Q3 2021 Galaxy Digital Holdings Ltd Earnings Call
Okay.
[music].
Good morning, and welcome to Galaxy Digital's third quarter, 2021 earnings call.
Today's call is being recorded.
At this time I would like to turn the conference over to Galaxy's Investor Relations team. Please go ahead you may begin.
Thank you.
And welcome to Galaxy digital third quarter earnings call before we begin. Please note that our remarks. Today may include forward looking statements actual results may differ materially from those indicated or implied by our forward looking statement as a result of various factors, including those identified in our filings with the Canadian Securities regulatory authorities and available on our website.
Or in future filings, we make with other securities regulators forward looking statements speak only as of today and will not be updated in addition, none of the information on this call constitutes a recommendation solicitation or offer by galaxy digital or its affiliates to buy or sell any securities, including Galaxy digital securities with that I'll now turn it over to Mike Novogratz.
And CEO Galaxy digital.
Good morning, everyone.
Calling from our new office down here on 300, Betsy So there's an air of excitement.
<unk>.
I want to start off by quoting my favorite song, which has been clean go to the Moon, which says no regrets is bullish and I promise you and my children I will never again use my name in the third person.
But it kind of completely encapsulates, how I'm feeling about our industry and our company right now.
Galaxy is that a unique perch in that we see institutional.
Investors in every bucket, we see people that are building. These ecosystems on a daily basis, and so we're really seeing the energy that's pouring into this space right now when we when I traveled to the mid east or around the country and meet with big institutional allocators, they're either allocating already or they're getting very close.
This last year, we've seen $25 billion of money move into the venture space.
That's a staggering amount versus where we were in the past.
So it's hard for me not to believe that the GDP of this space like the market cap, which is currently around three trillion dollars.
Is it a lot higher than a year.
When we meet with new founders radar venture venture teams are constantly meeting with new foundry, we see an explosion of innovation.
People building on top of platforms and building on top of those and so the opportunities.
Of new innovation to invest in it to to help guide through to trade to custody.
To expand.
And then when I look at the MLP space.
The NFC space came from nowhere it is already.
Trading $3 $5 billion of debt like last quarter $10 billion of any ftes are traded.
And so yeah.
You know, it's hard not to be bullish.
Because of that you know I think it's really clear to see that this is a growth industry and galaxy is a growth company.
18 months ago.
Pre COVID-19 or maybe it was two years ago, we were roughly 80 people and today. The combined Galaxy go entity would be 510 people.
That's a lot of growth we've taken our office of people that we hired generally as our chief people Officer now we have 10 people working on recruiting onboarding and integrating to try to build what we hope is the investment bank of the future.
One really exciting announcement I want to make before I get to our earnings.
Is that we've just announced today that Neil Paciello.
The deputy former Deputy Solicitor General of the United States, one of the most prominent lawyers and all of America and a dear friend of mine is joining us as a senior adviser and he's going to share right.
Advisory Committee for Us.
Mostly helping us in D C and navigating what we think is going to be an interesting political.
And regulatory framework, but also helping us with our own legal department here and commercial opportunities around the firm and so we want to welcome Neal I couldn't be more excited.
Let me turn to earnings real quick.
Listen it was a awesome quarter right net comprehensive income increased to $517 million in the quarter, that's up over 1000% from the previous year.
Our year to date comprehensive income $1 2 billion.
It's pretty remarkable the earnings power that this industry is providing us.
Could it be fair to say that some of the income is attributable to overall price appreciation of the assets that we hold in the venture of medicines that we hold but our operating businesses are also doing amazingly well Damian and Chris It Alex is going to are going to provide much more detail about that later in the call.
Finally, I'm excited to share that our preliminary earnings quarter to date as of November 12, or approximately $400 million meeting, let our total year to date earnings or over $1 6 billion as of last Friday.
Regarding our U S listing as we've previously announced subject to all required regulatory approvals and processes. We remain in progress to re domicile list in the United States. We confidentially submitted a registration statement with the SEC relating to the move to the U S and are actively engaged with a common process. We now expect to complete this process.
The list in the U S. In the first quarter of 2022.
And regarding our acquisition of Big go we expect to close this deal concurrently with our move to the U S. In the first quarter.
Through this process, we've been running at full speed and continue to grow the business concurrently taking advantage of market opportunities and progressing with our digital integration planning daily and as shareholders. You should be very excited for what Galaxy has accomplished this quarter and the combined galaxy co can accomplish next year and going forward.
With that I'm going to turn it over to Damian Vanderbilt our co president and head of global markets.
Thanks, very much Mike good morning, everybody.
I'd like to take a minute to also welcome Neil catch L to our leadership team.
I've had the.
Pleasure of getting to know Neil through the last quarter as we were figuring out this position here and.
He is really something that we can't wait to get him in here to help us navigate.
D C and regulation as Mike alluded to.
I Wonder I want to score a few of mikes comments about adoption trends before I jump into the performance of our asset management and advisory businesses, which both had phenomenal quarters.
In my over 20 years and market facing roles I've spoken to clients investors and prospects every single day, and this past quarter and fourth quarter to date I have never seen the volumes are interested in bounds come across my desk.
I've spoken to everyone from 22 year old Crypto 1 billion is looking for investing and trading advice. So the investment committees of the most conservative pension funds in the world, who are exploring adding bitcoin and crypto to their investment mandates.
Let me share some interesting insights with you from conversations with our global clients.
Institutions are getting up the curve extremely quickly on our sector.
Most now have dedicated crypto teams.
Alternative managers are onboarding with us regularly now and where possible applying tread fly strategies to crypto assets.
So many of the world's largest asset allocators and institutions. However.
A lack of regulatory clarity continues to heavily influenced the ways that their capital can be invested in the sector.
Mike touched on those.
<unk> of least resistance for many has been allocating capital to the crypto sector.
This venture and private equity funds, who inherently have limited capacity.
This wall of capital is leading to rapidly ascending private company valuations and this leads me to two important observations one.
It can be misleading to look at the way capital is being allocated today and conclude that the institutional communities not rapidly becoming sophisticated in the sector. Most are in fact much more sophisticated than their current investing activities suggest.
And to that when we do get regulatory clarity there was a gigantic wall of capital that is waiting to be allocated to the sector directly.
Which is exactly what galaxy digital is designed to facilitate.
