Q4 2024 LendingTree Inc Earnings Call
and many more. Thank you. Thank you.
Forward looking statements, we make are subject to risks and uncertainties and lendingtree as actual results could differ materially from the views expressed today, many but not all of the risks. We face are described in our periodic reports filed with the SEC. We will also discuss a variety of non-GAAP measures on the call and I refer you to today's press release and shareholder letter both available on our website.
For the comparable GAAP definitions and full reconciliations of non-GAAP measures to GAAP.
Speaker Change: And with that done. Please go ahead. Thank you Andrew and thank you everyone for joining US today. We are delighted to report the company finished 2024 and a very strong note generating $32 million of adjusted EBITDA in the fourth quarter, which was well ahead of our forecast another quarter of terrific terrific performance in our insurance segment was the primary driver of this result, while our <unk>.
Speaker Change: <unk> and consumer segments also generated strong year over year growth as well.
Speaker Change: Last year, we benefited from the beginning of a very strong cycle in auto insurance demand from both consumer and carrier perspective, I would like to call out the momentum we are generating so several other parts of our business in the fourth quarter year over year revenue growth across some of our key product offerings included homeowners insurance was up 175.
Speaker Change: On the equity grew 48% small business grew 45% personal loans and auto loans, both grew by 21% and mortgage grew 12%.
Speaker Change: Importantly, we expect double digit revenue growth will continue in each of these products in the first quarter of this year.
Speaker Change: The key message I would like to share with our shareholders that the company has returned to growth after a prolonged period of different difficult operating conditions, our forecast for the year confirms our growth outlook with an adjusted EBITDA outlook, calling for 16% annual growth at the midpoint of the range and we expect this result will be driven by revenue growth.
Speaker Change: Across all three of our reportable segments, which is a testament to the value of the diversification of our business model we.
Speaker Change: We have also maintained a laser focus on our variable marketing and fixed costs. This discipline will help us generate positive operating leverage as we continue to scale our revenue base.
Speaker Change: Our balance sheet has improved significantly over the last year as well with net leverage ending the year at three five times trailing adjusted EBITDA. We expect leverage will continue to trend lower as earnings growth continues and we reduce our debt balance further with excess cash we believe the substantial improvement in our credit metrics.
Speaker Change: It will allow us to lower our interest expense and our debt and improve free cash flow generation for shareholders.
Speaker Change: We entered this year with strong momentum exhibited in our fourth quarter results our business functions at its best when there is consistent demand from both sides of our marketplace. We expect stable interest rates, a healthy consumer and an outlook for continued economic growth will drive accelerating demand from our customers as well as our lending and insurance carrier.
Speaker Change: Partners, we are energized for the year ahead, and look forward to continue creating value for our shareholders from our operating results and now operator, we're happy to answer any questions.
Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press Star then one on your telephone. We also ask that you. Please wait for your name and company should be announced before you proceed with your question one moment for the first question.
Speaker Change: And the first question will come from the line of Ryan Ryan Tomasello of <unk>. Your line is open.
Ryan Tomasello: Hi, everyone. Thanks for taking the questions.
Ryan Tomasello: Barry I just wanted to start on insurance I guess, if I simply annualize your second half revenue performance.
Ryan Tomasello: That would still imply pretty robust growth in 2025 over 2024, so I'm just trying to tie that back to your comments in your shareholder letter for a more modest growth in 2025.
Ryan Tomasello: Which sounds like it's relative to the double digit growth youre expecting in your other segments. So anything I'm missing there or just trying to understand the nuances around what's going on with insurance this year.
Ryan Tomasello: Yes.
Scott Perry: Brian Hi, This is Scott Perry I'm answering any question, there and I would say.
Everything you said is generally right we are expecting more modest growth as the year goes on.
Scott Perry: We've still got compared to the first half of last year I think we're looking at still strong growth and as the year continues on is going to be.
Scott Perry: Harder and harder comps against where we're at but I would caveat that around.
Scott Perry: Almost all of our carriers are still.
Scott Perry: In a growth position with us and they've made that pretty clear to us, but theyre going to be a little bit more diligent this year.
Scott Perry: As far as.
Scott Perry: Being smarter with our marketing dollars and being closer tie to what are the most profitable areas for that is so definitely we still expect.
Scott Perry: Insurance to be a really good story and 25% as the year grows goes on I think youre going to see that growth moderating, but for us as a company. We're also going to be very focused on returning our vms margins. That's more of our historical norms and so I would say that story in 'twenty five is more moderate overall growth.
Scott Perry: Our margins starting to get back up to that low to mid <unk> range.
Scott Perry: Okay. Thanks for clarifying that.
Scott Perry: And then I was hoping you could elaborate on the opportunity to potentially take more price across the business, particularly in the insurance segment.
Scott Perry: And I guess tying that back to <unk>.
Scott Perry: Understanding of that.
Scott Perry: It is now being vacated but were there any measures that you had teed up or had already put in place that you still might be benefiting from in 2025% including price increases.
Scott Perry: Yes, I would say we are it kind of depends on the different products, we sell an insurance like our click product, which is our biggest product is more of a market based pricing where people are paying to be in a certain ranking in the solar on the page and so as you have more competition.
Scott Perry: As more carriers get in that that creates those market pricing dynamics, the lead pricing, which will be more around the one on one concern CPA, we had been communicating to our clients price increases that we're going to be associated with that that we need for the large for the most part agreed to our clients one that went away.
Scott Perry: We werent going to charge those price increases because that was no longer an issue we were dealing with.
Scott Perry: Obviously over the long run we always want in a perfect world, we want prices to our clients going up at similar rates to the cost of media.
Scott Perry: Thanks for taking the questions.
Scott Perry: Yes.
Scott Perry: Thank you one moment for the next questions.
Speaker Change: And our next question will be coming from the line of Jed Kelly of Oppenheimer. Your line is now open.
Jed Kelly: Hey, Greg.
Greg: Good alright. Thanks.
Greg: Yeah, just just on just on insurance I mean, I think we've seen strong results across the board from from a lot of the marketplaces, just as we sort of go throughout the balance of the year can you kind of tell us how we should gauge on.
Greg: What companies are taking the most share and kind of what how we should view sustained share gains.
Greg: Once this up cycle ends and then just my follow up is we're sort of seeing the new administration sort of targeting lower interest rates can you just talk about how we should view right in regards to your full year guide. Thank you.
