Q1 2021 Quinstreet Inc Earnings Call
Good day and welcome to the Quinstreet first quarter fiscal 2021 financial results Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Erica Abrams. Please go ahead ma'am.
Thank you Dan good afternoon, ladies and gentlemen, thank you for joining US today as we report Quinstreet first quarter fiscal year 2021 financial results John.
Joining me on the call today are Doug Glenshee, CEO and Greg Wong CFO of Quinstreet. This call is being simultaneously webcast on the Investor Relations section of our website at Www Dot Quinstreet dotcom.
Before we get started I would like to remind you that the following discussion contains forward looking statements.
These statements involve a number of risks and uncertainties that could cause actual results to differ materially from.
That was projected by such statements and are not guarantees of future performance.
Factors that may cause results to differ from our forward looking statements are discussed in our recent SEC filings, including our most recent 8-K filing made today and our 10-K filing date on August 22020.
Forward looking statements are based on assumptions as of today and the company undertakes no obligation to update. These statements today, we will be discussing both GAAP and non-GAAP measures a reconciliation of GAAP to non-GAAP financial measures are included in todays earnings press release, which is available on our Investor relations website with that.
I will turn the call over to Doug CEO of Quinstreet. Please go ahead.
Thank you Erica.
And thank you all for joining us today.
There's a few one was a good quarter for the company.
We made excellent progress on a wide range of short and long term growth initiatives or core financial services and home services client verticals.
And we continue to strengthen our products.
Knowledge and operations for future great compare.
Competitive advantage and efficiencies.
Or tailwinds are strong.
The shape of the current marketing budgets shifting online is steepening.
Well in market demand for our core French marketplace solutions has also accelerated.
Oh, she moose Munch work ever more recognized by the most advanced clients as their most productive and consistent digital marketing channels at scale.
We delivered strong results in Q1.
Particularly in insurance and home services, our two largest businesses.
Auto insurance revenue growth continued to accelerate reaching.
Reaching 57% year over year due.
Due to unprecedented and broadening demand from clients.
And two good progress with growth initiatives.
We continue to make good progress with Q R. P in the quarter.
Both with the agency client pipeline.
And with more and deeper carrier integrations.
Your P. continues to promise to be one of the most exciting long term business opportunities in the history of the company.
But a strong value proposition for agency clients and carriers.
And with big scale.
And SaaS like margins for Quinstreet.
It is an opportunity uniquely suited and defensible for Quinstreet.
Due to our deep integrations with carriers and our industry, leading technology capabilities.
This opportunity is long term.
Right.
And sticky.
Your p. as a core operating platform for agency clients and carriers.
Current GRP activity is dominated by integrations.
And testing.
We are receiving strong positive feedback back early testing and usage activity.
From launched clients.
And revenue to continues to ramp.
For now remains immaterial to overall company results.
Home services grew even faster than auto insurance due to the addition of modernize.
We delivered strong results there.
Longer results in higher than expected due to the successful execution of growth initiatives.
And the two ahead of schedule integration and capturing of synergies with modernize.
Trends in credit driven businesses.
Typically personal loans and credit cards.
Stabilized and improved in fiscal Q1.
I really like our position in those enormous markets as the economy improves.
Now I see them, it's stabilized future.
Future growth engines.
Very synergistic with insurance and home services.
As previously announced we divested the education client vertical on August 31st.
As another step in our strategy to their work footprint to our best opportunities.
And to accelerate revenue growth and margin expansion.
Looking ahead to the current quarter for fiscal Q2.
We expect continued strong momentum and revenue growth in.
In insurance and home services.
And continued strong overall company performance as a result.
We currently expect revenue in fiscal Q2.
To be between 118.
And $122 million.
At least in line with Ford.
Ford beating.
Typical seasonality.
And representing 21% year over year revenue growth for non divested businesses at the mid point of the range.
We expect adjusted EBITDA margin.
To be in the mid single digits.
The only typical seasonal fluctuations.
With that.
I'll turn the call over to Greg.
Thank you Doug.
Hello, and thanks to everyone for joining us today.
Q1 was a strong start to fiscal 21.
Where we delivered record revenue.
Continuing to operate in a cold and 19 in fact it environment.
