Cintas (CTAS) 27 Mar 242024 Q3 Earnings call transcript

Good day, everyone, and welcome to the Cintas Corporation announces Fiscal 2024 Third Quarter Earnings Release Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Jared Mattingley, Vice President and Treasurer, Investor Relations. Please go ahead, sir.

us. joining for you Thank With me and Financial Chief Officer; President Todd Hansen, Executive Schneider, Mike Chief and Vice Executive is President Officer. and

After a open discuss third Securities from forward-looking Litigation will fiscal statements. of our from Private results. commentary, XXXX civil Act provides for We analysts. The we harbor call the our will Reform to safe questions quarter XXXX litigation

from forward-looking the in current statements contains those discuss. our differ call forward-looking subject actual over financial statements views company's you I Securities as call refer the contained filings and discussion recent cause Commission. to to the conference and This to with Todd. performance. the we may materially risks most reflect and These points are turn to could uncertainties, events on now future these Exchange that which to I will results

strong whom dollars quarter. Thank our partners, grew quarterly we you, outstanding third revenue the $X.XX execution and X.X% very revenue. Jared. record for to quarter Due to employees, billion. call we revenue dedication for results The our represent of the delivered Total third

are businesses. of with the our We performance each pleased of

momentum growth and robust, revenue have the we Our business. good remains in

New strong. business remains

to a operate sales Our continues team high level. at

and services success and We at within as focus very verticals our our verticals, customers. are as remain seeing across products particularly existing broad levels well of attractive penetration cross-selling many the within strong are new our levels. efforts Retention and

a increase of XX.X%. quarter Our XX.X%, increase a XXX income to strong Gross was basis record bottom line. margin for revenue flowed increased record the of third our growth through an to an XX.X%. XX.X%, Operating points

in cash operating third businesses quarter, to grew expenditures robust flow through our $X.XX. a the $XXX remains capital we prior activities strong. grew the provided Net third Cash to continued in In over XX.X% EPS invest of quarter year. XX.X% by the million. Diluted

shareholders $XXX.X On $XXX March. an dividends, million the quarter, increase paid XX, acquisition in from purchases previous of March third we made we the of XX.X% quarterly the million. During paid amount

gives capital buybacks. and through to cash and of how across acquisitions, expenditures, $X.X dividends strong have flexibility capital billion we flow capital choose of Our us our X we over priorities deployed quarters, deploy our

I would partners call customers, on for whom shareholders thank continued other. our employees and to like we our their each our focus

Mike I'll Before financial results, provide turning over expectations details the our year. quarter call fiscal provide our to our of updated third for to

are increasing We financial our guidance.

raising expectations $XX.XX growth $X.X $XX.XX X.X%. XX.X%. Mike? our billion range from We to revenue $XX, rate of total $X.XX a expectations from a $X.XX are X.X% Also, billion, a we to a to are a of annual to raising range to billion to $X.XX $XX.XX of of our rate billion annual XX.X% of growth range diluted a EPS of to to range

Thanks, Todd, morning. and good

update quarter was in you basis by We X as year there be growth next that points was organic X.X%. growth to third currency XXXX compared will extra due adjusted for difference workdays the compared number remind models rate, this was last a your impacted workday. XXX revenue exchange to $X.XX you year. billion revenue fiscal Total foreign fluctuations fiscal to and $X.XX billion rate for workdays, Our current positively fiscal year, of the less the acquisitions,

compared year. was XX.X% Safety Fire the last compared business First X percent third and this revenue year, last 'XX XX as of Services, XX.X% fourth $X.XX 'XX of fiscal was year, billion a to fiscal the points. Gross third of Organic Sale to quarter first by for growth X.X% was was down less fiscal margin Each for Rental Uniform Direct XX.X%. an XXX and Facility Services, which the the than we'll XX.X% will billion Services Aid X.X%. next and increase Uniform for have for margin Protection of workday an year, Gross means quarter increase XX.X% have basis quarters and workdays quarter for each of $X.XX

Protection XX.X% tailwind continued segment margin. was from efficiencies XX.X% Rental Fire operational Gross for of helped Services Gross was a this year. basis improvements for volume by Facility Strong Uniform Services, the Rental business of gross First points and sale. percentage strong Safety generate basis margin technology Direct for points. and last for Services XXX Facility and Aid Services, growth, XX.X% and XX.X% Energy and Uniform margin XX Uniform increased

and we business In leverage out Sigma the extract Six our and our addition, continue of to engineering growth, investments through inefficiencies technology teams. our revenue strong

garment have investments improves technology material Our which plants, sharing allowed improve our us among to cost.

