On Wednesday, Pitney Bowes (NYSE:PBI) discussed first-quarter financial results during its earnings call. The full transcript is provided below.

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The full earnings call is available at https://edge.media-server.com/mmc/p/9zxfuea7/

Summary

Pitney Bowes reported strong first-quarter results, leading to an increase in guidance due to broad-based momentum across divisions.

The company highlighted significant progress in Presort and Sentec, with strategic efforts in operational improvements and acquisitions, including hiring Greenhill for larger acquisition evaluations.

Pitney Bowes Bank is making rapid progress in identifying value-driving opportunities, leveraging its low cost of capital to support shipping software customers.

The company has enhanced shareholder value through capital allocation policies, including dividend increases and share repurchases.

Management expressed confidence in the company's long-term positioning and highlighted efforts to improve customer retention and acquisition in Sentec.

The company achieved positive free cash flow in the quarter, attributed to strong working capital management and operational performance.

Pitney Bowes is focusing on conservative cash flow guidance to account for potential headwinds and ensuring a balanced approach to cost management and growth investments.

Full Transcript

OPERATOR

Good day and thank you for standing by. Welcome to the First Quarter 2026 Pitney Bowes Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press Star one one on your telephone. You will then hear an automated message advising your hand is raised to withdraw your question. Please first Star one one. Again, please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Alex Brown, Director of Investor Relations and Assistant Treasurer.

Alex Brown (Director of Investor Relations and Assistant Treasurer)

Please go ahead. Good morning and thank you for joining us. Included in today's presentation are forward looking statements about our future business and financial performance. Forward looking statements involve risks and uncertainties that could cause actual results to be materially different from our projections. More information about these items can be found in our earnings press release, our Form 10K and other reports filed with the SEC that are located on our website at www.pb.com and by clicking on Investor Relations, Please keep in mind that we do not undertake any obligation to update forward looking statements as a result of new information or developments. Also included in today's presentation are non GAAP measures. Specifically, ebit, ebitda, EPS and Free Cash Flow are all on an adjusted basis. You can find reconciliations for these items to the appropriate GAAP measures in the tables attached to our press release. We have also provided a slide presentation and spreadsheet with historical segment information on our website. With that, I'd like to turn the call over to Curt.

Curt (CEO)

Good morning and thank you for joining us today. As reflected in our earnings release, first quarter results were strong and broad based. Our results and outlook reflects momentum in the business and supported the upping of our guidance. CENTEC performed well in the quarter and is showing potential signs of turning the corner on sales. Presort continues to win business and build sales momentum. We continue to expect growth to return to the business in the third quarter. Turning to Pitney Bowes Bank, Steve and his team are making rapid progress with respect to operational improvements and in identifying value driving opportunities. Additionally, we've delivered significant shareholder value through our capital allocation policy including dividend increases and significant share repurchases. Finally, we have started interviewing advisors for the second stage of our strategic review. In summary, Pitney Bowes is extremely well positioned for the long term. In closing, I feel obliged to send out a special thank you to the over 6,000 Pitney Bowes team members. Our results are a Direct reflection of their talent and dedication to the company. With that, let's open the call for questions.

OPERATOR

Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 11 on your telephone. If your question has been answered, you wish to remove yourself from the queue, please press star 11 again. We'll pause for a moment while we compile our Q and A roster. Our first question comes from Jasper Bibb with Truist Securities. Your line is open.

Jasper Bibb (Equity Analyst at Truist Securities)

Hey, good morning guys. Can you talk about the consolidation opportunity and presort, you know, whether this quarter you mentioned hiring Greenhill to evaluate opportunities there? Historically, I think a lot of your acquisitions in that business has been pretty much mom and pops, which I imagine you can handle internally without having to have an investment bank involved. So I guess does hiring Greenhill signal any change there that you'd potentially consider larger acquisitions in that segment or you're approaching consolidation opportunity any differently than you have in the past?

