Q2 2021 FTI Consulting Inc Earnings Call

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After the day's presentations will be in the opportunity to ask questions to ask the question. You Me press started and 1 on your telephone keypad to withdraw your question. Please press, sorry, and then too.

Please note this event is being recorded.

And now like to turn the call of her to Mollyhawk Vice President of Investor Relations. Please go ahead.

Good morning, welcome to the Sci consulting conference call to discuss the companies second quarter of 2021 or the names results as reported this morning management will begin with formal remarks, after which they will take your questions.

Before we begin I would like to remind everyone that this conference call may include forward looking statements within the meaning of section 27, a the Securities Act of 1933 and section 21 of the Securities and Exchange Act of 1934 that involve risks and uncertainties.

Forward looking statements include statements concerning plan objective.

The strategies future events future revenue future results and performance expectations plans or intentions relating to financial performance acquisition share repurchases business trends and other information or other matters that are non historical including statements regarding the <unk>.

2 minutes of our future financial results and other matters.

Part of discussion of risks and other factors that may cause the actual results or events to differ from those contemplated by forward looking statements and investors should review the safe Harbor statement and the earnings press release issued this morning, a copy of which is available on our website at www Dot F T I consulting dot com.

As well as the other disclosure under the heading of risk factors and forward looking information and our annual report on form 10-K for the year ended December 31st 2020, and and our other filings with the SEC.

Investors of caution not the place undue reliance on any forward looking statements would you speak only as of the day of this earnings call and we will not be updated.

During the call people discuss certain non-GAAP financial measures such as total segment operating income.

Dusted EBITDA total adjusted segment EBITDA adjusted earnings per diluted share adjusted net income adjusted EBITDA margin and free cash flow.

For a discussion of these and other non-GAAP financial measures as well as Ah reconciliations of non-GAAP financial measured and the most directly comparable GAAP measures investors should review the press release and the accompanying financial tables that we issued this morning, which include the reconciliation.

Lastly, there are 2 items that have been posted to the Investor Relations section of our website. This morning for your reference. These include a quarterly earnings presentation, and and Excel and P. D. F of our snorkel financial and operating data, which had been updated to include our second quarter of 2021 result.

With these formalities out of the way I'm joined today by Steven Gunby, Our President and Chief Executive Officer, and Argive suburb of all our Chief Financial Officer.

At this time I will turn the call over to our President and Chief Executive Officer, Steve Gunby.

Thank you Molly good morning to everyone and.

And thank you all for joining us I hope.

Everyone and your families continue to be well and know.

We all can see light at the end of the tunnel regarding the pandemic.

But I also know that of no place around the world No place around the world are yet fully and that light.

So I'm, hoping everybody remains safe.

I'm also hoping that we are are the they're bringing in the background there.

Yeah well.

And the new place doing the call. So unfortunately, we might have the little background noise, sorry about that.

So look I'm, hoping everybody and stay safe I'm also hoping that we all are getting a chance to reconnect with our loved ones and her colleagues and somewhat deeper way over the last several weeks like this week I've had the pleasure of starting to see clients person and traveling to some of our offices the or people I hope.

You have begun to have the equivalent for me it has been wonderful.

And get the chance to see people person and person again.

Obviously technology is incredibly.

About connecting us.

The changes are abilities of feel connected when we're apart now from technologies are better than others. I think letter writing from my youth wasn't that great. Notwithstanding the fact that my parents celebrate and the fact that I spent on the postcard from summer camp and telegrams, except for emergencies weren't much better.

The telephones, obviously helps bright and they were real time, the and or interactive the allowed you to talk to somebody and stayed connected.

And zoom and teams are incredibly better and.

It gives us of eye contact and give us the ability to see authenticity and some of these spaces the powerful thing.

But when we get back out and the world I for 1 and rediscovering the fact that even today.

Steven today, nothing is better than getting a chance to see someone in person and.

And may be giving that person a hug.

And my best wishes for everybody on this call as we're each trying to navigate our way back.

Closer to those rich parts of of life.

Turning to our results I'm going to let RJ give you all of the details of this yet again terrific quarter of it is terrific quarter.

And there's lots of details, but I'm going to leave that the him what I'd like to do with your permission.

Is.

Share a bit of of a longer term perspective.

And these earnings call, we often are talking about market forces.

The forces that are external to our firm last year. For example, we talked about the courts being closed and.

And travel restrictions and the impact of each of those and other times, we've talked about the restructuring Marcus either being up or down or whether the transaction market is booming or not obviously those discussions are important we wouldn't be talking about them. If they weren't markets do affect our individual businesses and they can affect them sharply over any short period of time.

Him.

What what is also true and to me far more powerful.

Is how little.

The market's determined our performance over any extended period of time, how much when you look back over 2 years 4 years 6 years 7 years of our history, how much of our business is not driven by quarters or by market factors.

And is driven by.

By what our teams do.

It's about what our ability over any extended period of time and not get driven.

And my quarterly market forces, but rather for us and.

Control of our destiny.

Now I know, there's some longtime observers of our company on the call and some of you of suggested that at 1 point. This company was never up of most of the restructuring business was up.

And the destruction of business was not up and left the restructuring Mark and was up and as a consequence.

And 1 point, we were seen by some.

The the Cork, the floats up and down.

With restructuring waves.

I don't know whether that was ever fully true.

But I believe.

Our track record over the last 2 or 5 plus years suggest is not.

The case.

Today.

Our teams have been and are building businesses that are global diverse.

The most important powerful.

Each 10, as we've seen b whipsawed by market in the short term.

But over the last years, we have shown that if we do the right things over any experience and extended period of time.

We are not works from the ways.

But rather folks who determine our future by.

By now I believe you can see examples of this and every 1 of our businesses and every 1 of our region for example, our technology business.

This quarter is being helped by the strong MNI and market markets matter.

Having said that by far the more fundamental change and our trajectory and this business wasn't driven by market.

Was driven by the team's driving the dziedzic changes of the engineered for years ago at that point and some of you might remember of the business was headed and the wrong direction, even with solid market.

The strategic changes the team drove reverse that at.

The business started to move up even before the M&A boom and.

And as a consequence I believe we have been the fastest growing major player at least organically and the discovery business over the last few years.

Not because of the market.

What our teams.

Have done.

Similarly need com, yes, the M&A and antitrust clearance markets are hot if you look underneath that.

You see the cornerstone of our multi year growth that we've driven and.

His actions taken by teams.

The support and add to the Fabulous physicians, we have and the U S.

And extend those positions abroad, not market phenomena, but the phenomenon of great people.

Attracting other great people.

FFC, obviously saw the market's effects last year due to the the halted court activities and travel as a consequence as I think many of you will remember of the business operated at a loss at some points last year.

As you know we remain convinced that we have.

A very good business and SLC with terrific professional and we hired even in the face of that downturn.

The aside and the look and my experience you can hurt a business seriously by overreacting to short term headwind.

For example, like failing to hire great people or getting rid of of.

Good people.

But my experience also is if you don't make those steps.

If instead, you support great people and a downturn.

You see ultimately that the short term headwinds dissipate.

And the powerful underlying strength and potential that great group of people emerges.

And we are seeing that this year with epilepsy.

And Strat commerce.

Our teams to getting 6 years ago and since drive of set the strategic changes that turned the business from what was once the declining business and doing terrific growth engine of business, that's growing and brand and revenue and capability not on every dimension perfectly every quarter.

But robustly and powerfully over any extended periods of time, including this year.

I would save Corp, and for the last some I suspect worry the corporate finished the counter example, since at least this year the market forces seem to be Trumping everything.

I would argue that corp, and in fact fully reinforces the overall points.

Yes, the restructuring market is down a huge amounts of and we are therefore down and restructuring the.

Essentially versus last year.

But it's worth noting.

That our restructuring business and.

And the face of this terrible market is still up from.

Substantially.

From 6 years ago for example, my first year here.

Reflecting the team's.

Strengthening of that business.

Strengthening and operating strong creditor rights business, we had and the U S.

Expanding substantially R U S company side business and demanding the dramatically strengthening.

Ah restructuring physicians abroad and multiple markets.

And the CF results today also reflect the efforts of our team made over the same period to build business transformation and and transactions business that today are soaring.

The result, those of you look out over multiple years not just this year versus last year, you look through the ups and downs of the market, we have been able to develop and attract rig professionals and the U S and around the world and as a result of the CF results are down year on year.

They are not over an extended period of time they are up.

For example, the profits and the first half of this year.

Even with the head of the market the restructuring.

Are still at of run right.

And is essentially triple my first year here.

So are we affected by market share of course, but are we determined by those markets I don't think of the data suggest the I think the data.

Just the please suggest otherwise market forces effect of sometimes dramatically over short periods of time in our individual businesses. They caused the big and zags. While we is also seen that if we don't overreact to the zigzags given the stirred we assess our businesses and when we find that we have confidence and those businesses and and the teams drive.

Them, and we commit to investing and those businesses, even and the slope period.

Even if it hurts those financials and that slow period.

As we did last and FFC and are fully willing to do so and C. F. R.

Our experiences over any longer period of time.

We get rewarded powerfully.

We end up building businesses at great people want to stay and and help build the.

The great people want to be part of businesses that attract great people that support the ambitions and the development and.

And allow them to build businesses, they're proud of and client relationships that make an impact.

When you have great people doing great work and scribbling supported you end up with people who are developing themselves feeling good about themselves and great people outside of your farm and wanted to be part of that.

And you create businesses that through the zig zags become sustainable powerful.

Durable resilient and exciting growth engine.

That is what our teams.

Through this eggs and zags to me.

Have demonstrated.