Scott Perry: Yes, Scott why don't you take the.
Scott Perry: Market share on insurance and then I'll take the interest rate question.
Scott Perry: I would say starting on on market share I would say I would just start in general.
Scott Perry: Staying with our competitors for the most part are you seeing the big carriers that will really leaning in last year are still the ones that we definitely have a number of other carriers.
Scott Perry: Smaller carriers that are starting to get in more and growing rapidly.
Scott Perry: But from a holistic perspective, it's really the top three or four carriers that are driving the market at this point and if I was going.
Scott Perry: To guests.
Scott Perry: It will still be those three or four carriers that will drive the market through <unk> through 'twenty five.
Doug: Go ahead, Doug on the interest rates on interest rates.
Doug: Any lowering of interest rates.
Doug: And I've noticed.
Doug: The treasury bonds bills.
Doug: Move downward a little bit that definitely helps our home business and helps all of our businesses really.
Doug: Those businesses are based on obviously consumer interest, but thats really based on interest rate intros and as interest rates fall. There is more consumer interest and the lenders you have more flexibility to approve somebody because the payment is.
Doug: Is lower and therefore, it can they can get it approved with their income so.
Doug: So it's better for everybody.
Doug: Even if you had a consumer that is not as strong.
Doug: We would we obviously would prefer a low interest rate.
Doug: From our insurance perspective, a low inflation environment and.
Doug: That's what was the double whammy over the last four years.
Speaker Change: Yes, John I'll, just add on to that is as it relates to the guide for home, we're not contemplating any material reduction in rates, we're kind of assuming basically the rate environment that we're in today, where we're basically assuming in the guide is a continuation of the strength in home equity that's a product that works really well for the consumers in that it works really well for the lenders as well.
Speaker Change: So we're assuming that that strength of monetization on the RPI continues throughout the guide, but not benefiting materially any rate decrease.
Speaker Change: What's cool about that is thats just consumers managing their balance sheet, just like Lendingtree is managing their balance sheet, they're going okay. I've got equity in my home doesn't make sense to refinance the whole thing, but if I can tap those at a lower rate than by credit cards My auto loan.
Speaker Change: Let's go for it.
Speaker Change: Thank you.
Speaker Change: Thank you one moment for the next question.
Speaker Change: And the next question will be coming from the line of defense Sequelae of Jos Your line is open.
Speaker Change: Oh, Hey, guys CUSIP Scully so <unk>.
Speaker Change: Maybe a question for Scott and one for Doug.
Speaker Change: Just doubling on the insurance question I guess as you look at the business.
Speaker Change: Beyond maybe 2025, and maybe because you're an insurance man hasnt been in business for a long time as you look historically I'd like the steady state in a normalized environment of insurance can you maybe share with us where that steady state historically has been maybe.
Speaker Change: Our range and and.
Speaker Change: Any reason why we shouldnt be back to that kind of level and then.
Speaker Change: Doug maybe on the on the Google Algo change some of your competitors did suffer from from from some of the changes that we saw a couple of times last year you guys clearly did not maybe remind us again about the strategy around.
Speaker Change: SCO versus SCM organic traffic versus not how much of your traffic is actually organic im assuming its minority, but maybe just.
Speaker Change: Discussed at that as a headwind to competitors that may be not as much cheap guys. Thank you.
Scott Perry: Scott go ahead.
Speaker Change: Sorry on the insurance side Youssef.
Speaker Change: I mean I'll start by saying, we're all we're already running at all time highs.
Speaker Change: So it's not a matter of getting.
Speaker Change: Getting back to a level, we're running at all time highs.
Speaker Change: If I compare it to the last big downturn, which was in the 2016 timeframe.
Speaker Change: First off the downturn wasn't as severe as this most recent one but after we got out of that downturn in the industry as a whole there was a significant step up.
Speaker Change: A doubling of the business from the previous high as before that before before I reached a level, where it kind of leveled out for a period of time and it wasn't just that was the industry as a whole and I think that's just generally.
Speaker Change: When you come out of this downturn is in a lot of these carriers have reset their marketing budgets. Every single time, you see more orientation towards online performance marketing because that stuff bottomline just performs better than most other marketing categories and I think youre seeing that same phenomenon.
Speaker Change: It happened this time around or there is more dollars are coming to companies like ours and our direct competitors.
Speaker Change: I think it will be continuing to grow over the next 18 to 24 months because the carriers are in a very profitable position to the point, where a number of them are already looking to give right back in certain areas, which will create a whole another shopping cycle when that starts to happen. So I think I think we've got.
Speaker Change: Our highest in front of us, but then when it reaches that steady state I mean, it's just.
Speaker Change: It's really a matter of whether there is a huge impact like inflation coming out of nowhere, which.
Speaker Change: As long as we can be in a steady state there.
Speaker Change: The business will run in a steady state.
Speaker Change: And on the.
Speaker Change: SCO and organic traffic.
Speaker Change: At 15% to 20% of our traffic is organic.
Of that the rest would obviously be people hearing awesome typing in Santa et cetera.
Speaker Change: And in terms of the Google algorithm change.
Speaker Change: <unk>.
Speaker Change: What I've noticed Google doing and quite.
Speaker Change: Quite frankly agree with it.
Speaker Change: As they are.
Speaker Change: Giving more credit to high quality unique content that really aides the consumer.
Speaker Change: So they did things like shutting down the quote unquote marketplaces in.
Speaker Change: Of newspaper sites, because they basically were leveraging their credibility on the news to go sell Jack Hammers and.
Speaker Change: No.
Speaker Change: Screws or whatever and mortgages.
Speaker Change: But so we feel really good about it because our business has always been so I would say lendingtree has always been unabashedly in the paid marketing camp and I wanted our SCO side to work.
Since $19 99.
Speaker Change: I would say for the first time, it's really gripping.
Speaker Change: The team is really working well we've made a number of changes and so we're coming from a small base and can grow into it.
Speaker Change: And we happen to have the place of having really high quality content. So as we.
Speaker Change: Leverage on that and use the Lendingtree brand integrate all of these acquisitions that we've had plus get the processes right.
Speaker Change: There is a lot more traffic to go after like 15%.
Speaker Change: Of your volume still produces a heck of a lot of EBITDA.
Speaker Change: And then just to add on one thing to that we're very happy with where we're at on that <unk> revenue in the fourth quarter was actually up 30% year over year.
