Q2 2022 Real Matters Inc Earnings Call
Good day, and thank you for standing by well consider real matters second quarter 2022 conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your tongue.
If you require any further assistance please press star zero.
Now like to hand, the conference over to your Speaker today Lynn Barker. Please go ahead.
Thank you operator, and good morning, everyone. Welcome to you all matters financial results conference call for the second quarter ended March 31, 2022 with me today are real matters, Chief Executive Officer, Brian Lynch, and Chief Financial Officer, Phil Herman. This morning before market opened we issued a news release announcing our Q2 results for the three months ended March 31.
2022 release, the accompanying slide presentation as well as financial statements and MD&A are posted in the investors section of our website at <unk> Dot com.
During the call we may make certain forward looking statements, which reflect the current expectations of management with respect to our business and the industry in which we operate.
However, there are a number of risks uncertainties and other factors that could cause our results to differ materially from expectations.
Please see the slide entitled cautionary note regarding forward looking information and the accompanying slide presentation for more detail.
You can also find additional information about these risks in the risk factor.
<unk> section of the company's annual information form for the year ended September 32021, which are available on SEDAR and in the investors section of our website.
Reminder, we refer to non-GAAP measures in our slide presentation, including net revenue net revenue margin adjusted EBITDA and adjusted EBITDA margin non-GAAP measures are described in our MD&A for the three and six months ended March 31, 2022, where you will also find reconciliations to the nearest <unk> measures with that.
I'll now hand, the call over to Bryan Bryan.
Thank you Lynn.
Everyone and thank you for joining us on the call.
I'll kick things off today by discussing some of the highlights of our second quarter and some of the key drivers behind our numbers.
Bill will then take a deeper dive into our segment financials and I'll wrap up the call with some brief remarks prior to taking questions.
We reported consolidated revenues of $95 million consolidated net revenue of $24 2 million and consolidated adjusted EBITDA of $2 $5 million in the second quarter.
Our U S appraisal business delivered solid financial results against the declining market environment, and we delivered top ranking performance on client scorecards and U S appraisal, which resulted in market share gains in the quarter.
U S title also saw year over year market share gains with our recently launched clients as a result of being ranked a top performing vendor.
In Canada, we had our best second quarter on record.
The U S mortgage market presented significant headwinds to our business in the second quarter. The U S 30 year fixed rate mortgage.
<unk> increased in 27 years in this quarter, putting pressure on both the incentive to rate refinance and affordability.
Interest rates jumped more than 50 basis points in mid March the largest two week increase in more than a decade.
Affordability is now at its lowest point on record outside of the 2004 to 2007 period with the monthly payment for the average priced homes purchased up $329 or 24% year to date.
And $596 or 54% since the onset of the pandemic.
At current rates the rate refi candidate pool was down more than 80% compared to the started the year.
Sitting at approximately 2 million candidates.
Against the backdrop of these interest rate movements, we estimate that the mortgage origination market contracted by 38, 8% in the second quarter with purchase transactions down an estimated 8% and refinance transactions down an estimated 54, 1%.
U S appraisal mortgage origination revenues, which includes purchase and refinance were down 11, 5% year over year compared to an estimated 23% decline in total addressable origination market volumes as market share gains and new client additions help soften.
The impact of the market decline.
In the quarter, we increased market share with four of our top five clients and we launched three new lenders in U S appraisal.
Other revenues also increased on higher home equity volumes.
Our market estimate includes a year over year decline in the use of GSE waivers, which helped increase the size of the addressable refinance market for appraisal and partially offset the 54, 1% total market decline for refinance market active.
<unk>.
In our U S title segment second quarter centralized title revenues declined 74, 7% year over year against an estimated market decline of 54, 1%.
As I mentioned earlier, our performance with newly launched titled clients has earned us increased market share on a year over year basis.
Performance remains the key driver of growth in our U S title business as we continue to advance the sales cycle with more franchise type clients and convert the pipeline to new client launches, we launched one new title client in the second quarter.
