Q4 2024 Marcus & Millichap Inc Earnings Call
Greetings and welcome to Marcus <unk>, Millichap fourth quarter and year end 2024 earnings conference call.
As a reminder, this call is being recorded.
Speaker Change: I would now like to turn the conference over to your host shock Courtenay.
You may begin.
Courtenay: Thank you operator, good morning and.
Speaker Change: And welcome to Marcus <unk>, Millichap fourth quarter and year end 2024 earnings conference call.
Speaker Change: Today, our president and Chief Executive Officer.
Speaker Change: <unk> Chief Financial Officer, Steve did you narrow before I turn the call over to management. Please remember that our prepared remarks and responses to questions may contain forward looking statements words, such as May will expect so.
Speaker Change: We estimate anticipate.
Speaker Change: <unk> and variations of these words and similar expressions.
Speaker Change: Tended to identify forward looking statements.
Speaker Change: Actual results can differ materially from those implied by such forward looking statements.
Speaker Change: A variety of factors.
Speaker Change: Clothing, but not limited to general economic conditions, and commercial real estate market conditions, the company's ability to retain and attract transactional professionals the company's ability to retain its business philosophy and partnership culture amid competitive pressures the.
Speaker Change: Company's ability to integrate new agents and sustain its growth.
Speaker Change: Other factors discussed in the company's public filings.
Speaker Change: During its annual report on Form 10-K filed with the Securities and Exchange Commission on February 28 2024.
Speaker Change: Although the company believes the expectations reflected in such forward looking statements are based upon reasonable assumptions. It can make no assurance that its expectations will be attained the company undertakes no obligation to update any forward looking statement whether.
Speaker Change: As a result of new information future events or otherwise.
Speaker Change: Certain financial information presented on this call represents non-GAAP financial measures. The company's earnings release, which was issued this morning and is available on the company's website represents a reconciliation to the appropriate GAAP measures and explains why the company believes such non-GAAP measures.
Speaker Change: As yours are useful to investors.
Speaker Change: This conference call is being webcast. The webcast link is available on the Investor Relations section of the company's website.
Speaker Change: Www Dot Marcus <unk> Millichap Dot com, along with the slide presentation, you may reference during the prepared remarks.
Tom: With that it's my pleasure to turn the call over to CEO Tom <unk>.
Tom: Thank you shark on behalf of the entire Marcus <unk> Millichap team good morning, everyone and welcome to our fourth quarter and year end earnings call.
Tom: I am pleased to report that we ended 2024 with our highest quarterly revenue in two years Rev.
Tom: Revenue for the fourth quarter was $240 million up 44% compared to last year with adjusted EBITDA of $18 million and net income of $8 $5 million.
Tom: For the year revenue grew 8% to approximately $700 million and adjusted EBITDA of $9 4 million a net loss of 12 million.
Tom: While we're pleased to have narrowed the net loss from 2020 threes market shock returning to profitability is Paramount and continues to drive key initiatives.
Tom: During the quarter brokerage revenue increased 40% with transaction count up 23% and volume growth of 41%.
Tom: Our results reflected a definitive outperformance relative to the market increase of 6% in transaction count and 32% and volume as reported by RCA.
Tom: Financing revenue nearly doubled in the fourth quarter and volume was up 139% due to our teams or further penetration into larger transactions and the expansion of our IPA capital markets group.
Tom: To illustrate our progress consider that our previous quarterly record prior to the 2022 market disruption was just over $36 million.
Tom: In the fourth quarter of 2024, we achieved $31 million of revenue. Despite it's still a challenging lending environment.
Tom: Another contributing factor was our originators access to lenders.
Tom: N M C. C closed with 177 separate lenders in the quarter and 367 for calendar 2024, which was a key catalyst for these improved results.
Tom: Three key factors drove our higher than expected results during the fourth quarter.
Tom: The first was the dramatic drop in the 10 year treasury yield to a low of three 6% in September following the fed's decisive 50 basis point interest rate reduction.
Tom: This window of lower interest rates coincided with price adjustments since the market peak of 2022 and record capital looking to get off the sidelines and come back into the marketplace.
Tom: Internally, our year long effort to increase client contact and expand our exclusive inventory enabled us to grow our pipeline of deals under contract going into the fourth quarter as these factors converged.
Tom: This included a marked increase in larger transactions coming to market as the return of institutional capital continued to build momentum.
Tom: Perhaps the most important trend to share is the urgency to close which started to propel revenue growth late in the fourth quarter.