For the first quarter.
Total revenue was $139.3 million.
Also importantly, we made good progress with our strategic initiative to narrow footprint to our best performing and fastest growing opportunities.
Divesting the education client vertical on August 31st.
Revenue from non divested businesses, our go forward client vertical footprint.
$127.6 million in the first quarter, representing 23% year over year growth.
Adjusted EBITDA grew 32% year over year in the first quarter to $12.5 million or 9% of revenue.
Adjusted net income grew 42% year over year to $8.8 million or 16 cents per share.
Looking at revenue by client vertical are.
Our financial services client vertical represented 68% of Q1 revenue was $94.2 million.
Auto insurance, our largest business delivered record revenue grew 57% year over year.
This growth reflects strong spending from a broad range of major carrier clients and excellent progress on a number of growth initiatives in the quarter.
Trends in our credit driven personal loans and credit cards businesses stabilize and improve in fiscal Q1.
We expect these businesses to be good long term growth drivers for quinstreet as the economy improves.
Our home services client vertical represented 24% of Q1 revenue and grew 157% year over year to $33.4 million a record quarter for that business.
As a reminder, on July 1st week Watermark, we acquired modernized.
To add to our scale and capabilities at home services.
Total organic year over year growth in home services client vertical was 14% in the first quarter.
Sequential growth in home services.
33% on an organic basis LP.
Outpacing our expectations in the first quarter and demonstrating the early success of the integration and capturing of synergies from the modernize acquisition.
Our education client vertical represented the remaining 8% Q1 revenue.
Adjusted EBITDA in the quarter were 32% year over year to $12.5 million or 9% of revenue.
Turning to the balance sheet, we closed the quarter with $102.2 million of cash and equivalents.
We began the quarter with $107.5 million in cash.
Big cash movements in the quarter included the generation of $17.6 million, an operating cash flow and $20 million from the sale of our education business.
This was offset by cash outflow of $40 million for the acquisition of modernize.
Normalized free cash flow for the quarter was $10.4 million or 8% of revenue.
Most of our adjusted EBITDA drops to normalized free cash flow due to the low capital requirements of our business model.
I would like to remind everyone of the seasonality characteristics in our business.
The December quarter or fiscal second quarter is typically impacted by the holidays due to quite staffing and budget.
And due to consumer shopping patterns.
These factors generally verse reverse in the March quarter, which is typically our strongest quarter of the year, where we see our clients with new annual marketing budget and fully staffed employee levels.
With that as context look.
Looking at our outlook, we expect Q2 revenue to be between 118 and $122 million.
At least in line with or beating typical seasonality.
Representing 20%, 21% year over year growth from non divested businesses at the midpoint of the range.
We expect adjusted EBITDA margins to be in the mid single digits, reflecting only typical seasonal fluctuation.
In summary.
The first quarter marks a record start to fiscal year 21.
We are happy with our financial performance in insurance.
And home services and encouraged by the early recovery of our credit driven businesses.
This has all resulted in us once again, beating our expectations and outlook for the quarter.
Going forward.
We are excited about our business, especially given our success in narrowing the footprint and increasing our focus to the best performing and fastest growing opportunities.
Trailing 12 month revenue from our go forward client vertical footprint of financial services and home services was $439.9 million.
Representing a three year compound annual growth rate of 32%.
We're well underway to faster more predictable revenue growth and expanding margins with little to no losses scale.
Fiscal year 21 is likely to be a record revenue year for the company.
With that I'll turn the call over to the operator for today.
At this time, we'll open the floor for questions. If youd like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again press star one if youd like to queue up for questions. We'll pause for just a moment to allow everyone else.
You need to signal for questions.
Well take our first question in queue is comes from John Campbell with Stephens, Inc.
Line is open. Please go ahead.
Hey, guys. Good afternoon, congrats on a great quarter.
Thank you Josh. Thank you John sure I talk to us a little bit about the strategic alliance with <unk> that that seems like a really interesting announcement for you guys is that a multi year agreement and then maybe if you guys could talk to what you're doing now versus what you've kind of been up to with those guys over the last two years.
Oh, it's a multiyear agreement we're just deepening the relationships we can both work more aggressively on joint optimization and joint programs.