And together.

I believe we will continue.

To do so.

With that let me turn it over to you RJ to take us from the quarter.

Thank you, Steve and good morning, everybody.

In my prepared remarks, I will take you through our company wide and segment results.

And discuss guidance for the full year.

The beginning with our second quarter of results.

And this morning, we reported the record quarterly revenues with growth of 17% peered over the year and.

Revenue growth more than offset increased cost, primarily promo and investments in both organic headcount of growth and and acquisition.

Earnings per share were further boosted by lower weighted average shares outstanding our way, so and from a lower back straight.

The resulting in the 39, 4% increase and gap EPS and and 31.8% increase in at adjusted EPS.

The strength and hour M&A and litigation driven businesses more than offset the impact of lower demand for restructuring globally.

Overall, we are pleased with these results, which give us even greater confidence and our increased guidance ranges for the year.

The revenues of $711.5 million, we're up $103 and $6 million compared the revenues of $679 million and the priority of of water.

<unk> of the Golden 77, and 221 compared to $1.20.722 20.

Adjusted EPS for the quarter, where the $1.74, which compared to 1 dollar and 32 cents and the priority of the quarter.

The difference between the gap and adjusted EPS, and 221, and it reflects free $1 million and a fair value and measurement of acquisition related contingent consideration.

Which increased GAAP EPS by 910.

And and $2.4 million of non cash interest expense and relate that to our convertible notes, which reduce GAAP EPS by fix them.

Net income of $62.8 million compared to $48 and $2 million and the prior to get a quarter.

The year over year increase was primarily due to the higher operating profit and our forensic and mitigation consulting or <unk> segment, as well as our technology and the economic consulting segments.

And which was only partially offset by lower operating profits and a corporate finance and restructuring segment compared to the priority of of quota.

SG&A of $133.9 million or 18.8% of revenues the.

This compares to SG&A of $126.90 million or 29% of revenues and the second the airport and the second quarter of 2020.

The dollar increase and SG&A was primarily due to and unfavourable impact related to foreign currency translation are FX.

Increase compensation, primarily the related to non billable headcount growth.

And higher than.

Which was partially offset by lower bad debt.

And the previously mentioned fair value the measurement.

Second quarter of 2021, adjusted EBITDA of of $92.3 million or 13% of revenues compared to $75.8 million are prevalent and 5% of revenues and the priority of quarter.

A second quarter effective tax rate of 19.3% compared to $23 and 1% and the priority of quarter.

Our backs right for the quarter was favorably impacted by a discrete facts adjustments.

From Remeasurement, all far deferred backs asset and the UK.

Following the proposed UK back so the the increase effective April of 2023.

Without this change our second quarter of 2021, the effective tax rate would have been 23.3%.

Part of the balance of 2021, we expect that effective tax rate to be between 22 and 25%.

Fully devoted way so 4 Q2 of 35.4 million shares declined.

2 and a half million shares compared to 37.9 million shares and 2.220.

Our convertible notes at the potential dilute the of impact on EPS of approximately 872000 shares for the quarter.

Included and way so as of average share price of the of $140.72. This past quarter was above the $101.58 and version petrol right.

Billable headcount increased by 470 professionals are and 1% compared to the priority of of quarter.

Noteworthy in Maine, we closed on the other acquisition of the roads group welcoming of 38 available the professionals to our construction solutions practice and within our <unk> segment.

And and July of last year, reacquired Belsat consulting, adding 151 billable professionals.

Sequentially billable head down decreased by 27 professionals are half of 1%.

Now I will share some insights at the segments level and corporate finance and restructuring the revenues of $231 million decrease 6.1% compared to the priority at a quarter of.

Decrease and revenue was driven by lower demand for restructuring services globally, which was partially offset by higher demand for our transactions and business transformation services and North America.

Adjusted segment, EBITDA of <unk>, $2 million or $17, and 4% of segment revenues compared to $76.3 million or let the 1% of the segment revenues and the priority of quarter and.

Just the segment of EBITDA was negatively impacted by the continued downturn and restructuring activity compared to the record demand, we saw and 2.220 and the initial wake of forward.

As well as the higher compensation, primarily the related to of 19.8 per cent increase and build up of the head count.

On a sequential basis, the revenue increased $4.8 million or $2 and 1% as strong growth and both of our business transformation and transactions businesses and related success fees more than offset the continued decline and demand for restructuring services.

Turning to SLC and revenues of of $157 million increased 41.7%.

Compared to the priority of the quarter the increase and revenues was primarily due to higher demand borrowed and investigations and dispute services and.

Just the segment EBITDA of $18 million or 11.9% of segment revenues compared to a loss of $9 million and the variety of of quarter as.

As a reminder of the second quarter of 2020 was when COVID-19 related lockdowns, particularly affected SLC, the resulting in many matters being deferred due to travel restrictions foreclosures and delays.

The year over year increase and adjusted segment EBITDA was primarily due to higher revenues and a 14 percentage point increase and utilization, which was partially offset by higher valuable of compensation and the 5.5% increase and billable headcount.

The quench Lee the revenues were flat, but adjusted segment EBITDA decreased $11.4 million, primarily due to increased compensation acquisition related costs and.

And certain revenue the photos.

Our economic consulting segments record revenues of $183.3 million increased 21% compared to the priority of the quarter.

The increase was primarily due to higher demand for non M&A and related anti trust and financial economic services, which was partially offset by lower realized rates and demand for our M&A related antitrust services compared to the priority of quarter.

Adjusted segment, EBITDA of $30 and $7 million or $16 and 7% the segment revenues compared to $21.7 million or $14 and 3% of segment revenues and the priority of the quarter.

The increase and adjusted segment EBITDA was due to higher revenues, which was partially offset by hired variable compensation and of 9.1% growth and billable headcount.

Sequentially, the revenues increased $14 million or 8.3%, which was primarily driven by and increased demand for our financial economics, and the M&A related and bad press services.

Adjusted segment EBITDA improved $4.1 million.

In technology and revenues of $78.6 million increased.

67%.

Compared to the priority of quarter.

The increase in revenue was primarily due to higher demand for cross border. The investigation litigation and M&A related second request services.

Adjusted segment, EBITDA of $18 and $5 million or 23.5% of segment revenues compared to $6 and $40 million or $13 and 7% of segment revenues and the priority of the quarter.

The increase and adjusted segment EBITDA was due to higher revenues, which was partially offset by an increase and compensation and higher SG&A expense.

Sequentially and revenues were slightly lower compared to record revenues and the first quarter as decrease demand for the M&A related second request services was nearly offset by higher demand for litigation and cross the border and investigation services and.

Adjusted segment EBITDA declined $3.1 million sequentially, which was the largely due to an increase in SG&A expense.

The revenues and the strategic communications segment of $67.8 million increase 19.2%.

Compared to the prior year court.

The increase and revenues was primarily due to a higher demand of corporate reputation and public affairs shows.

Adjusted segment EBITDA of $13.5 million or 19.9% of segment revenues compared to $10 million or $17 and 6% of segment revenues and the priority of the quarter.

The increase and adjusted segment EBITDA was due to higher revenues, which was partially offset by an increase and compensation and higher SG&A expense.

Sequentially, the revenues increased $7.3 million, primarily due to higher demand for corporate reputation and public affairs services and.

Just the segment EBITDA increased $3.1 million.

Let me know discuss the cash flow and balance sheet items regenerated net cash from operating activities of $125 and $6 million, which decreased by $27.4 million compared to $153 million and the second quarter of 2020.

The year over year of decrease was largely due to an increase of insanities primarily related to head from growth, which was partially offset by higher cash collection.

Regenerated free cash flow of $105.8 million and the quarter.

Total net net of cash decreased $93.5 million sequentially from $252.8 million on March 31st 2021, the $159 and $4 million on June 30th 2021 the.

The sequential decrease was primarily due due repayment of borrowings under our seniors bank revolving credit facility.

Turning to our guidance.

We are raising our full year 2021 guidance ranges for revenues and GAAP Bbs.

We are also raising the lower and all of our full year 2021, adjusted EPS guidance range.

These changes primarily of reflect our strong performance and the first half of 2021.

We now expect revenues will range between $2.7 billion and $2.8 billion up from our prior range of of between $2.5.75 billion and $2.7 billion.

And GAAP EPS is now expected the range between $5.89 and.

And $6 of 79 and 10 up.

Up from up dry of range of of between $5.60 and $6.30.

We now expect adjusted EPS to a range of between $6 and $6.50.

Up from our prior range of of between $5.80 and $6.50.

The 11 cents per share variance between EPS and adjusted EPS guidance for full year 2021 includes the estimate the backs effected impact of non cash interest expense of 20 per share related to our 2023 convertible notes and the second quarter of 2021.9.

Per share gain and related to the fair value of the measure events.

Are updated guidance for full year 2021.

<unk> bye.

By 4 key considerations.

First the restructuring activity remains subdued due to government support and extended moderate sodium.

The low interest rates and strengthening and certain industry verticals.

And our restructuring business could weaken further as large matters from 2000 to indeed, the rolls off.

Second global M&A activity, which drives demand and not economic consulting and technology segments as well as our transactions practice and corporate finance and restructuring is at the does that could levels.

There is no certainty that M&A activity will continue at this space.

Could typically fourth quarter is a week of quarter for us because of both and increase in time off during the holidays.

Part of our employees and this season and the business slowdown.

Paul.

COVID-19 is filled with us with different parts of the world being impacted at varying degrees.

And before I close I want to reactivate the few key themes that underscored the strength of our company.

First.

We have conviction and our world leading business day.