In our Canadian segment second quarter revenues were up 11, 2% year over year from increasing market share with a number of our large Canadian bank clients and modestly higher revenues from insurance inspection services.
With that I'll hand, it over to Bill Bill.
Thank you, Brian and good morning, everyone.
Turning to slides four and five for a closer look at our financial results.
U S appraisal segment revenues decreased seven 8% year over year to $74 million due to lower addressable market volumes, partially offset by market share gains with existing clients and new client additions.
Transaction costs in our U S appraisal segment decreased seven 4% year over year.
Revenue decreased nine 2% to $15 1 million, while net revenue margins declined 40 basis points to 21, 4% compared to the same period last year.
The decline in net revenue margins was due in part to the mix of mortgage origination volume service, which included complex property with higher appraisal fees as well as an increase in home equity volumes.
Operating expenses in this segment decreased two 5% to seven 2 million due to lower payroll and related costs and lower licensing fees.
Adjusted EBITDA in U S appraisal declined to seven 9 million from $9 2 million in the second quarter of fiscal 2021.
And adjusted EBITDA margins contracted to 52, 1% on lower net revenue margins and lower adjusted addressable market volumes.
Turning to our U S title segment revenues declined 73, 1% year over year on lower estimated refinance market volumes of 54, 1%.
Diversified revenues totaled <unk> 4 million.
Klein of one 6 million from the second quarter of fiscal 2021, as a result of rationalizing the service offering last year.
Transaction costs in our U S titled segment decreased 69, 9% and net revenue margins decreased to 67, 1% from 76% in the second quarter of fiscal 2021.
Contraction in net revenue margin was due to a higher proportion of closed centralized orders relative to incoming order volumes in the comparative quarter of last year and higher net revenue margins in the comparative quarter last year for home equity volumes serviced.
Operating expenses in U S titles decreased $5 8 million to $9 4 million in the second quarter due to lower volume service.
We posted an adjusted EBITDA loss of $2 2 million in the second quarter of fiscal 2022 down from the $13 million, we generated in the same quarter last year.
Owing to the impact of lower refinance volumes.
As we outlined during our last conference call. We continue to manage operating expenses relative to volumes service, while ensuring that we make the right decisions to support our long term objectives.
In Canada revenues increased 11, 2% on a year over year basis to $13 8 million, while net revenue margins contracted by 70 basis points due to the mix of appraisal services supply.
Canadian segment operating expenses were <unk> 6 million in the second quarter up from zero point $5 million in the second quarter of fiscal 2021.
And adjusted EBITDA margins decreased to 67, 3% from 76% in the same quarter last year due to an increase in operating expenses.
Are you able to other expenses.
In total second quarter consolidated net revenue was $24 2 million compared to $46 7 million reported in the second quarter of fiscal 2021 due to lower revenues in our U S title and U S appraisal segment, which was offset in part by revenue growth in our Canadian segment.
Consolidated net revenue margins were 25, 5% in the second quarter down from the 36, 2% we posted in the second quarter of fiscal 2021, reflecting lower margins across all three segments.
Consolidated adjusted EBITDA was $2 5 million in the second quarter of fiscal 2022 down from $19 million in the same quarter last year.
Consolidated adjusted EBITDA margins decreased to 10, 4% due.
Due primarily to the performance of our U S titled segment.
And lower market volumes.
Turning to the balance sheet, we ended the quarter with cash and cash equivalents of 78 million at March 31 2022.
In the quarter, we purchased approximately 336000 shares at a cost of $1 5 million.
At the end of the quarter, we had $2 5 million shares remaining under our current in CIB.
And as we outlined in this morning's press release, we intend to increase the size of our current and CIB seven 6 million shares contingent on the approval of the PSX.
We also announced our intention to renew the NCI.
Given our outlook on the business.