We're super excited about it there is incredibly high quality organization.
A very high quality media, great customer and consumer following.
I'm really a a consumer advocate.
And we're excited to help them, you know run insurance and and and get the right matching technologies in the marketplace going for insurance or not and probably be adding other lines as well.
Okay. That's helpful. And then Greg I tell you kind of slip into last minute there, possibly looking for a record revenue year. This year I mean, clearly you guys have done a ton of divestures over the last several months. So it seems like you know just given those divestures a record year. It would be really good result for you guys. This year. If you could just maybe just help.
That's what the math a little bit I don't know if you've got it on hand, but kind of what you guys did X divestures and revenue by quarter last year and maybe all then just give us a sense for how much the issues are impacting and then as we think about your of your growth you know each quarter from here I'm.
Trying to get to the right comp for next year.
Yeah, John last year revenue, excluding the divested businesses are they from a go forward footprint right now that.
That was about $420 million.
For the full year.
Okay, and I don't know if you've got this fight on hand, do you have it by quarter I'm, just trying to get to like an apples to apples growth rate going forward.
Ah, Yes, Q2 was about little over 99 million in the December quarter.
Q3 was a 110 million.
Q4 was about 103 million.
Okay very helpful. Last one quick one for me on the gross margin leverage that was clearly there. This quarter was actually just a product of the total revenue growth or is there any kind of mix shift items to call out I don't it looks like you had obviously less education revenue less credit businesses, and then a lot more home services.
Yeah. The biggest piece John was really the top line leverage. So we're we're growing the top line on a very similar or fixed cost base, but we did also see expansion and our media margins.
In the quarter. So we did a good job at a yielding more of the media.
Excellent. Thanks.
Thank you John.
Our next question comes from Jason Kreyer with Craig Hallum. Your line is open. Please go ahead.
Hey, guys. Good afternoon, congrats on the not only strong quarter, but the heavy lifting you've been doing.
Thanks, Jason first just wanted to talk like can you walk through any surprises you saw in the quarter. I mean, obviously you Oh performed your original guidance pretty handily. So just wondering where you saw that the pockets of old performance emerge over the course of the last 90 days.
Sure.
The first time, you know our biggest business auto insurance the momentum there.
And the breadth of the momentum there with clients really unprecedented and surprised even us and were pretty big.
Optimist and enthusiast about ER physician <unk> insurance market as you know.
And it just keeps getting better no you know more and more clients.
Accelerating the shift to budget on mine as I indicated.
And more and more of them wanting to do more with us because we worked with them for so long and perform so well for them and a number of them.
Has pointed out that we are by far and away their best performer at any scale and a and so we have a queue of clients with big budget increases that that has been pushing up our momentum into it and the smoke for that line and an insurance over the past couple of quarters and that.
You know as we look forward, it's just accelerating.
The on top of that.
In insurance, we've made you know we've been working on a lot of new growth initiatives, there <unk> product expansions or media expansions.
And a number of those inflected.
Began to in fact last quarter and continued in fact this quarter.
That's been that was a you know that's always a pleasant surprise you don't know how to you can't always projectiles.
And are forecasting accurately so those things went better than we thought both the momentum on the core business core click marketplace business and on insurance as well as the progress and the smoke the curbs in terms of progress on somebody the new growth initiatives in insurance.
And ER the modernize acquisition home services, we drew you know just.
British chip substantially beat or timing on the integration and our timing on a number of the projects to capture synergies and so that business not only did a lot better home services. Overall is as a result of that in the quarter that was a good upside surprise.
But weve already lifted.
Our full year outlook and targets for that business pretty significantly.
On the on the backs of that so the home services.
It's a massive market in the modernized acquisition has been even better than we thought it faster than we thought.
And so as we look ahead on that but that continues to be something that is gets us excited and as I said weve already lived through our full year targets pretty substantially.
And we way outperformed where we thought we'd be just quickly last quarter.
I would say another upside surprise continues to be a the work on Q R. P. The pipeline work with the with the.
If I can just keeps getting stronger the work with C. diff client spoke signed in the <unk> and and launched in others continues to go incredibly well work with the carriers to do more integrations and commencing carriers to give us more complete.
