Q3 2021 Intercontinental Exchange Inc Earnings Call
Our outperformance relative to industry trends continues to be driven by increased customer adoption of digital tools across the workflow. While these secular growth trends have been a clear tailwind for our recurring revenues. There is also opportunity to drive accelerating adoption across our transaction based businesses, such as our clothing solutions where revenue increase.
<unk> by 30% in the third quarter.
Looking to the fourth quarter guidance, we expect our recurring revenues will once again grow sequentially and be in a range of $147 million to $152 million at the midpoint. This represents growth of approximately 25% year over year, which is on top of 20% growth achieved in last year's third quarter.
In summary, we once again had strong contributions from each of our businesses and across the asset classes in which we operate we.
We delivered double digit growth in revenue operating income and earnings per share. We also generated strong cash flows reduced leverage to under three and a quarter times announced the divestment of our stake in Euroclear and successfully took back public on the NYSE as we look to the end of the year into 2022, we remain focused on.
Meeting the needs of our customers continuing to drive growth and create value for our shareholders I'll now turn the call over to Ben.
Thank you Warren and thank you all for joining us this morning.
Please turn to slide eight.
Our strong third quarter results were driven in part by interest rate volatility global energy supply shortages and the continued adoption of our mortgage technology, even amidst a decline in origination volumes.
More importantly, underpinning that performance our long term secular tailwind that will continue to drive growth across asset classes and macroeconomic environments.
And with data and technology at our core we are strategically positioned the business to benefit from these tailwind across our platform.
In energy the globalization of natural gas and the evolution to cleaner energy are trends that we began investing in over a decade ago and today cleaner energy sources, including global natural gas and environmental.
Make up approximately 40% of our energy revenues and have grown 12% on average over the past five years.
With the rise of LNG natural gas markets are becoming more global in nature.
And our European gas benchmark TTS is emerging as D global gas benchmark.
Revenues in our TTS markets have grown 38% on average over the last five years.
Including 84% growth in the third quarter.
The supply shortages and price volatility that we saw in the third quarter are a peek into the future of what the energy transition could look like.
Energy consumption is expected to double over the next 30 years, yet carbon emissions are expected to be reduced by half.
This imbalance in supply and demand will introduce additional complexity and volatility to energy markets, which will drive greater demand for our risk management.
Our global environmental markets, alongside our global oil gas and power markets provide the critical price transparency across the energy spectrum that will enable participants to navigate this evolution.
Complementary addition to the risk management that our technology provides is our growing suite of associated data products.
Leveraging our leading environmental markets, we built a suite of carbon indices, which allow global investors to access market based carbon prices through a single investment instrument.
And today, there are growing number of Etfs benchmarking to our carbon indices and environmental markets.
Turning now to fixed income.
The electronic vacation of fixed income is a data driven trends.
We recognize this in 2015, when we acquired IDC.
And continue to invest and innovate in data and technology to further enable this trend.
Our leading evaluated prices provide critical price transparency for nearly 3 million Securities daily.
By combining our proprietary pricing data with our comprehensive reference data, we've built innovative tools and analytics that will facilitate the continued electronic vacation and automation of the fixed income markets.
Solutions like our continuous evaluated pricing.
Best execution and liquidity indicators for example, provide pre pre trade transparency needed to determine fair value.
We also see the electronic vacation of fixed income within the ETF ecosystem.
Our quality pricing and reference data combined with 40 years of history.
<unk> as the foundation of our growing index business.
We not only offer benchmark indices, but also calculation services analytics and unique solutions like our custom indices.
By servicing the entire ETF ecosystem through data and technology, we've been able to grow our index business double digits for the past four years.
And finally, turning to our mortgage business.
In the third quarter, we were once again able to grow our revenues, even with industry volumes down double digits.
This continued outperformance is a result of executing against our strategy of leveraging our mission critical technology and data expertise to accelerate the analog to digital conversion happening in the industry.