and allows Our positively provide efficiencies routes, labor densities improve route and which to technology existing our us truck route impacts energy. our purchasing, to SmartTruck

teams us Six Our helped the maximize of Sigma utilization plant equipment, engineering efficiencies to labor in the us that have and create energy. plant allow our

segment growth our recurring last XXX continues revenue points a provide healthy revenue increased Strong WaterBreak Gross Strong from some to high-margin in in Aid segment. our First Services Safety products of to Rentals, like help AED and continues margin basis stations year. this for performance revenue the revenue expand mix. margins and eyewash

Aid in distribution us to technology costs. investment product provide Our improved and route efficiencies. to center continues And First lower optimization dedicated SmartTruck our allows

margins. these contribute to gross of All improved

Cintas. monetary increase million. brought XX City an was settle settlement, points well by action in with and contract expenses including quarter dispute recognized in of proposed as technology resources, XX the associated to interest class agreed is The $XX total settling We year. the determined selling in plaintiff basis the costs trainee agreement in administrative this the driven last principle in basis is Laurel. from by management increased payment claim and of investments our best purported that program to the points The as Selling

costs periods. not future impact will we expect the financials our that settlement in

cash As Todd earlier, flow. generated we mentioned strong

the in which expenditures free For allowed our us capital resulted XX.X%. the X.X% back to cash has for flow the into year, increased has This of invest business, year.

to line automation our and margins grow Our processing in plants technology and improve where expand the additional capacity efficiencies needed. top investments include to

million capital quarter, million revenue $XXX.X compared quarter third expect the for XX.X% expenditures to 'XX around income increase of Operating was X.XX% in of an Operating of in of of XX.X% as year's last year. basis compared $XXX.X last third percentage We income fiscal to year. a finish to revenue the XXX points.

accounting the discrete effective compared certain rate quarter to Our was primarily rates last stock-based impact tax tax The impacted the XX.X% for for were third in compensation. quarters year. by both items, tax XX.X%

as quarter XX.X%. Net annual Todd income $X.XX to our $XXX.X $XXX.X increase to of EPS to following: the million be year's result year, was an provided is quarter of variable 'XX compared million for to This Related $XX the year. note guidance, compared fiscal guidance. interest the please in third compared debt. financial rate expense diluted less 'XX, predominantly $X.XX million fiscal million third of last expected last a $XXX.X to

XX.X%. effective expected to be rate compares XX.X% rate tax 'XX. fiscal a Our is of 'XX fiscal This in to

Our guidance does buybacks. not any include share of the future impact

That we announced the acquired quarter. prepared no As not remarks. the accordingly, our I periods. in will of impact future financials Guidance recently acquisitions fourth revenue our our $XX.X for mentioned settlement earlier, impact includes million the quarter. proposed that concludes includes guidance. revenue is impact the the expect And third This during on of there

question happy needed. single Thank Now questions to and follow-up a your you. analysts. just from we are X answer if ask the Please

Patnaik Barclays now will from We Instructions] take our first question from Capital. Manav [Operator

[ of inefficiencies, for I the of the margins, also with as engineering, margin it's is could extracting the This assess but elaborate characterize ask whether think that, the the you you just ] regards please? of Six sustainability from Kennedy Ronan Sigma, the those about strong we the SmartTruck, should of in on if context could how Can on drivers contributions or performance, to kind Manav. the

we team, in our in the chain have investments Certainly, for we paying When it the you investments and focus. results. it the we inputs all business, are with gross the SmartTruck, are the those being supply investment Thank team, improve investment many our there's our the question, expectations your Sigma those culture, our in us Ronan. intensity you which are of said, off, to the many, about run investments numbers. think to run starts That that engineering our helping the making how really margin, in Six organization we our

leadership basis investments that the So I experience partners. number for the hey, providing on gave X and pleased customers with focused with us with where you. SmartTruck made, those exact have what There's the better and pleased and better you points, our experience an can't culture we've give the employee we're a they're and of we're organization inputs a our providing many results, for driving

pricing how the And trending then versus you top the strong new just business penetration expectations, and obviously helpful. with on please? regards line also can and well, as about to performance from contributions talk That's retention, is

Good question. Yes.

