Q3 2021 Digital Media Solutions Inc Earnings Call
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Hello, and welcome to the ditch to meet yesterday's shouldn't third quarter 2021 earnings call.
My name is Lauren and I will be couple of today's scene Youku today.
If you would like to ask a question during the presentation you may do so by pressing star at least by one on your telephone keypad.
I would now how did you weight the two highest Thomas bulk executive Vice President corporate strategy and Investor Relations cheap again Thomas Please go ahead.
Thank you for joining us to discuss <unk> financial results for the third quarter of 2021.
With me on the call are Joe <unk>, <unk>, co founder and CEO and Mr. <unk> <unk> CFO.
We posted our earnings announcement this morning in a press release and also on our Investor Relations website.
By now everyone should have access.
Before we begin I would like to call your attention to our safe Harbor provision for forward looking statements and our financial results press release.
The safe Harbor provision identifies risk factors that may cause actual results to differ materially from the content of our forward looking statements.
For a more detailed description of the risk factors that may affect our results, including disclosure about the effects of the Corona virus outbreak. Please refer to our financial results press release, and our SEC filings.
Also during this call management's commentary will include non-GAAP financial measures.
Reconciliations between GAAP and non-GAAP financial measures.
Quarterly results can be found in the tables of our financial results press release, which we have posted to our Investor Relations website at investors <unk> digital media solutions Dot com.
The additional financial and other information to be discussed on this call can also be found on our Investor Relations website.
Now I'd like to turn the call over to Joe <unk> our CEO.
Thank you Tom and welcome everyone.
2021 has been a year of double digit growth for Dms, specifically during Q3 revenue was up 30% on a reported basis over the year ago quarter with record revenue of $107 4 million and record adjusted revenue of $111 8 million.
Q3 results were driven by strong growth across both of our primary segments brand direct solutions, which grew 32% and marketplace solutions, which grew 47%.
Performance across our segments was led by 77% growth in our largest vertical insurance, 64%. If you adjust for the crisp acquisition.
During the Q3 period, even with some industry headwinds as a result of rising loss ratios of our auto insurance clients. We saw continued growth in auto which represented 46% of insurance revenue.
Auto insurance was closely followed by health insurance, which now makes up 43% of our insurance revenue and is growing.
Within auto insurance, we sell to many of the top carriers plus we have a robust network of independent insurance agents supported through programs like ZIP quote ignite that we've spoken about previously.
Within health insurance, we have advertisers in both the over 65 and under 65 categories, giving us diversification.
I'm also excited to say that in Q3, we successfully launched the protect health insurance agency and here in Q4, we've been writing policy since the beginning of the Medicare annual enrollment period.
As a result, we have access to the 135 billion Commission Tam component of the insurance market.
Outside of insurance E Commerce current education, and consumer finance together grew by 8% year over year.
During the third quarter, we also launched the efficiency and technology initiatives or epi.
This initiative is focused on making strategic decisions designed to drive better connectivity inside the dms ecosystem, which creates efficiency and growth. The ETR is expected to result in future annual savings of $8 4 million once fully implemented prior to year end 2021 with three five.
And annualized savings already completed as of September 30.
In mid August we announced the strategic review I cannot offer an update currently beyond what we announced but will do so as soon as there is something to share as a reminder, our goal is to maximize value for shareholders and we hired two of the best banks to advise us that said there is no guarantee that strategic review will conclude with the transaction.
<unk> of any sort.
Shifting into Q4, the current quarter includes the Medicare annual enrollment period for over 65 Health insurance, which began October 15th plus the open enrollment period for under 65 Health insurance, which started in November one.
We have good early indications that advertising spend during this year's AEP and OUP period will be up from last year, which has us optimistic that we are on track to exceed our expectations for the entire period.
As a result of the current trends across health insurance and the holiday shopping season, our Q4 guidance is $112 million to $122 million in revenue $116 million to $126 million and adjusted revenue and $16 five to $19 5 million in adjusted EBITDA.
Beyond the Q4 period, we are looking forward to 2022 and the growth opportunities, we see which include <unk>.
Growth powered by our proprietary tool set of data technology and media reach continued growth in insurance, both in auto and health insurance.
Expansion of our protect Medicare agency business, which was a scratch start for us in Q3 and expected to grow strongly in 2022.
And of course, the effects of our efficiency and technology initiatives, which will further streamline our business, allowing us to grow faster, while reducing redundant costs with that I will pass the call over to the Suntrust to cover the financials.