Speaker Change: So to Doug's point, we're happy where we're at we're happy with the trajectory of where it's going but I'll also say our media practice has.
Speaker Change: <unk> has been very successful in a broad based fashion, whether it's paid search whether its at CEO, whether it's social display programmatic.
Speaker Change: All of our categories are performing very well.
Speaker Change: That's great. Thanks, a lot and congrats.
Speaker Change: Thanks.
Speaker Change: The next question.
Speaker Change: The next question will be coming from the line of John Campbell of Stephens. Your line is open.
Oscar: Good afternoon. This is Oscar this offer Jon congrats on the strong quarter and thanks for taking my question.
John Campbell: The consumer segment group for the first time since Q2 do you feel like you're in a position for sustainable growth for at least the near to medium term.
John Campbell: And as a follow up to that what do you view as the key swing factors determining your pace of growth over the near to medium term.
John Campbell: I'll, let Scott maybe take the consumer segment and I'll take maybe swing factors.
John Campbell: Awesome.
John Campbell: Yes, I would say on the consumer segment.
John Campbell: There's way more good than bad.
John Campbell: Credit card business is still rough, which I think that's just an industry wide I think you're probably hearing that from everybody.
John Campbell: I mean, our small business is on a large growth trajectory.
John Campbell: A lot of that is supported by we've been actively ramping our direct sales force and that's been highly successful we've got a very qualified salesforce that we have been growing.
John Campbell: One of our top.
John Campbell: Companies that we write originate loans through actually informed us in January that we were their number one originator of anyone that worked with.
John Campbell: And we feel like Theres, a lot of growth from their bulk both from increasing our direct sales force, but then also the opportunity to drive more traffic from a lot more areas that we haven't even really tapped into yet personal loans that one has been growing well for us grew 20% will be grown double digits in Q Q1 as well.
John Campbell: A phenomenon.
John Campbell: You've actually seen a lot of the public first of all lenders have come out and expressed that they are growing in their financials are looking a lot better which we love to here being that these are all big clients of ours.
John Campbell: Does that category, it's like the credit boxes are still pretty tight but as long as you can find the consumers that meet those credit boxes there.
John Campbell: Our clients are very <unk>.
John Campbell: Actively telling us bring them on they want to write those loans and they're seeing very profitable growth out of it.
John Campbell: And then without getting into details I will just also say auto loans I think is another category. That's been growing a lot that we have we feel theres a lot of momentum.
John Campbell: In the next year, so the consumer consumer products in general you've got.
John Campbell: Interest rates are still saw higher but you've got a lot of consumers out there that are looking for lending options and so as long as you are good at.
John Campbell: Driving those consumers to our site and matching them to clients in a good way to give them solutions.
John Campbell: There's a lot of growth for the for the indefinite future even outside of interest rates going down.
John Campbell: And in terms of swing factors I would say one is obviously.
John Campbell: Not going to discount the market.
John Campbell: If we get to a raging inflation in insurance companies have to chase premiums again and high interest rates because the fed shutting down the economy shutting down lending then.
John Campbell: That obviously gets a lot harder and the opposite is true it gets a little bit easier for us.
John Campbell: Thing, which we really havent baked into our numbers is a lot of.
John Campbell: Is a lot of really anything from.
Improving products or any game changing technology, we are working and are focused on a.
John Campbell: A number of initiatives.
John Campbell: And we just talked with our board last week about our strategy.
John Campbell: And that would include AI.
John Campbell: We're definitely giving more focus through obviously and then the third one which is.
John Campbell: Kind of boring, which is operational excellence, we realized as we were.
John Campbell: And ourselves that.
John Campbell: G like we've acquired a bunch of companies.
John Campbell: We've got a bunch of people we know.
John Campbell: Different sized company.
John Campbell: And.
John Campbell: What do we need to do and a lot of it is really getting the operating system of the company right. So as we look at our strategy. It was.
John Campbell: Very boring, but it was really around cost containment.
John Campbell: Exploring a few key things and then improving our operations.
John Campbell: And just making them as efficient as we can.
John Campbell: Great. Thank you very much.
Very attainable.
John Campbell: Not that exciting, but I kind of like it.
John Campbell: Alright, perfect. Thank you so much.
Speaker Change: Thank you one moment for the next question.
Our next question will be coming from the line of Mike <unk>.
Randall: Randall of Northland Your line is open.
Speaker Change: Hey, guys, thanks, and congrats on a strong finish.
Randall: Two questions.
Randall: First one could.
Randall: Could you talk a little bit about the financial.
Randall: Impact and benefit from winning the one to one consent.
Randall: And secondly, the step up we've seen in home equity.
Speaker Change: Is that prime primarily driven by just lenders willingness to engage and want those home equity loans more just trying to understand a little better what changed.
Randall: Okay.
Randall: Once you take home equity and then.
Speaker Change: I'll take the first part do you mind, sorry, sorry, the last question on home equity.
Speaker Change: I don't know home equity there is theres a lot of tailwind in home equity.
Speaker Change: Just around I was first start off with our client base and our distribution of who within all our consumer traffic too.
Speaker Change: Feel like they really.
Speaker Change: Reoriented themselves last year last year, there was a lot of a lot of these businesses. We're very focused on refinance but then as the year went on and interest rates are staying high they developed more and more skills around.
Speaker Change: Taking home equity leads in and focusing on that business and so we really saw an inflection point really starting to hit us in the second half of the year really in the fourth quarter, where the client demand on home equity really started going through the roof. Because they went from a products where a well we'll take it if we have to because theres no refinance customers too. Please.
Speaker Change: Give us a lot of this product this is a good week.
Speaker Change: We now have a sales force that's capable of working this traffic.
Speaker Change: And then from a consumer standpoint, I think it's also the scenario with very little buying and selling of homes.
Speaker Change: And with the equity that the consumers are sitting on the homeowners is sitting on specifically just keep going up and up.
Speaker Change: <unk>.
Speaker Change: They're going to want to do Remodels, we're going to want to consolidate that theyre going to want to go on vacations and so it's like there.
Speaker Change: Still the best interest rate product compared to all other lending products.
Speaker Change: So from a consumer demand standpoint, we've seen increases there.
Speaker Change: I think as people get more settled into the homes are in versus thinking about whether they want to go look for new home hopefully that answers. Your question, yes the single.
Speaker Change: No single advisor a single entity consent.
