Q3 2021 EverQuote Inc Earnings Call
Good day and thank you for standing by welcome do they ever closed third quarter 2021 earnings call.
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I would now like to hand, the conference over to your Speaker today really Johnson of the Blue shirt group. Please go ahead.
Good afternoon, and welcome to Evercore third quarter 2021 earnings call, we'll be discussing the results announced in our press release issued today after the market closed.
On the call. This afternoon is Jamie mental Clark.
Chief Executive Officer, and John Wagner, Chief Financial Officer of Evercore.
During the call we will make statements related to our business that may be considered forward looking statements under the federal securities laws, including statements concerning our financial guidance for the fourth quarter and full year 2021, our growth strategy and our plans to execute on our growth strategy.
Including our direct to consumer agency.
And the business the growth levers, we expect to drive our business the impact of Covid on our business and the insurance industry ability to maintain existing and acquire new customers, our recent and planned acquisitions and interest or ability to acquire other companies our goals for integrations and other statements regarding our plans and prospects.
We're looking statements maybe identified with words and phrases such as we expect we believe we intend we anticipate a plan may upcoming and similar words and phrases. These statements reflect our views only as of today and should not be considered our views as of any subsequent date.
Specifically disclaim any obligation to update or revise these forward looking statements except as required by law forward looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations for a discussion of material risks and other important factors that could affect our actual results. Please refer to <unk>.
It was contained under the heading risk factors in our most recent quarterly report on Form 10-Q, and our annual report on Form 10-K, which is on file with the Securities and Exchange Commission and available on the Investor Relations section of our website at Investor <unk> Com and on the SEC's website at SEC Gov. Finally during the course of today's call.
Certain non-GAAP financial measures, which we believe are helpful to investors a reconciliation of GAAP to non-GAAP measures are included in the press release issued after the close of market today, which is available on the Investor Relations section of our website at investors that Evercore dot com and with that I'll turn it over to Judy.
Thank you, Brian and thank you everyone for joining us today.
On October 18, we announced preliminary results for our third quarter and address current challenges in the auto insurance market.
Several key carrier customers experienced higher than expected claims losses, resulting in a sudden pullback in their marketing spend in the second half of the quarter as they attempted to restore their target levels of profitability.
Based on carrier feedback higher than expected claims losses were primarily attributable to a higher loss severity or cost per claim driven by two factors.
First vehicle replacement value and cost of vehicle repair rose significantly stemming from supply chain and labor shortages.
Second liability or medical costs increased due to a larger than expected number of accidents with serious injuries or fatalities as well as overall medical inflation.
In addition claims associated with extreme weather, including Hurricane Ida placed further strains on carrier profitability.
We believe these industry dynamics are isolated to our auto insurance vertical temporary in nature and will correct in the coming quarters as carriers adjust their pricing to a new underwriting environment before restoring higher levels of customer acquisition spend.
During our decade, serving auto carriers, we have seen similar challenges from which Evercore has re accelerated growth following a period of pricing correction by the carriers.
In an effort to align our cost structure to the current auto insurance environment, we implemented an approximate 10% structural reduction in non marketing operating expenses, excluding noncash items.
As part of reducing operating expenses, we did an extensive review of our business, which resulted in making organizational changes to consolidate leadership and streamline decision, making which we believe will better position evercore for strong growth when the auto insurance industry rebounds.
We remain steadfast and building towards our long term vision of becoming the largest online source of insurance policies by using data and technology to making sure.
For simpler more affordable and personalized.
At the beginning of 2021, I outlined four levers of our growth strategy, including.
Number one attracting more shoppers.
Number two growing insurance provider coverage and budget.
Number three optimizing and deepening consumer provider engagement and number four expanding non auto verticals.
Here's an update on progress in the context of these growth levers during.
During the quarter, we reported strong traffic growth as we successfully attracting more consumers to our marketplace, resulting in a reacceleration of quote request growth to 21% year over year.
This quarter, we closed our previously announced acquisition of policy fuel and we are pleased with the early performance and how the team has integrated into a broader direct to consumer agency or DTC agency operations.
The acquisition of policy fuel is consistent with the strategy. We first announced last year to begin building a multi vertical tech and data enabled DTC agency platform, which enables evercore to capture a larger portion of the economic value of each transaction.
While giving us a path to directly access the lion's share of the $150 billion addressable market.
And at the same time, it brings us closer to our customers, enabling us to develop more seamless buying experiences and deeper relationships with consumers and.