Thank you, Joe and good morning to everyone.
Its tough with some color on our revenue reported revenue was 107 4 million.
A record quarter up 30% over the same quarter last year, and adjusted revenue was $111 $8 million up 31% year over year.
Organic revenue grew 11% over Q3, 2020, and the split between organic and inorganic revenue was healthy at approximately 85% to 15%.
Insurance, which accounted for approximately 63% of our total revenues in Q3 grew 77% over the third quarter of 2020, 64% when you adjust for the crisp acquisition.
Same for a moment with insurance in the quarter auto made up 46% of total insurance health came in at 43% followed by life at 6% and home at 5% as you can see we are much better diversified than we were last year to put this into perspective in the year ago period.
The auto accounted for 65% of our insurance revenues Jeff.
Just touching on the other sectors brand in E Commerce, which represented 15% of our total revenues was up 8% compared to the year ago quarter, showing positive momentum as we head into the holiday season career and education, which was approximately 11% of our total revenues in Q3 declined.
3% year over year with the combination of Covid spikes and government program affecting our customers' advertising demand.
<unk> finance approximately 9% of our total revenues has shown good strength for us up 25% in Q3 over the prior year's quarter.
The macro environment had a stronger effect on our gross margin as insurers maintain demand while dialing back their advertising spend.
For the third quarter reported gross profit was $31 million equating to a 29% margin within the 28% to 31% range. We discussed on our last earnings call and compared to 32% margin in Q2, 2021, and the 30% margin we achieved a year ago.
David we have a marketing margin, our Vms was 35% compared to 38% in Q2, 2021, and 35% a year ago on a reported segment basis, excluding intercompany revenue that Q3 brand new it solutions gross margin was 23% compared to 26% in Q.
2021, and flat from the same quarter last year, and Q3 marketplace solutions gross margin was 25% compared to 29% in Q2, 2021, and 30% from a year ago.
Other solutions, primarily including our SaaS software business had a gross margin of 72% contributing to our overall gross margin level.
For operating expenses as Joe mentioned, we have an ongoing commitment to drive efficiencies and reduce cost and the way, we execute our operations and support infrastructure, which included the investment in Dms voice, we have been streamlining in eliminating systems to create better experiences for our publisher partners.
Advertiser clients and consumers and added capabilities, which delivered revenue and margin improvements. The ETR is focused on technology efficiencies and organizational design that will continue to drive better productivity across the organization by reducing the redundancy that has occurred as a result of acquisitions.
Plus significant growth over the years, the ETR will also streamline decision, making and efficiently reduce our operational costs.
$5 million in annualized savings were completed during the third quarter. However, the majority will be completed in the fourth quarter on an annualized basis, we will improve the cost structure by $8 $4 million, but the effect on Q3 was negligible given the timing.
Effects of the initiative, let's show up both in our cost of goods sold as well as Opex.
<unk>, 90% of the $8 4 million in Opex.
For example, we are migrating from a fully cloud based infrastructure to a hybrid cloud on premises solution, which is required to enable a truly scalable agile infrastructure and gives us maximum flexibility and control of hardware network performance storage redundancy and cost efficiencies.
Important to note these efficiencies and cost savings are not just a onetime initiative we are in.
Embracing the efficiency and cost savings philosophy with plans for continual introspection to identify and resolve redundancy throughout the business.
Total operating expenses amounted to $26 million in the third quarter, a decrease of $3 million from Q2, 2021 and up $2 million year over year.
You May recall, we became a public company on July 16th 2020, and while Q3 was our first quarter and we cycled against public company expenses.
Areas of Opex have risen as a result of recent acquisition and our investment in people processes and technology.
We ended the second quarter with a total head count of approximately 600 full time equivalents.
Finally on profitability, our adjusted EBITDA in the quarter was $11 million or a margin of 10% compared to $14 million or a margin of 17% in the same quarter last year.
Net income came in at $5 $4 million or a margin of 5% up from $1 $3 million or a margin of 2% in the same quarter last year EPS came in at 10 cents.
<unk> nine <unk> in Q3 2020 lastly.
Lastly, turning to the balance sheet and liquidity. We ended this quarter with $18 $7 million in cash cash equivalence and marketable securities flat from the end of Q2, reflecting normal shifts in working capital our total.
