Three Earnings Topics to Watch During Second Quarter Earnings Season

Jeff Buchbinder (00:00):

Hello everyone, and welcome to another edition of LPL Market Signals. Jeff Buchbinder here, your host for this week, with my friend and colleague Tom Shipp to talk about earnings. How you doing today, Tom?

Tom Shipp (00:13):

Doing great, thanks Jeff.

Jeff Buchbinder (00:16):

Wonderful. So we're going to do things a little bit differently today. I mean, normally we would do a full earnings preview, but we did that on our blog. So LPL research.com has or lpl.com/research has an article from June 30, what to watch this earnings season. So, just at a high level, it's going to be strong, probably going to end up close to 30% earnings growth driven, of course, by tech and AI. We're going to try to go a level down. Of course, Tom, you have great insight on individual companies as our head of equity research at LPL, and given your more recent sell side equity research tour and my tour <laugh>. So I want to really kind of dig a level down and talk about earning season. So you highlighted three things to discuss, of course, AI CapEx has to be one of those three, so we'll start there.

Jeff Buchbinder (01:15):

And then second, refining within the energy sector, certainly a hot topic these days with the latest developments in the Middle East. And then lastly, the banks, which kickoff earnings season this week, actually, as you're listening to this Tuesday morning starts bank earnings season. So it is Monday, July 13, 2026 just after lunchtime here on the East Coast as we're recording this. So, Tom, let's jump into the AI CapEx issue first. We all know it's, the numbers are just going to be massive. The question for you is, you know, depending on what we hear, what signals might you take from that? You know, beyond just, is it up or is it down?

Tom Shipp (02:02):

Yeah, I think where, yeah. So like you said, Jeff, there's everyone's looking at these numbers, and I think you've brought a really good point, and you mentioned this in the outlook, like, does seem like the narrative is starting to talk about okay, monetization. And I know we'll get to that a little bit, but I still think there is signal in the CapEx guide and numbers and for a few reasons. One, I think that if they were to come out and everyone said, hey, 2026 numbers expectation for CapEx is flat, nobody changed, right? I think the immediate, you know, we've just gotten so used to, oh, we're spending more, spending more. I think the immediate reaction might be, oh, what's wrong, right? But flat would be, hey, maybe it's just good capital planning, maybe it's whatever, right? But like, the numbers are still very, very massive.

Tom Shipp (02:54):

It would still be supportive of all the things we've talked about in terms of you know, where the spend is going. It leaves all the other questions that we have still there, but it wouldn't necessarily be bad. But that said, let's just go ahead and put flat to, you know, maybe pulling back a little bit as these red flags. I think you got to click a little bit deeper to really get some signal as to why they would, you know, why the, if that was what happened, right? Because I think if numbers go up, I think the narrative kind of remains exactly the same. But if numbers were flat or going down, you really want to think about like, what would be driving that? And, you know, and without getting too wonky, I think I would break it into three categories of why they may be flatter down, right?

Tom Shipp (03:41):

Implementation or deployment of that spending, i.e., we can't get enough power, we can't get enough water, we can't get permitting, whatever may have been that's saying, hey, we thought we were going to spend this much in calendar year 2026 because of X, Y, Z bottleneck, we're actually going to spend less, right? I think the market would generally, you know, depending on how well the narrative is told and how, you know, viable it is, I think the street would say, okay, that's understandable. We know these are bottlenecks. And in fact, it might even reinforce the, you know, the current winners, you know, within the space of your bottlenecks, right? Whether it be industrial technology, hardware, whether it be semiconductors and memory. So I think that would kind of be a, okay, fine, we'll accept that. The other kind of nuanced one would be, ah, you know, maybe it's related to financing or what have you.