Now to put some of those calls and numbers into context, remember, where we stand today as Mark mentioned, we have seen reports and data, indicating that over $24 billion of investment in fund raising in the digital assets economy to date.
Could this year.
And our own internal track as indicates that the invested dollars into the space is actually closer to double that amount year to date through October.
By comparison for you will in 2020, it was less than 7 billion using the same crackers and we still have two more months to go in 2020 one.
What's more is we're seeing well over $400 billion now with daily crypto market volumes on exchanges and a market capitalization of the crypto sector nearly three trillion dollars.
So what is that telling me.
I think the accelerated investment activities boosting valuations as I mentioned, it's adding to the number of crypto unicorns, which is notable that number is standing at more than 20, crypto firms with valuations north of $1 billion.
Notably that group includes a few custody platforms, we think because financial services incumbents are looking to get into that space, whether through deals or partnerships.
That's of course part of the reason we are buying Victor the second largest crypto study in the world.
Flight that $1.2 billion deal price setting a record at the time.
Already saying, it's smaller competitors appreciate in value.
It seems like investors are realizing what we have known for a little while which is it adding custody services in crypto is an integral step to becoming a leader across the space.
I remember distinctly the world pre announcing because we're one of the most frequent questions I got from our clients is how and where to watch securely store our digital assets.
Until may of this year.
My team and I had been directing them to our network of trusted trusted crypto custodial partners.
And now once we close our clients will have the option to custody, where they transact and can rely on galaxy for the entire lifecycle of transacting and holding digital assets.
The only testing my read on all of these are pumping valuations is that the investing world is waking up to what we've been saying that the addressable market opportunity is largely untapped and has the potential to increase exponentially as applications of blockchain technology for facilitation of broad Detroit and <unk>.
Almost become a reality.
That's what I've said previously the one thing we could have wrong in our forecast is the size of the 10 it could be a lot bigger than even we had galaxy believe it could be.
Now turning to our business units I'll provide an update for our asset management and investment banking units and Chris will provide updates for trading money and our principal investment portfolio.
Beginning with asset management business.
We continue to see strong demand for both passive and active exposure to crypto currencies. During the third quarter, we saw significant inflows into our funds and we saw assets under management increased 57% from the end of the second quarter.
Reaching $2 $2 billion, having grown 175% year to date.
Net client inflows in the quarter exceeded $490 million confirming that the investment case for crypto currencies in a fund structure remains compelling.
So even in a quarter, where crypto asset prices were rising backing out the impact of asset price increases we continued to see net new capital coming into the Galaxy platform.
And the trend about the same attracted positive net inflows has continued quarter to date.
As we're thrilled to share with the market, but as of the end of October our assets under management have now reached $3 $2 billion.
That is pretty remarkable growth since we ended 2020 at just over $800 million in assets under management.
We continue to have a really strong partnership with our friends at Cri in Canada through a number of products with our theory of Etfs, that's now well over $1 billion AUM.
And we've added a number of other incredible partners to the Galaxy ecosystem since we last spoke.
In August we partnered with the Larian to launch the hilarious Galaxy global blockchain indices.
And Ah Larian Galaxy global crypto currency focused blockchain indices.
These indices support the ever growing demand for investment opportunities in the blockchain and crypto economy.
In September we announced a strategic partnership with Invesco Etfs to develop a comprehensive suite of U S listed physically back digital asset exchange traded funds.
This exciting launch of market, leading capabilities will offer investors an unprecedented combination of solutions and information that gives structure to the complex and fast moving digital asset space.
We're tremendously excited to work with Invesco and the leadership there on products for the future.
On the new product front, we were excited to launch the Galaxy default Index fund, which is a passively managed fund providing institutional investors access to returns based on the performance of <unk> through a simple secure vehicle with exposure to the largest most liquid portions of the decentralized finance crypto market.
The fund was ceded by our friends in long term partners, New Zealand funds, a wealth management firm that manages over $2 billion of New Zealand to savings.
Finally in October and announcement was made regarding the launch of the Invesco wherein galaxy crypto economy E T S.
And the Invesco Alerion Galaxy blockchain uses and decentralized Comose ETS.
Which all have somatic equity exposure to global public companies and select investment vehicles that are actively engaged in the cryptocurrency and blockchain sectors.
Turning to actively manage venture funds as we reported last quarter. The Galaxy Interactive fund has deployed substantially all of the $325 million committed in the inaugural fund, which was already the largest franchise dedicated to the interactive sector.
As a reminder, we establish galaxy interactive in 2018 to fill a gap in funding available to companies in the interactive sector. The.
The intersection of content finance and technology.
And in October we announced the Galaxy directive as rice to fund with $325 million of committed capital with participation from over 70, new Lps, including institutional investors endowments strategic investors and family offices.
And as shareholders. It is key to remember the galaxy digital retains and LP interest in both Galaxy Interactive fund offerings as well as G. P.
Yeah.
Moving now to our investment banking business. There has been a flurry of activity in just the past few weeks demonstrating the significant amount of interest investors and companies have in the crypto economy.
But also the substantial network that our banking team has built over the past year.
Judy I V closed three deals in the last three weeks is working with eight.
Active mandates and maintains an active pipeline, including many more potential deals.
Regarding the first of those deals in October of this year, our advisory team acted as exclusive financial advisor and sole placement agent on a $50 million capital raise for cool ways, a specialized cloud provider for both proprietary and client use cases across the digital asset machine learning and V effects rendering spaces.
The team also advised on two M&A transactions, which were expected to be announced shortly and for one of these we acted as the exclusive financial advisor for the acquirer.
I look forward to updating you on both transactions next time, we speak.
And last but not least up team served as digital assets adviser on a capital market transaction, which is expected to be announced this week.
The team remains extremely busy working through eight active mandates in various stages of execution. The engagements remained primarily for capital rising given the staggering amount of fund raising activity, we've seen mail sector in the past few quarters.
We've also been hiring to assist with the growing demand in the historic levels of transactional and fundraising activity, we're seeing in our industry.
Since we last spoke to you we've added a senior managing director in New York to enhance origination and execution efforts for which we continue to see accelerated demand.
Overall, we remain confident we'll continue to see strong growth in both our asset management and advisory businesses and the infrastructure, both Steve and Michael are building to support that expansion.
I'll now hand, the call to Christopher I wrote in my co President who will walk you through some investment trends, we're focused on details for trading and mining businesses and an update on the very important and exciting petco acquisition progress.
