Cuộc họp công bố kết quả kinh doanh Q3 2026 của Ecovyst (ECVT): Nâng định hướng EBITDA

Điểm nhấn chính

• Ecovyst báo cáo doanh thu quý 3/2026 đạt 309 triệu USD, tăng 51% so với cùng kỳ năm trước, nhờ sản lượng axit sunfuric cao hơn, giá bán thuận lợi, đóng góp từ Calabrian và khoảng 67 triệu USD chi phí lưu huỳnh chuyển giao sang giá bán.
• EBITDA điều chỉnh tăng hơn 6% lên 61 triệu USD, vượt biên độ dự báo của công ty, bất chấp chi phí sản xuất và chi phí bảo dưỡng định kỳ tăng cao.
• Biên EBITDA điều chỉnh giảm từ 28,1% xuống 19,8%, chủ yếu do chi phí lưu huỳnh cao hơn làm tăng doanh thu báo cáo nhưng không đóng góp tương ứng vào lợi nhuận. Nếu loại trừ phần chuyển giao chi phí này, biên lợi nhuận đã có thể cao hơn khoảng 550 điểm cơ bản.
• Ban lãnh đạo đã nâng dự báo EBITDA điều chỉnh cả năm lên 208 triệu - 212 triệu USD và dự báo doanh thu lên 1,05 tỷ - 1,07 tỷ USD.
• Ecovyst dự báo nhu cầu thuận lợi đối với axit sunfuric tái sinh sẽ tiếp tục duy trì do tỷ lệ vận hành của các nhà máy lọc dầu vẫn ở mức cao. Nhu cầu khai khoáng cũng đang hỗ trợ sản lượng axit sunfuric và lưu huỳnh đioxit.
• Công ty dự kiến phân bổ tới 20 triệu USD cho hoạt động mua lại cổ phiếu khi có cơ hội thuận lợi trong nửa cuối năm 2026, bao gồm 2,7 triệu USD đã mua lại trong quý 3.

Dữ liệu tài chính quan trọng

Sản lượng tăng và giá bán thuận lợi đối với axit sunfuric nguyên sinh và axit sunfuric tái sinh đã hỗ trợ lợi nhuận. Những lợi thế này phần nào bị bù trừ bởi chi phí sản xuất, chi phí vận chuyển, lạm phát, hoạt động bảo dưỡng định kỳ tăng, chi phí liên quan đến nhân sự, chi phí mua lại Calabrian và mức hấp thụ chi phí cố định kém thuận lợi hơn.

Hiệu quả kinh doanh và hoạt động

Nhu cầu axit sunfuric tái sinh được hưởng lợi từ tỷ lệ vận hành cao của các nhà máy lọc dầu và nhu cầu xăng ổn định. Theo ban lãnh đạo, xuất khẩu xăng đã tăng 5% so với cùng kỳ năm trước. Biên lợi nhuận lọc dầu cao cũng khiến một số khách hàng hoãn lịch bảo dưỡng nhằm tối đa hóa sản lượng.

Một khách hàng đã dời đợt bảo dưỡng định kỳ từ quý 4/2026 sang đầu năm 2027. Khoản chi phí hoãn lại khoảng 3 triệu USD này đã đóng góp vào triển vọng EBITDA cả năm cao hơn, dù ban lãnh đạo cho biết phần lớn mức tăng dự báo đến từ hiệu quả hoạt động.

Nhu cầu axit sunfuric nguyên sinh duy trì ổn định trong các mảng nylon, ứng dụng công nghiệp và xử lý nước. Ban lãnh đạo dự kiến doanh thu liên quan đến nylon năm 2026 sẽ đi ngang so với năm 2025. Nhu cầu từ hoạt động khai thác đồng và borat, cũng như nhu cầu lưu huỳnh đioxit từ khai thác vàng, tiếp tục duy trì tích cực.

Calabrian đã đóng góp vào kết quả quý 3 sau thương vụ mua lại vào ngày 30 tháng 6. Ban lãnh đạo cho biết quá trình hợp nhất và các hiệp đồng kỳ vọng vẫn đang đi đúng tiến độ, trong đó một số hoạt động hợp nhất thậm chí còn vượt tiến độ.