Tom: Recall that by mid November the 10 year Treasury had shot right back up to four 4% in reaction to the election outcome market perception of inflationary policy proposals and the fed's ongoing struggle to achieve the last phase of inflation gaming.
Tom: This elevated the motivation to close deals that had locked in lower interest rates in anticipation of the market entering yet higher for even longer interest rate period in 2025.
Tom: Therefore, our outsized results in the fourth quarter came from a much higher closing ratio of deals under contract than historical averages as well as some degree of pull forward in transactions.
Tom: Revenue for middle market, and larger transactions accelerated 56% and 88% respectively, while our private client revenue registered a 27% increase even as bank and credit Union financing for smaller deals remain constrained.
Tom: For the year, the company closed 7800 transactions and $43 $6 billion in volume, reflecting gains of 4% and 14% respectively over 2023.
Tom: This translates to 31 transactions per business day, and four for business hour keeping M. I ranked as the leading investment brokerage firm by transaction count. According to various third party sources.
Tom: Let me take a moment to acknowledge the hard work and dedication that our team brings to each and every one of our clients one transaction at a time.
Tom: Looking forward the fed's efforts to breakthrough the last phase of inflation Taming do their target level is definitely proving to be more difficult than expected as the labor market remains strong and threats of tariffs create additional uncertainty.
Tom: As a result, many clients who are preparing to bring inventory to market in the first quarter have returned to a wait and see stance.
Tom: Our team continues to battle interest rate volatility as the most disruptive factor in bringing in buyers sellers and lenders together and closing deals.
Tom: As a case in point the 10 year Treasury yield has moved by at least 50 basis points in either direction.
Tom: Lean times since March 2022, when the fed started the market disruption.
Tom: Each of these moves impacts real estate pricing investor sentiment and loan to value ratios by lenders among many other nuances of marketing and closing deals.
Tom: The frequency of lifting price adjustments explorations and transactions falling out of contract remains elevated distracting our sales force from new business development.
Tom: Notwithstanding these headwinds there are several reasons for cautious optimism for incremental growth in transactions. This year after a slow start.
Tom: First we're seeing a growing number of situational distress, we're maturing loans and or operational issues, such as the cost and availability of insurance will push more listings and sales.
Tom: Second higher interest rates and the fed with no urgency to become more accommodative anytime soon or pressuring prices further.
Tom: As the hopes for a fed miracle fade and the need to sell rises realistic pricing should become more common.
Tom: We continue to see well priced assets move as multiple buyers are at the table in most cases overall today's pricing for most property types is compelling against replacement cost, which is driving opportunistic private investors and many institutional investors seek opportunities.
Tom: Third construction starts are pulling back rapidly and significantly going into 2025 and anticipated for 2026.
Tom: This is most meaningful for apartments, industrial hotels, and self storage, where pockets of overbuilding have created local softness in some markets.
Tom: Retail remains a highly desired asset class due to little new supply and repositioning over the past decade.
Tom: This strength is mainly showing up in our multi tenant shopping center business.
Tom: The office sector remains a tale of two markets with older urban product hurting the most and newer suburban office performing well.
Tom: Last but not least dry powder capital is ample and there is no shortage of interested buyers for well priced assets.
Tom: On the buyer side of the equation hopes for a larger scale distress acquisitions at significant discounts have also faded as lenders have made a major push to extend maturing loans in most cases.
Tom: Or offset MMR. The main strategy is to further increase our investor outreach and client contact and provide helpful content for decision making.
Tom: Internally, we're laser focused on individual producer productivity and business plan to increase kind of outreach with more efficiency as.
Tom: A steady stream of technology advances, including an expanded use of AI throughout our various underwriting and support processes as well as the expansion of our centralized underwriting and back office services are a few examples.
Tom: Our investments in industry events.
Tom: Research content expansive media coverage talent acquisition and retention are fully aligned with the overall objective to further penetrate the market by property type and market area.
Tom: We are building on the success of our auction and loan sales divisions, both of which are proving to be effective value added services, where our clients.
Tom: And highly complementary to our sales force.
Tom: We continue to pursue strategic acquisitions in our core business and adjacent business lines that can extend these synergies.
Tom: As I have shared the acquisition bid ask spread and near term performance risk relative to guaranteed value expectations have prevented a number of acquisitions we have pursued.
Tom: At the same time, the recruiting of experienced individuals and teams remains a bright spot as we continue to add talent with a book of business two of the <unk> platform.