Thanks, Amy and good morning, all I'll first cover the performance of our trading mining and investing businesses.
Our trading business continued to show that despite seasonal and price volatility, we can grow through greater depth of relationships with counterparties across spot derivatives and lending execution as well as providing opportunistic market, making offerings to ecosystem players.
Before we get into specific key metrics I want to provide greater clarity on a regular question we'd get about trading.
And thinking about the business is split between one our firm's core long active trading on our own behalf versus two all beta neutral counterparty facing and liquidity provider activities year to date contribution for counterparty and market, making related activities is approximately mid teens as an overall mix of total net revenues.
To be clear, we're considering net revenue is realized and net unrealized gains and trading net of funding costs plus net interest income from the entire trading division.
Now, let's start with business performance from our execution desks counterparty or counterparties spot trading volumes decreased 28% quarter over quarter. Following all time high volatility witnessed in the second quarter.
While this was a decline from the record highs witnessed last quarter, we are still comping to a dramatic increase in excess of over 280% versus prior year period.
Derivatives were a relative bright spot for us declining in the single digit percentages quarter over quarter.
Increasingly sophisticated institutional approach towards managing crypto exposure demands scaled derivatives and structured trading execution.
Derivatives is a clear differentiator for GTT, and we applaud Rob Pranav in the rest of the team for their accomplishments this year so far.
Turning to lending, we've continued to add and deepening existing client relationships.
As a reminder, we believe originations tell a clearer story for growth given the volatility of crypto asset prices that can cause notable shifts to the size of our overall loan portfolio for any given snapshot.
Third quarter, we added nearly one 5 billion of gross counterparty loan originations growing cumulative year to date, one originations to well over $3 billion.
This drove a 65% sequential increase in the size of the counterparty one book to $615 million as of September 30th.
Moreover, I'm excited to report that we've now surpassed 900 million U S. In our loan book as of last week.
We continue to see robust share of Fiat denominated loans at around a third of the overall book versus nearly zero percent at the end of 2020.
This helps to provide a dampener against the impact of crypto price volatility on our overall loan portfolio aggregate exposure.
And more importantly for measuring the impacts of market volatility, we continue to deliver robust growth while remaining over 100% Collateralization on average and operating with no defaults are forced liquidations provide.
Providing intelligent and thoughtful financing solutions to the market continues to be a core pillar of our company.
We believe that the foundation, we built here will allow us to scale this activity dramatically across both product as well as business units in quarters to come.
I also want to highlight the incremental revenue paas within and surrounding the GTT business that have emerged as a notable contributor to performance over the last few months. Specifically these are our services to both emergent and legacy network protocol communities that include market, making liquidity and capital provision no validated formation and staking.
James Roth and his team working closely with our execution in lending desks as well as with the entire blue fire trading team have built out a suite of new offerings that we believe will fuel incremental growth support development of projects within the crypto economy and make galaxy <unk> platform of choice not just for institutions accessing the sector, but for the formation of new institutions within this.
Sector.
Finally, I want to note that the proof of G. T. His leadership within the industry continues to be exemplified by its accolades.
Last month, CBOE announced it will acquire <unk> to enter the digital assets bought and derivatives markets and it also selected Galaxy digital for its digital Advisory committee to support its plant expansion.
This all speaks to the resiliency of the institutional grade business, we are building and hopefully signals to our clients and counterparties that they can rely on us for liquidity and execution regardless of market conditions.
Moving onto our principal investments business, we've continued to aggressively pursue and invest in the most compelling opportunities across the ecosystem.
Excluding our portfolio of companies within our interactive business. We now have 110 investments across 71 portfolio companies.
Through fourth quarter to date, our team continued to grow our strategic portfolio with new names added such as pet our new Salon based real World data Oracle service in collaboration with jump.
Segment, one of the largest independent sticking out to service providers.
<unk> the first completely defined native client execution platform and chaos labs, a nextgen smart contract audit and stimulation company led by former Facebook alum founders.
We continue to see record breaking fundraising and deployment around the sector, which provides us with the flexibility to realize and recycled gains opportunistically and to see our direct exposure to this space mature faster than it would've been vision, even a year earlier.
Specifically, our new trend emerge this year with the public and stock markets, taking aim at crypto.
On the existing portfolio side, we've been the beneficiary of successful public listings and completed slashed contemplated dis backs, including coinbase backed site for mining and bullish global.
Furthermore, we've also begun to selectively.
Active in the primary pipe market, where strategic alignment of interest exist.
Two examples of this include core scientific as well as our most recently announced investment in Monex group, a Japanese financial services leader as well as in one of its portfolio of companies trade station group.
My next not only has a strong footprint in Japanese retail market with over two and a half million customers across traditional financial brokerage and crypto through its wholly owned sub coin check, but its third hallmark property trade station operates one of the most comprehensive self directed prosumer trading platforms in the U S for equities futures options and most recently crept up.
We're incredibly excited to support and partner with the trade stations crypto offering in the U S as well as to strategically align ourselves with the <unk> platform as we turn our eyes towards APAC expansion across the entire business.
We're incredibly proud of the venture team's dedication to the sector and galaxies mission within the business to source diligence execute on and then helped grow the sector's most cutting edge technologies.
Now turning to mining where the team continues to build momentum in both mining and its mining finance offerings.
And prop mining through strategic relationships and our knowledge of the space. We remain on track to receive a steady supply of hardware to achieve mining capacity of nearly 2000 pet attached per second by the end of 2022, which remains well over 1% of the total bitcoin network hash rate as it stands today.
And importantly, we continue to mind bitcoin at a significant discount to fair market value with our all in full cycle cost of mine still below 10000 U S per coin.
Turning to our client facing business our mining team continues to secure collaborative mining deals across lending with over $75 million of net originations and credit facility specific to bit quaint miners, including Argo and honey.
We've also seen miners in traditional pools of capital with direct or indirect mining exposure brought in their use of our platform doing business with our derivatives desk for risk management exposures amid ongoing volatility.
Last quarter, we also made public a dedication to manage our carbon footprint and increasing the use of clean energy.
We're now happy to share that as of September 30th our mining business is using and electricity power mix consisting of more than 80% sustainable power sources, and we maintain a long term goal to utilize and over 80% sustainable power mix. So all in all the positive trends, we saw in the third quarter across the business and so far in <unk> demonstrate the continued staying.
<unk> of the crypto ecosystem, but also the politically the validity of our diversified offering model or.
