$WCN Waste Connections Q4 2025 Earnings Conference Call

Okay. Thank you, operator, and good morning. I would like to welcome everyone to this conference call to discuss our fourth quarter 2025 results and our outlook for 2026. I'm joined this morning by Maryanne Whitney, our CFO and several other members of our senior management. As noted in our earnings release, adjusted EBITDA margin expanded by 110 basis points in Q4, capping a strong year for Waste Connections driven by price, organic growth, solid waste, and continued operating improvements. For full year 2025, we delivered an industry-leading adjusted EBITDA margin of 33%, up 100 basis points year-over-year, excluding lower commodities. We also completed approximately 330 million of acquired annualized revenue and returned over 830 million to shareholders through share repurchases and dividends while preserving flexibility for continued growth and return of capital. Before we get into much more detail, let me turn the call over to Maryanne for our forward-looking disclaimer and other housekeeping items.

Okay. Thank you, Maryanne. We're extremely proud of our accomplishments in 2025, led by disciplined execution to deliver better than expected operating and financial results. For the third consecutive year, employee turnover and safety incident rates declined, exiting 2025 at multi-year lows. In fact, building on a well-established track record for better than industry average performance, in 2025 we reached historic company record levels of safety, our most important and impactful operating value. Moreover, that momentum has continued into January when safety-related incidents were down almost 20% year-over-year to another record low. Additionally, we saw multi-year improvement in employee retention to achieve our 2025 targeted voluntary turnover level of 10%. And we're continuing to raise, or in this case lower, the bar as we see momentum for continued gains. As expected, these ongoing improvements have driven cost savings, productivity gains, and improved customer service. As we had indicated would be the case, we are realizing related reductions in operating costs throughout the P&L, most notably in labor, repairs and maintenance, and most recently risk management. Moreover, we've seen incremental benefits from pricing retention as a result of enhanced employee retention and customer satisfaction. In fact, solid waste core pricing of 6.5% in 2025 exceeded our original expectations for the full year, further expanding an outsized price-cost spread and contributing to underlying margin expansion of 100 basis points in solid waste. This outperformance enabled us to overcome incremental pressure on reported margins related to a second consecutive year of declines in value for recycled commodities and renewable energy credits associated with landfill gas sales, as well as continued sluggishness in underlying solid waste volumes. Not only did we report our expected adjusted EBITDA margin expansion to an industry-leading 33%, but we did so in spite of recycled commodity values at multi-year lows and without contribution from operations at Chiquita Canyon Landfill, which we closed at the end of 2024.

On the subject of Chiquita and the closure-related outlays, we continue to make progress on managing the elevated temperature landfill or ETLF event. The technical aspects of that process are moving forward largely as expected, subject to some timing differences on outlays as we have made better than expected progress in some areas. On the other hand, the political challenges of resolving this situation continue to exceed our updated expectations, primarily because of related regulatory permitting, legal consulting, and other unanticipated requirements that have dragged out and inflated an already burdensome and dysfunctional process. As we have indicated previously, to address these regulatory challenges, we have sought out and we welcome the involvement of the US EPA and constructive efforts to streamline processes, remove regulatory impediments, and enable a more effective and efficient response. We are encouraged by recent meetings we have had with top officials at the US EPA about their further engagement at the site. US EPA has indicated they are finalizing next steps for both short and long-term solutions to assist Chiquita in further mitigating and managing the reaction and streamlining the regulatory oversight at the landfill.

Moving next to acquisitions. During 2025, we closed approximately 330 million in annualized revenue from 19 acquisitions, ranging from West Coast franchises to competitive markets, including integrated businesses, new market entries, and a number of tuck-ins to existing operations. Our expected 2026 rollover revenue contribution of approximately 125 million reflects a few additional deals already completed this year and is expected to grow with our active pipeline. As always, we'll stay selective about the markets we enter and disciplined about the amounts we pay, and we would consider any additional deals as upside to our full year 2026 outlook.

