Afternoon, everyone, or good morning. My name is Sheila Kahyaoglu with the Jefferies Aerospace, Defense and Airlines Equity Research team for those on the webcast. We have Moog with us here, Pat Roche, who is President and CEO, and Jennifer Walter, who is EVP and CFO. Thanks both for being here again at the conference, despite no coverage, but always potential. For those new to this story, maybe if you could just give a quick overview of what drives Moog going forward.
Thanks, Sheila. Yeah, it would be great if you joined in to coverage, but we are happy to support you at the event today. Moog is celebrating its 75th anniversary this year, so we were established in 1951. First product of the company was on a missile fin control, ship-to-air missile. That is the founding of the company, and there is a trajectory through its entire life which has been around missiles, developing onto intercontinental ballistic missiles, and then you go on to the Gemini program, Saturn program, and Artemis most recently. So we are doing thrust vector control, actuation on all of those rockets and missiles. That is where the company has come from. It expanded capability over the years to do systems of systems engineering.
If you look at an Embraer 2 jet, we do everything from the moving surfaces on the wing through to the flight control computer in the cockpit. So a really broad range of engineering capabilities in the organization. We do precision components from hydraulic servo valves through to slip rings, electric motors, ball screws. So all of those technologies that allow us to do motion control and fluid control, basically, for our customers. Applications we go after are either mission critical, flight safety critical, or have high economic impact if they do not work. That is a common feature across our business. Culture of the company is really important. The reason I bring it up here is over the last three years, we have had a Glassdoor award as one of the 100 top best places to work in the U.S. for companies of over 1,000 employees.
So we are very proud of the fact that we are recognized for that, but that has been a feature of our company over its full 75-year history. Why it is important is the employee value proposition, that this is being a great place to work. It helps us as we are ramping, in these times, to attract new talent into the organization. So it is a differentiator for us. That is a little bit about the background of the company. The applications we are on, we design the IP. We are sticky in those applications because you are qualified for them, so we are hard to displace from many of the applications that we do.
Great. You've had a remarkable run of operating performance. How would you frame where the company is today versus a few years ago, and what's changed the most in terms of portfolio and execution?
I think overall, there's a fundamental change that happened from a few years ago, and that's really accountability for the leaders of the business and making sure that we've got clear expectations as far as what performance looks like. I would say we are very deliberate about those and aided those in some very simple restructurings of our business so that the businesses actually have control of their resources, their destination, and their outcomes. That was a fundamental change. To achieve the results that they did, we really focused on some things that we've been chatting about, and that's pricing and simplification. They've used those tools to help in their execution. The execution has delivered. Overall, the nature of the products that we supply, that hasn't changed. Our overall markets that we served, that hasn't changed.
It's really the discipline that we put in and the accountability that is the core change that was made, and then the focus on the pricing and simplification as the tools that we help to achieve those results.
That's great. Maybe touching upon your backlog and just the demand environment. Backlog is up 23% to $3.3 billion, outpacing your revenue growth of 15%. How should we think about the conversion of that backlog over the next few years? Also, how do you think about your supply chain's ability to meet as well as the labor element?
Yeah. Thanks, Sheila. The backlog itself that's listed there, that's our 12-month backlog, so that will get executed over the coming 12 months. Our total backlog is about $7.1 billion. The backlog is growing faster than the sales revenue, you are correct. If I go back to Investor Day, which was June 2023, we said our rate of growth at the top line would be between 5% and 7%. We have exceeded that for the three-year period. Our overall growth rate will be around 9% CAGR over the three-year period. Year-over-year, given our 2026 guidance relative to 2025, we are probably up 14%. It is true that revenue growth has strengthened over the time. It is a result of tailwinds in the market, for one.
I think more importantly, our capability to deliver for our customers has secured us additional wins, has taken wins away from competitors, and is gaining us new scope on some applications as well. We are growing faster, we think, as a consequence of those things.
Any way to parse that all into the 14%? As you think about your backlog growth, what surprised you to the upside from an end market perspective? Then maybe if we could think about the pricing and the new wins element coupling into that 14%.
I think our Space and Defense business has grown faster than was originally anticipated. A lot of growth is coming through there. I guess the surprise might be at data center cooling on the industrial side and the stability in the industrial business. The rest of the industrial business is holding up, and then you have this hotspot associated with data center cooling that has added extra fuel on the industrial side in terms of growth.
