, but, you know, going forward, that's unlikely to be the area where you see.

On the other hand, you know, the flip side to that is in India, you're seeing traditional end market investments happen, which results in us seeing an investment cycle as well over there. And those are in the more traditional, you know, and other elements of manufacturing as well. So I think I'd say to you, business is usual broadly, the mix is changing a little bit, getting more positively impacted by electronics and then the rest being made up of the more traditional end markets.

God, thanks very much for the color.

Here on this, Matt. So I think a couple of things. Yeah, first, let's just talk about the comps in year over year. So if you may recall 2025, we had strong front half margins, weaker back half margins. So when you think about the whole year in the context, fully expecting us to see better year over year, just given how last year played out. So that's just a bit of a comp scenario. But as mentioned in the prepare remarks, and as we've stated, we have series of actions underway that we need to undertake to improve margins.

And I think there's going to be the focus, given that's the biggest driver. I do think some of the other aspects like higher hard and good sales and some of the sale of equipment, as Sanji mentioned, you know, we view that as actually positive. That's something we will continue to do that will get us greater wallet share and greater connection to future gas sales. So those are an integral part of our model that will always have been and will continue to be.

And you do tend to see those grow stronger in certain recoveries and as markets start to expand. But we will likely look to take some cost actions this quarter, depending on the size that's something we want to get ahead of. I mean, it is clear you're seeing more inflation around the world. And that's something that we have to manage to our productivity and our actions.

And in some regions, you're seeing growth, which supports it in other regions, you're seeing inflation without the growth. And that's an area we're going to focus on specifically for this quarter. Above and beyond our normal productivity initiatives, we normally take as part of our everyday DNA. So more to come on that, it's something we'll probably get a little more color on and what we've done in the October call. But I can tell you right now, these actions are already underway.

And we're accumulating all of them to get ahead of the next several quarters.

Basic, Abigail continues to grow well. You know, we consider that the, and we talked briefly about some of the options around space earlier on in the call. But, you know, we are on track for that billion dollar opportunity that we laid out over the next few years. I think 2030 was the timeline billion classes are what our expectation around the space markets was. Once it reaches a certain size, you'll see us split that out in our end markets and have more visibility around it.

Abi, thank you. Thanks everyone for participating in today's call. If you have any further questions, please feel free to reach out. Have a great day.