All right. Good morning, everybody. Thank you so much for joining us for this second day of the Wolfe Autos, Auto Tech, and Semis Conference. My name is Emmanuel Rosner, and I'm the lead autos analyst here at Wolfe Research. I'm very pleased to kick off day two of this year's conference with Aptiv. Through most of its years as a public company, Aptiv has been known as the industry's most technologically advanced supplier. Its portfolio of technologies includes ADAS, electrical distribution system business, where Aptiv has exposure to at least two times the content on EVs versus ICE, and when it comes to the industry's transition to more efficient consolidated compute architecture, it is the only supplier with a complete end-to-end solution.
Now, the last couple of years have been a bit more challenging, with organic growth in excess of industry production slowing from eight to 10 points previously to just two points in 2023 and around one point in 2024. Aptiv's guidance is for growth of the market to reaccelerate this year towards five points. We'll discuss what's driving this in a minute. And by March 2026, Aptiv plans to separate the EDS business into a new public company. Investors are still trying to figure out how to evaluate EDS and the RemainC o, New Aptiv, how to think about the competitive advantages of each, their sustainable growth rate, earnings potential, and eventually valuation. So to discuss all this, I'm extremely pleased to welcome Kevin Clark, who's Chairman and CEO, and Varun Laroyia, who's CFO of Aptiv. Thanks for being with us.
Thanks for having us. Appreciate it.
So let's maybe start our discussion today with trade. We're in a holding pattern at the moment when it comes to possible Canada and Mexico tariff, at least until early March. This could have major implications for the industry, as well as for Aptiv, as you're moving a lot of goods, parts into the U.S. So we don't really know what's going to happen, but I wanted to better understand some of the mechanics of your operation. So if a tariff was imposed, is that immediately borne by you? You would, of course, move to pass it along to the OEMs. How quickly does it happen? And what about your supply chain? You work with hundreds of suppliers that will likely need immediate relief. So how should we think about all that?
Yeah, it's a great question, and it's a complicated one, but to maybe frame up when you think about our exposure to tariffs, so global company, we operate across the globe. Roughly 30% of our revenue is North America, 30% Europe, 30% in Asia-Pacific, principally China. We run a very regionalized supply chain. So China for China, basically North Africa, Eastern Europe for Europe, and then North America is North America, principally for us, Mexico. That's where our operation sits, so to give you a perspective, we have roughly 65,000-70,000 employees that sit in Mexico and have over 30 manufacturing facilities there. For us, the biggest exposure really is Mexico, U.S. In terms of Europe, U.S., China, U.S., and vice versa, there's very little that we buy or manufacture that flows across those borders.
So the real challenge for us in terms of what's being discussed now is trade between Mexico and the United States. To size it from a dollar standpoint, we export out of Mexico roughly $4.6 billion of product on an annual basis. The bulk of that is wire harness content, so large vehicle wire harnesses. That is a product where that's virtually where the industry capacity resides in Mexico. So it's not just Aptiv, it's anyone else in the wire harness space, in the seating space, and other areas like that. So from an industry standpoint, it's a challenge. And I know we had speakers here yesterday from the OEs, but to put it in perspective, there's roughly $90 billion of goods that flow from suppliers to OEMs in the U.S. for assembly on an annual basis. So we're a small part of that.
For us, given the nature of what we do, that'll be passed on to the customers, so it's not we absorb and then recover, it's passed on to the customers, so they'll have to pass that on to end consumers, so as we think about how this impacts us, indirectly, it's a vehicle production outcome, so as prices of vehicles go up, how does supply demand work out, and what does that mean from an overall production standpoint and ultimately our revenues? When you look at the broader supply base, again, that's something that we've been highlighting with all of our customers as well as with the supply base. Our concern is about the automotive industry, the weaker suppliers out there who maybe have more concentrated exposures, whether it be OEM or product, and how does the industry make sure that they are able to manage through any situation like this? So it's complicated. It's disastrous for the industry if implemented. It will translate into vehicle production reductions and obviously will impact the profitability of the OEMs.
And then longer term, how are you thinking about potentially de-risking this issue? Presumably, it's a bigger exposure for EDS versus new Aptiv. But you've talked about moving more of the wire harness business that is almost entirely in Mexico to Central America. Would you look to accelerate this move if tariffs were implemented? And is there opportunity in general to move any manufacturing to the U.S.?