We're not only scaling and our ability to provide access into the crypto sector, but also in supporting its growth from relationships within the ecosystem.
Before I hand, the call over to Alex I want to provide a very short update on the <unk> acquisition.
Our teams are progressing nicely on tactical and strategic integration planning led by our Chief operating Officer Aaron Brown.
We're in active preparation to deliver a single scaled platform to clients on day, one post closing and our discussions have already spawned numerous ideas for synergistic growth on the other side of the merger process.
I'd also like to ride some quick operational highlights from the <unk> business over the last quarter.
We're pleased to announce that <unk> has continued to grow AUC across its clients with assets under custody of $35 5 billion at quarter's end and surging after the quarter to cross 64 billion in November.
They also continue to support over 400 coins and tokens and 150 crypto exchanges worldwide.
Moreover, the Brookfield transaction enhances both our product innovation and development capabilities as of today as Mike mentioned, because head count has reached 234 full time employees with significant hiring focused on the technical aspects of the platform.
We continue to believe this combined solution will be the premier one stop shop for access to digital assets.
With that I'll turn the call over to Alex to walk everyone through the specifics of our financial performance Alex.
Thank you Chris Good morning Galaxy earned half a billion dollars for the three months ended September 30th and.
And the remarkable $1 2 billion gain year to date.
Our equity capital exceeded $2 billion at the end of this quarter.
Continuing to position galaxy to take advantage of abundant opportunities in this rapidly developing market.
In addition, as Mike said earlier, and we published in the earnings release this morning.
The fourth quarter to date through last Friday, our preliminary results were approximately $400 million. This.
This would bring year to date earnings to $1 6 billion and equity to two 4 billion now.
Now back to the quarter.
By the end of this quarter equity capital grew by 150% from the end of last year.
This was driven by galaxy's long term strategy to maintain a long digital assets portfolio.
Our diversified investments in this sector.
Active trading and hedging and our growing operating businesses.
To elaborate digital assets, taking realized and unrealized gains on digital assets.
We recognized $529 million for the quarter.
Excluding non controlling interests money from outside investors in funds that we consolidate gain on digital assets was $448 million for the quarter.
And $745 million year to date.
Private investments are great part of our story again.
Again, taking realized and unrealized together, we gained $177 million from investments in this quarter.
And $602 million year to date.
Our portfolio includes investments in 71 companies.
We recorded investments at cost or at a discount to market value.
In fairness many of our investments are made its early stages and are not immediately liquid.
Another piece of the investment story flows through gains on digital assets we.
We invest in your token protocols once the tokens are issued they are recorded as digital assets typically new tokens are made available for trading in tranches over time.
We record restricted tokens and digital assets at minimal at meaningful discounts Stoke.
It still can become unrestricted we recognize gains in digital assets.
On the cost side.
Equity based compensation increased in the third quarter for the full quarter effect of the grants that were made in the second quarter of this year.
This was for last year.
Last year's awards that were held up by a blackout period mandated them candidates out prior to the announcement of our bids co acquisition.
We also increased our bonus accrual for the quarter correlated to the positive results in the business.
General and administrative fees included an accrual for local taxes, and we recorded higher professional fees related to our U S listing and acquisitions.
Balance sheet.
As I mentioned before equity was $2 billion at the end of this quarter.
Cash was $276 million did.
Digital assets, including digital assets receivable and excluding non controlling interests were $1 8 billion.
In private investments were $780 million at the end of this quarter.
We mentioned change in auditors last quarter.
As part of moving our public listing to due to the U S retained KPMG as our auditor.
This was the first quarter there you viewed our results I would like to welcome KPMG to Galaxy.
I would also like to again, thank Davidson, our Canadian audit firm.
The exceptional service they provided and continue to provide the galaxy.
We enjoyed working together and we greatly appreciate their local expertise and talented staff.
With that back to the moderator for questions.
Thank you ladies and gentlemen at this time, we will be conducting a question and answer session. If you'd like to ask a question you May press star one on your telephone keypad.
I mentioned the tone will indicate your line is there any question queue you.
You May press star two if he would like to remove your question from the Q4.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Our first question comes from the line of Deepak Kaushal with BMO capital markets. Please proceed with your question.
Hi, guys can you hear me okay.
Loud and clear.
Excellent, Mike and the team glad to be back on the call and.
Yeah.
Glad for the opportunity of asking some questions.
Mike just on the on the first question on the U S listing.
The lack of a better word delay you know the prior expectations Q4, and how youre looking at Q1.
Can you give us some insight into into what what happened was it just kind of administrative.
And what are kind of the next steps in the process you've done your confidential filing.
What should we expect in the near term before that becomes public in saying, Okay, Yes, listen I can't give you much color. Unfortunately, because where we are in process, but you know our process will be no different than than any company filing with the SEC.
You put in and they give you comments you go back and forth.
And so like we said we expected and are excited.
First quarter <unk>.
Close bit go concurrently with re domiciled in the U S and enlisting here.
Okay. Okay. So just in general Hmm, maybe as an aside to that.
You know the FCC did give some heat to to another publicly listed company.
With respect to lending.
How is your lending business different from that and how do you expect the regulators to look at it youre lending business in light of that.
Sure. Thanks Deepak.
I think first of all I'd like to.
How do we finance the lending business and so we financed our lending business, both with internal capital So equity capital as.
As well as wholesale financing lines for lack of a better term from institutions.
Inside and outside of the crypto ecosystem.
So.
Not retail public retail deposits. So I think that that that's first and foremost.
But the biggest differentiator.
And I think that's probably.
The area that the regulators have taken the most focus on and the other side of it is from a from our asset perspective.
Our counterparties are all institutions family offices, and ultra high network individuals as well. So we don't take part directly in financing retail nor do we nor do we take financing from retail.
Okay. That's helpful unexplained, Chris Thanks for that.
Two more questions. If I may one again back to Mike obviously, we're.
We're in a different time versus 2018, and they've got a lot of questions from investors, where we are in the cycle.
Just from you again, what were some of the lessons learned in the last cycle in 2018.
You guys better prepared as a business and strategically this time around if we do see another crypto winter at some point.
I think for first the industry is much much more mature.
In 2017, you know going into 2018, it was broadly speculative.
And it was a very immature investor base right. It was 99% retail.
Buying into this story that.
Crypto and blockchain is going to change the world.
And then the <unk>.
<unk> got a little nervous.
