My name is Conor Walters, and I'm an associate on the Jefferies Aerospace & Defense and Equity Research team, and I want to welcome you all to the 2025 Jefferies Global Industrials Conference. Today, I'm lucky enough to be joined by Will Heyburn, the Co-CEO and Chief Financial Officer of Strata Critical medical, formerly BLADE Urban Air Mobility. He also served while at BLADE Urban Air Mobility as CFO and Head of Corporate Development, and prior to joining BLADE, he served as the Vice President at RedBird Capital Partners, a principal investment firm focused on providing long-term capital and growth equity buildup and structured equity investments. Will, thanks so much for joining us.
Thanks for having me, Conor.
Cool, so let's just jump right into it. I mean, it's been a busy week with the transition from BLADE to Strata. But maybe just to start, can you provide a little background on Strata as it stands today, what markets you operate in, and how you broadly think about the opportunities for the business?
Yeah, so maybe just real quick on the transaction. You know, we entered an agreement with Joby Aviation to sell the passenger business to them for up to $125 million in cash or stock at their option. We've received the upfront portion of that already, which is about $80 million in stock, which they elected, and then what's remaining is a $10 million indemnity holdback and $35 million of earn-out that's essentially based on maintaining the same financial performance that we're exhibiting right now and retaining some key employees.
So that's just a quick overview of the transaction, and then the only real overlap between our passenger business and our medical business is the use of rotorcraft in New York City, and so we'll have a long-term arrangement with Joby, not only to continue to have access to those rotorcraft but also to be able to use the Joby aircraft, the electric aircraft, in any market where it becomes available for medical purposes, which we actually think could be a pretty nice value add for us with our customers because these aircraft are expected to be quieter and lower cost.
So excited about that part of the future, but I think for the here and now, it's a great opportunity to become 100% focused on the medical part of our business, which was the fastest-growing part of our business, grew almost 20% this quarter, the most profitable part of our business, and the area where we just see the most positive long-term growth dynamics and the most opportunities for new products, both through organic growth, and we'll talk about a few of the areas where we've built new capabilities that we're selling through to our customers, and a bunch of inorganic opportunities. Because the way we're set up in this business, and maybe I'll talk just for a second about what we do in the medical side of the business.
We are one of the largest transporters of human organs for transplant in the world. We focus just on the United States, but this is a very difficult mission because hearts, livers, and lungs that we focus on moving need to get from donor to recipient in a matter of hours for them to be usable in the transplant process, and so we have aircraft and an asset-light network. Most of the flying we do, about two-thirds, is aircraft that we don't own. We own about a third of the capacity that we utilize. They're spread out all across America.
They're ready to go on a moment's notice to go fly a surgical team from our customer, that's usually a transplant center, to the location of a donor, recover that organ, and fly back in order to be able to put that in a recipient and save that person's life, right, right then and there. And all this has to happen very quickly, and it's a really exciting market to be in because combination of new regulation and a bunch of new technology is allowing more people to receive the life-saving organs they need than ever before. So on the regulatory side, you're seeing the government change the prioritization from what's most geographically convenient in terms of matching an organ to instead matching it to the person that needs it the most.
This is putting a lot of pressure on the logistics system, and it really benefits a diversified asset-light network like the one that we've created because we're able to bring a larger aircraft for a longer trip. We're able to use a shorter aircraft or a rotorcraft when that makes more sense for a short trip, and by picking the right aircraft for the mission, we save our customers money. And so they appreciate both the flexibility, and they appreciate the unique capability that, in what's a very fragmented marketplace of mostly mom-and-pop operators of small aircraft, didn't really exist before when you were more range-bound.
On top of that, we're seeing a dynamic where new technology is allowing you to utilize organs that even just three, four, five years ago would not have been suitable for transplant, so you can actually repair some of the damage that's done when a donor's heart stops and still make that not just a usable organ but an organ that someone's gonna thrive and live a very long life. So that's really exciting, really early days of mostly what's called perfusion technology, which is a fancy word for pumping oxygenated blood through an organ and helping to repair it so that it's able to be used successfully. So all of these dynamics are playing out, and it's resulting in mid to high single-digit growth in the number of organs that are being transplanted.
