Q2 2021 Piper Sandler Companies Earnings Call
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Yeah.
Okay.
Good morning, and welcome to the Piper Sandler companies conference call to discuss the financial results for the second quarter of 'twenty 'twenty.
And 1.
During the question and answer and session and secure.
Securities industry professionals may ask questions of management.
The company has asked that I remind you that statements on this call that are not historical or current facts, including statements about beliefs and expectations.
And our forward looking statements that involve inherent risks and uncertainties.
Factors that could cause actual results to differ materially from those anticipated are identified in the company's earnings release and reports on file with the S. E C, which are available on the companies to website.
At Www Dot Piper Sandler Dot com and on the S. E. T website at Www Dot S E C. That's all.
This call will also include statements regarding certain non-GAAP financial measures.
The non-GAAP measures should be considered in addition.
And to and not a substitute for measures of financial performance prepared in accordance with GAAP.
Please refer to the companies earnings release issued today for a reconciliation of their fan and got financial measures did and most directly comparable GAAP measure.
The earnings release is available on.
Sorry, yes termination speech on the company's website and at the S. E C website.
And as a reminder, this call is being recorded and <unk>.
Now I'd like to turn the call over to Mr. Chad Abraham Mr. Abraham you may begin your call.
Good morning, everyone.
Thank you for joining.
The call to review, our second quarter 2021 results.
I'm here with Deb, Schoneman, our president and Tim Carter our CFO.
We will go through our prepared remarks, and then open up the call for questions.
We delivered the fifth consecutive quarter of increased revenues.
On the and highlighting our momentum and demonstrating the earnings capacity of our business model.
Well, we continue to experience strong client activity across our business segments and broad based investment banking activities drove the increase in revenues during the second quarter.
We generated adjusted net revenues of 400.
<unk> hundred $93 million for the second quarter on.
27, 7% operating margin and adjusted EPS of $5.37.
All quarterly records.
For the first half of 2021, we recorded adjusted net revenues of $906 million.
A 26, 4% operating margin and.
And adjusted EPS of $9.51.
Again record setting activity.
The outlook for the second half of 2021 remained strong as our pipeline of deals is at peak levels.
Our success is resonating.
Potential new partners and we are continuing to pursue our growth initiatives.
Turning to our corporate investment banking business.
We generated total corporate investment banking revenues of $351 million in the second quarter of 2021.
Up 31% from the previous peak.
And the first quarter of this year.
Performance in the quarter was strong across industry verticals and product offerings higher.
Highlighting the scale and diversification of our business.
Our healthcare financial services, and diversified industrials and services teams had terrific <unk>.
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Highlights for the quarter included.
Our health care franchise continues to produce very strong results with performance balanced in both advisory and equity financing during the quarter.
The breadth of our financial services group was apparent with strong performance across Subsectors.
Including depository insurance real estate and Fintech.
Further strengthening our non depository sectors remains an area of focus and growth for us.
Diversified industrials and services produced a record quarter driven by outstanding advisory activity primarily.
Italy with our private equity client base.
We continue to invest and building our sector coverage within this group and we currently have 70 investment banking professionals, including 12 Mds on the platform.
That activity, both advisory and underwriting continues to be strong our.
Our deep <unk>.
Structuring expertise and strong distribution and provide us with multiple ways to assist our clients.
Collectively these teams generated over $70 million of revenues for the quarter.
And our restructuring business was further enhanced with the acquisition of Trs advisors and the team is contributing and.
In line with our expectations.
During the quarter M&A and restructuring activity generated 53% of total corporate investment banking revenues.
Equity financings contributed 24% and.
And debt financing and capital advisory engagements produced 23% of revenues.
We expect the mix of our corporate investment banking revenues to shift as our advisory pipeline built and equity capital markets activity begins to moderate.
Within corporate investment banking, our advisory services business generated record revenues of $249 million during the quarter.
And up 63% sequentially and 191% over the second quarter of last year.
Our performance was strong both on an absolute and relative basis.
We completed 58, M&A and restructuring transactions and 40 capital advisory deals during the second.
Sure.
Our consistent focus and investments in people industry coverage and products for our investment banking business continued to drive new highs and our revenues.
M&A activity was strong across industry verticals with high volumes and increased transaction sizes.
Our average M&A fee has increased reflecting our fee discipline and larger average transaction size as our brand continues to strengthen.
