Q3 2024 Avantor Inc Earnings Call

Thomson Reuters StreetEvents10-26

Participants Christina Jones; Vice President, Investor Relations; Avantor Inc Michael Stubblefield; President, Chief Executive Officer, Director; Avantor Inc R. Brent Jones; Chief Financial Officer, ...

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Brent Jones; Chief Financial Officer, ...</p>\n\n<a href=\"https://finance.yahoo.com/news/q3-2024-avantor-inc-earnings-043604866.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Q3 2024 Avantor Inc Earnings Call</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nQ3 2024 Avantor Inc Earnings Call\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-26 12:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/q3-2024-avantor-inc-earnings-043604866.html><strong>Thomson Reuters StreetEvents</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Participants\nChristina Jones; Vice President, Investor Relations; Avantor Inc\nMichael Stubblefield; President, Chief Executive Officer, Director; Avantor Inc\nR. Brent Jones; Chief Financial Officer, ...</p>\n\n<a href=\"https://finance.yahoo.com/news/q3-2024-avantor-inc-earnings-043604866.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"AVTR","symbol_name":"Avantor, Inc.","start_time":0,"source_url":"https://finance.yahoo.com/news/q3-2024-avantor-inc-earnings-043604866.html","article_id":"2478126629","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2478126629","pubTimestamp":1729917364,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Christina Jones; Vice President, Investor Relations; Avantor Inc. Michael Stubblefield; President, Chief Executive Officer, Director; Avantor Inc. R. Brent Jones; Chief Financial Officer, Executive Vice President; Avantor Inc. Daniel Arias; Analyst; Stifel Nicolaus and Company, Incorporated. Good morning. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to Avantor's third quarter 2024 earnings results conference call. I will now turn the call over to Christina Jones, Vice President of Investor Relations. Ms. Jones, you may begin the conference.Thank you, CJ, and good morning, everyone. I appreciate you joining us today. I'm starting on slide 3. We delivered another solid quarter with in-line performance across all key financial metrics. Reported revenue increased sequentially to $1.71 billion, while organic revenue declined 0.7% year-over-year.We were encouraged by another quarter of outperformance in bioprocessing and as st","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"AVTR":"Avantor, Inc."},"translate_title":"2024年第三季度Avantor公司收益看涨期权","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AVTR":0.9},"content_text":"Participants\nChristina Jones; Vice President, Investor Relations; Avantor Inc\nMichael Stubblefield; President, Chief Executive Officer, Director; Avantor Inc\nR. Brent Jones; Chief Financial Officer, Executive Vice President; Avantor Inc\nDaniel Brennan; Analyst; TD Cowen\nDoug Schenkel; Analyst; Wolfe Research\nTycho Peterson; Analyst; Jefferies\nMichael Ryskin; Analyst; BofA Global Research\nVijay Kumar; Analyst; Evercore ISI\nDaniel Leonard; Analyst; UBS Equities\nConor McNamara; Analyst; RBC Capital Markets\nDaniel Arias; Analyst; Stifel Nicolaus and Company, Incorporated\nRachel Vatnsdal; Analyst; JPMorgan\nLuke Sergott; Analyst; Barclays\nTejas Savant; Analyst; Morgan Stanley\nPatrick Donnelly; Analyst; Citi\nPresentation\nOperator\n Good morning. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to Avantor's third quarter 2024 earnings results conference call. (Operator Instructions)I will now turn the call over to Christina Jones, Vice President of Investor Relations. Ms. Jones, you may begin the conference.\nChristina Jones\n Good morning. Thank you for joining us. Our speakers today are Michael Stubblefield, President and Chief Executive Officer; and Brent Jones, Executive Vice President and Chief Financial Officer. The press release and the presentation accompanying this call are available on our Investor Relations website at ir.avantorsciences.com. A replay of this webcast will also be made available on our website after the call.Following our prepared remarks, we will open the line for questions. During this call, we will be making forward-looking statements within the meaning of the US federal securities laws, including statements regarding events or developments that we believe or anticipate may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings. Actual results might differ materially from any forward-looking statements that we make today.These forward-looking statements speak only as of the date that they are made. We do not assume any obligation to update these forward-looking statements as a result of new information, future events or other developments. This call will include a discussion of non-GAAP measures. A reconciliation of these non-GAAP measures can be found in the press release and in the supplemental disclosure package on our Investor Relations website.With that, I will now turn the call over to Michael.\nMichael Stubblefield\n Thank you, CJ, and good morning, everyone. I appreciate you joining us today. I'm starting on slide 3. We delivered another solid quarter with in-line performance across all key financial metrics. Reported revenue increased sequentially to $1.71 billion, while organic revenue declined 0.7% year-over-year.We were encouraged by another quarter of outperformance in bioprocessing and as strong order rates continue as well as sequential and year-over-year growth in our Laboratory Solutions segment. Adjusted EBITDA margin was 17.6%, and adjusted EPS increased to $0.26 in the quarter. Sequential mix headwinds were largely offset by strong realization of savings from our cost transformation initiative.Our disciplined approach to working capital drove another quarter of best-in-class free cash flow conversion. This enabled us to pay down over $200 million of debt, bringing our net leverage down to 3.8x. Given our strong year-to-date performance, we are raising our free cash flow guidance for the year.On October 17, we successfully closed the previously announced divestiture of our clinical services assets, which provided support for customers engaged in clinical trial activities with kitting, biorepository and archiving services. This divestiture allows us to focus on our lab and production platforms where we have strategically advantaged position and scale, higher growth entitlements and lower capital investment needs.After a highly competitive process, we are confident we receive full value for the business. The $500 million in after-tax proceeds, combined with our strong cash generation, accelerates our path to achieving adjusted net leverage of less than 3x.In addition to our strong operating results this quarter, we also made considerable progress in advancing our long-term growth strategy. Recent highlights include the expansion of our magnetic mixing systems portfolio with the introduction of a new tabletop mixer. We launched this new product at the recent Bioprocess International Conference in Boston, where we showcased our innovation capabilities with multiple scientific and keynote presentations.In our lab segment, we launched several new third-party branded products, including Agilent advanced analytical instruments for advanced battery and sustainable energy applications, Sarstedt