Part of that strategy is intentionally shifting more business to recurring revenue.
Particularly within our origination technology and data and analytics business.
While we only recently began this transition we've already seen strong client adoption.
Another opportunity that we're executing on today is in our closing solutions the.
The demand for automation in the closing of a real estate transaction is increasing.
We see this evidenced by the continued onboarding of new customers to our electronic closing room and hybrid solution that we launched in the second quarter.
This month, we further advanced the automation of our E closed solution, which can save lenders hundreds of dollars per loan by leveraging additional technology and automation by adding E note and evolve.
Our comprehensive offering and the efficiencies that it delivers.
<unk> as well to execute on what we believe to be a $1 billion opportunity.
Within data and analytics, our AI Q solution Leverages AI machine learning and proprietary data from our origination platform to automate the steps in the loan manufacturing process.
This automation could save lenders thousands of dollars per loan by reducing manufacturing time and complexity.
Today, only a fraction of mortgage technology customers take our <unk> solution and we continue to have strong sales success cross selling to existing customers, even if they're not on our loan origination system, including one of the largest depository is in the U S.
And while still in early opportunity at under $100 million in revenue today, the efficiencies that our data analytics provide position us well to continue executing against what we think is a $4 billion opportunity.
Flywheel effect that our leading technology and data provides combined with the cross sell that our broad connectivity offers generates an array of opportunities for us to grow a business that at one $4 billion today is only a fraction of the $10 billion opportunity.
I'll now turn the call over to Jeff.
Thank you Ben and thank you all for joining us this morning.
Please turn to slide nine.
The third quarter extends our track record of growth.
We once again grew revenues grew adjusted operating income and grew adjusted earnings per share with strong growth from all business segments across asset classes and amid a dynamic macro environment.
These results are a testament to the strength of our business model positioning the company at the center of some of the largest markets undergoing an analog to digital conversion and which together make ice and all weather name that generates growth on top of growth.
The diversity of our platform positions us to benefit not only from near term cyclical events, but also longer term secular growth trends.
We've expanded into new asset classes grown our addressable market and broadened our expertise, making our network significant and providing the opportunity to unlock additional growth by collaborating across businesses.
We recently announced another new product from the collaboration between ice data services and ice mortgage technology called the ice rate lock indices.
Leveraging anonymised in aggregated data from ice mortgage technologies, leading origination platform. This suite of indices provide a more comprehensive accurate and timely reflection of residential mortgage rates.
Building on this innovation like we've done in other asset classes. These indices provide an opportunity to create additional products like rich analytics and better pricing tools for lenders.
The opportunity to turn raw unstructured data into actionable insights our bounds across our business.
By taking alternative data sets and marrying them with our proprietary data we've built solutions that offer unique insight into the market.
Our climate analytics for example leverage our strength in the fixed income market with third party geospatial data to help market participants better manage climate risk as a part of their overall investing and risk management processes.
As ESG is increasingly becoming a component of investment portfolios, our technology and data expertise positions us well to deliver solutions that meet these evolving customer needs.
We have strategically assembled the portfolio to drive growth across asset classes and macro environments.
And part of this strategy is capturing value by thoughtfully repositioning businesses.
This year alone, we harvested our gain and Coinbase announced an agreement to do the same with our stake in Euroclear and unlocked back via on New York Stock Exchange listing.
These transactions expose billions of dollars in value creation and position us well to return capital to shareholders, while continuing to invest for our future growth.
It's collaborative efforts innovative solutions and strategic capital allocation like this that have driven our growth for the past 20 years, and which lay the foundation for continued growth well into the future.
Or I end my prepared remarks, I'd like to thank our customers for their business and their trust in the quarter and I'd like to thank my colleagues at ice for their contributions to the best third quarter in our company's history topped only by a record quarter earlier this year.
I'll now turn the call back to our monitor our moderator to Nab a conduct a question and answer session, which will run until 930 eastern time.
Thank you Paul.