As an example, our chemicals and materials team, which we added with the 2020 acquisition of Valence has recently announced 6 deals.
Deals with an aggregate transaction value of $14.5 billion.
Ample availability of debt and equity a favorable rate environment strong business performance and CEO confidence continue to drive strong M&A activity.
The potential for tax law.
Changes is and added catalyst and may pull forward activity into 2021.
As a result, our pipeline of deals is at record levels across most of our industry teams.
We believe the M&A market is experiencing strong secular growth and we are well positioned.
And to benefit.
Turning to corporate financing.
During the second quarter of 2021, we generated $102 million of revenues and completed 67 equity debt and preferred financings, raising 24 billion and new capital for our clients.
Strong equity valuations low interest rates reduced market volatility and high demand from investors.
Market conditions remain conducive for equity and debt capital raising during the quarter.
Our healthcare team led the quarter, followed by financial services and technology.
With <unk> and healthcare, we continue to be a market leader, where we ran the books on 22 of the 24 deals we completed during the quarter.
In financial services, we were particularly active and subordinated debt financing for community and regional banks, where we maintain over 50% market share.
So on deal value.
Technology is an important area of growth for us and we have made significant progress on increasing the number of book run deals and average fee size.
It was an active quarter in terms of recruiting and we finished the second quarter with 145 Mds.
Based on <unk> banking and capital markets.
Hiring 5 new managing directors to strengthen our presence in health care services Med Tech renewables, and clean energy oilfield services and equipment and industrial software and technology.
Our success and momentum continue to resonate and the market.
Marketplace.
Our strong performance during the second quarter of 2021 also resulted in corporate investment banking revenues crossing the $1 billion Mark for the last 12 month period.
Our people and expanding expertise makes us increasingly diverse and well positioned.
And to take advantage of secular growth.
We continue to expand our sector coverage develop new product capabilities and increased market share and add great talent to our platform.
I would like to thank our team for making Piper Sandler a leading brand and destination of choice for our clients.
Now I will turn the call over to Deb.
Thanks, Chad I'll begin with our equity brokerage business.
For the second quarter of 2021, we generated equity brokerage revenues of $35 million down, 19% sequentially and 14% from the second quarter of last year.
The market's.
Volatility and volumes during the second quarter.
Market indices marched higher driven by strengthening economic conditions and accommodate a federal reserve policies, providing ample liquidity.
We believe that current market valuations are muting trading activity and we expect revenues to continue near these levels and the third quarter.
And we remain focused on providing value added research and premier execution capabilities.
Specific to research and we continue to build out our industry coverage, which in 2021 included expanding our coverage of the technology sector.
Based on our current roster of publishing analysts we ranked number 1 in terms of the number of.
Salary cap companies under coverage and in total we have over 950 stocks under coverage.
Turning to municipal financing for.
And for the second quarter, our public finance business generated $36 million of financing revenues up 33% from the first quarter of this year and 17% compared to the second quarter of last.
Last year.
We underwrote 239 municipal negotiated issuances during the quarter raising $4.3 billion for our clients.
With low interest rates and a strong credit outlook municipal market issuance continues to remain strong driven by new money issuance as well as continued refinancing activity.
While our governmental business, which drove our strong results last year remained strong the upside to our performance. This quarter was driven by great results from our specialty sector clients, which include special districts healthcare senior living education, hospitality housing and transportation.
We were able to assist our clients.
And pricing and number of higher margin transactions and the quarter.
And our high yield platform within public finance centered around specialty sectors differentiates us in the marketplace and provides diversification to our governmental business.
This combination of sector expertise provides us with 1 of the largest specialty businesses and the market.
And these segments continue to be an important growth driver for us.
On a year to date basis municipal financing revenues of $63 million represent our strongest first half on record.
Our relative performance was also strong with first half revenues up 18% from 2020 relative to a.
A 3% increase and the overall market based on par value of municipal negotiated issuances.
Looking forward our pipeline remains strong and we expect the second half of this year to be similar to the first half.
Turning to fixed income.
For the second quarter, we generated fixed income revenues of 61.
And $1 million down, 8% on a sequential basis and up 25% compared to the second quarter of last year.
The 10 year Treasury rate decreased from 174% at March 31, 214, 7% at June 30.
The reduction and yield has driven some market participants to.
On the sidelines awaiting more clarity and the direction of rates, however activity within our financial services clients continues to remain strong as banks are flushed with excess liquidity.