growth is to many components about certainly that's component, our we not factors. be made, The like we the contributing pleasing We to growth from majority. business the But there's a that when is really So really grow but The the a like when pricing businesses. internal in where it our we our volume really -- of we because standpoint. of we've we acquisitions it, that think about think want good from certainly, growth, is to again, growth, majority able growth and manner. are us

our year. planned exactly it's business. new has historical. the And and Pricing from that's moderated, Where really much had to is we're closer what benefiting we throughout

is performing a at team Our level. high

retention Our appropriately. service then the -- is levels we're are organization attractive. cross-selling And very

aware that great products our customers are prospects make We sure of. have and services of we our and that breadth to a want

growing that And those factors. all so we -- they're we're we kind business. we are areas, how and and the kind across we -- contributing across big all like are, where like we're all of But of benefiting benefiting of

next Chan from UBS. And from our question comes Josh

talk could that Do rate seeing about to growth now you're [indiscernible] the of moderated and Could rate guess, a level. based I seeing pricing historical there to you're prior and see the the about dynamics run -- the current question, customers piggybacking you all what out has you on sustainability retention that talking on you that? talk

exciting we businesses XX America. us. from service runway an Yes, think standpoint. where like -- little a for are growth The X customers. there's Josh. there's incredible Again, million over There's We is we we North thing million a in

about to continuing. -- new of from accounts selling XX% our that no-programmers and is come we're So

them showing than talking it So and a from are better prospects to we're great they do to seeing today. way . results

necessarily is doing They just somehow. do some to they're cases, that Now it. expensive might mean be that faster, in smarter, better, It's it that, it redirecting than new spend. less money way spending that the we're doesn't even

think that with resonating proposition and prospects we the prospects -- of the attractive runway are business customers. our So and number of our out buying me, there or is because very excuse

So we expect growth a are that we like we from where standpoint.

continue to want As we I we like we're that mentioned, manner. how in and growing,

for That's right of And recent ahead. revenue great XX% years. incremental color. you higher in this Is in now the forward historically. margins comes my sort level the of XX% to at you're being range on that growth about end talked follow-up, going margins And incremental of the that

the a Well, growth, need linear. doing We so focused ways. of business we're margins. on to incremental to higher doing on math in by extracting margins, so good at be our Yes. of XX% really out getting we to our not order those We're and that XX% recognize is continue revenue the running end But improve leverage many inefficiencies, to that.

speaking, going That's puts and generally higher for we and the end takes range, high. higher there's end. than lower sure. and know we won't prefer be as so the will some be I be that like some some quarters But and And to

question next of Bank from America. from Balsky our And Heather comes

the quarter, just an And I update of this did M&A think was assets? talk could attracted about the hoping just going to kind you forward. what on then to how if about you you M&A

to I'm Mike start, regarding Heather M&A. certainly happy --

an for So component it's important us.

cannot You pace M&A. certainly

in it they In one But provided businesses, are the the Kentucky, that tell really off, announced the of with come and needed takes X great some it as of attractive dance. this to I So the you region can really past case businesses. country. quarter first us do, capacity that kind of we they in operators, X good

closer were In added some less customers able to to the time to that absorb and driving. the nice customer really capacity, more X addition allows we our with time we're facilities, us spend synergies into of as to to the so volume --

able the In us. the did in in in additional it any to into But M&A facilities. case, to Pennsylvania, we our of important of that acquire that's capacity. were not we absorb case So the acquisition XX

and about driving new services So that of again, customers more get with the synergies, the we less to our attractive also cases, time to customer, talk in breadth time we broader products then those have.

very So it's -- think attractive. overall, we it's

to I As mentioned, takes it X dance.

attractive really case, in businesses, made it. X for great You us. that really can't sense these operators But were pace this

a points. Maybe couple added of

said, that fiscal had made remarks, less keeping Todd we've year long. we've that about of we $XX this these Each and Todd those. you impact million them mind, all acquisitions, As year. gave prepared revenue. talked is annual handful million are in a in great of the than of The includes the X But in our $XX.X acquisitions

fourth quarter acquisitions we've that the would all last impact so include XX of the made months. And throughout

something keep our mind in about Just to you're quarter thinking as fourth

R.W. question comes Baird. next our Instructions] from And [Operator Andy from Wittmann

that your the your that. fundamental is about on these X build just that to on here? million fourth commenting I you just guidance that, sorry -- Mike, the it this basis somewhat an there guidance, somewhat there and $XX as legal company, you included to where guidance? were larger outlook then recognizing still contribution. and that any XX to quarter raise addendum is I'm that your now you in question a was And in on initial that or settlement considered talked want last for change up acquisitions M&A that about, you able Or absorbing are in was your points did? Is

Yes.