Total debt at quarter end was $224 million and net of issuance costs. It was $218 million as of quarter end, we had the full $50 million balance available to us on our revolving credit facility.
Last month, we issued updated guidance and we are comfortable that we're on track to achieve that guidance of course like every company. There are unknown. So we must monitor including D that I want to call out right now.
Q4 is the seasonally very important quarter for us we have spent a lot of effort and resources to ensure that the health insurance open enrollment period, which has been ongoing since October 15th is a successful one on all sides of our business the strength of the upcoming holiday shopping season. During these uncertain.
Time will also have an effect on our Q4 results a quarter ago, we were cautiously optimistic that the worst of Covid was behind US. However, the delta variant enlarged and impacted the U S affected our employees, our advertising clients and beyond there'll be seeing some improving trends.
It is difficult to predict whether we will once again have to deal with future space. However, with continued investment in our people processes and technology and with continued execution. We remain comfortable with our previously mentioned gross margin range of 28% to 31% and variable marketing margin.
Of 32% to 36% for the full year 2021, as a reminder, next year, we plan to pivot to GAAP revenue for both reporting and guidance that Youll consistency. We will continue to provide guidance for both GAAP and adjusted revenue for the remainder of 2021.
2021 full year GAAP revenue guidance is a range of 421% to $431 million and our adjusted revenue guidance range is $437 million to $447 million.
While we expect adjusted EBITDA of $60 million to $63 million, including the impact of acquisitions that were completed during the first half of the year unchanged from last month's update.
We anticipate our free cash flow conversion to continue into Q4, which in turn we expect to help our ability to continue to delever absent any future acquisition.
In summary, we reported a record revenue quarter in Q3, we are excited about our early with all during the AEP and OUP periods, and we believe that our efficiency and cost savings initiatives will become part of the fabric of our organization with that we thank you for your interest in Dms and we will now open the line.
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Okay.
Our first question comes from Michael Graham from Canaccord, Michael. Please proceed.
Hi, Thank you and thanks, a lot for all the information.
I just wanted to ask two questions. If I could the first one is just on the on the auto insurance space.
What are you thinking about in terms of how long it might take for the carriers to sort of cycled through this period of compressed margins and sort of return back to normal levels of marketing spend like how long has that taken in prior industry cycles. Like this and then the second one I just wanted to ask you.
You talked last quarter about launching Dms voice.
Which seems like a good sort of boost to margins you.
You mentioned this quarter some COVID-19 related headwinds in your call centers. So just wanted to ask him to talk about your progress there more broadly.
How big this channel can be for you over time.
Hey, Michael Good morning. This is Joe Mariner Chi good to have you on the call I'm used to have a Maria on I know you are in for her today.
We're multi telcom.
Thank you.
Okay. So first question on auto insurance and the bid price cycle and how long that.
That might last.
I guess, what I'd first say is that we have confidence that we.
We're at a bottom in insurance now because we're working with both the enterprise insurers and then we have our Asian footprint, which is substantial.
And beyond this we've been tracking the kpis and bid prices for the better part of the last couple of months as we've seen some compression herein.
With the Kpis that we track and looking at the bid prices and with the feedback that we have from the carriers plus the stability that we get from the agent model.
We believe that we're at a stable bottom now so the compression in our opinion has ended how long the cycle's going to last.
Kind of have to look back to the same cycle in 2016 17.
There is.
Relatively.
Firm degree of optimism going into 2022 that bid prices will start to come back up.
With that.
That's to be determined, but that's pretty much consensus from from the from the people that we speak to enterprise clients agents and then other competitors in the space. So.
I think we're working our way through we've reached the bottom and hopefully in early 2022, we start coming back up.
Second question on Dms voice.
Generally that's an internal solution and it has served us well and it has helped us deliver.
Top to bottom inside of our funnel capabilities. The issue that we had in Q3 was specific to our Memphis call Center, where.
We staff a lot of our health insurance.
Team that right now is obviously critically important to us during the open enrollment period. So because we have a static contact center there that type of environment is more susceptible to.
The COVID-19 issues that come.
Our country has been plagued with which would obviously not been great.
And we did have a delta spike in that call centers that was isolated to that one specific location, but the largest fatality of dms voices about agility and flexibility in <unk>.
Leveraging data technology media reach specifically the technology that is the voice and most of those agents or <unk>.
At home. So the platform itself is solid but we did have an issue in our static call center, which not a whole lot. We can do about that if you have a delta outbreak, we've got a rollout safety protocols and make sure that we're taking care of our people first.