Speaker Change: Here's what I would here's what I'd say on that our initial our expectations first off we spent nine months with a good bit of people optimizing what we were interpreting as this rule.
From this law that was passed out here's before.
Speaker Change: Getting it right for the consumer and still being able to have a decent business model for and worked with all of our partners and we were very thrilled to see winning the court case and then the FCC pulling it back.
Speaker Change: I would say that what our expectations were is that initially we would have gotten a lot less revenue from both insurance and lending and specifically products.
Speaker Change: And it was also our expectation that that would recover. So for example, all of our lenders and insurance partners are bidding for the price of a lead to be based on.
Speaker Change: Their expectation of a conversion rate if a given lead is going from three lenders are more insurance companies to two 5% on average their conversion rate is going to go up by the same amount roughly so we were expecting over time that that was going to offset that.
Speaker Change: It was going to be a bunch of short term pain.
Speaker Change: Obviously that that has gone away, but from a broader sense, what I would say is the.
Speaker Change: The focus and I don't want say deregulation, but like call. It common sense is really.
Speaker Change: Obviously, it helped us with that.
Speaker Change: And I see just across industries like people are willing to give something a shot or talk about something they werent able to talk about before.
Speaker Change: Our regulatory regime, we started in 1996.
Speaker Change: And all of this stuff is like interpretations of laws that are made up by these government agencies. So.
Speaker Change: <unk> of that from my perspective, the better because we're just trying to do right by consumers and.
Speaker Change: There is a.
Speaker Change: Automotive and updated stuff out there.
Speaker Change: Got it Okay, hey, thank you.
Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone.
Speaker Change: One moment for the next question.
Speaker Change: Our next question is coming from the line of Melissa <unk> of Jpmorgan. Your line is open.
Speaker Change: Thanks for taking my questions today, and I wanted to start on consumer and looking at the margin going forward. Obviously, there was a nice jump there in four Q, which seems to be pretty seasonal in nature.
Speaker Change: Given the growth that you're expecting there it seems like maybe there might be just a little bit of margin contraction in 'twenty five as you invest in sort of <unk>.
Speaker Change: Position for wallet share gains.
Speaker Change: Is that how you guys are thinking about it.
Speaker Change: Yes, it's Jason I can take that one for yes for consumer we do as we look into 2025, we do expect that margin to normalize a little bit as we've talked about historically to the mid to high <unk>.
Speaker Change: Going forward in 2025, but still delivering double digit revenue growth.
Speaker Change: And that growth is going to be coming from small business, which Scott talked about leaning into the concierge experience there.
Speaker Change: Just very strong unit economics, that's very successful for us and that's a very high margin business.
Speaker Change: Yes ill continues to do well.
Speaker Change: Lender buybacks boxes haven't materially expanded but within those buy boxes lenders are driving origination growth pretty strongly.
Speaker Change: So those two things are going to keep driving revenue growth forward, but we do expect that margins normalize a little bit from Q4.
Speaker Change: Okay great.
Speaker Change: And then just looking at the insurance segment.
Speaker Change: That's it.
Speaker Change: It's been a huge recovery cycle and it sounds like you're expecting some normalization there at least to begin.
Speaker Change: I'm curious.
Speaker Change: Given the impact potential impact.
Speaker Change: Some policies on that.
Speaker Change: The potential impact of that dampening demand for auto.
Speaker Change: On potentially higher price.
Speaker Change: What sort of impact would you expect that to have on revenue trends within the insurance segment, specifically you mean like tariffs on auto insurance parts that are auto parts that are worked their way through the insurance microsurgery. If theyre just fewer people shopping for cars car sales go down because of that.
Speaker Change: The higher costs from tariffs.
Speaker Change: Medical.
Speaker Change: Yes, I mean, thats definitely car shoppers are part of the group of consumers that are coming shopping for insurance, but I would say in general.
Speaker Change: That would be a minority of all the consumers that we just have the beauty of the <unk>.
Property and casualty insurance market is like everyone gets a renewal every six months.
Speaker Change: So everyone is getting a bill in the mail every six months us reminding them that they should probably be shopping and checking rates furniture and bottomline. All of these consumers have been getting huge rate increases.
Speaker Change: I have over the past couple of years and so that drives.
Speaker Change: A lot of shopping behavior, and I don't think thats slowed down in 'twenty five when I look out to 2006, I think what will happen, which will be the next phase of the recovery of the insurance carriers become profitable enough that they start reducing their rates.
Speaker Change: A lot of times, they're legally obliged to reduce rates and if they become too profitable and that will create another shopping cycle of wire.
Speaker Change: People are the people know that they can get a better rate by shopping again.
Speaker Change: Yeah, we just want to make it.
Speaker Change: A simple as we can for people to comparison shop for these products.
Speaker Change: Because there's always opportunities to refinance and is your credit gets better or your situation changes or.
Speaker Change: Given insurance company's view on the market and.
Speaker Change: Kansas changes slow you might be able to save some real model.
Speaker Change: Thank you.
Doug: Thank you and this does conclude the Q&A session for today I would like to go ahead and turn the call back over to Doug.
Doug: CEO for closing remarks.
Speaker Change: You guys are easy on us today.
Speaker Change: So thank you all very much we're very happy to share the outstanding fourth quarter results today, and we're energized by the growth opportunity ahead of us in 2025.
Speaker Change: After achieving 33% adjusted EBITDA growth last year, we expect to grow another 16% at the middle of our forecasted range in 2025.
Speaker Change: Incredibly proud of our team prepared for persevering through difficult period that began at the onset of the Covid pandemic, none of US would have expected the fallout from both the direct and second order effects would have lasted as long as they did but our company is.
Speaker Change: Emerge stronger and more focused as a result, and look forward to updating you on our progress in the quarters ahead.
Speaker Change: Thank you.
Speaker Change: Thank you for joining today's conference call you may all disconnect.
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Speaker Change: Good day and thank you for standing by welcome to the Lendingtree, Inc. Fourth quarter 2024 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be any question and answer session. If you'd like to ask a question. During this session. Please press star one on your.
Speaker Change: Telephone you will then hear an automated message advisory your hands as rates.
Speaker Change: Your question. Please press star one again please.
Speaker Change: Please be advised that today's conference is being recorded I would now like to turn the conference over to Andrew Weisel. Please go ahead.
Andrew Weisel: Thank you, Lisa and Hello to everyone joining us on the call to discuss Lendingtree fourth quarter 2024 financial results.