And this quarters of results reflect both of the benefits of sustained and investing even when faced and even when facing short term volatility.

And the diversity of our business.

Second and not only a deepening of our core capabilities, but also we are expanding and the adjacencies such as non MMA related antitrust business transformation cyber security public affairs, and the environmental and social and governance related services.

Third the bedrock of our success remains the strength of our people and their client relationships.

Combining with creating a culture that has year after year allowed STI to be event as a best place to work by Forbes Consulting magazine, and the Washington Post among others and.

And finally, our balance sheet is and the vehicle and we have demonstrated the ability to boost shareholder value through share buybacks that production organic growth and acquisitions when we see the right 1.

With that let's open the follow up for your questions.

We will now begin the question and answer session.

To ask a question and the press sorry, and then 1 on your telephone keypad.

And and the speaker phone please pick up the headset for pressing the key.

To withdraw your question, please press start and too.

At this time of the pause momentarily to of similar officer.

Our first question comes from England and Sandburg. Please go ahead.

Questions on the first 1 I was just wondering with the difference being rolled out of the grocery market and.

And you talk a bit about the different digits, saying and performance the cost of the different geographies and business.

Could you repeat that Sam we got I got at least from from my ex and there was a little garbled. The I heard the different the end of it I didn't hear the beginning and by the way the nicest nice degree of your voice.

Yeah.

No it was just.

On the stand a bit more about the the performance across the different geographies that you operated.

Given the the sort of decorating back the rollout that we've seen and all of the market and.

Our day, you want to take that sort of floats, so listen all of our all of our.

Regions of growing and and you can see that and are.

We publish the results by of each in terms of revenue. So you can see that as the year of of the year of growth and all of our all other regions.

The the.

The vaccine rollout is is.

And is different and though I mean, there are markets for example, where.

The folks haven't been able to get back into the office is that because the limited vaccine roll-up and the typically and and the less wealthy countries different if I may say so.

But that hasn't affected us too much because the end of the ghetto and.

Every single region is growing and and the teams in terms of M&A, driven businesses and litigation and and and the the corporate reputation and public affairs services are actually relatively consistent and we've been able to add the head down and everywhere as well.

Okay, great and that helps down the the second yeah and that that's great and then the the second 1 in FL say I was just trying to understand the plays how much of a strong growth and being driven by a relief and top demand from last year and and early this year the.

Just.

Underlying demand growth and then do you expect and R. F L.

And will normalize the day across the rest of the.

Given the how strong and get this quarter.

And the answer really is yes, and yes to both the parts of your question. So when we reported first quarter of results. We delegate app that these blur and really beyond the exceptional results and there was a lot of and of deferred work.

The most was getting done.

I think we are now that differed work is now behind us and may be spilled some.

Pumping elements of that but this is this is the growth in the quarter and really you should and I and May I suggest users of which ended suggests combine the 2 quarters when you're looking not margin and things like that because you could get from 1 quarter of the other.

And expenses and deferred revenue elements of that combined margin level of this more appropriate.

Okay, Great and then maybe just just 1 more can you just talk a bit about your wage inflation expectations of the rest of the year and the you seeing a similar sort of back to the junior Tyler that you're hearing from the total of investment bank and the UN.

Yes.

Let me address that.

Look I don't think we have a back door I think.

I think we've done a pretty I think our teams of done a great job over the last while of.

Of just and.

And making sure.

That were connected through hours of the ranks of our team I just think it's just been a big focus and.

We're investing and our people as the future of our firm and I think that's being noticed and that has caused over a multiyear business year the stickiness the morale of.

All of those things to go up and and the attrition rate the plummet.

And that's been great now last year.

Attrition rate I think was not just because we got the better looking at the firm but because.

People were frozen versus Covid.

So.

We're absolutely seeing some catch up for that and then look I think COVID-19 has caused some people to just read them and like.

We have people who are leaving not the go to competitors so much as.

People are deciding to go.

Not not literally becomes Zen masters and the top of the mountain, but but really.

Really radical different life choices.

It's something we're monitoring it is it's not it it's certainly higher than it has been and.

It is not totally unexpected I mean the.

Anybody who thought the attrition rate during Covid was.

The the underlying reality was a little bit self delusional, but we're trying to work hard to make sure that.

And people, who don't make mistakes and their careers that they don't they don't leave the do something and and regretted and and and I think we're doing a pretty good job. So it's not it's not a huge phenomenon, but we are.

So far year to date, not a huge phenomenon, but we're monitoring it and we're trying to help people supportively think through their choices does that helped Sam.

Yeah, that's great. Thanks, very much and all of the AG.

Our next question comes from television.

The true security. Please go ahead.

Thank you.

Can this transformation of <unk>.

Number of years ago towards and organic growth.

<unk> investing and the requisite talent.

Of.

If I'm right that and and the state for the process might be a period of time, where you are actually kind of.

Bringing and junior talents onboarding them and the eventually promoting them to the range of.

And these and Smbs and kind of Julie and this organic growth internally versus lateral hires today, how far away may that be is that a generational thing and that sort of a decade or 2 or.

357 years away from being able to feel some of that.

Well I think we're already starting to feel some of that but I think I think you can quantify this I mean, we have been and we haven't been doing that since.

Early and my tenure.

And probably get Ali or Molly to give you the statistics on how much entry level hiring we've done and and then over the last few years I mean, it's not just lateral hires we've done record numbers of the promotion.

The and the M D and so forth and and.

And we've also some of the lateral hiring was at the mid levels and some of those folks are now coming through to 2 SMB.

But I do think there's a there's a good analogy which is.

I used to do a lot of work and the liquor business and Scotch Interestingly enough you know how long it takes the growth rate 12 year old Scott.

12 years.

And I won't make the answer that question.

And we're like that business if you.

If you want to.

Have great 12 year old Scotch you have to have confidence in the business and best in the rate raw materials put it in the right environment and not let the barrels blow up because of the bad order or not or too and and see that the the Scott season, and and develop over that period of time and you have to have confidence and your business and and by the way of.

A lot of our Smgs R 12 year old Scott.

The at least the ones that are hitting the ground running of use of people get promoted off and faster than that but for.

And where they start to really lift the business is often around that time.

And so yeah. So we have been fortunate.

That we've been able to find lateral hires.

Plus lateral hires which is not always the case.

To help supplement that growth and that's been of key part of it but we've been investing and this since my.

Maybe not my first day of my first year year, and we're already starting to see some results, but yeah. It takes 12.

12 years to grow 12 year old Scott to get Great 12 year old Scotch and if you think you want a smattering of 18 and drove Scott.

And.

That the long time.

So we're working through that but we're seeing results already does that help.

Thanks.

How long do you expect the.

And may have to be and especially fruitful source of of.

Again, I guess season lateral sort of talents.

As a result of regulatory or other pressures that you see on competitors and that geography.

Well look.

1 of the of 1 of my.

The principles of life of the obituary and never take anything for granted so I I think hard about that question every day, but I want to say.

I think I think there are a lot of people who have joined US who of realized that we are of better platform.

Many of the people joined us of joined us from firms that have conflicts that.

With audit functions for example of that that we don't have the.

The history of of firm was and many markets over a broad we weren't known you cannot attract 8 plus people. Even if you have no conflicts to affirm that's not grown and that's not known with change that over the last year and then as a result, some early brave souls from leading firms and markets, where we weren't no none came over and.

And when others check in with them. They say Wow. This has been of great platform.

More accessible it's more collaborative.

Actually I have of global business, So if I need to do global work.

And can actually coordinate around the globe with authority and we don't have conflicts we of conflicts, sometimes but we don't have conflicts from and audit function, which is the big serious issue.

I think this is a trend that had if we do the right thing has lots of legs.

Behind it.

But we better as always keep doing the right thing does that help.

If I could bring larger and.

Could could you help us understand the.

Mix in 2 segments of spit.

Specifically and CFR, what sort of split May you have between bankruptcy and non bankruptcy work and then all of it.

And will be the specific numbers put and econ could you give us a sense for the relative size of M&A related antitrust versus non M&A related antitrust. Thank you.

Sure Toby began.

So first things first.

We don't like to sit and non bankruptcy, we'd like to say business transformation and transactions versus those.

And and restructuring the.

Fairly sensitive.

Books are not bankruptcy and everything else.

So that number and it's fairly dramatic and last last year and Q2, we were like 72% restructuring and.

And the.

Less than 30%.

And and business transformation and transactions.

It's almost slipped entirely very close to flip the entirely and do do this year.

Around the 30% and restructuring and.

And and so.

And it's almost and absolute flip.

And the in terms of the uncle further.

Between business transformation and transactions transactions is the 1 where we've seen.

Great of growth.

So I hope that helps therefore of that fees and.

In terms of.

The economic consulting fees it varies by a few percentage points from 1 quarter of to the other but typically are antitrust businesses have ballpark hillcoat revenues and that's usually split evenly between mmm.

Mmk and non M&A mmm.

Mmk has more often than not been bigger.

But but in a non MMA and also seen tremendous growth and that area.

Thank you very much.

Continuing and the hiring of fronts.

Large as your incoming class of sort of junior summer of hires undergrad Grad school graduates and and how does that compare to a year ago.

Similarly sized over 200 feet.

Okay, and then last question for me.

Has the the bite the administration's regulatory posture or at least seeming regulatory posture impacted activity to date or is that sort of us of future driver and his fees of.

The Senate.

Approved the nominees take their roles.

I think it's very hard to tell Toby the.

Endless discussions and our firm on this it was the also endless discussions and our firm of out.

On Brexit effected Brexit have on this quarter and.

And I think.

I think it's very hard to this day, which comes back to I think the James made the theme of.