So the Was part Andy, part? your what first the forgot of I already question. first

for just First is unchanged fundamental your business outlook fundamental there a -- is is your for question Or XQ? unchanged outlook change...?

No. apologize. I Yes,

As Todd about. talked

where of have. very we remains the the be to quarter in we Our in of profile fourth market stated right sort for that the good. want The large. to And is growth remains the of momentum want business adoption remains good. terms guide The

continued And change so of no . not business. like seen, we've all really with would continue like in of we that put together the to performance any mean and the customer behavior momentum

the points, well, in of the to that year, in it this the initial second third beginning that the -- quarter, absorbed not contemplated XX basis your from was the simply basis and As points absorbed. simply relates question, XX was guide through

question And next Sachs. our comes George Goldman from Tong from

selling client you Can external the budgets environment, on provide are including cycles sales an update performing? how and

certainly I'm George. happy Yes. to start,

really of seen in haven't cycle. change much a sales We

our We're new to services at still to really, proficient and pretty presenting large, is business. prospects with -- smarter, always services, new seeing do not As something in products really Momentum products run it's good. be we've our them seeing, become to thing. -- in spending the far we the guess, and a help customers the to and we them faster, all is those I make and still continues possible. redirecting darn them remains continuing tweaks, interest products as certainly as it's I invest it better mentioned But the the resonates. to mentioned, outsourcing just I it better, new program attractive as we're services and prospects to And we're help not as to market and to a And as change. always provide. Usually, good, And earlier, they're to us it cheaper money. type

separately, serve helpful. a focus can Got including is verticals about health verticals, then as to you bit for growth? your much organic runway there talk And revenue little additional How these a focus it. care? That's tailwind to

Yes.

so George, growth. it's in So internal our

strategy So it That is and that is been for that the services to the past a products they good years. us. over the us customer has helping and of around organize and number want provide helping focus us

around all with attractive we're we our value health it, state, hospitality, the proposition and business, find government is like them all So resonating attractive, We local them. very it's and education, in. it's care, whether verticals we're organized

from from next William Tim Blair. our comes And Mulrooney question

McCann [ is Mulrooney. Lu for Tim ] on This

product curious from introductions know on growth just to story if base move one I'll of is then row growth. I with wanted that quite I'm much of to also for your new on new segment quarters first customers. important product penetration second Aid -- first How your a the double-digit in and with now. I start at But X, First driver a growing a introductions? there's a after. in been the one few of here and an But So has rate established ask Safety are this Uniform

like Luke. part our culture first the aid innovation. We business, of really continued is

our always improving improving processes, services. products, we're improving looking So our at our

asked a is But Aid really due And I number the business was can So better center. have we're a always products as investment growth of value better you sourcers, hey, this, points the to x a have businesses. Aid, resonating. give distribution cannot we able component. rollout it And about, First I it's you mix it's of good. or First in what providers there of, But basis tell with you product business proposition and to you. our of our our really of that be in all the

to chain fashion, you in So a to a robust have us allows to it that be the get us in timely when supply a successful. customers products really great spot puts

sale So absolutely make they're it's we're -- Aid we customers, yes, all know from of want want fire whether cross-sell. but uniform or all to many conduits, -- or try that, customer, cross-sell, benefiting our And sure we a different we're direct we yes, business. our them to occurs that that First in about

And helpful. on Aid Safety maybe and just here. Understood. Really sticking First

products you've portfolio? to your continue other is out about I'm curious hear here build the we about segment Is there? point, does expect As room and the you at the like essentially what some services feel know. of business, introductions more it more potentially that to suite essentially you think Or product to built should of out as full for

go again, culture. to Yes, Luke. Yes, our back I'll

services. to -- is provide ourselves and are such we best that be the culture innovating and products Our pushing to constantly

put best employee in best position And for customers. of most the constantly partners our value We're position, to to so partners in see come. the that provide the to more innovating you'll our our

one keep we and into perspective. do with us it is a aid our comment, that And thinking first And how we safety how maybe people customers we umbrella. broad have Luke, may the safe when speaking business, that's talked think And safety about look think and fairly safety, image, and mean innovation customers, cleanliness we're broadly added speak Todd about our can do to employees this a about, when our opportunities about are customers when future. we help keep compliance. that the at quite that And heard business, of umbrellas thinking this you about we large way from their