Andrew Weisel: With us today are Doug Lebda, Lendingtree, as chairman and CEO, Scott Murray, COO, and president of marketplace businesses, and Jason <unk>, Our CFO as a reminder to everyone. We posted a detailed letter to shareholders on our Investor Relations website before the start of this call and for the purposes of today's discussion will assume that listeners have read that letter and we'll focus on.
Andrew Weisel: Q&A.
Andrew Weisel: I hand, the call over to Doug for his remarks, I'll remind everyone that during this call. We may discuss planned increase expectations for future performance.
Andrew Weisel: Forward looking statements, we make are subject to risks and uncertainties and lendingtree as actual results could differ materially from the views expressed today, many but not all of the risks. We face are described in our periodic reports filed with the SEC. We will also discuss a variety of non-GAAP measures on the call and I refer you to today's press release and shareholder letter both available on our website.
Andrew Weisel: For the comparable GAAP definitions and full reconciliations of non-GAAP measures to GAAP.
Speaker Change: And with that done. Please go ahead. Thank you Andrew and thank you everyone for joining US today. We are delighted to report the company finished 2024 and a very strong note generating $32 million of adjusted EBITDA in the fourth quarter, which was well ahead of our forecast another quarter of terrific terrific performance in our insurance segment was the primary driver of this result, while our home.
Speaker Change: <unk> and consumer segments also generated strong year over year growth as well.
Speaker Change: Last year, we benefited from the beginning of a very strong cycle in auto insurance demand from both consumer and carrier perspective, I would like to call out the momentum we are generating so several other parts of our business in the fourth quarter year over year revenue growth across some of our key product offerings included homeowners insurance was up 175.
Speaker Change: So AUM equity grew 48% small business grew 45% personal loans and auto loans, both grew by 21% and mortgage grew 12% importantly, we expect double digit revenue growth will continue in each of these products in the first quarter of this year.
Speaker Change: The key message I would like to share with our shareholders that the company has returned to growth after a prolonged period of different difficult operating conditions, our forecast for the year confirms our growth outlook with an adjusted EBITDA outlook, calling for 16% annual growth at the midpoint of the range and we expect this result will be driven by revenue.
Speaker Change: Across all three of our reportable segments, which is a testament to the value of the diversification of our business model.
Speaker Change: We have also maintained a laser focus on our variable marketing and fixed costs. This discipline will help us generate positive operating leverage as we continue to scale our revenue base.
Speaker Change: Our balance sheet has improved significantly over the last year as well with net leverage ending the year at three five times trailing adjusted EBITDA. We expect leverage will continue to trend lower as earnings growth continues and we reduce our debt balance further with excess cash we believe the substantial improvement in our credit metrics.
Speaker Change: Will allow us to lower our interest expense and our debt and improve free cash flow generation for shareholders.
Speaker Change: We entered this year with strong momentum exhibited in our fourth quarter results our business functions at its best when there is consistent demand from both sides of our marketplace. We expect stable interest rates, a healthy consumer and an outlook for continued economic growth will drive accelerating demand from our customers as well as our lending and insurance carrier.
Speaker Change: Our partners were energized for the year ahead, and look forward to continue creating value for our shareholders from our operating results and now operator, we're happy to answer any questions.
Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press Star then one of your telephone. We also ask that you. Please wait for your name and company should be announced before you proceed with your question one moment for the first question.
Speaker Change: And the first question will come from the line of Ryan Ryan Tomasello of <unk>. Your line is open.
Ryan Tomasello: Hi, everyone. Thanks for taking the questions.
Ryan Tomasello: Barry I just wanted to start on insurance I guess, if I simply annualize your second half revenue performance.
Ryan Tomasello: That would still imply pretty robust growth in 2025 over 2024, so I'm just trying to tie that back to your comments in your shareholder letter for a more modest growth in 2025.
Ryan Tomasello: It sounds like it's relative to the double digit growth youre expecting in your other segments. So anything I'm missing there or I'm, just trying to understand the nuances around what's going on with insurance this year.
Ryan Tomasello: Yes.
Ryan Tomasello: Bryan Hi, this is Scott Perry Im answering any question, there and I would say.
Speaker Change: Everything you said is generally right we are expecting more modest growth as the year goes on.
Speaker Change: We've still got compared to the first half of last year I think we're looking at still strong growth as the year continues on is going to be harder.
Speaker Change: Harder and harder comps against where we're at but I would caveat that around.
Speaker Change: Almost all of our carriers are still.
Speaker Change: In a growth position with us and they've made that pretty clear to us, but theyre going to be a little bit more diligent this year.
Speaker Change: As far as.
Speaker Change: Being smarter with our marketing dollars and being closer tied to what are the most profitable areas for that is so definitely we still expect.
Speaker Change: Insurance to be a really good story and 25 as the year grows goes on I think youre going to see that growth moderating, but for us as a company. We're also going to be very focused on returning our vms margins back to more of our historical norms and so I would say that story in 'twenty five is more moderate overall growth.
Speaker Change: With our margins starting to get back up to that low to mid <unk> range.
Speaker Change: Okay. Thanks for clarifying that.
Speaker Change: And then I was hoping you could elaborate on the opportunity.
To potentially take more price across the business, particularly in the insurance segment.
Speaker Change: And I guess tying that back to <unk>.
Speaker Change: Understanding of that.
Speaker Change: It is now being vacated but were there any measures that you had teed up or had already put in place that you still might be benefiting from in 2025% including price increases.
Speaker Change: Yes, I would say we are it kind of depends on the different products, we sell an insurance like our click product, which is our biggest product is more of a market based pricing where people are paying to be in a certain ranking in the solar on the page and so as you have more competition.
Speaker Change: As more carriers get in that creates those market pricing dynamics, the lead pricing, which will be more around that one and walk in van <unk> CPA, we had been communicating to our clients price increases that we're going to be associated with that that we for the large for the most part agreed to our clients one that went away that.
Speaker Change: We weren't going to charge those price increases because that was no longer an issue we were dealing with.
Speaker Change: Obviously over the long run we always want in a perfect world, we want prices to our clients going up at similar rates to the cost of media.
Speaker Change: Thanks for taking the questions.
Yes.
Speaker Change: Thank you one moment for the next questions.
Speaker Change: And our next question will be coming from the line of Jed Kelly of Oppenheimer. Your line is now open.
