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CFO Brian Delghiaccio explained the revenue shortfall was due to a deeper-than-expected decline in construction activity and weakness in the manufacturing vertical, which their initial flat-economy guidance did not anticipate. CEO Jon Vander Ark confirmed the ES business saw positive pricing but negative volumes, acknowledging they prioritized price and may have lost some share. He remains optimistic about the long-term outlook for US manufacturing, which would benefit the ES segment.

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CFO Brian Delghiaccio explained that the company had initially expected the construction business to be flat year-over-year, but it continued to decline, which was not anticipated. He also highlighted weakness in the manufacturing vertical. CEO Jon Vander Ark confirmed that in the ES business, price was positive while volume was negative. He noted that maintaining flat margins in that environment demonstrates a disciplined trade-off of volume for price.

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CFO Brian DelGhiaccio noted that Q4 faces a tougher prior-year comp, as margins were flat from Q3 to Q4 last year versus a typical seasonal step-down. For 2025, he confirmed a 10-20 basis points M&A rollover from deals closed to date and anticipated a slight increase in interest expense due to refinancing at higher rates, but nothing overly significant.

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CFO Tony Amandy explained the B2B growth forecast was slightly tightened to around 1% due to slower-than-expected growth in the Champions business in Q2, though the outlook remains positive. On the macro question, he reiterated that internal data from pricing studies and exit surveys do not point to affordability as the core issue. He highlighted that retention of existing families was actually higher in the first half of the year, suggesting the challenge lies in converting prospective families.

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CFO Tony Amandi clarified that the midpoint of the guidance assumes flat year-over-year occupancy. He also guided to 10-15 new center openings for the year and suggested that the prior year's acquisition count of 23 centers would be a reasonable proxy for the midpoint assumption in the 2025 plan.

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CFO Anthony Amandi noted that tuck-in M&A valuations remain in the low to mid-single-digit EBITDA multiples and the deal flow is strong. He also provided post-IPO figures, stating the effective interest rate is now 7.8% and the pro forma share count is just under 118 million.

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CFO Craig Conti explained that the guidance assumes a travel throughput rate for the rest of the year consistent with the Q2 exit rate of 99-100% of the prior year. Regarding the FMC business, he confirmed a further decline is expected in Q3 due to macroeconomic factors and churn, after which the company expects to stabilize and grow from that new base. For Government Solutions, Mr. Conti attributed the strength to both higher-than-anticipated product sales and accelerated service revenue growth outside of New York City, which is now expected to be in the low double digits.

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CFO Craig Conti confirmed that year-to-date travel trends align with their full-year forecast despite some daily volatility and detailed the expected quarterly revenue sequence for Commercial Services. CEO David Roberts noted strong win rates in Government Solutions, with a typical 12-to-18-month period for new annual recurring revenue (ARR) to convert to recognized revenue. Craig Conti added that Government Solutions revenue outside of New York City is expected to grow in the low double-digits, ramping sequentially through 2025.

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Executive Craig Conti detailed the 2025 cost drivers: margin pressure from portfolio mix, pre-revenue costs for new government program installations, and a $5 million non-capitalized ERP expense in the first half. He guided for a 40-45% free cash flow conversion rate, implying slightly higher CapEx. Executive David Roberts added that new contract margins are broadly consistent with historical levels, though large installs can cause temporary pressure.

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CFO Jim Tarangelo attributed the B&I segment's strong performance to record new business, high retention, and increased participation rates. He explained that new business margins are typically flat in year one and ramp to mature levels over three years, also noting that strong performance could lead to higher incentive compensation costs.

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CEO John Zillmer stated that the company's win rate has consistently improved, estimating a 10% to 15% year-over-year increase in closure rates. CFO Jim Tarangelo explained the interest expense guide incorporates several factors, including repriced term loans, upcoming 2025 debt maturities that need to be addressed, and the roll-off of some interest rate swaps.