But then as that translates to us, the average distance between a donor and a recipient has increased by about 50% over the last five, six years, and our economic unit is really a block hour of flight time. So you're seeing all these dynamics play out, where you're flying farther to bring organs to the people that need them. You're often using larger, more capable aircraft, both to make that long trip and to be able to accommodate perfusion equipment that goes along. And it's added complexity around needing to be able to move at a moment's notice in more places with different kinds of aircraft, so it really turned the whole landscape upside down in a way that's benefited us.
And benefited the unfortunately very long list of people who need these life-saving organs, and sadly, still about 15 people die every day waiting for an organ. But you've got the government, you've got technology companies, you've got logistics providers that are coming together to try to turn that number to zero. So it's a really exciting time, and really exciting time for us to be focused on this area, and also focused on other parts of that logistics chain that are much smaller penetration for us. We've started building our own ground network, about 50 lights and sirens vehicles across the U.S., so we're bringing that internal, whereas before, we used to direct that spend on behalf of our customers to third parties.
We're also providing administrative and clinical support for the actual matching of an organ to a recipient on behalf of our customers. We've only got about eight of them that are signed up for that service that we launched about a year and a half ago. Big opportunity for us to, to create a new growth area and a new customer acquisition pipeline, and then there's a bunch of areas that we're still directing spend on behalf of our customer, but we don't have the capability internally, which we see as great opportunities to either buy or build new capabilities that our customers are already relying upon us to set up for them. So that could be things like the folks that accompany the surgeons and the organ to, to called preservationists, who take care of the chain of custody of the organ.
It could be perfusionists that operate the life support equipment at the donor location or the machines that help preserve the organ. It could be the third-party recovery specialists that help actually procure the organ. So there's a bunch of areas where we're doing all the coordination on behalf of our customers, but we don't yet have those capabilities. So that's why we're very excited about the position we're in, and I'll hop off the soapbox now. But I wanted to just give you a quick overview of why we think this is the area that we wanna focus on and why we see great opportunities for capital investment here.
That's a perfect overview, and I can't wait to get into some more detail on some of that. But maybe you started off with a helpful overview of the transaction, getting rid of the passenger business and the deal with Joby. I'm curious what kind of opportunities this unlocks for medical as a standalone business. You touched on some of the operational efficiencies that might be there. Curious how this might change your, you know, investment strategy, whether that's changing how the ground network is established for passenger versus medical. It can be more dedicated. Any thoughts on how that focus might, you know, unlock value for Strata?
Yeah, I think. Well, first and foremost, financially, the divestiture is expected to be profit neutral, both on a free cash flow and adjusted EBITDA basis. So you have additional proceeds coming in from the transaction, but you're not really. We expect not to have an impact on the P&L, and that's a function of both the higher profitability profile of the medical business and also our ability to significantly reduce our corporate overhead without the passenger business. So we've talked about how we think there's about $7 million of unallocated corporate savings that'll happen starting in Q4. So we'll take our run rate down to a little bit above $5 million of unallocated corporate in a quarter to about $3.5 million.
So the business can be much leaner, much more efficient, and on the capital allocation side, we do see great near-term opportunities to deploy those proceeds. We talked about some of the areas just a minute ago that are directly within the organ transplant and transplant services vertical, but there's also some areas outside of the organ transplant vertical, whether that's in healthcare or other things that need to move quickly, like radiopharma, whether that's time-critical logistics for manufacturing. These are all areas we're studying, and our approach is generally we wanna learn about it first and then decide if we build or buy. So we've hired some salespeople that specialize in those areas. Very small investment, but it allows us to get our feet wet organically in those marketplaces and then figure out what's the best place to grow in those areas.
I think the sort of two other capital allocation opportunities that we're looking at are, one, for the 10 aircraft that we own, that represent about a third of the flying that we do, those are all operated and maintained by third parties. So there could be an opportunity to bring some of those capabilities in-house for the aircraft that we own, and in the process of doing that, you could acquire new customers, 'cause maybe you acquire an operator that has customers we don't have, either within transplant or in some of those other verticals where things need to move quickly that we just talked about.
So great opportunities there, and we're continuing to win a lot of new business organically, but it's a pretty fragmented marketplace, so there could also be some opportunities for what might feel like more of a regular way roll-up, in this marketplace, so we'll be evaluating those as well.
That's perfect, and maybe just to think about, like, the rationale, why do you think that right now was the right time to sell the passenger business and, you know, separate Strata? And what made Joby the right partner there?