Yeah, we have four plants in the United States, but when you look at wire harness production, and we've seen a significant amount of wage rate inflation, direct labor inflation in Mexico over the last three years. So as a part of that, to offset a part of that, we've implemented plans to move some manufacturing facilities into Central America. And that's in process now. So we have a plan to move roughly 25%-35% of our overall production to Central America. When you look at the numbers, though, when you put the context of wage rates and tariffs in context, tariffs would have to be at 55% of value for it to justify us moving assembly of wire harnesses from Mexico to the United States. So it's a structural matter for the industry.
The supply chain between Mexico and the United States is something that has evolved over the last 30-+ years where certain activities that were highly labor-intensive, which is certainly on the wire harness side or the seating side, where productivity, efficiency, cost reduction could be generated so that OEMs could support production in the United States.
Just to add to the piece about the tariff retention increase, this is before we take into account as to what the capital expenditure would be required to kind of reshore, so the return on that. So the hurdle rate becomes pretty high.
Yeah, and that makes sense. I wanted to pivot to the expected split of the company, your spin-off, a new Aptiv versus EDS. You had a big announcement a few weeks ago. You said that Aptiv will be spinning off the electrical distribution business, which is an $8 billion business. What you're keeping, the new Aptiv, is a combination of your terminals and connectors businesses, your active safety and user experience portfolio, and Wind River. Maybe talk to us about the decision to structure the deal this way. Why separate EDS, which is somewhat low growth? Why not separate, for example, engineered components instead of EDS?
Yeah, so our outlook for, I'm not sure I'd characterize EDS as low growth. It's lower than our AS&UX business, given the nature of the technology. So our outlook in a flat vehicle production environment is EDS grows roughly mid-single digits. It is the leader in the data and power distribution industry, so strong presence across the globe. When you look at the margin profile of that business, it's literally 2x any of our competitors, even with some of the challenges we have with labor inflation in places like Mexico. Given the margin profile of the business, so call it high single-digit sort of EBITDA margins today, growing to 10% and beyond in the out years, kind of mid-single-digit revenue growth. The nature of the business is different. It's a program-oriented business. The other two businesses that will remain within Aptiv are really product businesses.
It's a business where when you think about what our customers look for, there are two primary ingredients. It's cost and quality. It's what they're really, really focused on. Versus in the other two businesses, it's really about what value do we bring, what technology do we bring, and do we bring cost effectively? So the mindset is very different. We're really focused over the next five years on significantly ramping up automation of the manufacture of the wire harness. We have a number of strategic relationships with OEMs where we're modifying or working with them on how they design vehicles. And as a result of that, what does that mean for a wire harness?
And then how do we drive automation in our plants, as well as how do we help them drive automation in their plants as well so that we simplify the installation of a wire harness in a vehicle? We're going to ramp up some capital spending in terms of footprint rotation, as well as investment in automation capabilities. So today, we run at 18% of our direct labor hours are automated. End of 2026, we'll be at 30%. By end of the decade, we'll be at 50%. So it's a great business with a great competitive position. We think we're in a great position to, quite frankly, gain share organically and inorganically. There's some incremental investments that we need to make.
But when you look at the margin profile and nature of that business, when you look at the margin profile and nature of what will remain in Aptiv, they're different. The reality is they're different. And we need to provide that business with the flexibility to make those strategic decisions and have a shareholder base that aligns with the realities of that business: mid-single-digit growth rate, solid operating margins, but not at the operating margin levels that the balance of the Aptiv business currently operates and will operate at, and position it for success.
Maybe focusing on Aptiv, RemainCo. I'm seeing investors have been trying to figure out how to value both businesses. But with new Aptiv, I'm seeing you'll have about half of the revenues tied to the engineered components, mainly terminals and connectors. You have good non-autos exposure as well, but less than some of your connector peers. I think you're expecting some mid- to higher single-digit annual growth here long term. Talk to us about what you see as the competitive advantages that Aptiv has here. And how's the margin profile of ECG specifically versus some of your public comps in terms of the outlook for the next few years?
Yeah, ECG has a clear line of sight in terms of public comps. So it's an interconnect business, a cable management business. So this audience is all aware of who the players are out there. I would say we have a higher concentration of the business in automotive. So a little less than 80% of the revenues are automotive-related revenues. Strong margin profile, comparable margin to the competitors that you're aware of in the automotive space. When you look at our position outside of automotive, so aerospace and defense, telecommunications, industrial, comparable margin structure, but it's a lower % of our overall business. Over the last several years, we've been really focused via acquisition. And you look at our acquisition history of building out our capabilities in that business.