Of my part of the discussion today, which is.

Market forces can affect us, including and a regulatory changes.

But.

Sometimes you can't even see them and the data which is what we have now it's still noisy of the data too hard.

That we may as well focused on.

Franklin and our businesses. So that's what we can control so I.

I would say at this point I don't think anybody has the definitive answer for that obviously, we would think that the increased regulatory scrutiny as the plot.

For our business and how much of that is already being seen and the data I would guess not that much but but it's this yet.

Okay. Thank you for your help.

Our next question comes from Mark correct.

The duty and company. Please go ahead.

Very good morning good.

Morning, Mark.

So I really appreciate the the commentary on.

Human capital at the.

Firm and and the willingness.

And the best store and good times, and bad and and what have you I was wondering if you talk a little bit about maybe some of the other areas and the investment, particularly.

What you are looking at as far as your views on other technology spending and support as well as maybe some of the office space headquarters things like that maybe how we should be thinking about some of the potential.

Investments, sending the support of of your capital of that you're looking at going forward there.

Well I'll take of Cracket part of it and then the 5 day is something else and Mossad, Please do J and look like.

We have we.

We have a very good team Ross.

Now.

Almost every 1 of our businesses and Asia.

We're not and every geography, but we have very good team and across Asia, and so we have growth ambitions or.

For Asia.

As well and.

And we've been adding talent and and it.

Can't think there is any.

Segment, we haven't been adding and adding talented and CF, we've been adding talent and MLC was night and tell and econ with Matt and calendar Stratcom women and balanced in fact, I think the and every business we've been adding talent.

We are stronger and some markets and others.

That's true.

And Europe too by the way.

2 and Latin America by the way.

I think there's plenty of growth and the markets that we're in.

Singapore, and Hong Kong and the China.

Before we have to go to Myanmar.

But.

We continue to look at.

Where we can get the right talent.

Ongoing expansion and the region and it's always the same issue like.

We are expanding and lot and Germany now because we know the critical mass of of of.

People and you can build behind you can't it's hard to go to a new country.

Without that critical mass of talent and so.

Date of the day and day out our focuses on further reinforcing and supporting terrific teams to grow in the market that we're in because of my goodness, there's a lot of business and.

And the markets were in and and a lot of growth, but eventually I suspect we will penetrate some of the other major markets and the and the region as well does that.

And the answers of different lens you wanted on the question.

A little bit maybe on the on the sort of thing where you feel you all as far as technology and.

Of the.

And where will bear witness.

The additional long of spending there or if there were any particular things that you would like to enhance to move things forward from the company So liberally RJ.

In terms of physical infrastructure, and and and technology infrastructure. I mean, we have we have equivalents infrastructure every place around the world. The we have good but it's not like we have we haven't we haven't shipped their old computers to the folks and and in Asia and make them use it and and.

And.

So I think we are equivalent state the in terms of real estate, we've been remodeling offices and every geography of some offices that are people are desperate for the remodel like for example of New York and people are just Covid, Our New York Office last week and I think.

People are just can't wait for when we move into our New office and Asia has some of the older offices, but also has.

When did we move into Hong Kong, and probably the new Hong Kong office, probably 18 months ago or something like that so I don't think we are behind and our commitment of capital or and any other way and.

And and 1 particular region or another R. J U U and the same place you of a different view.

Absolutely and it is market share looking at the Capex numbers, and maybe that's where you're coming from this year is the elevated levels of Capex..2 reasons..1 the primary reasons..1 is we have the new New York office, where the the improve.

Improvements to that are of capital.

And the.

Substantial and it's all disclosed and argues and case.

And secondly, we are redoing, our ERP systems, which I promise you will not do every year and so so.

So those both of those are the heavy lift but the ours is a little capital of intensity business day.

The the high EBITDA do free cash flow true.

Okay and that helps and what's interesting.

Interesting interesting the ear.

I promise about the do and Erp's east of every year. The go directly to keep the comments and.

And once the guy by the way if I ask him to March by ask them to do he'll quit so there's there's lots of reasons why we won't do 1 every year.

The last thing for me and see if I wanted to circle back with you because 1 of the.

The the comments that you may be of prepared remarks of sort of around and having the opportunity to reach out to and and how the initial.

The initial contact with some folks that you haven't been able to and the while during the pandemic of together. If there are any in particular that you were that you were getting and those initial contacts and sort of maybe some of the feedback that you are getting <unk> benefits anecdotal kind of of.

Some of the things that some of the takeaways that you've gotten from those initial commentary as to how folks the feeling about moving forward and some of the activities that that might be prioritize. Thanks.

Yeah of look I think I think you get different reactions I think the the main reaction of gotten at least and the early conversations is just.

And it really I mean, a very human reaction of of what the light.

The have the connection in person and it's very weird right because we've made the.

Zoom and teams work, I mean, and and it clearly work and the way better technology, and non and give us a lot more flexibility going forward. It's still the case of people like clients and teams that.

And I have been and intense contact with you know it's just different when you are in person and you and.

And yes, you ask people about their families on the phone and so forth that you just.

I don't know you just it just feels like you are at Liberty to actually explore those and more depth and year of out whatever the swimming thing and the <unk>. It's just it's just the different human experience and I think that'll happen.

Happening with us and and other people and I think everybody's struggling secondly, with figuring out whether.

We have a straight path up for their sidesteps with.

The the variance out there and how fast the we open offices and how do we deal with unvaccinated.

And all of that so there's a lot a lot of that going on I think I think there's a general.

Since that.

Everybody is committed to like all right, we got to get the world back closer to something not back to where it was because the technology changes, but certainly.

2 and.

Eventually of post Covid world, but but how we navigate that because we're not yet and of posts over the world is the subject of of lots of discussion.

I would say there's a lot of.

Energy about moving business is ahead, and then I think everybody.

Whether the storm of Covid.

Well, but I think some ambitions and some discussions of the global ambitions of people have.

Just didn't half of this month and I think there's some general desire to do that by and our clients and within our firm does that talk to your question Mark yet.

Yes, very much so thank you.

Our next question comes from Andrew Nicholas with the William and Blair. Please go ahead.

Thanks, and good morning.

The first question I wanted to ask is just on pipeline specifically within SLC I realized the only have so much visibility there over over the medium term, but just kind of thinking about the next couple of quarters is there any way to characterize that pipeline relative to last quarter or even and the second half of the last year.

So and we don't typically talk as specific as pipeline or monthly of trends and given an overarching guidance.

The.

If you compare will be done just as good.

5.9 is robust good.

Our people are busy of utilization and see the utilization staff, we have a very compelling proposition to offer.

Fair enough and then from my follow up question.

And restructuring, obviously, you're assuming and your guidance that restructuring activity remains subdued the totally play reasonable and I'm not going to ask to to guests or.

Yes, the guests what what catalyses some sort of acceleration and defaults are of growth because that's the anyone gets but I was wondering.

Absent and kind of the government support and the excess liquidity being pumped into the system. If you have any thoughts on just overall fundamental conditions and some of the conversations you are having is is this the situation where or in your view.

Where fundamentals aren't necessarily getting as much better as we might of otherwise expected to the point, where when support is pulled back you will see of pretty significant ramp up and this business or.

Timing of tied how do you kind of see this playing out over a multiyear period.

No the great question and it's 1 that we talk a lot about I think we do have a view that says that as a positive view on that question I look I think I think.

I think the way to think about this is what the government is doing is allowing some companies that are temporarily made unhealthy the bread.

Essentially.

Like it's the the.

Federal government around the World version of.

Of.

Meese supporting FFC last year flcl, the great business, you're and idiot the cut the cut.

People, just because you have a couple of slow quarters and the same thing for restructuring and so the federal government is offering the incredible levels of support.

So we have businesses that are viable not get killed by.

By a temporary from the phenomenon, having said that the loose money is clearly, allowing companies that are not particularly healthy the.

Avoid restructuring and I think the the the the the.

The veil ability of capital at unbelievably low rate.

Is.

At least and my knowledge of the history of this industry and and I'm not the best historian and is unprecedented and.

And so.

The second order consequences that.

The companies that probably should be going under undergoing restructuring right now or not and and factor adding more of that.

And so I think that has a very long term bullish.

Implication for.

Or that business with the big question being the 1 you thankfully didn't make me.

And beyond which is the and when does that cause I think.

I don't think it's 10 minutes I think that's the issue, but it's the reason for us to be incredibly calm well. It's 1 of the 2 reasons. The market is going to be there is our belief on restructuring and then the second of all we continue to invest it and make it the best business and the World I mean, the best.

And so I think the combination of those 2 is very bullish for our company, but there is a big question about when the Big question does that help the Andrew.

Perfect exactly what I was asking thanks, a lot Steven and thanks object.

And can you think thank you all for joining today, we really appreciate it and let me come back from my opening remarks, and I Hope I hope.

We're all figuring out a way to get the deeper richer connections with people that means so much to us while staying safe and.

The good wishes to all of you.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

[music].

[music].

Welcome to the F. T I can fall in the second quarter 2021 earnings Conference call all participants will be in listen only mode.

If you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After today's presentation will be and opportunity.

To ask questions.

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Please note this event is being recorded.

I would now like to turn the call over to Mollie Hawkes Vice President of Investor Relations. Please go ahead.

Good morning.

To the FBI consulting conference call to discuss the company's second quarter 2021 earnings results as reported this morning management will begin with formal remarks, after which they will take your questions.

Before we begin I would like to remind everyone that this conference call may include forward looking statements with.

Within the meaning of section 27, a of the Securities Act of $19.33, and section 21 of the Securities Exchange Act of $19.34 that involve risks and uncertainties.