You've noted some additional content wins and new win rates as well in defense and space. I guess, how do you think about some of the missile agreements that haven't flowed in, and how that could add to the growth rates?
Yeah. As you said, we have record backlog, but yet none of that backlog includes the buy two, buy three, or buy four rates that were on the missile programs. Missiles for us is about $275 million of revenue in FY 2026. It's grown probably at around 20% plus growth rate over the last year or so, but that does not yet reflect anything coming through on those higher production rates. We are in negotiations with all of the primes on those missile programs. We have a high level of exposure to the Mach 12 missile programs. We're on PAC-3. We're on PAC-2. We're on THAAD. We're on AMRAAM. We're on Standard Missile-3. We're on Standard Missile-6. We're on Tomahawk.
As all of those go through ramp increases, we will begin to see that coming through as orders to our business probably in the next three to six months.
Great.
Pretty detailed negotiations with all of the primes on those.
How do you think about when they get funded for that CR being funneled in there as well, and that flowing into your backlog and revenues, the timing of that? Is all 12 months?
On the missile programs, I see those as the highest priority for the U.S. government at the moment, so I believe that the missile programs will all get funded. Certainly, the conversations we're having with our customers are not about if, but about how quickly you can ramp, and even asking for faster ramp rates than have been discussed over the last two years.
Can we talk about going back to that ability to ramp or just ability to convert on your backlog? What are you seeing in the supply chain today versus 12 months ago, and what are you anticipating in the next 12 months?
Yeah. I think that's a great question about ability to ramp, and I'm going to broaden it out to four factors. I think over the last few years, we've been investing heavily in capital. As you know, for our business, we spend roughly twice the level of our peers on capital investments. That's been preparing us for growth. These discussions about ramps on missile programs have been going on for 18 months or 24 months, where we've been doing scenario analysis. How do you ramp? What do you require in your own facilities? What new manufacturing equipment do you require? What talent do you require? We've been looking through this for quite a while, so we've been preparing for it. We've been investing in optimizing our facilities from the perspective of ensuring that we're doing the right things in our business.
The simplification has helped take out some businesses that were extraneous that we didn't want anymore. That has freed up space that allows us to accommodate some of this ramp. We've also invested in some new facilities. Again, that helps us with the ramp that's coming. So that's on the facility side. In terms of people, I think it's equally important. We invested in a training center in our headquarters last year, spent $6 million on standing up a training center that would allow us qualify machinists more quickly and bring them into production. And we've delivered results on that, so we are able to bring someone into the organization and have them fully productive within four months instead of six months.
It's reduced that by a quite significant margin, and introduced people then into the production process who are less of a burden on their supervisors because they're not doing as much on-the-job training, and also they have less errors and defects arising as a consequence of that. That was a learning we took from the ramp-up after the pandemic, where there was a lot of change in people, due to people taking early retirement, so we had to learn how to more quickly bring people into production. So we've proven we can do that. On the supply chain side, on the Space and Defense Group, we've set up what we call bimodal teams.
In addition to the team that's running the current business and executing and delivering for our customers, we have a second team stood up that's looking at the ramp that's ahead and how to ensure that the supply chain is robust enough to be able to deliver, which is critical to our success as well. And so that's identifying any weaknesses in it, any single-point failures in it, and addressing those, either dual source. Some cases we've looked at what's going on and decided we might want to in-source some of that activity if the supplier isn't strong enough. And so they're the decisions we're actively making at the moment. But a proof point for our ability to ramp, if I look at the data center cooling pumps that we're doing, we've quadrupled our production of those within 12 months.
The process you go through to bring along your supply chain with you and to optimize your internal manufacturing to quadruple rates, I think we know how to do, and we've proven it in other product lines as well. We've seen ramps on the commercial side that we've responded to well. We've ramped previously on Hellfire missile production by a factor of four if I go back a decade as well. We know how to ramp.
That's great. I have some questions about how you get the workforce going, because it seems like no one else can, so that is interesting. You guys do it with accountability and culture and such a nice demeanor, so kudos to you guys. Switching maybe to commercial aircraft, how do you think about, you've delivered stronger margins there from a volume, price, and aftermarket perspective. What's some of the improvement driving that, and how do you think about it going forward?
Right. There's a few factors that we've got. Let me start with actually some of the pressures. This business is actually pressured by tariffs, maybe about 200 basis points of pressure comes from this, so it's more significantly impacted than some of our other businesses. There's some differential there.