life science and blood collection consumables as their first major US distribution partner, and Oxford Nanopore's grid ion long-read NGS sequencer, further expanding our collaboration with Oxford Nanopore to bring this higher throughput instrument to market in Europe and the Americas.We officially opened our new flagship innovation center in Bridgewater, New Jersey. This 60,000 square foot facility staffed with PhD scientists, biopharma engineers, biologists and bioengineers, is 1 of 13 of Avantor innovation centers globally dedicated to solving life sciences biggest challenges. The Bridgewater Innovation Center includes capabilities for upstream and downstream process development, pilot plant for scale-up simulations, and analytical and bioanalytical labs that support multiple modalities, including monoclonal antibodies, cell and gene therapies and protein peptide therapeutics.Our new cell business received an award from the prestigious Kaizen Institute for excellence in process improvement and quality management. I recently had the opportunity to visit this team in California and witnessed firsthand how their commitment to the Avantor Business System is driving tangible operational results and fostering strong employee engagement, consistent with our culture of continuous improvement.We continue to improve the efficiency and productivity of our supply chain operations. In the quarter, we completed major technology installations at our Visalia, California site and opened a new facility in Devons, Massachusetts toward our fluid handling business. We advanced our sustainability platform and recently received an updated rating from [Covatis], a global leader in business sustainability assessments that places Avantor in the top 17% of over 130,000 rated companies globally.Additionally, we signed our first virtual power purchase agreement through the Energize program, a pharmaceutical industry sponsored program that will reduce our energy costs and deliver renewable energy to our operations across Europe. Finally, our team continues to effectively execute our multiyear cost transformation initiative with several critical work streams ahead of schedule. We are confident that we'll exceed our in-year cost savings target of $75 million in 2024.Turning to our segment results. Laboratory Solutions modestly outperformed our plan, returning to growth for the first time in two years. Within biopharma, overall market conditions remained relatively stable. Year-over-year increases in biotech funding have not yet translated into increased preclinical spending and large pharma continued their pattern of cautious spending and prioritizing their clinical pipelines.In our other end markets, core diagnostic testing demand remains strong, and we delivered growth in both our education and government and applied end markets, underscoring the strength of our diversified platform. Consumables and services performed well, and equipment and instrumentation demand improved modestly from first half levels.In bioscience production, bioprocessing end market conditions continue to improve. Production levels increased, and this quarter, the FDA approved 13 additional biologics and protein peptide therapies for various indications, including oncology, Alzheimer's and ulcerative colitis.In line with these strengthening conditions, our bioprocessing sales outperformed our expectations of a low single-digit decline, finishing flat year-over-year. Strong order momentum once again reinforces our confidence in mid- to high single-digit model processing growth in the fourth quarter. Outside of bioprocessing, we saw sequential growth in biomaterials, offset by declines in our advanced technology sales in the US.In summary, we delivered another quarter of solid performance. Our cost transformation is ahead of plan, and we have raised free cash flow guidance for the year. Order momentum in bioprocessing continues, and we are encouraged by the return to growth in our Laboratory Solutions segment.With that, I'll now turn it over to Brent to walk you through our third quarter results in more detail.\nR. Brent Jones\n Thank you, Michael, and good morning, everyone. I'm starting with the numbers on slide 4. Reported revenue was $1.71 billion for the quarter, declining 0.7% on an organic basis. Sales trends in our Laboratory Solutions segment were similar to second quarter levels with a modest improvement in equipment and instrumentation demand. Within our Bioscience Production segment, bioprocessing outperformed expectations, while advanced technologies were modestly below plan.Adjusted gross profit for the quarter was $573 million and adjusted gross margin was 33.4%. Adjusted gross margins declined sequentially largely due to mix. Key contributors were the increase in equipment and instrumentation and lab solutions and headwinds in advanced technologies and Bioscience Production.Year-over-year adjusted gross profit was impacted by mix and modestly lower sales volume. Adjusted EBITDA was $303 million, and adjusted EBITDA margin was 17.6%. Our cost transformation initiative continues to drive meaningful SG&A savings nearly offsetting the sequential mix-related headwinds to gross margins.On a year-over-year basis, performance was impacted primarily by our incentive compensation reset. Adjusted operating income was $275 million at a 16% margin, in line with adjusted EBITDA performance and the drivers just noted. Adjusted earnings per share were $0.26 for the quarter, a $0.01 sequential and year-over-year improvement. Our adjusted EPS performance in the quarter reflects the flow-through of our adjusted EBITDA result as well as lower net interest expense. Interest expense favorability was driven by incremental debt paydown from outperformance in free cash flow and the impact of our interest rate swap termination.As Michael noted, we delivered another strong quarter of free cash flow, generating over $200 million in the quarter and approximately $550 million year-to-date inclusive of cash costs related to achieving our transformation savings. Excluding those same costs, we have generated approximately $625 million of free cash flow in the first three quarters against our original full year guidance range of $600 million to $650 million. In Q3, we paid down over $200 million of debt and our adjusted net leverage ended the quarter at 3.8x adjusted EBITDA.We closed on the sale of our clinical services assets on October 17. After accounting for transaction costs and expected tax payments, we netted approximately $500 million in cash proceeds, which we intend to use for debt pay down. As part of the transaction, we also transferred balance sheet capital lease obligations of approximately $50 million, further reducing our leverage. We now expect to finish the year at/or below 3.4x adjusted net leverage and continue to make meaningful progress towards our target of sub-3x adjusted net leverage.Slide 5 outlines our segment performance. Laboratory Solutions revenue was $1.17 billion for the quarter and grew 0.6% versus prior year on an organic basis. Sequentially, sales grew modestly due in part to an improvement in equipment and instrumentation. While biopharma and health care continue to be pressured by the cautious spending environment, we saw nice improvements in other parts of the portfolio. Education and government grew mid-single