eHealth Inc. Q1 2023 Earnings Call
Good morning, everyone and welcome to Ehealth, Inc Conference call to discuss the company's first quarter two telephones three financial results. At this time all participants have been placed in a listen only mode. The floor will be open for.
Your questions. Following the presentation. It is now my pleasure to turn the floor over to you Brian Mitts Senior Investor Relations manager. Please go ahead.
Good morning, and thank you all for joining us today on the call. This morning translate an Ehealth Chief Executive Officer, and John <unk>, Chief Financial Officer will discuss our first quarter 2023, if I answer it.
Following these prepared remarks, we will open the line for a Q&A session with the industry.
As a reminder, this call is being recorded and webcast from the Investor Relations section of our website a replay of the call will be available on our website later today.
Today's press release, our historical financial news releases, and our filings with SEC or.
Also available on our Investor Relations site, we will be making forward looking statements on this call without certain matters that are based upon management's current beliefs and expectations relating to future events impacting the company and our future financial or operating performance.
Looking statements on this call represent <unk> views.
Today and actual results could differ materially.
Undertake no obligation to publicly address.
Any forward looking statements in future filings or communication regarding our business or results.
The forward looking statements, we will be making during this call are subject to a number of uncertainties and risks, including but not limited to those described in today's press release and in our most recent annual report on Form 10-K, and our subsequent filings with the FCC.
We will also be discussing certain non-GAAP financial measures on this call managements definition of these non-GAAP measures and reconciliation to the most directly comparable GAAP financial measures are included in today's press release.
With that I'll turn the call over to frankly.
Thank you Eli and thank you for joining us this morning for our first quarter 2023 earnings call.
On this call we will discuss the latest industry developments review, our first quarter results.
A highlight key operational and strategic initiatives underway I.
I would also like to mention that we will be holding an analyst and Investor Day next Thursday may 18th.
At this event you will hear from our extended leadership team and gain further insights into Ehealth strategy operational goals and key financial metrics based on our three year financial outlook.
We look forward to you joining us at this notable day for Ehealth.
We delivered a strong first quarter performance demonstrating the positive impact of the transformation plan, we began to implement in Q2 of 2022.
We entered the first quarter of this year on a significantly improved cost foundation compared to Q1, a year ago, while continuing to improve our telesales conversions member economics at enrollment quality.
During the quarter, we rolled out phase two of our business transformation across key functional areas of the company.
This includes expansion of our direct marketing channels and brand building effort initiatives to drive further productivity gains in our telesales organization.
Cross functional member retention program and technology projects aimed at taking our omnichannel capabilities to the next level.
We are also gaining traction in executing on our business diversification strategy as we prepare for a launch of a major carrier dedicated deal later this year.
I'll talk more about these initiatives in just a few minutes.
But first let me take a step back and remind you of our mission and differentiated value proposition.
<unk> mission is to expertly guide consumers through their health insurance options, when where and how they prefer.
Our value proposition is rooted in our customer centric marketplace that provides beneficiaries with data powered tools access to our full time license benefit advisors to help them find health insurance that best fits their needs.
We're also differentiated through our extensive carrier agnostic business model.
A critical component of <unk> business success depends on assisting beneficiaries through the shop educate advise and enroll process.
Our overarching goal is to match the beneficiary with a plan that best meets their financial health and lifestyle needs, regardless of which carrier is offering that particular plant.
Ehealth also provides consumer with a range of enrollment methods to pick their preferences customers can enroll in plans through our self serve online platform supported by chat co browsing capabilities should they want professional help floor.
When complete the enrollment on the telephone with one of our licensed train adequate advisers guiding them from start to finish.
Again, our goal is to meet the customers, where they are and do everything we can to simplify their journey to the often confusing process of selecting health coverage.
We remain bullish on the unique strengths of the Medicare advantage market and our growth opportunity within it.
Medicare advantage is favorable demographic trends bipartisan legislative support.
Compared to traditional Medicare and offers a significant value proposition and produces superior health outcomes.
Because of these anchors we are confident that this market will continue to be a key driver of our success.
Throughout the past several months, we have closely observed a number of regulatory developments that took place in our sector, including cms's issuance of new Medicare advantage and part D prescription growth as.
As well as the final 2024.
<unk> care advantage rates.
While rate changes were ultimately more favorable being contemplated by the advanced notice we anticipate that the slowdown in reimbursement rate growth combined with recent fluctuations in star ratings will likely lead to shifts in carrier competitive dynamics during the upcoming AEP importantly, the impact will vary by state and.