Our deep expertise market leadership and breadth of relationships has enabled us to advise these clients on repositioning their balance sheets and.
And investing and a low rate environment to seek any available yield curve, our spread opportunities that are attractive on a risk adjusted basis.
Activity among many of our other clients was softer relative to the first quarter of this year as tight spreads and low yields lead clients to remain on the sidelines, resulting and a decline and secondary trading.
Particularly in tax exempt municipals.
We continued to build our fixed income sales team focused on hiring highly productive individuals who have deep relationships and product expertise and you can leverage our platform capabilities to grow their book of business as part of that.
Initiatives, we hired 2 senior salespeople.
<unk> second quarter, both specializing and non agency structured products.
In addition to hiring we see opportunities to increase client penetration and the productivity of our existing sales force by leveraging our platform full capabilities and serving clients with advice and product expertise that goes far beyond traditional bonds.
And the settlement outlook perspective, with the current low rates and uncertainty over the direction of interest rates in July we have experienced a slowdown and client activity.
Now I will turn the call over to Tim to review, our financial results and provide an update on capital use.
Thanks, Bob.
As a reminder, my comments will be focused.
Adjusted non-GAAP financial results.
We generated record net revenues of $493 million from the second quarter of 2021, and an increase of 19% over the sequential quarter and 68% from the second quarter of last year.
Our performance and the quarter was driven by strong contributions.
On our investment banking businesses, including record advisory services revenues.
Net revenues for the first half of 2020, 1 totaled $906 million and increase of 69% over the prior year period as we benefited from the significant recovery of investment banking as well as robust brokerage activity.
Turning to operating expenses and margin.
Our compensation ratio was 67% for the second quarter of 2021 down from 61, 5% for the first quarter of this year, reflecting our strong performance from the quarter and first half of this year.
On a year to date basis, our compensation ratio.
From and are 61%.
We continue to manage compensation levels, while considering investments employee retention and business outlook.
Based on our current market outlook and pipeline of growth opportunities, we expect our full year compensation ratio to be near 61%.
Non compensation.
Sensation expenses, excluding reimburse deal expenses were 49 million from the second quarter of 2021 and increase of 10% on a sequential basis as we are starting to see a pickup and travel related costs.
We anticipate a continued increase and travel related expenses through the remainder of the year.
For the.
And second quarter of 2021, we generated operating income of $136 million and and operating margin of 27, 7% both of which represent quarterly records.
These strong results represent the third consecutive quarter with over $100 million of operating income and the fourth consecutive quarter with.
And margin in excess of 20%.
On a year to date basis, we generated operating income of $239 million and increase of 196% over the prior year or.
Our margin for the first half of 2021 was 26, 4%.
Our operating income and.
Margin reflect the increased scale, we have built the successful integration of our acquisitions and the benefit of lower travel related expenses.
We continued to demonstrate our ability to drive operating margin expansion, while growing revenues and generate significant levels of excess cash from operations.
Our adjusted tax rate was 26, 6% for the second quarter of 2021 and within our guided range our.
Our adjusted tax rate for the first half of 2021 was 25, 8% slightly below our range as we recorded a tax benefit and the first quarter related to restricted stock vesting at prices higher than their grant.
<unk> price.
We continue to expect our full year adjusted tax rate will be within our targeted range of 26% to 28% going forward.
Turning to earnings for the second quarter of 2021, we generated net income of $99 million up 31% sequentially driven by higher.
Revenues and an improved margin.
Diluted EPS for the second quarter was $5.37.
Representing our strongest quarter on record and an increase of 29% over the previous peak.
For the first half of 2021 net income totaled 174 million and <unk>.
Higher EPS was $9.51.
Compared to the first half of 2020, we nearly tripled net income and diluted EPS, driven by the significant improvement and markets and our strong execution.
Let me finish with an update on capital.
With record earnings and no significant increase in operating capital usage.
Excess liquidity continues to build and our capital position remains strong.
We're committed to returning capital to shareholders to drive total returns.
During the first half of 2021, we paid an aggregate of $41 million to our shareholders through our quarterly and annual special dividends and repurchased.
Just approximately.
Diluted 121000 shares or $36 million of common stock in order to offset dilution from annual stock grants.
In addition, the board approved a quarterly dividend of <unk> 55 per share to be paid on September 10, 2021 to shareholders of record as of the close of business on.
<unk> <unk> 27.