Forward looking statements include statements concerning plans objectives goals strategies future.

And welcome Ben future revenues future results and performance expectations plans or intentions relating to financial performance acquisitions share repurchases business trends and other information or other matters that are not historical including statements regarding estimates of our future financial results.

Future of and other matters.

For a discussion of risks and other factors that may cause actual results or events to differ from those contemplated by forward looking statements investors should review of the Safe Harbor statement and the earnings press release issued this morning, a copy of which is available on our website at www Dot STI.

Results of the Dot com and.

Well the other disclosures under the heading of risk factors and forward looking information and our annual report on form 10-K for the year ended December 31, 2020, and and our other filings with the SEC and.

Investors are cautioned not to place undue reliance on any forward looking statements.

<unk>, which speak only as of the day of this earnings call and we will not be updated.

During the call we will discuss certain non-GAAP financial measures such as total segment operating income.

<unk> EBITDA.

Adjusted segment EBITDA.

Adjusted earnings per diluted share adjusted.

And I can sell from adjusted EBITDA margin and free cash flow.

For a discussion of these and other non-GAAP financial measures as well as our reconciliations of non-GAAP financial measures. The most directly comparable GAAP measures investors should review the press release and the accompanying financial tables that we issued this morning.

Net included the reconciliation.

Lastly, there are 2 items that have been posted to the Investor Relations section of our website. This morning for your reference. These include a quarterly earnings presentation, and an excel and PDF of our historical financial and operating data, which have been updated to include our second quarter 2021.

1 result.

With these formalities out of the way I am joined today by Steven Gunby, Our President and Chief Executive Officer, and Ajay <unk>, our Chief Financial Officer.

At this time I will turn the call over to our President and Chief Executive Officer, Steve Gunby.

Thank you Molly good morning to everyone.

And thank you all for joining us I hope.

Everyone and your families continue to be well I know.

We all can see light at the end of the tunnel regarding the pandemic.

But I also know that and no place around the World No places around the world are we yet fully in that light.

So im hoping everybody remains safe.

I'm also hoping that we are bringing in the background there.

Yeah well.

And then the new place doing the call. So unfortunately, we might have been a little background noise sorry about that.

So look I'm, hoping everybody stays safe I'm also hoping that we all are getting a chance to reconnect with our loved ones.

Colleagues and and somewhat deeper way over the last several weeks like this week I've had the pleasure of starting to see clients and person and traveling to some of our offices to see our people I hope.

You have begun to have the equivalent for me it has been wonderful.

I get the chance to see people person and person again, obviously technology.

Ones and are incredibly terrific about connecting up.

The changes our abilities the field connected when were apart.

Now some technologies are better than others I think letter writing from my youth wasn't that great. Notwithstanding the fact that my parents celebrated the fact that I spent from a postcard from summer camp and telegrams except for emergencies.

These werent much better.

The telephones, obviously helps right. They were real time, the inner interactive the allowed you to talk to somebody and stay connected and zoom and teams are incredibly better.

It gives us the eye contact they give us the ability to see authenticity and some of these space is the powerful thing.

But when we get back.

Back out and the World I for 1 and rediscovering the fact that even today.

Even today nothing is better than getting a chance of peace summit in person.

And maybe given that person the hub.

And my best wishes for everybody on this call as we're each trying to navigate our way back.

Mr to those risks.

And part of life.

Turning to our results I'm going to let RJ and give you all of the detail of this yet again terrific quarter. It is a terrific quarter.

And there's lots of details, but I'm going to leave that to him what I'd like to do with your permission.

Is.

Share of bit of a longer term perspective.

On these earnings calls, we often are talking about market forces.

The forces that are external to our firm last year. For example, we talked about the courts being closed.

And travel restrictions and the impact of each of those and other times, we've talked about the restructuring markets, either being up or down or whether the transaction market is booming or not.

Obviously those discussions are important we wouldn't be talking about them, if they werent markets do affect our individual businesses and they can affect them sharply.

Over any short period of time.

But what is also true and to me far more powerful.

Is how.

How little.

The market is determined our performance over any extended period of time, how much when you look back over 2 years 4 years 6 years 7 years of our history, how much of our business is not driven by quarters or by market factors.

And it's driven by us.

By what our.

Do.

It's about what our ability over any extended period of time and not get driven by.

The quarterly market forces, but rather for us.

Troll of our destiny.

Now I know theres some longtime observers of our company on the call and some of you have suggested that at 1 point this company.

He was never up unless of the restructuring business was up.

And the restructuring business was not up unless the restructuring market was up and as a consequence.

And 1 point, we were seeing by some.

As of Corp, that floats up and down.

With restructuring wave.

I don't know whether that.

That was ever fully true.

But I believe.

Our track record over the last 2 or 5 plus years suggests it is not.

The case.

Today.

Our teams have been and are building businesses that are global and diverse.

<unk> and.

The most important powerful.

Each 10, as we've seen the whipsawed by market in thus short term.

But over the last years, we have shown that of Sweden, the right things over any extended and extended period of time.

We are not <unk> on the wave.

But rather folks who determine our future.

By now I believe you can see examples of this and every 1 of our businesses and every 1 of our region for example, our technology business.

This quarter is being helped by the strong M&A and market markets matter.

Having said that by far the more fundamental change and our trajectory.

Trajectory and this business wasn't driven by markets was driven by the teams driving strategic changes at the engineered 4 years ago at that point. Some of you might remember the business was headed and the wrong direction, even with solid market.

The strategic changes the team drove reverse that at.

That business started to move up even.

Even before the M&A boom and.

And as a consequence I believe we have been the fastest growing major player at least organically and the E discovery.

<unk> over the last few years.

Not because of the market, but because of what our teams.

Have done.

Similarly in Econ, yes, the M&A.

And I Trust clearance markets are hot if you look underneath that.

You see the cornerstone of our multi year growth that we've driven.

His actions taken by teams the <unk>.

<unk> and add to the Fabulous positions, we have and the U S.

And extend those positions abroad, not market phenomena, but the phenomenon of great people.

M&A interacting other great people.

<unk>, obviously saw the market's effects last year due to the the halted cord activities and travel as a consequence as I think many of you will remember of the business operated at a loss at some points last year.

As you know we remain convinced that we.

Have a.

A very good business and MLC with terrific professionals and weak hired even in the face of that downturn.

The aside and the look and my experience you can hurt a business seriously by overreacting to short term headwind for.

For example by failing to hire great people or getting rid of.

And people.

But my experience also is if you don't make those steps.

If instead, you support great people and a downturn.

You see ultimately that the short term headwinds dissipate and the powerful underlying strength and potential of that great group of people emerges.

And we're seeing that this year with SLC.

And strat coms.

Our teams the getting 6 years ago and since drive a set of strategic changes that turned this business from what was once the declining business and so a terrific growth engine of business, Thats growing and brand and revenue and capability not.

On every dimension perfectly every quarter.

But robustly and powerfully over any extended periods of time, including this year.

I've saved Corp, and for last some I suspect worry the corporate and as the counter examples since at least this year.

It <unk> seem to be Trumping everything.

I would argue that Corp, fin and fact fully reinforces the overall point.

Yes, the restructuring market is down a huge amount and we are therefore down and restructuring.

Substantially versus last year.

The market worth noting.

And that our restructuring business.

And the face of this terrible market.

Is still up substantially.

Substantially.

From 6 years ago for example, my first year here.

Reflecting the team's.

Strengthening of that business.

<unk> and already.

Already strong creditor rights business, we had and the U S <unk>.

Expanding substantially our U S company side business and demanding of dramatically strengthening our.

Our restructuring positions abroad in multiple markets.

And the CF results today also reflects the efforts of our team made over the same period to build business.

Transformation and transactions business that today are soaring.

The result that is if you look out over multiple years not just this year versus last year. If you look through the ups and downs of the market, we have been able to develop and attract great professionals and the U S and around the world and as a result of the CF results are down year on year.

We are not over an extended period of time they are up.

For example, the profits in the first half of this year.

Even with the hit of the market the restructuring.

We're still at a run rate.

And as essentially Triple my first year here.

<unk>. So are we affected by market share of course, but are we determined by those markets I don't think the data suggest the I think the data illicitly suggest otherwise.

And forces affect us sometimes dramatically over short periods of time in our individual businesses, they cause zig and zag and why.

We have also.

Seen that if we don't overreact to the zig and zag, if instead, we assess our businesses and when we find that we have confidence and those businesses and and the team is driving them and we commit to investing in those businesses even in a slow period, even if it hurts those financials and that slow period.

As we did buy of and FFC and are fully willing to do so.

And also CF, our experiences over any longer period of time.

We get rewarded power fleet.

And we end up building businesses.

Great people want to stay and and helped build the.

The great people want to be part of businesses that attract great people that support their ambitions and the development and.

And allows them to build.

Businesses are proud of and client relationships that make an impact.

When you have great people doing great work and feeling supported you end up with people who are developing themselves feeling good about themselves and great people outside of your farm and wondering if part of that.

The create businesses that grew the zig and zag become sustainable power.

Powerful.

Durable resilient and exciting growth engine.

That is what our teams.

Through this ex <unk> to me.

Have demonstrated.

And together.

<unk>.

I believe.

<unk>, we will continue.

The do so.

With that let me turn it over to you all day to take us through the quarter.

Thank you, Steve and good morning, everybody.

In my prepared remarks, I will take you through our company wide and segment results.

Discuss guidance for the full year.

Beginning with our second quarter results.

This morning, we reported record quarterly revenues with growth of 17% year over year and.