First, within automotive, we acquired a company called MVL back in, I don't know, 2012, 2013, and then KUM, a Korean company as examples back, I don't know, 2015, 2016, to build out our automotive capabilities from a regional standpoint. We have everything we need now. So now the real focus is how do we expand outside of automotive? So high teens sort of operating margins, that's the perspective you should have on that business, mid-single-digit growth rates. The ASUX business is really two aspects to that. There's a very strong ADAS business where we provide full platform solutions as well as portions of a platform.
So, perception systems, radars as an example, higher growth, so high single-digit, low double-digit revenue growth, margins in the mid-teens sort of growth rate, a big mix of software that we're trying to continue to build on so that we can provide customers with all or a portion of the software stack within the vehicle. Roughly 80% of that revenue is automotive. The balance is non-automotive, and it's principally telco, aerospace, and defense.
And just going back to the engineering component for a minute, how should we think about the investment priorities for this business over the next few years? I think the message was this is probably an area where you'd be looking to do some acquisition.
Yeah, we'll continue to do acquisitions in that space. It's an industry that's consolidating. There are a number of M&A opportunities. A number of the assets are private equity-owned, so they need to be monetized. And we have a long funnel of M&A opportunities that we keep track of.
In terms of focus there, it's to expand the non-autos exposure?
Expand the non-auto, yes.
Timing, would that be before the split or after or doesn't matter?
Yeah, listen, we'd like to. It depends on value, and it takes two parties to agree on something. But we'd like to, if we can, do a couple of transactions in 2025.
Got it. And then going back to AS&UX , this has long been the main secular growth engine for Aptiv, at least the highest growth, and it certainly was from 2018 to 2022. But then we've seen a few more challenges in 2023 and 2024, especially in user experience. Your guidance, which you initiated a week or two ago, has AS&UX up 4%, 5% this year and also through 2028. No, through 2028, it's probably more like high single digits. So what gives you confidence in that acceleration? And do we need to see re-acceleration in user experience?
Yeah, we'll continue to see within user experience, maybe explain what it is. There are three aspects to that. There's an in-cabin/driver monitoring system that sits in user experience. You could debate whether that's user experience or ADAS-related, quite frankly. So more advanced monitoring in the cabins, oftentimes tied to more advanced ADAS solutions. That's one. Second part would be domain controllers, cockpit controllers within the infotainment realm, which we've been seeing actually for the last couple of years that get up integrated into the ADAS controllers. So we have a strong position in both. So we think we'll benefit from that trend. The third is what I'd call more traditional sort of infotainment business that those of you who've been around for a while are familiar with. So think about players like Harman.
We have two programs that are in runoff now, one with a multinational joint venture in China and then one with a German OEM. We have a number of new programs that we'll start launching later this year. So we'll see the decline in revenues continue for the first half of this year. And then you'll see that decline actually reverse itself beginning to flatten out and then reverse itself in 2026. So that's a part of it. ADAS is very strong. Last year, when you look at the impact of really four or five customers on the overall Aptiv revenues and our revenues, a D3 in North America where we have a significant amount of ADAS business, a global European OEM that has large operations in North America as well that had significant production costs we were impacted by, and then one of the large German OEMs. Our view is we'll see their situations at a minimum not deteriorate as much as they did in 2024, so we'd expect to see more stabilization of production, and because of that, we'll get a bit of a benefit in terms of year-over-year growth rate.
Maybe one more on ADAS. Pretty topical. BYD has created some interesting headlines earlier this week with this God's Eye where they essentially want to spread it pretty much standard, some sort of like semi-autonomy on vehicles of all sorts of price points. When you sort of see that kind of behavior out of essentially Chinese automakers, is that something that is helpful to you? Because essentially, other OEMs get to watch this and say, "Wow, look at this capability. We need to get there." Or is that something that could be viewed as competition?