In addition to our successful integration of policy fuel, we continued making foundational investments in our health and Medicare DTC agency platform in Q3.
We grew the team improved many business processes and built new technology to support a steep ramp in health and Medicare agent capacity in advance of the annual and open enrollment periods in Q4.
We now have approximately three times, the number of agents and our health and Medicare DCP agency compared to last year, and we remain confident that we will deliver strong Q4 performance and our health insurance vertical and further solidify this foundational pillar of future growth.
On the provider side of the marketplace, our diversified distribution model benefited us in the third quarter.
As carriers move to quickly reduce their direct marketing expenses in response to higher than expected claims losses.
Our third party local agent demand and DTC agency operations have experienced significantly less impact from the current headwinds in the auto insurance market.
As we continue to build ever quote we are guided by serving customers on both sides of our marketplace consumers seeking a more streamlined shopping experience with personalized coverage options.
And insurance providers seeking more profitable policies and the age of digital insurance shopping.
We are executing on our strategy and we are increasingly well positioned to deliver on our customer promises.
We believe evercore occupies a unique position in the industry as the only player at scale with marketplace and agency operations across major personal lines of insurance.
We have assembled a distinctive combination of data technology and operational assets that can be leveraged to generate advantages in areas like bidding for traffic expanding customer LTV via multiline customer relationships and designing innovative experiences to own and manage a customer's insurance life in ways that.
Do not exist today.
While the current auto insurance market dynamic presents a temporary step back it is indeed temporary I.
I truly believe evercore will be better positioned than ever before to emerge as a powerful player in the 150 billion insurance distribution market now.
Now I'll turn the call over to John to provide more details on our financial results.
Thank you Jamie and good afternoon, everyone I'll start by discussing our financial results for the third quarter and conclude with guidance for the fourth quarter and our updated guidance for the full year.
Our revenue for the quarter was 107 6 million, an increase of 20% year over year.
Revenue in our auto insurance vertical increased to $89 7 million a growth rate of 20% year over year.
Revenue from our other insurance verticals, which includes home and renters life health and commercial insurance increased to $17 9 million a growth rate of 18% year over year, representing 17% of revenue within the quarter.
Our revenue growth in the third quarter was driven by a 21% increase in the volume of quote requests in our marketplace offset by a 1% year over year reduction in revenue per quote request.
So as Jamie outlined the performance of our auto insurance vertical in the third quarter was impacted by some carriers, reducing their marketing spend in an effort to manage through their profitability targets given the sudden spike in their claims losses.
Though increases in claims frequency were largely anticipated by carriers as miles driven have continued to approach pre pandemic levels claims.
Claims severity was significantly greater than expected.
This led to certain carriers to abruptly and dramatically reduce their advertising spend in our marketplace late in the quarter and in a manner that we had not anticipated.
This pullback in demand directly impacted our marketplace monetization through lower revenue per quote request.
We believe these higher claims losses will continue to impact carrier's profitability in the near term.
In turn impacts their willingness to spend on marketing and new consumer acquisition.
<unk> begun in Q3, the full extent of reduced carrier spend will impact us in Q4, and it is likely to take multiple quarters for auto insurance carriers to fully repriced or insurance book of business to current trends and for their marketing spend to completely recover.
That said, our marketplace remains healthy and increasing auto insurance rate environment will likely drive more consumer shopping over the same period.
We expect continued growth in quote requests in Q4 at rates similar to those that we achieved in Q3 on a year over year basis, while reduced demand as a result of insurance industry factors will cause both sequential and year over year reductions in revenue per quote request.
In Q3, we delivered variable marketing margin or <unk>, which we define as revenue less advertising expense of $32 4 million.
An increase of 10% year over year as.
As a percentage of revenue third quarter, GM was 30% down from 33% in Q3 of last year.
Though partially offset by lower advertising cost per quote request Vms was directly impacted by the decline in marketplace monetization and carrier demand.
As we look forward to Q4, we expect the dynamics of the auto insurance market will continue to put pressure on DMM within our auto insurance vertical.
But as our advertising cost structure is highly variable we will seek to calibrate our advertising spend to optimize the DMM in absolute dollars.
Apart from our auto insurance vertical we expect DMM to benefit from strong revenue growth within our health direct to consumer agency during the annual health open enrollment period in Q4.
This is expected to drive an improvement in <unk> operating for the business overall in Q4 versus Q3, despite the downward pressure in the auto insurance vertical.