Ladies and gentlemen, we will now begin the question and answer question.
Okay.
We will be allowed to ask one question pardon me.
If you have multiple questions.
Ill walk you through the questions.
Ask the question can you can start within one.
Paul.
Okay.
A couple questions.
To withdraw your question please.
Amit.
The first question Richard.
With your question.
No problem.
Yes, good morning, gentlemen, good morning.
Good morning, Jeff Good morning, Laurent can you hear me.
Yes, there is coming through clear.
Sorry, sorry.
My one question Jeff is.
The mortgage technology business I think.
Surprised a lot of people and when you zone in.
The closing and you addressed it a fair amount of it in the prepared remarks, but I'm just trying to understand the closing solutions and what are the new tools and trying to get better insight. It looked like that segment of the mortgage tech grew 28% or $19 million.
In a market that.
At least incrementally gets it seemed to get soft.
Yes, let me ask Ben to address that since he manages that business for us.
Hi, rich.
Thanks for the thanks for the question, Yes in summary, one it's part of the thesis we had in doing the overall deal is that we saw a long term.
Secular trend here for people to want to automate and digitize the mortgage process continue to work on condensing the amount of time it takes to close on a real estate transaction.
And if you look under the covers of that closing solutions business. This is a business that's going to be very transaction oriented a lot of the costs associated to it actually go on the actual closing statement of the client themselves.
So youre going to see that this is one of the businesses, it's going to be heavily transaction oriented and if you look at the components underneath it that are really driving the growth.
First part goes back to an acquisition, we did a number of years ago, which is to simplify our business. This is the business that electronic does the electronic recording at the at the county of all the closing documents associated to a real estate transaction.
In this COVID-19 environment, we saw a year ago.
The number of documents that were being recorded in the counties moving more and more away from paper and towards towards Digitization and using our rails to do so and we continue to see that so simple files and input into that growth.
The second component there is a business that we've talked about many times, which is a business called Mers, we have a new bundled service offering there that takes a number of the spoke services that we had within mers. So the registration of the loan itself. The registration of any note, which we continue to see E notes being adopted more and more through the industry.
As well as lifetime servicing transfers all being.
We bundled that all into one one complete one complete offering for for our clients and then the third area that we've talked about on prior calls is the launch of E close which was really enabled by the combination of the expertise we have with Mers simple file and the Ellie Mae business and we combine that origination network.
That Ellie Mae has with the with the settlement agent network that the simplified business has we've launched our E close offering in the second quarter, we've enhanced that offering with our own proprietary E signing capabilities in the third quarter and then just this month, we launched our own proprietary E note as part of our loan.
<unk> documents set as well as evolve and we're continuing to see customers adopt those solutions I mentioned on the last call. We had 55 customers going through implementation. We now have 76 that are adopting it and as that continues to ramp I see that as a another area that's going to continue to fuel growth in the closing line item.
Which is really enabling us to take a business that 12% 12 months ago was a $200 million business to now if you look at the trailing 12 months, it's a $300 million business continuing to go after that $1 billion Tam that we outlined.
Thank you very helpful and I don't want to Jinx, you, Jeff, but you got a lot of things going right. This time with peers.
Yes.
Thank you.
Christian Mitra comes from Ken Worthington from JP Morgan.
Hi, good morning.
And part of.
That has had a good run here and while I used as a phone founder owner.
My impression is box seems to be more of a financial and strategic investment at this point I guess, maybe first is that the correct view.
And if so what is the intent for that investment and how do you see the utilization or investment of the proceeds given the significant value creation, we've seen here even in recent weeks.
Yeah, well first of all.
And I think you know.
We'd like to position ourselves, where there are analog to digital conversions and there's an analog to digital conversion going on in the wallet I mean, when I was a kid I had a carried around a leather wallet in my pocket and.
Bob.
Children today may never own a leather wallet.
And so that analog to digital conversion is something that we wanted to be a part of I think we decided to create backed as a separate.