And the strong cash position our capital allocation strategy going forward will be focused on purchasing shares.
We believe it represents the best use of cash in this environment.
With that I'll turn it back over to Bryan Bryan.
Thanks Bill.
The fundamentals of our business are strong our U S. Appraisal segment delivered solid results in the second quarter, despite significant mortgage market headwinds.
We continue to win market share across all of our segments based on our performance and we launched new clients.
While interest rates increased much quicker than anticipated the market declines we are seeing today and the industry forecasters are calling for over the next 12 to 18 months are not dissimilar from the normalized market assumptions, we had outlined during our investor day in the fall of 2020.
Albeit occurring a year earlier.
Cost management will continue to be key as we navigate through these headwinds as we've done in the past we are focused on scaling our cost structure to align with volumes as we work to grow volumes such that we can scale back up.
That said supporting long term clients and the franchise value of our business is non negotiable our.
Our strategy to grow market share through top tier performance and adding new clients has not changed and we remain confident in our fiscal 2025 objectives.
Home price appreciation is up a record 19, 6% year over year and up 34% since February 2020.
Americans have more equity in their homes than ever and we will be working with our clients and leveraging our platform to help consumers take advantage.
Their capital equity.
We have existing home equity capabilities to support our long term growth objectives.
Channel expansion has always been a key element of our sales strategies that allows us to engage and accelerate the sales cycle with our clients.
It creates stickiness in our relationships, while uncovering organic growth opportunities.
Lastly on capital allocation, given our outlook for the business and prevailing prices, we are ready to deploy our balance sheet to purchase shares as we believe it is the best use of cash and a significant opportunity to return value to shareholders. We.
We do not view the current environment as conducive to accretive M&A activity.
With that operator wed like to open it up for questions now.
Thank you.
At this point if you have any question simply press star one on your telephone keypad again to ask a question simply press star one on your telephone keypad.
And your next to your first question comes from the line of Richard <unk> from National Bank. Your line is open. Please go ahead.
Yes. Thank you.
With respect to the title business I was just wondering if you sort of look at.
We're trying to obviously optimize the cost reductions with the opportunity so in its current form.
What capacity upside is there are you kind of consuming like three quarters of that capacity have can you give us a bit of context on that.
Yes, so I think I'm sorry, thanks for the question Richard I'd start with on the title business.
The pipeline I think continues to be robust on the business. So we need to keep focused on the new customers that we are targeting.
Number two we need to continue to deliver the exceptional performance Richard that the team is delivering right now so it's a non negotiable that we don't stay at the top of the performance scorecards with our customers.
That being said there has been a fairly dramatic.
Change in the refinance market this past quarter.
So our view is we want to run the business efficiently, but with our 2025 targets in mind and the tripling of market share and so we need to do that balance.
<unk> short term operational management with with longer term.
Capability and capacity to continue to bring on new customers and continue to build our market share.
Okay, Okay, and then on the title side still.
As you sort of look back on the prior quarter I believe you had some win backs in terms of tier threes and fours.
We kind of look forward here whats the sort of the mix between call it tier, one and twos and threes and fours.
As you kind of kind of moderate this business going into next year.
Yes. Good question, Richard So I think let's look at the long term first which is just.
Just like our appraisal business, we have now built up over the years the tier one portfolio. So all six of the tier ones and an incredibly robust tier two to tier four portfolio. Our view is that we leverage all of those same relationships that we build up on the appraisal side and take advantage of our performance.
Equity that we continue to drive on that site and drive those customers onto the title platform. So that continues to be our strategy and that is where we plan to land in title is have that type of tier one and tier two to four.
Category of customer customer base that being said I think in the near term the tier ones are definitely dealing with with an awful lot with the changes in the market.
So we are cautious cautiously optimistic that we'll continue to push the rfps through with the tier ones, but.
Yeah.