Tom: This is also helping to offset the elevated turnover of trainees in newer agents due to market conditions.
Tom: This strategy is also enabling us to expand market coverage with little overlap with our existing teams.
Also very proud to have built a fortress balance sheet over the years with no debt and an expanded capital allocation plan that has returned $170 million to our shareholders in the form of dividends and share repurchases since 2022 and made one of the most difficult real estate market disruptions and history.
Tom: Most importantly, we're confident that we have the experience capital and client support to grow and maximize shareholder returns over the long term.
Steve: With that I will turn the call over to Steve for more details on our results Steve.
Steve: Thank you Hassan.
As mentioned revenue for the fourth quarter was $240 million up 44% compared to last year's $166 million for.
Steve: For the full year total revenue was $696 million up 8% compared to $646 million last year.
Steve: The significant year over year and sequential revenue growth in the fourth quarter was driven by low rates. When the fed initially began to make cuts in September and buyers incentive to close in the quarter before rate locks expired.
Steve: Revenue from real estate brokerage commissions for the fourth quarter was $203 million compared to $145 million last year, an increase of 40%.
Steve: For the quarter sales volume was $12 $3 billion across 1700 42 transactions.
Steve: 41% and 23% respectively.
Steve: For the full year 2020 for revenue from real estate brokerage commissions was $590 million compared to $560 million last year, an increase of 5%.
Steve: Full year sales volume was $33 $6 billion across 50, 447 transactions up 9% and essentially flat respectively.
Steve: Average transaction size during the fourth quarter was approximately $7 million compared to $6 $2 million a year ago.
Steve: For the year average transaction size was $6 $2 million compared to $5 $6 million in the prior year.
Steve: Increases in average transaction size for both the quarter and full year are due to a greater mix of revenue coming from middle market and larger transactions as institutional investors re entered the market starting in the third quarter.
Steve: Within brokerage for the quarter, our core private client business contributed 59% of brokerage revenue or $103 million versus 66% or $95 million last year.
Steve: For the full year, the private client business contributed 62% of brokerage revenue or $366 million versus 67% or $373 million last year.
Steve: It'll market and larger transactions together accounted for 38% of brokerage revenue or $77 million during the fourth quarter compared to 31% last year.
Steve: For the full year middle market and larger transactions represented 34% of brokerage revenue or $203 million compared to 30% last year.
Steve: Revenue in our financing business, including M. M. C. C was $31 million in the fourth quarter compared to $16 million last year, a 97% increase.
Steve: Financing revenue for the full year increased 26% to $85 million compared to $67 million last year.
Steve: Fees from refinancing accounted for 33% of loan originations in the quarter compared to 44% last year and for the full year refinancing fees were 38% of loan originations compared to 49% last year.
Steve: Other revenue comprised primarily of leasing consulting and advisory fees was $6 million in the fourth quarter and $22 million for the full year compared to $6 million and $19 million, respectively last year.
Steve: Turning to expenses total operating expense for the fourth quarter was $233 million, 27% higher than last year.
Steve: For the full year total operating expense was $729 million or 3% higher compared to the prior year.
Steve: Higher absolute expenses were primarily due to an increase in variable costs directly attributable to higher revenue.
Steve: However, as a percentage of revenue total operating expenses decreased year over year in both the fourth quarter and the full year.
Steve: Drilling down into expenses further cost of services was $152 million or 63, 2% of total revenue for the quarter modestly lower than 63, 4% in the prior year.
Steve: For the full year cost of services was $431 million or 62% of total revenue an improvement of 100 basis points compared to last year.
Steve: The decrease in cost of services as a percentage of revenue reflects a slower ramp up of revenue in the first nine months of the year, resulting in senior producers hitting higher thresholds later in the year.
Steve: SG&A in the fourth quarter was $76 million or 31, 8% of revenue an improvement of more than 13 percentage points compared to the prior year.
Steve: For the full year, SG&A was $281 million or 44% of revenue compared to 44.1% last year.
Steve: The improved expense ratios were attributable to a higher revenue base, along with ongoing cost reductions, partially offset by expenses related to talent acquisition and retention.
Steve: In the fourth quarter, we returned to profitability and generated net income of $8 $5 million or 22 cents earnings per share compared with a net loss of $10 $2 million or 27 cents per share in the prior year.
Steve: For the full year net loss was $12 $4 million or <unk> 32 per share a significant improvement compared to a net loss of $34 million or <unk> 88 per share last year.