Brand and a separate entity because a lot of our investors.
Seem to not see the.
Coalescence of institutional and retail.
Coming together as access is increased through digital tools.
You can see it in the U S equity markets Theres less distinction between a retail order on an institutional order for example, and so that same convergence is happening across all businesses.
We were a little bit concerned that our investor base wouldn't approve.
I appreciate that we can both be an institutional network provider and also a retail network provider and so we decided to give the company a separate brand.
And it was we just didn't feel like it was being appreciated insight advice and so we decided to give it a separate capital structure.
On the New York Stock exchange.
<unk>.
Other than that back we will be doing this on earnings calls now as a public company I'm no longer on the board.
So I don't want to ever speak for the company.
Going forward, but.
But I will tell you that.
We do.
I believe there is value creation, an analog to digital conversions and we're trying to place value there around the business and that's part of why.
I see us as being an all weather name that can grow on top of growth.
Celine clothing solutions to forecast from on the on the transactional side.
Thanks, Brian.
I'll try to go through some of the components of what we saw that that drove that growth.
And as we highlighted the business grew double digits.
Year over year or sorry.
So the business grew 7% year over year.
With the backdrop of a decline in industry volumes being up double digits. We also grew the business 8% sequentially. If you look at it from second quarter to third quarter against a volume environment that industry estimates would have down double digits.
As well and if you look at each of the line items of what's happening there youll see that we outperformed not only in the aggregate, but also in each line item what that transaction what that overall transaction environment was in.
In the origination line item.
What you see there that I outlined in the last in the last quarter is that it was in our prepared remarks again today is that part of our hypothesis doing the deal is that we could take certain parts of the revenue base here and move it move it more and more towards subscription. It takes some of the volatility out of it and the origination line up.
Item is one in particular that we are doing that with and we've only done that with a very small percentage of the customer base. The average client is a customer.
Is under contract for four to five years and we just started this year with a small percentage of the client base. We've had a great pickup in customers being open to moving more towards subscription. So I see we have a long runway of that the other thing that's going on in that origination line is we're continuing to add more customers, we're gaining more market share and as we implement those customers.
Those are new loans that are running through our system and we are getting some transaction volume.
We never saw before that's offsetting some of the headwinds that that you would see in that transaction environment.
The second line item data and analytics. It's the exact same story, we're taking a business. So this is the automation of the underwrite process.
Through our AI tools.
This is a business that was almost a 100% transaction under the covers we have been moving it more and more.
Towards subscription we're going to continue to do so and we are having incredible success cross selling this to clients. It does take a little bit longer to implement customers on this solution, because you're automating and deeply embedding your solutions into very complicated.
Workflow in each of these businesses as you're automating underwriting processes, but we have a number of customers that are going live on the platform that we sold we continue to have great sales success, and we have a number continuing to go through implementation so thats continuing to.
Grow and offset any training transaction issues you see there and then on the closing solution side. This is where I unpack that and the first question a lot of the new innovation that we have.
Lot of the changes that we made simple file continues to gain market share really versus paper R. E closed solutions are brand new innovation that the that the industry hasn't seen before and each time, a customer is subscribing to whether it's using our E closing room. They are using our documents that they are using our E. Note. They are using our.
Vault, they can use either a component of those services or all of them and each time. They do that we're getting incremental revenue on every transaction, that's using that and it's all greenfield and there's very little competition in this space because of the unique position we've been in to build all of those.
Okay.
That's great color. Thank you so much.
Yeah.
Thank you. The next question we have from.
From Keybanc.
Great. Thank you.
If I could just follow up actually on that in the past the last question.
Just regarding the move to subscription on the origination side specifically.
You said, a small amount of those customers have migrated to subscription can you help quantify that is that sub 10% of the customers or any numbers around that and can you just talk about the pricing structure.
I thought the recurring revenues and the origination side previously were really just fee minimums on volumes, but it sounds like maybe this is a bit different in terms of fee structure. So can you just kind of go over that and what.