Why is that, Jennifer? Sorry. Why do you have the tariff pressure?
We have the tariff pressure because of the products that we wind up bringing into the United States and where their source of origination, as well as the type of materials that we bring in.
Is there no way to in-source it going forward in any way?
We have taken certain actions to not bring things into the U.S. where we do not have to and reroute them, and that is helpful in mitigating and reducing the overall impact that we started off with.
Got it.
There are a number of other initiatives that we had earlier, this was maybe a year or so ago, where we did have airlines sending stuff back into the U.S. for it to come out. That should be exempt. Not everyone's filling out the appropriate paperwork to do that. We got over that in a quarter or two of refining it. There's a number of different things that we've taken action on to reduce the amount of tariffs that we have, but a lot of it is structural in place for us. That is one thing that is impacting us. You mentioned aftermarket. We do have very strong and robust aftermarket. However, as a percentage of sales, it has actually decreased in the past couple of years, and it'll continue to decrease in a couple of years from now.
That's just because the ramp rates on the OE side of the business are growing so fast relative to aftermarket, which is also growing strong, just not to that same level. Those are some of the pressures we have, but we're overcoming them with the activities that we've got. Pricing. We did a number of activities on pricing on the OE side of the business, and as the volumes are ramping, we are seeing the benefit of those pricing things get into our results. There's also simplification efforts that we have going on. Some of it benefits us from the working capital side by reducing the overall manufacturing side of our products, whether it's stuff that we're doing in-house or whether it's our supply chain.
It's a combination of both of those things that are bringing the efficiencies to offset some of the headwinds that we've got in this business.
Can you talk about some of the largest program drivers and how you think about additional win rates there?
Yeah. Our exposure is significant on the wide body platforms, so the 787 and the A350. We've got all the content for the flight controls, the primaries and secondaries on the 787, and the A350, we've got the primaries and most of the secondary flight controls. So those are entire systems, very significant content per aircraft. On the narrow bodies, these came out well before the wide bodies came out, or at least the original design of them.
Sure.
Those were parted out on flight surfaces at the time. We do have flight surfaces on those aircraft, but we don't have entire systems. No one has the entire systems on those. As we look to the future, I think the next opportunity is going to be the next generation aircraft that might come out four or five years or so from now. That would be the next opportunity. I think when we go into thinking about planning for those things, we want to be deliberate about the contracts that we get into, understanding what the profit potential is, making sure that we can manage the ramp rates and volumes of something like that, because it's more similar to a narrow body than a wide body as far as level of production rates go.
Those are some of the considerations that we do as we look forward to the next generation that would be out there.
Can you talk about some of your value-based pricing benefits, where you've had the most traction, and on the next generation aircraft, I'll follow up on the next gen.
Okay.
Where you are adding the most in terms of value-based pricing here today? As you have kind of done.
On the commercial aircraft side of things?
Yeah, on commercial aircraft.
Yeah. I would say we started this journey a few years ago, and at the time it was really project-based. It was, let us go talk to our customers and really ensure that they understand what value that we are bringing to the forefront, and really making sure that we are having the conversations in a long-term partnership type of an agreement. We want to be there for their next generation. We want to be there for the long term. But we also need to make sure that we are getting pricing that is fair for what we are currently doing. Those are the conversations that we would have originally in addressing the pricing types of issues.
I would say for the most part, that reset happened about three years ago or so.
Right.
We got what we needed to drive the business forward in what we think is a more fair and equitable manner. Every contract that comes up for renewal, though, we have still got that same focus.
That makes sense. As we think about the next generation aircraft, four to five years is potentially when they will launch it. We do not know if it will be Boeing or Airbus first. How are you focusing your R&D efforts? Secondly, what is your criteria as you have those discussions on how you invest with the OEM?
Obviously we want to look at these things nice and early so that we can understand what the aircraft is, the type of controls, how different they are. From the overall standpoint, we want to make sure that we are being selective in what we choose to do. Having all content on such volumes is extraordinarily difficult, so we want to make sure that we are focusing on winning the things that we are really good at and the things that we can be compensated fairly for. Those are really the aspects that we are going as we are exploring the potential opportunities.
Great. No, that is helpful. Maybe going to Space and Defense.
How do we think about the split of the business there and some of the largest growth drivers, although I know we touched on a few already?
