Q3 2022 Lemonade Inc Earnings Call
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Ladies and gentlemen, Hello, and welcome to the eliminate Q3 2022 earnings call. My name is Maxine and I'll be coordinating the call today, if you would like to ask a question James presentation.
You say by pressing star said by one and if you think he pad.
I will now hand, you too yeah, what's not levy VP communications eliminate to begin. Please go ahead when you're ready.
Good morning, and welcome to Lemonade third quarter 2022 earnings call.
My name is Youll listener Levy and I'm the VP communications at Lemonade joining me today to discuss our results are Daniel Schreiber co CEO and cofounder Shai, winning girl co CEO and co founder and Tim Bixby, Chief Financial Officer.
The letter to shareholders covering the Companys third quarter 2022 financial results is available on our Investor Relations website investor Dot Lemonade dotcom.
Before we begin I would like to remind you that management's remarks on this call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the risk factors section of our form <unk>.
10-K filed with the SEC on March 1st 2022, and there are other filings with the SEC.
Any forward looking statements made on this call represent our views only as of today and we undertake no obligation to update them.
We will be referring to certain non-GAAP financial measures on today's call such as adjusted EBITDA and adjusted gross profit, which we believe may be important to investors to assess our operating performance reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our letter to shareholders.
Letter to shareholders also includes information about our key operating metrics, including enforced premium premium per customer gross loss ratio and net loss ratio and the definition of each metric why each is useful to investors and how we use each to monitor and manage our business.
With that I'll turn the call over to Daniel who will begin with a few opening remarks Daniel.
Good morning, and thanks for joining us to review, our Q3 results and the outlook for the remainder of 2022.
I'm happy to share that we had a strong quarter with our top and bottom lines coming in better than expected year on year RFP or in force premium grew 76%.
And per customer grew 35% and $65 million adjusted EBITDA loss of bottom line also bested our expectations.
Our loss ratio has been coming down in recent quarters and Q3 saw a reversal in that welcome trend despite.
The spike in loss ratio. However was not unexpected we had cautioned that the metro model deal would have an adverse effect on loss ratios in the short term and hurricane in added several points of loss ratio too with that said, we do anticipate the overarching downward trend to continue in the coming quarters, notwithstanding the occasional bumps.
Q3 is moving season.
Usually almost sufficient time to acquire customers Covid played a little havoc with seasonal patterns in recent years, but this year. The familiar seasonality was back on full display accordingly, we pulled in some of our marketing spend from Q4 to Q3.
This helped boost our Q3 top line, but will come at the expense of growth in Q4, all told we expect our second half of the year to be as guided low the allocation between the quarters has been <unk> to optimize our spend.
Much else has happened since the last call, but to highlight a deal we announced with chewy and a launch in the United Kingdom.
Starting with Chewy chewy is a foremost destination for pet parents in the U S and in the spring they will start selling eliminate Pat to about 20 million customers trees.
<unk> revenue share compensation consists of a few components, but will be paid out primarily in the form of eliminate equity.
With regards to he chose lemonade and we're thrilled they chose eliminate stock in addition to amounting to a huge vote of confidence in what we're building. This structure aligns our interests with to incentivize to drive sales or eliminate pet and deliver long term growth at an extraordinarily low cash burn for eliminate.
As for launch in the U K at the risk of sounding too sappy. This is a meaningful step for us insurance as we know it hails from the UK and on a personal note. So do I. So both professionally and personally bringing eliminated to the U K is a homecoming of sorts.
Beyond the sentimentality of it all the UK is the largest insurance market in Europe , and so represent a material addition to our total available market.
Finally, we're looking forward to next week's Investor day, where myself and others on the leadership team will go deeper into our strategy metrics path to profitability and how were running the business, we'll be sharing more about our AI lines of business and our financial modeling than we've ever done before and we very much look forward to seeing.
<unk> that if you haven't registered yet please head over to our Investor don't eliminate dot com site and sign up under the news section.
And with that let me hand over to Tim Tim over to you.
Great. Thanks, Daniel.
A little bit more color on our Q3 results as well as expectations for the fourth quarter and the full year and then we'll take your questions.
We had another strong quarter of growth driven by additions of new customers a portion of them related to the acquisition as well as continued increase in premium per customer.
In force premium grew 76% in Q3 as compared to the prior year to $609 million. We believe that this key operating metric is useful to understand the full scope of our topline growth before the impact of reinsurance and regardless of the timing of customer acquisition during the quarter.