Really, just the massive transformation that we're seeing in the organ transplant landscape. It's the right time to build some of those new capabilities. We need capital to do it, and so we wanted to be able to continue to maintain the position we have as the market leader in logistics. But logistics is becoming more complex. It's requiring more specialized services to come along with it. We've always marketed to our customers what we call the one-call solution, so they contract with us to move 100% of the organs that they're gonna need to move by air, and they make one phone call to us, and we take care of everything else.
Everything else is becoming a much longer list than it was two or three years ago, because of the technology that's being utilized, because of the third parties that are getting involved. And so we have to grow with our customers' needs. We've done a lot of that organically, but we felt that now was the time to really invest in giving our customers what they're asking us for, and also invest in diversification across some other verticals. We're already moving blood samples and tissue samples, and we see opportunities to move things like radiopharma and parts that we talked about. And, you know, in terms of Joby being the right partner, you know, they've done a phenomenal job designing an incredible aircraft that we think is gonna have really interesting use cases for medical.
And so it was important to us at Strata that we have that long-term relationship with Joby, first of its kind relationship, to be able to use the aircraft for medical purposes. And when you think about the operating costs being much lower, the maintenance downtime being much lower, there's a lot of marketplaces today where we'll use turboprop aircraft, we'll use a light aircraft, we'll be moving organs on their own, or we'll be moving one or two people and some equipment on behalf of maybe an organ procurement organization, which are the groups that deal with the donor side of the equation, putting them on the right life support, things like that, often in a smaller geographic area. These are use cases that would be perfect for an aircraft that's lower cost, lower range, and that's exactly what Joby's building.
So I think that was a really important part of having that long-term partnership that we think is gonna benefit our medical customers as well.
That's a perfect segue into my next question, because the acquisition agreement included access to Joby eVTOLs for medical flights, as you touched on earlier. So curious how you think about the timeline for that use case, and in the interim, what are your fleet needs? Because you touched on, you know, the distance between donor and recipient has grown by 50% in recent years. So how's that mix of, you know, range capabilities kind of fit into your plans over the next few years until eVTOLs slot in?
Yeah, so you know, today, 99% + of the flying that we do is on fixed-wing aircraft. So dynamics, we talked about donors and recipients getting farther away. It's typically a jet trip. So that's the focus, and when we think about our fleet, both owned and third party, you know, about a third of the flying we talked about is on the 10 Hawker 800 aircraft that we own. We think it's a great aircraft for the mission. It's essentially what NetJets was using before the current fleet. So, and, it's got great capabilities.
It can often make a transcon trip for us, and also has a large pressurized cargo capacity that allows us to accommodate some of the perfusion equipment that's being utilized, and also allows us to accommodate perfusion equipment that could be on the come, and our partnership with OrganOx is an example of where we can uniquely accommodate that machine for perfusion in flight once it's approved for that use case, so you know, we like the aircraft that we're in. We like the flexibility of the asset light network that we utilize, so beyond the 10 that we own, we have another about 20 fixed-wing aircraft that are four-walled for us under something kind of resembling a wet lease. They can't fly for anybody else.
They're staffed, ready to go whenever we need them, and we're able to position them close to our customers, which is a really important selling point for the customer. You know, the exchange between us and the customer is commit contractually that all your flying will go through us, and then we'll make sure to position our fleet such that we're not needing to charge you repositioning, and you're not needing to wait for an aircraft to reposition when you've got a time-critical mission that you need to get started on. So we'll continue to utilize the asset- light model.
Beyond those kind of 30 aircraft that are either wet leased or owned, we've still got another 20% of our capacity that's through safety-vetted operators, where we don't have any long-term commitment to them, and that's kind of our flex capacity that allows us to manage the natural ebbs and flows and the demand for organ transplant at any one particular center, right? Because everyone has their patients. There's a pecking order in terms of how high up they are on the priority list, and you have some months where they've got a lot of high priority folks that get allocated organs, and then we need to use some of that flex capacity to accommodate it, and then you have some months where maybe their list is lower on the priority list.
They're not doing as much flying, and so that's why we like building it this way. Those owned aircraft are the most highly utilized aircraft. We get great operating leverage because we're amortizing the pilot salaries, the hangar costs, the insurance over more hours as we fly more. We get some fixed cost leverage on those aircraft that we wet lease, and then we're just paying an hourly rate for the aircraft where we have no commitment. So we think we're in a really good spot, and we want to kind of continue those ratios. And so as we grow, we have said we expect to add a single-digit number of additional aircraft to the owned fleet over time.