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Chief Executive Officer Stephen Kramer detailed a multi-pronged strategy for the middle cohort, focusing on articulating the value proposition, nurturing families from inquiry to start with technology and 'white glove' service, and ensuring a flawless center visit experience. Chief Financial Officer Elizabeth Boland explained that the 25-30% backup care margin reflects conscious, ongoing investment in the network, technology, and marketing to sustain high growth, which tempers margin expansion beyond that range for now.

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CEO Stephen Kramer explained that only one-third of their 1,400+ clients use more than one service, representing a significant cross-selling opportunity. CFO Elizabeth Boland reiterated that favorable FX has a minimal earnings impact due to the U.K.'s current profitability. She stated the guidance reflects the seasonal nature of the backup business and a slight moderation in full-service enrollment, which is offset by Q1's outperformance.

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CFO Elizabeth Boland stated the goal is to reduce the bottom cohort from 16% of the portfolio toward the pre-COVID level of around 5% by the end of 2025 through enrollment gains and pruning. She detailed the margin profiles: the top cohort (>70% occupied) is back to pre-COVID profitability (~10%+ EBIT), the middle cohort is at mid-single-digit margins, and the bottom cohort is currently losing money on a unit basis.

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CFO Elizabeth Boland confirmed margin outlooks: backup care similar to 2023 for the full year and full-service improving but remaining low-single-digits. She also noted an overhead allocation shift impacting segment margins in H2. Regarding pricing, she said they remain mindful of balancing costs and affordability, and while they have pricing power, the strategy is to taper increases slightly next year as inflation eases.

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CFO Eric Abouaf explained that the margin strength was driven by two main factors: ongoing productivity initiatives across divisions like MI and Commodity Insights, and the specific patterning of investment spending, which is more back-end loaded this year. He clarified that these investments are crucial for driving future growth.

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CFO Eric Abouaf explained that the margin strength was driven by two main factors: ongoing productivity initiatives across the division and the specific patterning of investment spending, which is more back-end loaded this year for new product and sales launches. He indicated there were no significant one-time benefits.

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CEO Martina Cheung expressed high confidence, citing stable retention rates, strong sales pipelines, and Annual Contract Value (ACV) growing faster than revenue. She noted that lapping cancellations from early 2024 will support acceleration in the second half of the year and highlighted positive customer feedback on sales realignments and recent large deal wins.

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President and CEO Martina Cheung explained that while they don't guide quarterly, the outlook assumes modest expectations, including just one more rate cut and no major economic shocks. The low single-digit billed issuance growth forecast accounts for a strong Q4 2024 pull-forward, full drawdown of 2025 maturities, modest pull-forward from 2026, and a balanced view on M&A recovery.

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Incoming President and CEO Martina Cheung explained that while some issuance was pulled forward, the forward maturity wall remains healthy at $2.0-$2.8 trillion annually for the next five years. She emphasized that GDP growth is the strongest correlate to issuance. She also confirmed that the 6-9% growth target was a multi-year enterprise-level goal, and the company remains on track to achieve it.

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CEO Will Lansing noted continued customer interest in the platform and a good bookings pipeline, though growth rates are not at the highs of past years. CFO Steve Weber attributed the strong auto revenue growth primarily to pricing, with a smaller contribution from volume increases.

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CFO Steve Weber attributed the non-origination revenue growth to a mix of factors, including license sales and international activity, noting this line item can fluctuate. CEO Will Lansing described the regulatory environment as favorable for FICO, stating, 'It's all basically good news for us.'

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CFO Steve Weber attributed the non-origination B2B Scores revenue increase to a combination of factors including license sales, international market activity, and prescreening, noting that this line item can fluctuate quarter-to-quarter. CEO Will Lansing described the current regulatory environment as 'a good one for FICO,' stating that the company is pleased with its position and that recent developments are 'basically good news.'

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CEO William Lansing stated that FICO incorporates a level of conservatism in its guidance to account for macro uncertainty and leaves specific volume forecasts to analysts. On monetizing downstream score usage, Mr. Lansing acknowledged it's an interesting idea they have studied, but emphasized that FICO is extremely cautious about changing its business model due to the risk of unforeseen consequences and its responsibility to the stability of the financial ecosystem.