<unk>.
We believe Ehealth carrier agnostic model local market focus and ability to offer a broad selection of planned sourced from large national carriers as well as smaller regional carriers will be key for delivering strong performance in this evolving environment, while providing the best value to beneficiaries.
Our emphasis on fostering member loyalty and retention regardless of whether the beneficiary stays on the same policy or uses our platform to find a new one is an important part of succeeding in this market.
With respect to the 2020 for MAA and party prescription rules.
We believe they are generally in line with the recent trends towards greater emphasis by regulators and carriers are the beneficiary experience enrollment quality.
This includes increased scrutiny of our marketing materials and sales practices for Medicare products.
Most roles are aligned with our own goals as we support rigorous protections for the customers we serve.
Ultimately, we expect these roles and the corresponding operating adjustments to move the industry, even further towards rationalization of marketing activities, which we started to observe last AEP.
We're still working with carriers and CMS to clarify some of the provisions of our rules. However, it is important to note that we began planning changes to our tele sales and marketing processes starting when the proposed rules were first released in December of last year.
While we do have some concerns that these rules could create additional complexities and new and conveniences for beneficiaries in the near term.
We continue to believe that our Omnichannel platform offers significant value compared to other distribution channels and making the process of selecting and enrolling into Medicare coverage as seamless as possible.
We believe this will be especially true under the new regulations.
For example.
Our costs here like model for telephonic and online assisted enrollments can effectively accommodate appointment setting if needed.
In fact, a large share of our telesales enrollments at the beginning of each AEP are typically driven by appointment.
Further we expect ehealth to have access to physical locations, where customer walk ins can be accommodated through a combination of technology and agent support.
For customers, who don't require agent assistance and preferred to do their own research.
We are unique in our choice model offering that includes end to end self service online enrollment.
Finally, we plan to continue to grow our carrier dedicated arrangements and are prepared to fulfill that demand and a fully compliant way and within the guidelines set by each carrier.
After we receive clarity on the provisions of the rules that we still have some questions about we plan to move rapidly to implement any required changes well ahead of the AEP when the rules take effect.
The bottom line is that we remain confident in the attractive M&A market opportunity and our ability to serve customers in this market.
Moving now to our financial and operating results.
Our first quarter revenue and enrollment volumes were generally in line with our expectations.
At the same time, we delivered better than expected earnings driven by two factors.
A positive impact from cost elimination and reduction efforts.
A meaningful improvement in our telephonic conversion rates, which for the first quarter increased 21% year over year.
The quality of our enrollments also continued to improve as reflected in stable, earning data related to our member retention during the critical AEP OAP shopping cycle as well as improvement in <unk> scores.
As a reminder, <unk> stands for Medicare complaint tracking module and reflects beneficiary complaints filed directly with CMS.
Ehealth observe another 50% year over year decrease and a CPM rates from Q1 'twenty to Q1 of 'twenty three based on data available to date.
Many of our key carrier partners have recognized as important service improvement.
First quarter revenue was $73 7 million, a 30% year over year decline, reflecting the optimization of our variable marketing expense and agent head count to drive stronger LTV to CAC ratios compared to first quarter a year ago.
At the same time, our GAAP net loss and adjusted EBITDA improved substantially on a year over year basis by approximately $13 million and $12 million respectively.
Our cash flow from operations increased 29% compared to Q1 of 2022, driven in part by the improvement in net loss compared to a year ago and better than expected renewal cash payments on our existing members bulk of which are encouraging outcomes.
We ended the quarter with $203 million in cash cash equivalents and marketable securities.
More than sufficient to execute on our operational plans through 2023 and beyond.
We will share more about our cash flow expectations for 2024, and 25 at our upcoming analyst and Investor day on the 18th of this month.
Now turning to our operational and strategic initiatives underway.
As a reminder, on our last earnings call, we laid out four operational priorities for 2023.
First to continue to build on last year's progress with an Ehealth omnichannel marketing and lead generation engine second to improve conversion rates across our entire platform, regardless of how the customer chooses to interact with ehealth.
<unk> to introduce the next phase of our customer retention strategy and finally four to further diversify ehealth revenue streams.
This year, we plan to return to enrollment growth driven by a demand generation strategy that focuses on audience segmentation and targeting differentiated messaging and gradual scaling of our direct and strategic partner marketing channels as we reduce our reliance on lead aggregators.