digits year-over-year, and our applied and industrial sales grew again with growth in both the Americas and Europe.Adjusted operating income for Laboratory Solutions was $152 million for the quarter with a 12.9% margin. Sequentially, Laboratory Solutions adjusted operating income was up modestly. We had a slightly negative mix at the gross margin line, largely offset by spend controls and transformation-related SG&A savings. Adjusted operating income margin decreased 20 basis points from Q2. The year-over-year adjusted operating income decline was driven by the impact of our annual incentive compensation reset, partially offset by savings from our cost transformation initiative.Bioscience Production revenue was $543 million, an organic decline of approximately 3.5% versus prior year. Sequentially, reported revenue declined modestly, primarily due to advanced technologies. Bioprocessing, representing about 2/3 of the segment, outperformed expectation and was roughly flat year-over-year with another strong quarter of order intake. Biomaterials performed in line, while advanced technologies was somewhat below expectations.Adjusted operating income for Bioscience Production was $138 million for the quarter, representing a 25.4% margin. On a sequential basis, adjusted operating income margin was impacted by mix and higher freight expense. Year-over-year adjusted operating income declines were largely driven by incentive compensation headwinds.Moving to the next slide. We are reiterating our full year P&L guidance, net of the impact of our clinical services divestiture and raising our free cash flow guidance. Clinical services was expected to generate approximately $200 million of annual revenue, which will no longer be in our results as of October 17. Accordingly, we are adjusting our reported revenue guidance for the year by approximately $50 million to reflect this impact. Clinical services was part of our Lab Solutions segment, so these expectations should likewise be adjusted.The divestiture is approximately 10 basis points dilutive to our full year adjusted EBITDA margin and $0.01 dilutive to adjusted EPS. As a result, we now expect adjusted EBITDA margin of 17.3% to 17.8% and adjusted EPS of $0.95 to $1.03 for the full year.Given our strong free cash flow performance this year, we are raising our free cash flow expectation from the original range of $600 million to $650 million to more than $750 million. This is before transformation-related cash costs of approximately $100 million.A couple of final comments on organic growth. We are reiterating our expected full year organic growth of negative 2% to positive 1% as our organic growth assumptions remain unchanged. The midpoint of our guidance assumes an approximately 49%, 51% first half to second half revenue split as we have anticipated all year. The low end of the range assumes a more muted seasonal pattern.By segment, we expect Laboratory Solutions organic growth to be flat to modestly up in Q4, leading to an unchanged expectation of flat to low single-digit declines for the full year. We expect Bioscience Production organic growth of low to mid-single digits in Q4 with strong order growth supporting mid- to high single-digit organic growth in bioprocessing. For the full year, we expect Bioscience Production and bioprocessing both to decline low single digits organically, also unchanged.I'll now turn the call back to Michael.\nMichael Stubblefield\n Thank you, Brent. Before we conclude, I would like to summarize the key takeaways from another strong quarter. We are encouraged to see our ongoing commercial intensity driving growth in our lab business, alongside continued outperformance in bioprocessing.Our order book continues to grow, positioning us for mid- to high single-digit bioprocessing growth in the fourth quarter. Our cost transformation initiative is delivering results ahead of plan, allowing us to substantially offset the mix headwinds we experienced in the quarter. We will exceed our in-year savings target of $75 million, and we'll exit the year with run rate savings of more than $150 million.Enabled by the Avantor Business System, our disciplined approach to working capital resulted in another quarter of best-in-class free cash flow conversion. And we raised our free cash flow guidance for the year. Together with the proceeds from our clinical services divestiture, our strong free cash flow is accelerating our deleveraging efforts and positively impacting our earnings.We continue to make progress with our new operating model, realizing significant commercial and operational benefits just 10 months in. We are now a leaner, more agile and more efficient organization. This new model is also enhancing both our internal processes and the way our customers -- our platform. Importantly, we have significantly advanced our long-term growth strategy, achieving key milestones in the areas of innovation, new product introductions, sustainability and supply chain infrastructure. I want to extend my gratitude to our Avantor associates across the globe for their dedication to serving our customers and their invaluable contributions to our success.I will now turn it over to the operator to begin the question-and-answer portion of our call.\nQuestion and Answer Session\nOperator\n (Operator Instructions) Dan Brennan, TD Cowen.\nDaniel Brennan\n Thanks for the question, and thanks for the info on the call. Maybe just on the implied fourth quarter guide, just to start, guys. You gave some color, Brent, right at the end on the segment. But could you just kind of give us a sense of where we should be thinking about overall for the company because if you took the full year guide, 0% to 12% is what's kind of implied in the fourth quarter. So why? So just help us a little bit on that.And then b, just as it relates to Bioscience Production, Brent, I think you heard you say low single to mid-single. If I kind of plug that in, I think I come up with kind of down 3% for the year. I think your prior guidance for the full year was not pointing to us. Maybe just unpack a little bit of the overall guide and what it means for the segment for the fourth quarter.\nR. Brent Jones\n Yes. No, absolutely. Thanks for the question, Dan. I wouldn't read much into the broad guidance point here other than we're really updating for the impact of the clinical services divestiture there. Really the outlook broadly unchanged there in terms of what we see in the segments, I think the important point is return to growth in Lab Solutions there flat to up a little bit in Q4, the mid- to high growth in bioprocess in Q4. And then the few really unchanged in BPS for the segment, down low single digits there in Q4.\nDaniel Brennan\n Okay. And then -- yes, I'm sure we can unpack that more on the call here. And then maybe just as we turn the page, I think some of your peers already earlier in the week, gave some color on '25, whether explicitly or implicitly. So I think the Street sits at like 4.5%. Michael, you talked about a lot of optimism on cost cuts and some of the initiatives you have, but still a tough environment. I mean does that seem like a realistic starting point do you think at this point from what you're seeing in your business trends?