That aside we will continue to be onboarding tier two to four customers and so you should continue to see some of that over the next couple of quarters. So a lot of it I think has to do Richard with how the market plays through how our lenders focus both from a product standpoint, so where they focus activity a lot of focus right now on <unk>.
<unk> not surprisingly, but also we should see some focus on areas like home equity, which for some tier ones means theyre going to have to sort of restart the engine. So we'll have to see how that plays through the rfps are there. We continue to have conversations around them, we're cautiously optimistic, but what you should see more tier twos to force.
Also coming on the platform the next few quarters.
Okay, and then just one last one for me, obviously, you're subject to the.
The macro here, but.
I guess the challenges is that.
The stock price, where it's at.
You are clearly still sort of gaining share in the base.
Youre probably.
Given the cash flow and what you've been able to do on the cost side could be a potential target probably cut by a private equity like how do you kind of think about defending kind of opportunistic actions given youre depressed position chair of the macro today.
And so I think Richard it is it is a bit of a difficult market. We've seen this market before so the organization has been through this type of up and down in the past.
And so listen I think as as.
And along with my executive team I think what we really do is we stay very focused on the things that we can control.
And so that's really what we're focused on is running the business incredibly efficiently Richard and taking market share as you mentioned.
So so that's really what we're focused on our belief in the near term is that with the results we've been delivering with the cash that we have.
We've been very fortunate to raise on our balance sheet that the best use of our capital over the next little while is to deploy it into the market and buyback our shares which as you mentioned, we think are at an incredibly low position right now, especially as you look at the mid to longer term. So.
Thats really I mean thats the stuff that we can control Richard that's where we really stay focused and and that's what the team is going to stay stay delivering on that as well as sort of keeping an eye on our 2025 longer term objectives.
Okay, great. Thanks for taking my questions.
Thanks Richard.
Thank you. Your next question comes from the line of Todd as Michel <unk> from BMO capital markets. Your line is open. Please go ahead.
Hi, good morning.
Just in terms of the market outlook I mean, there's obviously a lot of moving parts in terms of trying to forecast the market but.
As you look at the current MBA forecast and just given your conversations with the customers.
In the current rate environment do you think those forecasting realistic or do you have any reason to.
Think differently.
Yes, So I think you are.
Youre referencing Thanos I think MBA, Freddie and Fannie They if you sort of take a consolidated look.
I think they view the market as <unk> calendar end of this year quarter and maybe into the first quarter of next year from a calendar standpoint, So I think that's really what the markets.
I think looking at from a from a trough on the title on refi. So I think we're not that far off that I think that is probably doable, we talked very clearly in our investor day that the benefit of the refi market would eventually find its way down and so as I mentioned I think we thought that would.
Happen next year, it looks like it's happening a little bit earlier, and so we sort of built that into our model. When we looked out over time Santos and so it hits a bottom bouncing.
Market of call. It 400, 500000 orders from our standpoint.
So I think we should see that in the next couple of quarters and so our view is again very much dependent on rates and other dynamics in the market that we should see that coming in the next few quarters.
Okay, and then on the title I think you've talked in the past.
Working with the customer in terms of maybe a pilot on the purchase side.
Any update on that side.
Yes, so again very small proportion of our title business right now is on purchase but we continue to leverage the capabilities that we have seen us on on purchase. So we will continue to drive that with our customers. It's part of our sales strategy as we go forward.
So I think that will be sort of one key element and the.
The other piece will be it would be interesting to see how cash out refi ends up playing out.
Again, very much dependent on the rates versus home equity, which of course could come into play.
If the rates continue to stay reasonably high so we'll see what the lenders ended up doing and where they focus some of their attention as I mentioned the tier ones.
Some of them got out of home equity early in that refi cycle. So some of them may come back in we deliver in that home equity space. So that would be the other space I think right now.
There will be I think some focus Santos and where we are very well positioned to deliver against.
Okay, great. Thanks.
Okay. Thanks Dennis.