And things have gone too far there was a supply response with so much new product.
I think what's different now is institutions are much bigger part of this.
The infrastructure the infrastructure that's been built is much more real.
And so the blockchain some more robust.
The business is building building on top of them are generating real revenue, we're moving from a crypto only ecosystem to interacting with the real World I think <unk> was the first really big area, where that showed up in part of the reason why we have this excitement right now as people realized Wow, we can use.
<unk> change too.
Disrupted revolutionized the art market and the advertising market in the collectibles market and soon enough it'll be the health care market and so I think theres been a realization that this is not just an asset play. This is a technology play.
This is web three out of the internet of the future the.
The Internet a value exchange that you can get lots of different names, but I think investors get that now and so.
You're seeing much deeper investing in this space doesn't mean, we can't have corrections.
We will have a correction at one point right. There is that there is a lot of euphoria going into the markets.
Markets don't grow up go straight up forever.
And so there's plenty of.
Things that could cause corrections.
I'm really confident that those corrections will be bought.
People will continue to build build and build and so I told my employees in 2017 18 years, they were taking a risk.
There are risks that this will work out and I don't think theyre, taking credit risk I think we have execution risk right. There's a lot of competition in the space, we need to execute execute execute.
But this industry is here for good.
Okay. That's helpful. What three dot all you mentioned that another buzzword, we're hearing a lot. These days is not averse.
You you have investments in N F T gaming.
You've got your new Interactive fund.
What do you see as the critical pieces of infrastructure in this med averse.
And how are you guys getting exposure to that space in particular.
We've made 22 or 23 investments in that space, you know put $62 million of of capital.
Lots of those.
Those companies I can think of things like Candy digital which we helped start which is a.
Memorabilia and NFC memorabilia company Major League baseball is the first big client but.
Some other clients coming on board.
I can think of art blocks, which is the premier.
Premier platform were generative art lifts generative art is using code to create art and it's probably the.
No.
The space of the NFC world closest to the art market.
In 15 years or 20 years, when you look back things like the beach Czerniak than.
Are going to be known as the great artists.
Different men.
You know crypto pumps in what we call collectibles and so we're putting investments all over the space.
We really think this is the first inning. There do you think about right now if you buy a great and it's T. You can show it to someone on your phone or maybe on a prequel television screen.
In the future, there's going to be a our glasses, they're gonna be whole worlds created.
Wear your ftes interact.
With the rest of the world and so we really think this is early stages. We just raised another $325 million funded interactive.
Could it be more proud and excited about the team we have there.
I think we're on the cutting edge continue to hire into the space and so it will be a big part of our business going forward.
Okay, great well. Thank you for taking all my questions I appreciate the airtime.
That's fine.
Our next question comes from the line of Mark Palmer with B T. I G. Please proceed with your question.
Yes, Thank you and good morning.
Thanks, very much for the update on a bit goes performance.
Particularly up through.
November which is it's just remarkable we have been hearing an awful lot about bitcoin or I should say.
Blockchain infrastructure firms that are gearing up for a big surge in staking in 2022.
Especially with the anticipated.
Emerge.
For theory I'm 2.0.
And your integration with Deco, how are you thinking about taking volumes in 2022, and how are you preparing.
For a potential increase in volumes.
Sure.
So we we are focused on is taking.
We think that.
Objectively the vol.
Volume of potential unlock of of assets Mistakable assets.
A bunch of new networks that were launched this year, there's gonna dwarf what we've seen so far in.
In the past and so it is a core focus of ours and a core focus of the entire <unk> team.
We think staking.
Is something that clients of a custodian are going to demand and so we think it's incredibly important that we offer it.
And so we are.
We are working on the strategy on that front, but go today.
Does offer staking itself and in partnership with external partners and we're going to do that strategy going forward, but it will be.
Unless things are macro change it will be a core part of our offering.
Thank you and yeah.
Of course, we saw the approval of a bitcoin futures ETF actually more than one.
But we also saw a rejection of physically backed bitcoin ETF.
Just wanted to get your take on.
Where things stand.
In terms of approval of.
These structures, what your expectation is going into 2022.
How that will impact your strategy with regard to the asset management group. Thank you.
Thanks, Mark it's Damien.
We have filed at the moment as you know with Invesco out partners.
With an S one and so.
We're going to be limited in giving too much perspective.
Around the direct answer to your question.
Think the.
The futures backed bitcoin ETF approval.
Was possible because of the cash settled nature of that product and so none of that.
Uh huh.
Protector.
To achieve that exposure hits, the underlying big coin market.
That is clearly different with the bitcoin backed Etfs and.
We're hopeful that as the FCC works through some of their concern list that the future will.
B, a bright one for firms like ourselves and invesco and others to be able to have a cashback bitcoin Etfs.
Very good thanks very much.
Our next question comes from the line of Ken Worthington with J P. Morgan. Please proceed with your question Hi.
Good morning, and thank you for taking my question and I wanted to follow up on on Mike's yours and in Damien's comments in your prepared remarks in terms of the crypto markets. We saw healthy sell off mid year and more recently a recovery with many token prices searching to new highs again following up on your prepay.
Remarks, you commented on on the on.
On the environment.
There've been a number of teams that you've spoken about and I think have driven increased interest in the cryptocurrency market.
The thought of Bitcoin is digital gold.
I think the Fiat inflation hedge seemed to be a contributor earlier this year to what extent do you think mainstream participants are in our evolving from saying crypto currencies, maybe Justin asset just seeing them more as a technology and is there a change here that might be drew.
<unk> participation and interest and then more broadly as you speak with your clients and maybe more importantly, non clients, whereas the mainstream market in terms of understanding the crypto ecosystem.
Yeah, Let me answer that so I would start with.
In the institutional world right people are putting money into venture the big institutions that are now putting money into not just a claim but a theory of in other projects. I think this shift of thought that we're going from an asset play to a tech play is a big driver of the acceleration of the <unk>.
Fomo actually of saying I can't Miss the next Internet.
In the retail market, it's harder to have our fingers on it we don't touch them on a day to day basis, though I certainly do through my Twitter.
Conferences and lots of other ways.
I think it's you know it will be.
Be unfair to to.
To not give them some credit for sophistication.
The crypto universe is.
Is <unk>.
Very dedicated right.
Here's the nicknames like D gens and whatnot. There is a core group of people that are making their living following these projects and understanding them.
And so I think it's a more sophisticated market than it was certainly in 2017.