Curt (CEO)

Yeah. Jasper, thanks for joining us and thanks for the question. With respect to the pre sort acquisition. We've been talking about that for quite a bit in terms of being a real strategy for us, as we've mentioned, there's great opportunity to create value. So yes, we can go out and pursue these opportunities on our own, but just having an outside advisor really can help accelerate that. We have a team that's heavily dedicated on execution within the business, but having dedicated resources to really accelerate those discussions can only help. And with respect to size of acquisition, the sweet spot really is quite frequently the smaller mom and pop type pre sort opportunities. But again, as we continue to progress, get better at running our business, we want to look at all opportunities to really create value for the business. And as we've said so many times before, these deals typically come at a pretty low multiple or immediately accretive to the business. So as our capital position gets better, as our balance sheet gets stronger, it starts to open up additional opportunities. But we're primarily focused on trying to find some of these smaller tuck in acquisitions that we can pursue.

Jasper Bibb (Equity Analyst at Truist Securities)

Thanks. And then really nice quarter for Centec. Can you maybe just talk about what worked this quarter, how you see that business trending over the balance of the year and in your guidance scenario, do you think could potentially flatten out on the year over year revenue growth or maybe even grow by the end of the year and what gets you there?

Curt (CEO)

Yeah, and Jasper, we don't want to get ahead of ourselves, but you know, I'll just start by pointing out or answering the part of your question of what's working. And Todd and his team are doing a fantastic job as reflected in our results. And I'd highlight sort of two categories and then a few points under each. So with respect to our meters business, I think there's been a level of perhaps neglect in terms of focusing on slowing the rate of decline. We're not delusional about the future of mail, but there's still a lot we can be doing. So there's three areas of focus that Todd and his team have been really digging into that are helping us slow that rate of decline. One, we're starting to look Historically, we've handled virtually all cancellations as a processing issue, not as a retention issue. So we're putting a lot more. So historically, if somebody asked to cancel their meter, we processed it and that was the end of it. We're now switching to when those requests come in, doing outreach to try to figure out can we save that customer, what can we do to make sure they're getting the most value out of the meter and make them hopefully reconsider the decision. Second of all, one of the things we're looking at is predictive analytics,. So what we're doing now is trying to, you know, it's one thing to try to save somebody when they decided to leave. We're putting a lot of work into understanding what are the metrics, what are the signs that a customer is at risk, and trying to proactively get to those customers, figure out, can we offer them a better solution in advance, figure out how they can get more value out of their meter, which we expect to reduce the rate of cancellations. And then finally, we're refocusing on customer acquisition. Historically, we've been so focused on General Electric Company (GEC) and other parts of the business that, you know, I don't know that we put enough effort into our actual sales effort. We believe we have the best products, best services in the space. We're proud of it, and we should be out talking to the market more about it. So Todd and his team are really focusing on go to market strategies there. The real opportunity for growth comes from the shipping software side. And there, again, there's three things we're really doing. One is we're narrowing and simplifying our offerings. Right now we offer a high number of shipping software solutions, which I think can create some confusion in the market. It also limits our ability to optimize those offerings. So we're putting a lot of effort into narrowing our product base and improving those products for our customers to help accelerate growth. Second of all, Pitney Bowes has a proud tradition of product innovation technology development and that's somewhat driven our product development within shipping software. So often we would look at what's a really cool technology we can implement in the shipping software space and we've turned and then figure out what customers want that we're flipping that on its head and figuring out what do our customers want and how do we meet that need. And then finally, and this will become more apparent in coming quarters, we're using the bank as a differentiator in the shipping software space. So you know, financing is can be pretty important in the shipping software space. There's, you know, a lot of cash that flows through that business and being the only player out there with a bank gives us real opportunities to offer products and services to customers that our competitors simply can't. So you know, I guess put that all together. You know those that's the progress we're making in terms of when we get to growth. I think we've made a lot of promises in the past and not be able to deliver. And you know we, and you know our team, I keep emphasizing let's focus on getting things right day to day and the future will take care of itself. So I believe that day is coming. But we'll update as we get closer to that date.