This quarterly cash dividend represents a 22% increase compared to the quarterly cash dividend paid for the first quarter of this year.
Overall, we are thrilled with our record second quarter and first half results. Our business continues to be well positioned for growth against a strong market backdrop and where comp.
Confident and our ability to grow and deliver shareholder value by executing on our long term strategic objectives.
Thanks, and we can now open up the call for questions.
We will now begin our Q&A session and in order for you to ask a question Star then the number 1 on your telephone keypad.
And again, if you would like to ask the question. Thank you press the star again net of your line on your cash.
Allophone keypad.
1 moment please for our first question.
Our first question comes from the line of Devin Ryan of JMP Securities. Your line is open.
Good morning, everyone. How are you.
Hi, Devin.
Maybe start with a question.
A question or a couple of questions on the M&A advisory business chat and maybe just to dig in a little bit on some of the outlook commentary clearly.
And you're very good environment right now we're hearing that.
Middle market M&A and Craig.
And you guys are clearly participating in that.
And I'm just curious as you kind of look out.
It sounds like perhaps there could be some pull forward into this year for <unk>.
Tax reasons or other reasons I'm, just kind of curious what the biggest drivers are of activity.
And there and then the.
The other part of the question just is on balance.
And specifically you highlighted it we've seen some really nice productivity. There are some large deals. So curious if that's just a function of their business.
Momentum that they already had or are there benefits.
And that they're already seeing being on the Piper platform.
Yes, thanks, Kevin.
Yes.
We're obviously seeing really good activity and advisory and are really happy with.
Q2, but continue to see very good pipeline I would say as I think about the drivers for advisory and 1 of the things across the M&A market, if I just compare to.
Other years and the path where its been strong as it is just really strong across so many industry groups and segments. So youre just getting broad based.
Participation and the M&A market and then.
And like we commented there is definitely a secular <unk>.
<unk> and M&A that summer.
Driven by sponsor activity I mean, there is just so much capital in various alternatives and private equity that that is having a <unk>.
A big.
Impact on business, obviously financing is good.
I think at the beginning of the year.
We got asked the question.
Sure.
Tax rate and future tax rate and we had started to hear that on a few transactions.
As the year has progressed.
Definitely some processes that we started over the summer.
And that want to finish by.
Year, and so I also think that.
That is helping the year I don't think thats overwhelmingly driving the timing of some things, but it's just another factor and then specifically to your valence question. Yes. If you just remember we closed on this transaction last spring.
Not obviously the greatest timing, we closed very little.
Revenue in the back on.
Half of the year, but they have just had a spectacular first half and I would say frankly most of that.
Revenue is to come because a lot of these transactions were just announced and several of them are quite large many of them involved.
Private equity Theres definitely examples of.
Sure.
B and on our platform has helped but most of this is just years of building the <unk>.
Expertise and being thought of as a really good partner in that space and it is just resulted in some.
Really key marquee transactions that are frankly, a pretty large sum middle market, but.
Several pretty large so.
<unk> backlog of transactions to close here in the second half and early next year.
Okay terrific color. Thanks, Chad.
Really 1 for Deb on the fixed income brokerage opportunities that you alluded to.
And I'm just curious if you can give any more specifics around potential scale.
Scale that you could see from some of these initiatives to expand.
On the platform and then whether that implies.
And more capital need and some of those areas as you expand.
Yeah, Devin and so it's really about continuing to build out the breadth of our product expertise and that.
And you know now with the combination with Sandler way beyond normal bond CUSIP business.
So rather than flow on trade and securitization.
Some areas, we're focused on even specifically with Securitizations is 1 that we think theres some opportunity to build out and I.
I would say, we still have not fully realize the benefit of the combination either while we've seen.
Really nice revenue growth from what was the 2 separate businesses now combined.
And there are still work that we're doing to leverage the broad products that we have that was very complementary between the 2 businesses across the combined sales force and focused on driving.
Really.
<unk> analytics and tools focused.
And client verticals that we've talked about relative to your question on capital as you have seen we have reduced the amount of capital that we have used and that business, partly given the scale and just the breadth of the products we have.
We do not see a need for dramatically increasing capital in any way to grow the business.
I'm very and that part of the focus.
And if that answers your question fully Devin.
Why that.
Yeah, no very helpful. Thanks, Deb and.
And maybe if I could just squeeze 1 more and get.