During the quarter. We also launched the first phase of our branded content strategy.
Currently market testing our materials with scale deployment of these materials plans for the AEP.
We also started building targeted campaigns aimed at distinct Medicare audiences, including due to Medicare members med sup et cetera, a recognition of varying needs interests and preferences.
Essential to our marketing strategy is maintaining agility, which allows us to opportunistically lean into channels that are yielding quality leads at attractive LTV to CAC ratios.
At the same time, we are prepared to pull back on marketing spend at anytime a drop savings to the bottom line should we not see sufficient opportunities that satisfy our target enrollment margin.
Online conversions remains a major focus for the company. This year, we achieved significant improvement in telephonic conversions over the past six months and are planning to replicate the success online.
Every year.
Our prospective customers come to our online marketplace to learn more about the Medicare program.
<unk> coverage available on their county, and compare plan options EBIT.
Even a modest increase in visits.
Salt and center applications would be a meaningful financial lever given the large size of our online audience.
Last year, we introduced new Omnichannel tools, including online chat and agent co browsing features on our E. Commerce platform and are now working on additional ways to make our marketplace experience, even more convenient and navigational.
This concludes our planned release of video chat with our licensed agents enhancements to our mobile platform, which is growing in share of total site visits relative to desktop as well as improving targeting user experience at key points of our online tunnel.
Our product team is also closely collaborating with the marketing organization to provide customized online experience in support of audience centric campaigns as well as our major strategic partnerships.
Driving increased member retention is a key element of our three year strategy in our 2023 operating plan achieve.
Achieving meaningful retention improvements requires close alignment and collaboration between our marketing telesales and technology teams.
We believe that relationship building starts from the very first touch point when the customer continues throughout their entire experience on our platform.
Harry's on long after we complete the enrollment.
Our next stage of retention activities is built on the same concept of personalized one size does not fit all approach as our new marketing strategy.
We are building customer relationships on a local market basis.
Tailoring outreach based on a predictive models that identified members that are at risk for churn.
Still further <unk>.
And to expand the scope of our post enrollment engagement services that are proven to both improved member experience and drive stronger retention.
On the revenue diversification side, we're making progress in building out our dedicated carrier arrangements that are typically.
By favorable cash flow timing compared to our core business and allows us to generate revenue without deploying our own marketing resources.
As we shared on our last earnings call earlier. This year, we won an RFP with one of our major carrier partners that will be supported internally by a team dedicated ehealth agents.
In Q1, we started ramping our benefit advisory resources in support of this revenue model.
Within our individual family and small business segment, we continue to see a positive LTV trend as the average duration for these plans continues to increase.
We also observed strong.
So activity with our small business groups.
With respect to the macro environment, we expect the Medicaid redetermination cycle related to the federal government's ending up the COVID-19 emergency to serve as a potential driver of incremental AARP enrollments have incorporated that trend into our 'twenty three guidance.
It is estimated at around 15 million Medicaid and chip members will be just enrolled between April 23 and may of 2024.
In a subset of that group is expected to be eligible for zero or low premium ISP plants based on their income.
We believe our rich history.
<unk> deep expertise in the Iot market uniquely positions us to help these individuals navigate their coverage options.
Just on our encouraging first quarter results. We are reaffirming the guidance ranges. We gave on last quarter's earnings call. Our year to date performance puts us in a strong position as we continue to execute on our strategic and operational goals.
At the same time, it's important to recognize that we expect to generate all of our projected 23 positive adjusted EBITDA during the fourth quarter the.
The vast majority of our year over year revenue growth projected for 2003 is also forecasted to occur in Q4.
So while we are pleased with our first quarter performance. We also acknowledge the important work ahead of us to achieve our 2023 plan.
Following our seasonally strongest cash collection quarter, we remain confident in our ability to strength of our balance sheet through continued execution.
Lastly, through the strong performance of our human resources organization and department leaders throughout the business Ehealth continues to progress towards creating a best in class corporate culture.
Through a host of enrichment programs benefits communication initiatives.
<unk> significantly improved employee engagement, which in turn is driving strong performance across the organization.
We look forward to hosting you in person.
And digitally during our upcoming analyst and Investor day on May 18th.
Ehealth leadership team is excited about the current trajectory of the business and I personally look forward to showcasing the strong team that we've assembled.