Our focus has been and will continue to be solid waste, and we look forward to building on a model that has consistently delivered value creation. Following multiple years of outsized acquisition activity, we remain well positioned for future growth. With leverage of 2.75 times debt to EBITDA, our strong balance sheet and free cash flow generation allow for continued investment in acquisitions along with other opportunities including growing shareholder returns. To that end, during 2025, we increased our quarterly per share dividend by 11.1% to return a record amount to shareholders, including over 330 million in dividends and over 500 million in share repurchases. We have taken an opportunistic approach to share buybacks and intend to continue to do so. We recognize that market sentiment and capital flows may shift over time, but that doesn't change the fundamentals of our business or the durability of our model, which makes buybacks compelling in the current environment.

Additionally, we are reinvesting in the business and positioning ourselves for further growth and value creation through both sustainability-related projects and artificial intelligence or AI technology-driven initiatives. Looking first at sustainability, we continue to make progress developing our portfolio of renewable gas or RNG facilities, including five already online with the remainder expected to be operational around year end. We have also broken ground on an additional state-of-the-art recycling facility expected online in 2027.

Looking next at AI and our multi-year rollout, which began in 2025, these investments are aimed at enhancing efficiency and boosting productivity by further digitizing and automating our operations and improving forecasting through data analytics. At the same time, we're focused on service and customer experience for improved transparency and mobile connectivity. What's exciting is that we're just getting started and are already seeing positive outcomes as we expand the utilization of AI and data analytics across multiple platforms. For instance, we've enhanced our dynamic routing platform to further optimize asset utilization and performance. Promising early indications show direct and indirect benefits beyond cost reductions, ranging from improvements in safety and employee engagement to enhanced customer satisfaction and retention. We're excited to build upon these efforts as we deploy additional applications and expand our development in 2026 and 2027. And now I'd like to pass the call to Maryanne to review more in depth the financial highlights of the fourth quarter as well as provide a detailed outlook for the full year 2026. I will then wrap up before heading into Q&A.

Thank you, Maryanne. Coming into 2025, we emphasized excellence with humility, recognizing our ongoing commitment to a proven strategy for delivering industry-leading results while acknowledging the benefits of new ideas, innovation, and technology. We're excited about our progress in 2025 and the momentum in 2026 for another year of outsized solid waste margin expansion along with double-digit adjusted free cash flow growth. Moreover, we're positioned for upside from any pickup in the economy or commodities as well as additional acquisitions. We're excited to win from within in 2026 and are grateful for the dedication of our 25,000 employees who set us apart by putting our values into action every day. We also appreciate your time today. I will now turn this call over to the operator to open up the lines for your questions. Operator.

Yes, and Sabah, I would say that when we at the third quarter call, I think we had reported that we had closed about 250 million by then, that we expected to close another 75 to 100 million thereabouts. You see, we closed about another 80 million. That brought that number to 330. In fact, today we've closed and last week closed about the other 20 million of that. So that brings you right to that 100 million that we talked about that was out there that could occur during the fourth quarter or the very beginning of the year. So that has occurred. So there's no real change to M&A. As Maryanne said, look, I know you haven't followed the space forever, Sabah, but if you go back, there's a pattern by multiple companies within the space that tend to go out and put out guidance at the beginning of the year and make all kinds of improvement assumptions in the economy and then come back around in the third quarter or the fourth and back all those off. We don't believe that's a prudent way of providing guidance. We're providing guidance with what is known today and assuming it doesn't improve and that if it does improve, it will be upside. So we just think that's a more conservative approach. Not saying there's anything wrong with the other approach, but this is a very consistent pattern for us and actually for others in the space taking the approach they have.