The strategy is in terms of migrating these customers. Thank you.
Thanks Kyle.
So on the so on the move to move to subscription tier to answer the first part of how much how many of the customers that we've done with its well less than 10%. So it's a very small percentage of the customer base that we've been able to do this with.
As you can imagine now is a good time to actually be engaging with customers to make this transition towards subscription because you are in a high volume environment.
Customers are in this high volume environment, they want to adopt more automation they want to be able to.
Continue to automate and be as efficient as possible against any of their competition. So.
They're continuing to add on add on more and more of our services.
So when we go in and engage in clients in this in this in this negotiation we are willing to forego some transaction revenue, but we're not foregoing all of it.
We're just making it very open in our in our algorithm around Hey, we're going to shift some to subscription we are willing to give up some transaction, which is mostly the success fees on those transactions that we get but we also remember the other transaction element that we do get is on our network. So anytime alone is coming on to our <unk>.
Network and ordering services from third parties for the automation that we're providing there.
We're collecting a fee for providing that benefit along those rails and that fee will continue.
As it is today.
And sorry, our those are are those multiyear contracts with some upside or some sort of escalator in them just trying to understand.
The leverage as you continue to gain market share of origination volume et cetera, I guess are you taking away some of the upside.
Moving to subscription.
Just how do you view that balance.
Thank you.
Sure So as I mentioned as I mentioned earlier.
Earlier in the commentary the average customers on four or five year agreements that's not changing.
So.
You can and we just started this so we just started doing this this year and we only did it with a subset of the customers that we're actually going through renewal.
To really see what we learned in going through that and testing that our hypothesis now theory was right and we've proven that.
So we have a long runway to do this and.
<unk> continued to feed.
Subscription revenue growth.
Over time in terms of our we've taken away some of the upside what would the way I see it as were taken away some of the volatility in that line item and where our upside is there still a ton of new innovation that we're introducing to the marketplace between the E close offerings that we have that we've launched between the automation of the underwrite and all.
The analyzers that we've been talking about on prior calls that we've been introducing to the market marketplace. This is all brand new innovation that is going to continue to drive transaction revenue growth in parallel to reducing the volatility and risk and some of the line items that we have like origination and data and analytics.
That's very helpful. Thank you very much.
Thank you. The next question comes from Dan Shannon.
Hi, Thanks. Good morning, So wanted to just talk about kind of capital allocation now that you've reached your targets in resuming the buyback was curious about kind of next year and kind of the interim time period with.
The idea is around M&A is still being part of your strategy.
Buybacks and kind of the capital allocation priorities here in the near term or kind of the net.
Kind of startup next year as well.
Yeah, Thanks, Dan It's Warren so so.
Alright, so yes, we at the end of it.
<unk> ended the third quarter, we got to under three and a quarter times that was kind of our target to resume share buybacks that we set when we announced the Ellie Mae deal back in August of last year, and so we will start about after about $250 million. This quarter that I would think about that kind of being more of a partial buyback because we do still need to get to three times eventually.
And I think we're well on our way there, but so we will do a bit of a balance paydown of data alongside these repurchases over the next quarter or so but I think once you know thinking about next year, you know nothing's really changed in terms of capital return philosophy I mean, it's the same it's going to be the same thing as pre Ellie Mae where it's returned CAD all capital to shareholders that we don't need for investment.
And or M&A to shareholders through buybacks and dividends. So I think you should expect us to be thinking about it that way and the only thing that really has changed here is that we've continued to grow free cash flow organically and then of course, not at Ellie Mae which.
<unk> as you obviously heard today and in the last couple of quarters seeing that it's performing very well so those don't read of things.
Things that I'd be thinking about azure as youre kind of thinking about next year in capital return at the moment right now we're kind of going through the 2022 budget process. So as.
As we start to refine that we'll be able to kind of give you guys a bit of an update in the next couple of quarters. So.
Thank you.
Yeah.