\nMichael Stubblefield\n Well, Dan, I'd say probably a couple of things. Firstly, I think as we've done in previous years, where we sit here in the year, it's probably a little bit too early to comment on 2025. We'll certainly see how Q4 plays out and follow our normal cadence as we get into our fourth quarter call for next year.\nOperator\n Doug Schenkel, Wolfe Research.\nDoug Schenkel\n Actually, my first one, let me build off of Dan's question -- so Dan's second question. So as we think about Q4 EPS, I think the midpoint of guidance implies something like $0.27 to $0.28, recognizing you're not going to guide for '25 now, that's not what I'm asking. But if we just kind of annualize that for 2025, recognizing the world's gradually getting better, your order book continues to improve, your cost transformation initiatives continue to take hold. With just annualizing the Q4 number be a good way to kind of establish a minimum number for next year, assuming things just continue to move in the direction they're moving.\nMichael Stubblefield\n Yes, Doug, I'd say a couple of things. Firstly, I certainly understand the math that you're trying to do. But we'll just reiterate, for us, it's probably a bit too early to comment on 2025. But what I would probably draw your attention to is just what we've experienced this year in our lab business. It's been a year of stability and some gradual improvement.Certainly, we're encouraged by the return to growth in the third quarter as well as gradual recovery in the bioprocessing space. We've got a best-in-class platform there and the outperformance for yet another quarter is encouraging. I think we've got a good setup as we exit the year.But structurally, our order book doesn't really give us the visibility to predict the timing or the shape of what -- how things are going to play out next year. But I'd say the end market fundamentals are strong. We're encouraged by the momentum in our business, especially bioprocessing. And perhaps most importantly, I think we're doing all the right things to ensure we're well positioned to capitalize on the growth as it presents itself next year.\nDoug Schenkel\n All right. Thanks, Michael. Can't blame me for trying, hopefully. All right. And then I just -- I want to follow up on a -- with an unrelated question on BPS.So on the whole, BPS came in, I think, a little bit light of expectations, but bioprocessing was actually better than expected which I think leads us to the conclusion that maybe the offset was [new]. Can you just give us some color on what's going on there?And then I guess, higher level for the segment, I think margin was a smidge lower than the margin you generated in that segment in the second quarter on similar revenue. I'm just wondering if that was mix or something else like maybe you pulled forward some investment in the quarter or something like that?\nMichael Stubblefield\n Yes. Let me take your first one. Brent can handle your question on margin, Doug. On the BPS segment, we have kind of a broad diversified platform there, probably three principal components there. Obviously, 2/3 of the platform is our bioprocessing platform.Again, another quarter of outperformance. We delivered kind of flat performance year-over-year as well as sequentially compared to a low single-digit decline. We're actually encouraged to see our biomaterials platform grow sequentially. So another good quarter there. So the pressure really in that segment was within our advanced technologies platform and primarily in a down quarter on US semiconductors.\nR. Brent Jones\n Doug, on the margin side -- Doug, following there on the margin side, I mean, there are a few things going. As sort of as we noted in the script there, we did have higher freight expense in that segment. There are things going on in the world there that we work very hard at that, but that was a headwind to us.And we also had the specific comments to Michael, we also had a bit of the mix of the mix there. Nice performance in bioprocessing there. The headwinds and advanced technologies, you put that together with some mix of the mix and that leads to that performance.\nOperator\n Tycho Peterson, Jefferies.\nTycho Peterson\n Going to love this. I'm going to ask another question about the 4Q range. I'm just curious, are you guiding us to the midpoint and high end is budget for us, can you flush that out a little bit? And then the implied margin in 4Q was also pretty wide. Just wondering if you can kind of give us some of the gives and takes on the 4Q margins.\nR. Brent Jones\n Yes. No, Tycho, thanks for the question. look, the broad view on the guidance there is the midpoint of the guidance would get you to a seasonal ramp in the lab business. We talked about this some last quarter. The low end would be more muted conditions to sort of similar to the exit rate we saw in Q3 there. So that's the reason for the broadband. That's consistent with the environment that we had talked about before.The flow-through of the margin, I mean part of this, we haven't wanted to touch every piece of the guidance around there. I think you can think of nice consistent performance there when you think about what Q4 wants to be, that will have similarity to Q3, assuming the expectations we talked about there.Again, in Q4, we talked about lab flat to modestly up. BPS, positive low single digit to mid-single digit there. You put that all together, the puts and takes with the headwinds of the clinical services divestiture, which is some headwind to margin, but then nice tailwind from the mid- to high bioprocess there that gets you in a consistent place there to Q3 on a margin basis.\nTycho Peterson\n Okay. That's helpful. And then going back to one of the questions earlier from Doug, on some of the other businesses. You flagged semi. I'm just curious your outlook there, how much pressure you think this could put on numbers going forward?And then, also, what are you thinking on new cell going forward as well? I know you don't specifically want to comment on '25, but just curious on underlying trends there and how we have to think about what you're seeing?\nMichael Stubblefield\n Yes. So a couple of things to unpack there for you, Tycho. Firstly, on the new cell platform, as we've talked about this in a lot of different forms, it's a really terrific platform, extremely well positioned. The business is running a bit ahead of plan this year. Again, we saw a sequential growth in Q3, which was encouraging.We've got a great innovation pipeline. Procedure accounts are trending in the right direction here. So I think the setup for that long term continues to be quite favorable. And we would anticipate long term that being a mid- to high single-digit growth platform for us and certainly nothing ahead of us that would indicate that's not possible. On the semi front that you referenced there, yes, certainly some pressure building in that end market as we move through the quarter.There are some bright spots in that space, and there's a lot to like about where the technology is headed there. But what we saw in the quarter was a stall in the recovery, particularly in the US and a little bit of some traction getting lost there in the end market.And you see that Tycho and a lot of the recent public updates from some of the key players in the space I think baked into our outlook for the fourth quarter is we would anticipate that to continue. Unfortunately, that's a relatively small part of the business. And given the strength in bioprocessing and biomaterials, we're able to largely offset that weakness with strength in those other areas of our business.