Yeah, Tammy. I mean, number one, you are correct. Price is moderating and that's a good thing. We're happy about that. Remember, we don't focus on the ultimate amount of the dollar amount or percentage of the price increase. We try to focus on maintaining the spread of 150 to 200 basis points spread to what we believe our cost is going up. So if you look at our guidance for core price of that 5 to 5.5% and say that's 100 basis points down from 2025, it would indicate to you that we believe our cost is down about 100 basis points relative to 2025 on an increased basis. And it is, we began 2025 with labor rates approaching 5% year-over-year, and we exited Q4 with labor rates up about 3.9% year-over-year and trending down towards 3 to 3.5% throughout 2026. We had other costs within the P&L in 2025 that began the year probably closer to 4.5% and moved throughout the year closer to up more in that 2.5 to 3%. So it's just about the spread. We look forward to not having to put as much dollar amount or percentage rate increase on our customers. They're feeling the same effects from the economy as everyone else. But the spread is maintained the same or approximately the same and that's what we focus on.

Well, yes. There are, and you know, we're actually excited about them too. Who ever thought in an old-line industrial waste company that we would understand what AI even was? But this year we're focused heavily on two incremental initiatives of seven that we've agreed to do between 2025 and 2027. This year's two are moving the company into more of a dynamic, real-time customer routing opportunity. We have very good routing today, but it is what I'd call static. It has no ability to read incoming data. So you run the route sort of the night before or the week before. Where we're moving to is sort of a real-time routing that takes into effect things, just like I said on another call, would be like Waze for your car. It takes in road closures. It takes in traffic conditions. It takes in accidents. It takes in third-party data feeds to allow us to react real-time and resequence with the utilization of AI doing the resequencing, not somebody doing it in another way. So that's one. And the second one is we're developing a dramatically more robust mobile connectivity platform and working towards trying to eliminate inbound calls to our customer service groups locally by as much as 30 to 50% over a multi-year period. We take over a million and a half calls from customers per month right now. And our objective is to get that down somewhere between 700,000 and a million over the next couple of years by being able to push out information mobilely to customers for the five to six most common things. We know what the five to six most common things customers are asking and it's mostly because they're not receiving that information in real-time, such as, I think your driver didn't pick me up today because he usually picks me up between 7 and 8 a.m. And in reality, he's going to pick him up that day, but the road has been closed due to snow. And so we're able to push out, they're able to see mobilely when their driver will arrive and where their driver is on their route. Much like you do with your Uber. If you order an Uber today, you know where they're at and how far away they are. Those kinds of things are dramatic changes in efficiency and customer service quality for us. So those are two things that we're working to bring online in 2026.

Well, let's tackle the first part of that, which was your M&A question. Look, as you know, M&A can be lumpy. We've had three very strong years in a row. No reason to expect that 2026 looks any different. There's nothing that has changed in the underlying opportunity basket. Nothing has changed in our appetite to complete deals or our ability to complete deals or our financial flexibility. So, I think it's very fair that you and others should expect another sort of outsized year. Now, how much of an outsized relative to a normal 150 to 200 million year, the year needs to play out to see that, but I think hopefully you look back at the last three years' track record and we're not seeing something that would make us think that this year looks differently. And we certainly have the capacity as we've said in our script to do both whatever comes along at M&A and as much buyback and return of capital as we think is prudent based on the fundamentals of our business and what is driving those opportunities in the buyback. So we don't see any limitations on any of those. As far as every now and then you pointed out that a larger deal comes along. And we looked at several things that we didn't pursue or weren't successful on in 2025 and we had one of those in 2024. We had one of those in 2023. I mean certainly there's a good chance that happens in 2026 but we don't bank on any of that or forecast any of that because that just leads to overpaying and pushing to do something that you might not otherwise have done. So we continue to look at everything and be very active. But we're going to continue to be very disciplined in our approach to what we think is a quality asset for long-term value creation.