Thank you and your next question comes from the line of Daniel Chan from TD Securities. Your line is open. Please go ahead.
Good morning.
Just a.
A few questions around the capital allocation you mentioned that M&A is going to take a payback be put on the backburner here I'm, just wondering whether thats related to the data strategy or something else and related to that why not take advantage of lower valuations in the current marketplace.
Thanks, Dan I appreciate the question so.
I would start with on the data monetization side of the acquisition plate.
Right now with where the market sits with our where our price sits right now that's something that we are putting on the back burner. It's there it's simmering, but it's definitely on the back burner.
Also been looking at.
Titled Tuck under so that's been another area of focus from an M&A standpoint, hopefully not surprisingly.
And right now our view is that the the cheapest the lowest risk the best shareholder value for US right now in the short term is definitely taking a look at buying back stock, which is why we've talked about increasing our in CIB.
So I think Thats really again back to what we think makes most sense in the near term.
We think thats the best deployment of cash right now lease risk.
Shareholder return.
Okay. Thanks, and then as it relates to the CIB you only have about a month and a half left on your current in CIB and Youre looking to expand that to buy another $1 6 million shares should.
Should we expect you to exhaust that 10 CIB by June .
I think Dan the way I would look at that as I think we will be very active on the NCI in the in the upcoming.
Near term and again a lot of it depends on some of the dynamics in the market but.
I think youre going to see us very active.
Okay, and if we think about potential limits. There should we think about it is are you willing to go above what you generate on a quarterly free cash flow basis.
Yes, no definitely Dan so we're going to be more active than we've been in the past around free cash flow will definitely be stepping up.
Great. Thank you.
Thank you and your next question comes from the line of Gavin Fairweather. Your line is open. Please go ahead.
In your prepared remarks, you talked about seeing some year over year share gains with your tier one and tier two but it does look like you.
Had moderating market share overall this quarter. So maybe you can just speak to what youre seeing in the tier three and tier four basin and when do you think that share can stabilize there.
Sure so.
On title share.
Gavin has mentioned we continue to drive very strong performance with our tier one and tier two so on our long term strategy, which is to continue to build that base I think we're definitely showing some.
I think the performance benefits, there and showing some results on that front.
As far as the mix as you know we made some decisions on customer mix and so we see that sort of playing through and we think we're pretty well at the back end of that.
Also mentioned diversified title as you know that that business non scalable.
Business that we shuttered a while back that still has a bit of an impact there.
The other piece is if you take a look back at Q2 last year Gavin.
Actually had a sort of a bunch of closed volume come in there was somewhat unexpected it was a carryover from the previous quarters. So if you take a look at our margins our margins were very very strong above 70% in Q2.
And so the compare youre now getting a little bit of that on the compare year over year, playing through so that really I think explains the market share differential.
Okay. That's helpful and then.
In your remarks, you also talked about.
Sales processes with the tier ones for title.
Influenced a little bit by kind of the slower environment.
Maybe a bit more inwardly looking right now so if you can talk about how you're adjusting your tactics from a sales environment, just given kind of those changing.
Maybe priorities in the market, maybe talk about how you're tactically shifting to adjust.
Sure so.
Sales stay very focused on.
Tier ones, we will continue Gavin to have them focus on tier ones.
But that being said, we will also continue to drive and put our shoulder into tier twos to fours. So I think you'll see that we'll continue those those types of sales conversations across the spectrum.
That being said pending on as I say some of the market conditions some of the ways in which the lenders are going to.
To manage through the conditions over the next few months last quarters. We will then respond appropriately so I had mentioned that.
We have pivoted some of our sales conversations toward purchase we've also pivoted some of those conversations towards home equity pending on how that lender is looking at the refinance market. So.
Again, our long term is continue to focus on leveraging all the appraisal work, we're doing with the tier ones now in the performance that we're seeing there and leverage that back onto under the title business. So we will keep those RFP conversations going.