Steve: Our near term financial results are negatively impacted by expenses related to investments made in talent acquisition technology and brokerage support at a time of hampered revenue production.
Steve: We continue to believe these investments will be accretive in the eventual market recovery.
Steve: For the quarter, adjusted EBITDA was $18 million compared to negative eight $4.5 million in the prior year.
Steve: For the full year, adjusted EBITDA was $9 $4 million compared to negative $19 $6 million in the prior year.
Steve: The effective tax rate for the quarter was 26% for the full year was 5%.
Steve: Moving onto the balance sheet, we remain well capitalized with no debt and $394 million in cash cash equivalents and marketable securities an increase of $14 million in the quarter after paying a $10 million dividend and funding new investments during the quarter.
Steve: And last week, we announced that our board declared a semiannual dividend of <unk> 25 per share or approximately $10 million payable on April four 2025 to shareholders of record on March 12 2025.
Steve: As Tom mentioned since initiating our dividend and share repurchase programs nearly three years ago, we have returned more than $170 million in capital to shareholders.
Steve: Looking ahead to 2025 volatility in interest rates and the fed's wait and see approach to further rate cuts given the strong economy and inflation concerns continue to pose challenges we.
Steve: We do see improving conditions overall S Assam summarized but weighted to the latter half of the year.
Steve: First quarter revenue is expected to follow the usual seasonality trend and be sequentially lower than Q4. However.
Steve: However, the strong performance in Q4 has impacted the normal flow of Q1 activity. So that sequential decline is likely to be a little bit more pronounced.
Steve: Cost of services for the first quarter should follow that seasonal reset and be in the range of 59% to 61% of revenue.
Steve: SG&A for the first quarter should reflect an increase year over year in absolute dollars consistent with higher agent support Baidu improved revenue performance in 2024 and continued investments in central services to support sales producers.
Steve: As we've discussed in the past our tax rate is dependent on the relationship between expenses that are non deductible for tax purposes. It projected pretax book income for the full year and therefore can fluctuate greatly.
Steve: We remain committed to helping clients navigate the external market environment, while internally, we continue to drive operational efficiency through best practices across the organization. We are confident that the investments, we're making in the platform positions us well for long term growth.
Steve: With that operator, we can now open the call for Q&A.
Steve: Thank you.
Steve: At this time, we'll be conducting a question and answer session.
Steve: If you'd like to ask a question. Please press star one from your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Steve: You May press star two if you'd like to withdraw your question from the queue.
Steve: For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys.
Steve: One moment, please we poll for questions and once again that is star one thank you.
Steve: No.
Speaker Change: Thank you and our first question is from the line of Jason Belcher with Wells Fargo. Please proceed with your questions.
Jason Belcher: Hi, good morning.
Steve:
Steve: I was just wondering if you could talk a little more about the different transaction size buckets for commission revenue maybe touch on any notable changes in the types of buyers and sellers youre seeing or any specific changes in transaction terms are you might've seen since the election or maybe even since the start of the new year.
Speaker Change: Happy to Jason Good morning.
Steve: Well.
Steve: Biggest trends.
Steve: Should be highlighted is the continuation of capital coming into the larger transactions. We saw that start the middle of last year and build further momentum. That's the combination of institutional capital actively looking for acquisition opportunities looking at replacement cost and price.
Steve: Versus the 2022 peak as the two main catalysts for why they are.
Steve: Much more engaged in the marketplace today. The second reason behind that is a lot of entrepreneur private investors that are also back in the market looking at some higher risk higher return types of acquisitions. We are seeing some of that in the office sector. We're certainly seeing some of that in the shopping center sector and even some more.
Steve: Family older vintage multifamily that a lot of institutions would stay away from but private entrepreneurial investors would actually embrace that need either a rescue capital or capital for deferred maintenance and so on within the older older vintage workforce housing type of class B and C.
Steve: Yes.
Steve: Other trends to note is that we.
Steve: We're seeing new capital formation, there are new groups and just about every major metro that are actively looking for acquisition opportunities as well as a lot of our existing clients.
Steve: That we've done business with over the years being far more.
Steve: Motivated by the fear of missing out frankly than being concerned about the fear of ongoing uncertainties. So the investor sentiment has definitely shifted I would say that the election outcome.
Steve: <unk> helped that investor sentiment.