Dự báo của ban lãnh đạo

Ban lãnh đạo dự kiến sản lượng axit sunfuric tái sinh quý 4 sẽ tăng so với cùng kỳ năm trước. Sản lượng axit sunfuric nguyên sinh dự kiến sẽ giảm so với mức nền so sánh cao của quý 4/2025, khi các sự cố ngừng hoạt động tại nhà máy lọc dầu tạo điều kiện chuyển dịch công suất sang các hợp đồng bán giao ngay với mức giá hấp dẫn.

Công ty dự kiến chi phí lưu huỳnh sẽ hạ nhiệt sau khi Chỉ số Lưu huỳnh Tampa giảm 90 USD từ mức 705 USD xuống còn 615 USD/tấn. Dù vậy, ban lãnh đạo vẫn thận trọng trước khả năng quản lý hàng tồn kho và giải phóng hàng tồn kho vào dịp cuối năm.

Rủi ro và các yếu tố cần theo dõi

• Việc trì hoãn bảo dưỡng nhà máy lọc dầu có thể làm tăng rủi ro xảy ra sự cố ngừng hoạt động ngoài kế hoạch.
• Ecovyst dự kiến sẽ có 6 đợt bảo dưỡng định kỳ nhà máy axit sunfuric vào năm 2027, bao gồm cả đợt bảo dưỡng được chuyển từ quý 4/2026 sang.
• Ban lãnh đạo hiện dự kiến hoạt động bảo dưỡng định kỳ của khách hàng trong năm 2027 sẽ cao hơn một chút so với năm 2026, dù vẫn thấp hơn mức cao ghi nhận vào năm 2025.
• Chi phí lưu huỳnh cao hơn tiếp tục làm tăng doanh thu báo cáo và gây áp lực lên vốn lưu động thông qua hàng tồn kho và các khoản phải thu.
• Chi phí sản xuất, vận chuyển, nhân sự và các chi phí liên quan đến lạm phát vẫn là những rào cản đối với lợi nhuận, dù ban lãnh đạo cho biết việc định giá theo hợp đồng và các cơ chế gắn với lạm phát đang hỗ trợ bù đắp chi phí.
• Khả năng giải phóng hàng tồn kho vào cuối năm có thể ảnh hưởng đến nhu cầu axit sunfuric nguyên sinh.

Điểm nhấn phần hỏi đáp với chuyên gia phân tích

Ban lãnh đạo cho biết mảng kinh doanh axit sunfuric tái sinh được hỗ trợ bởi sản lượng theo hợp đồng và nhu cầu đối với alkylate dùng trong nguồn cung xăng và xuất khẩu của Mỹ. Công ty kỳ vọng mảng này sẽ duy trì khả năng chống chịu tốt ngay cả khi giá dầu hoặc biên lợi nhuận lọc dầu biến động.

Đối với axit sunfuric nguyên sinh và lưu huỳnh đioxit, ban lãnh đạo vẫn lạc quan về nhu cầu khai khoáng, đặc biệt là trong các ứng dụng khai thác đồng và vàng. Ban lãnh đạo cũng lưu ý nguồn cung mới còn hạn chế và kỳ vọng kết quả giá bán thuận lợi nếu nhu cầu tiếp tục duy trì mạnh mẽ sang năm 2027.

Ecovyst cho biết chuỗi cung ứng axit sunfuric vẫn thắt chặt với lượng hàng tồn kho hạn chế trong hệ thống. Do đó, ban lãnh đạo hiện không dự báo tình trạng tích lũy hàng tồn kho quá mức khi bước sang quý 1/2027.

Về phân bổ vốn, công ty sẽ ưu tiên vận hành an toàn và hiệu quả các tài sản hiện có, đồng thời đánh giá các cơ hội tăng trưởng hữu cơ và tăng trưởng phi hữu cơ tiềm năng dựa trên lợi nhuận mang lại cho cổ đông.

Toàn văn biên bản cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good morning. My name is Joel, and I'll be your conference operator today. Welcome to the Ecovyst Third Quarter 2026 Earnings Call and Webcast. Please note, today's call is being recorded and should run approximately 1 hour. [Operator Instructions] I'd like to now hand the call over to Gene Shiels, Senior Director of Investor Relations. Sir, please go ahead.