Premium per customer increased 35% versus the prior year to $343. This increase was driven primarily by the metro mile acquisition impact and to a lesser extent the combination of increased value of policies overtime as well as the continuing mix shift toward higher value homeowner current pet policies.
Gross earned premium in Q3 increased 71% as compared to the prior year to $136 million.
Roughly in line with the increase in in force premium.
Revenue in Q3 increased 107% from the prior year to $74 million the growth in revenue is driven by the increase in gross earned premium as well as a reduction in the proportion of premium ceded to reinsurers to 55% in the quarter as compared to 70% in the prior year.
Our gross loss ratio was 94% for Q3 as compared to 77% in Q3, 2021 and 86% in Q2 2022.
Operating expenses, excluding loss and loss adjustment expense increased 33% to $110 million in Q3 as compared to the prior year.
This was primarily driven by increased personnel expense stock based compensation expense and legal and professional fees, partially offset by lower sales and marketing expense.
We also continued to add new lemonade team members in all areas of the company go out the more modest pace, we've seen for several quarters in support of customer and premium growth and geographic expansion Global head count grew 36% versus the prior year to 1371, primarily due to the impact of the closing of the Metro mine acquisition.
In July .
Net loss was $91.4 million in Q3, or $1 37 per share as compared to the $66 $4 million net loss, we reported in the third quarter of 2021.
While adjusted EBITDA loss was $65 $7 million in Q3, as compared to $51 $3 million in the third quarter of 2021.
Our total cash cash equivalents and investments ended the quarter at approximately $1 $1 billion.
Reflecting an increase of $164 million due to the metro mile acquisition, partially offset by use of cash for operations and capital expenditures of $131 million since year end 2021.
With these goals and metrics in mind, I will outline our specific financial expectations for the fourth quarter and an updated full year 2022.
For the fourth quarter of 2022, we expect enforced premium at December 31 of between 612 and $615 million.
Gross earned premium between 147 and $150 million revenue between 77 and $80 million.
And adjusted EBITDA loss between 65 and $62 million.
Stock based compensation expense of approximately $60 million capital expenditures of approximately $3 million and a share count weighted for additional shares issued in connection with the metro mile acquisition totaling approximately 70 million shares.
And for the full year, we expect again enforced premium December 31 between 612 and $615 million gross earned premium between 486 and $489 million revenue between 245 and $248 million in.
An adjusted EBITDA loss between 238 and $235 million.
Stock based compensation expense for the full year of approximately $60 million capital expenditures of approximately $11 million and a share count again weighted for additional shares issued in connection with the metro mile acquisition totaling approximately 65 million shares.
And finally, a reminder, again that our first Investor day is happening next Tuesday November 15th starting at nine a M. Eastern time, and our New York offices and via webcast. Please RSVP. If you haven't already using the link provided in our shareholder letter order join us via webcast during or following the event and with that I would like to turn the call back to <unk>.
Shai.
Thanks, Tim.
We'll now turn to the top voted shareholders' questions.
And the first one is coming from Darren Who's asking how much growth should we expect to see from the Tuohy partnership and will it include any alliance with Petsmart.
So we're really excited about the chewy partnership and we believe that the deal can easily deliver significant growth at extraordinary low cash burn.
Being able to offer lemonade pet to Twitter 20 million customers in those they'll add in coming years can you easily become one of our primary growth channels for eliminate pet.
By the way this partnership relies heavily on eliminate API, which we continue to strengthen as we grow our partnership based distribution channels I believe that using our technological advantage to integrate with partners quickly is strategic for lemonade.
To the second part of your question Petsmart was once owned by chewy, but the two brands separated I believe in 2020 and so the deal does not include any lines for them.
The next question comes from paperback Investor, who wanted to get an update on the Metro model integration.
And he also asked about the common Daniel made of us waiting for regulators to approve rates before loss ratios can improve.
Well, it's been just a few months since the Metro model deal closed, but the synergies between our teams data and tech stack are in full force.
In fact out of the metro mile employees off of the role eliminate 100% have accepted it and it's already impossible to tell who's a former metro Mila and who's not.
Regarding metro miles loss ratio you're right.
Some regulators take more time to approve rate changes and others.
In California, where 65% of Metro miles business was the regulators have taken an unusual position and resisted rate changes across the auto industry as a whole.
Several major carriers have reported elevated loss ratios as a result, and many of them have effectively pulled out of that market until these impasses resolved.
Along with the rest of the industry, we look forward to bringing rates back in line with risk as soon as possible.