\nOperator\n Michael Ryskin, Bank of America.\nMichael Ryskin\n I want to talk a little bit about the clinical services divestment and the impact to the guide. I know you only really talked about the last 2.5 months of the quarter. But is it reasonable to just take that and prorate that to fiscal year '25, meaning like you said, $200 million a year? You're seeing $150 million of it this year, so you expect the other $150 million, give or take next year.And then in terms of EBITDA, it's a 10 bps dilution to the EBITDA margin this year. So 30 to 40 bps impact to EBITDA margin next year? Or is there any other seasonality we should keep in mind or anything like that?\nMichael Stubblefield\n Michael, really good question there. And I think the math that you've laid out there makes a lot of sense. Just to reiterate a couple of the points here. We talked about the business being roughly $200 million on an annualized basis. There's not a lot of seasonality to that.So you see roughly 1/4 of that impact being taken in Q4. And I think it would be safe for you to assume that you would see a similar impact as what we're seeing here in Q4 play out through the first three quarters of next year and not just for the top line, but all the way through the P&L.\nMichael Ryskin\n Okay. That's easy. And then the other point was you mentioned a couple of times during the call, the cost savings, you're ahead of your $75 million target for the year. Is that a little bit of timing, like some pull forward from next year? Is there -- you sound a little bit more wood to chop? Are you potential for upside to that number for next year as well, just how we think about that comment in the context of this is a three-year program?\nR. Brent Jones\n Michael, it's Brent. I'll take that. Look, we appreciate the focus on that. Year-to-date realization is nicely ahead of plan for the full year. Again, we still have hard work to do in Q4, but we expect to deliver comfortably in excess of $100 million in the year. This puts us nicely ahead of the $150 million exit rate that Michael noted on the call last quarter.Really how we got there was year-to-date realization ahead of plan. We got more in-year impact. We started talking about that on the Q1 call due to being really quick execution in connection with that. I wouldn't read any more into what it means for the broad program. It's three years, the $300 million. We're obviously incented to get these things done rapidly, but we'll update you with the guide there. But I would say it's better than steady she goes there.\nOperator\n Vijay Kumar, Evercore ISI.\nVijay Kumar\n I guess just one back on -- sorry, the performance in the quarter. When you look at within BPP, ex-BPS, I think the other parts of the business are down mid-teens. I know you mentioned semi. Was this a timing -- was there some timing impacts here? And should that come back?I know you mentioned some of the peers. What's the read here? Should we be looking at companies like ASML? Is that the read here of how to think of semis?\nMichael Stubblefield\n Yes, a couple of things there, Vijay. Thanks for the question. Again, we'd just make sure it's crystal clear for the call today. Bioprocessing continues to outperform. We did grow our biomaterials platform; the new cell platform, sequentially.So the pressure really here is within our applied segment -- advanced technologies segment. We're primarily in the US semiconductor sector. We provide formulated solutions that go directly into semiconductor manufacturing processes. So I think the read through to the end market probably best to look at the manufacturers of the semiconductor chips themselves, Vijay.Not really timing related. I think as I said, the answer in one of the other questions. This has been an end market that had significant headwinds throughout all of last year. We had been on a pace of recovery as we've moved through the first half of this year and even into the early days of the third quarter.And what we really saw as we moved through the third quarter was that momentum stall out, and we see a bit of a pause here in that recovery. And our assumptions for the fourth quarter would contemplate that continuing based on the forecast we're getting from our customers.\nVijay Kumar\n Understood. And you did bring up bioprocessing, Michael. I guess, the order trends gives visibility to mid- to high singles in Q4. What were order trends? And I'm getting to maybe something like 2% organic for overall companies based on your bioprocessing outlook for Q4. Is that like a reasonable jump-off point for next year?\nMichael Stubblefield\n Well, yes, thanks for bringing up a really important part of our story here. We are encouraged, Vijay, by the continued momentum that we see in our order book with another really strong quarter in that regard. And I also say, importantly, it's not just about the order book, but we're certainly seeing that order book translate into revenue, which did enable another quarter of outperformance in bioprocessing.And then based on the orders and momentum that we have, I think we see a lot of confidence in our ability to deliver on mid- to high single-digit growth in bioprocessing within the fourth quarter. Our year-to-date revenue and order trends validate that we have a best-in-class platform with a sustained track record of share gains.So I think we like our positioning and the setup for Q4 is strong. And when we look against our long-term algorithm, there's still some room to go here in terms of getting that platform all the way back, but we really like the trajectory and certainly are encouraged, Vijay.\nOperator\n Dan Leonard, UBS.\nDaniel Leonard\n On that 20% EBITDA margin exit rate for 2025, that target you have, can you remind me what growth you need to achieve that? And does the clinical service -- services divestiture impact that target at all?\nMichael Stubblefield\n Yes. Great question. Dan, when we look at that target that we've set of 3% exit rate for last year, what we -- or for next year, excuse me, what we've said about that is we had a high conviction and we do have a high conviction in our ability to achieve that primarily based on the many different ways that we can get there, including the self-help measures and the things that we can control. Brent, given some color here on how our cost transformation initiative is trending and that certainly gets you most of the way there.And it doesn't imply a full recovery of the end markets, and we don't need a lot of heroics on the top line to get there. So you still got a lot of conviction about that. The fact that we're ahead of plan on the cost transformation will certainly help.Now it is worth pointing out when we set that target, we didn't contemplate the divestiture of our clinical services platform. So as we get into our planning for 2025, we're certainly going to have to take that into account. But our original assumptions, I think, are still very much in play here, and we can get to that level adjusted for the clinical services divestiture with things that are primarily within our control.\nDaniel Leonard\n Understood. And as a follow-up, Michael, can you give your updated view on the competitive environment in Lab Solutions and the market share picture there?