Yeah, listen, those announcements, there's no surprise. We're not surprised. The reality is ADAS is democratizing, and you're seeing expansion across both down and up vehicles. So that trend will continue. OEMs need ADAS solutions. They need to be cost-effective, but they need them. Customers pay for ADAS solutions, which is one of the few options in a vehicle that customers are actually willing to pay for. And rebuy rates are, I don't know, 95%+ . So it's something that consumers look for. I think it just validates the growth opportunity within that space. For us, when you think about the China market, we're uniquely positioned. We have our Gen 6 ADAS platform, which is a global platform. But in China, we have either investments or partnerships with Chinese vision providers, Chinese SoC manufacturers. We've done everything we can to localize what has to be localized or what our customers want us to localize and provide them with flexibility. BYD, although we're not on current ADAS programs, we would expect that to be an incremental opportunity for us, especially as they manufacture outside of China.
Going back to EDS, so for this year, we're expecting organic revenues to be broadly flat. Last year, revenue was down about 6%. But then your midterm view to 2028 is probably mid-single digit sort of organic growth rates. What will get it to re-accelerate, essentially? I would have thought after what was challenging customer mix headwinds last year and easier comps, would maybe have seen that already this year?
Yeah, I would say two things. If there's a headwind, one is customer mix. That will take a little bit of time to play out. If there's a tailwind, it's electrification. We're firm believers in electrification. Obviously, it's going to be slower in North America than other markets. Our outlook this year for the increase in EV production is roughly 15% from a unit production standpoint. Put that in perspective, IHS is at 20%. Our revenue guidance assumes 10% growth in EV revenues for Aptiv. I would characterize that as part of the conservatism that we've, quite frankly, built into our outlook for 2025. I think a lot of that plays out within the EDS business.
Just to make sure I understand your point, you still think there's some customer mix headwinds this year impacting?
I think there's some amount in China, the mix of China multinationals versus locals, so we have, relative to our other two businesses that we talked about, more concentration with the globals in China versus the locals, so that will still be a headwind, then the tailwind will be continued EV adoption, and what I mentioned, those customers that we should see an improved growth outlook in 2025 versus 2024.
On your China points, you had indicated by the end of this year, you expect to have a mix that's more reflective of the underlying market.
Right. Yes.
Now, longer term for EDS, what will be the impact of the Smart Vehicle Architecture on this business? You've talked before that as OEMs transition to consolidated electronic architectures, it would result in maybe less wiring content. We've seen that with some OEMs, Rivian, for example. New Aptiv would obviously benefit from additional domain controller, zonal software. But how should we think about the impact on EDS longer term?
Yeah. So OEMs are focused on how do they take weight, mass, and complexity out of the wire harness for cost reasons, for range reasons on electric vehicles, for quality reasons. And that's something, quite frankly, we've been very focused on since 2017 when we launched our SVA concept in terms of how do we cannibalize our existing business. Now, that requires OEMs to change what they do and how they do, as well as suppliers like ourselves. So it really needs to be a strategic relationship. And when you think about weight, mass, principally in a wire harness, that's copper. And for us, copper, it's an indexed item. So we're paid, price goes up and down based on the price of copper. So from a value provider margin standpoint, margin rate standpoint, really de minimis impact. From a top line, it can impact that business.
So it's really taking the non-value-added part out. But when you look at SVA in its entirety, what happens? So a wire harness does get more efficient, more effective. Mass comes out. More content goes into what sits in the ASUX business. So it's high-speed cable assemblies or specialized connectors in the ECG business. It's advanced compute in the ASUX business. So when you see us book SVA awards, it's in ASUX booking. So there'll be a shift in terms of content opportunity. Now, again, we're big believers that you're going to continue to see a tailwind from electrification. So businesses like EDS will continue to benefit from that overall trend. So that'll be an offset to some of the content that comes out of the wire harness.
And then, on the margin side, in terms of the outlook, so I think EDS EBITDA margin maybe 9%+ . You got automation initiatives, maybe some footprint plans for this business. But looking at 2028, you've only, I think, pointed to EBITDA margin climbing to 10% + So what are the puts and takes on the cost side?
No, we pointed to margins at 10% +. We think there's meaningful opportunity. We didn't feel the need to be more precise than that, quite frankly, as it relates to guidance out three years. The big driver of that performance is really footprint consolidation and rotation, a reduction in labor rates and some material cost savings. So we think on a relative basis, the margin enhancement in that business is actually the opportunity is actually very significant.
I was wondering how cash generative this business could be, doing some very basic math. It seems like it could be a pretty strong cash generator, maybe, I don't know, $250 million or so on RMAS. But please let us know if that's the right ballpark, which at current market implied valuation would be obviously a very strong free cash flow yield.