Listen, it's not everybody like and anything you got some core group of people that are really understanding what's going on in there pulling new people into these ecosystems you remember, what's both really really powerful about the way crypto works, but can be also.
It can be dangerous is that once you are engaged in a project you've got a vested interest in pull other people into your project and so youre seeing hold the ecosystem show up right. I mean, this year I think that the best examples are both terrell lunar and salons.
Ecosystem is run by very charismatic.
Founders with good technology with lots of building and lots of great partners and so out of nowhere you have gotten.
It's unfair to say I know, where these guys have had been building for years, but the real acceleration of those networks came this year and youre seeing it in things like Avalanche.
Al Grand lots of other.
These ecosystems are pulling people in.
It's way early to figure out.
All of this all shakes out will we have you know for blockchain and web three or 40.
And I think anyone who tells you they know the answer is probably.
A little foolish because we're still early in that play.
But again to your question there's more sophistication.
And most people than most people think.
And Ken I might just add one thing under Mike's comments were.
You might find it interesting.
Describe.
When I'm talking to the largest institutions now a sense of frustration.
At the lack of regulatory clarity, which is in many instances, forcing them to have only one channel to allocate capital into our sector and that's through fund structures are the adventure of private equity, which I mentioned in my prepared remarks and their desire is clearly.
To make sure that they are not missing the next legs of the movement in the underlying crypto assets and so you're seeing an expansion in the private.
Market valuations of the infrastructure companies.
And once we get regulatory clarity there is just a <unk>.
Gigantic wall of capital that will try to find its way into the crypto asset <unk>.
<unk> system directly and so there was a frustration that.
Lack of clarity is almost forcing them to miss the price appreciation that is happening in the marketplace and forcing them into into a.
Private equity is.
Environment that is extremely stretch.
Stretched.
Great. Thank you very much.
Our next question comes from the line of James Friedman with Susquehanna. Please proceed with your question.
Hi, exciting times guys, it's Jamie at Susquehanna.
Two I'll just ask them upfront.
So I think it was Damian speaking with regard to the defy Crypto fund I think that's maybe the one that.
It's actually the Bloomberg Galaxy Defy index. So maybe you were talking about something else, but my question is.
Do you see any.
Different characteristics with regard to the demand trends for the defects are not in terms of volume, but in terms of.
Investors relative to some of the other.
Assets, that's the first one and then with regard to the U S listing.
I'm, just curious and I realize Mike you said you can't talk a lot about it and I totally respect that I'm just curious.
What's the spirit of that like why why is that why do you feel like.
That's real important for you if you'd do.
Thank you Ellen.
That question first.
We went public in the Canadian venture exchange and the Toronto venture exchange.
Back in 2018, because it allowed us to raise permanent capital.
Broadly on a business plan and in the U S. You need three years of audited financials.
No.
That was great.
What is very clear to me now is that the liquidity of the world.
It shows up in the NASDAQ and shows up in the U S. And so you look at a stock like ours that on average trades 50 odd million dollars of day Sunday is higher some days lower relative to say the mining stocks that do one quarter, one fifth one sixth of what we do.
In both.
Diversity of activity in earnings and lots of things and they trade at times 500 $600 million a day.
So you know to create liquidity for our shareholders to be able to access deep capital markets. It seems that essential to beat here listed in the U S. It's the capital markets Center of the World and we want to be a global company with Big aspirations. We think this is a growth industry.
So being able to tap in and raise capital when we see opportunities as a as an important part of our game plan.
I might add just to check on your default fund question.
If you look at the development in our asset management business of our index product.
It is perfectly mirrored what we're hearing from our institutional clients that are choosing to use passive fund structures to allocate into the sector and so what we are aiming to provide people with the building blocks to put together an exposure.
That suits their investment needs and so it typically and this is true.
The majority of the sales cycle of institutions in our sector and.
People start with bitcoin like an allocation that's the longest sale, but then stopped doing work typically on a theory and then they want to have our theory of trek a fun to allocate there.
Then.
Next.
Area demand ends up being default.
So these building blocks are in response to where client demand for allocating capital to the sector.
And these funds do provide onshore and offshore capabilities in most instances for people to put them together they can create their own index whites with how much they want to have in bitcoin versus east versus deep, but we also have a bloomberg.
Partnership, where we've created a large cap coin index that rebalanced every month and so people can say, we're going to do a market cap index based allocation and use that fund product. So you will see.
A handful more of those types of index products come out in the fourth quarter and the first quarter, which give everyone. The opportunity to sort of put together a portfolio that gives you a different exposures across the ecosystem.
Got it thanks for that happy holidays.
And two things.
Our next question comes from the line of Owen Lau with Oppenheimer. Please proceed with your question.
Good morning, and thank you for taking my question could you. Please provide more thoughts about.
About the consolidation in the crypto industry are we still in the early stage of M&A that companies are just adding more capabilities or do you see some signs that there are just too many similar projects out there competing in the same industry. Thank you.
Yes, let me answer that two ways. So there are there haven't been M&A around infrastructure and I think we will continue to see some but if you think about the pie. The pie is growing so quick that new companies certainly have roles to play.
The big debate is really around who's building, both level, one and level two blockchain and what's what's tight blockchain is going to be the block chain of the future and so there are probably 15.
Contenders.
That wont it.
Unseat a theory them or either unseated theory or more at least be part of that ecosystem that becomes.
The the giant distributed supercomputer work.
Consumer and financial.
Companies are built on top of and so.
I think youre going to continue to see new projects both level two solutions.
<unk> chains, all trying to sort out this.
This equation of decentralization.
Security and speed.
And that trilemma as the tally Fujian wants to put it.
Isn't solved yet.
And so.
That part is probably the most exciting from an investor perspective from a from a computer science perspective.
So I think youre going to continue to see lots of projects there.
When it comes to.
Exchanges and custody.
And security are there I think you'll continue to see some consolidation because theres economies of scale that play out.
Yeah.
Got it just a quick follow up on that then could you. Please add a little bit more color on the principle in fact, once I think Mike you touched a lot on the N F. Keep it all at an F T where do you see the opportunity in the private market and Youll principally in the last months. Thank you.
But what's beautiful about open source network right about blockchain.
And that.
Is that you can build on top of what already exists. So we call. It composed ability I always use that.
The example, if you had an iPhone and then you put.
You put GPS on the iPhone and next to you you get Uber and door dash and all the other <unk>.