Getting them back in when it is appropriate so that was that was the specific issue with the Memphis call Center, which was I.
I would say acutely problematic because.
We need to staff up staff up heading into the AEP period. So there was a number of different things that we have to do once we worked our way through that to make sure that we were at capacity. So we can hit the ground running here during open enrollment, which we were able to execute on those on those strategies.
Okay. Thanks sounds good Joe I appreciate all the all the color.
Youre welcome.
Our next question comes from the line of Marvin Fong from BT Archie Marvin. Please go ahead.
Good morning, Thank you for taking my questions.
A question on gross margin I think it's a fair to assume.
Auto insurance a little weaker.
But I thought it'd be helpful. If you could provide sort of an update on on your other major segments, how pricing and margins are behaving are they basically kind of mirroring the strength in revenue growth and then a second question just on.
Protect health insurance agency I know, it's begun underwriting out in time for the for the fourth quarter open enrollment period, maybe you can just kind of give us an update on how that's going and then also it might be helpful too.
Give us some additional color on how youre thinking about that for next year when it should be.
It will ramp more fully thank you.
Okay.
Hey, Marvin good morning. This is Joe speaking, so I think I'll work backwards through your questions and cover their protect Medicare Agency first.
Yes, so that was pretty much stood up during the Q3 period.
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Right up until the point, where we made it public facing announcement in early October it was to be determined if we were gonna have licensing in place to have those agents on the phone during the open enrollment period, which started the 15th of October. So it was an all out sprint in the quarter to lay the foundation to get the infrastructure play.
<unk> and the licensing in place to have those folks on the phone and I'm.
Proud to say excited to say that the team across the fatality Dms cold hard and we got it done and we have roughly 25 licensed agents on the phone during this open enrollment period, which.
It was really important for us to get in market. This year, because we're seeing really positive early indications in terms of performance. There. We obviously have really strong.
Top of the funnel capabilities, leveraging our data our technology and our media reach and now having the ability to write policies and be vertically integrated there is very exciting for us and as I said the early indications are.
Are in line with those expectations very positive so <unk>.
<unk> growth going forward for next year I mean, this is a head count driven model in terms of having qualified licensed agents on the phone and we feel very confident that with the learnings that we'll have in this open enrollment period and with the infrastructure, we have already built in with.
Let's call. It subsequent investment in that infrastructure that we can substantially ramped this model into 2020 to them because it is headcount driven.
We have a plan we have a formula we can execute on that and we can take 25 agents up to say 150 agents, which.
This is in line with our plan and that would drive fairly linear growth. When you look at adding that head count. It just is a function of how we add that head count how that head count has trained recruit hired and trained to put on the platform, but the goal would be to have.
Exponentially more agents on the phone next year during the open enrollment periods. When we have this year and being in period being in market. This year during that period is what sets us up to make that happen. So we're very excited about that.
Yeah.
With regard to.
Gross margins outlook I'll, just say generally that and I think for <unk>, it's probably going to want to contribute here as well, but just generally you hit on it in an auto insurance, we saw bid price compression in the quarter and we were not sure where the bottom was there, but we wanted to continue to stay.
In market and deliver on the advertising budgets that we had so we did absorb some of that compression internally, which obviously hits our variable marketing margin and then pulls through to our gross margin levels. So.
That was certainly an issue for us inside of the insurance category, which as you are aware during period was the majority of our revenue 63%. So there is a disproportionate hit there to variable marketing margin and overall gross margin outside of insurance, we did not see this.
Same type of compression that we saw inside of insurance and margins were generally stable elsewhere in the business.
I'll flip it to you if you want to provide any more color to Marvin on this.
Sure Joe Thanks.
Marvin I think firstly I'd like to say like a reported gross margin was 29% well within the guidance range of 28% to 31% that we've been talking about slightly below the prior quarter last year again for all the reasons, we just talked about the auto insurance political impact as well as the effects of the spike.
<unk> infections.
Joe hit it I mean insurance was the area that got hit.
But if I kind of break it out.
And we've said this before we don't manage the business to a specific margin calls right. We continue to focus on optimizing our services to create efficiencies, we just touched on Dms voice.
Advertiser clients continue to spend more with us.
First party data as it grows.
The rest of the business growth overall in our gross margin growth. So I would say across the rest of the portfolio, it's pretty stable, but as we said I mean, the efficiencies that we put in place will be again across the different <unk>.