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CEO Lee Shavel noted that Verisk is well-positioned to introduce new technologies to the industry. Co-President of Underwriting Solutions, Saurabh Khemka, provided specific adoption metrics, stating that the POS AI tool is used by nearly a quarter of users and the Mozart AI tool by almost half of its customers, both delivering significant efficiency gains and enhancing the value of the core products.

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CFO Elizabeth Mann stated that while margin efficiency is an embedded discipline, the pace of expansion might taper, as reflected in guidance. She noted Q1's strength was partly due to expense timing and high-margin storm-related revenue. CEO Lee Shavel added that investment intensity acts as a counterbalance to immediate margin gains, serving the company's long-term interests.

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CFO Elizabeth Mann confirmed the storm impact was primarily transactional. For 2025, she outlined several headwinds for transactional revenue, including tough comps from contract conversions and high auto activity in early 2024, the divestiture of the transactional AER business, and typical first-quarter seasonality.

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President and CEO Lee Shavel and executive Saurabh Khemka provided details. Khemka stated the program is over halfway through its investment phase and that KPIs include new insights like the 'Executive Insights' reports, now available for five of six major lines. He described 'Future of Forms' as a continuous innovation. Khemka also highlighted a new digital platform, core.verisk.com, which is seeing engagement levels multiple times higher than previous platforms, driving value for customers and Verisk.

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EVP & CFO Devina Rankin clarified that the C&D margin expansion was driven by efficiency, price-cost spread, and favorable mix from strong landfill volumes, though this will moderate in H2. She stated that the full-year EBITDA guidance of $7.55B is intact, with the only negative revision being a ~$25M reduction in recycling EBITDA due to commodity prices and costs, which is being offset by strength in C&D and higher-than-expected synergy capture.

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EVP and CFO Devina Rankin explained that of the $190 million in incremental sustainability EBITDA, about $40 million flows to the Collection and Disposal segment via royalties and fees. She guided for a back-half weighted synergy ramp for Stericycle and H1 pressure from recycling commodity comps. Both Devina Rankin and President and CEO Jim Fish expressed confidence that the ITCs are secure, noting the original investments were viable even without them and that other potential tax credits were excluded from guidance.

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CEO Robert Fauber detailed that the 75% growth in private credit revenue is distributed across multiple areas. This includes asset-backed finance within Structured Finance, ratings for BDCs and fund finance activities within the FIG franchise, and even some deals in Project Finance. He also highlighted its impact on new business, noting that private credit-related deals accounted for nearly 25% of first-time mandates in the quarter.

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CEO Robert Fauber explained that Moody's has 'traditional levers' to manage costs in cyclical downturns, such as effectively managing headcount. He also emphasized the long-term strategy of becoming more 'volume agnostic' by investing in modern applications and AI tools for analysts. He noted that AI deployment in the rating agency is deliberate to ensure a proper control environment.

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CEO Robert Fauber stated that formal updates to the medium-term targets would come in February but outlined the current strategy. He described a dual approach: an 'expand' strategy of cross-selling more solutions to the existing financial services customer base and a 'land' strategy of acquiring new corporate logos for use cases like trade credit and supplier risk.

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President & COO Baer Pettit stated that there has been no fundamental change to the positive outlook for custom indexes. He attributed the quarterly fluctuation to the specific timing of deals and reaffirmed that it remains a very important and unequivocal growth opportunity for MSCI.

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Chief Financial Officer Andrew Wiechmann reported healthy retention rates of 96.5% in Index and 95.5% in Analytics. He noted that Q1 benefited from lapping a large bank merger cancellation from the prior year. While the top cause of cancellations remains client events and some caution persists around Europe, the core business showed strong resilience. He suggested some lumpiness in cancels could occur if market uncertainty continues.

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CFO Andrew Wiechmann explained that pressure on asset managers has lingered more in Europe, whereas the Americas are showing signs of improvement driven by sustained market momentum. Regarding the second question, he clarified that converting one-time data sales to subscriptions is a normal part of the business and was not a significant or outsized factor in the quarter's results.