Jed Kelly: Hey, Greg.
Speaker Change: Good alright. Thanks.
Speaker Change: Yes, just just on just on insurance I mean, I think we've seen strong results across the board from a lot of the marketplaces, just as we sort of go throughout the balance of the year can you kind of tell us how we should gauge on.
Speaker Change: What companies are taking the most share in and kind of what.
Speaker Change: How we should view sustained share gains.
Speaker Change: Once this up cycle ends and then just my follow up is we're sort of seeing the new administration sort of targeting lower interest rates can you just talk about how we should view right.
Speaker Change: In regards to your full year guide thank you.
Scott: Scott why don't you take the.
Speaker Change: Market share on insurance and then I'll take the interest rate question.
Speaker Change: I would say is just starting on on market share I would say I would just start in general.
Speaker Change: With us and with our competitors for the most part you are seeing the big carriers that we're really leaning in last year are still the ones that are linear.
Speaker Change: Definitely have a number of other carriers.
Speaker Change: Smaller carriers that are starting to get in more and growing rapidly but from a holistic perspective, it's really the top three or four carriers that are driving the market at this point, if I was going.
Speaker Change: To guests.
Speaker Change: It will still be those three or four carriers that will drive the market through <unk> through 'twenty five.
Go ahead, Doug on the interest rates on interest rates.
Doug Lebda: Any lowering of interest rates.
Speaker Change: And I have noticed.
Doug Lebda: The treasury bonds bills.
Doug Lebda: Move downward a little bit that definitely helps our home business. It helps all of our businesses really.
Doug Lebda: Those businesses are based on obviously consumer interest, but thats really based on interest rate intros.
Doug Lebda: As interest rates fall there is more consumer interest and the lenders you have more flexibility to approve somebody because the payment is <unk> is lower and therefore, they can they can get it approved with their income so.
Doug Lebda: So it's better for everybody.
Doug Lebda: Even if you had a consumer that is not as strong.
Doug Lebda: We would we obviously would prefer a low interest rate and from our insurance perspective, a low inflation environment and.
Doug Lebda: That's what was the double whammy over the last four years.
Speaker Change: Yes, John I'll, just add onto that is as it relates to the guide for home, we're not contemplating any material reduction in rates, we're kind of assuming basically the rate environment that we're in today, where we're basically assuming in the guide is a continuation of the strength in home equity that's a product that works really well for the consumers in that it works really well for the lenders is.
Speaker Change: Well, so we're assuming that that strength of monetization on the RPI continues throughout the guide, but not benefiting materially any rate decrease.
Speaker Change: What's cool about that is thats just consumers managing their balance sheet, just like Lendingtree is managing their balance sheet, they're going okay. I've got equity in my home doesn't make sense to refinance the whole thing, but if I can tap those at a lower rate than by credit cards My auto loan.
Speaker Change: So let's go for it.
Speaker Change: Thank you.
Speaker Change: Thank you one moment for the next question.
Speaker Change: And the next question will be coming from the line of Youssef Squali of Jos Your line is open.
Speaker Change: Oh, Hey, guys CUSIP Scully so.
Speaker Change: Maybe a question for Scott and look for Doug.
Speaker Change: Scott just doubling on the insurance question I guess as you look at the business.
Speaker Change: Beyond maybe 2025, and maybe because you're an insurance man having been in business for a long time as you look historically had like the steady state in a normalized environment of insurance can you maybe share with us where that steady state historically has been maybe.
Speaker Change: Our range and and.
Speaker Change: Any reason why we shouldnt be back to that kind of level and then.
Doug Lebda: Doug maybe on the on the Google Algo change some of your competitors did suffer from from from some of the changes that we saw a couple of times last year you guys clearly did not maybe remind us again about the strategy around.
Doug Lebda: SCO versus SCM organic traffic versus not how much of your traffic is actually organic im assuming its minority, but maybe just.
Doug Lebda: Discussed at that as a headwind to competitors that may be not as much to guys. Thank you.
Scott Perry: Scott go ahead, Doug, Yes, sorry on the insurance side Youssef.
Speaker Change: I'll start by saying, we're all we're already running at all time highs.
Scott Perry: So it's not a matter of getting.
Speaker Change: Getting back to a level, we're running at all time highs.
Speaker Change: If I compare it to the last big downturn was within the 2016.
Speaker Change: Jim.
Speaker Change: And first off the downturn wasn't as severe as this most recent one but after we got out of that downturn in the industry as a whole there was a significant step up almost a doubling of the business from from the previous high as before that but before before I reached a level, where it kind of leveled out for a period of time.
Speaker Change: It wasn't just that was the industry as a whole and I think that's just generally when you come out of this downturn is in a lot of these carriers have reset their marketing budgets.
Speaker Change: Every single time, you see more orientation towards online performance marketing because that stuff bottomline just performs better than most other marketing categories and I think youre seeing that same phenomenon happening. This time around or there is more dollars are coming to companies like ours and.
Speaker Change: Our direct competitors.
Speaker Change: I think it will be continuing to grow over the next 18 to 24 months because the carriers are in a very profitable position to the point, where a number of them are already looking to give right back in certain areas, which will create a whole another shopping cycle when that starts to happen. So I think I think we've got higher highest in front of us.
Speaker Change: But then when it reaches that steady state I mean, it's just.
Speaker Change: It's really a matter of whether there is a huge impact like inflation coming out of nowhere, which as.
Speaker Change: As long as we can be in a steady state there.
Speaker Change: The business will run in a steady state.
Speaker Change: And on the.
Speaker Change: SCO and organic traffic.
Speaker Change: At 15% to 20% of our traffic is organic.
Speaker Change: Of that the rest would obviously be people hearing awesome typing in Santa et cetera.
Speaker Change: And in terms of the Google algorithm change.
Speaker Change: <unk>.
Speaker Change: What I've noticed Google doing and quite.
Speaker Change: Quite frankly agree with it.
Speaker Change: As they are.
Speaker Change: Giving more credit to high quality unique content that really aides the consumer.
Speaker Change: So they did things like shutting down the quote unquote marketplaces in.
Speaker Change: Of newspaper sites, because they basically were leveraging their credibility on the news to go sell Jack Hammers and.
Speaker Change: Ed out.
Speaker Change: Screws or whatever and mortgages.
But so we feel really good about it because our business has always been so I would say lendingtree has always been unabashedly in the paid marketing camp and I've wanted our SCO side to work.