Steve: But then in the last 30 45 days, we've seen a little bit more of a pull back just a wait and see how the new administrations policies start to rollout and what really happens on the inflation front of course, we didn't get a friendly.
Steve: Just a couple of days ago and that.
Steve: That's the kind of concern that is keeping some investors on the sidelines, mostly on the seller side of the equation.
Steve: As I mentioned in my comments number of our clients that we're planning to bring product out to market have decided to hold off for just a bit having said all that we're seeing incredible demand on the buy side.
Steve: And just the more the cumulative need to sell or desire to sell now that we pretty much know that.
Steve: The kind of the baseline threshold for interest rates.
Steve: It's going to be in that four in a quarter to $4 75 range.
Steve: Much more so than three 5% to 4% at least in the foreseeable future.
Steve: That's very helpful. Thank you for all that color.
Steve: Shifting gears a little bit.
Steve: Just wondering if you could talk a little bit about your exposure to the greater la market and what kind of impact you've seen from the recent fires there, especially as it relates to the multifamily transactions.
Steve: Do you have any sense, how much multifamily reps.
Steve: We have increased or are expected to increase in the greater L. A area.
Steve: Wow.
Steve: Wildfires.
Steve: Tragic and the way that the community was affected of course, we directly now countless displaced friends associates and.
Steve: Related.
Steve: Related people to our business.
Steve: <unk>.
Steve: Really hasnt required a lot of support and we're glad to do our part to make that happen.
Steve: From a market impact.
Steve: Point of view there are multiple ripple effects that first and foremost at a more macro level is insurance of course, we continue to have a lot of pressure on operating costs.
Steve: Not only insurance.
Coming a lot more expensive, it's just very hard to get policies.
Steve: Issued a written and that has become a major obstacle in the local market, California is a big market for us Southern California is a significant market for us and part of the reason that.
Steve: The Q1 kind of pipeline is a little bit slower than it would've been has to do with some inventory being pulled from the market and more clients hesitating to bring product to market to see what happens.
At a macro level of course that has an impact on the company, but not to any measurable way that would be of any concern.
Steve: From a rebuilding perspective.
Steve: There is where there is some direct correlation between market sentiment and some of the discussions around tariffs.
Steve: <unk> cost labor cost and frankly can.
Steve: Turns around.
Steve: Local governments ability to organize and rebuilding effort, which is obviously going to be fraught with all kinds of obstacles and issues. It is creating a lot of pressure on rents.
Steve: I'm not so convinced that that is sustainable and it's going to kind of reset the benchmark for rent growth.
Steve: In Southern California.
Steve: Definitely near term increase but.
Steve: Questionable as to where those increases are going to be sustainable beyond the near term.
Steve: The reaction to the tragedies.
Steve: At the same time I have to say, California in general.
Steve: And southern California in particular is being viewed by the investment community is a bit of a diamond in the rough because these metros are.
Steve: Hugely supply constrained and the tragedy is make that even more acute at the same time they have lagged in the recovery compared to many other metros and we're just getting the momentum among job creation rent growth and that has made.
Steve: You know apples to apples comparison of a lot of California investment.
Steve: <unk>, Northern California by the way much more attractive.
Steve: On a risk adjusted basis prior to the tragedy I don't think that.
Steve: It's going to be affected much.
Steve: Macro view is still very favorable toward how pricing has reacted and why there are some attractive opportunities as an entry point throughout California.
Speaker Change: Thank you. Thank you for all of that.
Steve:
Steve: I guess.
Steve: You guys have referenced exploring some.
Steve: External growth opportunities as well as other strategic initiatives.
Steve: <unk> technology or talent recruiting and development.
Steve: Any discussions on the external growth front or strategic.
Steve: Strategic initiatives internally that you could share more on specifically.
Steve: Yeah, it's a bit frustrating in that there are groups out there.
Steve: <unk> been actively talking to and have made offers to that would've been great strategic fits for us and we would have been a great growth platform for them.
Steve: In the near term concerns around performance, obviously profitability is very important to us.
Steve: And being able to acquire entities that are accretive and value added pretty much from the get go is an important.
Steve: Consideration for us so valuation has been.
Steve: A little bit of the obstacle as has been the.
Steve: Terms of what the sellers had been expecting and guaranteed value versus our comfort zone.
Steve: But those discussions are still ongoing and a couple of cases.
Steve: And in retrospect some of the deals that we passed on.
Steve: It turned out to be really good decisions.
Steve: To be direct about it because of the market uncertainty outweighing.