Our Space and Defense Group business is about $1.1 billion in fiscal 2026. About 60% of it is defense, 40% of it is space. When you look at those businesses then and think about the applications, ground vehicles, those sort of systems is probably the largest segment of it, then missiles. That is $300 million+ for the ground vehicles side. Missiles is about $275 million, as I mentioned, and then space components, less than $300 million as well, $250 or something like that. So they are the three biggest sections of it. They constitute about 60% overall of the Space and Defense Group's business.
The major growth areas, you see the uplift in defense spending, whether we're under continuing resolution, whether they add something for the next year or not, the need is certainly increasing all the time on the defense side, both here in the U.S. and with allied nations. European defense spending is going to increase dramatically over the coming number of years out to 2030 as they've made commitments under NATO spending to increase. We see an uplift happening on the defense and space side of the business. I'll go to our space business in a minute, but on the defense side, we certainly see an uptick. On the missile side of the business, it seems to be the U.S. government's number one priority. We see significant increase coming through.
There is nothing in our backlog today that reflects the by two, by three, or by four increases that are ahead of us. On the final section of it, space components, our space applications mostly service defense needs. As space becomes a strategic war fighting domain, it changes the requirements. We think we have some components that particularly suit that type of application and working with our customers on those. There's uplift in all of those. It's significant. It makes Space and Defense one of our fastest-growing segments within the organization.
Some of that, I guess, is because you have content on five of the seven major hypersonic development efforts, although I'm guessing that's a smaller piece of the pie.
Hypersonics is smaller in terms of materiality to the overall enterprise, but yes, we have good coverage across those programs. None of those are in production yet. We're all in testing and development, but because we have good exposure, we would anticipate that as they move to production, that we would have some content there and hopefully a growing business there. That depends on, again, priorities within the U.S. military, but hypersonics would obviously be part of a Golden Dome defense or whatever needs to be put in place.
How do we-
But that also drives some of the space requirements as well. So tracking incoming missiles and defense applications in space obviously get driven by that requirement as well.
How do we think about them contributing to the bottom to revenues more materially, and how do they impact your margins today?
I would focus more on the missiles than the hypersonics-=
Okay.
in terms of the impact. Missiles grew 20% year-over-year or more than 20%. I would expect the rate of growth on missiles to be really significant over the coming few years in those seven-year framework agreements that have yet to be fully flowed down into the supply chain. I would expect in the next three to six months, we will start seeing orders coming in that are reflective of those higher production rates. So that's going to be the bigger impact. The hypersonics is probably a little further out and by the time it gets into production-
Yeah.
volumes, Sheila.
How do you think about just you've consolidated your space launch and avionics business into focused factories? How do you think about just what's the update on that business, whether it's measurable impact on focused cycle times or non-value handoffs?
Yeah. So I've talked in the past about rationalizing our footprint as an organization overall, consolidating sites together and working towards having focused factories. So this sort of reflects what's going on there. As we've been pursuing those efforts in the industrial side of our business, we've probably made the most significant changes to our footprint globally in reducing the number of sites that we have around the world. That has significantly driven margin uplift in the industrial business. You saw a really high level of profitability in Q3 for our industrial business that was reflective of some tariff refunds, but underlying, the business was really strong there as well from those improvements. On the reorganizing our own facilities, we shut down a facility in Reading in the U.K. and moved the product from that back in. That was a Space and Defense Group site.
We moved that product back into one of our existing U.S. sites. In the building you refer to specifically, we've used that as an opportunity to consolidate the thrust vector actuators that are used for launch vehicles. This is getting product into space, into that manufacturing facility and the associated electronics that go with that. That's the avionics you're referring to there. That was to allow us free up space in other parts of our buildings that are then focused on the missile side. You're moving stuff around, but you're moving with an intent that you have a focused factory at the end. That's important for me because that gives accountability to that leader to staff it appropriately, to invest in its future, and to make those decisions. We talked about, Jennifer mentioned earlier, accountability flowing down the organization and expectations being clear.
When you do that, you have less interdependence going on across the organization. oh, that part needs to come from this plant. I need to go and talk to them about it. In our organization now, we're working towards having much more concentrated activities that are specific to specific businesses and giving the people the accountabilities to run those in line with the expectations we have for financial performance.
How do you balance the needs across your different customers, whether it's the primes requesting their missiles on time or components or the new space customers, the commercial space guys, and your government customers?