Sure. Okay. Well, let's address the, you made a comment about the buyback. First off, look, we don't communicate at any time whether whatever the stock price is what our intentions are. We have obviously our view of underlying fundamental value that we're running at all times and we're going to be active. That's what I can tell you. Okay. And so I think that speaks for itself. You saw what we did in the third and the fourth quarters when there was dislocation. On RNG, there's actually a two-point inflection that you need to think about here for this conversion moving back, and you're right, 50% is impressive, but I would remind you we've been as high as 53, 54% at one point in time so getting back to 50 for us is actually very average of where we've been. But next year, 2027, you lose the capex that has been associated with these 12 RNG projects and you now begin most of the full contribution of the EBITDA and free cash flow. So it's sort of a double whammy for 2027 in that vein. Now will there be incremental RNG or sustainability in future years? Well, certainly there could be, but that would be for new projects that represent incremental cash flow and growth opportunities not related to the 12 original and the three to four big recycling facilities we've talked about. That piece will be done this year. We expected the outlay for RNG to be done in 2025. But the reality is we don't control all the timing on that outlay because of the permitting and the local utility interconnect that we have to respond to. And I think you're seeing that in everybody's RNG that it's taking a little longer to get online than original thoughts. But we're very confident in that 100 million to answer your question being done in 2026 and then the contribution being there for 2027 in the EBITDA and cash flow. Next to Chiquita. Look, what I would tell you is this. First off, I think you and other investors need to think through this this way. First off, an ETLF is nothing new in this industry. There are 10 to 15 going on right now across the US in many states. Your large public companies have between three and five each going on today, that were going on last year, that were going on the year before. The difference is they don't have them in California. If this had happened in 49 other states, you and no one else would have ever known about it, which is why you don't know about the other 10 to 15 occurring because they're not in California. One is by one of our large competitors, but be thankful for them, it's not in Los Angeles County, it's adjacent. The reason the EPA is involved at our request is because they are having an extremely difficult time understanding the dysfunctionality of California's inability to resolve its own regulations. That is the issue. Okay. And so what we know is your question was is 2026 the last year of outlay for Chiquita and how confident? What we're confident is this is stepping down and continues to step down and will step down fairly meaningfully in 2026 as the year goes on because of the involvement and the streamlining that is coming along. Will there be some in 2027? Yes. But it will be quite lower again than 2026. So we should begin to approach those approximate 50% conversion levels as we come through 2027. So I can't, we can't sit here and tell you will it be exactly that in 2027 without knowing where we'll end with things on Chiquita in 2026. No. But all those things are triangulating to that direction.

Sure, Jerry. And I think most of what you're referring to is where we are in our Arrowhead landfill in Alabama and our intermodal facilities along the eastern seaboard in Mass, Connecticut, and New Jersey, New York. Again, to remind everybody, in August of 2023 when we acquired this network, it was doing about 2,300 to 2,500 tons a day through the network into the landfill. We're now doing 7,500 tons a day sort of at the peak period. We have built out incremental rail storage and track capacity in our New York, New Jersey intermodal facility. We have incremental track buildout that we must do at our Arrowhead landfill, which we are in the process of. We believe as we come through 2026 we will be in the 9,000 to 9,500 tons a day into our Arrowhead landfill. So we basically almost, not quite, almost quadrupling what was there two and a half years ago right now. So I would tell you that I think that's going fairly well. As is our continued densification, to use your word, in the Northeast. We did multiple tuck-ins in our New York franchise market area in 2025. We acquired at the end of the year a large transfer station as well in New York in Queens. We acquired a large recycling facility in Hoboken in 2025. So we have, I'd say, put a lot of effort into building sort of our leading position certainly at least in the New York City metro area. So I would tell you overall, Jerry, that continues to be a focus and continues to be opportunistic, there's opportunity there, but we have made good headway.