So near term, our real focus right now, so near term, it won't be that attractive. And that's because we're investing capital, roughly $250 million over the next three years, incremental, above and beyond what we typically do to rotate footprint and invest in automation. So there's incremental investment that'll take place near term that will generate big benefits post-investment. But I think the zip code that you're talking about, kind of post three years out, is the range that the business should operate at.
Maybe finally, just on this split, any new thoughts on potential capital structure for the two separate entities? If you put too much net debt in SpinCo with its lower EBITDA and presumably lower multiple, there may not be that much equity value left. Any further thinking since your announcement around how to structure this?
No, absolutely, Manuel. Listen, we've been very, very thoughtful about ensuring that it's a great business and we position it for success. So based on the capital commitments that we've made with regards to footprint consolidation and rotation, we're conscious about that. And as you think about the two businesses, the new Aptiv remains investment grade, but we're positioning EDS as a strong sub-investment grade business. And given the strong cash flow profile of the business, some of the capital needs near term, we've been conscious about how we think about that. So think about with the range of two to three times of leverage as we separate that. And then there would be a dividend back to new Aptiv as a result of that, which allows them to not only continue to invest in what they need to be competitive on a long-term basis, but also position them for success.
Finally, maybe just turn back to your 2025 outlook, which you initiated recently. So you guided to 2% organic growth in 2025, but that assumes industry production down 3%. So it would imply about 5 points of growth above that market. If I look at 2023 and 2024, you did 2 points and one point respectively. Customer mix has been a big challenge, especially last year, especially among a handful of some of your biggest customers. But help us get comfortable with this acceleration in the outgrowth. What's the main drivers of going to 5 points this year? And with a slow start of the year in Q1, how will you get to these high single digits by the end of the year?
Yeah. So listen, I think what we provided background on was our outlook for vehicle production and then our outlook for revenue. Vehicle production could change. It could affect our revenue. It may not affect our revenue. So there's an element of kind of that production mix, the denominator that we just don't control. So I want to start with that. We're very confident in our revenue growth outlook. We've spent incrementally more time than we usually do going through OEM- by- OEM, platform- by- platform, power plant- by- power plant, region- by- region, and triangulating between customer schedules, IHS, other third-party sources, and what we're comfortable communicating from a guidance standpoint, especially given what we went through a year ago. So we put forward significant haircuts.
I think our outlook for things like 10% revenue growth in EVs is pretty conservative, especially given some of the platforms that we're on from an OEM standpoint. So that's the process that we've gone through. And I think we feel extremely comfortable with the guidance that we've given in relation to that. We think our outlook for vehicle production and the mix is pretty solid. But again, there are certain platforms we don't have content on or as much visibility to.
In terms of underlying drivers of acceleration, absence of mixed headwinds, is that the biggest one? Is high voltage the biggest one?
It would be some tailwind from high voltage. Last year, launches were up 8% year-on-year last year. Starting in the Q1, it takes a few years for actual programs to hit kind of scale. We're going to benefit from those launches as we come into this year and in the back half of the year. I think, transparently, I think if you do the math on the year-over-year growth rate and you kind of normalize last year, roughly half the year-over-year growth rate is more of a normalization driver.
And your slide from last week, you talked about close to $400 million of higher labor costs, which you're offsetting with about $400 million of productivity. First, can you talk about what those productivity measures are? And then, still surprised to see labor costs still rising this fast. Can you just talk a little bit about that and if we're going to see any automation-related savings this year?
I'll let Varun take the numbers. I'll make a comment. I think it's important to put in context for the automotive industry in Mexico the last year, 2023, 20% + wage rate inflation from a direct labor standpoint. The closer you were to minimum wage or the lower your wages were, the more the greater the increase you saw. The Mexican government was very, very focused on how do they increase the standard of living of especially those in Mexico who were of lower income. There was a lot of pressure and, in fact, mandated increases in minimum wage. We experienced in 2023 and 2024 north of 20% wage rate inflation there. We absorbed it. We pushed most of it through to our customers over a period of time. This year, our outlook for wage rate inflation is roughly 15%.
So it's actually less than what it was in 2024 and 2023. Part of that, I believe, the government being supportive of the pace of acceleration for players like ourselves. And then there's some initiatives underway that have been pushed out in terms of length of the workweek, holidays, things like that, that will drive costs up in Mexico from a wage rate inflation. But the Sheinbaum government seems to be very focused on how do they do it in a very measured way versus the prior administration was how do we get as much through as we can as quickly as we can. So.