Thank you the next question Karen.
Hum.
Hey, good morning, guys.
Wonder if we get some incremental color on the energy business I appreciate the kind of long term outlook.
Maybe how are you thinking about the business near term the potential for the current environment persists.
Any color just in terms of.
The health of the customer base, what are you seeing new customers coming in.
And maybe just on the LNG global opportunity.
What are you seeing the biggest sources of uptake from a regional perspective.
Thanks, Chris.
So when you look at our when you look at our energy business.
And we've talked about this on several calls one of the things I think that's come to light.
Through through this is that we are very different than any of the any of the peers that are out there and that we have developed very deep liquid markets across the energy class spectrum, So whether it's coal oil and gas power and environmental we've invested heavily across that entire spectrum.
Give our customers the tools they need to manage what we saw is a secular trend more than a decade ago of people moving towards cleaner fossil fuels, such as natural gas and towards environmental markets carbon offset markets compliance markets and the like.
Made several acquisitions climate exchange 10 years ago, we've been building out our global natural gas suite and we have now a business that's substantially different than any of our peers. We continue to invest as we talked about in prior quarters, our oil business, which is doing extraordinarily well.
With investments that we've made and the launch of our Bourbon contract that ice futures Abu Dhabi, we have a new contract in the Gulf Coast, It's launching in the beginning of next year.
In partnership with several big physical players and we're in the middle of a Brent consultation where Midland W. Ti may be added into the Brent basket. So you have a whole bunch of dynamics going on across this it's because customers know they need to manage their risk through this transition and as I mentioned in my prepared remarks, I think the environment.
That you've just seen you got a peek into what it's going to be for a long long time.
This energy transition is going to be very volatile.
Everyone sees the secular trend where investments are pouring into renewable projects.
Projects, such as coal are not getting invested in and the fact is any energy supply source I don't care. What it is is susceptible to supply.
Supply chain events weather events. For example, if you have wind turbines in the wind's not blowing it's not really easy to transition back to a coal fired plant to get power back on the grid. So I foresee that we're in for a long ride a volatility and now more than ever the exchanges and the risk management tools that we.
Provide are extraordinarily valuable to our clients and it is important to us that we continue to engage with them as much as we ever have to continue to innovate.
Thanks, Chris.
Thank you.
Hello, Greg.
Okay.
Hey, good morning, everybody. Thanks for the question.
I was hoping maybe we could zoom out for a second.
Provide a lot of details around the new segments, but if you look at ice today, 50% of revenues comes from sort of recurring sustainable business. It's grown at 10% for the last couple of quarters organically in your guidance for Q4 implies about attempts and growth as well. So maybe just walk us through how you think about sustainability of that recurring.
Revenue base and the growth algorithm that we can think about here on the multi year basis.
Yeah.
Yes, it's a great question.
And I think you know the.
One takeaway you should have is that that has been in and intentional.
Evolution on behalf of the management team.
<unk>.
Have been.
We started the company really being a highly transaction oriented.
And have always wanted to have a bigger recurring growing base.
Base that we can rely on.
Part of part of our thinking of becoming an all weather name is is finding these analog to digital market conversions, but also.
Creating a portfolio of businesses that we operate that can that are durable in different environments.
We really wanted to get into the mortgage space and really worked for over 10 years to put ourselves in that space because it benefits from a low interest rate environment.
Generally speaking we have other businesses like our interest rate futures and to a certain degree.
Inflation oriented products like commodities that tend to do better than high interest rate environments and so.
From a transaction standpoint, we want it we want it to be durable, we want to grow on top of growth and not be a name where people pile in win when interest rates are going up and pile out when interest rates are going down and so.
The more that we feel like we can lock into growing and recurring revenue. It gives it gives investors a basis to know that we're going to continue to pay a dividend that we're going to have capital to reinvest in the business and and then if we can have transaction businesses that.
Regardless of.
Macro environment can do well.
It just feels like a company that investors should own and that that has been the strategy that we've.