Sure. Well, Jerry, I would say that your characterization that others are experiencing are very similar to ours in many ways. Look, these things are taking a little longer to get online due to mostly permitting and startup issues. But they get there. We get them there as a company and as an industry. There's multi-months if not up to a year to work out and get the flow accurate and really work through the startup issues of the plant. So you probably start up at somewhere maybe in a 40 to 50% efficiency and you work up over time to approaching 100%. You're not at 100% efficiency till well after a year plus being online and getting your flows increased and everything dialed in. So the ramp is somewhat slow. Of course, profitability is affected by both...

Revenue values, and as you know, rents have come off a high of 340ish down to a low of two and now sitting in that 240ish range. So they're down a third, and that certainly has an impact depending on your structure of the RNG ownership facility. As you know, we and most others have sort of one of three types of structure: fully owned to some sort of hybrid to a royalty arrangement. And it also is affected by inputs on the cost side such as the cost of electricity, and of course that has had some waxing and waning. So I would tell you that the returns, while lower than probably and then certainly when run at $3 and $325, are still very good, extremely good returns at the 220 to 250 range not of RIN value and current electricity cost. Not as great as they were at an obviously higher commodity value, but still very attractive and well worth the investment that we're making.

Yeah. And to give you an example, Jerry, a real life example, I mean we have one of the largest, we have the largest facility in Canada outside of Montreal that we've owned a long time. It's very effective. We started another one. It was supposed to be online in April of '25. It came online in December of '25 and it only began running at sort of close to full capacity in the last couple of weeks. So, you know, they can take a little longer, but they definitely, the performance is still attractive.

So James, I'll give you some high-level stuff on this because a lot of this is, you know, changes fluidly quite frequently. So at the peak of the reaction, which we believe the peak was somewhere between June and August of '24, we were generating as much as 400,000 gallons of leachate per day. As of the end of the fourth quarter, we were generating most days between 200 and 225,000 gallons. So that number, as you can see, is at least from the peak down approaching 50%. We have other things such as wellhead temperatures that are cooling. So we have every reason to believe that the statistics point to that we are on the downward slope or the back side of the curve of the slope of the reaction as it is starting to cool and waning. What the slope of that trajectory line is, obviously it's too early to tell but the indicators are that we're over the hump and on the other side. So that's number one. The cost per gallon varies. It can be as low as about 50 to 60 cents to as high as $1.50 to $2.50 depending on what treatment facilities are available and what constituents they can take. Some facilities cannot take various things that are within leachate and so you have to transport further to a more complex treatment facility. And yes, to answer your question, I would say that the leachate treatment is not 50 to 60% but I would characterize it more as about 40 to 45% of the cost, certainly the large majority. And then lastly I would tell you that I'm not sure that evaporation is necessarily going to happen. This still resides within the state of California. But it's interesting you bring that up, at a large one of these going on in Nevada right now. There you can purchase acreage and go out and aerate this in the desert for two cents a gallon. So it is quite interesting how one state handles this compared to a state like California. So I doubt we'll get to evaporation but yes, we do believe that the involvement of the EPA can lead to some streamlining of treatment facility opportunities and that ultimately leads to a more cost-efficient process.

Well, first off, that's again a very good question. Two-part, hopefully both things we're going to answer here gives you some comfort in this. First off, we absolutely do believe that that expansion will go forward. That is expected to happen here over the course of the next several months. We are in the technical review piece of the expansion with the state and generally in the state of New York and other states the technical review is really what the design, the final design and contours will be relative to whether it's a go or no go. The go or no go is a separate process and that has effectively been decided in our favor. So we have quite a very high degree of confidence that Sica will succeed in its expansion and go forward. But in order to have enough airspace to honor our commitments, we have been throttling back volumes consciously at Sica, our choice, over the last 18 months. And so we have taken that to other landfills that we own throughout our network both in New York and Pennsylvania and some to our Arrowhead network that we mentioned earlier, our intermodal. We have also had to push out some third party to do that. And so we've overcome that as well in our results. But to answer your question, I would tell you that if Sica were to close as you said, if that is a worst case scenario, the impact to us is far less than what we absorbed at Chiquita closing. So without laying it out, it's far less and you've seen us overcome the impact to EBITDA revenue and margin of Chiquita and this would be far less. It would be something I'm not even sure you would notice.