The revenue growth more than offset increased costs, primarily from our investments.

And the both organic head count growth and and acquisition.

Earnings per share were further boosted by lower weighted average shares outstanding of our ways, So and from a lower tax rate.

The resulting in net 39, 4% increase and GAAP EPS and a 31.

In the 8% increase in adjusted EPS.

The strength and our M&A and litigation driven businesses more than offset the impact of lower demand for restructuring globally.

Overall, we are pleased with these results which.

Give us even greater confidence and our increased guidance ranges for the year.

Revenues of $711.5 million were up $103.6 million compared to revenues of $607.9 million and the priority of quota.

GAAP.

1 point of $1.77, and <unk> 21, compared to $1.27, and <unk> 'twenty.

Adjusted EPS for the quarter was of $1, 74, which compared to $1.32, and the prior year quarter.

The difference between our GAAP and adjusted EPS and <unk> 21 reflects.

And $3.1 million and a fair value remeasurement of acquisition related contingent consideration.

Which increased and GAAP EPS by <unk> <unk>.

And of $2.4 million of non cash interest expense related to our convertible notes.

GAAP, which reduced GAAP EPS by <unk> <unk>.

Net income of $62.8 million compared to $48.2 million and the prior year quarter.

The year over year increase was primarily due to higher operating profit and our forensic and litigation consulting or <unk>.

Segment, as well as our technology and the economic consulting segment.

Which was only partially offset by lower operating profit and our corporate finance and restructuring segment compared to the prior year quarter.

SG&A of $133.9 million were 18.

<unk> percentage of revenues.

This compares to SG&A of $126.9 million or 29% of revenues and the secondary airports and the second quarter of 2020.

The dollar increase in SG&A was primarily due to and unfavorable.

The 8 act related to foreign currency translation or FX increase.

The increase compensation, primarily related to non billable head count growth.

And higher range.

Which was partially offset by lower bad debt.

And the previously mentioned fair value Remeasurement.

The impact.

Second quarter of 2021, adjusted EBITDA of the $92.3 million or 13% of revenues compared to $75.8 million or 12, 5% of revenues and the variety of quarter.

Our.

And quarter effective tax rate of 19, 3% compared to 23, 1% and the priority of quarter.

And our tax rate for the quarter was favorably impacted by discrete tax adjustments.

From Remeasurement of our deferred tax asset.

<unk> the U K.

Following the proposed U K tax rate increase effective April 2023.

Without this change our second quarter of 2021 effective tax rate would have been 23, 3%.

For the balance of 2021.

1 we expect that effective tax rate to be between 22 and.

And 25%.

Fully diluted ratio for Q2 of 35.4 million shares declined.

The 1.5 million shares compared to 37.9 million shares and do.

Q2 'twenty.

Our convertible notes and the potential dilutive impact on EPS of approximately 872000 shares for the quarter.

Included in way, so as an average share price of $140.72, <unk> this past quarter was.

Of the $101 and 38 and conversion threshold Brian.

Billable headcount increased by 470 professionals are 10, 1% cash.

And back to the priority of quarter.

Noteworthy in May we closed on the acquisition of the roads group.

Umbrella coming of 38 billable professionals to our construction solutions practice within our <unk> segment.

And in July of last year, we acquired Deltak consulting, adding 151 billable professionals.

Sequentially billable head count decrease.

Decreased by 27 professionals are half of 1%.

Now I will share some insights at the segment level and corporate finance and restructuring and revenues of $231 million decreased 6.1% compared to the prior year quarter the decrease.

And revenue was driven by lower demand for restructuring services globally, which was partially offset by higher demand for our transactions and business transformation services and North America.

Adjusted segment EBITDA of $40.2 million or 17, 4% of segment revenues.

Compared to $76.3 million or let the 1% of segment revenues and the variety of quarter.

Adjusted segment EBITDA was negatively impacted by the continued downturn and restructuring activity compared to the record demand, we saw and <unk> 'twenty and the initial wave of Covid.

As.

Well as higher compensation, primarily related to of 19, 8% increase and billable head count.

On a sequential basis revenue increased $4.8 million of 2.1% as strong growth and both of our business transformation and transactions businesses and related.

Success fees more than offset the continued decline in demand for our restructuring services.

Turning to SLC and revenues of $157 million increase.

The increased 41, 7%.

Compared to the prior.

The water the.

The increase in revenues was primarily due to higher demand for our investigations and disputes services at.

Adjusted segment EBITDA of $18 million or 11, 9% of segment revenues compared to a loss of $9 million and the priority of quarter.

The year as a reminder, the second quarter of 2020 was when COVID-19 related lockdowns, particularly affected SLC, the resulting and many matters being deferred due to travel restrictions coal closures and delays.

The year over year increase and adjusted segment EBITDA was primarily.

Higher revenues and of 14 percentage point increase and utilization, which was partially offset by higher variable compensation and of 5.5% increase and billable head count.

Sequentially revenues were flat, but adjusted segment EBITDA decreased $11.4 million.

Due to.

Primarily due to increased compensation and acquisition related costs.

And certain revenue deferrals.

Our economic consulting segment record revenues of $183.3 million increased 21% compared to the.

Prior year quarter.

The increase was primarily due to higher demand for non M&A related antitrust and financial economic services, which was partially offset by lower realized rates and demand for our M&A related antitrust services compared to the prior year quarter.

Adjusted segment EBITDA of $30.7 million or 16, 7% of segment revenues compared to $21.7 million or 14, 3% of segment revenues and the prior year quarter.

The increase and adjusted segment EBITDA was due to higher revenues, which was partially offset.

Offset by higher variable compensation and of 9.1% growth in billable head count.

Sequentially revenues increased $14 million or 8.3%, which was primarily driven by increased demand for financial economics, and M&A related antitrust services.

Adjusted segment, EBITDA improved $4.1 million.

And in technology and <unk>.

Revenues of $78.6 million increased.

67%.

Compared to the priority of quarter.

The increase in revenue.

This was primarily due to higher demand for <unk>.

Ross border investigation litigation and M&A related second request services.

Adjusted segment EBITDA of $18.5 million of 23, 5% of segment revenues compared to $6.4 million or 30.

13, 7% of segment revenues and the priority of quarter.

The increase and adjusted segment EBITDA was due to higher revenues, which was partially offset by an increase in compensation and higher SG&A expenses.

Sequentially, our revenues were slightly lower compared to.

Record revenues and the first quarter has decreased demand for M&A related second request services was nearly offset by higher demand for litigation and cross border investigation services.

Adjusted segment, EBITDA declined $3.1 million sequentially, which was largely due to an increase.

Greece and SG&A expense.

Revenues and the strategic communications segment of $67.8 million increased 19, 2%.

Compared to the prior year quarter.

The increase in revenues was primarily due to higher demand of corporate.

<unk> reputation and public affairs.

Adjusted segment EBITDA of $13.5 million or 19, 9% of segment revenues compared to $10 million or 17, 6% of segment revenues in the prior year quarter.

The increase and adjusted segment.

<unk> EBITDA was due to higher revenues, which was partially offset by an increase in compensation and higher SG&A expenses.

Sequentially revenues increased $7.3 million.

Primarily due to higher demand for our corporate reputation and public affairs services.

Adjusted segment.

<unk> EBITDA increased $3.1 million.

Let me now discuss key cash flow and balance sheet items, we generated net cash from operating activities of $125.6 million.

Which decreased by 27.4 million.

As compared to $153 million and the second quarter of 2020.

The year over year decrease was largely due to an increase of insanities, primarily related to head count growth, which was partially offset by higher cash collections.

We generated free cash flow of 100.

$5.8 million and the quarter.

Total debt net of cash decreased $93.5 million sequentially from $252.8 million on March 31, 2021 to $159.4 million on June 30 of 2020.

1 the <unk>.

The sequential decrease was primarily due to repayment of borrowings under our senior secured bank revolving credit facility.

Turning to our guidance.

We are raising our full year 2021 guidance ranges for revenues and GAAP EPS.

We are.

Also raising the lower end of our full year 2021, adjusted EPS guidance range.

These changes primarily reflect our strong performance in the first half of 2021.

We now expect revenues will range between $2.7 billion and.

1.8 billion.

Up from our prior range of between $2.5.75 billion and $2.7 billion.

And GAAP EPS is now expected to range between $5.89 and.

And $6 of 39.

Up from our prior range of between $5.60 and.

$6.

And 2 P M.

We now expect adjusted EPS to range between $6 and $6.50.

Up from our prior range of between $5 a day.

And $6.50.

The 11 per share variance between EPS and.

Adjusted EPS guidance for full year 2021 includes the estimated tax effected impact of non cash interest expense of <unk> <unk> per share related to our 2023 convertible notes and the second quarter of 2021, 9 <unk> per share gain related to the fair value re measured.

And adjusted.

Our updated guidance for full year 2021 is shape.

By 4 key considerations.

First the.

The restructuring activity remains subdued due to government support and extended moderate audience.

Asia, and low interest rates and the strengthening in certain industry verticals.

And our restructuring and business could weaken further as large matters from 2020 the roll off.

Second global M&A activity, which drives.

And in our economic consulting and technology segments, as well as our transactions practice and corporate finance and restructuring.

And is that good levels.

There is no certainty that M&A activity will continue at this space.

The third typically fourth quarter is a weaker quarter for us because of both and increase in time off during the holidays for our employees and of seasonal business slowdown.

Paul.

COVID-19 is still with us with different parts of the world.

Being impacted at varying degrees.

Before I close I want to reiterate a few key themes that underscore the strength of our company.

First.

We have conviction in our world leading businesses.

And this.