H. Shiels

Thank you, operator. Good morning, and welcome to Ecovyst's Third Quarter 2026 Earnings Call. With me on the call this morning are Kurt Bitting, Ecovyst's Chief Executive Officer; and Laurie Bergman, Ecovyst's Chief Financial Officer. Following our prepared remarks this morning, we'll take your questions.

Please note that some of the information shared today is forward-looking information, including information about the company's financial and operating performance, strategies, our anticipated end-use demand trends and our 2026 financial outlook. This information is subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially. Any forward-looking information shared today speaks only as of this date.

These risks are discussed in the company's filings with the SEC. Reconciliations of non-GAAP financial measures mentioned in today's call with their corresponding GAAP measures can be found in our earnings release and in the presentation materials posted in the Investors section of our website.

I'll now hand the call over to Kurt.

Kurt Bitting

Thank you, Gene, and good morning. The positive momentum we experienced over the first half of 2026 continued into the third quarter, and as a result, Ecovyst delivered another quarter of strong financial results. Third quarter adjusted EBITDA was $61 million, up over 6% compared to the third quarter of 2025 and above the high end of our guidance range. Importantly, we delivered this growth despite higher turnaround activity and costs compared to the third quarter of 2025. This favorable result reflects higher volume and sales, favorable pricing and the contribution margin from Calabrian, which we acquired at the end of the second quarter.

As we look to the balance of the year, we expect demand trends to remain favorable. For regenerated sulfuric acid, we anticipate continued high refinery utilization, particularly as some customers look to defer maintenance to maximize production. Consistent with this trend, 1 customer has asked us to move a turnaround originally scheduled for the fourth quarter to early 2027. Building on our strong year-to-date performance and supported by robust demand fundamentals, we are once again raising our 2026 adjusted EBITDA guidance to a range of $208 million to $212 million.

This represents a $9 million increase at the midpoint relative to the guidance we provided in early August, with the majority of the increase driven by our operating performance and the balance reflecting the deferral into early 2027 of a turnaround with an estimated cost of approximately $3 million.

Turning to Slide 5 for an update on demand trends and outlook. Despite higher gasoline prices, gasoline demand remains stable and gasoline exports are up 5% year-over-year. With strong refining margins, some refiners are electing to defer maintenance to maximize value creation. We believe these factors will continue to drive high refinery utilization and support favorable demand for regenerated sulfuric acid. However, deferred maintenance may increase the risk of unplanned outages.

For our sales of virgin sulfuric acid, we continue to expect sales into the nylon end use to remain stable for the balance of the year, with sales flat when compared to 2025. And for our sales of virgin sulfuric acid, sulfur dioxide and derivatives into industrial applications and water treatment, we also expect stable demand through year-end. For virgin sulfuric acid specifically, although the Q4 Tampa Sulfur Index decreased $90 to $615 a ton, we remain cautious about the possibility of inventory management and destocking around year-end.

Lastly, for sulfuric acid sales into copper and borate mining applications and sales of sulfur dioxide into gold mining applications, we see positive demand through year-end and beyond. As we conveyed last quarter, as a leading provider of products that are critical to our customers' processes, we continue to believe that long-term demand fundamentals remain positive, presenting compelling opportunities for Ecovyst.

I'll now turn the call over to Laurie, who will review our financial results for the third quarter.

Laurie Bergman

Thank you, Kurt, and good morning, everyone. Before reviewing the quarter, I'd like to say how pleased I am to have joined Ecovyst. Over the past couple of months, I've spent time getting to know our businesses, our people and our opportunities. And what has stood out to me is the strength of our capabilities and customer relationships. I'm excited to work with Kurt and the team to build on those strengths with a focus on disciplined execution, cash generation and long-term value creation. With that, let me turn to our quarterly results.

Turning to Slide 7. Key highlights for the quarter included higher volume for regenerated sulfuric acid and favorable pricing with sales and adjusted EBITDA up year-over-year.

Turning to the details on the third quarter on Slide 8. Third quarter sales were $309 million, up $104 million or 51% compared to the year-ago quarter. The increase was driven by higher sales for both virgin and regenerated sulfuric acid, favorable pricing, the contribution from the Calabrian business acquired on June 30 and higher average pricing associated with the pass-through of higher sulfur costs of approximately $67 million.