Delivery services and mapping services and so you can think of the blockchain as the ice storm in lots of ways that things get built on top of and so what we're seeing is an explosion of innovation, it's like that the new generation decided oh those old rules don't exist. We can just innovate and so we are.
Constantly looking for great founders with great ideas and there are a lot of them.
No.
Tons of the the best Engineering minds coming out of University are going right into this space and so our team John call, Michael Jordan, well, Natalie or are what I'll call.
We had three venture team.
Is constantly out there meeting these founders looking for opportunities Chris you want to highlight a few of the yeah.
To hit on some specific things as it pertains to sort of unchanged right. There's there's core unchain protocols. That's building the base layer infrastructure for peer to peer.
Transacting and then there's things like we mentioned pit, which is of a real world data Oracle right and so bringing real world data programmatically on chain is going to be incredibly important in order to sort of bridging that in order to bridge the two gaps and allow.
<unk> contracts to interact with things that are happening sort of outside just the ones in the zeros.
In web three.
Another example.
Is.
<unk>.
Sorry.
Another example is taking we talked about right and so staking as an infrastructure is incredibly important and we are we are.
A handful of investments now in staging providers throughout the ecosystem.
Because we see that as we particularly we see that piece of the ecosystem sort of that.
The demand on a go forward basis basically exploding.
And so those are those are a couple of examples online credit scoring it was another good one.
And so as People's identities.
<unk> become a exist more on chain than they do in the real world.
We need a way to figure out who the who those people are and how are they going to act.
And showed good actors get lower cost of capital and get more financing and so unchain credit, scoring and I'd say the identity is also something that we're really focused on because we think so these are the level two three and four layers of the ecosystem that are being built now that are really going to drive the economy on churn.
Got it. Thank you Mike Thank you Chris.
Our next question comes from the line of George Sutton with Craig Hallum. Please proceed with your question.
Thank you congratulations on the results and I'm pleased to hear your comments process relative to a U S listing.
Damian you mentioned, a gigantic wall of capital will be allocated I'm just curious how much of that you feel is dependent upon some regulatory clarity.
I think it's happening anyways. This is Mike I'm, sorry, I cut Damian off.
That's my privilege of age.
I think it's happening anyways right I was just with some big pension funds that are moving that direction, they're going to allocate them.
I think it would accelerate a lot.
Right because again, if you think about the more conservative institution.
How does how does institutions look well.
Who goes first to go second once you have two or three people in that bucket if its insurance company. If its pension fund if it's college endowment they all want to know how the other guy let the other guys are doing and so we're starting to hit the tipping point in almost every one of those buckets I just know that if they get the okay from the regulators.
It will accelerate because youre pitching aboard the board or less close to the markets and then the portfolio managers the guys that run these funds.
They tend to be older not younger.
Right Theres, a direct correlation of age understanding tripped out right you talked to 24 year olds. They all they all get it you've talked to 74 year olds and very few get.
And so I think this is just a process.
Inventory clarity completely accelerating.
Okay.
Just one other quick question for you you mentioned health care could be the next big area of disruption for the blockchain I'm. Just curious if you could give a little bit more of a picture of what you're referring to there.
Let me restate that I think I don't think its going to be the next big.
Areas of disruption I do think it will probably be one of the hardest because of all the problems in health care, but it it would be.
Insane.
A future where we have.
Stop being trends Trent value being transmitted all around block chain and you can keep your private data.
That we're not gonna have our health care records in your own NFC right.
I do think we'll get there it's probably the tail end of this revolution not not to be getting himself I.
I misspoke I apologize.
Thanks, Robert Flaherty.
There are some projects working on it but it's a you know with HIPAA stuff and just the way our health care system is set up it's.
It's a tough it's a tough.
Road to Hell right now it just makes so much intuitive sense think about your go to you go to the doctors and then what your health care Records you can like all different Kansas.
They should be in your wallet right next to your bitcoin.
Youre opera tickets and you end up Ts.
Thank you.
Our next question comes from the line of Kevin Dede with H C. Wainwright. Please proceed with your question.
Good morning, gentlemen, thanks for having me.
Damien just a little more clarity.
Wanted to jump in on it Mike that's great I E.
Yeah, I'm, just still a little confused right I get the whole wallet capital clearly evident.
What's not clear to me is what happens with regular regulatory clarity do you see a compression.
And the private equity market given that the institutional public one opens up.
And do you think that would come with a collapse in private valuations how should we look at that.
Yeah, So I would tell you that.
Probably one of the most central issues here in the U S for investors and.
Providers of liquidity is the determination of what crypto assets.
Probably securities and those that are not in.
And whilst that fundamental.
Interpretation subjectivity exists most large fiduciary fees are not going to take any risk there and they're going to allocate capital into the sector through mechanisms that are permissible so venture capital funds and private equity funds and so that is where you're starting to see.
<unk>.
I would say excess capital try to find its way into the sector relative to what would probably be happening. If there was clarity of where people could allocate directly.
And I don't necessarily think that.
That clarity, we will see a collapse in private equity valuations.
The reality is of private equity in our sector as there is very few assets.
<unk> for people to invest in or to acquire relative to the Tam as I also mentioned in the number of people who want to be exposed to the sector.
I think what you will see once we have regulatory clarity is.
Assets that are currently allocated into.
Other sectors find their way into crypto.
But the allocated directly and people being able to allocate portfolios into the full ecosystem of coins and digital assets.
We're involved in.
Okay. Thank you Damian.
I'm not sure who would want to take this.
A little clarity on the mining strategy.
Given the.
The target appears to be maintain greater than 1% of the network cash I'm wondering if that sort of strategic intent longer term.
Yeah, I think the.
At its most fundamental level, we think bitcoin.
Incredible incredibly important part of the crypto ecosystem.
About whether asset and we think being a participant.
On the network and helping to secure the network is important from a good actor perspective, let alone the financial profile of maintaining and so.
We picked 1% as a target as our initial target.
We're going to achieve that.
Where that goes from there yeah, I think we'd all look around and say, we'd love to maintain at least 1% because I never got that necessarily a hard and fast harder.
The hard and fast goal that will depend on how the network evolves warehouse rate goes we're on a capital basis and how we allocate.
But as a starting place that feels pretty good.
We love the economics.
In bitcoin mining today, we think there are forces at hand.
That suggest those economics are going to stay highly attractive for an extended period of time, not the least of which is Ah.