And another question from Darrin. He asked if we're concerned that prolonged inflation, a hardening reinsurance market increased claim costs limits on rea changes.
And increases in reserve requirements could create a perfect storm and kept side eliminate.
There is the short answer is no I don't think these will culminate into a perfect storm or any kept sizing.
You've touched on several different risks they mentioned so let me address them one by one.
Inflation means that prices keep going up so the impact on the cost of claims is immediate while the time it takes to change prices moves at the pace of regulators.
There's a lagging window in which premiums collected are lower than what they should be to maintain a healthy loss ratio.
We've made the changes so that some of our product ought to adjust for inflation and for others, we're getting into a filing pace and rhythm that should keep pace with inflation, but it will take a while for all of these changes to work their way through the system and for policies to earn into these new rates.
As for your point about reinsurance hardening and the increase in reserve requirements reinsurance companies had a rough several years, but this doesn't mean that they'll change your business model or stopped providing reinsurance.
You see this affecting mostly the cost of reinsurance and expect it to go up but at the same time, we're becoming more diversified.
With more product available in more regions, we believe that our reinsurance should play a different role in our business optimizing on two primary needs protection against rare catastrophic events.
And optimizing our surplus requirements.
Tim will address this more fully in our Investor Day next week.
<unk> also wanted to know more about a comment that was made by Daniel.
Rich you mentioned that the majority of our marketing tests are deemed failures.
Wanted to know what was the actual total cost of these failures and going forward. How do we plan to course, correct with winning strategies that don't result in further shareholder dilution.
Darrin I think this point was misunderstood.
When we say that the large part of our marketing campaigns are failures. It doesn't mean that they've brought in zero business or led to losses.
Just like everything else, we do we approach advertising in a data driven way.
Traditional marketing, where you'd have one campaign to better annual marketing budget on.
We create thousands of different variations and test them with very small budgets.
There are so many because we run ads for different product with different creatives different audience segments and different targeting you.
You can think about this as a sports tournament, we run many ads and put small budgets behind them to see which one works. We then take the winners apply what we've learned to improve them and then have them compete against each other.
This process leaves you with the best performing ads.
Spending a fraction of the cost of a full campaign.
You also learned a lot in process. So the next set of ads will perform better straight out of the gate.
And another question George wanted to know what is our top priority for 2023.
Thanks for the question George.
Our primary focus for 'twenty threes, our path to profitability, which translates into three main pillars.
The loss ratio cross sells and efficiency.
As a reminder, we are in the midst of making hundreds of changes in all of our product lines to adjust for inflation and accuracy based on our customer's lifetime value predictions on our screens were starting to see encouraging signs of improvement and our team will continue this focus throughout the year.
On cross sells were seeing continued improvement as our team focuses on bundling upsell and cross sell initiatives through our newly created customer group.
And on efficiency will be focusing on further improvement of our a P is and our ability to integrate with distribution partners as well as investing blender and our internal automation tools.
We'll provide more insights on all three in our Investor Day next week and I invite you to tune it.
And with that let me turn the call back to the operator for more questions from our friends on the Street.
Okay.
But if you would like to ask a question. Please press star followed by one on Netflix.
Now if you do change your mind, Chris craft off of it by Covid.
What's your question. Please ensure that your line is I'm going to talk.
Our first question today comes from Michael Phillips from Morgan Stanley . Please go ahead.
Okay.
Thank you everybody.
You mentioned, there and the final comments, our reinsurance impacts of diversification of product and I assume geographic too to help offset the hardening market there, but anything else. Besides that I guess, specifically would you be willing to take a higher cap well that's retention on your business to kind of surprises there.
Yeah, Hey, Mike.
The short answer is yes, so I think our our view on reinsurance generally as.
Optionality. So historically I think we've taken advantage of.
Oh, good markets and good terms that fit with our overall goal of the size of the business the risk profile, but generally our bias is to is to lean toward reinsurance more as a.
Benefit for surplus efficiency capital efficiency now that we are getting.
A really good grip around our.
Our loss ratio our claims risk different products.
We're much more comfortable I think now then.
Three or four years ago in terms of balancing that risk and so yeah, I think we'd be open to.
Taking a little more risk.
Balancing the terms in and we'll kind of see how the market plays out our next renewals coming up.
Not until mid year next year, but.
But we would be open to that.
Okay. Thank you.
And then I don't know if you're willing to give kind of a mix of home versus rents are today versus prior period, but I guess I'm curious just to hear your thoughts on the impact of inflation between those two sets of books.