He calls not just insurance.
Overall comfortable with the 28% to 31% range going forward and BMI of 30% to 36%.
That's great that's great and if I could do a follow up just on M&A I know you guys don't.
I don't want to give too much away, but just curious I think kind of across the publicly traded area you know valuations have come in.
Just curious on what you might be seeing in terms of valuations for assets you might be interested in are they coming down and.
Just any any thoughts about the strategy going forward would be great. Thanks.
Hey, Marvin it's Joe back in again.
You are correct. It is there certainly are a lot of opportunities in our space. It's a relatively fragmented space I would say that market temperature is still on the hotter side right now.
From our perspective.
You have.
More sellers, but theres also a lot of interest as well so.
We'll continue to navigate this.
We've been very deliberate when it comes to deploying our financial and human capital specifically as it relates to M&A.
We obviously want to keep a pulse on what's going on out there we have.
Dedicated corporate development staff, but we're in the midst of our Q4 period.
You know what the guidance is for the period, we have the open enrollment periods, we stood up the <unk>.
Medicare Agency organically, we're really excited about organic growth prospects right now and finishing this year as strongly as we can but.
We will certainly.
Not put the blinders on and be cognizant of the fact that there could be opportunities out there in the corporate development team does a great job of staying on top of that but specifically to your question.
The market is still on the hottest side right now both in terms of quantity sellers and the interest from the buyer side. So valuations are still on the higher side I think that's the direct answer to your question.
Gotcha, that's that's great color. Thank you Joe and thank you for the singer.
Good talking to you Marvin have a great morning.
Yeah.
Our next question comes from the line of Jason <unk> from Craig Hallum. Jason. Please go ahead.
Hey, good morning, guys, Joe some of the other public companies that sell into the health and Medicare segments have reported a little bit of choppy results and outlook and kind of cited some churn and regulatory changes just curious if you can dive further into exactly what you're doing in that health and Medicare category, how you're helping carry.
<unk>, maybe how you're differentiated relative to others that are in the market.
Hey, Jason Good morning, good to speak to you.
So I can't speak to the inner workings of some of the other public companies, yes, you're right I saw some of the announcements that came out of specifically the ehealth yesterday.
There was some choppiness and.
When we look at our business.
We view ourselves as best in class in that top part of the funnel, which is why we are a strategic marketing partner to companies.
Ehealth like select quote go health as an example and <unk>.
And that's because we're leveraging that centralized toolbox, which we've talked quite a bit about which starts with data.
First party data that.
And then you have our technology, our proprietary technology with which connects into our media reach so I would tell you that this is really simple attracts back directly to the data and our ability to put the right offer in front of the right person in the right place at the right time and.
Because we are.
Able to source consumers that have high intent interact as you move down that funnel conversion statistics stay relatively predictable and ability to convert and.
Acceptable rates, where theres ROI on marketing spend is there and.
The consistency of the ability to do that is what I would say.
It gives us stability in our ecosystem as a strategic marketing partner and then as we move over to the other side being in the agency business.
We're very confident in our top of the funnel capabilities to source good quality consumers that have intent to interact and purchase the senior health insurance products. So.
Best in class or top usually results in good outcomes, down-low, and where strategic marketing partner to these folks and now we're in market with our own agency. So.
With regard to what's going on in our ecosystem, we're very confident about that.
With regard to what might be going on in those other ecosystems I don't fully have my arms around that but I can tell you that we have very as I said earlier when speaking.
To Marvin we had very positive early indicators here with the results that we're seeing inside of our agency model.
Perfect and then just bouncing back into auto insurance wondering if you can break that down a little further how broad based kind of the compression was there was that across all enterprise.
Enterprise and agency and then from a carrier perspective, where you're just seeing that maybe from a couple of large carriers or are you seeing kind of a little bit of hit to combined ratios the marketing budgets across pretty much all of the carriers are working on.
It's pretty consistent across the enterprise clients, obviously, the agents provide a greater degree of stability.
In terms of how they spend their marketing dollars, but.
When you don't.
When you don't see this stuff coming in.
It.
It starts to move in a in a fashion, where its continually moving down its hard to plan ahead of that so it puts you in this place where you're somewhat reactive to it. So we had to make adjustments in the third quarter and then subsequently.
Monitor those adjustments as we moved into the fourth quarter to ensure that we could.