Our DTC agency within our health life and auto insurance verticals operates with a considerably higher revenue per quote request and DMM, which demonstrates the financial benefit of guiding our marketplace consumers through the complete insurance coverage churn through to purchase.
The changing dynamics within our business, namely higher engagement higher take rate and higher lifetime value within our DTC agency are not consistently captured within a traditional marketplace volume metric like quote requests and we intend to review, how we may evolve our quarterly metrics to better capture our new.
In 2022.
As Jamie mentioned, we implemented an approximate 10% structural reduction in cash non marketing expenses in an effort to realign our cost structure and streamline and focus our organization as this action took place in Q4, the cost reductions were partially impact Q4 with the full reduction.
<unk> captured an expense run rate entering 2022.
We believe this will position us to continue to target operating and positive adjusted EBITDA for as long as carrier demand remains constrained and will allow us to quickly return to higher levels of profitability when the auto insurance carriers returned to their normal pattern of acquiring consumers through digital channels.
Turning to profitability GAAP net loss increased to $5 3 million or.
Or a loss of <unk> 18 per share based on $29 3 million weighted average shares outstanding GAAP net loss included a tax benefit of $2 5 million.
From a onetime partial release of our NOL valuation allowance associated with the policy fuel acquisition.
We delivered adjusted EBITDA of $2 7 million or two 5% of revenue for the third quarter lower <unk> from our auto insurance vertical and higher expense associated with the closing of the policy fuel acquisition earlier than planned within the quarter both impacted adjusted EBITDA This quarter.
Positive operating cash flow of $2 8 million within the quarter tracked closely to adjusted EBITDA and resulted in $41 $8 million of cash and cash equivalents on the balance sheet at the end of the quarter net of the $16 million in cash paid at the closing of the policy fuel.
<unk>.
Historically cash flow from operations has tracked closely to adjusted EBITDA as it did in Q3.
As we anticipate policy sales commissions to contribute more significantly to Q4 revenue. We also expect that operating cash flow will trail adjusted EBITDA in Q4, as we collect most policy sales commissions over the expected lifetime of the policy sold which stretches into future periods.
On August 16th we announced that we closed the acquisition of policy fuel we have been pleased with the integration and ramp so far and now expect policy fueled to perform above our previously stated expectations for Q4.
Similar to our non auto insurance verticals, and our health and life DTC Agency, we expect policy Fuel's policy sales as a service business model will not be significantly impacted by carrier marketing reductions and will provide us with revenue diversity during a challenging period from our auto insurance marketplace.
Turning to guidance, our Q4 guidance is significantly impacted by industry factors affecting our auto insurance vertical and the near term.
For the quarter, we expect revenue to be between 93, five and $98 5 million.
Variable marketing margin to be between 35% and $33 $5 million and adjusted EBITDA to be between negative one five and positive $1 5 million.
Consequently, we are lowering our full year 2021 guidance for revenue and adjusted EBITDA as follows.
We expect revenue to be between 410 and $415 million a year over year increase of 19% at the midpoint and a decrease from our prior guidance of between 440 and $446 million, we expect variable marketing margin to be between 127 and 130.
Yeah.
Our year over year increase of 18% at the midpoint and a decrease from our prior guidance of between 138 and $141 million.
And we expect adjusted EBITDA of between 12, five and $15 5 million.
A year over year decrease of 24% at the midpoint and a decrease from our prior guidance of between 23% and $26 million.
In summary, though we foresee near term headwinds we remain confident in our ability to manage our business. During this period and to return to performance consistent with our long term model of high growth and increasing profitability as industry demand normalizes.
And beyond the temporary conditions driving auto insurance industry demand, we believe our direct to consumer agency is poised for a breakout performance in Q4, validating our strategy, Jamie and I look forward to answering your questions.
As a reminder to ask a question you will need to press star one on your telephone.
<unk>. Your question first the pound key please standby, while we compile the Q&A roster.
Your first response is from Michael Graham of Canaccord. Please go ahead.
Thanks, a lot guys and thanks for all the all the information and the color I just wanted to ask a little bit more about that.
What you see as the potential duration of some of the softness in auto I remember at the time of your IPO you were just sort of coming off of a flat year.
With similar circumstances.
Claims going up and margins compressing and I believe that took a couple of quarters. After that at that time, just wondering if you could maybe put a little more color around sort of the timing you expect to see unfold here.
Maybe if I could just add on to that cash flow.