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President and COO Baer Pettit stated that MSCI is seeing significant competitive displacements in ESG & Climate and is executing well in Analytics, often in formal RFP situations. While not naming competitors, he expressed confidence in MSCI's competitive execution and solid positioning, noting the landscape is more fluid in private markets but strong elsewhere.

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CFO John Gamble attributed the higher litigation costs to general outstanding lawsuits and a rising volume of small claims from individuals, which he expects to remain elevated. CEO Mark Begor explained the weaker talent market is due to corporate cautiousness around economic uncertainty, particularly regarding tariffs, which has dampened hiring activity over the last six months.

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CFO John Gamble clarified that over 70% of USIS mortgage revenue comes from hard pulls. CEO Mark Begor noted a trend of lenders using fewer bureaus for initial shopping, a dynamic Equifax aims to win with differentiated data. Gamble expects TWN inquiries to slightly outperform mortgage inquiries in 2025.

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Chief Financial Officer Helen Shan stated that the company is currently focused on executing in Q4 2025 and will provide formal guidance for fiscal 2026 during the September earnings call. She noted that the trends driving current performance are expected to continue.

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Chief Revenue Officer Goran Skoko and CEO Phil Snow addressed the questions. Skoko confirmed the UBS contract was signed and its ASV booked in Q2, representing a key strategic win. Snow added that the user rollout will occur in subsequent quarters. Regarding the retired product, Skoko stated its impact was contained within Q2 and that no further significant product retirements are planned for the fiscal year.

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CEO Frederick Snow reiterated the guidance of 30 to 50 basis points of growth from generative AI in fiscal 2025. He mentioned several monetized use cases, including a conversational API for wealth clients and the 'Pitch Creator' for banking productivity. He emphasized the value proposition is practical efficiency gains and that the demand pipeline is solid.

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CEO Frederick Snow reiterated the expectation of 30-50 bps of growth from gen AI in FY25, which is included in guidance. He mentioned monetized use cases like the conversational API, the 'Pitch Creator' for banking, and data sales for AI model training. He emphasized that the value proposition is centered on practical productivity gains and efficiency.

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Executive Frederick Snow acknowledged that while headwinds persist, there is an opportunity to perform better than the guidance suggests. He pointed to generative AI as a potential wildcard that could accelerate growth if monetization occurs faster than planned. He also noted that a faster-than-anticipated recovery in sell-side hiring could be a tailwind. Snow stressed that the team's main focus is on accelerating top-line growth above the current 5% level.

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EVP and CFO Earl Ellis stated that the ATS project delays were due to normal timing shifts and customer approvals, with activity expected to revert in the second half and margins to return to the historical 9-10% range. President and CEO Scott Salmirs described the Education segment as a stable, GDP-level grower with strong cash flow, noting positive renewal trends and increasing traction with its integrated, bundled service offerings.

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President and CEO Scott Salmirs attributed higher win rates to investments in sales talent, training, and AI-powered RFP responses, while maintaining margin discipline. Regarding ATS, he confirmed the microgrid business is very strong with a record backlog, while the bundled energy solutions side remains soft due to interest rates but is showing incremental improvement.

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President and CEO Scott Salmirs attributed margin gains to moderating wage inflation, better labor availability, and a new workforce productivity optimization tool that is in its early stages. He confirmed ATS revenue can be lumpy due to project timing but noted the backlog is very strong. EVP and CFO Earl Ellis added that capital allocation remains balanced between accretive M&A, like the recent Quality Uptime acquisition, and share repurchases.

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CEO Gene Hall described a historical pattern where clients initially pause during uncertainty before re-engaging as they need Gartner's help to navigate the new environment. CFO Craig Safian reiterated the company's disciplined, opportunistic, and price-sensitive approach to share repurchases, focused on optimizing long-term returns.