Jasper Bibb (Equity Analyst at Truist Securities)

That all makes a lot of sense. Maybe last one for me it sounded like a good quarter for net new business in presort. I think Leather mentioned you think volumes might get back to growth in the back half of the year. I guess just on that comment, can you piece out maybe how much of that is net new business wins and incremental volume that you won versus I guess lapping the customer losses in the prior year.

Paul

Yeah. Yeah. So Paul, I know you've done a lot of work on that. Do you want to take that one on pre sort? Yeah, look we are we've stopped the losses and we're picking up wins and we're obviously filling our pipeline which is the right thing. And I think as we get into the latter half of the year we should start to see some positive momentum again in presort.

Jasper Bibb (Equity Analyst at Truist Securities)

Got it. Thanks for taking the question.

Curt (CEO)

Thank you, Jasper.

OPERATOR

One moment for our next question. Our next question comes from Aaron Kempson with Citizens. Your line is open.

Aaron Kempson (Equity Analyst at Citizens)

Thanks for the questions. Can you help us think about the drivers of the strong 1Q Free cash flow of 43.5 million bucks. I think the consensus before you Pre announced on April 21st was a $14 million outflow so call it a $57.5 million Delta upside. And then is there a signal investors should be taking away about the durability of free cash flow between years, given that cash flow can vary quarter to quarter. But you followed up a strong 4Q25 number with a strong 1Q26 number.

Paul

Hi, Aaron. Listen, this is Paul. Thanks for the question. Look, we had good working Capital Management in Q1, better than I would have originally thought. And so that was a good thing. And you are right to point out it was strong in Q4. But at the end of the day, we don't totally control all aspects of when our pre soar customers prepay. So, you know, obviously we benefit from that and we used it to improve our operating performance. But yeah, overall solid operating performance, Q4, Q1 and just good working capital management are the reasons. And yeah, absolutely. I think there's durability in our free cash flow. I mean, we've got. Kurt and I both said for many times we're an undervalued stock if you believe in free cash flow. And obviously the durability is sort of proving itself out.

Curt (CEO)

And Aaron, just to add to that, the way that we're really looking at it in your question about durability, Q4 was obviously an incredibly strong quarter for cash flow. And there was a little bit of concern on our part that as you mentioned with working capital there could have been a, a pull forward effect of cash flow that maybe would have normally come in Q1 got pushed into Q4. But with the strength we saw in Q1, there's two real takeaways. One, it makes us more confident that our Q4 cash flow was a real number, not a artificially impacted number by, you know, the pull forward of cash. And then secondarily, you know, the strength of Q1 also gives us a lot of optimism for the current year. This is the first positive free cash flow quarter we've had in quite a few years. But we're trying to be a little conservative on the guidance side. This is a whole new world for us in terms of the strength we're seeing in our cash flow. We like to think it's durable and will lead to a strong 26. But we're trying to be a little bit conservative on the cash flow side just in case there was a pull Forward effect into Q4 and Q1.

Aaron Kempson (Equity Analyst at Citizens)

Okay, that's helpful. And then bigger picture, Kurt, this has been a great story since you formally stepped into the CEO's seat from the board almost a year ago. Now, stock close to 1554 yesterday versus 910 before you came down from the board and officially took over. What's the one thing you're most proud of over the last year? And then maybe something that's proven harder than you thought it would have been initially that you're hoping to get right in the remaining 2/3 of 26. Thank you.

Kurt

Yeah. So in terms of thing I'm most proud of, I'd really say the employees of Pitney Bowes. We have over 6,000 team members. I'm an ex consultant, I've been in startups, work inside of more than a dozen companies. And one thing that impressed me even before joining the board and before the proxy campaign, it's just evident how dedicated the employees are to the company. I think maybe they needed better guidance and leadership, but the commitment is there and I think it's a Peter Drucker saying that culture eats strategy for lunch. And the culture of Pitney Bowes is incredibly strong. So just seeing the ability of employees to stay focused on execution, remain committed to the transformation, despite not having maybe the clarity they might want in terms of strategy. I think the way to run a business is to fix what you have and then figure out how to grow from there. For a company in our situation, that can be incredibly hard on employees and they've performed admirably. So, you know, that's certainly been the thing I've been most proud of. As far as the biggest challenge, I would just point to our forecasting, you know, that, you know, it's always difficult as a CEO to come out, you know, reiterate guidance and then miss I think, you know, that highlighted some of the problems we had in terms of forecasting within the business. Paul and his team have done an incredible job over the past few months to really improve our ability to forecast. And there's been a silver lining to it. To get better at forecasting, it's really forced the team to dig into the nuts and bolts of the business to get down into the weeds. And as we do that, we're learning a lot about the business and helping us make better decisions on a go forward basis.