Tom Shipp (04:39):

And folks might say, hey, look, they're paying attention to the balance sheet. They're being good stewards of capital. You would have to be a little bit, you know, put on your detective hat maybe, and understand are they trying to, you know, are they using this as an excuse? And similar to like, if it was oh, redesigns of technology, I think the big one, and I don't think anyone's going to tell us this, even if it was the case, but if demand, if customer demand had actually slowed down and therefore they were pulling back spending, I think the odds of them telling us that are just about zero. But those are really where I'm kind of looking at it. So, I know that the CapEx numbers have gotten so big and so focused on that, most analysts are starting to shift their, maybe focus onto monetization and kind of a deeper dive on that. But I still think there's numbers and or there's still signal in, you know, what we hear on the CapEx guide. So long-winded, but that's really what I'm looking at when I think of, you know, what we hear from the CapEx numbers

Jeff Buchbinder (05:43):

Yeah. Related to the potential for some customer pushback. I completely agree. We're very unlikely to see any of that just yet. But that's really the key to margin expansion, right? Adopting AI and actually improving the profitability of your business. I'm not talking about hyperscalers, I'm talking about the rest of the market. That the margin expectations in consensus estimates are up like two points over the next six, eight quarters. That is a lot of margin expansion. So actually our forecast in the outlook for earnings for the S&P 500 in 2027 is a little below consensus. And that's really the reason why we think the margin expectations are optimistic. So I'll certainly be watching for all of these signals that you just listed, Tom, I'll also be listening for adoption commentary, right? Yeah. Companies talking about they're using it, it is driving productivity and it gives them more confidence that they can expand their margins.

Jeff Buchbinder (06:54):

Another thing that's come up related to this recently, Tom, is the depreciation, right? Because this is, you're hearing this more from the bears. When CapEx happens, right? It's immediate revenue for the chip makers or the infrastructure makers, but the folks actually buying these chips, this equipment, they depreciate that over a period of several years. So you know, it's kind of like an earnings mismatch. And once that revenue hits and you fast forward a few years, it's more cost than it is revenue. So, how do you think about that?

Tom Shipp (07:38):

Yeah, I think where we're, how we're thinking about that, and I think you see this in consensus numbers, both with the, you know, where broken out and where there are good estimates for the operating margins within the cloud businesses, right? So you see it there. You also see it in returns on equity, right? You look at Google on out years, Google may have peaked, and this year might be the peak of their ROE or their ROIC whatever kind of balance sheet return metric you want to look at, because these companies have shifted from a cap, you know, cap light you know, highly cash generative businesses to almost more infrastructure industrial type businesses. And the big question around that is, how cyclical will the end demand be, right? So you can be an infrastructure play with high capital intensity, but if you're still a secular grower, that's fine, right?

Tom Shipp (08:35):

You can actually expect to see almost you can expect higher margins, right? Because there's a bigger barrier to entry to that capital outlay. The, so, but that's the one thing you see, right? I was just pulled a quick and dirty before the call here, looking at depreciation expectations from consensus. And because we're talking about the largest, most covered companies in the world, there are, in fact, you know, more than 10 analyst estimates out to 2030 for depreciation <laugh>. So we've got good consensus data there. And you start to see, I think on looking at the four big hyperscalers Google, Amazon, Microsoft, and Meta, we're seeing a depreciation CAGR (compound annual growth rate) from, call it, I use a base year of 2023, right? Because starting in 24 is when they all started spending a ton of money.

Tom Shipp (09:32):

We're looking at a compound, annual growth rate of about 30%, which is smack dab in line with the CapEx numbers about 32%, and cloud revenue at 29%. So they're all roughly in line. So the analysts are putting these numbers in their models in appropriate ways, you could say. What I think folks need to kind of be cognizant of is that as that depreciation hits, the one thing I noticed as I look through those numbers is people start to tamp down their CapEx numbers to still a high run rate, but not growing, starting about 29 and 30. So they kind of hit this level. And this is, you know, typical of financial analysts writ large, but you know, the sell side in general, okay, hey, we'll grow this out and then out year, then we'll kind of flatline it.

Tom Shipp (10:23):

We don't know if that's necessarily how it's going to play out. So if they continue to have to keep growing their CapEx, that's one thing. But if they don't, if it is this big spend between now and 2028 or so, and then it kind of run rates at extremely elevated levels of CapEx, but not growing, over time, that depreciation in that CapEx number will equal one another. And a kind of heuristic that we use when we're modeling is, okay, well if your depreciation is less than your CapEx, then that incremental CapEx is considered growth CapEx. So you can, once you have a long history of numbers, you can look at it that way. But I think that's the big thing, is understanding how capital intensive will this be, because even if they have to run rate at, you know, a trillion dollars a year, that's a lot, right?