That is not yet rolled out to the fleet today, Adam. So it would be misleading to tell you that it is and what we think those savings will be. We have beta tested what we've done in probably what would equate to maybe up to 5% of our locations, but not at all of the routes on those 5%. So that's a smaller test. But I do expect that we will have this rolled out fairly broadly by the third and fourth quarter of this year and then really more fully deployed throughout '27 but have a good impact or a good understanding of the potential impact in the second half of this year at some point.

Yeah, I would tell you Chris that it's probably too early for us to make any real, you know, educated response to that, but I can tell you in speaking with our Canadian leadership team, we were just in Canada this week at our Canadian region office on Monday and Tuesday. And they were, it was not something they were concerned about based on how everything they understood at this point.

In the fourth quarter are you referring to Trevor or in the quarter we're now sitting in? We really didn't see any weather impact in the fourth quarter. I mean weather was somewhat mild but nothing to note. Of course, in the month of January, there was a fairly significant cold snap that I think affected our business in up to 30 states and certainly there is some impact, but nothing material by any means.

I think we covered it. That was the construction-driven slowdown.

Yeah. Well, look, to start it with when we looked at this, we actually identified up to 40 areas that we could potentially look at the utilization of AI in some way or another. We prioritized the seven things over a three-year period that we thought had the biggest opportunity for impact to the business positively whether that be from an operating, a financial, customer service, etc. efficiency. So those are the things we attacked. Last year we worked heavily '25 on commercial pricing and a couple of other initiatives in AI. This year as I said it will be on routing and mobile customer engagement. Without question, these initiatives should and I think will lead to improved efficiency, improved margin performance and improved asset utilization. No question. Dynamic real-time routing allows you to move assets with information that today you don't really have or you have only reactively, not proactively. And therefore, you have to have a little bit higher spare factors in your fleet at locations. Those kinds of things. You end up with a little higher overtime because you are reactive versus proactive. So it's not one of these things that moves the dial in one area, 40 or 50 basis points. It's one of these things that moves seven or eight dials 10 to 20 basis points throughout your P&L over time. And so that's how, what we see and what we are seeing. And ultimately, look, it provides a better service quality, a more proactive communication with your customer, greater efficiency for your physical and your human assets, and greater projectability in your business. Those are the things we're expecting and we're seeing. It just makes it better for all of our shareholders, our customers, our employees, and ultimately our shareholders. So we're excited about it. I think it's still early innings and not prepared to put a marker out there of what does this mean? But I can tell you that these investments the payback is very quick. The payback is months to maybe a year and a year and a half. So these are very solid investments for the business.

And one other thing I would say William that I think we weren't going to talk about this but since you raised the question, look, we have gone out and purposely recruited one of what we believe is the top RNG experts anywhere in the industry. And this person is an executive officer of one of the finest RNG companies. We work with all of them and we have more regard for this company than anywhere else. And they have built and operated some of our facilities and we have been laser focused on figuring out how to have him join us. And he starts Monday morning and we are very very excited about that. We're not going to release that name right now because that's not appropriate for him or his company. But that I think shows you our commitment to RNG and our acknowledgement that we could continue to get better there and like any area just like we're doing in AI and others. If you got to go out and get the talent, we're going to go out and get the best talent we can find to drive what we may not be as good in as we are in some of our core competencies. So I think we'll just continue to get better as we go forward in RNG starting Monday morning.

Yeah. Well, it's clear we'd rather operate only in jurisdictions that have a more friendly business environment. But we are obviously in 45 states so that bet is already decided. I certainly wouldn't pursue owning an additional landfill in California in the next 200 years but other than that no it doesn't change anything.