Standard growth ambition of around 20% per year, just wondering how youre thinking about that as we finish up this year and head into next.
Hey, Mike Thanks for the question Jami.
So we have a couple of data points to draw on in terms of the expectations around timing and duration and obviously, we don't we don't have perfect information, but the first thing we can draw on as historical experience. I think you are right. It was around 2008 2016 2017 last time, we experienced something like this and then the second data point.
It's just the feedback we're getting some carriers.
And so.
The playbook that they deploy is the drawdown market expand to solve for two things really the first is in period profitability fee in quarter and year profitability.
To stop acquiring policyholders, they now know to be unprofitable.
Step two to address that second piece.
The carriers will re file their rates with the state departments of insurance and Thats a process that will take several months.
Then once they feel good about the rates they'll reengage and.
And resume sort of normalized levels of marketing spend so that's what we saw in the previous time. We went through this that's what we expect to see happen. This time. It is the guidance we've been given by carriers in terms of how long we expect it to persist.
The best information, we have right now suggests that we'll find we'll find the trough will find the bottom in Q4.
Likely to see a step up in Q1, and then somewhat gradual recovery over the course of next year and I think different carriers sort of we were affected in different ways and we will respond with different.
Approaches or at least levels of speed and that's been our experience. So.
We would expect to see somewhat of a phased in approach over the course of next year ultimately, having us exit next year back to normalized levels of spend.
And then Michael I would just add to that with regard to the second part of your question that also implies that we would exit next year back on on a long term growth model. Our long term growth model is still an appropriate.
Long term growth model to use obviously, what we're seeing in the next number of quarters.
Is something.
That is tied to the industry tied to some of the macro trends for the industry.
But we are confident that we will emerge into 2023 back on our long term model of growth and profitability growth.
Okay sounds good thanks, Jamie Thanks, Jonathan.
Thanks, Michael.
Thank you. Your next response is from Ram <unk>.
With William Blair. Please go ahead.
Good afternoon, and thanks for taking the question.
Jamie kind of circling back.
Michael's question.
No you've seen these changes before particularly at the IPO.
Correct, but I guess, what's similar with what we're seeing today versus last cycle, which are both life cycle.
Wanted to more technology in cars and pushing of claims cost, but then you also have.
Some added cost current share with supply chain issues and then.
Getting people to go back to watch it just love your perspective on sort of the compare contrast.
Thanks Ralph.
<unk>.
There are there is a confluence of factors that are occurring this time, which are.
Distinctive right there are different the underlying drivers are different than the last time around.
So one difference is the fact that.
The carriers have another other rep under their belts right and I think are better positioned this time to respond quickly having learned some lessons from the last time. This occurred and we are hearing some of that.
It's just the underlying drivers so in this case you've got this.
Confluence of events number one being miles driven coming back to almost pre COVID-19 levels I think right about now.
96% or 90.
19 levels of miles driven and so accident frequency is going up as a result.
What we hear from the carriers. This was largely anticipated Bryan so perhaps not not a driving factor relative to expectations.
But number two is increases in levels of severity.
And this was not completely expected.
So they are seeing more serious accidents and more bodily injury expenses associated with that.
And they are seeing as you mentioned supply chain shortages labor shortages are making the cost of repairing and replacing vehicles more expensive.
And then you layer on top of that.
Hurricane Ida came through again, not an unexpected event for a hurricane to.
Atlanta in Louisiana, but for that Hurricane to proceed and flood.
Good chunk of the northeastern United States wasn't expected alright, and so.
Higher frequency plus higher severity cost catastrophe all coming together at the same time.
Some of which was unexpected which is making this a particularly sort of sudden shock to the system.
But back to my first point I do think the carriers this time around or at least better prepared right playbooks are pretty well understood at this point and so they go through the motions.
And bill.
Bill.
Anticipate they emerge kind of back to where we started once rates have been normalized.
That's helpful perspective, just maybe one more clarifying question I guess just in terms of what's driving the claims severity, maybe if you could flush that out a little bit, but that's something that does.
Yes continued through I guess.
Q4, what would sort of I guess slowdown.
So to speak or neutralized the severity part of it.
What's going on.
Well again.
Again, the two factors driving the severity.
Our.
More serious accidents, and so greater bodily injury.
Fences and health care costs associated with that and then number two is the supply chain and.
And labor shortages.
Now when the carriers to address those issues.
It can be addressed in one of two ways. One is a sort of resolve themselves as I think youre sort of enquiring about number two is.