Two you know quote to buy integrations as well as we even had we've already had a couple of product expansions. Some major carriers have asked us and are now working with us on it.
A real big use case expansion to cure, our p., which we had not really thought about that pretty dramatically expands the market, even beyond where we thought it was.
The tear your commitment to GRP, it's just astonishing in terms of how hard they're pushing with us and and how how they're helping develop the market and work on these projects expansions with us and how committed they are to the product show.
Hey, I'm, just an awful lot of good stuff and I guess, the last thing they went better than we expected.
Was the credit driven businesses both.
Pretty quickly stabilized.
And and begin to grow again for US off you know off the bottom. So there's certainly still down quite a bit year over year due to togut in the economy.
But we found the bottom pretty quickly there and bounced off with a pretty pretty hard which is in most.
Oh, the big credit card issuers are now back in the market, albeit with tied to filters and smaller budgets as they feel their way through the uncertainty in the economy.
And Ah.
So a number of the personal loan lenders or or or coming back I would say our back yet, but we've we were able to execute very well on the other products in that in that business, including helping consumers with their credit their credit issues in credit repair and services like that that can be that we pivoted to those with.
Very well so I was just you know across the board. It was a very very good quarter in and we've got a lot of momentum going into the rest of the fiscal year.
You know a couple of times now you've mentioned new growth initiatives in the auto insurance category.
I know it seems like you've been having success with new products not only for carriers by targeting the agent community I don't know what that's kind of part of these new initiatives, you're talking about or if there was maybe any other color you could give us some more details on these new initiatives you're pursuing.
Yes, it's broadening the product mix. Yeah. So then we can you know we really have not historically most of the folks we compete with.
Most not all dominantly served the agent networks and we have not really had product for agents historically and of course, then we have pure p., but that's not something that competes for their historic other historic figures. It's a it's a brand new.
You know.
Technology SAS opportunity there, but.
We have introduced a product and products into that market that are in that that business and the expansion that perhaps is going very well so yes.
Shifting you know and being able to serve with our marketplace.
Marketplace.
In performance marketing out, but the other half of the insurance market, which you see the agent networks is a big part.
Of.
The gross or the growth initiatives that we're working on.
And there are but there are a number of others as we roll through product improvements.
And we as we consolidated functionally or marketplace team.
And began to focus those folks.
And and those in or algorithms teams Kinda media Department by media partner client by client those products.
I refer to them as promising growth initiatives are going extraordinarily well. So it's it's you know, it's kind of meat and potatoes of quinstreet, but there there are things that.
I really do move the needle I mean, we it's not unusual for us to improve their performance for a quite a big carrier client by 30% we.
We we apply those.
Those initiatives and that market place team has now staffed and coming up to speed and we're adding more staff. So it's you know, it's it's bread and butter algorithms stuff, then bread and butter analytics and optimization products for the for the various clients and for our media partners and it's also getting a new home. These segments are the mark.
But including a serving the.
The agent networks those are some of it you know and there's an even longer list. It's a we you know one of the reasons we consolidated.
Where's that we have so much opportunity in these businesses that we kept and it just didn't make sense to have a resource is read into other areas. We you know we have plenty of great big opportunities in the markets that we kept.
All right a lot of good color in there. So thanks appreciate it thanks, Doug Thanks, Greg.
Thanks, Jason.
Our next question comes from Jim Goss with Barrington Research. Please go ahead.
Hi, Thanks.
Thanks, maybe continuing along the same you're just talking about Doug.
With Q RP.
'cause due regard it as an opportunity more outside of the group, you're currently dealing with or Ah within them to the extent to they have a direct sales versus agent groups. So within them or is it a little of both because it would seem like the SAS version.
It is going to be you.
You know maybe help you broaden your overall business to them at all so yeah.
Be involved in some of the same area you're already incurring currently involved with a company wise.
No you're right Jim it's it it is both yeah, we we talked a lot about the agency clients and of course, we have not historically.
Done much by way of business with the H. Inter agency networks. So.
Side of the insurance World and so that's an important client.
Client expansion opportunity for us in Q R. P. The core a few RP is working with the independent agent World, which is the biggest party agent agent industry to have a much more efficient and productive.