Tom Shipp (11:15):

So there, there's just a lot of revenue and, and earnings that'll have to come from this. And I think the big piece that we'll want to see, to your point, is adoption from maybe the rest of the, you know, market, but also like, I'd like to start seeing some more explicit monetization, you know, numbers from not just the cloud business, but also specifics within their AI models, right? So Google has AI, you know, AI models, Amazon, Microsoft, not so much. So, I think that's what we'll really start to see because not only are they able to sell it in cloud, but are they able to monetize it, you know, via their own models, via reselling of models and how we're going to see that. So that's the big question mark. I still think we're for a little early to be able to see that explicitly, but right now, investors have to kind of trust that it's going to come. And that's still where we're at.

Jeff Buchbinder (12:13):

In Meta's recent announcement that they were going to potentially sell off some of their, or their excess compute capacity tells you that that is important. Monetizing these investments. Meta's a little bit different because that's not really their core business. They're using AI more to drive you know, the Facebook, Instagram, WhatsApp complex. But you know, with ad targeting and all of that, but if they can show returns, sufficient returns, that probably bodes well for the Amazon’s and Microsoft’s and Oracle’s of the world.

Tom Shipp (12:49):

Yeah. And they do develop models. So the interesting news with that, around the same timeline of when they announced they'd start selling excess compute capacity, which is interesting because not too long ago they didn't have any excess compute. So that may be some signal there. But the other interesting thing they said is starting to monetize their own models via APIs, which is where they're all these model companies are not seeing a ton of call it revenue on the consumer side, right? Because ask me if you know, my LLM of choice started charging me money to use it, I would go to the next one that doesn't. Right? I have zero loyalty to these things. I think most people are the same way. I think where they want to really monetize is within APIs to corporate America to help corporate or corporations become more efficient, right?

Tom Shipp (13:46):

That's really where they believe the money's going to be made. And Meta came out and said they were going to start offering that, and they were going to, they said that the current players in the market, call it your Anthropics and your OpenAIs are charging too much, and we're going to undercut on price, which is, I mean, it could be a, that could be a harbinger of a price war to come, right? And so we'll see, so much to be sussed out, but I thought that was an interesting piece for investors to think about it when Meta's coming out saying, hey, we're going to do APIs, but we're going to do it cheaper.

Jeff Buchbinder (14:22):

Yeah. I hear you that, I mean, price is coming down already, price of tokens and corporate buyers are being more sort of rational or optimizing their token buying and usage and all of that. But when you put yourself in the CFO shoes, you got to think that they want the best model <laugh>, right? And so if you're going to trust your corporate data to a model, you're going to want not just the best model, but maybe the model that can give you the most security Yeah. Cyber security internally. Any thought there?

Tom Shipp (15:04):

Yeah, I absolutely agree on the latter, on the former, I think there's going to start to be a lot of rationalization on what the best is, right? Do we need the latest and greatest frontier model to you know, summarize these, this email or convert something to a PowerPoint or what have you? So you could start to see token pricing come down to match the level of what you're doing. And I think that's where, not just the CFO, but the chief information officer or technology officer will increasingly be attached to the hip when it comes to this aspect of their capital planning, of saying, hey, well what, what APIs do we need for, you know, call it this part of the business to help, you know, to help improve productivity for general administration, right? Versus, oh, I'm a drug company trying to solve you know, like cure cancer, right? Like just two very different use cases that I think maybe you don't need the best model.

Jeff Buchbinder (16:05):

Yes. I agree a hundred percent. We're going to see sort of model segmentation and you'll pay a premium when you need it. So let's end the segment Tom by looking at investment implications. So, you know, let's just say we get an increase in CapEx, which I think is probably the base case and the, you know, the signal there is that maybe the AI trade isn't over, even if it evolves. My claim is that we're still likely to see a broadening out because this earnings season we could see close to 20% earnings growth from non-tech. So I like using the non-tech, or actually you could use median company, we'll probably get mid-teens on the median company for Q2 earnings season, which starts this week. I like to use those metrics more than the Mag Seven because If you use the Mag Seven, you're ignoring the memory companies, right?