And we will then make sure that we're continuing to fill the tier two to three pipeline.
Pending the timing with the tier ones.
I appreciate the color on pipeline.
Thanks Kim.
Thank you and again if you have any question simply press star one on your telephone keypad to ask a question. Please press star one on your telephone keypad.
Your next question comes from the line of Robert Young from Canaccord Genuity. Your line is open. Please go ahead.
Hello, Good morning.
The last question I'll, just continue on that around the operational changes you're seeing at your customers.
I guess they.
<unk> been doing some head cut.
And so I was wondering if you could comment how widespread that is.
I assume it's impacting the refi side of the business more but is there any other any anything you can say about where the operational changes are and then as you look through that does that create an opportunity for more adoption of digital software tools in this space is it create.
Have a vacuum or.
For some of the things that you do.
Thanks, Rob.
No.
I think I'm reading the same things you are in the news the last couple of weeks, so definitely very clear that the.
The lenders are taking action and managing their costs.
Due to the actions that we've taken so.
I'd say, we're going to see some of that and the pivot to me right now that we're seeing with those lenders is around really sort of doubling down on purchase and making sure that they are taking advantage of their customer base and winning as much purchase business as they can and I've mentioned home equity, which I think is now be.
Coming a bigger conversation again, a lot of that will be rate dependent.
So we're seeing a bit of a flex towards that.
And when you talk about the the tech products.
Rob I think the capabilities that we have in those areas I think meet the demand of those customers. So I think there is opportunity for us to deliver against the movements that some of them may have again, so depending on where their strategies go we we deliver and purchase.
Delivering home equity.
So our view is that we're very well positioned to deliver against the needs depending on where they move.
And but in the near term I think it's your view now that it's likely that those customers will be more focused on their internal operations and considering adopting new tier one sorry, new tight.
Title.
Products et cetera is that correct, how long does that last do you think.
Yes, I mean, I think I think it is.
Youre asking a tough question, Rob only because I don't know whats going to happen with the dynamics in the market. So a lot of it is going to be driven I think by market dynamics and this has been a fairly.
Short term high moving rise in the rates.
Other piece, though that plays in through all of this Rob, which which is slightly off of the product mix. It's also around the consolidation of vendors. So.
What a lot of lenders do when we get into a market like this as they do start consolidating the vendors that they are doing business with and so the benefit I think for US is we almost always benefit through this because of where we sit on the performance scorecards. So because we're at the top of the score cards when they.
<unk> rationalized vendor bases, we usually are able to win some market share through that that rationalization. So we expect that theres going to be some of that in the market over the next quarter or two again with rates, where they are so so that should be a bit of a tailwind for us.
Okay, maybe just last one for me is just around the <unk>.
Seasonality typically starts to.
Drive some higher transactions around this time of year and I was wondering just curious if youre seeing any growth in.
The appraisal.
Spring market train out better or worse than you thought and then if you could also comment on what youre seeing out there from waivers.
The prevalence of desktop appraisal that sort of thing and then I'll pass it on.
You covered quite a bit in those last three.
So let's start with.
Household affordability as we mentioned I mean that is at the lowest rate it's been in a long long time, Rob. So affordability is a bit of a challenge.
I'd say its a little bit of a headwind on the purchase side that being said.
There is continues to be significant demand in the market. So you've got sort of got a very interesting overlap going there between affordability and demand. So again, we'll have to see how that plays out throughout the spring and summer, but our expectation is there will be a bump.
Seasonality wise.
As we've seen in the past.
So that's sort of on that piece on waivers we continue to see waivers go down. So we saw a very decent year over year decline in a marginal quarter over quarter decline, but it continues to find its way down and so that of course is.
Tailwind for the business and that it opens up the addressable market. So I.
I think that answers those too and desktops, we've seen very little momentum on desktops. So we are doing very few we of course are capable of doing them we have the.
We have the capabilities to do it Rob, but we're seeing a very very low volume in desktops right now.