Then also through acquisition, as if we were bringing on new customers or bringing on new capabilities, that could come with some additional aircraft as well. But for today's world, the focus is really on the fixed wing. We've maintained the rotorcraft capability where we need it, and then we look forward to being able to give our customers the unique eVTOL capabilities when those come. But that's not something that is gonna impact the near-term thesis.
Great! That's super helpful. And maybe just to zoom in on, you know, the medical market itself, what is the competitive landscape looking like in that business area? Who are your primary customers, and where are your main avenues for growth as you see it today?
Yeah, so, you know, in terms of the customers, there are about 250 transplant centers. Those are the hospitals that have the patient that's gonna receive the organ, and then there are about 55 OPOs, organ procurement organizations. Those groups divide the country up into little regions where they're responsible for identifying donors, receiving the necessary consents from families, and then preparing those donors for the procurement process. We work with both groups. On the transplant center side, you tend to have longer flights, and the typical motion is that you are picking up a surgical team from that transplant hospital. You're flying to the location of the donor. They are gonna procure the organ with their own team members, and then you fly back.
And on the organ procurement organization side of things, a little more moving staff and equipment on the ground, though many of them that are responsible for larger geographic areas are moving staff and equipment by air as well. So you see opportunities in both sides to use the air assets, and then finally, on the organ procurement organization side of things, they are responsible for exporting kidneys. So kidneys, unlike heart, liver, lung, they can get where they need to go in a day or so, and so they are often shipped. What we've done is we've created a new product offering where we have couriers that hand-carry kidneys in the cabin of a commercial aircraft rather than put them in cargo.
It eliminates the situation where airlines lose your cargo just like they lose your bag, which unfortunately happens somewhat regularly in the kidney transport world, and so that's another offering that we offer to the organ procurement organization, so those are kind of who the customers are. In terms of who we compete with, it's an extremely fragmented industry. We have about 30% of market share on the air side of things, single-digit percentage in all the other ancillary areas that we just talked about, whether that's kidneys, whether that's ground, whether that's administrative and clinical organ placement matching, a program that we call TOPS. But you look around the marketplace, it's a lot of mom-and-pop operators of a handful of aircraft that are based near the transplant center that they serve.
And where we can just be much more flexible because our network is national, we're not beholden to one particular type of aircraft. If you own two Challenger 300s, every day is a pretty good day to fly a Challenger 300. It might not make sense if you're only flying a hundred miles with two passengers, right? And so, probably the more common case is that you own a very light jet, a Citation jet, and every day is a pretty good day to fly a Citation jet. But now that we're flying farther than we used to, you're making a fuel stop. Your customer starts to wonder, "Why are you making a fuel stop?" They want to use a piece of perfusion equipment. It might not fit through the door.
So these are the kind of situations that come up, and it gives us an opportunity because sometimes someone who's not our customer is at the airport with a legacy provider, and they realize they can't fit what they want to bring with them through the door, and then they need to recover very quickly. We pick up the phone. We're able to scramble an aircraft under two hours. We're able to save the organ on that particular trip, and they get an opportunity to see the way we work, which is handling everything, ground, catering, any third-party surgical recovery, any third-party perfusion. We arrange everything for them.
They get the bill, and for a larger, more capable aircraft, often they're paying less, and so that's often a customer acquisition tool for us the first time a hospital can't make the mission they need to make with the legacy provider they've been relying upon for a while. So as these dynamics continue to play out, we expect to see more and more at bats for that, and then we also try to accommodate any new technology that our customers want to use, and OrganOx is a great example of that. A piece of equipment that, you know, we're hoping will start to be used to perfuse organs in flight very soon required some preparatory work to be able to do that. That's something that we want to do on behalf of our customers because we view ourselves as an open-source logistics provider.
Whatever the customer wants to use, they're always right, and so we do the work, and we take the time to make sure they can accommodate any equipment that they want to utilize, any third party that they want to work with. The only thing they have to promise us is that they're gonna use us every time for the air logistics.
I think you just painted a great picture as to the complexity of what needs to go into this and why you want to be the logistics provider leader, first and foremost. But maybe from a financial perspective, can you provide a little bit of an outlook on how you see this market developing and maybe where share at 30% on the air side, low single-digit ancillary, where that's come from and where it goes? Particularly as distance expands, you know, the complexity intensifies. Just curious how you think about it. Like, is this 18% growth we saw in Q2, is this something we can see sustainably, or where do we go from here?