question And Steinerman our from Securities. next comes Andrew JPMorgan from

quarter, you Services a the versus when of directionally, the make how growth In stops ancillary services? from you like coming ad your also, look growth segment, in about and Facility And at within is good there rentals And if can uniforms both? uniforms. is much actually comment

you all. Andrew, to give seeing out as those and don't we our good specific question, services. at we're our facility services all There's demand across numbers. know, of and But growth products directionally, business them frankly, our business, uniform business for yes, your for

one to point there. to area particular out nothing So

-- haven't change As our customer behavior to far really a as add-stops, a there. seen there's we

call I'll as of it's it's, business I'd it, kind say inputs kind nevertheless, number. So There's to usual. business But as that usual. many of

Bibb question Securities. And from Truist comes our next from Jasper

there really First follow the impressive Aid. up discussion SG&A at year. on I XX% up prior wanted you from to on had quarter, also earlier but was gross XX% this The the margin

think when base. more the a do on leverage G&A you provide you that First color deliver So making bit start the Aid to you're maybe that bit over segment should a business? just in margin could investments And of

business, earlier, investing and health it's The a of is and massive. the about are We And Yes, talk there really I than that value the we're business is Mike's Jasper, customers. their and we to the proposition point more performing to out their mantra of amount like well, safety resonating. appropriately. in important really what's business and prospects mentioned, as employees the

products resonating. So services. is a those position invest to to and great in We're that provide

So just we're that. doing

it We're are the show up we I like you're in resources. in investing operating sense invest. gross margin. seeing where in we it selling because think to investing we're makes marketing and so the And margin and resources really And

year improvement a or ago. Yes. been XX% Each has which quite year is quarter this higher, from a big

and out And growth margin to invest to so of line as of the long-term investments particularly and see all businesses, Todd of said, Safety. in our playing those really you continue First can gross in we the want Aid

the the over up love we margins. bit few continue and invest we years, They're to as see a quite we'll But appropriate. last

on labor what makes sense. hoping on just expense to in you're the And update It seeing for fleet-related I was then costs get and growth quarter. an

make the flat-footed we Certainly, that competitive labor the wages. previous good over we're say providing And seen to We when were years. is important America jasper, has that inflation want component. an spoken that came sure attractive on to it not wages, past question. few calls we've I'd North wage

SmartTruck exciting they're we've perspective. certain to position, whether So that have our -- us that as from allows in we best engineering or teams, here's where possible. like Sigma subject Six as good to a us we are our automate transformation it's And helping we and that efficiencies mitigate is earlier, items really been our teams, what's portions technology plant business, mentioned to bring to of I

total what be people. manage good still so labor investing competitive And best organizations, through in in seeing we the a invested very and and our to make costs off and and years paying for with attract as and spot those we're sure it's we're we're really have

our question comes RBC. from And Ashish next Sabadra from

as go if on update Google I we you wondering front. you've partnership. just think benefits I provide your can how onto wanted that forward? the about focus GCP and should to migrated those the that I already we you was quarter, have but also believe on SAP in seen may benefits the an

characterize have well, we with off, first question, a would relationship great I Google. Ashish. Good --

would did in it And platform. innings You're the migrate there. Cloud correct. Google characterize early we're We I to as the

be provide relationship put be possible to people believe us certainly maximize our and position our that to available more position to as and to the because and value there's And makes will provide value, customers value better in as a to employee to a we more so put more we hope our provide which successful them that successful. to in partners to tools

early we're can where optimistic So innings, but about go. that

That's color. I a if accounting clarifying And very quick helpful question. ask can

and you any the sheet, and if on other rental So driving provide Uniform on quarter-to-quarter. Is service anything just can moderated that the wondering, that better or that color balance sequentially was what's in I that? front? items efficiency