Adjusted EBITDA of $61 million was up over 6%, reflecting the volume and pricing dynamics contributing to the sales increase. These factors were partially offset by higher manufacturing costs, the impact of general inflation and higher transportation costs. For the third quarter, the adjusted EBITDA margin was 19.8% compared to 28.1% in the year-ago quarter. The decrease reflects the pass-through effect on sales of significantly higher sulfur costs. Excluding the pass-through effect of higher sulfur costs on sales of approximately $67 million, the third quarter adjusted EBITDA margin would have been approximately 550 basis points higher.

Slide 9 provides an adjusted EBITDA bridge, highlighting the primary factors for the increase in third quarter 2026. The pass-through effect of higher sulfur costs on sales was approximately $67 million in the third quarter. Excluding the pass-through, net pricing increased $5 million, and this was primarily associated with favorable pricing for both virgin and regenerated sulfuric acid. Higher volume contributed $15 million to the period-over-period increase in adjusted EBITDA.

These factors were partially offset by higher manufacturing costs, higher turnaround costs and activity compared to the third quarter of 2025, higher employee-related costs, including inflation costs, costs associated with the acquisition of Calabrian and less favorable fixed cost absorption.

Turning to cash and leverage on the next slide. Cash generation remained positive in the third quarter with year-to-date adjusted free cash flow of $32.4 million. Recall that free cash flow generation this year reflects both higher capital expenditures associated with the ongoing expansion of our Gulf Coast storage and logistics and the working capital impact of significantly higher sulfur costs on inventory and accounts receivable.

During the quarter, we maintained a strong liquidity position with available liquidity of $167 million at September 30, comprised of cash and cash equivalents of $71 million and availability under our ABL facility of $96 million.

Lastly, our net debt leverage ratio was 2.1x, essentially unchanged compared to June 30, and this includes only 1 quarter for Calabrian for the trailing 12-month period.

I'll now turn to our outlook and revised guidance for 2026. Sulfur prices continued to rise in the third quarter. However, we expect modestly lower sulfur costs for the balance of the year, reflecting a $90 decrease in the Tampa Sulfur Index from $705 per ton to $615 per ton.

We still expect the full year pass-through effect of sulfur costs on sales to be approximately $220 million. Taking into account the positive demand and favorable pricing we have seen for the first 9 months of this year and factoring in the expected pass-through effect of higher sulfur costs, we now expect our full year 2026 sales to be in the range of $1.05 billion to $1.07 billion, up modestly from our previous guidance of $1.02 billion to $1.06 billion.

Reflecting our strong year-to-date performance, stable demand and favorable net pricing, we are raising our full year 2026 adjusted EBITDA guidance to a range of $208 million to $212 million, a 4.5% increase at the midpoint from our prior guidance range of $195 million to $207 million. This outlook also reflects the shift into early next year of a turnaround previously scheduled for the fourth quarter with a cost of approximately $3 million.

We are also raising our adjusted free cash flow guidance to a range of $50 million to $60 million, up from $45 million to $55 million. Our expectation for the full year 2026 interest expense is now at $19 million to $21 million. And we now expect capital expenditures to be $90 million to $95 million with the midpoint up slightly from our prior guidance of $85 million to $95 million. Depreciation and amortization is now projected at $84 million to $88 million, up from our prior guidance of $80 million to $84 million. We continue to expect our full year effective tax rate to be in the mid-20% range, and we now expect adjusted net income to be in the range of $70 million to $85 million with adjusted diluted net income per share of $0.63 to $0.77, up from $0.58 to $0.72.

As we move to the next slide, I'll provide directional guidance for the fourth quarter. Given the high refinery utilization that Kurt alluded to, we expect fourth quarter volume for regenerated sulfuric acid to be up compared to the year-ago quarter. While we expect fourth quarter virgin sulfuric acid volume to be lower than in the fourth quarter of 2025, this reflects a strong prior year comparison. When unplanned refinery outages reduced regenerated sulfuric acid volume in the fourth quarter of 2025, we were able to shift our capacity to capture attractive spot sales of virgin sulfuric acid. With refinery utilization running high this year, we expect that capacity to remain focused on serving our regeneration customers.

Regarding our turnaround schedule, as previously noted, we are deferring the turnaround previously planned for the fourth quarter into early 2027. The projected cost of this turnaround was approximately $3 million. And as noted in the chart, we expect to execute 6 turnarounds at our sulfuric acid plants in 2027. Overall, for the fourth quarter, we anticipate adjusted EBITDA to land in the range of $54 million to $58 million.