This quarter's results reflect both the benefits of sustained investing even when faced even when facing short term volatility.

And the diversity of our business.

Second not only of re deepening our core capabilities, but also.

We are expanding and adjacencies such as non M&A related antitrust business transformation, cyber security and public affairs, and the environmental social and governance related services.

Third the bedrock of our success remains the strength of our.

And so and their client relationships.

Combining with creating a culture that has the year after year allowed STI to be ranked as a best place to work by Forbes and consulting magazine and the Washington Post among others.

And.

And finally, our balance sheet is and vehicles and we have demonstrated the ability to boost shareholder value through share buybacks debt reduction organic growth and acquisitions when we see the right 1.

With that let's open the call up for your questions.

We will now begin the question and answer session.

To ask the question you May Press Star then 1 on your telephone keypad.

And we're using a speakerphone please pick up the headset before pressing the keys.

To withdraw your question. Please press Star then 2.

At this time of the pause momentarily to assemble the roster.

Our first question comes from Sam England Sternberg. Please go ahead.

Questions on the first 1 and I'll, just wondering with the different vaccine rollout across the market.

Can you talk a bit about the different <unk>.

And performance across the different geographies and business.

Could you repeat that Sam we got I got at least from from my it's and there was a little garbled I heard the different the end of it I didn't hear the beginning and by the way nice the nice to hear your voice.

Yeah.

No. It was just the.

And to understand.

And the sound a bit more about the performance across the different geographies that you operate and give.

And the sort of differing vaccine rollout that we've seen and all of the market.

R. J you want to take that.

So short flow so listen all are all are.

The regions are growing and you can see that and are.

And we publish results by region in terms of revenue and so you can see that as the year over year growth and.

All of our all other regions.

And the.

The vaccine rollout is.

And is different though I mean, there are markets for example, where we.

Folks have.

And just to get back into the offices as of yet because theres limited vaccine rollout.

Typically in and the less wealthy countries, if I may say so.

But that hasnt affected as the too much because the <unk>.

Literally every single region is growing and.

Haven't been aims and terms of M&A, driven businesses and litigation and and.

And the.

And the corporate reputation and public Affairs services.

And actually relatively consistent and we have been able to add head count everywhere as well.

Okay great.

The theme and the second yes, and Thats, Great and then the second 1 and I'll say I was just trying to understand of how much of the strong growth is being driven by a release of pent up demand from.

The last year and early this year.

The state just peer underlying demand growth and then do you expect.

The.

And we normalize the day across the rest of day.

Given how strong you did this quarter.

The answer really is yes, and yes to both the parts of your question. So when we reported first quarter results. We telegraphed that these were really beyond the exceptional results and there was a lot of.

And the deferred work that.

And was getting done.

I think we are now that deferred work is now behind us and maybe sales some.

Buttering elements of that but this is this is the growth in the quarter and really you should and May I suggest users opportunities suggest combined the 2 quarter.

And when you're looking at margins and things like that because you could get from 1 quarter to the other.

And expenses and deferred revenue elements of that.

The combined margin level is more appropriate.

Okay, Great and then maybe just just 1 more could you just talk a bit about your wage inflation.

Quarter locations through the rest of the year and are you seeing a similar sort of back towards the junior talent that you are hearing from the investment bank and the U S.

Yes look let me address that.

Look I don't think we have a back door I think.

I think we.

We've done.

And I think our teams have done a great job over the last while of.

Of just <unk>.

And making sure.

And that we're connected through our at the ranks of our team I just think it's just been a big focus and.

We're investing and our people as the future of our firm and I think thats being noticed and that has caused over a month.

And for your business year, the stickiness of the morale of.

All of those things to go up and the attrition rates the plummet.

And Thats been great now last year.

And the attrition rate I think was not just because we've got better looking at the firm, but because of <unk>.

People were frozen versus Covid.

<unk>.

Absolutely seeing some catch up for that and then look I think COVID-19 has caused some people to reexamine life.

We have people who are leaving not the go to competitors so much.

People are deciding to go.

Not not literally becomes.

So and the top of the mountain.

Really radical different life choices.

It's something we're monitoring it.

And it's certainly higher than it has been and.

It's not totally unexpected.

Anybody who thought the attrition rate during Covid was.

The underlying.

Buying reality was a little bit self delusional, but we're trying to work hard to make sure that.

And people, who don't make mistakes and their careers that they don't they don't leave the do something and then regret it and and I think we're doing a pretty good job. So it's not it's not a huge phenomenon, but where we are.

So far year to date, not a huge phenomenon.

Zen men, but we're monitoring it and we're trying to help people supportively think through their choices does that help the Sam.

Yeah, that's great. Thanks, very much and I'll pass the egg.

Okay.

Our next question comes from Tobey Sommer with true Securities. Please go ahead.

Thank you <unk>.

Began this transformation of number of years ago towards and organic growth.

Business investing and the requisite talent.

If I'm right that and and state for the process might be a period of time, where you actually kind of.

Bringing.

The nominal junior talent onboarding them and the eventually promoting them to the ranks of Mds and Smbs and kind of fueling this organic growth internally versus lateral hires today.

Our away may that be is that a generational thing that's sort of a decade or 2 or.

357 years.

The way from being able to steal some of that.

Well I think we're already starting to feel some of that but I think I think you can quantify this I mean, we have been and we haven't been doing that since early in my tenure.

I can probably get Ali our moly to give you the statistics on our much entry level hiring we've done.

And and and then over the last few years I mean, it's not the lateral hires we've done record numbers of promotion the S&P.

The and the MD and so forth and and.

And we've also some of that lateral hiring was at the mid levels and some of those folks are now coming through to to SMB.

But I do think there is the good analogy which is.

I used to do a lot of work and the liquor business and Scotch and interestingly enough you know how long it takes the growth rate 12 year old Scott.

12 years.

Won't make the answer that question Tobey.

And we like that business.

And.

If you want to have great 12 year old Scott you have to have confidence and the business and best in the right raw materials put it in the right environment not let the barrels blow up because of a bad quarter or 2 and.

And and see that the.

The Scot season, and develop over that period of time.

Time, and you have to have confidence and your business and <unk> and by the way a lot of our Smbs are 12 year old Scott.

The at least the ones that are hitting the ground running each of the people got promoted off and faster than that but.

Where they start to really lift the business is often around that time.

And so yeah. So we have been fortunate.

Yeah.

That we've been able to find lateral hires.

The plus lateral hires which is not always the case.

To help supplement that growth and that's been a key part of it but we've been investing and this since Mike.

Maybe my first day, but my first year here.

<unk> and we're already starting to see some.

<unk> adults, but yes it takes.

12 years to grow 12 year old Scott to get Great 12 year old Scott and if you think you want a smattering of 18 <unk> Scott.

Yes.

It's the long time.

So we're working through that but we are seeing results already does that help.

Thanks.

How long do you.

I expect.

It may be and especially fruitful source of.

And again, I guess season lateral sort of talents.

As a result of regulatory or other pressures that you see on competitors in that geography.

Well look.

And I have 1 of the.

1 of my.

And the principles of life is the always worry and never take anything for granted so I I think hard about that question every day, but I want to say.

I think I.

There are a lot of people, who have joined US who of realized that we are of better platform.

Many of the people joined us of joined us from firms that have conflicts that.

And with audit functions for example that we don't have.

The history of our firm was in many markets over abroad, and we Werent known you cannot attract 8 plus people, even if you have no conflicts.

Firm, that's not growing that's not.

Not known we've changed that over the last year and then as a result, some early brave souls from leading firms and markets, where we werent no known came over and when others check in with them. They say Wow. This has been of great platform.

More accessible it's more collaborative.

Actually of a global business.

So if I need to do global work.

And can actually coordinate around the globe with authority and we don't have conflicts we of conflicts, sometimes but we don't have conflicts from and audit function, which is the big serious issue.

This is a trend that had if we do the right thing has lots of legs.

And it sales but.

And we better as always keep doing the right thing does that help.

If I could.

Bring larger and.

Could you help us understand the <unk>.

Mix in 2 segments.

Specifically and CFR, what sort of split maybe between bankruptcy and non bankruptcy work and then.

Youre willing to give specific numbers, but and econ could you give us a sense from the relative size of M&A related antitrust versus non M&A related antitrust. Thank you.

Sure Tobey began.

So first things first we.

We don't like to say non bankruptcy.

We'd like to say the business transformation and transactions versus the.

And restructuring and it's a fairly sensitive.

And folks are not bankruptcy and everything else.

So that number its fairly dramatic loss last year and Q2, we were like 72.

2 percentage restructuring and <unk>.

Less than 30%.

And in.

The business transformation and transactions.

It's almost flipped entirely very close to flip the entirely in Q2 this year.

Around the 30% and.

Capturing and.

And so.

It's almost an absolute flip.

And in terms of the encore further.

Between business transformation and transactions transactions is the 1 where we've seen.

Greater growth.

So I hope that.

<unk> share for that piece in terms of.

The economic consulting piece of it varies by a few percentage points from 1 quarter to the other but typically our antitrust businesses have ballpark total revenues and.

And Thats, usually split evenly between.

<unk> and non.

Helps ne.

M&A has more often than not been bigger.

But the non M&A and also we've seen tremendous growth and that area.

Thank you very much.

Continuing on the hiring front.

How large is your incoming class.

And im sort of junior summer of hires undergrad and Grad School graduate and.

And how does that compare to a year ago.

Similarly sized over 200 people.

Okay and.

And then last question from me.

Is the the bite the administration's regulatory posture.

Of seeming regulatory posture.

Impacted activity to date or is that sort of a future driver of fees.