Maintain the budgets that we have at the enterprise level and service those clients because they need to be spending and then also.
Serve the Asia customer base as well and.
I guess, what I'm, telling you is when you don't know where the bottom is sometimes you maintain certain spend levels, which is what I was getting at with Marvin on gross margin with the singer came in behind on.
You try to spend through this stuff to maintain advertising budget and in doing so sometimes.
You do this at low margin and potentially no margin to see what the cycle is in that just generally effects. The totality of the business. So the price compression was pretty consistent across the enterprise level customers. There was some compression at the agent model, but not nearly as much I would tell you the agent the.
The agent base that we have gives us.
A good degree of stability on the auto insurance side, which is why you know on our COO.
Q on Q basis quarter on quarter basis, we still grew pretty demonstrably in the category, but.
No theres no denying that there was price compression at the enterprise level and that had a negative impact on the business and the industry in total so.
Got it okay. Thanks for the color appreciate it.
You got it Jason good morning.
As a reminder to ask any follow up questions. Please press star one on your telephone keypad.
Our next question comes from the line of Nick changed from Citi. Nick. Please proceed.
Great. Good morning, Joe Thanks for taking the questions.
Two if I could I guess, one is maybe looking at the E Commerce business as we go into the holiday season is there any.
Jack.
Any signs of an impact from supply chain challenges and I think in some categories. We're hearing that holiday spend is getting pulled forward.
People are kind of planning a little bit more due to kind of.
Certain items being out of stock and then the second question.
You know without I guess looking for a comment on the strategic review is there.
The strategic review impacting your M&A strategy I guess in other words are you.
Potentially not being as aggressive.
On acquisitions as you work through the strategic review.
Yeah.
So I'll work backwards with you and good morning, Nick good good to have you on the call. Thank you.
I'll work backwards on that so with regard to strategic review.
Yeah.
It's basically business as usual for us as a public company.
Obviously that in the background does create a little bit of noise, but you know.
We need to continue to run the business as we have run the business.
No as I said, it's more of them.
It's a fairly busy M&A environment right now and you have a lot of sellers out there, but you also have a lot of interest on the buyer side than I.
I would generally say that prices are on the warmer hot side and.
We're keeping it.
Tad on that to make sure that.
We're aware of the opportunities, but we're also very much heads down on our plan for the balance of the year.
So very excited about the momentum that we have here during the open enrollment periods with the health insurance segment of the business and we did make an acquisition earlier this year and Chris that we made.
Strategically ahead of this open enrollment period, so executing during the open enrollment period on that strategy. As a result of that acquisition is kind of like the continuation of our M&A strategy, but.
I wouldn't say, we're closed down, but we're heads down on the organic side and we're certainly.
Keeping our eyes on the on the M&A grid, so to speak or the companies that we track. So yeah and then in regards to the strategic review.
It's in the <unk>.
In the script in the press release, you know no comment until there's something to comment on so just.
Just continue to move forward with that we've got two really good banks and Goldman Sachs and Canaccord working on that so if and when there is an update we'll obviously communicate that to the market.
On the question with regards to E Commerce. It's a good one you know theres a lot of supply chain issues.
In the country that are highly publicized.
We generally don't see those types of issues with the advertisers that we work with and we've not been given any early indications as we head into <unk>. We're now very close to that e-commerce holiday shopping season.
There are some unknowns around that and we'll have to see how that plays out but the current guidance that we have provided.
Which we went through on the call in terms of where we believe we will finish the year.
It contemplates.
The degrees of unknown that exist in the market with regard to.
The holiday shopping the AEP period, some of the uncertainty that still exists with Covid COVID-19. So that's all factored into the GAAP revenue guidance of 421% to $431 billion. The adjusted revenue guidance of $4 37 to $4 47, and the expected adjusted EBITDA.
60% to 63 right so.
Then.
Q4 projections and the totality of that is.
I'll just go with the adjusted revenue of $116 million to $126 million adjusted revenue and $16 five to 19, and a half and adjusted EBIT. It takes all of all of those variables into account and.
We're excited about that because that would be another record revenue quarter and we're seeing really good positive early indicators on performance to lead us to believe that we're going to get there.
Great. Thank you.
Youre welcome Nick.
Okay.
That is beyond just the Q&A session and this concludes today's call. Thank you for joining like hype you'd have a lovely rest of your day you may now disconnect your lines.
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