Yes, Todd of working a little but the we all those certainly pieces and about talked garment bit little are how is on inventory, business, is one bit a of of he sharing. touched on

think So into garment sharing, we garments for improve when inject to inventory. as example, new need in-service we you can about many don't that

it So more in-service add Todd inventory. to existing the from like in-service we Certainly, have sourcing better don't though, the are utilization growth, said, the of of there improved strong. as others well. Volume really sharing as areas. purchases. inventory means remains new one means our into . That's much And as

growth volume And of some of the some offsetting initiatives. these so we're is nice seeing with what

our And from question Stephanie comes next Jefferies. from Moore

haven't pretty little on bit margin optimization, and the appreciate provide could discussion likes. front I step could color in But of opportunity of other further, what early ones see accelerated of you still the or then for kind terms where you in think route a next kind management we the the terms wanted the discussing to initiatives, that of improvement maybe areas some merchandise been for if it as maybe you is of more of the continue to major of I in a of kind the improvement. guys taking impressive your major color yet. focus quarter. six continue innings are which And Sigma the

our and on total, initiatives we referred focused strategic basis how business our we is our impact is cost initiatives cost in earlier, X And down XX Mike labor. spend to points. earlier, costs, certainly price. material material that to -- our costs, a not our labor. the referred we're our energy largest But our can our just all that that's Those From energy, material

because areas volume inefficiencies to business. robust Mike's the love growth, in because to others. speak sacrifice efficiencies any to we've X of so is got volume very driving particular want strategic we growth those earlier don't initiatives So focused the we margin that in out on the point, or earlier we're I all extract but our to these the in that wouldn't it's these innings of And

culture innovate got We've that. runway to nice bit that and little we're our that A to for is doing push better. ourselves trying a is constantly of be for forward

you'll that think see I So continue.

As acceleration, it's We're far as in. it. built doing constantly

So think sure those this there's is margins, component of I hit on focused incremental we're numbers. -- can and an we making important

Yes. . the The in and some about of are the believe foundation a creates just certainly recent forward. moving for Cloud very to Todd and I innings talked might we the thing is technology, add only a Google early that we there. us runway there's nice migration to do interesting things

Scott comes our from Schneeberger from And Oppenheimer. next question

Could Uniform [ Protection you forward, ] All for to the Direct margins Sales the please Scott. as some well perspective and please? as for It's on outlook Fire for speak Other going Daniel on

to Mike, the Uniform for if on And outlook. speak start business I'll us. is Direct business Sale the to you strategic margins. The a want

large really of or accounts some it's strategic in the hospitality, business. have our whether gaming area national We accounts,

And so more money direct garment that. a lot with strategic just spend a us those meaning also with customers sale outside that not but of

it That little lumpy positioned nature rollouts the important. with and But purchases. that's proposition there. we're are like where can be where there. the like being we business that value We So certainly of to said, due a we

is outlook the there. very positive think we So

to improvement. and great been legally you we've it's the great have fire the the far have years, last business seen several We've where it's over only And results services. The as business seen business, us. for we're As growth. a margin great those in products revenue

outlook that we we is positive are really the because So see opportunity. and for -- out of there think the runway the it's prospects

comment margin? to So if on you Mike, want

Sure.

might margins business Todd in to said, increased and specific other that the I So point starting in handful and get seen we've implementation lot we're one see year-over-year, in there, increase that same into the really SG&A have particular, our out like take some as of fire in business. the the quite fire SAP the off to last business bit fire years, a and initiatives a seen did we the other business, The thing initiatives of in for businesses. we've

proficient with So that into Safety create we overall we rental the fire on how nice fiscal move. as you've as pressure at 'XX because might get of But of some that use little Aid we margins a and and see understand bit really the can opportunities. that First to seen investment and margins, once businesses, it, in move our it

So little maybe and on SG&A seen year year bit maybe little we've pressure implementation. that great bit a the improvement, of because some next of following -- of a

certainly continue longer margins to perspective. the we in margin Sale a those Uniform expect But improve to Direct from term

said, And As down. to going is a will bit from be going business and quarter go be as little margins bumpy to well. It's that, because quarter. to that Todd up of the

I quite anything have. a don't X the isn't as to think we business consistent So that there's it out call other other than specific of as

question from Nicolaus. comes Stifel, our And Shlomo next Rosenbaum from

then more areas little specifically, bit in environment talk to macro of areas could how if follow-up. And reduce you raises wage automation exposed I about touch those and kind some the to are the they're -- with looking you regard you in you like verticals? a where that, for employment can are due of minimum to Todd, to California, the a after employment have upon

continue occurred change mentioned, environment, there's wage as under we out our occurred And years. in customer pressure our many, puts employers a things that because macro figure haven't and behavior. for ways inflation automate to takes. much from and many It's Yes, always mentioned, you to seen will to as Certainly, occur. has some I

we -- infrastructure the the from benefiting onshoring, But like find generally, it's this in. the can is we of, -- bills to environment. reasonably oh, think there headwind been this the spot here. successful it's we environment there, I that in that's we're specifics also be really we're can't a boy, out is speak macro where some that that And and stable. attractive or are And we Now --