Jeff Buchbinder (17:12):

And so your sort of AI trade is in the 493. So what I've tried to do is, you know, isolate, you don't completely isolate it. If you take out you know, just calculate non-tech earnings because then you've got Alphabet and Meta in there. But I still think it's more instructive because the earnings for the memory names have just gone so parabolic. They distort any metric that you would look at. So if you take out the Mag Seven from earnings, it's consensus is up 20. So we'll probably get something in the mid-teen, mid-twenties rather. But if you take out tech, you're probably going to end up maybe even high teens if expectations are 10 to 11% right now. And that gap is probably going to start to close. I mean, we thought this would've already happened by now. It's been a little bit delayed because of how strong tech earnings have been. But if tech earnings growth peaks in the 60 to 70% range, where it is now, starts to slow, I think the market gets more interested in the rest of the names outside of tech.

Jeff Buchbinder (20:33):

Yeah. Well, certainly the economic environment has been supportive. I mean, you can, well, certainly the market environment's been supportive of financials, right? With healthy IPO activity, a lot of mergers and acquisitions, generally speaking, it's just healthy capital markets. So there's an area where you could see some strength outside of tech outside of the Mag Seven. And certainly industrials is a bit of an AI trade too. And even though they don't have, they're not in tech obviously, and they're not in Mag Seven there's going to be lift there. And that can certainly help the earnings growth broadening story as well. So we like industrials here as we wrote about in the Outlook, which you can find on lpl.com, we also like energy and certainly that sector's getting a bid today for obvious reasons with oil up so much. So we'll sort of leave the high level you know, energy call, which was really around oil staying higher for longer, largely related to what's going on in the Middle East. But take that a level deeper and look at one of the sub-sectors of energy, which is refining, Tom. So talk about what you're seeing there and if this might be an investment opportunity.

Tom Shipp (21:55):

Yeah, so we put a note out in our monthly piece "Beyond the Numbers" back in March, right? When things were getting going with the war and everything. And just really wanted to call out some areas because whether you believe that this would be at the time short-lived, whether, you know, the Strait of Hormuz closure would last longer or what have you. We wanted to call out a few that we believe have, you know, maybe more secular tailwinds behind them. And we called out oil field services just more on a under invested, undercapitalized part of the industry. And folks will do more spending, we'll leave that aside for now. We also called out refining, which has a little bit of that aspect to it because there hasn't been a new refinery built in, you know, 40 some odd years in the U.S. and it's not much better globally but also because of the different nuances and drivers behind the refining space.

Tom Shipp (22:58):

So, oil prices can go down, right? But it's more about what products they're doing. So what product inventories, and when I say products, I mean gasoline, I mean diesel, I mean jet fuel, right? Those are your biggest kind of outputs with the input being crude oil. So, I think the easiest way to conceptualize that just is to go look at a performance of some of your pure play refiners. And those, since the start of the war when oil's been, you know, kind of almost round tripped, those stocks have remained up and are up about 40% relative to oil, I think. You know, even with today being up about 9%, right? So oil went up and kind of came back down as tensions cooled, the refiners have, you know, continued to make all-time highs. And the reason for that is the underlying drivers and economics behind it are not the crude oil price.

Tom Shipp (24:02):

It's, well, what do you turn that crude oil into and what can you sell that for? And inventories of diesel, of jet fuel and even gasoline have been drawn pretty low. And the refineries are running kind of all out to capture as much as they can. And that's where I think there's, you know, opportunity there still. And you know, a lot of questions we've received, hey, is this still going? Have they run too much? It's the leading sub-sector, what have you. I think that when we look at what the refiners can do, and again, there's fewer pure plays, right? Because you've got your Exxon and your Chevron who are big you know, run large refinery businesses. But when you look at names like Valero or Marathon that do a little bit more of the pure play, you can see those are where we want to kind of pay attention to and see where hey are they shifting from maybe gasoline to diesel, where the margins, right?

Tom Shipp (25:07):

The spread between your input and your output and industry parlance, it's called the crack spread, that those crack spreads have been more attractive for diesel and jet fuel. So hey, have they been able to shift some of their production from gasoline to this? So there's just, there's those nuances there. We continue to have a call it geographically advantaged spot within the U.S. because we've got advanced refineries, we've got the Gulf of America, Gulf of Mexico where they can take a lot of that crude in. We can do different grades of crude, whether it's heavy crude from Canada or heavy sour crude from Venezuela or light sweet from Texas. They can, they're flexible in that regard. So I think there's a quite a bit to, like, now I think that you, we can quibble over maybe the long-term trend, hey, cars are getting more efficient more EVs coming, right?