Aaron Kempson (Equity Analyst at Citizens)

Thank you.

OPERATOR

One moment for our next question. Our next question comes from George Tong with Goldman Sachs. Your line is open. Hi.

George Tong (Equity Analyst at Goldman Sachs)

Thanks. Good morning. On presort, you're now competitively priced versus peers and are starting to win back market share. Can you elaborate on the near term and then longer term strategies you have to drive a further revenue recovery from both a product and sales perspective.

Paul

Yeah. And Paul do you want to take this one as well? I know you've put a lot of work in the pre sort side of things. Yeah, look, I mean, obviously it's important for us to know our cost and pre sort and so we, you know, we have an advantage given we're the low cost provider and so we can sort of flex that muscle if we so choose to do that. But what we're seeing is, you know, Debbie and her team are doing a great job and their new sales team of building up our pipeline. And so that in part is one of the reasons led us to take actions on our guidance where we increase the lower end and in some places raise the upper end. So we know our costs, we know our position is we've done a good job of stemming the losses, picking up some wins and I see momentum picking up. Kurt, anything you want to add to that?

Kurt

Yeah, I would just say, George, I think you've known our company for quite some time. Looking back with gec, there was such a focus on generating cash flow from the core businesses to fuel the growth of GEC that I would say that Sentech and Presort were really starved of resources. Debbie and her team have done a fantastic job. We've opened up the purse strings to allow Debbie to invest in new capital, get more aggressive on pricing. So rather than focusing on how do we maximize free cash flow tomorrow, how do we maximize long term free cash flow? And if you think about it, it's not just on the revenue side, it's also on the cost side. Sometimes you have to spend money to save money. So a lot of things we could do to improve efficiency require resources to evaluate, to look into and those weren't there for Debbie in the past. So I think we'll continue to get more efficient. Our cost advantage should grow over time and as Paul said, just gives us more ability to price aggressively, win more business. And it's, you know, there's a bit of a flywheel effect. The bigger we get, the more profitable we get, you know, on a, on a per piece basis.

Paul

And George, the only other part to that is obviously we're in a great liquidity position these days. So, you know, we can now sort of look at acquisition opportunities and Kurt mentioned that in his, in his letter about that. So, you know, inorganic growth and also organic growth.

OPERATOR

Thank you. One moment for our next question.

Kurt

Thank you, George.

George Tong (Equity Analyst at Goldman Sachs)

Thank you.

OPERATOR

Our next question comes from Anthony Lipitzinski with Sidoti. Your line is open.

Anthony Lipitzinski

Good morning and thank you for taking the questions. Certainly it was Nice to see the Sentec business down only less than 1%. So quite an achievement there. Can you comment on the number of paid software subscribers that you talked about in the press release and how that contributed to Q1 and your increased guidance. And also you talked about booking sales also up in Q1 and Q2. If you could comment on that as well. And then I have one other question about the Sentec as well.

Paul

Yeah, do you want to take that, Paul? Yes. So your first, let's talk about bookings. You know, as we see, we're seeing growth in our pipeline and the, the sales teams where they are their quotas, they're achieving targets that we set out from them. So again, reason why we did what we did on guidance, we're seeing positive momentum there. As far as the subscriptions, I mean we are seeing, seeing better enterprise subscriptions. I don't know if we actually give the exact number, if we've ever given that out. But you know, the reason we have better sales, subscription, paid subscription, is our sales team's performing. That's what it is. So one is really linked to the other. But I don't. Again, I don't want to be evasive on you, Anthony, but I don't think we've ever given out exact paid subscription numbers. If it is something that's fair that we should, something maybe we'll consider putting on our investor website at some point. But let us think about that. Kurt, you want to add to that?