And 1 for Tim as well here. So just on the expenses on the comp ratio per se.
Guidance, but probably end up.
So thats the day, 61%.
We're talking about 62%.
Should we think about kind of 61% as maybe the bottom range Youre now going forward to the extent.
And revenues are.
Remain strong or is there room for even more leverage off.
And that to the extent there.
Opportunity for revenue growth into next year, and we should think about kind of the flex on the comp ratio, especially given that it's bringing on at better than we were previously predicted.
Yes, Devin I think youre thinking about that right in terms of what we've talked about before and we.
We're currently at I think.
This is this is sort of the right level based on.
Revenue levels.
At current activity.
Sure.
And that in that range.
And there is still.
Room for more leverage, but we're still very focused on what we can do from and invest.
Perspective within that 61%, what we're thinking about in terms of just overall retention. So I don't I don't see.
A large move on on that rate.
<unk>.
With revenue levels sort of where they are where they are currently at.
Okay great.
Alright, well I'll leave it there. Thank you guys congrats on a nice quarter.
And Kevin.
Your next question comes from the line of Mike Grondahl of Northland Securities. Your line is open.
Hey, Thanks, guys and congratulations.
After December and March really.
Ricky to have and encore, but you clearly did.
Chad just in relation to your comments on sort of the advisory business at peak levels.
Can you maybe comment a little bit about where you think we're in the M&A cycle.
How much of this business.
And is coming from financial sponsors and just kind of who youre seeing as your competition today.
Yeah.
Yes, I would.
We definitely I mean, obviously with the results, we're sort of at new peak levels for advisory.
But I would say we feel like this has.
Our room to run just looking at our pipelines I mean really across almost every industry team we're at.
Record levels for pipeline and so some of it.
Whether we.
And whether we're at the.
And if a cycle of roubini beginning of a cycle.
And that's a tough question I mean I personally believe we are in.
Secular growth market for M&A across many industries I mean, obviously.
Private equity is at record levels record levels of cash, but I also think.
Strategic.
And buyers just the pace of change and the business is they want to enter.
Many of the segments.
Our very good so I really believe we've got a lot of room to run here.
And advisory and then just help me with your second question again.
Financial sponsors.
<unk> the average of that.
M&A advisory business is coming there and then just I guess part 3 was kind of who you're considering your competitors today.
Yes, so we.
Financial sponsors continue to be very active I think still.
Still somewhat north of 50%.
Influenced and.
And most of our true.
Transactions.
<unk> is fairly close to the middle market, what I would say relative to our competitors is that really just depends on the industry team I mean, we have very different.
Competitors and bank M&A and <unk>.
And we obviously have different competitors in advisory for healthcare.
And certainly other boutiques, but lots of the big transactions, we do and health care and other spaces.
Compete with the Bulge bracket and then across just.
The bread and butter private equity business.
<unk> and industrial and consumers.
A lot of the middle market sort of boutiques. So it's really hard to answer that question unless we're talking about a particular industry team.
Sure.
Maybe I meant a little bit more the level of competition is it getting more intense.
How.
The overall level.
Yeah, I wouldn't say if any.
Necessarily more competitive.
For sure.
We know we are at and other firms are at capacity and.
And certain level. So we've got the opportunity to be awfully choosy.
And on which transactions, we take on which really helps and.
Increase and already good close rate.
Even higher it certainly gives us leverage on fee structures. So.
It's a competitive market.
Lots of advisory groups are doing well, but I think frankly.
And just the pace of activity is even just outpacing.
Capacity amongst all of us.
Got it and then just lastly quick recruiting plan.
You mentioned the 5 net new Mds this year.
Should we expect you to see you guys trying to contain.
Tim you to layer in and about that pace.
Yes, what I would say is obviously, adding 5 and the first half was was.
Really good we're sort of proud of doing that and a competitive market. It is true that we add.
More and the front half of the year.
Back half of the year, obviously with a very good year investment banking. Your bankers are doing well firms are doing well, it's going to get tougher to add as the year.
Year goes on we are still working on the group.
The growth initiatives. We are we have some interesting team hired discussions we have.
Others.
And then I don't see the pace staying the same just just based on the.
Time of year, but but for.
For several quarters now we've continued to grow.
MD head count so I don't know if that continues every quarter, but the long term trend is is we've got quite a bit of room to run there as well.
That's fair Hey, congratulations again, thank you.
Thank you.