And managed quoting platform.
And we and and so that serving agencies and agents, which is a new segment called customers for us.
It's a big part of what we do to our P. and is the core of the Q R. P opportunity that said.
To your point the the the quoting platform is only as good as the carriers you have on there.
And Oh, we have a little deepens, our commitment or integrations and the work we're doing with the number of the major carriers that serve that channel as we integrate with them and bring their quoting all the way to bind into the agent network and then add other services on top of that.
And also we have their carriers, who want to use GRP into.
Internally for efficiency reasons for productivity reasons.
And so it it we're serving you know so it does add to what we can do with our historic core client base, which of course the carriers.
Ourselves not the agent networks.
So it's it is it's a it's both.
[laughter] incest businesses tend to be stable and high margin that make sense. So maybe the impact on your business would be in two had less to revenue or.
More to the overall profit so it would seem to muddy up the financials, a little though in a positive way do you think you had tried to account for it as a separate category.
Ah you know.
Just a good question, we clear yeah.
Yeah go ahead I mean, it's a good good it's a great question and a perfect question. We just haven't we haven't gotten that far yet you know we.
Oh in terms of exactly how to do that to make sure that it is to your point if we just blended in.
That's going to make it pretty difficult to tell what's going on and that's not our intention. So I think it it'll probably be that we will wait until it gets to scale enough to warrant it.
And then you know make the decision as to how to how to report it but I you know as it gets when it gets to good scale its going to be difficult to just keep it mixed in blended in that doesn't I don't think that would show a truer picture of your only days of course doesn't make sense to break it out for lots of reasons, including the fact that it's.
You know, it's an early stage business, it's got a lot of a lot of uncertainty into it we know the pipeline going well we know the work with the clients is going well, we know that <unk> products is working and we just but in terms of I've said this what over two years exact ramp of revenue is very difficult to know because we just haven't done it before and this is a core.
Our operating platforms. These agencies, so they're not going to just turn it on and you know they're going to they're going to implement it they're going to test it they're going to roll it out to a few agents for a couple of months and they're going to have that you know they can have feedback that's going to work then they roll it out so.
Tracking it separately in its early stages. It just doesn't make sense for the business and doesn't make sense for the investors better and that's why you know what I thought it was important to make sure but he knew that the leverage that we got last quarter.
Came up from our core business stuff from TRP.
P. continuing to be immaterial to the overall business was also last quarter did leverage you saw in margin was all about the core business and that was all about the mix of business and the scale.
And the efficiencies. Despite the fact that during Tobin, we have not rationalize the way we would normally have rationalized given all of the divestitures we made.
And so we you know so we are now showing and and we will continue to demonstrate.
Yes, we can.
Scale from here as Greg said, I think it's easy to make the case that will likely have record revenue year. This fiscal year if.
He just wanting to do that do the quick math.
And.
And what we expect to happen is that we'll be able to scale.
Much more quickly.
And at that scale will very much more quickly drop to the bottom line from here just like it should we showed it can do last quarter, even though last quarter was a little bit of a hybrid in terms of having some divested businesses in it you can at least see the effects because that the core economics were about the same.
Okay, and just one more along similar lines regarding the EBITDA margin profile.
We're targeting you don't really you haven't really broken out and the EBITDA margin by.
Major category and education has gone through this live two major categories or can you distinguish between financial services and home services in terms of the relative margin profile. So that as we're modeling the revenue changes.
You can also get some mental thought about how it would impact the bottom line and the not for profit margin potential.
I don't know that we're going to do that given that there are so many shared resources between those businesses, it's very difficult for us to bring any of our client verticals.
Down to eight a. their own profit margins, because most of the core resources or share the core media resources core technology resources resources, the actual technology platform.
Ross shared costs and so we do have to go through a big exercising of allocating cost, which would basically keep jury bring you right back to how we report it today, but I can tell you from a contribution margin standpoint, and because we've done that we've had these conversations with investors as well as analysts a world.
They're all in a pretty tight range or the contribution margin to core functionality of our various businesses are very similar we get there and.
In in in auto insurance with scale.
And a little bit lower media margin because its not.
Not dominant the fixed business, which has.
As long as as a less less burden.