Let me touch upon the productivity side of things. So if you think about what Kevin mentioned earlier, footprint rotation, footprint consolidation. So with regards to footprint consolidation, two plants in China, another four in Mexico. So just kind of consolidating given the capacity. And then obviously the rotation out also, for example, from Eastern Europe into North Africa, Morocco, Tunisia, and again, looking at Egypt, for example. And so in China, kind of apart from the consolidation, moving further interior. So that's the kind of footprint rotation and consolidation piece. If you think of also engineering resources and moving engineering resources to best cost locations, that's another piece. Wind River, we've kind of deployed that engineering capability across our engineering organization. We're seeing tremendous productivity come through from there also. These are all elements that are in flight already. It's not as if these are new programs.
And so being able to harvest the benefits of that, we feel comfortable about getting some of those benefits. And then the final one is just kind of given where the market is, we have initiated a further 5% global salary reduction. This goes back to at the end of 2023, we've done a 10% reduction, another 5% in 2025. We won't get the full benefit of it in the current year, but we will get a substantial portion of that. So just to give you a quick sense in terms of how we're thinking about productivity to offset some of the labor inflation elements.
And then one topic that came up in last week's earnings call, and since this is also a semiconductors conference, you basically spoke about a planned increase in inventory of semiconductors, which had an impact on your planned working capital for this year. We've got quite a few semi-investors here, and I think the comment caught some by surprise. So what kind of chips are you looking to build inventory for?
So again, this goes back to legacy nodes. Think of 90 nm, 65 nm typically used for power management, voltage regulation. Naturally, it is where it is. And if you think about where the investment is going in from a semis' perspective, it's going towards the leading edge ones, so kind of thinner, faster, smaller chips, for example. There isn't more capacity going into the legacy side of things. And as you go back to a few years ago where we had to pay a fairly large sum in premium freight to make sure that we weren't leaving our customers with shutdowns. So it is a strategic investment we are making. That's what we have planned. That's what it's for with regards to where we're making those investments. Just to kind of size the overall number, it's a little bit over $200 million, roughly spread out between the first half and the second half. Clearly, based on demand, based on supply, we will calibrate in terms of the pace of that investment and as and when it's needed.
Yeah, we're worried about the capacity that hasn't gone into the legacy nodes. And we're worried about increasing demand for things like computers, laptops, items like that, especially with increasing usage of AI models that we're going to see allocations away from automotive and areas like that. So we just want to be in front of it. And if we don't see tightness, we won't make the investment in the incremental inventory. If we do, we will.
It looks like you're expecting to generate about $1.2 billion of free cash flow this year. You're also ending 2024 with $1.6 billion in cash. I think you mentioned paying down debt and bolt-on M&A as potential cash uses in 2025. Can you help us dimension that, and what would be the priorities for M&A?
Sure. Essentially, let me kind of go back in terms of the capital allocation side of things. You mentioned debt pay down. With the ASR that we did last summer, we've taken on some debt, but we'd also made a public commitment that we'd be delivering by about $1 billion by the end of 2025. Given the ongoing strong cash performance of the business, we essentially paid down $350 million of a $600 million Term Loan A that was due in 2027 in December, and then a further $250 million in the run-up to earnings. So essentially, the Term Loan A of $600 million has been completely retired, number one. We think of our pan-European factoring facility, roughly about $450 million. There's a natural roll off that takes place in any case. That pretty much will also be kind of extinguished by the end of the Q2.
We have an ASR running, but that's been funded upfront, so we can't be in the market. So that'll kind of run its course through the middle of the Q2, which then kind of gets us back into the second half of the year, and with the kind of free cash flow generation continuing, it's essentially a couple of points. One is, as Kevin mentioned, we'd like to get back into the market with some bolt-ons, specifically, for example, on the ECG side. If there's something on the stack from a software perspective on ASUX or for that matter, some organic investments that we could do, for sure, we'd like to invest back in the business, but clearly, you need two to tango, as they say, and it's not always clear in terms of when those opportunities will come to market. The backup obviously is we have a $2.5 billion authorization on share repurchase program. The ability to obviously benchmark against that versus other investment opportunities.
That is very clear. I think we're basically fresh out of time. So Kevin and Varun, thank you so much for being here. Thanks for the insights.