I'll now turn the call over to our CFO John <unk> John .
Thank you Fran and good morning.
Our first quarter results reflect the impact of the business transformation plan implemented in April of last year with continued efficiency gains in our marketing and sales organization.
Coupled with strong cash collections on our existing book of business.
A combination of these factors provide for a strong start to the year and ample liquidity to execute on our operating plan.
On a consolidated basis first quarter revenue of $73 7 million was down 30% year over year.
Recall that we discussed this in our Q4 earnings call Ehealth transformation plan emphasize prudent and profitable growth over a revenue growth at any cost approach.
Net loss for the quarter was $19 9 million an improvement compared to the net loss of $32 7 million in Q1 of 'twenty two.
Adjusted EBITDA was negative $12 7 million compared to the negative $24 8 million in Q1 of 'twenty two.
Our profitability improvements in the quarter are further proof that our business transformation efforts are firmly taking hold.
First quarter Medicare segment revenue was $61 8 million a decline of 35% compared to a year ago, driven primarily by a lower number of approved Medicare members from the aforementioned transformation efforts.
During the quarter, we operated with a leaner and more efficient agent staffing and marketing spend resulting in lower enrollments at the same time, our member economics improved substantially on a year over year basis with total acquisition costs per approved Medicare member of 771.
A decline of 22% compared to Q1 'twenty two.
Total Medicare Preke applications were just under 69.
Including 60451, Medicare advantage approved applications of.
28% decline compared to Q1 of 'twenty two.
16% of our Medicare advantage applications were submitted through our online unassisted channel and the combination of online assisted and online unassisted represented 54%.
Emitted Medicare advantage applications.
<unk> continuing adoption of Omnichannel enrollment platform.
This year at least.
Medicare advantage Ltvs were down 5% compared to Q1, a year ago in line with our expectations are.
Our LTV model is based on a three year look back which means that for the purpose of estimating persistency of our 2023 cohorts. We've replaced observations from 2019 with 2022 data.
Our 2018 cohort has higher retention and subsequent cohorts. So we're removing it from the model results in lower LTV estimates.
Bind with product in carrier mix.
Was the main driver for the year over year decline in MAA LTV.
We expect roughly flat ltvs for the full year 2023 compared to 2022.
As it relates to the cohorts enrolled during Q4 2020 to AEP.
We don't yet have the full view of the impact from planned switching which took place during the first quarter open enrollment period.
But our initial observations for the any cohort has so far pointed to a slightly favorable trend relative to the cohorts from 2020 in 2021 AEP.
We expect to get a more complete view on that cohorts performance over the next few weeks.
Per unit gross margin for our Medicare advantage plan was $130 versus a negative $38 in the first quarter a year ago.
As a reminder, our unit margins have a seasonal pattern with most profitable enrollments typically generated during the fourth quarter, which is characterized by the highest volumes and lead conversion rates in the year third.
Third quarter enrollment has the lowest gross margin of the year as we start to ramp our operating expenses ahead of the AEP and spread them over the seasonally lower enrollment following.
First quarter 'twenty, three Medicare noncommissioned revenue comprised primarily of carrier advertising revenue with $5 2 million compared to $10 7 million in Q1 of 'twenty.
The magnitude of the decline in non commission revenue was caused by the timing of a large carrier advertising payments that came in the first quarter 'twenty two.
As well as our recent pullback on Medicare marketing as we focused on cost restructuring and improved operational efficiencies.
Medicare segment loss in the first quarter was $3 4 million.
An improvement compared to a loss of $14 8 million a year ago.
This was driven primarily by impacts from our transformation initiatives, which began in the second quarter of 'twenty, two including higher unit margins, but offset by lower volume.
Moving now to our individual family small business and the ancillary product segment.
First quarter segment revenue was $11 9 million up 17% from Q1 'twenty two.
The SMB segment profit was seven 4 million an increase of 41%.
Stronger revenue and profitability were partially driven by revenue timing caused by a lagging approved gas.
Combined with slightly higher ISP enrollment volumes during this period.
As compared to a year ago.
The segment also benefited from strong renewal revenue from our small business group products.
non-GAAP fixed costs, which include our tech and content and general and administrative costs decreased by $2 5 million or 7% in Q1 compared to the first quarter of 'twenty two.
Given by head count and vendor cost reductions.
We tightly manage and review these expenses each month with senior leadership to ensure we are maximizing value and spending in line with our 'twenty three goals and longer term strategic objectives.