Kurt

Yeah, yeah. Anthony, a couple things I'd add as well. I think we put in our release this is the first year that bookings were up year over year in terms of impact on the quarter. One thing important to understand about our shipping software business and our meter business as well, we have equipment sales up front, one time revenue. We also have what we call stream revenue. Think of it as SaaS or recurring revenue. That's discounts on shipping labels, et cetera. Whenever you see strong sales and bookings like we saw in Q1, it certainly helps revenue. But one of the encouraging part is we do get that stream revenue that's going to help us in future quarters. So that's been really encouraging. And going back to the previous question about what you're proud of, what's really driving it is Todd has reignited the sales organization, the go to market strategy. And just one anecdote that I personally love is we had our Winner's Circle conference down in Fort Lauderdale recently and it was all the top salespeople across the organization and it was in a big hotel that hosts all sorts of conferences and coming out of that conference, there's multiple companies there. We had one of our salespeople go over to the conference right next to us, start talking to people, find out what it is they did, got in touch with some of the leadership there, started pitching our solution and we have a sales lead coming out of that. That type of initiative hasn't always been there with us, but we've gotten incredibly aggressive in our go to market and again, just the energy and the enthusiasm is great to see. So it's very encouraging. We're getting better at developing products and we're getting a lot better in go to market strategies and we're also getting a lot more aggressive. So more to come, but it's an encouraging sign and again, it's showing up in our results.

Anthony Lipitzinski

That's great to hear. And then currently in your shareholder letter you did say that you could experience some one time headwinds later in the year for Sentec. What did you mean by that? Maybe if you can elaborate on that.

Kurt

Yeah. So without going into too much detail, because it does pertain to customers that we work with, what I'd say is when you really think about the core of our business within Centec, it's the meters and shipping software, we do have some related businesses that I would call non core. Some of them get into things like fulfillment and they're not really central to what our business is. And just the reality is it's not a core business to us and over time we expect those to go away. So there's certainly the potential in the second half. We have one customer in particular that the volumes decline almost quarterly and that could pick up in the second half of the year. So unfortunately it will create a headwind, but it doesn't reflect on the overall health of the core business. So we just want to be cognizant and that may not come to pass, but we just want to be very transparent with investors about some things that might be coming down the pike.

Anthony Lipitzinski

Gotcha. Okay, and then last question for me. So a few weeks ago you guys announced a partnership or collaboration with temu. Can you just comment maybe on that? And what have you seen thus far? Could we see additional partnerships like this being announced by the company?

Kurt

Yes, and we don't want to get too much into the weeds on our customer relationships with any particular customer. But again, this is something that we're really focused on and it's figuring out how do we make the most of the assets we have. So, you know, we've looked into ways to offer, you know, banking services to customers. We've looked at all sorts of ways, trying to think creatively about, with our unique set of assets, how we can do that. So, you know, what you're discussing is more of what I'd call it, you know, sort of a beta test where we're trying to figure out, is this something that'll work. We don't want to lean too heavily into it. You know, we'll see how that particular deal works out, and if we have success there, we'll certainly try to spread it throughout the organization. So I would just say it's just a little bit too early to talk more about that, but maybe in a future call, assuming we have success, we can have a fuller discussion on that.

Anthony Lipitzinski

Very good. Well, thank you very much and best of luck.

Kurt

Thank you, Anthony.

OPERATOR

One moment for our next question. Our next question comes from Karthik Mehta with North Coast Research. Your line is open.

Karthik Mehta

Hey, good morning, Kurt. You know, you talked about potentially adding, I don't want to use this word, but adding maybe another business line to Centec to help the growth profile of that business and being a complementary business. I'm wondering if you have any more thoughts on that and if that would be something that's small or something that you're thinking that would be bigger, that could actually change the trajectory of that business. Yeah. And Kartik, I apologize. So is this from the letters, previous calls that we've talked about adding? Yeah, I think we've had previous conversations where I think Centex has an opportunity to maybe use some of the strengths of that business and if it's possible to maybe add another business line or maybe that's too big of a word, but add another business that help that.