\nMichael Stubblefield\n Yes. Great question, Dan. First, we'll just reiterate how encouraged we were to see our lab business returned to growth for the first time in a couple of years. The activity levels there have been improving, and we finally were able to push that into the growth territory.The sustained commercial intensity that we've referenced in a number of different forms here over the last year or so, I think is certainly correlated to the outperformance we're seeing in that segment. And when I compare our disclosures here around lab to other disclosures that others are making on lab, I think you see a platform here that continues to outperform.We're confident we certainly have a leading platform here and we remain focused on leveraging our capabilities to continue to grow share. And I think there's certainly a lot of data point here to support our view here that we've got a nice share story, particularly in things like academia when you look at our performance in that end market in the quarter. So it's a highly fragmented space. We're clearly a leader and we like our positioning and momentum here.\nOperator\n Conor McNamara, RBC Capital Markets.\nConor McNamara\n First, just on the implied guidance for Q4. Can you walk through -- that range is about $200 million based on your reiterated guidance. Can you just -- what do you need to see over the next couple of months for you to hit the high end of that guidance? Or should investors really be focused on the midpoint of your guidance as they think about Q4 results?\nR. Brent Jones\n Yes, Conor, thanks for the point. Look, again, go to my other comments on you, we haven't wanted to overly tweak things here. The lower end assumes muted, less seasonality, really continuation of the exit rate out of Q3. To get to the midpoint there, you'd see more of the seasonality that we discussed on our last call there. So you need to -- and I think another important point around that is we're really talking about the Laboratory Solutions piece of that there.We have absolute high conviction on what we talked about for Bioscience Production as well as bioproduction specifically there. And that just would be greater activity in the lab in that channel. Again, we like the exit rates we're going at to get to the mid or better. You need to see an acceleration in activity there.\nConor McNamara\n Great. And then on the cash flow generation, really strong quarter. Congrats on that. As we think about next year, you're going to -- you say you're going to exit the year at [3.4x] lever. Is it realistic to think that you could start being active in M&A next year? And what does the M&A environment look like right now?\nR. Brent Jones\n Okay. Just on the exit rate, I mean, it is absolutely very likely during next year, we'll be below 3x net leverage there. You just look at the cash generation as well as getting there on the EBITDA side of things doesn't put us in a position there.Now we want as comfortably stable our leverage target there. So that adds complexity to that. But I would say we'll be in the position where to start looking at inorganic growth for some time next year. Michael, I don't know if you want to supplement that?\nMichael Stubblefield\n Yes. No, I think that's exactly right. We are laser-focused on deleveraging and getting ourselves in a position where we have room under 3x to be able to sustainably be a consolidator in this space and M&A remains an important part of our long-term growth playback -- we're not -- or playbook.We're not in a hurry. We'll see how it plays out next year. We've got a lot of things in flight here around our cost transformation and standing up our new segments. We like the momentum in our end markets and our positioning. And fortunately, we can create a lot of value with all the organic levers that we have available to us. And whether it's next year or future year, we'll certainly get back to M&A at the appropriate time.\nOperator\n Dan Arias, Stifel.\nDaniel Arias\n Mike, at the Investor Day last year, you talked about the potential for an above-average growth period once the recovery is underway and once orders sort of turned the corner. How do you feel about that idea today when you look at the evolution of demand here and just the way that the dynamics are playing out as things slowly get better?\nMichael Stubblefield\n Yes. I mean it's a really good question. And as we've talked about here today, unfortunately, our business model doesn't give us the visibility to call the timing or the shape of how that does recover. But I'd just kind of point you to what we've experienced this year, which is a year of stability, gradual improvement in the lab, probably a little bit ahead of the curve on some of the applied markets in the academic space, getting back to more normal rates. We still got some room to go here with activity levels in preclinical research but there are some things to like about that.There are some certainly within large pharma that are doing pretty well there, and there are some green shoots even in the biotech space, not across the board, but certainly some of the larger biotech we see some of the step-up in year-over-year funding starting to translate into a step-up in spend on that. So we like that, but there's still some headwinds there that we need to overcome but the trajectory's encouraging.When you flip over to the production side of the business, exit rate here of mid- to high single digits is certainly, compared to where we've been this year is quite encouraging. But against the long-term algorithm, that would have us in the double-digit range. There's certainly room for improvement here. And we'll see how that plays out. We've got high confidence in working going to go for Q4 based on our order book.And the fundamentals are strong. We've talked about that all year. Demand remains great, great regulatory environment. I think we had another 13 approvals in the quarter on new molecules for new therapies and the production rates are continuing to improve as the destocking subsides. So I think the setup is good. We'll see how Q4 ultimately plays out, and we'll build that into our plans for next year here, but probably a little bit too early to call how we see '25 playing out yet.\nDaniel Arias\n Okay. Helpful. And then maybe just a follow-up on the overall consumables piece. I mean it feels like the inventory drawdown phase that we've been talking about has kind of run its course, but there is a level of restraint out there just overall on budgets.When you look ahead a bit, and I know you're not trying to raise expectations to get people's hopes up or anything, but I'm curious if just sort of conceptually, when you think about the beginning of next year and 1Q consumables orders. Do you think they could have a bit of a catch-up feel to them, maybe a little bit larger than normal if just spending into the end of the year was muted to a degree and now these companies are working with a fresh budget and maybe you need to restock a bit? Does that seem plausible to you at all or just not really?