That would push that affects our renter policies differently than a whole responsibly.
Yes.
The effects both.
But more concentrated in homeowners just because of the more likely significance of reconstructing reconstruction remodeling sort of the heavy duty stuff that that usually happens, whereas in renters, you're usually talking more about our possessions, but the reality is inflation is really across the board and so.
More concentrated in the home, but we're really looking at.
Doing our best.
Ahmet offset and mitigate inflation in all of our products.
There really is no product untouched.
But it's definitely a little more concentrated in home.
Cars now trust with Metro mile gone from quite small to a significant part of the business.
And so those those are a little more concentrated in those products.
Alright, okay. Thank.
Thank you.
The numbers question.
On the loss ratio you mentioned.
No impact in the Hana.
Can you give us the exact dollar amount of total claims paid went in.
Yes.
Yes, it was fairly minimal something on the order of less than $3 million to date.
Ian was that what you said is that correct.
I'm sorry.
You said Ian was minimal as I practice, making sure I understood.
Yes, yes, that's right.
Okay. Okay perfect all right. Thank you very much yeah, and maybe just as a reminder on that.
Florida.
In aggregate represent.
Less than 1% of our business or relatively unexposed, there and it's.
Essentially our renters book, So we had some impact but.
Relatively quite nominal versus.
Folks who have a large homeowners book in Florida, which we do not.
Okay. Thank you.
Yes.
Thank you and our next question comes from Tracy <unk> from Barclays. Please go ahead. Your line is now open.
Thank you I'm, just going to follow up actually on Mike's question about the loss ratio.
So if an wasn't a huge contributor if you could just walk through the sequential decline, which is worse than that three to five points.
You had previously shared.
Yeah.
Yeah. So.
We haven't guided.
Guide to loss ratio.
But we did have impact from metro mile, which has had kind of been running at a somewhat higher than their historical loss ratios certainly higher than our car.
And then home while we.
May.
A healthy number of filings only about.
A quarter of the book of business or so is H into those filings. So we are still seeing that benefit.
It will take.
Several quarters for the existing filings have an impact on that.
And that business.
We'll continue to sort of work.
Work hard to keep up with inflation impact so I think of it as <unk>.
Home.
Metro mile.
And the other parts were more or less as expected.
Okay.
Maybe on Metro miles I mean auto is a tough market. What do you think specifically I don't know if you can make any comments on bodily injury or physical damage severity claims.
We don't have much on that at hand on this prepared for this call today.
But maybe that's something that we'll look to provide a little more detail a little more disclosure going forward.
But to the extent, we are kind of looking at this.
Part tends to be.
Cars in general are more expensive to serve.
Uh huh.
To repair and so.
From.
Our experience in our book of business, which we are a little bit longer experience versus metro model it tends to be more around the.
Repair replace as opposed to the injury, but that's probably something we'll think about maybe providing a little more color in the coming quarters.
Okay. So maybe this question you're more prepared for how do you see your business mix shifting, particularly the all natural mile amongst patent sharing home bancshares in IL.
So I wouldn't I wouldn't describe truly at this point because it's early hasnt really launch next year.
Formally what.
What the benefit it really gives us is an ability to add.
Significant pet policies potentially but at a much lower cash cost and so we'll have some optionality there we see nice incremental growth through the chewy partnership we can choose to let that flow through in <unk>.
Increased the natural growth rate of pet or we could also offset.
And grow some of our other lines of business, knowing that we will achieve our pet goals through the chewy channel versus through the direct channels, we have to kind of that choice and let's see how that plays out we've got a healthy target.
In the first year and it grows over time.
And we think it's a really nice structure, where.
Give us.
Significant had policies if we achieve those targets at a much lower.
A much lower cost.
In terms of overall share at this point I Wouldnt expect I Wouldnt expect a dramatic shift in share.
That has continued to grow modestly.
Okay.
Pretty sizable share at 20% of the overall book.
So that will continue to represent.
A healthy portion of the total book.
Thank you.
Yeah.
Yeah.
Thank you. Our next question comes from Tony joined from Colby <unk>. Please go ahead. Your line is now open.
Hey, good morning, guys. Thanks for taking my questions.
The first one could you talk a little bit about some of the math or at least some of the theory behind your reference to that optimal cash burn equating to 20% to 25% growth and what sort of runway does that give you given your existing capital resources.
Yes.