Kurt

Got it. Yeah. I guess the easiest thing that I can point to that we've discussed publicly, really relies on the bank. As you can imagine, if you're an E commerce company producing a tremendous amount of shipping labels, there's a lot of outflow of cash. And so obviously, we don't want to expose ourselves to undesirable credit risk, but we can really, you know, we can really, by extending credit to those customers if they're credit worthy. You know, it can be. You know, we have a strong balance sheet, a lot of access to capital. With a bank, we have access to broken CDs and low cost of capital. So it's a way to essentially take advantage of our low cost of capital in the bank to profit by improving Opportunities for our customers that have a significantly higher cost of capital. So that would just be one example of a, of a real opportunity for us. And again, just, I can't emphasize it enough because I don't feel like we get appropriate value for the bank that we have. You know, our borrowing rate at the bank is, you know, on deposits is incredibly low. And again, we have access to brokerage CDs which is well below the cost of capital for any of our competitors. So it's a really unique asset we have. And you'll see over time with Steve and his team ramping up, you know, some of the, some of the value we can create out of the bank, not just through the bank, but also for our customers and other businesses.

Karthik Mehta

Yeah, no, I think bank is a pretty big asset and probably an area you can leverage a lot more just on cost cutting. You've done a great job reducing the cost of the business and it seems like from your commentary on sales, sales hasn't suffered. One of the biggest issues or questions comes up is, is the company cutting too much cost and is it going to hurt the eventual long term prospects of the company? I'm wondering how you're managing the cost cutting to make sure that the true meat of the company doesn't get hurt.

Kurt

Yeah, Paul, take that. Obviously he's integral to what we're doing on the cost side, but I think he can answer that pretty well.

Paul

So Kartik, I mean, obviously we're the initial round of cut sets more like blunt force. But we've been very surgical in how we do cuts going forward. Obviously we don't want to cut into our muscles. We've got muscles to flex. But I don't think that our costs are such that it's going to impact our ability to grow this business in the future. I spend a lot of time here in the office and so, you know, I live through this as does Kurt. And so we're very mindful of that not to overcut this such that this company doesn't have a viable future going forward. So. And the bigger point is, initially, you know, it was. And as it always, a lot of times it happens, you know, you bring in a consulting firm to do this. This last round of cuts, this was all management. So, you know, we were very refined on how we did that. And you know, to this point we're seeing positive results.

Kurt

Kartik, just a couple things to add as well. Contrary to, I would almost say our experience has been a little bit different than the concept of your question. And a great example I'd point to. And first of all, just for some context, a lot of our focus has been, you know, employee focused. You know, we've gone through some painful rifts, which has been really hard on the team. But you know, we're of the mindset that at this point we have, you know, hopefully that's not something that's a part of our future. But associated with those rifts, not only have we not cut into muscle, but we're 105 year old company so we've had some processes in place that have, you know, been. Been what they've been for, you know, 20, 30, 40 years. And as we've made some changes, you know, people stepped up into new roles, had to learn those roles. Just as one example within hr, we elevated somebody who's looking at benefits and having to get up to speed on our benefits plan. That person's taking a whole new look at them and they've identified north of a million dollars of just low hanging fruit that we can take out of the business from third party spend. And that was a direct result of bringing somebody new into the chair as a result of the cuts we've had. So in a way these cuts are leading to new thinking within the business and are leading to better outcomes rather than worse.

Karthik Mehta

Thanks Kurt and Paul, that was very helpful.

Kurt

Yeah, thank you Kartik.

OPERATOR

One moment for our next question. Our next question comes from Justin Diparlo with D O MO Capital. Your line is open.