I will now hand the call back to Kurt for some closing remarks.

Kurt Bitting

Thank you, Laurie. We are extremely pleased with our performance this year. Demand trends have remained in our favor, and we expect that to be the case for the balance of the year and beyond. As we look forward, we see opportunities for growth driven by increasing demand in mining applications for both sulfuric acid and sulfur dioxide. We also see growth opportunities for virgin sulfuric acid across varied industrial applications as onshoring of industrial activity continues to increase.

On the strength of our results thus far in 2026 and with confidence in the outlook for the balance of the year, we are raising our full year adjusted EBITDA guidance yet again. Our updated adjusted EBITDA guidance of $208 million to $212 million represents a 4.5% increase at the midpoint relative to our guidance in early August and a 3% increase even after excluding the benefit of deferring a turnaround with an estimated cost of $3 million into early 2027.

Just over 4 months into the Calabrian acquisition, the integration process remains on track, and in some areas, we are ahead of schedule. We acquired a Calabrian team that is enthusiastic and engaged, and we remain excited about the potential for growth that Calabrian presents. Delivery of the expected synergies also remains on track, and we expect these synergies to translate into value creation for our stockholders.

Our strong financial performance, liquidity, cash generation capability and balance sheet continue to support a flexible capital allocation strategy focused on creating value for our stockholders. In 2026, we have demonstrated each element of that strategy, organic investment, including the expansion of our Gulf Coast storage and logistics, the accretive acquisition of Calabrian and the return of capital through share repurchases.

Following $2.7 million of share repurchases in the third quarter, we are further accelerating our buyback activity in the fourth quarter with plans to allocate up to $20 million to opportunistic share repurchases in the second half of 2026, reflecting our confidence in the business and our commitment to delivering value to our stockholders. At this time, I will ask the operator to open the line for questions.

Operator

[Operator Instructions] Your first question is from Patrick Cunningham with Citi.

Phần hỏi đáp

Unknown Analyst

This is Alex on for Patrick. I guess if I look into next year, maybe how would you assess the potential of weaker refinery utilizations, assuming lower oil price scenarios? And maybe just like if you have any views into your customers' turnaround schedules for next year?

Kurt Bitting

Yes. Thanks, Alex. This is Kurt. So starting with the first part of that question, our regeneration business depends on refining throughput, the demand for alkylate and I would say the strong demand for refined gasoline exports, which we expect to remain strong into next year and into the future.

But I'll also say, at the end of the day, our base -- we have a base contracted business that where our core volume is really based on that alkylate value, which is not discretionary for the refineries. It's needed for the U.S. gasoline pool. It's needed for U.S. gasoline exports, and we will continue to believe that, that will be the case going forward.

So as we look forward, we expect our regeneration business to continue to prosper through that. And that's been the case, right? As you've seen refining margins move up or down over the past 4 or 5 years, you can see our regeneration business and its margins have continued to expand despite whatever the refining margins have been or the oil prices have been.

In terms of refining customer outages, I'd remind you that 2025 was a very heavy year for U.S. refining outages and particularly for our customer base. We're not guiding right now for 2027. But as we look at it now, we would expect that our customer base turnarounds will be slightly higher than they were in 2026, but not to the extent of anything that we saw in 2025. But again, I'll remind you, we are bullish on the regeneration activity as it relates to alkylation in the future as well as our contract structure, which has enabled us to continue to expand margins over time.

Unknown Analyst

And maybe for Laurie, what do you see as the biggest opportunities in maybe both the cash flow and cash deployment side?

Laurie Bergman

Yes. Thanks for the question. I mean 1 of the reasons that I joined the company is I'm really excited about the opportunities that we have going into this next year and the overall cash flow generation that we're seeing. As of right now, we're assessing potential opportunities going into the next year.

As we've continued to say, we'll always look at capital allocation in a very measured approach. I think key is investing in our base assets and making sure that they're operating effectively and safely. And we'll continue to look at other organic growth opportunities and potentially inorganic growth opportunities, but most importantly, looking at those that provide the most value and create the greatest shareholder return.

Operator

Your next question is from David Begleiter with Deutsche Bank.