The Senate.

Approved the nominees pick the rules.

I think it's very hard to tell Tobey the endless.

The discussions and our firm on this there was the also endless discussions and our firm about.

And on Brexit and what effect did Brexit have on this quarter and.

I think.

I think it's very hard to say, which comes back to I think the James made the theme of.

My part of the discussion today, which.

Sure.

The market forces can affect us including <unk>.

Regulatory changes.

But.

Sometimes you can't even see them and the data which is what we have now it's noisy of the data too hard NAV.

And we may as well focus on.

And our businesses because that's what we can control so.

I would.

Say at this point.

I don't think anybody has the definitive answer for that obviously, we would think that increased regulatory scrutiny as the.

For our business how much of that is already being seen and the data and with guests not that much but but it's this GAAP.

Okay. Thank you very helpful.

Your next question comes from Marc Riddick.

Sidoti and company. Please go ahead.

Hey, good morning.

Good morning, Mark.

So I really appreciate the commentary on.

On the human capital of the firm and the willingness to do.

And the best.

And the good times and bad and what have you I was wondering if you can talk a little bit about maybe some of the other areas and the investments, particularly.

Of what Youre looking at as far as your views on other technology spending and support as well as maybe the office space headquarters things like that maybe how we should be thinking about some of.

Of the potential.

The investment spending in support of of your capital of that Youre looking at going forward there.

Well I'll take a crack and part of it and then Bob day is something else you want to add please do RJ and.

Look we have we.

We are of very good team across.

Now.

Now.

Almost every 1 of our businesses in Asia.

We're not in every geography, but we have very good team across Asia, and so we have growth ambitions for for.

And for Asia.

As well.

And we've been adding talent and it.

I think there is any.

And we haven't been adding talent and adding talented and CF, we've been adding talent and the MLC would net and Ellen E com with Matt and calendar Strat Comm, we've been adding talent and I think the in every business, we have been adding talent.

We're stronger in some markets than others.

And that's true and.

And Europe too by the way.

The 2.

And America by the way.

I think there is plenty of growth and the markets that we're in.

The Singapore and Hong Kong the China.

Before we have to go to Myanmar.

But.

We continue to look at.

And where we can get the right al.

<unk> ongoing expansion in the region. It's always it's the same issue.

We're expanding a lot and Germany now because we now have the critical mass of of <unk>.

People, who can build behind you.

To go to a new country.

Without that critical mass of talent and so.

2 of them that day and day out our focus is on further reinforcing and supporting terrific teams to grow in the markets that we're in because of my.

The goodness.

A lot of business.

And the markets were in and a lot of growth.

Eventually I suspect we will penetrate some of the other major markets and the in the region.

As well does that sorry.

And the answer is there of different lens you wanted on the question.

A little bit maybe on the.

Sort of where you.

You all as far as technology and.

Of the.

Or whether there needs to be additional.

Spending there.

David is there any particular things that you would like to enhance to move.

Move things forward for the company.

And let me Jay.

In terms of physical infrastructure and technology infrastructure I mean, we have we have equivalents infrastructure every place around the world and we have good it's not like we have we have.

And we haven't shipped their old computers to the folks in Asia and make them use it and.

And.

So I think we are equivalents state and in terms of real estate.

And we've been and remodeling offices and every geography of some offices that are people are desperate for the remodel the like for example, New York.

And there will be will or I've, just within our New York Office last week and I think people are just can't wait for when we move into our new office and Asia has some of the older offices, but also has.

When do we move into Hong Kong, and probably the new Hong Kong office, probably 18 months ago or something like that so I don't think we are behind and our commitment of capital.

Little or and any other way.

And in 1 particular region or another.

And the same place do you have a different view.

Absolutely.

And if you are looking at the Capex numbers, and maybe Thats, where youre coming from this year as the elevated levels of Capex for 2 reasons 1 the primary reasons 1 is.

And as New New York Office, where the the.

And the <unk>.

Improvements to that our of our capital.

And the <unk>.

And the substantial and it's all disclosed in our views and the case and.

And second we are redoing, our ERP systems, which I promise you, we'll not do every year.

And so.

So those both of those of the heavy lift but the.

Ours is the low capital intensity business.

Yes.

The high EBITDA to free cash flow through.

Okay that helps.

The interesting it's interesting to hear I promise.

We have and <unk>.

Can you just sort of every year that exactly the just the comment.

And what is the guy by the way if I ask them to Mark if I ask them to do real quick so there's lots of reasons why we won't do 1 every year.

The.

The last thing from me and Steve I wanted to circle back with you because 1 of the comments that many of the prepared remarks of sort of around.

And it's my opportunity to sort of reach out to and.

The initial contact with some folks that you haven't been able to and the while during the pandemic I was wondering if there are any in particular.

Sure.

We're getting and those initial contacts and sort of maybe some of the feedback that youre getting even if it's anecdotal kind of.

Some of the things that.

Having the takeaways that you've gotten from those initial commentary as to how folks are feeling about moving forward and some of the activities that that might be prioritize. Thanks.

Yes look I think I think you get different reactions I think the.

The main reaction ive gotten at least and the early conversations as Jess.

And.

Some of the just really I mean, a very human reaction of the light.

The have the connection and person and it's very weird right, because we've made zoom and teams work I mean and and.

It clearly works and the way better technology, and non and give us a lot more flexibility going forward.

Still the case that people like clients and.

And is that.

And I've been and intense contact with it.

Just different when you are in person and.

Yes, you asked the people about their families on the phone and so forth that you just.

I don't know if you just it just feels like you are at Liberty to actually explore those in more depth and hear about whatever the swimming thing and the <unk>.

And it's just the different human experience and I think thats.

Happening with us and other people and I think everybody is struggling and secondly, with figuring out whether we.

We have of straight path up or their side steps with the.

The variance out there and.

And how fast and we open offices and how do we deal with <unk>.

And the needed.

And all of that so there's a lot a lot of that going on I think I think there's a general.

Since that.

And everybody is committed to like Alright, we got to get the world back closer to something not back to where it was because of technology changes, but certainly.

It's just at.

Eventually of post Covid world, but but how we navigate that because we're not yet and a post COVID-19 world is the subject of of lots of discussion.

I would say there is a lot of.

Energy about moving business is ahead and I think everybody.

Weathered the storm of Covid.

Well, but I think some ambitions and some discussions of the global ambitions that people have just didn't happen as much and I think there is some general desire to do that by and our clients and within our firm does that top tier question Mark.

Yes very much.

Thank you.

Our next question comes from Andrew Nicholas with William Blair. Please go ahead.

Thanks, and good morning.

The first question I wanted to ask was just on pipeline and specifically within the SLC.

I realize the only have so much visibility there over over the medium term, but just kind of thinking about the next couple of quarters is there any way to characterize that pipeline relative to last quarter or even and the second half of last year.

So and we don't typically talk.

And specific.

Its pipeline, our monthly trends and given the overarching guidance.

<unk>.

If you compare let me just say it's good.

Our pipeline is robust and good.

Ah.

And our people are busy of utilization you can see the who.

Utilization of staff.

Have a very compelling proposition to offer.

Fair enough.

And then from my follow up question.

And restructuring obviously, you're assuming in your guidance that that restructuring activity remained subdued that's totally.

Reasonable and.

And I'm not going to ask Ted to guests or.

Yeah, and guess, what what catalyzes some sort of acceleration and default or growth because that's of any.

The ones guests, but I was wondering.

Absent kind of the government support and the excess liquidity being pumped into the system if.

Scott and just overall fundamental conditions and some of the conversations youre having.

Is is this the situation where or in your view.

Where fundamentals arent necessarily getting as much better as we might have otherwise expected to the point, where when and support is pulled.

Do you have any you will see a pretty significant ramp up and this business or.

The timing aside how do you kind of see this playing out over a multiyear period.

No. It's of Great question, and it's 1 that we talk a lot about I think we do have a view that says that as a positive view on that question and look I think I think.

I think the way to think about.

The back with the government is doing is allowing some companies that are temporarily made unhealthy the grid.

It's essentially.

<unk>.

The the federal government around the world's version of.

Of the <unk>.

Nice supporting MLC last year, and LLC is a great business.

This is your and idiot to cut the cut people just because you're a of couple of slow quarters and the same thing for restructuring and so the federal government is offering that Inc.

Credible levels of support so we have businesses that are viable not get killed bye bye.

By a temporary phenomenon.

<unk> said that the loose money.

<unk> is clearly, allowing companies that are not particularly healthy the.

The avoid restructuring.

The.

The the.

The.

Vale ability of capital and unbelievably low rate.

Is it.

At least and my knowledge of the history of this industry and and I am not divest disoriented.

Unprecedented and.

And so.

The second order consequences that come.

Companies that probably should be going under undergoing restructuring right now or not and in fact, they are adding more debt.

And so I think that has a very long term bullish.

Implication.

And for that business with the Big question being the 1 you thankfully didn't make me.

And me on which as and when does that cause I think.

I don't think it's imminent and I think thats the issue, but it's the reason for us to be incredibly.

Well, it's 1 of the 2 reasons the market is going to be there is our.

And on restructuring and then second of all we continued investing to make it the best business and the World I mean, the best.

And so I think the combination of those 2 is very bullish for our company, but there is a big question about when the Big question does that helps Andrew.

Perfect exactly what I was asking and thanks, a lot Steve and thanks Ajay.

Thank you. Thanks. Thank you all for joining today, we really appreciate it and let me come back from my opening remarks, and I Hope I hope.

And we're all figuring out of way to get the deeper richer connections with people that means so much to us while staying safe and.

The good wishes to all of you.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.