And then Ron, I think... yeah, what I would say, Kevin, no, I do not necessarily believe that the franchise of New York City or the franchising model of the New York City market becomes necessarily a tailwind. What I do think however is it becomes a much more stable, less volatile market because it is a very competitive market up till now and so you have large swings. So I think it becomes a much more stable, projectable, investable market than it has been in the past where you can have a swing of a collection margin that goes from 10% to 6% to 20% in a three-year period. And now I think what you have is you'll have a very tight bandwidth of margin performance for the most part at very good margins at sort of company average type margins on an integrated basis.

Oh yeah and look, I don't think, I mean I think it's too early to tell what will happen in the UP and NS merger. I think we're quite a ways away from understanding whether that will happen and if it will happen what will be the guardrails put around that. We have a very long-term agreement with Norfolk Southern that the combined company would be honoring. So we're not concerned about it in that way. Could it open up additional opportunity because of the connectivity between those two? Well, that's certainly a possibility, but not something we've yet explored.

Yeah, I mean, Tony, number one, to say that we've done anything in that arena would be misleading because we have not. Do I think it is something that could potentially occur in the waste industry? Absolutely. I think it is potentially there. As you know, there's mixed views depending on where you are and what you look at on the self-driving vehicles. It's obviously happening in some markets today. So the technology is certainly there, but I will tell you, Tony, as you know, I'm on the board of a publicly traded airline, and I can tell you that for the last seven to eight years, you can push a jet back from the jetway, taxi to the runway, take off, fly to your destination city, land, and open the door with no one in the cockpit. I'm not sure anyone's getting on that plane. But so there's still pilots in every day. So there's this theoretical could this occur and then the reality of when a car gets in an accident that's bad but when a garbage truck hits something it's catastrophic. And so, even if it could, I still think you would have professionals in the cab there for those reactionary scenarios that occur if something malfunctions. Exactly the reason airlines have pilots today. It's there. It's not because they can't do it without it. It's because of the one-tenth of 1% that happens that they protect everyone from. And I think garbage truck would be the same way. But certainly something we will look at as the technology evolves. We're always, as are our peers, always looking for ways to improve the safety aspect of the business, the efficiency, the customer improvement. So but I think it's quite a ways out and we look forward to the day if that opportunity arises where we can improve it, but it's not there today.

Yeah. Thank you for asking that question. So when we opened our academies at one at the beginning of '24 and one at the end of '24, we felt that if we could get to approximately 35% of our driver need per year being internally developed at the academies we would consider that a tremendous success. We achieved that number in '25 and for '26 we are forecasting that 60 plus percent of our driver need will go through one of our two academies. So far exceeding our expectations. Now that's a two-fold function. That's because we've reduced turnover quite dramatically. So the need for new drivers isn't as high. But the second and more important thing is the retention rate through the academies is almost double the retention rate of those that don't go through the academies. So it's, and we also thought that would happen. We didn't think it'd be quite as good as it has been. However, so we're getting a double sort of whammy and that's what's helped decelerate the, improve turnover so quickly. Do we ever think that gets to 100%? Probably not but if it could stay in this above 50% range per year sort of what we call being internally developed and trained we'd be very happy and as I said we believe that number will be north of 60% this year. So far that, and again what is that yielding and we're working through getting the statistics to support this but we believe that the drivers that go through our academies, number one the turnover is lower. We know there's a direct linkage between turnover and tenure and safety. And so we think as we look out through this year into next year the linkage will show that those drivers we internally develop tend to have better safety performance statistics as well. So that's sort of where we are there.

Okay. Well, if there are no further questions, on behalf of our entire management team, we appreciate your listening to and interest in the call today. Maryanne and Joe Box are available today and to answer any direct questions that we did not cover that we are allowed to answer under Regulation FD, Regulation G, and applicable securities laws in Canada. Thank you again. We look forward to seeing you at upcoming investor conferences or on our next earnings call.