Yeah, you know, we guided towards mid-teens growth for the remainder of the year, and we see lots of opportunities to accelerate beyond that. As we talked about, the number of transplants that are happening, heart, liver, lung transplants, is growing mid to high single- digits, so you're already seeing good growth in the market. It's happening in part by the added complexity and the added distance that's coming in these transplant recoveries. So, so I think even beyond being able to match to a donor that's farther away, you're also bringing third-party equipment maybe from a different location, which adds flight hours on a per organ basis. You might be bringing a staff member, a third-party staff member, to recover the organ from some other location. So we're starting to see more legs per trips in some situations.
You're seeing transplant centers take a little more of a leap in terms of trying to recover an organ where there's a risk that it might not be usable, and so you're doing some flights where you don't necessarily recover an organ, which we call a dry run in the industry. But you're seeing transplant centers get more aggressive in that front, and those are areas where, because of our asset light network, we can uniquely manage the cost there. So I'll give you an example....
You know, if you have a donor where you're not certain that the organ is gonna be usable, but you still want to have a chance to take a look at it, if your legacy provider is based in Cleveland and the organ is in Texas, there's no way for you to evaluate that organ without flying from Cleveland to Texas, taking a look, and flying back. You're gonna incur that cost. What we can help our customers do is, through our asset light network, have an aircraft be on hot standby in Texas. Then the transplant center can use someone locally to determine if the organ's gonna be usable. If it's not, there's a small standby fee. You didn't fly an airplane a thousand miles round trip to find out that you can't use it.
So just one example of how we think complexity benefits our model, and we can help our customers solve these complexity problems in a way that a legacy operator of two or three aircraft can't. We expect to have more at-bats as this dynamic continues to play out in the industry, and we do think that our model wins the day relative to some of the more localized models that are commonplace, and see no reason that we can't be the majority of the market in terms of market share for air, and we see no reason that our ancillaries can't start to match our penetration on the air as well.
Perfect, and I wanted to hit on something you brought up a few times, which is your new partnership with OrganOx. The goal is to pre-position some metra perfusion devices at aviation hubs. I'm curious, can you give a little bit of background on the timeline of this goal, what the challenges are, and what kind of capability you think that this could add?
This is just an example of, you know, when we listen to our customers, we hear a lot of them excited about the OrganOx device. Up until still actually today, the OrganOx device is primarily used in what's called a back-to-base model. It's for liver only, and what that means is that the liver is recovered, and then once it gets to the transplant center, you will put it inside the OrganOx machine to perfuse the liver. You can do some liver function tests, and you can also improve the function of the liver before you transplant it into the recipient. The other way it's sometimes utilized is to perfuse on the ground while in transport, and we've done some of that with OrganOx.
What we heard from some of our customers is that this is really a machine that we would love to be able to use in flight, and we know that OrganOx has been working on that. And so we went to OrganOx and said, "Let us be ready for this. We have a lot of customers that want to utilize your machine." We're in the business of the customer is always right, and so we want to be ready if and when that day comes. And so we did the work ahead of time, built this strategic partnership, because to the extent that they are able to perfuse using the OrganOx device in flight, there won't be very many aircraft that are ready to do that.
And so we wanted to kind of get a first-mover advantage, not only to serve our existing customers, where, you know, we're getting the flight either way, so we just. It's really just good customer service. But also, to the extent there's folks we've never worked with before, their provider today is probably not gonna be able to move that device on day one, and so it's that entry point again, right?
They'll go to OrganOx and say, "We need a partner." We're OrganOx's partner for logistics, and so it gives us that opportunity with maybe someone we haven't had an opportunity to work with before to show them that we are faster, better customer service, lower cost, better coordinating all the complex, different moving pieces of a transplant process, and hopefully that converts to an exclusive contract like we have with our other customers over time. So really excited about this. Great team over at OrganOx, great opportunity, and looking forward to see them continue to make great progress.
Great! I mean, that's super helpful. I would love to dive into maybe some of the financial implications of a lot of this. You've talked about the advantages of your network versus some of the mom and pops, you know, having dedicated aircraft, closer positioning to, you know, either the donor or the recipient. Curious how this can translate into higher profit and how you balance pricing in that model.