David Begleiter

Kurt, could you discuss some of the cost issues impacting '26 earnings and how they might become neutral to tailwinds next year to drive earnings growth?

Kurt Bitting

Yes. So there's clearly -- there's been -- we see cost increases and inflation across many segments of the business, right? First and foremost, sulfur, which we're passing through our transportation costs, which we largely pass to the customers. But then obviously, our manufacturing costs and other costs associated with producing the sulfuric acid.

Now, we've had -- we have a good track record and that holds firm for this year of having good pricing power as contracts roll off, which we're able to raise our prices to keep ahead of those headwinds in terms of a cost basis. Plus, as you know, David, our contracts are linked to inflationary indexes. So as those inflation indexes rise with the inflationary pressures, we're able to just really mechanically pass those costs through to our customers and continue to grow our margins over time.

David Begleiter

Very good. And just on the virgin sulfuric side of the business, what's your outlook for volumes and volume growth next year in this business?

Kurt Bitting

Yes. The demand fundamentals for virgin sulfuric acid remain very strong, right? So a lot of that, as you look at -- particularly as you look at for sulfuric acid and then even sulfur dioxide now with our Calabrian acquisition into the mining segment. Copper mining remains very strong. Now we've got a nice exposure to gold mining, particularly up in Canada, which is some of the richest gold reserves in the world. So our outlook for those volumes and demand strength is bullish there, right, as we see continued strong tailwinds in those segments and really no appreciable new supply coming on to the market as well.

Operator

Your next question is from Laurence Alexander with Jefferies.

Alfonso Miguel Sevidal

This is Alfonso Sevidal on for Laurence. I just wanted to ask for more color on the merchant sulfuric acid market, maybe what you're seeing as far as supply-demand balances? And then the second question is on the contracts that are set to roll off by the end of this year or this year. And anything you're seeing on the pricing side for those contracts as they're about to renew? So just those 2 questions.

Kurt Bitting

Thanks, Alfonso. Yes. So again, I think the demand fundamentals for virgin sulfuric acid remains strong, particularly as it relates to our business in the mining sector as well as other industrial applications as we see industrial activity being strong in our neck of the woods in terms of -- in the Gulf Coast and where we participate.

And that, I would say, has translated to kind of blend in your second question, that's already translated into good pricing power for us. And you can see that as that was delivered in third quarter. We always have virgin sulfuric acid contracts that are rolling off at any given time period. They tend to be shorter term than the regeneration. And again, I think we expect the demand for virgin sulfuric acid to remain healthy going into the future. So we would expect positive pricing outcomes with those contract discussions.

Operator

Your next question is from Hamed Khorsand with BWS Financial.

Hamed Khorsand

I just want to understand, you're seeing this no maintenance or planned maintenance. Would this mean that there might be a little bit too much stocking of inventory going into Q1 of next year? And how are you thinking of inventory given the commentary you were talking about as far as what's happening in Q4?

Kurt Bitting

Hamed, I think the -- well, in terms of the stock, there's really not a lot of stock for virgin sulfuric acid or regeneration. The supply chains remain pretty tight. I mean there's just not a lot of inventory in the system. As we look to our turnarounds next year, we do see we're going to have an increase of one, as Laurie had mentioned in her comments, that we've moved one from this quarter to next quarter. But that being said, we expect that demand fundamentals in terms of regeneration and virgin sulfuric acid will remain healthy and will continue to expand margins. So does that answer your question?

Hamed Khorsand

It does. And then my other question was, any update as far as pricing is concerned, of -- what you're able to pass on as far as any price increases for your contracts for '27?

Kurt Bitting

Yes. I think we -- the pricing is -- that particular -- we've got our regeneration contracts, as you know, are longer term in nature, as well as the virgin acid, which tend to be a little bit shorter. So we expect -- obvi -- every year, there's more virgin sulfuric acid contracts that will tend to be renegotiated.

We look at those as -- and the ones that have been renegotiated this year have been renegotiated at positive outcomes. So we view as if demand, as we expect, remains strong and the demand fundamentals and virgin sulfuric acid, now I'll include sulfur dioxide in the conversation as well. If those remain strong as we expect them to into 2027, we would expect to have good pricing power as we move into those negotiations.

Operator

[Operator Instructions] There are no further questions at this time. This concludes today's call. Thank you so much for attending. You may now disconnect.