Tom Shipp (26:08):

So there's some of those headwinds that are present, but I think that that's a, you know, a 2030s conversation, <laugh> less than that. And with the refiners, they are cyclical. It does ebb and flow. So you really have to take a long-term, normalized look at them. And I think the other interesting thing, and you put this one to me, is, well, what about that elasticity right, of demand, right? If gas prices are too high, do we, does it impact consumers to a point where they'll drive less? And we haven't quite seen that here, there were parts of the world where they did, you know, put work from home you know, recommendations in place of people were maybe burning less gasoline for transport. But it's only about two to, depending on if you're looking at high income versus low income, you know, two to four or 5% of your household income goes to gasoline. So it's a lot lower percentage of your budget nowadays. And I think it's just, you know, it is what it is. And those are areas where, hey, if something's not going to be, you can make a lot more money off of it, but it's not going to impact demand. Like that's a place where we think that's opportunities.

Jeff Buchbinder (27:31):

Yeah. If I'm not mistaken, that number reached double digits back in 2008. It definitely reached double digits in the 70s, <laugh>, but when oil spiked to 150 at the start of the financial crisis, the percentage of household discretionary income being spent on energy spiked, obviously, we're in a much better place now. We're a little more efficient, as you mentioned, Tom. And then you know, oil is at 75, not 150 <laugh>, where was it, you know, 20 years ago, of course.

Tom Shipp (28:06):

And you put in that, in, you know, 20,26 dollars and, you know, or 2008 dollars, whichever direction you want to go, the price of gasoline and the price of oil is much lower than it was when it spiked in 2008. So yeah, that definitely tracks,

Jeff Buchbinder (28:22):

Yeah. So in a much better place now, we've talked a lot about this. The fact that we're energy independent is a big advantage globally particularly with what's going on in the Strait of Hormuz and Europe and Asia's dependence on that product coming through strait. So on the refiners, so we like energy. Tom, I assume, you know, you, based on your commentary like refiners within energy how do valuations look? Is that part of why you think these might still work? Or is it just sort of the refining playbook that, you know, you pass along the higher crude prices, but then on the way up and then on the way down you're slow to adjust those prices, which of course benefits margins?

Tom Shipp (29:07):

Yeah, so the on valuations, you know, we're looking at we're below average levels still kind of getting up to that average level. So just as a point of like context, maybe, looking at Valero for example, it typically trades at a 60%. It's forward PE trades at about 60% of what the market does. And as recently as June, it was at 45%. It's, like I said, it's creeping back up at about 55%. So the discount is almost to its average, right? Is almost gone. And a little bit of that just as you know, context, I think Marathon trades at about nine and a half times forward earnings, Valero about 11 times forward earnings. So, they're cheap, but they are cyclical, right? So if you look at the expected earnings growth this year, earnings growth this year is expected to grow, you know, over a hundred percent for these guys.

Tom Shipp (30:08):

But then next year it's expected to shrink, you know I think, what did I have on here? Yeah, 12% in 2028, 25% next year. So, folks are expecting, hey, they're over earning right now, and then it'll revert back, right? So that's kind of part of the story there with these stocks, and you have to be comfortable with that. But also when you look at what they've been doing in terms of capital returns, they under, you know, this is a cyclical business. They understand that we need to attract shareholders into a cyclical business that are okay with down years and up years. And, you know, they have been buying back stock when it's cheap. They grow their dividends. And so that's really how they'll look at that. So I think the thing that we're really watching this year is A) hearing about those capital returns, and maybe we'll see, are they going to, you know, either ramp up buybacks or do special dividends, anything of that nature to kind of help out from the years where they're over earning, because they're not <laugh>, we're not building more refineries, right?

Tom Shipp (31:20):

They're in a good spot from a capacity perspective. So it's really just, I think at this point, everyone knows the crack spreads are the margins that they're earning are high. That's baked into the stocks. I think where you want to look for maybe some idiosyncratic ideas is how's utilization been running? Have they been able to do their maintenance on an accelerated schedule or have they been able to take advantage more so of these elevated margins that they're seeing right now? So kind of twofold of what we're looking for this earnings season would be, you know, what utilizations have looked like alongside product mix. And then any updates to capital allocation, capital return policies.