Justin Diparlo (Analyst at D O MO Capital)

Good morning. On your pre release, there seemed to be some confusion regarding the pension expenses and I'd say also some even skepticism about whether or not you actually raised guidance. And I was just wondering if you could provide some clarity on that.

Paul

Yeah, no, I can address that. We absolutely did raise guidance and then. But you know, we further refined our thoughts on how we treat how we sort of take pension out of our numbers. I mean it's true that We've annuitized our U.S. and Canadian pensions very successfully and now we're turning our attention to a few other ones. And what we've decided on is we need a triggering event and one that when we have that triggering event, then we'll back that out of our adjusted numbers. And so, you know, if you didn't have that and our guidance would have gone up even more. So what you're seeing is we're erring on the side of conservatism. There's many examples out there of companies backing out all legacy pensions. We decided we're going to tie it to a triggering event.

Kurt

And just to be clear, I don't know if the genesis of your question, Justin, to put a very fine point on it, you know, value investor club. Other places, you know, we've seen comments that, hey, this pension issue actually was a artificially made things look better and it's quite the opposite. So our guidance would have been stronger were it not for this change. So I think some of those investors, presumably shorts, have the story backwards.

Justin Diparlo (Analyst at D O MO Capital)

Perfect. Makes a lot of sense. And then lastly, reading your CEO letter at the very end, there seemed to be to me a shift in tone perhaps, or emphasis at least regarding debt. And it seemed to be, I don't know, the way I read it sounded like we should be expecting some more material payments on reducing leverage. And I guess if you could just maybe provide your thoughts on that. Thank you.

Kurt

Yeah, and I'll give a quick answer. And Paul obviously is the guy to give the more detailed answer. But obviously we have a fiduciary duty to do what's in the best interest of our shareholders. At the same time, part of doing that is we have partners in our lenders, whether it's banks or debt holders. So our obligation is to our shareholders, but a part of that obligation is to make sure we have a good relationship with our debt holders. So we've done a lot for our shareholder. We think it's appropriate to de risk for the lenders to make sure that they want to continue to work with us and, and be a lender to us. And specific to delevering, we're in a really strong financial position. We have the 27s coming up. We have cash and liquidity to take that out. And our expectation would be within the next couple of months that we should be able to pay off the 27s without having to issue any additional debt. But I think Paul can give a better answer to the broader, broader issue.

Paul

Yeah, I mean, look, just to sort of add to what Kurt said, obviously, you know, we have a duty to our shareholders. It was the best course of action to do the share buybacks in the manner of which we did. You know, now we shift to other aspects. You know, obviously we desire to have improved credit ratings, and so we're working on that. With improved credit ratings is obviously a goal to delever the company. I've said, you know, to keep our net debt to EBITDA, you know, around 3 or slightly lower than that. And so that's just our next focus area. And obviously the most prompt thing we have with is current to us is our 27s. And as Kurt said, between cash and liquidity and, you know, and other tools that our banking partners have out there, you know, we're going to address that in the next few months. So we need to get this company back to the right appropriate leverage, and that's our focus.

Justin Diparlo (Analyst at D O MO Capital)

That's amazing. Thank you.

Kurt

Thank you, Justin.

OPERATOR

And I'm not showing any further questions at this time. I'd like to turn the call back over to Kurt for any further remarks.

Kurt

Thank you. Yes, everybody, thank you for joining us again. I can't be more excited about the performance of the business. It was a great quarter for us. We had a lot of progress. That makes us optimistic about the coming quarters and years. I would just like to say a thank you to, first of all, our shareholders for the trust you put in us. We work hard every day to try to deliver value for you. I think we're doing a pretty good job so far, and I think we. There's a lot of good things to come. Second, you know, a big thank you to the employees that I've said before. This truly is an exceptional set of employees at this company. The dedication to the company is phenomenal, and I can't thank all of them enough for the hard work they put in. And then finally, a thank you as well to our customers. You know, they're incredibly important partners to us and we strive every day to do a better, better job for them and, you know, just appreciate the trust they put in us. And we continue to drive value for them and look forward to continue business with them in the future. So thank you everybody for joining and look forward to next quarter's call.

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