Speaker Change: And $19 99.
Speaker Change: I would say for the first time, it's really gripping.
Speaker Change: The team is really working well we've made a number of changes and so we're coming from a small base and can grow into it.
Speaker Change: And we happen to have the place of having really high quality content. So as we.
Speaker Change: Leverage on that and use the Lendingtree brand integrate all of these acquisitions that we've had plus get the processes right.
Speaker Change: There is a lot more traffic to go after like 15% of your volume still produces a heck of a lot of EBITDA.
Speaker Change: And then just to add on one thing to that we're very happy with where we're at on that <unk> revenue in the fourth quarter was actually up 30% year over year.
Speaker Change: So to Doug's point, we're happy where we're at we're happy with the trajectory of where it's going but I'll also say our media practice has been very successful in a broad based fashion.
Speaker Change: Whether it's paid search whether its at the yellow, whether it's social display programmatic.
Speaker Change: All of our categories are performing very well.
Speaker Change: That's great. Thanks, a lot and congrats.
Speaker Change: Thanks.
Speaker Change: The next question.
Speaker Change: The next question will be coming from the line of John Campbell of Stephens. Your line is open.
Speaker Change: Good afternoon. This is Oscar this offer Jon congrats on the strong quarter and thanks for taking my question. So the consumer segment group for the first time since Q 'twenty two do you feel like you're in a position for sustainable growth for at least the near to medium term and as a follow up to that.
Speaker Change: What do you view as the key swing factors determining your pace of growth over the near to medium term.
Scott Perry: I'll, let Scott maybe take the consumer segment and I'll take maybe swing factors Erith Jason.
Scott Perry: Yes, I would say on the consumer segment.
Speaker Change: A way more good than bad the credit card business is still rough, which I think that's just an industry wide I think your prior hearing that from everybody, but I mean, our small business is on a large growth trajectory.
Speaker Change: A lot of that is supported by we've been actively ramping our direct sales force and that's been a highly successful we've got a very qualified salesforce that we have been growing.
Speaker Change: One of our top.
Speaker Change: Companies that we write originate loans through actually informed us in January that we were their number one originator of anyone that worked with.
Speaker Change: And we feel like Theres, a lot of growth from their bulk both from increasing our direct sales force, but then also the opportunity to drive more traffic from a lot more areas that we haven't even really tapped into yet personal launched that one has been growing well for us grew 20% will be grown double digits in Q Q1, as well a phenomenon.
Speaker Change: You've actually seen a lot of the public personnel all lenders have come out and expressed that they're growing in their financials are looking a lot better which we love to here being that these are all big clients of ours.
Speaker Change: Does that category I think that the credit boxes are still pretty tight but as long as you can find the consumers that meet those credit boxes there.
Speaker Change: Our clients are very <unk>.
Speaker Change: Actively telling us bring them on they want to write those loans and they're seeing very profitable growth out of it.
Speaker Change: And then without getting into details I'll. Just also say auto loans I think is another category. That's been growing a lot that we have we feel theres a lot of momentum.
Speaker Change: In the next year or so the consumer consumer products in general you've got.
Speaker Change: Got.
Speaker Change: Interest rates are still so high but you've got a lot of consumers out there that are looking for lending options and so as long as you are good at.
Speaker Change: Driving those consumers to our site and matching them to clients in a good way to give them solutions.
Speaker Change: There's a lot of growth for the for the indefinite future even outside of interest rates going down.
In terms of swing factors I would say one is obviously.
Speaker Change: I'm not going to discount to market.
Speaker Change: F.
Speaker Change: We'll get to a raging inflation insurance companies have to chase premiums again and high interest rates because the fed shutting down the economy shutting down lending then.
Speaker Change: That obviously gets a lot harder and the opposite is true it gets a little bit easier for us.
Speaker Change: Good thing, which we really havent baked into our numbers is a lot of.
Speaker Change: Is a lot of really anything from <unk>.
Speaker Change: Improving products or any game changing technology, we are working and are focused on a.
Speaker Change: A number of initiatives.
Speaker Change: And we just talked with our board last week about our strategy.
Speaker Change: And that would include AI, which we're definitely giving more focus through obviously then the third one which is.
Speaker Change: Kind of boring, which is operational excellence, we realized as we were.
Speaker Change: Looking at ourselves that.
Speaker Change: <unk> like we've acquired a bunch of companies, we've got a bunch of people we know.
Speaker Change: Different sized company and what do we need to do and a lot of it is really getting the operating system of the company right. So as we look at our strategy. It was.
Speaker Change: Very boring, but it was really around cost containment.
Speaker Change: Exploring a few key things and then improving our operations.
Speaker Change: Just making them as efficient as we can.
Great. Thank you Brian.
Speaker Change: Very attainable.
Speaker Change: Not that exciting, but I tend to like it.
Speaker Change: Alright, perfect. Thank you so much.
Speaker Change: Thank you one moment for the next question.
Speaker Change: Our next question will be coming from the line of Mike.
Grondahl of Northland Your line is open.
Mike Grondahl: Hey, guys, thanks, and congrats on a strong finish.
Speaker Change: Two questions the first one could.
Speaker Change: Could you talk a little bit about the financial.
Speaker Change: Impact and benefit from winning the one to one consent.
Speaker Change: And secondly, the step up we've seen in home equity.
Speaker Change: Is that prime primarily driven by just lenders willingness to engage and want those home equity loans more just trying to understand a little better what changed.
Speaker Change: Okay.
Why don't you take home equity and then.
Speaker Change: I'll take the first part you might well sorry, sorry, the last question on home equity.
Speaker Change: I think the home equity there is theres a lot of tailwind in home equity.
Just around I was first start off with our client base and our distribution of who within all our consumer traffic too.
Speaker Change: Feel like they really.
Speaker Change: Reoriented themselves last year last year, there was a lot of a lot of these businesses. We're very focused on refinance but then as the year went on and interest rates are staying high they've developed more and more skills around.
Speaker Change: Taking home equity leads in and focusing on that business and so we really saw an inflection point really starting to hit us in the second half of the year really in the fourth quarter, where the client demand on home equity really started going through the roof. Because they went from a product where a well we'll take it if we have here because theres no refinance customers too. Please.
Speaker Change: Give us a lot of this product this is a good week.
Speaker Change: We now have a sales force that's capable of working this traffic.