Sure. So a couple of the data points that we've shared obviously our cash balances there will we'll put up the Q today, but think of it as roughly just under $1 1 billion.
In cash investments equivalents.
We have set aside.
Less than $300 million in terms of supporting surplus that's within the insurance carriers themselves.
So I'm.
Looking out over the coming years and this is something we're going to get into a fair bit more detail at our Investor day, and so we don't want to.
Jump the gun on that but we think about our growth rate.
Primary lever of how much cash, we burn and it's really a growth rate of our choice.
I think sometimes there's emissions misconception that if our growth is slowing it's because the market demand is changing that's not the case.
Choosing to grow at a certain pace, because our sort of our unit economics on acquiring new customers are quite healthy and quite predictable.
We've dialed back the growth rate you saw in Q3, you see it in the guidance for Q4.
And Youre exactly right that sort of 20 plus percent growth rate gives us comfort that we've got now.
Or quarters of run rate, but many years many years of runway.
Before we have to be concerned about the ultimate.
Availability of capital.
Okay.
Okay.
Got it thanks, and then switching over back to a question on the two way partnership just wanted to clarify as chili's compensation, there solely driven by the topline number of policies and rasp referrals, rather than the underwriting profitability of those policies and then as a follow up do you think that the concept of paying those partners.
With warrants or stock to be part of kind of a regular playbook as you explore new partnerships.
So on the first question, yes, the structure is on customer acquisition.
We are very comfortable with what customers do and once they enter the eliminate funnel and so it's really focused on.
US access to $20 million.
Fairly happy customers and doing our best to leverage <unk> capabilities, there and bring them into the eliminated.
It's eliminated family.
Will become true eliminate customers in every sense of the word and go through our underwriting process.
Just as any other any other customer.
In terms of the structure.
I would look at our history. So this is the first time we've done this bar is very high.
And there are structures that are much simpler, but this is one where.
The scope of their customer reach the strength of their brand name and the synergies with pet is really a core core of our business made everything sort of fit and come together, where we're willing to structure. It.
With equity.
From guardrails around that equity so it must be earned they must achieve targets in order to ultimately generate value from those warrants and so we feel like it's.
A really nice balance of.
Sort of risk and reward for both sides.
Got it thanks Deb.
Thank you.
Our next question comes from Andrea <unk> from Credit Suisse. Please go ahead. Your line is now open.
Hi, good morning.
Could you share with us.
So the products and distribution channels.
Which kind of incentive you too.
To spend a bit more on your marketing.
This quarter.
Okay.
Okay.
Hi.
I think we've seen nice marketing efficiency, but we've actually been tempering the total marketing spend over time.
Perhaps the the comments that we made in the letter of pulling in spending from Q4 to Q3.
<unk> are sort of behind your question.
I am guessing yet and so we have yes. So we have continued to see nice efficiency and seasonality.
It's just something that we've seen.
Persistent even through the last few years, where Covid had a lot of unpredictability is continued to see moving season, which is.
People relocating gets back to school all the different changes that.
Likely happen in the fall continue to drive.
Better better results and so we saw that continue and even strengthened somewhat in Q3.
And that drove it in terms of channels I don't think I wouldn't.
Not point out any major shifts in the channels.
Two years ago, you didn't see many checks going out to pick talk that obviously has changed but thats not a not a surprise so I think the.
The channel that you would expect and see across other consumer customer acquisition efforts would be would be similar to us.
We're very focused on direct acquisition.
As opposed to brand marketing or some of.
Those other ancillary spend as we do a little bit but not too much.
And we can just continue to leverage our LTV to CAC models, which get better and better.
And when those numbers improve where we're more comfortable turning it up you did a little more of that in Q3 and.
And from a.
Capital management standpoint.
<unk> guided to a Q4 that represent a bit of a pullback in Q4, and if we see more efficiency than we obviously have the ability to adjust but that was the major cause of the ships.
Got it and and then Unfortunately my line was breaking up I heard you talking about loss ratio right.
So apologies if this was touched on but.
In the auto insurance line could you specify what your underlying loss ratio ex cat ex prior year development.
Again in the auto line and then also in the auto line.
What was your.
Aggregate rate increase across the.
<unk>.
What you filed and received in the quarter.
So that is more detail than we've disclosed.
Though very interesting of course, we're going to get into a little more detail around car loss ratios and how we see it breaking down by product in our Investor day again soil.
Upon until that I think for us.
A reasonable feel for how loss ratios are generally have evolved I would point to the public filings.