Updated pricing to reflect what is now a new normal and I think it is the latter tack that they are taking they are assuming that this is a new normal and they are revising pricing to reflect that.
Over time, one could certainly see at least the supply chain shortage in labor shortages.
Resolving.
And who knows that could lead to a period of time, where the carriers experience higher levels of profitability, but right now as far as we can tell they are really just focused on correcting pricing in response to what has emerged as a new normal.
Okay. That's helpful. Thanks, Dan.
Thank you. Your next response is from Jed Kelly of Oppenheimer. Please go ahead.
Great. Thanks for taking my question.
Just on the marketing recovery, we still see a lot of insurance TV commercials. So when the carriers are bringing back their marketing spend.
How does it work with the branded channels like TV.
Alright.
The affiliate marketplaces like yourself.
Hi, Jed I'll take that one.
So so I guess.
Ted all marketing spend for the carriers will be affected clearly there is a difference in terms of commitments and lead times on certain types of spend. So we think we felt this as soon as the carriers data and as soon as the carriers made the decision to calibrate their models toward trying to reach those profits.
Ability goals.
So I think that sudden for us I think over time as some of those commitments to mass mass media roll through that's when other advertising sources, we will see reductions and that's also that also might be a little bit of a tailwind for us going into 2022 in terms of carrier demand. So I think we are.
The carriers are faster to react with a marketplace like ours and then.
But over the medium term our marketplace also offers the carriers are more targeted level of spend that is highly attributable and so I think we do better in the medium term as they say recalibrate or rebalance against other marketing and acquisition sources those that have long.
Longer commitment cycles and that we get.
Proportionately more more spend as as our performance.
As is worthy of.
So I think youll see roll through jet, but but we're going to get hit first but I think we may do better in the medium term.
And then you mentioned next year getting back to your growth targets would.
Would that be 20% growth or would that actually be a higher level of growth call. It.
Do you actually think compounded into 20% growth relative to 2019, how should we think about that growth rate next year.
Yes, I think for we will certainly give guidance next quarter and give more thoughts on what 2022 will look like.
We know that we are looking at something in terms of carrier demand that is multi quarters and its length.
We're confident really is emerging from 2022 back on that long term growth.
Past.
So with regard to 2022.
Make any statements about where we are with regard to emerging out of 'twenty. Two we'll be back on that but long term profile. If you look in terms of how the company might emerge I mean, you can go back and look at periods like 2018.
There were periods in which we were able to grow, especially consumers to the marketplace volumes much more successfully coming out of the slowdown.
That may give some some indication but right now I think we're committed to the fact that the long term model is still the right model for us and that that will be back on track as soon as these.
These carrier demand and profitability issues normalized.
Alright, and then just one more for me I guess.
And then how does this make you rethink your direct to consumer initiative, I mean, potentially finding a way to accelerate the process. It seems that youre able to get more agents get more commissions that part of the business is much less cyclical.
Yes, it's a good question Jed so what are the interesting observations we've had through this period has been that.
Sort of carrier direct business was affected suddenly and substantially our agency distribution was largely unaffected and thats both both our third party.
Marketplace.
Agents as well as the direct to consumer agency and so to your point I think.
Certainly.
<unk>.
And still have high confidence that we're heading down the right path.
And I think Emboldens us.
Ed.
Consider how how we can be a bit more aggressive in moving faster down that path is as we go.
Yes.
I'll pause there thanks for your question.
Yes. Thank you.
Thank you. Your next response is from Cory Carpenter with Jpmorgan. Please go ahead.
Thanks for the questions.
How broad based <unk>.
Isolated to certain patents carriers, maybe you're kind of getting at any notable difference in cuts from traditional agencies.
Materials are insured tax.
And then.
And second question just with policy. If you will you mentioned, it's running ahead of expectations. So.
If you could talk to what's worked well.
Lessons learned from the integration thanks.
Sure.
The industry effects are relatively broad based Corey, but I would say.
To my earlier point, we're seeing them affect us more directly.
That's sort of direct more direct to consumer oriented carriers that would buy referrals directly from us. So that would include sort of DTC carriers. It might include some of those tomorrow insure tech carriers that you would classify them.
Seem to be.
Responding in our marketplace more more aggressively.
The second remind me the second part of your question correctly.
Paul just on pulp.
Yes, possibly.
Policy.
Yes, so we're up a couple of months and now on policy fuel.
Just to kind of re Orient you to how it fits into the big picture.