Speaker Change: And then from a consumer standpoint, I think there is also the scenario with very little buying and selling of homes.
Speaker Change: And with the equity that the consumers are sitting on the homeowners is sitting on specifically just keep going up and up.
Speaker Change: They're going to want to do Remodels, we're going to want to consolidate that theyre going to want to go on vacations and so it's like there.
Speaker Change: Still the best interest rate product compared to all other lending products.
Speaker Change: So from a consumer demand standpoint, we've seen increases there.
Speaker Change: I think as people get more settled into the homes are in versus thinking about whether they want to go look for Neil hopefully that answers. Your question, yes the single.
Speaker Change: A single adviser a single entity consent.
Speaker Change: Here's what I would here's what I'd say on that our initial our expectations first off we spent nine months with a good bit of people optimizing what we were interpreting as this rule.
Speaker Change: From this law that was passed out here's before and getting it right for the consumer and still being able to have a decent business model and work with all of our partners and we were very thrilled to see winning the court case and then the FCC pulling back.
I would say that what our expectations were is that initially we would have gotten a lot less revenue from both insurance and lending and specifically products.
Speaker Change: And it was also our expectation that that would recover. So for example, all of our lenders and insurance partners are bidding for the price of a lead to be based on.
Speaker Change: Their expectation of a conversion rate if a given lead is going from three lenders are more insurance companies to two 5% on average their conversion rate is going to go up by the same amount roughly so we were expecting over time that that was going to offset that.
Speaker Change: That it was going to be a bunch of short term pain.
Speaker Change: And obviously that that has gone away, but from a broader sense, what I would say is the.
Speaker Change: The focus on.
Speaker Change: I don't want say deregulation, but like call. It common sense is really.
Speaker Change: Obviously, it helped us with that.
Speaker Change: And I see just across industries like people are willing to give something a shot or talk about some they werent able to talk about before and our regulatory regime. We started in 1996 and all of this stuff is like interpretations of laws that are made up by these government agencies. So.
Speaker Change: Less of that from my perspective, the better because we're just trying to do right by consumers and.
Speaker Change: There is a.
Speaker Change: A lot of old and outdated stuff out there.
Speaker Change: Got it Okay, hey, thank you.
Speaker Change: Thank you.
If you would like to ask a question. Please press star one on your telephone.
Speaker Change: One moment for the next question.
Speaker Change: Our next question is coming from the line of Melissa <unk> of Jpmorgan. Your line is open.
Melissa: Thanks for taking my questions today, and I wanted to start on consumer and looking at the margin going forward. Obviously, there was a nice jump there in four Q, which seems to be pretty seasonal in nature.
Melissa: Given the growth that you're expecting there it seems like maybe there might be just a little bit of margin contraction in 'twenty five as you invest in sort of.
Melissa: Position for wallet share gains.
Melissa: Is that how you guys are thinking about it.
Melissa: Yes, it's Jason I can take that one third for consumer we do as we look into 2025, we do expect that margin to normalize a little bit as we've talked about historically to the mid to high <unk>.
Melissa: Going forward in 2025, but still delivering double digit revenue growth.
Melissa: And that growth is going to be coming from small business, which Scott talked about leaning into the concierge experience there.
Melissa: Just very strong unit economics, that's very successful for us and Thats, a very high margin business.
PL continues to do well.
Melissa: Lender buybacks boxes haven't materially expanded but within those buy boxes lenders are driving origination growth pretty strongly.
So those two things are going to keep driving revenue growth forward, but we do expect that margins normalize a little bit from Q4.
Melissa: Okay great.
Melissa: Then just looking at the insurance segment.
Melissa: I appreciate the thoughts.
Melissa: <unk> been in a huge recovery cycle and it sounds like expecting some normalization there.
Melissa: Please begin.
Melissa: Curious.
Melissa: Given the impact potential impact.
Melissa: But some policies on.
Melissa: The potential impact of a dampening demand for auto.
Melissa: On potentially higher price.
Melissa: What sort of impact would you expect that to have on revenue trends within the insurance segment, specifically you mean like tariffs on auto insurance parts that are auto parts that are worked their way through the insurance microsurgery. If there are just fewer people shopping for cars car sales go down because of the.
Melissa: Higher costs from tariffs yet.
Melissa: The hypothetical.
Melissa: Yes, I mean thats.
Melissa: I definitely car shoppers are part of the group of consumers that are coming shopping for insurance, but I would say in general.
Melissa: Yes that would be a minority of all the consumers that we just have their stomach the beauty of the <unk>.
Melissa: Property and casualty insurance market is like everyone gets a renewal every six months. So everyone is getting a bill in the mail every six months reminding them that they should probably be shopping and checking rates furniture and bottomline. All of these consumers have been getting huge rate increases I know I have over the <unk>.
Melissa: Last couple of years, and so that drives a lot.
Melissa: Of shopping behavior, and I don't think thats slowed down in 'twenty five when I look out to 2006, I think what will happen, which will be the next phase of the recovery of the insurance carriers become profitable enough that they start reducing their rates.
Melissa: A lot of times, they're legally obliged to reduce rates.
And if they become too profitable and that will create another shopping cycle of wire.
Melissa: People are the people know that they can get a better rate by shopping again.
Melissa: Yeah, we just want to make it.
Melissa: As simple as we can for people to comparison shop for these products.
Melissa: Because there's always opportunities to refinance and is your credit gets better your situation changes or.
Melissa: Given insurance company's view on the market and.
Melissa: Kansas changes slow you might be able to save some real model.
Melissa: Thank you.
Douglas: Thank you and this does conclude the Q&A session for today I would like to go ahead and turn the call back over to Douglas.
Douglas: For closing remarks.
Speaker Change: You guys are easy on us today.
Speaker Change: So thank you all very much we're very happy to share the outstanding fourth quarter results today, and we're energized by the growth opportunity ahead of us in 2025.
Speaker Change: After achieving 33% adjusted EBITDA growth last year, we expect to grow another 16% at the middle of our forecasted range in 2025.
Speaker Change: Incredibly proud of our team prepared for persevering through difficult period that began at the onset of the Covid pandemic, none of US would have expected the fallout from both the direct and second order effects would have lasted as long as they did but our company is.
Speaker Change: Emerge stronger and more focused as a result, and look forward to updating you on our progress in the quarters ahead.
Speaker Change: Thank you.
Speaker Change: Thank you for joining today's conference call you may all disconnect.