At the business line level, then a sales leads driven business and then in the home services business, we get there a little bit higher media margin, but more burden operationally because of the fact that it's got Oh, it's a more diverse business and it's a dominant the leads business, which tends to need more head.
Count so on a contribution basis, they're pretty similar and we've we tend to.
Indicate what those are periodically but in terms of breaking them out a segments no we wouldn't intend to do that.
It's a it would be.
Difficult and misleading given the way we run the business, which is with <unk>. The vast majority of the head count costs.
Our shared costs.
In the <unk> or in the core business and engineering media.
And are the are the big ones, so probably not.
Okay, No I think the you gave some.
Helpful a differentiation.
The answer you just gave so thank you very much appreciate it.
Thanks, Jim.
Our next question comes from Brian Meyers with Lake Street Capital markets. Please go ahead.
Yeah, Hi, guys. Thanks for taking my questions first one for me. So if I recall on the last call. You guys stated that you expected to see meaningful revenue from the Q RP platform any reason why that wasn't the case this quarter.
Oh, we did see good revenue gross from therapy, I guess it would depend on how you define meaningful we we you know I think I said last quarter too that we're starting out at like zero. So we actually expected to see you know revenue that you that you know.
Wasn't you.
You know kind of single digit dollars well in the quarter and we did see good revenue ramp and we did see good revenue from pure P.. We just didn't see revenue. This but you know we're running at almost $500 million you're in a in revenue.
And so.
Relative to the overall company pure P revenue is immaterial at this point it will probably continue to be so for the for the next you know I don't know again, coupled a few quarters and I say again, because I am not going to get the business of forecasting cure it because I don't know how as I've said before but we did see good.
Significant upward move in revenue, we actually do have you know Ah Ah.
Revenue that that would you know that at least.
Matters in Q R. P. Now, it's just immaterial to the overall company in terms of the scale.
Okay. That's helpful. And then just one more for me so what sort of trends are you guys seeing so far in the second quarter in personal loans and credit cards, and then have you factored them and serve it is or upside in the guidance for that.
Yeah, Great question, particularly with what's going on with the second wave in that we.
We have pretty we see continued.
I stay but stability in gradual improvement in personal loans and credit cards, so far this quarter.
We've seeing much more of a positive inflection in credit cards. So far this quarter than we saw last quarter and we see continued good progress in personal loans, which we did see last quarter and so I would say that the trends continue to be generally up into the right, but nowhere near.
The point, where they're going to get back to where they were a year ago or.
Sure, it's it's stable and improving gradually but still down you know overall the two the two verticals a downgrade probably 50 plus percent still 60% yeah. There was growth in the first quarter to around 60%.
So so still way down, but but but up into the right from where they were and we have to to your point right. We have been quite conservative.
And the way, we think about them for this quarter and they could they could run.
Reverse on us pretty significantly from here and we would still be very comfortable with what we provided as around after this for the for Q2.
Okay. That's helpful. Thanks, guys.
Thank you.
As a reminder to queue up for question you can do so by pressing star one.
We'll take our next question in queue.
This comes from Chris sick time with singular research. Please go ahead.
Hi, just done.
One of the two get a I guess a macro view on.
On auto insurance you know what.
What's going on.
With leading to such great growth.
Oh, Yeah, Chris it's it's a combination of factors one is that.
With.
Total did.
There is a lot less driving.
And and show the auto insurance carriers.
Are much more profitable than they would be sort of what that's driving there are fewer instance for your parents. So they have a lot more money to very comfortably in aggressively spend on marketing.
Generally not just on the internet, but generally it's been in marketing. So so the auto insurance carriers and sounds are quite healthy in this period that has led to among other things not just an increase in marketing generally buddy a more aggressive shift to budget to online.
Because more the other thing that's happening Cogan.
Is that folks are spending more time on mine and less time.
And on streaming and less time on other traditional marketing channels or may use extreme case, they're not listening to drive time radio.
So that budget its something that gets allocated elsewhere in most of the elsewhere as it's coming online. There's there's not as much fresh sports content as there was pretty cobot and so there's less inventory to spend marketing budgets. There. So a lot of that but just coming online. So it's it's it's cost carriers.
To turn their attention with these whiskeys marketing budgets more to online.