\nMichael Stubblefield\n Yes, I'm not exactly sure. When you look at a consumable's portfolio, which we benefit from, that inventories from our perspective, I think we would agree with your view that the destocking is pretty much behind us. And for the most part, inventories have normalized. And so we see our customers managing their inventories in line with their activity levels. So it feels like we have consumption and demand matching the orders that we're seeing at the moment.And certainly, the activity levels continue to improve. So I think that's encouraging. On the flip side, we have about 15% of our revenues or so on the equipment and instrument side of things. And that's probably been the bigger headwind across the space this year linked to budgets and capital spending.And as we noted in our prepared remarks, relative to where we're at in the first half of the year, we did see some sequential improvement in that as we got into the third quarter. And that's somewhat reflected in our mix that we see this year and in the quarter as well, but I think that's another good signal.The pipelines and activity levels have been strong there all year. It's been taking longer to convert those pipelines to orders and revenue, but there was a bit of a turn up on that area in Q3. So you kind of step back from all of that, things are definitely heading in the right direction, and the environment continues to improve.\nOperator\n Rachel Vatnsdal, JPMorgan.\nRachel Vatnsdal\n So first up, just on Lab Solutions. So I know you guys don't want to guide to 2025 at this point, but just given the hyper focus that investors do have on Lab Solutions into next year, how should we think about pricing in 2025 on the lab side of the portfolio? And what could that mean in terms of a floor for what the lab segment could do?Given some of these budget pressures that we're seeing on pharma and biotech and the pressure on volume, is there a world where lab could even be flat or declining next year? Or does that pricing power help define some of the performance and equate to some level of growth, even if it's just on pricing?\nMichael Stubblefield\n Yes, Rachel, thanks for the question. First, a couple of things maybe on pricing for 2024, as we've said in a lot of different occasions, pricing for us in the lab has played out in line with our expectations, which means we've been able to offset the COGS inflation that we do see. And fortunately, the environment on pricing and COGS has largely normalized compared to where it's been over the last couple of years, where we've been having to take outsized price increases to the market.This year, I think the dynamics have been a lot closer to kind of pre-COVID times. And we're right in the midst of that process where we're working with our suppliers to understand what COGS is going to look like next year. Early indications would seem that it's similar to what we were seeing this year perhaps, and we'll roll all that together and come forward with our pricing strategy here for next year here in the next 30, 60 days, something like that. And there's nothing that we see here that would give us pause for concern that we're not going to be able to drive our normal pricing relative to the COGS environment into the market.Teams got a great process, a lot of great discipline around this. And I think as long as we're in line with that -- COGS, I don't have any concerns at this point on that topic.\nRachel Vatnsdal\n Got it. That's helpful. And then just on the Bioscience Production segment and this advanced technology dynamics, can you just break down for us what percent of the Bioscience Production segment is exposed to silicon and biomaterials versus advanced technologies?And then within that advanced technologies for total co, that grew mid-single digits this quarter, but I know there's a fair amount of exposure within the lab segment. So what did advanced Technologies do within Bioscience Production segment this quarter given the weakness you've been calling on in semis?\nMichael Stubblefield\n Yes. So just maybe to recast what we've said about the segment, 2/3 is bioprocessing. I think we've covered performance of that pretty well here today. And then the balance of that 30%, 35% of the platform is kind of split between our new cell platform, our biomaterials platform and the other applications in things like aerospace and defense and semiconductors.Overall, at the enterprise level, we've talked about semiconductors being roughly a couple of points of our overall exposure. And you're right to note, there is certainly some applied exposure in the lab where we actually saw growth in that part of the business in the quarter, which is, I think, just a great proof point of not only the diversity of our platform, but certainly the resilience and relevance of our platform.So the weakness that we saw there really was isolated to the semi activities and principally in the US is where we saw the kind of the headwinds materialize as we move through the quarter.\nOperator\n Luke Sergott, Barclays.\nLuke Sergott\n I just wanted to get a clarification up here on Doug's earlier question. So with the biosciences exit low single-digit to mid-singles in 4Q, and you guys are still talking about doing the bioproduction exit of mid to high. I guess as we think, and I know like everybody's trying to figure out '25 but like if bioproduction actually mid to high, wouldn't -- why would that not be kind of the growth rate in '25? I just -- it sounded like the interpretation there was that it could be a little bit lower. I'm just trying to figure that out.\nMichael Stubblefield\n Yes. I wouldn't try to extrapolate our Q4 exit rates into whatever we think we're going to come forward with next year. I think it's a good data point to show the trajectory of the recovery that we've experienced this year, starting the year down low teens, progressing to kind of flat here in the third quarter to now exiting at mid- to high single digits.So I think we're on a great course here for bioprocessing overall, a lot of momentum in where we're going. And as I said before, we're not yet back to our double-digit growth rate there. So there's a bit more room to go.When you then look at the biomaterials business, we've outperformed this year relative to our expectations. There was a -- we grew that platform over 20% last year. So we knew this year was going to be a little bit more challenged as a lot of the inventory restocking that we experienced last year was going to be a headwind for us this year, but we like the fundamentals there and anticipate a mid- to high single-digit growth rate for that platform over the longer term, and we'll see where the semi business lands.But no, the exit rates for bioprocessing, I think our constructive way to think about the jumping off point, and we'll have to then synthesize that through our process here as we come out with our full year guidance. But we like to set up there. The pipelines are strong. Order book momentum continues now for the last four quarters at least. And so the I think there's a lot to like about that, Luke.\nLuke Sergott\n Yes. Okay. I just wanted to clarify. Okay. That makes sense.And I just want to tease out a little bit here on the equipment drag on the margins. I know you said it improved sequentially. And the E&I piece of the business has been soft across all peers and from every channel check. So talk a little bit about what you're seeing there? Like what was the pickup? Was it still down year-over-year? Just what was the ultimate drag on that margin and ultimately, the outlook for the E&I coming back?