First quarter, non-GAAP customer care and enrollment cost of $26 4 million decreased 37% year over year, while non-GAAP marketing and advertising of $32 4 million decreased 44% compared to Q1 'twenty two.
Due to the business transformation efforts implemented.
Our total first quarter non-GAAP operating expense, which excludes stock based compensation and restructuring charges was $91 6 million.
Junction of 32% compared to Q1 of 2020.
Operating cash flow for the first quarter was $60 8 million or.
29% improvement compared to $47 1 million in Q1 'twenty.
The stronger than expected cash collections during the quarter were driven in part by renewal members within specific carrier cohorts as well as higher renewal Commission rates.
At the same time initial cash payment for new enrollments declined year over year as expected primarily as a result of lower Medicare enrollment volumes during the most recent AEP and <unk>.
As compared to the same enrollment periods a year ago.
As a reminder, we don't receive the majority of initial cash payments, resulting from fourth quarter AEP enrollments until Q1.
Ending cash cash equivalents in marketable securities balance was $202 7 million at quarter end up from $144 4 million as of December 31, 2002.
Our balance sheet also reflects $205 7 million in short term commission receivables expected to be collected over the next 12 months.
And $596 $4 million in long term commissions capable.
We believe we have sufficient cash to execute on our operating plan this year.
<unk> two future positive cash flow.
I will discuss our financial goals for the next three years.
<unk> the timeline to positive cash flow generation.
At the upcoming Analyst day next week.
Looking ahead, we are reaffirming the fiscal 2023 guidance ranges, we gave at our fourth quarter earnings call.
Before we start the Q&A I'll briefly comment on our outlook for the rest of the year.
The second quarter of this year marks the first anniversary of our multi year business transformation journey, when we began to implement a number of strategic and operational initiatives.
While we expect to continue to realize further operational efficiencies throughout the year.
The impact of key operating metrics will not be as pronounced on a year over year basis. As it was in Q1, we expect revenue in Q2, and Q3 to be flat to slightly down compared to the same quarters, a year ago before returning to revenue growth in the critical fourth quarter.
Fourth quarter revenue is expected to grow at a double digit percentage rate year over year, driven by higher commission revenue as well as our carrier dedicated business model.
In terms of sequential trend our guidance assumes wider adjusted EBITDA loss in Q2, and Q3 than we had in Q1, taking into account the fact that the quarters seasonally smaller revenue base.
And our plan to begin ramping our agent head count and investments in training and preparation for AEP and our previously disclosed dedicated carrier new business.
However, we expect our second quarter adjusted EBITA to nevertheless benefit from our improved cost structure compared to a year ago.
In conclusion the <unk>.
First quarter positions us well for continued strong execution and the path to profitable growth.
I would now like to open the line for questions.
Operator.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one on your telephone keypad.
Hey, a J Donald Trump acknowledging your request questions will be taken in the order received should you wish to cancel your request. Please press the star followed later if.
If you are using a speaker phone please lift the handset before pressing any Keith one moment. Please for your first question.
And your first question comes from the line of George Sutton from Craig Hallum. Your line is now open.
Thank you very nice job on your Medicare advantage.
Cost to acquire per member.
So I had a.
Two part question relative to the new CMS rules, particularly the 48 hour rule and you did mention.
First that you were looking at ways to access physical locations. So I wondered if you can go into more detail on that and second.
Hugh.
A couple of years past had a confirmation call at the end of the transaction I'm just curious with this just simply be rather than an immediate confirmation call. They call that set up in 48 hours.
Thanks.
Good morning, George Frank Thank you for your questions Let me.
Let me address them in the order that you raised that.
The 48 hour rule was just really a catalyst to accelerate what we had been planning for all along and that was how can we add.
Additional dimensions to our strategic partner relationships.
So what I.
I can't get into too much detail, because it's premature but I can confirm that we are exploring multiple.
Alternatives to.
The more touch with are more aligned with.
The local nature of healthcare.
We even made modifications to our telesales operating.
Structure last year going to be expanding that pretty extensively for.
Having AEP again getting closer and closer to the local market because healthcare is local.
With respect to our strategic partners.
I think it will be in a place to provide a little more color as we report out Q2, but I will.
Reinforce that we are.
Looking at multiple opportunities there.
As far as the second question.
Yes.
Yes.
This rule first.
We came out became public in its draft form seeking comments.