Steve: Our desire to grow and bring entities into the into the <unk> platform.
Steve: Looking forward, we are not giving up on those kinds of.
Steve: Targeting and approaches of actual companies and platforms in the meantime, we continue to have a lot of success in attracting experienced individuals and teams.
Steve: That are joining the firm at a pretty steady flow, we are adding resources to continue to build on that momentum and another channel of investment and diversification for us has been.
Steve: Partnering with other firms at investing in some other firms that we believe are very complementary.
Steve: Through our platform and to our clients examples that I've highlighted before our equity multiple which is essentially a.
Steve: Very well established tech heavy platform for raising equity.
Steve: In investment management, which has become a really good source of solutions for many of our clients and we have introduced them to many of our agents.
Steve: There are a good partner in that arena for us and growing in that in that channel.
Steve: Archer is another example.
Steve: Really an AI oriented startup that is a data consolidator and basically a platform for modeling our net operating incomes and property profiles and sub market profiles that can make our underwriting broker opinions of value and clients.
Steve: Basically probability assessment much much more efficient so not only are we going after core business investment opportunities and acquisitions adjacent business line acquisition opportunities, but also in terms of our investments in technology oriented out outputs that can be.
Steve: Dentary to the business organically, we have grown the auction business from scratch in the last two and a half years coming up on three years.
Steve: <unk> successfully our acquisition and integration of mission capital, which brought a.
Very well respected brand within the loan sale and loan advisory business has been very successful, especially as the cycle turns to where a lot of lenders and investors are selling loan pools and need our advice on valuing those.
Steve: So theres interesting variety of examples of how we've already added complementary function to the firm and are using our strong balance sheet to continue to pursue them.
Steve: Thanks for that update this.
Steve: Maybe just one for Steve as well.
Steve: Switching gears to capital allocation.
Steve: It looks like Q4 was a kind of a quieter quarter on the share repurchase front.
Steve: Maybe if you could talk a little about.
Steve: How you think about balancing the different capital allocation buckets going forward in terms of share repurchase versus dividend growth versus other investment opportunities.
Speaker Change: Yes, Jason happy to take that.
Speaker Change: And you touched on the fact that our strategy as you would imagine is multi pronged it's us.
Speaker Change: Not only investments for our long term growth and technology.
Speaker Change: Technology.
Speaker Change: Yes.
Speaker Change: M&A.
Dividends and share repurchases.
Speaker Change: We were a little bit quiet on the on the repurchase side.
Speaker Change: <unk> continued to.
Speaker Change:
Speaker Change: Distribute dividends.
Speaker Change: We continued our pattern of semiannual.
Speaker Change: Dividend declarations are paid.
Speaker Change: Paid that in in October the board.
Speaker Change: Just.
Speaker Change: Earlier in the week announced.
Speaker Change: A dividend coming up here for the for the first quarter as we look at how we.
Speaker Change: Make those allocation decisions.
Speaker Change: Dial them up dialogue dial up and down Opportunistically, specifically as it relates to repurchases.
Speaker Change: I think we said this.
Speaker Change: Last quarter at a time, when we're not generating as much cash flow.
Speaker Change: We will be.
Speaker Change: A little bit more opportunistic in how we engage in and repurchasing shares.
Speaker Change: And.
Speaker Change: Although we did generate quite a bit of.
Speaker Change: Operating capital. This this quarter, so we will revisit that and of course the dividends.
Speaker Change: Our I would expect that pattern to continue although that's.
Speaker Change: Up to the board to decide on a periodic basis.
Speaker Change: But importantly, we continue to invest very very heavily internally in technology.
Speaker Change: I think as Tom mentioned.
Speaker Change: Investments in our.
Speaker Change: Our central support functions.
Speaker Change: Which is a way to generate efficiencies.
Speaker Change: Across underwriting and proposal preparation and marketing for our agents pulling that back into a central function. So heavy investment there over the last two years and we're really starting to see.
Speaker Change: The fruits of those investments.
Speaker Change: Great. Thanks, very much for taking my questions.
Speaker Change: Thanks, Jason Thanks, Jason.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time I would like to turn the floor back to management for closing remarks.
Speaker Change: Thank you operator, and thank you everyone for joining our call. We look forward to seeing many of you on the road and to have you back on our next quarterly update call is adjourned.
Speaker Change: Thank you. This concludes today's conference you may now disconnect. Your lines at this time. Thank you for your participation.