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Executive Eugene Hall clarified that Gartner's public sector business is highly diversified across 74 countries and various government levels (federal, state, local), viewing it as a vibrant sector. CFO Craig Safian explained that while renewals are spread throughout the year, Q1 is slightly above the 25% average. The key dynamic, he noted, is that Q1 is also seasonally the lowest new business quarter, which drives their prudent planning.

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CEO Gene Hall positioned AI as one of several critical issues Gartner helps clients with, alongside cybersecurity and data analytics, suggesting it's part of their ongoing value proposition rather than a new, distinct growth surge. CFO Craig Safian deferred specific 2025 guidance to the February call, emphasizing that the year-end 2024 CV figure is the most critical input for the 2025 revenue outlook.

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President and COO Timothy Boswell attributed the margin pressure to return activity from a strong Q4 and the in-sourcing of trucking resources ahead of volume, which should provide leverage later. Regarding inflation, he stated that it is generally supportive as their largest cost, the fleet, is already owned, providing a relative advantage. He noted that demand remains the key variable.

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President & COO Timothy Boswell detailed that the top 200 customers generate about $500 million in revenue, or 20% of the total, and include major GCs and retailers. He explained the opportunity lies in creating a vertically aligned business development layer to sell across geographies, improving wallet share with existing accounts, and adding new ones. CFO Matt Jacobsen specified that the Q1 EBITDA margin is expected to be down by about 100 basis points year-over-year at the midpoint, driven by headwinds and investments in sales headcount.

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President and CFO Timothy Boswell stated the modular pricing spread is a favorable 12%, while storage is flat. He outlined a 2025 strategy focused on new AI-informed pricing and quoting technology to improve bundling. CEO Brad Soultz added that a seasonal recovery would typically begin in March, coinciding with expected rate relief and political clarity.

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EVP and CFO Todd Cello clarified that the 70% subscription figure applies only to the Marketing business. He then detailed the resiliency of the broader segment: Insurance and Tenant/Employment tend to perform well in downturns, Communications and Tech are generally neutral, Media is more negative but insulated by subscriptions, Public Sector is neutral-to-positive, and Collections is counter-cyclical and would see increased demand.

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CFO Todd Cello confirmed the guidance reflects current trends without assuming rate-cut benefits and includes prequalification volumes. He noted that while some shift to fewer credit pulls for prequalification has occurred, they continue to win share. CEO Christopher Cartwright added that a complete shift to single-pulls is unlikely as lenders balance cost savings with the need to maximize qualification rates.

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President and CEO Christopher Cartwright explained that the $50 million in bookings from OneTru-powered products de-risks the company's goal of returning to high single-digit revenue growth. He highlighted that the elevated pace of innovation in analytics, marketing, and fraud solutions is improving sales, even in a tepid market, and positions TransUnion well for when customer acquisition spending increases.

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CFO Bryan Hipsher clarified that the exited partnerships did not meet expectations regarding the relationship and cost of service, and a renewal on favorable terms was not possible. CEO Anthony Jabbour described the new vertical strategy as the final phase of the transformation, enabling D&B to engage clients with deeper industry expertise and tailored solutions, citing a new healthcare vertical initiative as an example.

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CEO Anthony Jabbour stated that the primary focus is on the strategic process for the entire company, rather than a smaller divestiture of the Credibility business at this time. CFO Bryan Hipsher added that the partnerships with LSEG and ICE are structured as revenue-sharing agreements on combined solutions, designed to monetize joint capabilities and expand market reach, particularly in private capital markets.

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CEO Todd Schneider clarified that the pricing challenge is a general trend reflecting lower inflation, with price increases returning to historical levels across the board. On M&A, he described the environment as active, with Cintas focused on acquiring high-quality businesses within its existing segments to extract synergies and expand its customer base.

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President and CEO Todd Schneider attributed the growth to strong customer buying motives around health and wellness, a favorable product mix shift towards recurring revenue items like AEDs and eye wash stations, and strategic investments. He noted that while the businesses operate with separate route structures, they actively share data and leverage the rental business's customer base for cross-selling.

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