Jeff Buchbinder (32:08):

Very good. So we'll be paying attention to what we hear from the refiners this quarter. It's going to be a great earnings quarter for energy, not surprisingly, <laugh>, not just refining. Again, we continue to be overweight energy from a tactical perspective at LPL Research. So Tom, let's move on to your last one. Banks of course the area that's going to be most in focus this week, the you know, the SpaceX IPO for the banks that participated in that, the uptick in mergers and acquisitions, right? For investment banking, the fees are going to be great. There's going to be a lot of trading revenue. That was the case last quarter, Q1. It's going to be the case again in Q2. But what else will you be watching as we hear from the banks over the next week or two?

Tom Shipp (33:00):

Yeah, so this week, we'll hear from the big boys, right? We'll call them the money center you know, big, large national banks and, you know, we started to put out a quarterly bank and credit union compendium, and it's geared toward a lot of our institutional clients, but it is available to all. And what we do in that report is we kind of, we'll review the prior quarter, kind of look at what guidance and those sort of things are. And then we just lay out a ton of industry charts and everything. So that's my shameless plug for one of our new quarterly Research pieces. Those will come out about two months after the start of the quarter. So the next one will come out like toward the end of August.

Tom Shipp (33:43):

And that's due to when the FDIC puts out all of its aggregated numbers that we use for a lot of our exhibits. But there's just different drivers, right? So you mentioned for the large caps and the money center banks, we're looking at, you know, fee revenue, capital markets, equity capital markets, right? So the IPOs, M&A, banking fees. So, very much on who's winning. You kind of look at your league tables, right? Who did the most deals, who's winning in in those regards when? And yeah, the net interest margins and deposit betas are all important too, but it's just one piece of the business for these large mega banks. But when you get into the small caps, you really are looking at your deposit betas, your net interest, your net interest income and net interest margins.

Tom Shipp (34:34):

And so, you know, we'll be looking in in that regard for, you know, what folks are doing, who's able to kind of capitalize on the interest rate environment, how competitive are deposits, right? Are you losing deposits to others, which is your funding source. Deposits are generally cheaper than what you're making on your loans or else <laugh> your bank's belly up if it's not. And so that's really where we'll be looking because you can have a bank report trailing net interest margins and net interest income exactly the same. But depending on the reset schedules, and this is a maybe a bit in the weeds here, but just bear with me for one moment. If you think about it from what a bank may say about their reset schedule on the calendar.

Tom Shipp (35:28):

Like, do they expect a lot of, call it certificates of deposits or brokered you know, accounts that have a fixed rate will are a bunch of those rolling over and you'll have to reprice them. Will that repricing drive deposits out the door, what have you? So I think there's still, there's room for stock picking and looking at, you know, each of the individual banks, particularly when you get down to the regionals and the ones who are more dependent on that traditional deposit and loan growth business. But yeah, I think we'll be looking just from the, you know, from the top down level, what's loan growth look like? I think a lot of the concerns over credit quality and stability, a lot of those are always there with the banks. But I think that piece of the narrative is kind of moved behind us.

Tom Shipp (36:19):

And so we'll be focusing more on what is that growth? What are loans growing at? What are we able to generate off of those loans relative to our deposit base? So that's really kind of where we're looking at. And I think on the large money centers, we'll hear from them by the time this is published. I think we've got five of them coming tomorrow, and some of them even at the same time as far as the calls go. So, I think from that perspective, there's always good economic color from the bank CEOs. But we'll be keyed in on the regionals for some of that nuance when it comes to the deposit betas and net interest income outlook.

Jeff Buchbinder (37:05):

So let's go ahead and wrap there. Thanks, Tom, for your insights. Kind of digging deep into these three themes that you highlighted, or segments, I guess, of the market. It's going to be about AI primarily and all the tech spend, but that's not all that we are going to be watching <laugh>.

Tom Shipp (41:59):

That's right. We look at everything here at LPL Research. That's why when you asked for three, I said, okay, well definitely AI, but let's pick a few others that I know are important because I get the questions on them. So there are other places,

Jeff Buchbinder (42:15):

No doubt. So we'll certainly be back with what we learned from second quarter earnings season on a future Market Signals. But for now, we'll leave it there. Thanks again, Tom, for joining. Appreciate it. Thanks to all of you for listening to another episode of LPL Market Signals. We'll see you next time. Take care. Thank you.