So, you know, our customers are trying to be as cost efficient as possible, and so what we try to do is we leverage our scale to reduce what, for a lot of customers, is the largest hidden cost, which is repositioning of aircraft. So we get a contract to fly all of a customer's organs, and then what we're able to do, based on the knowledge that that volume is coming our way, is move aircraft closer to the customer, often at the airport that they're gonna depart and arrive. And so by doing that, you save them a lot of money, because our pricing model is to charge by the hour of flight time based on the size of the aircraft that's being utilized.
And so we believe we're very competitive in terms of what our rates are that we charge our customers, and there's, you know, a 3%-5% escalator there. But where we think we're industry leading is our ability to have an aircraft leave from the point of departure that the customer requested without having to bill that customer for a couple hours of flying from some other location. So we really try to think about all those things together to create a lower cost for our customer, and we're doing it by investing in aircraft that we place in specific locations. And if you look at the difference in margin, for an aircraft that we own, and that's margin net of depreciation, versus a third-party aircraft where we have no commitment, it's more than a 10-point improvement for us.
So we're actually able to make the same if not more gross profit dollars per trip when we're saving our customers money at the same time. So you've seen us make that investment in aircraft. You've seen us move those aircraft closer to our customers. It's resulted in us bringing more customers on board, and then, of course, we always have the capability, if we need to, to go outside of that network when a unique situation calls for it, and then just mark up a third-party aircraft, typically by about 20%.
And so you know, we're in a good position on our contracts to be able to make a nice margin, irrespective of how we accomplish the mission for our customer, but it's important that we always accomplish the mission, and it's also important the pricing is predictable, and that's why we have a rate card that just tells the customer what it's gonna cost on a per-hour basis.
I'm sure that transparency goes a long way with them, too, but maybe as we think about it, how do you think about some of the more fundamental moving pieces behind operating leverage and where margins can go for medical from the 13% you posted in Q2? What do you see as the largest, like, tangible drivers to get there, and what's achievable at scale?
Yeah, so the 13% was a segment-adjusted EBITDA margin in Q2. We said we expect that to be closer to 15% for the remainder of the year, and then we have a midterm target for that segment-adjusted EBITDA margin to get to the high teens. The way we think that's gonna happen is by getting more operating leverage, primarily on our owned aircraft. As we've talked about, we had about double the amount of maintenance on a scheduled basis that would've been normally implied with a normal distribution of maintenance this year, and so that had two negative impacts on us year to date. One, aircraft that are our highest-margin aircraft were unavailable, so you had to use definitionally capacity that costs us more. Doesn't cost us anything on the top line.
We're still always able to complete the trip with the asset-light network, but you were using higher-cost supply. And then two, for the aircraft that were up that we own and are available, you were amortizing the fixed costs of the pilots and the insurance, et cetera, over fewer hours. So our highest-margin aircraft actually were lower-margin than they would usually be during this period of heavy maintenance. So as we get to more of a normal distribution of scheduled maintenance, we expect the margins on those aircraft to go up. We expect to be able to utilize the assets more, put more hours per airframe, and that means our cost to fly an hour goes down. So that's probably the biggest driver, and then we're also optimizing our cost structure.
The SG&A is not gonna grow linearly with the growth of the business, and in fact, post the passenger divestitures we just talked about, we expect to see our corporate costs drop significantly, you know, about a $7 million reduction, from where we are at close to $21 million, on an annual basis today. So I think, we're in a really great spot to optimize the financial model, particularly post-divestiture.
That's perfect, and maybe just to wrap, 'cause we are just about up on time, but wanted to give the floor to you to offer what are your three key takeaways you want investors to walk away from this discussion knowing about Strata?
Yeah, I think the three key things in my mind are incredibly attractive, growing market where we have a unique vantage point in terms of being able to build new capabilities that our customers are already buying from someone else. You know, I think corollary to that is that it's still middle innings in terms of the drivers of the growth in that market. You're having more perfusion equipment come in that is able to accomplish what current technology can accomplish but at lower cost, and you have regulations that are continuing to evolve.
And then, you know, capital investment opportunity, I think, is a really important point that it's all related, but because we're interacting with all the third parties that a huge sliver of the customer base uses every day, we work with potential acquisition targets. We have a sense of who's great, who's okay, who do our customers really love, who always delivers, and so I think we're uniquely positioned to be a great capital allocator in this area as well.
Awesome. I think with that, we'll leave it there. Thanks so much.