And once again, if you would like to ask a question. Thank you press. The Star then the number 1 on your telephone keypad.
Your next question comes from the line of Michael Brown of <unk>. Your line is open.
Great, Hey, Chad, Tim and you guys.
Yes.
So I wanted to I guess start with advisory, obviously really strong first half up over 100% year over year.
Chad you made a comment about the <unk>.
Momentum there and.
And and expectation for.
Okay.
And at the exact wording you used but basically on a good second half year.
I guess my question is a lot of your peers have talked about the potential for the second half to be stronger than the first half.
<unk> had a bit of and outperformance in the first half relative to your peers.
But is there any way to kind of put some stakes on the ground on on the expectations for the second half based on what Youre seeing and the pipeline is it possible to meet or exceed the first half.
Yes, I think the way we think about advisory we would agree with you I think if you look at everybody's that's reported and others that are.
Out there, we think on and advisory level, we've outperformed and the first half.
And so while we think.
And we're going to continue to have a very strong second half.
Not going to stand here and.
Predict that it's going to be up from the first half, but certainly based on what we're seeing and the pipeline deals we have and.
Announced.
Level of activity.
And we feel good about.
Trying to replicate the first half and the second half for advisory.
Okay great.
And then during the quarter, the bite and administration.
You know basically urged for greater scrutiny on M&A transactions and a greater anti trust.
Considerations on M&A deals and you know.
And 1 of the areas. It was kind of a specific spotlight on on bank M&A and encouraging fts.
The SEC Doj and fed.
Take a more robust.
A review of mergers there.
Can you speak to what your expectations are there for your business appears to be a bit more focus on large cap bank M&A, but wanted to hear your thoughts if that could certainly.
She and moved down to the smaller community size banks as well.
Yeah, we certainly recognized across all industries, you know some of the commentary from the administration. If we if we see this in <unk>.
Several industries and it's certainly hard to argue that it wouldn't have an effect on the M&A business.
All I can tell you is just from the.
Level of activity, it's hard to see how that's going to unfold, specifically with financial institutions and depository, yes, there has been specific commentary on.
And I personally think they will be focused on the much.
Merger transactions I mean, if you really think about it a lot of the middle market transactions, we're doing and even some of the larger regional transactions.
I'd argue that is giving.
And these banks and opportunity to compete better and offer a better level of services to the consumers and compete with the.
Large banks so.
And I'm not sure I generally agree with sort of the philosophy, but there's no question. There's been commentary what I can say is you can just look at our deals and deals announced across the street and the last month or 2 since that came out and it hasnt slowed.
Active.
A large <unk> at all and the level of conversation is high and the amount of deals we have announced is high so I think your.
The way you phrased that question is correct I think theres going to be a lot of scrutiny at the very very large deal size.
Okay, Yeah, I appreciate the thoughts there Chad.
Pivot and maybe just 1 last 1 for me on the dividend.
Great to see another increase there is.
And just want to make sure and admission.
Changing the payout.
Patients is that still the right way to think about it or are you maybe kind of run with a little bit higher dividend payout.
Or is this just kind of speak to the fact that youre seeing.
Higher.
They are built like durability to your higher EPS here going forward.
Yeah, Mike maybe I'll take that.
So, we and our dividend payout ratio of 30% to 50%.
And that's.
Now.
The plan and what we have in place.
Which includes the 4 quarterly and then the special I think we've run over the last couple of years more at the lower end of that range, because we've been deploying a lot through corporate development.
And we've talked.
Over the last quarter or 2 where.
Still given the amount of cash generation, we've got we'd likely move more up in that that range.
And Youre right in terms of just again with the overall level of earnings and this consistency of a higher level of EPS, we do feel like it's.
On the right thing to remix.
And in some ways to more and more of a quarterly.
And that would obviously bring bring the special down a little bit more so we're thinking about that mix.
The dividend payout ratio of 30 to 50 stage, yes, we are likely.
More at the higher end of that range.
And given given the results.
Okay, great. Thanks.
Okay.
And there are no further questions at this time I would like to turn it back from making sure Chad Abraham for any closing remarks.
Thank you operator.
I'll close by thanking all of my employee partners for their continued hard work and dedication to our clients.
And thanks to everyone that joined the call and we very much look forward to updating you on our third quarter results have a great day. Thank you.
And ladies and gentlemen, this concludes today's conference call. Thank you for participating in this.
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