Foreseeable continued supply chain.
Mismatch between available supply of.
High quality equipment and.
And with demand and so so we like the business a lot we're committed to it and we think there are there actual longer term tailwind behind it which is slightly different than what it's been.
Over the past five years prior to now.
And Chris you commented on trading volume through the September quarter.
Cross derivatives and spot I was wondering if you could just add a little more color on what you've seen.
Sure.
We have seen.
We have seen volumes pretty much across the board of our core product offerings increased post September 30.
Which is commensurate with what you would expect.
And as correlated to sort of flashes give it out on our own results generally speaking.
And so.
The market is volatile.
But in general we have seen a rebound.
In October into early November.
But it's still early yet.
Okay.
Mike a couple for you maybe.
Could you talk a little about.
How you see.
Position of crypto.
Versus gold and an inflationary environment that seems to be one or and at the moment.
<unk>.
Do you think.
If you would ask gold bugs.
Two years ago, where the price of gold would be given.
You know what's happened in monetary and fiscal conditions around the world.
They would have all answered far higher than here.
<unk> thousand 800.
Whats happened there has been a substitution of.
Bitcoin for goal.
And we've seen it directly you've seen and indirectly you've seen in the charts.
Still think goal is probably an okay asset to own in this in this environment, but it's it's just gotten crushed by bitcoin and I think that adoption cycle continues.
Without any other shift when we went from analog from analog to digital right I mean, how many people still use Kodak film.
And because it is just a better version of a store of value and it's being accepted at our accelerating pace.
Our value gets its worth from the social construct that people agree that it's valuable but I've got a whole my hard earned.
Money My Labor my savings in this form and they're now over 200 million people around the world that participate in the clean ecosystem and it continues to grow and as you'll get.
<unk> not just of those 200 million people, but have guys like Stan Druckenmiller, and Paul Jones and insurance companies and now pension fund. The debate about is it is it a store of value.
Is way over it was over nine months ago, and so now it's just adoption.
And it doesn't mean it will be volatile right. It still trades at 90 ball.
And so 10 times of volatility or seven times the volatility of gold.
And so.
On a volume adjusted basis, it's actually.
Most of the same.
The same amount of risk in People's portfolios.
I, just think youre going to continue to see it and adopt it.
It's cheaper to store, it's more of a new it's more mover.
It's more.
I mean, the verbal now that I'm missing or it's easier to move.
And so it's just it's a better mousetrap.
Well couldn't couldn't you sort of extrapolate that to include all of Crypto, Mike I think that's kind of where I was hoping you would go.
Listen I think there are three buckets I put crypto in why don't I put bitcoin has its own individual brand and its and its one that right. It doesn't mean it will be the only store value right people are storing value in crypto pumps right now.
Right.
It's a cultural association.
There are only 10000 crypto pumps, it'll only be 10000, crypto punks galaxy about crypto pump. So if you're a galaxy shareholder you now own a part of a crypto punk.
It's a really powerful community.
When Jay Z.
His avatar crypto punk I remember I.
I was on stage at Christie's and I said, well, we should all by them because the king of culture. Just said this is important.
And so that will be a store of value in some sense in the same way art is but in terms of a fungible big.
Liquid store of value I think bitcoin is going to be the winner.
The second part of Crypto wallet has some affinity to it right a theory.
Selena and.
All the polygon and all these other ecosystems.
They really are tech bets, they really are event that we rebuild.
This infrastructure.
What I call three and that adoption on that infrastructure really accelerates.
The evaluation is part of that infrastructure and part of that sense of being part of the community in the same way Vic one isn't so it's not zero or one but the broad use case.
There is utility in these things.
And then when do you get.
Things like <unk>, which are built on top of those platforms.
Real earnings.
Bill Mudd.
Money that gets generated.
And so I think as a lager and most defy protocols will be looked at more like we look at equities.
You'll have long short short defy analysts.
They've been less in favor in the last six months because.
It'll level level, one and level two protocols, where the activity is.
F T space really credentials as well, but let's not count defy out I think youre going to see a a renaissance.
These protocols there is still some regulatory hurdles to get through and defy most most notably is who gets to use it right. If you're trading against the smart contract are you trading against someone who has been Ky seed.
But there are lots of.
Yeah.
People working on solutions to that including ourselves and I'm very confident within the next 12 months, that's going to be easier and easier for regular regulators to understand and it would be okay with and then I think youll see an explosion of use cases, and that's what's going to get the traditional finance companies and artists.
Okay last question for me Mike.
Last quarter we.
We opinion to the wall on your call a bitcoin I think you said 60, K, we went way through that before the end of the year. We got six weeks left what's your guess.
Does that.
You haven't been a macro investor my whole life, what typically happens in the last stretch the horses come around the bend and they see the finish line of these 31 and the winners push ahead.
So it will absolutely not surprise me to see a.
Pretty sharp move a big client of cerium and many of these projects into year end.
I do think we'll have a correction sometime in the first quarter people will wake up to say well I've got to pay tax.
They don't wake up to.
If you're a hedge fund.
We're taking your your promote.
And so theres, a theres a vested collective interest to drive prices higher.
Sure.
Whereas you know listen being an investor in <unk>.
Crypto after the kind of move we had is difficult right because on the one hand, you're saying I see all of this flow what's going to drive prices significantly higher and you look at how far it's moved and you say Oh got a correction could be painful.
The genius of being a speculator or or an investor in that stuff has to be able to hold both of those things at the same time as possible possible and to try to keep as many.
<unk>.
As much sensitivity to what youre seeing in the shorter run. So you can protect against those those big moves I don't see anything right now.
The real short run that could.
That can really damage the ecosystem.
But that doesn't mean, there is nothing out there.
Okay. Thanks, so much Mike and gentlemen, and maybe you'll give us a chance to ask at the end of the fourth quarter. Thanks very much you got.
There are no further questions in the queue I'd like to hand, the call back to Mike Novogratz for closing comments.
Got it thanks for that.
Supporting us thanks for being on the call today.
It's been an amazing year for Galaxy, we could not be more excited.
It was a great quarter, we're off to a great start this quarter.
I wanted to just.
Emphasized we are a growth company in a growth industry and so we're going as hard as we can.
Christopher mentioned store employees that they need to take at least one vacation a year, but we've got you now.
A unbelievably talented group of young men and women that are working their tails off and so.
Thanks for listening and we'll be back.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.