Yeah. I think the whole process of 80/20 and the simplification has really helped us with that because if I look at a business like industrial with 3,000 customers or 3,500 customers, 400 of them drive most of the business. If you know who your important customers are, you can make those priority calls much more effectively, Sheila. I think that's been across the organization. We've looked at the entire customers. We've categorized as A and B customers, A and B products, and those A customers are the ones that our business model works best for, who really appreciate the value that we're adding for them, and they're the ones we really want to support in terms of growing the business. That's where our focus is on growth.
The customers that are in the B products and the B customer segment, they are ones that typically attract a lot more indirect overhead costs to support them, are not as profitable as we think they might want to be, and where we have made local business decisions to change terms and conditions of business. In those plants that have done 80/20, and that is most of the organization at this point, they are really clear on who the priority customers are, and those priority customers get advantage when it comes to lead times, bid response times, capacity.
Great. Maybe just touching upon industrial, since you mentioned the customer base there. I guess that could be one of the less understood parts of Moog. What are the products and end market splits there as we think about your diverse customer base too?
The largest part of our industrial segment is what we call industrial automation. That makes up about 45% of the segment. This is the core and the heart of the segment. It is where we do controls for equipment manufacturers that would be stamping out car doors, for instance, in plastic injection molding, heavy industry applications like that. There is a fast mover in this section. About 20% of this part of the business is in the data center cooling pumps, and I will get back to that in a second because that is an exciting part of the business. The rest of the business is made up of medical applications. That is about a quarter of this business, and then the rest is split between flight test and auto simulation as well as energy applications. That is the breakdown of this particular segment.
I want to come back to the data center cooling pumps because that is an exciting growing part of the business. Last year, it was about $25 million in sales. This year, it is approaching $100 million in sales. There is more demand out there than there is supply, so it has opportunities to continue to grow. It is a real important opportunity for us. We believe that we have got critical technology that is very helpful for the end users in these applications, so it is a really exciting part of the business. But when we think about industrial as a whole and how it fits into the rest of Moog, which is all A&D otherwise, it has an important part because it is diversification. What ties everything together is that we do precision motion and fluid controls and control systems across all of our businesses.
This one just differentiates itself because it is a different market. It is shorter cycle time compared to the aerospace and defense businesses, and it is a consistent cash generator. So when we have investments to make in other parts of our business, we know that we are going to have cash coming in from the industrial business on a more regular type of basis. It really helps to fund some of these bursts of investments that we see in some of the more cyclical, longer-term businesses.
Outside of the cash element, how do you find the strategic importance of industrial to your overall business?
Right now, we do think it fits. It fits largely because it is the technology that we can leverage across all of our businesses. It really fits from the technology standpoint. The differentiator is really the end market applications.
That $100 million increase in the data cooling pumps, was it to one customer, or are you diversifying across other customers as well?
We currently have one hyperscaler that we are serving, two CDUs that are going into that hyperscaler. We are looking at other opportunities to reach other hyperscalers as well to further leverage that growth. We have gone from $25 million to $100 million this year, and there are opportunities. We put another line in India to help increase our capacity there. It is not very capital intensive, so we can do that fairly easily to capture additional business.
Got it. Just on margins of the industrial business, how do you think about that going forward?
Industrial group margins are actually pretty solid. They are solidly in the ongoing run rate of the mid-teens. We did have a couple of specials in the most recent quarter when we did have the tariff refunds, so that inflated our margin significantly. But it is a solid performer. It is one of the leading performers within the company.
Great. I should have probably covered this earlier when we were talking about Space and Defense Group, but military aircraft, can we talk about the MV-75? I remember when this was just a potential program, and now it is in development, hopefully, and will be in production one day.
How do we think about where you are there and when the sales actually get material?
We are in the engineering and manufacturing development phase of the program. That was about a three-year cycle. We are well into that at this point. It goes to low-rate initial production in the late 2020s, and then into volume production in 2030 onwards. It is a replacement for the Black Hawk helicopter, so there is significant volume opportunity behind this program. Our content on it is very significant. It is a helicopter and an airplane, so if you think about the things we do as a company in motion control, the rotors have to tilt between the flight condition and the takeoff condition. We do the pylon actuation for that. The blades on the rotors are actually all pitched as well, so swashplate actuation, we do that. All of the control surfaces are under Moog's control.