Okay. Thanks for taking that three partner up offline.
Thank you. Your next question comes from the line of Martin <unk> from <unk> capital markets. Your line is open. Please go ahead.
Thank you guys for taking the question can you review for us.
Yes.
The appraisal and or title has seen pricing pressure during previous.
Volume corrections in the market.
Yes pricing pressure so.
The appraisal business, if I start there Martin the appraisal business. When there is a significant decline in volume what that generally means and the business is.
The competitive niche of the appraisers and the.
That appraisal.
The platform for us the competitiveness of the appraisers on the platform. When there is when the volume comes down.
The overall cost structure with them comes down so we're able to lower some of the costs there and so youll see a little bit of pricing come down on the appraisal side. When there is a significantly lower volume.
We have seen less of that on the title slide titled seems to be because the pricing in title is.
It's very complex, it's very county, driven its state driven.
It's very very complex setup, it's backed as you know and built around the insurance side with title insurance. So it sees less dynamic than than the appraisal side does when the volumes are changing.
Gotcha, so in previous refinance bus.
Title prices have held steady.
Yes, they are less they are less impacted.
Then then you might see on the appraisal side.
Perfect.
Okay.
Has there been any.
What is it.
What does the competition do.
In U S title during these periods of lower refinance volume does their behavior change.
But by the pricing observation that sounds like great.
There's not much they do and I'm, just wondering because I know many of them have.
Other lines of business like.
Insurance.
And just wondering what their behaviors.
In this product line.
Martin I think you are talking about competitors like folks to compete with US I think when you mean competitors other lender competitors of some sort or another yes.
Yes, no I mean your competitors.
What do our competitors do so.
The reason I don't want to speak for our competitors.
I think they like us.
When the volumes changed dramatically in a particular area within the business I assume that they focus on other areas of the business, where they think the opportunity lies for them. So for us as I mentioned in title. We've got we currently are servicing the purchase side of the business, we have capabilities around home equity.
And so I think where then we focus our attention as we make sure that we're doing what we need to do in the refinance component and as we mentioned there is still there's still healthy refinance volume even in a bottom bouncing market. There is still healthy volume there there will always be some healthy volume there.
But if the lenders turn their attention to either the purchase side or home equity.
Our depot.
Finding its way back into the market, then that's where I assume that's where we at least we will focus our attention.
Okay, great. Thank you.
How about Canada.
How confident are you that.
The Canadian market will hold in as well as it has been because obviously they are also subject to similar.
Similar dynamics in India.
In the interest rate market.
Yes, I mean, the big difference between the two markets as you know Martin is around refinance and.
In Canada, we don't have a.
Market, that's similar to the U S.
Robust component and competitive.
Following the U S does so because purchases by far the most significant driver of the business. The question then becomes what do we think about the housing market in Canada and the housing market is very healthy as you know so we are seeing very good volumes, we're seeing that seasonality in the.
Canadian market right now so it is it continues to be a pretty dynamic and strong market.
So we'll see how that plays out so I think our view at least in the near term is that is that the market remains healthy from a volume standpoint for us.
Okay.
And then last question for me.
You mentioned vendor consolidation by.
By lenders in this environment, what happens to you where you.
Your clients, who you caps.
Last year as you were preparing to ensure you have capacity for new tier one vendors.
Yes, so those those lenders that we have as they are part of the overall mix Martin and again I drive it back to the performance that we're providing for them. So these are sort of the types of lenders that we see as long term.
Customers of ours. So the type of performance that we've been driving across the board has been incredibly strong and so because we sit.
The sort of top of the performance scorecard. Our view is that we will continue to drive.
Sure there.
Therefore, if there is any consolidation we assume that.
That we're going to.
We're going to continue.
To win share through that.
Sure.
Super Thank you.
There are no further question at this time. This concludes today's conference call. Thank you.
And for your participation you may now disconnect.
Okay.
Okay.
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