<unk>.
We first began.
Down this direct to consumer agency path with the launch of our life Insurance agency in early 2020, we accelerated down that path with the acquisition of cross point and health and Medicare space in.
And the sort of mid to late 2020.
And then we have accelerated once again with the acquisition.
Policy fuel and with the acquisition of policy fuel. We now have this direct to consumer agency operating across all major personal lines.
So we're excited to have closed the deal the team is well integrated and and we're off to a good start it's still quite early so theres a lot of focus on the integration and ensuring we maintain.
The plan, we laid out for the team, but all signs are positive so far in <unk>.
We're excited to have him on board.
Okay.
Yeah.
As a reminder to ask a question. Please press star one on your telephone keypad again that if I want to ask your question.
Your next response is from <unk> Tandon of Needham. Please go ahead.
Hey, good evening actually Kyle Peterson on for Mike Thanks for taking the questions.
Wanted to touch a little bit on some of the emerging verticals.
Otis that both as a percentage of revenue.
Some absolute dollar basis sequentially.
That dipped a little bit what are you guys seen some of the same challenges you guys.
In auto in some areas, it's kind of like like home and life or just want to see if you could provide any additional color on some of the emerging verticals.
The emerging verticals.
<unk> been affected by the same industry dynamics that the auto market has been and we would expect to see the emerging.
The non auto verticals accelerating into Q4, there wasn't really a catalyst for outsized growth in Q3, I think they were sort of kept pace with auto but didnt exceed it.
As you recall we.
We have been investing quite heavily over the course of this year to get ready for the annual and open enrollment periods in health and Medicare and Thats included.
Three exiting the number of advisors and that agency business and all the infrastructure and team to support them.
So as we progressed here through Q4, it's still very early in the enrollment periods, but the signs are positive and we do expect that to be a large catalyst for.
To reaccelerate non autos growth this quarter.
Okay.
Hopeful and then I guess, just maybe a follow up on obviously, some moving pieces between carrier demand and then.
Obviously, if there is some.
Expense reductions rationalizations, but.
How should we think about is there anything in that.
And a 10% cut to cash expenses that would impact so like the pace of <unk>.
Your ability to grow.
Basically when the demand environment improves or how should we think about the puts and takes between some of these cost initiatives and kind of how you guys are prepared to reaccelerate growth as demand improves.
Yeah, It's a great. It's a great question, so as we approach the expense reduction.
We are weighing a couple of different things on the one hand.
We're trying to.
Model out effectively different scenarios with respect to how deep the direct auto.
That would be and how long it would last.
And be diligent in managing expenses.
Preserve.
Profitability through that period of time.
On the other hand, if you if you just take the direct auto business and set it aside and I know, it's a big thing to set aside but if you can do that and you look at the rest of the business. We're actually feeling very good about the investments that we've made and starting to see them pay off right. So we've been talking a lot. This year about the verified partner network on the <unk>.
Newmar acquisition side of the business.
Launching new products into that and that's beginning to take hold.
Direct to consumer agency strategy is our progress is accelerating and as we move into the open enrollment period and as we acquire policy. If you will the marketplace agency business is healthy and so a lot of the investments we've been making.
We are really building some momentum right now.
And we wanted to be very thoughtful not to.
Not to disrupt the momentum that is building in other parts of the business. So as we approach that we are balancing those two things and we feel the level of expense reduction we got too was responsible in the context of what's going on in the auto business, but didn't necessarily.
Sara-lee slow down the momentum we are building or make any sacrifices that we couldnt live with in terms of slowing progress on the other parts of the business and it came with some organizational changes that we think will just help us move more efficiently.
So my personal sentiment is we're in a good position we have some tough.
<unk> things going on around us right now but.
It will pass is our expectation and we believe that as it does we'll be really well positioned to keep growing and getting back to our.
Through our <unk>.
Trajectory that we were on before.
Makes sense thanks, guys.
Thanks, Paul.
Yeah.
This now concludes the Q&A for our call.
Turn the call back over to Jamie Mindell CEO.
Yes.
You all for joining us today.
The market presents near term headwinds for our business, but we are confident that these issues are temporary in nature and will correct as carriers adjust their pricing strategies to the new underwriting environment.
As we mentioned we are executing well against our strategy, we believe ever quote will emerge from this period, even better positioned to be a powerful player in the $150 billion insurance distribution market.
Thank you all and have a great evening.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Yes.
Yes.
Okay.
Sure.
Sure.
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