We do the flight control surfaces on both the wings and the rotor and the rudder. That is major systems throughout there. We are surprisingly, I think, also the flight control computer within that aircraft. Heritage we have developed that goes into Embraer E2 regional jets. We have been able to use our capabilities there to fly this aircraft, and we do a hydraulics conditioning system in there and haptic feedback for the pilots because the feel of the aircraft differs between a helicopter and a plane, and we give that feedback directly to the pilots through the sticks. That is all our systems. Multiple systems within the aircraft itself. It means that when MV-75 gets into the volume production, it becomes a more significant program for us than, say, Joint Strike Fighter at the moment, which is our anchor program on the military aircraft side.
How do we think about the content across maybe F-35 versus MV-75?
Because we have more systems on a MV-75, it's higher content.
Would it be seven figures?
We haven't disclosed the content value.
I love content per ship set.
Yeah
and then you can just do some simple multiplication
Yeah, sure.
and put it in your model and make it easy.
It's an important program for us. That's the key thing, and the development activity is going well over that engineering manufacturing development program. There have been some funding gaps on Bell's side. That hasn't disturbed the flow on our side in terms of development activity, and we look forward to moving that aircraft into production.
How do we think about You've been investing in a new Advanced Integrated Manufacturing-
Yeah.
site as well for military aircraft actuation. Clearly, a lot of consolidation and optimization across your footprint overall. How do we think about what this facility adds and.
I think it helps us develop a new set of capabilities in an organization. If I look at machining that goes on in our military aircraft business, and throughout the rest of the businesses as well, I could characterize it as a 1980s job shop. Material moves from one manufacturing center to another. You have waiting and queue times for each machine. It transitions through the manufacturing process in that manner, and it's not efficient or as efficient as it could be. The AIM building, Advanced Integrated Manufacturing, we have six machining centers lined up with a tracked robot that loads and unloads all those machines. But on top of that, it's inside a humidity-controlled, temperature-controlled building, and now we can do in-process measurement activities.
Previously, we had to move product out to a separate room where the Zeiss machine would do the measurements on it. That's now integrated into the cell. What happens is you load a block of metal into the beginning of the cell, and it moves it through all of the manufacturing process steps and testing steps so that what you get out is something that's much closer to a finished product now. It increases our cycle time for product manufacture significantly, and we believe will have a big impact on our ability to produce product even at higher rates in the future. I think that's important for us. If we consider things like next generation Single Aileron or something like that, we would have to have more automation to do it, and this establishes a capability and proves it out within the military aircraft group.
Where is the facility?
It's based in East Aurora, New York, in our headquarters. It's a 150,000 sq ft building. We actually did a ribbon cutting on it on August 14. It's two-thirds populated with the manufacturing equipment at the moment, and we have about 200 products actually running through manufacture in the building today. We've already transferred them from our existing site, qualified them in the new location, and have them in production. Over the next number of months to October 27, we will transfer over 1,500 products in total into the site by October 27. Then we'll be running at full capacity in that building.
This would be more like a footprint for you to. An example you could mirror for the next generation single-aisle.
It's an important strategic capability for us.
Yeah.
When the MV-75 aircraft goes into full volume production, we would replicate more of this in the machining side as well. I think the learnings on automation flow through potentially onto the missile sides of our programs as well when you get up to really high volumes on those. I think there's a capability builder as well as the impact it has on the MAG business today.
Okay. Maybe just to wrap it up. How do we think about how you both envision Moog FIVE years from now, from both a revenue and margin perspective going forward?
A bigger and stronger company than it is today. We've demonstrated since the last Investor Day that we can drive transformation in the organization, so a really focused leadership team in the company who has been driving transformation. It's delivered organic growth from the business at a higher rate than we anticipated back at the Investor Day, and we see the factors influencing that, tailwinds, but also our ability to win from competitors and to add scope onto our supply. We see that continuing in the future, so that's a positive. Our margin improvement journey has been significant, 100 basis points a year on average, we would say, over the last three years. I think continuous improvement never ends, and I believe that we will continue to drive margin enhancement into the coming years. We'll talk about that at our Investor Day in December of this year.
Free cash flow has been improving in our organization, and I see that continuing over the coming years as well. I see it as a much stronger business in the next three years than it is today, significantly larger in scale than it is today, and more profitable.
Great. Well, thank you so much for being here.
Thank you.
Thanks, everyone.
Thank you.