Are been have any mean I way them? a change could positively spun that I wondering, either there just in follow-up, say, they a general. any them competitively from ago, comment environment seen there changes or the and the you you in you more that for in business terms in with X competitor have was negatively? just taking out, Maybe months you has Just bid? was

value would I very deal They're usual. they respect well will as future. the be in I've has competitor, to has always been of and partners company, providing very on our be It it's customers the have it's as a as business been it and be, been. best as good always great -- competitive always and as them, environment. characterize we're far best with a in the in putting our a Shlomo, sure proposition. been, I'm the long we have Yes. pretty But focused I'm it for sure successful position will employee

none really, that changed. So of has

next our And Northcoast from question from comes Research. Kartik Mehta

maybe Maybe of is more been have that the you cautious well thought? little you're better to guidance. result it Is better that year, actually at sales you nonprogrammers thought? Todd, happened. a than this being being just look about extremely as than the bit you execute you the able metrics like economy beat business, And

If point what you to? look you you've been would able do better, to at why

Outsourcing starts Aid our of and they it each pace our is in, our is said, and and Kartik, we Yes. But nicely. the the business, being the really spoke good. that of we're about employee proposition with partners our resonating value it's the expectations which of businesses and resonating intensity culture run. very First

do to with has to as -- it the easy not in people has it past. hire been Maybe it's as

So to But we're with exceeded have internal expectations, to it, there's spot we're focus our -- pleased -- more better attractive. our it that much we like it's we're many products, our and make make because to people on you someone inputs outsource so to services, the And want it's technologies happier. better we're customers that successful trying to much that. We in. and more better if providing

where we're continuing positioned like So invest we're for a and but to future. the lot inputs, we of

X just And follow-up.

same? these seeing from expectations discussed to are But some M&A you market and are today, Or the in acquisitions about lot. at can the has know take environment, pricing obviously to any maybe the come you it years a sellers? I'm change You of what I fruition. remained look wondering, as

question. pace succession might And But from very are an to cause point, different ready, they there. we're many it's I good interested. -- sizes, them any between, your medium, to To we And change it's would shapes it's cause age these wouldn't when them. ] Kartik, little, in acquisitive, we're highly And life whether decades the about Yes, [ ready. everything them, can't owner's interested are and or all that making. certain or speak to in It's we events in it's M&A in move. more are there's a very cases, events certain big, think really you about make more that.

And Kaplan Morgan our from Stanley. from comes question next Toni

to focused sort do wanted into Is non-focused the between focus you assess go-to-market ask there of Are And share the sort verticals a new able to versus add as question vertical a focused for strategy verticals. whether I verticals a growth to well? ones? you designation? how that of on different focused

Well, I'll verticals. what customer focused certainly [indiscernible] that. very to the are than And we've them and grow organized that approach And in attractive. I verticals an expect are around when business general. our have really certainly chosen you base, faster expect we about say think good you this

you can't think yes, to x give we well. growth, I specific of, it's basis So total adding chosen we've of points boy, a our amount but

creates what customer for and successful to value most and one have we what And should the puts what's to the employee gets another base. position it what analyzing we always the our way should best in we're partners the And be really or not? best down

investment at So always we're -- but where looking is we this that, we're point. doing evaluating our like

year-over-year. your and Cintas wanted you've some ask recently marketing to that Terrific. I heard increased example. Bloomberg also about I whether for budget commercials Radio, on

there's wondering push Just more marketing? a or towards if been greater coincidence that's if

is off, Yes, hear you. working, to hitting The glad it's Toni. thank algorithm and audience. target that. I'm our first

there's sure be make just to -- the we're very best to to and been say technology trying a It's as step there. sure ROI leverage change and the analytics wouldn't is I trying that So investment placed, possible. deriving our investment make well is

matter tweaks step a of investment. . versus change just So in a it's

further to the closing turn remarks. like call At no for I'd are Jared this over back questions. time, to there

Thank you for joining this us morning.

fiscal forward of 'XX quarter to fourth in that results We our issue financial you time. July. look speaking at will Thank with again We you.

This concludes today's conference call. Thank you participation. for your

may You now disconnect.