Lloyd here for Amit.
I mean years now and it's finally.
Coming to fruition in the mortgage business as Ben has mentioned.
We've passed our colleagues with let's let's try to to really build a durable subscription underpinning to our business that also has really interesting transaction opportunities because of changes in technology.
And the same thing in any missions and our in liquefied natural gas I know you and I have talked for years about.
Our thesis that the natural gas market would globalize in that.
There would be global benchmarks, not regional benchmarks and so a lot of these.
These metrics that you see in your and your economic model have been incredibly intentional on our part over a long period of time and it's great that in this quarter as was mentioned earlier that everything came together at one time.
Great. Thank you.
Thank you.
Hum.
Yeah.
Yeah, Hey, good morning, everyone.
Just one quick follow up on the mortgage side again, a lot of good qualitative detail but.
I think what's missing a little bit of some more quantitative.
Updates here and I guess I know you don't give us any sort of numbers of mortgages that go into a system a quarter I know a lot of investors are asking for that but in absence of that.
Given that you're talking about a kind of like upsell revenue upsell story, maybe you can at least help us how much your revenue per mortgage has been a.
Over the last year or two I mean again like.
Upselling I guess that revenue per mortgages go up so maybe some numbers you can put around that and if you can decompose a little bit between pricing in certain new services that would be very helpful. Too. So hopefully you can give us a little something here.
Yeah.
Yeah, Alex there's a lot in that question what what al.
One area I can unpack here is when you dig into that whats leading to our subscription growth. So that's one of the areas.
Our thesis is that we could move more and more towards subscription and certain parts of the business and if you look at the components of what's what's fueling that one is the very.
<unk> as customers are renewing moving more and more towards subscription and the origination and the data and analytics line. That's one component.
Second is new sales and this is just about market share gains. So we continue to have a lot of success in continuing to add new customers onto our onto our platform.
Cross selling services to our existing clients as it relates to the third.
So in that cross selling the way to think about it.
Theres not theres opportunities for us to expand the footprint with our clients with the existing services that they have we have clients that are using us for example in the loan origination side in the correspondent channel.
Moving to add the retail channel onto that adding services like our maven compliance service or are all regs offering all of those are heavily subscription oriented. So we have a concerted effort to cross sell and then the fourth is price.
And our algorithm when we did the deal and our hypothesis is that on the subscription revenue growth, which is a big component of what we think.
Is required to really hit that 8% to 10% long term guide it over that long period of time each of those elements the renewals new sales cross selling and price that will be pretty much an equal distribution across those three that you'll see over a long period of time is what's going to what's going to fuel that sustained.
<unk> subscription growth.
So that's that that's the area I would highlight there on the transaction area I mentioned, a whole bunch of the new products that were that were.
That we're that we're rolling out, which we believe has an opportunity to continue to grow transaction revenue as well.
And offset declines that you see in industry environment.
Okay, well I don't know historical basis, the revenue per mortgage going through the system.
Brian.
Domestically or.
So to come back to the question.
Can you repeat the question we didn't we didn't follow it I'm sorry.
Hi, Bob.
To come back to my original question.
Looking at our historical basis, the revenue per mortgage going to the system. So that's gone up over last year or so.
I assume again, if you don't have any quantitative it's right, but at least directionally given that you're adding services.
Yep correct.
We end up looking at it like that.
We don't we don't necessarily look at it like that but anecdotally I would say yes.
Okay, alright, thanks again.
Thank you, ladies and gentlemen, if you have a question.
Number one.
For the moment.
First question.
Well welcome all final copes with.
This concludes our question and answer portion I would now like when companies over back to Chuck.
Hey, Mark.
Thank you Denise and thank you all for joining us this morning.
We look forward to continuing to discuss our all weather strategies with you as our world economy continues to evolve.
And with that I hope you have a great day.
Thank you Quintin has now concluded thank you for attending today's presentation.
Disconnect.
[music].