And as they've done that what we have seen is carriers are making very fundamental shifts and saying you know we've been wanting to shift online faster for a long time. This is this.
This is that the.
A very natural spurt to do that.
And we're seeing them make shifts that we expect to be a permanent we don't expect that they're going to flop right back off line again in fact, we've never seen the phenomenon of.
Clients going from our solutions and shifting that budget back offline.
That's never been I'd say anything we've seen generally but I don't it's no firm date seen it specifically and then off cases. So most of the moves you're seeing are pretty permanent shifts and this coconut has been something that just kinda spurred it and so we've got a lot of budget.
Seeking to not only go online because that's where the action is now and where you can get productivity now, but also seeking to make a more permanent shift to digital and use this as an opportunity to be more digitally oriented into put the systems and the integrations and they do other factors in place that they may have been putting off but now they have.
They have the a and the reason.
And motivation to do it.
And that's getting done so its and then the last thing I would add and this is and I don't know know glass because its the least but I would say that.
We're getting to the point in our channel.
Where there's been so much success for some of these most successful carriers.
I love the other carriers are finally, saying on top of everything I, just said about reasons to do it you know now is our opportunity to try to take over to catch up because the guys that they kept big carriers that have went more aggressively and have more budget in digital it, particularly in our part of the channel or.
Performing much better generally speaking.
Then carriers that habit and so you're seeing some capitulation associated with the fact that you've got this moment in time, where they're being spurred to do it anyway. So it's a it's an interesting comp.
Confluence.
A a lot of different things, but we think a very positive.
Permanent shift.
And long term inflection.
As we now are seeing from carrier from carriers that over the past couple of quarters have begun that shift we're.
We're seeing pretty dramatic increases in their appetite demand as they now or.
We're set up to do digital better and there's they're starting to get.
A taste of.
What we can do for them from a performance standpoint.
Okay great.
One thing I mean, if it's not auto insurance or do you see this type of growth in any of your other well I guess home services.
The other.
Sector segment that has this type of growth.
Insurance generally we're seeing quite strong growth auto insurance is the biggest part of our insurance business vast majority of it.
And it is the strongest but we're seeing very strong growth right now in a couple of other lines of insurance or a few other lines of insurance home.
Health and Medicare as well as like areas that we have not historically.
Been nearly as well represented as we should have been and in areas that are much bigger for a number of our competitors are folks that also participate in our part of the channel and so we are seeing good growth broadly in insurance the <unk> and its use as you indicate home services is going great and growing very quickly.
We expect that to continue even after we lapped the modernized acquisition as I said, the data integration and the synergies capture in the organic growth off of those two assets has accelerated we we expect that to continue on.
<unk> latest survey of the homeowners indicated that.
Despite the fact that we expect home services to be quite seasonal usually get softer in November December most homeowners because they're not traveling during the holidays are claiming to continue we're at home services projects during November and December So we could see a stronger in November and December than we anticipate and home services, given the resources that survey and it.
Given the environment that we're in.
In terms of we had great growth rates and credit cards and personal loans before co. Good.
We are of course down there and like everybody is in those verticals during koby, because a credit driven businesses are impacted by the weak economy and the high unemployment and the uncertainties associated with those.
I loved our positioning as economy comes back and it will.
And those businesses once once we lap the initial coping effect and a worsening economy comes back those business will add a very significantly to scale and growth.
Just getting back to where we were.
And we've made a lot of preparations improvements I think we can do much better than that as we come back and right now they're not contributing anything to our growth. So all you are seeing in terms of growth and leverage is with you know with personal loans and credit cards, you know on their faces as businesses I think again as they are for every.
Okay. So.
Those businesses I expect to be great growth drivers again, and a and then not and do not too distant future.
So yeah, we'd like we'd like the footprint as Greg said, if you look at the footprint that ran the growth rate is north of 30% on a three year compounded basis and and.
You know the two businesses that aren't directly cobot impacted auto insurance and home services or or or are doing very well and the other two businesses or personal loans and credit cards.
Quite stable and again I expect them to.
Re scale.
And we're we'll lap it and as we do see pretty dramatic inflection up into the right or growth correct.
Okay, great. Thanks.
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