Metro mile previously, which are the loss ratios have been above a 100% for some time. So over time, we expect to bring those in line with the rest of our product goals towards.
A much lower rate, but for now.
Those rates.
You can assume that persisted at an elevated level.
Okay, well look forward to hearing about it next week. Thanks.
Thank you.
Thanks, Jason.
From behind that please go ahead your line is for April .
Hi, This is Steve on for Jason.
Just two quick questions. One is can you help us understand the impact on.
Metro mile for for three third quarter gross profit and then secondly, how do you think about scaling the auto insurance side of the business over the next 12 months and the impact on the P&L. Thank you very much.
So we don't breakout metro mile.
We're really reporting as one consolidated company at this point.
I can give you some data points to get you in the right direction. So historically.
If you look at Metro miles stand alone.
Premium levels, you would see numbers.
In the.
Earlier this year 117.
Tracking down to roughly 110, so it's fair to assume that there is.
If you isolate and metro mile. It would it would still be above $100 million in ISP.
And so with that combined with the historical loss ratios are above up above 100.
You can kind of let that flow through and she did that would have a pretty material impact.
On the gross margin line, but we don't we don't breakout metro miles specifically.
The loss ratio in general I think is the is the primary driver of the gross profit change.
And so as that loss ratio comes close to our target I would expect that the gross margin and the adjusted gross margin as we report them to come back in line with what we saw in our loss ratio.
A couple of years ago was in the mid seventies.
In terms of your second question scaling car. So we're with lemonade car before the merger of Metro mile.
We have launched so far three states metro miles brought us up to a total of about.
And kind of.
10 States in total and then we have a plan we haven't disclosed state by state and we typically don't in advance because we do.
We're opportunistic about moving things around it's not always in our control.
The exact date of launch from a regulatory perspective, but I would ask you.
You should expect additional launches over the course of.
All of 2023, so by the end of the year I would expect several new states, but when we get closer to launching them are at the point of launch then obviously, we'll we'll give more clarity on that.
We'll expect to continue to add new states consistently over that over the next couple of years.
Great. Thank you very much.
Thank you as a reminder, if you would like to ask a question. Please press star followed by one on your telephone keypad now.
And the next question comes from George Santana from <unk>.
The America.
Sure.
Yeah.
Yeah. Thanks for taking my question My first question.
Late through the guidance for <unk>.
Premium in force in four Q.
A little higher than it is in <unk>. My guess is that youre going to be non renewing the metro miles customers and growing in other places and if that substitution is correct. I'm wondering if you can talk about that plant.
Yeah.
Yes, that's a fair.
A fair proxy.
So again metro mile.
No longer viewed by us as a standalone business.
As part of eliminated.
Our car product is made up of pay per mile, which historically was was metro mile as well as our fixed price product.
But if you were to isolate it.
Exactly those customers acquired through metro mile.
There is a.
Typical attrition rate and we're not investing heavily at this point to grow that business and so that.
In the Q4 guidance, you see that historical metro mile number coming down.
A pleasant surprise the retention rate has been.
Solid benefit actually better than our expectations.
Which is providing some benefit.
To the ISP growth.
And then the remainder is really our.
A reduction of spend in Q4 of which we pulled into Q3.
So you'll see.
The growth rate.
Increases the size of our overall business, excluding metro miles and compensate for some of the.
Natural attrition that's happening in that.
Metro now customer base.
Hi, there sorry loss for a second and then the.
Entre.
<unk> are resolved.
Pet insurance products through.
I'm wondering.
If you think this marketplace becomes warmer nominated as one of several brands sold on that web sites, and whether you're competing on product and price or whether youre competing on exclusivity.
And maybe I know you probably what is it your opinion success, though they haven't really sold that much product on should we so to speak.
<unk> approached differently.
Yes Tobey.
While we are aware of the competition is not really a primary focus.
We we like the ability to be open to all channels and therefore, it's nonexclusive structure for either of US we want to be open to other channels.
Working with other partners.
So.
Whether or not Japan is there whether or not your opinion does well, we really don't expect it to impact eliminate trajectory.
Very large market.
Do we have access to an extraordinary.
Both large and dedicated customer base. So there's plenty of room plenty of room for all of us.
We will obviously look to.
Expand channel partnerships, where it makes sense, but this is one that we're really.
Excited about both strategically and also just the sheer size of what they have done and what we can do.
Thank you we have no further questions. So this concludes our quotes about ladies and gentlemen. Thank you all for joining you may now disconnect your lines.
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