That was really our call to action in terms of scenario planning and.
We looked at.
Multiple possible outcomes in all of our telesales side, we already have a pretty robust capability of the appointment scheduling side. In fact, we always start the AEP season now.
Using the marketing period as an opportunity to schedule appointments.
The go live on October 15th to startup AEP.
We're going to be expanding that capability.
So that the scheduling technology.
More robust.
But essentially as you characterized it I would say that thats.
One way of doing it.
We will use AI, where we can so that we could.
Notify people their appointment so E mails and tax.
So we wouldn't be very smart and efficient customer centric in how we approach just because people like to communicate in different forms not always by phone, but by text and email. So that's how we're thinking about it right now George.
I just ask one follow up there does that mean like October 13th you could have conversations and then schedule a follow up for the 15th then and be <unk>.
Lined with the rule.
It's our understanding that that marketing period is for just that marketing.
Could utilize that period too.
Began the scheduling process.
There's still we expect further clarification on CNS.
Our depth of multiple sources of how they're thinking about things, but as far as interpretation of the marketing guidelines that we would do that we've done it in the past in terms of appointment setting. We just can't begin the sales process until the official start of ADP, which is October 15.
I appreciate the clarity thanks guys.
Sure.
Thank you and your next question comes from the line of Danielle costs like from CB. Your line is now open.
Hey, guys. Congrats on the quarter. This is Luis Helford, Danielle I, just wanted to follow up a little bit on the cornea our role as well.
Would you be able to detail what percentage of recalls or inbound versus outbound during AEP and what proportion of that business has done the last 48 hours.
Good morning, Daniel Thanks for the question.
I think it's fair to say that virtually 100% or thereabouts or inbound call, meaning when we do an outbound excuse me the follow up.
So we don't do what I would call proactive outbound calls that's usually yes.
We do callbacks.
That's obviously, an outbound, but we are almost entirely inbound oriented on our telesales side.
But let me remind you though that we.
We have.
Our multi dimensional omnichannel distribution capability Craig.
So we have.
Sure.
We have.
Our online platform, which is both an assistant and assistant.
Yes.
We rely on that for contributions meaningful contributions to our growth activities.
We think the 48 hour hold could be a catalyst for accelerated.
<unk> is the platform.
Gotcha Thats helpful and the other part of my question is would.
Would you Bill.
So what percent of your business happens in the last 48 hours into AEP season.
Yes.
I'm sorry can you repeat the question.
What percent of your business is done in the last 48 hours of the AEP season.
Oh, okay.
I would say that.
We'll give you a percentage but.
It's meaningful it's important.
So as I said in the last 48.
About the rule as it's constructed today provides for now 48 hours required for the last four days.
Last week of AEP.
Important period of time, I'm, not going to understate that.
Towards achieving our AEP calls.
Got you. Thanks, that's very helpful.
Okay.
Thank you once again should you have a question. Please press star followed by the one.
And your next question comes from the line of George Hill from Deutsche Bank. Your line is now open.
Yeah, Hi, it's actually maxion, George Thanks for taking the question.
We've been hearing a lot of plan sponsors talking about investing more in their own brokerage capability.
Internal sales channel.
Can you give us some color on the impact you are currently seeing and how do you prepare to deal with it. Thank you.
Good morning, Matthew Thanks for your question.
There's been a lot of talk about this on the broker reports as well, but it doesn't reconcile with our relationships with our carrier partners.
Okay.
From personal experience when I was on the carrier side.
We did put an importance on having proprietary capabilities.
But it had to be balanced because.
It becomes a fixed cost and you can only.
Really rationalized so much fixed cost when you've got a.
Concentrated selling period of about eight weeks each year.
Yes.
Vast majority of the volume comes in so I think that there is multiple ways that carriers are thinking about this including working with us at the dedicated carrier relationships. So it can be cut dedicated accounts.
Proprietary but it's outsource.
So.
I think there is detailed missing and what's been conveyed and im sure that carriers will share more details at the appropriate time, but we're not seeing any change in our relationships all of them are getting stronger.
Because we've demonstrated that we can perform quality growth activities.
We do it in a way that enhances customer satisfaction through a reduction in Cta volumes. So we are earning the trust and confidence of our carrier partners.
Thank you for your questions.
Thank you there are no further question at this time. Please proceed.
Thank you all very much.
Thank you that this concludes our conference for today. Thank you all for participating you may now disconnect.
Yeah.