\nMichael Stubblefield\n Yes, a couple of things there. You're right, first of all, in that it is a relatively modest part of the business. It's roughly 15% of the total with a little bit more of that exposure in Lab Solutions where we see roughly 20% of our lab revenues are linked to equipment instruments.Market conditions, generally speaking, have been pretty similar all year, really highlighted by there's more cautious spending on capital items, particularly within biopharma. We did see some improvement, as we've noted in the third quarter. It was up low single digits sequentially.But to your point, it's still down year-over-year. I think the first half of the year, we were probably down high single digits, low double-digit kind of range and so it did improve to down mid-single digits in the quarter. So still a bit of a headwind.But as we've said, actually, the activity levels and pipelines have been pretty strong most of the year, all year. What we see, though, is just a longer cycle time to get that activity converted to an order and ultimately realized in the P&L. So maybe some green shoots here in the quarter as things seem to be start to moving in the right direction.\nOperator\n Tejas Savant, Morgan Stanley.\nTejas Savant\n I appreciate the time here. Michael, I just want to double-click on Smid-Cap Biotech a little bit. I know it's like low single-digit exposure for you. what are you hearing from that specific customer constituency given the weakness called out by some of the CRO peers and so on. When do you think the rate cuts start to filter through in terms of customer psychology? Or do you expect perhaps like election outcome clarity to move things along a little bit on that front?\nMichael Stubblefield\n Great question, Tejas. I'd say a couple of things about the biotech space. It's a relatively modest exposure for us, but it is an important customer set just given the science that they're developing. And similar to what we're seeing with some of the large pharma, it's a little bit of a mixed bag here in that yes, particularly a lot of the smaller biotechs are still struggling under the weight of the funding headwinds that have been in play over the last couple of years. But we are starting to see some green shoots in this area.And if I kind of segment the exposure here to the biotech space, we actually see some of the larger customers within that area, have a bit more access to cash, maybe benefiting from some of the early turn in funding on a year-over-year basis here, actually starting to return to growth. So yes, still some headwinds there. We're not fully seeing all of the step-up in funding translate into preclinical spend yet. But certainly, we're encouraged by some of the green shoots that we are starting to see there.\nTejas Savant\n Got it. And then my follow-up is focused on Europe, Michael. Just talk to us about sort of any signs of stress in the system or perhaps like sequential improvement, especially in important geographies like journey. You've got this dynamic of defense spending crowding out other priorities from governments.But then on the other hand, I think in the past, you've also talked about how you're relatively under-indexed to biopharma there versus North America. So just paint that picture for us a little bit in terms of what you're seeing exiting the third quarter and into October here in Europe.\nMichael Stubblefield\n Europe for us has actually been probably the strongest geography as we look across the business. I think even in the third quarter, it outperformed the Americas. And some of that, I think, can definitely be linked to what you're talking about there on maybe a little bit less exposure to preclinical research and biotech funding and such on a relative basis.And when I look through to things like our applied exposure in the region, we actually saw some pretty reasonable growth in the quarter for Europe. So Europe overall holding up quite well despite some of the macro factors out there. And again, I think it's just a great proof point of the benefits of a consumables-driven portfolio and the resilience that our platform offers.\nOperator\n Patrick Donnelly, Citi.\nPatrick Donnelly\n Michael, maybe just a follow-up on that last one on the biotech pharma piece. We certainly heard from some folks that the biotech continues to push things out a little bit. Large pharma, maybe slightly better. But I guess when you guys think about that -- those customer bases, are you seeing a bit of a dichotomy at all? How are you kind of having conversations with customers and just viewing the go-forward in terms of the willing spend, both into year-end and then budgeting into next year as well?\nMichael Stubblefield\n Yes. A couple of things to point out there, Patrick. Biotech funding has been a headwind going back to the early days of last year. We did see it tick up beginning in Q1 this year. And as we sit here on a year-to-date basis, it is encouraging to note that overall biotech funding is up on a year-over-year basis, and we definitely see things heading in the right direction there.But it is somewhat mixed in terms of the picture out there. As we talk to customers, particularly the smaller biotechs, we definitely see more muted activity levels. You see fewer start-ups coming in that generally drive some good activity when funding is strong. But the more established biotechs, Patrick, we actually do see the step up in funding translating into growth. When I look into our business, we saw that a nice sequential improvement in that part of our business in the quarter.We still do need some of the smaller folks to step up to kind of get away from this being generally a headwind. But there are some green shoots here that we have our eyes on that give us some encouragement here and do align with this trend of funding being up year-over-year.\nPatrick Donnelly\n That's helpful. And maybe just a last quick one for Brent, just on the gross margins in particular where I understand mix is obviously an impact this quarter. Just trying to think about the go forward, whether it's price, mix, any moving pieces we should be thinking about as the right point for '25 just given this quarter? It seemed like have moved around a little bit with mix just trying to get our arm around that one.\nR. Brent Jones\n Yes. Look, you have another around '25 there, Patrick. We'll come back to you on February there, but I think I would just have you focus Q4 and beyond, we're going to have some headwinds from the clinical services divestiture. We do have the mixed variability. You cited those headwinds should be essentially offset or more than offset by the growth in bioprocess in Q4.That's a real virtue of that mid to high. So I think about Q4 is something very similar to Q3 and we'll update you on all the mix and everything else for the guide for '25.\nOperator\n Those are all the questions we have time for today. And so I'll turn the call back to the management team for any closing remarks.\nMichael Stubblefield\n Yes. Thank you, operator, and thank you all for joining us today. We appreciate your support of our business and really look forward to updating you when we get a chance to meet next. And until then, be well, everyone. Have a great Friday.\nOperator\n Thank you, everyone, for joining us today. 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