Q2 2025 Real Matters Inc Earnings Call
Yeah.
Speaker Change: Good day, and thank you for standby and welcome to the real matters second quarter of 2025 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
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Speaker Change: I'd now like to hand, the conference over to your speaker today Lindbergh.
Speaker Change: President of Investor Relations and corporate Communications. Please go ahead.
Speaker Change: Thank you operator, and good morning, everyone welcome to real matters financial results Conference call for the second quarter ended March 31, 2025 with me today are real matters, Chief Executive Officer, Brian Lynch, and Chief Financial Officer, Rodrigo pinch out. This morning before market opened we issued a news release announcing our results for the three and six months ended March.
Speaker Change: 31, 2025, the release accompanying slide presentation, as well financial statements and MD&A are posted in the Investor Relations section of our website at real matters Dot com.
Speaker Change: During the call we may make certain forward looking statements, which reflect our current expectations of management with respect to our business in the industries in which we operate however, there are a number of risks uncertainties and other factors that could cause our results to differ materially from our expectations. Please see the slide entitled cautionary note regarding forward looking information and the company.
Speaker Change: Slide presentation for more detail you can also find additional information about these risks in the risk factors section of the company's annual information form for the year ended September 20 September 30th 'twenty 'twenty, four which is available on SEDAR and in the Investor Relations section of our website. As a reminder, you referred to non-GAAP measures.
Speaker Change: In our slide presentation, including net revenue net revenue margin adjusted net income or loss adjusted net income.
Speaker Change: Our loss per diluted share adjusted EBITDA and adjusted EBITDA margin non-GAAP measures are described in our MD&A for the three and six months ended March 31, 2025, where you will also find reconciliations to the nearest arrest accounting standard measures with that I'll turn the call over to Bryan Bryan.
Bryan: Thank you Lynn and good morning, everyone and thank you for joining us on the call today.
Bryan: Our business delivered solid results in the second quarter as we continued to deliver top of the scorecard performance and onboard new customers.
Bryan: We posted consolidated net revenue of $10 1 million compared with 11 5 million in the second quarter of 2024, mainly due to a double digit decline in the addressable U S purchase mortgage origination market.
Bryan: Our U S title segment delivered strong year over year growth driven by net market share gains with clients and higher refinance origination market volumes.
Bryan: We posted double digit revenue growth in U S title in Canada year over year, and we continued to leverage our network management model and disciplined cost management to drive net revenue and EBITDA margin improvements.
Bryan: U S appraisal revenues were down 9% sequentially.
Bryan: However, we outperformed an estimated double digit decline in market volumes.
Bryan: Our net revenue margins improved by 80 basis points quarter over quarter to 27, 3% keeping us in the range of our target operating model for the 10th quarter in a row.
Bryan: And U S appraisal adjusted EBITDA increased to $2 6 million from $2 4 million in the first quarter due to lower operating expenses.
Bryan: We maintained our leadership position in U S appraisal ranking as a top performer on lender scorecards.
Bryan: Our U S appraisal business is in a strong position, we have additional capacity with our existing operating cost base, which should deliver strong operating leverage once more volumes flow across our platform.
Bryan: U S. Total revenues were $2 3 million down from $2 5 million in the first quarter, which was a relatively robust quarter as youll recall driven by closings from the short lived September interest rate rally.
Bryan: On a year over year basis, our U S title business continues to build momentum.
Bryan: We outpaced estimated market volume growth in the second quarter and posted an increase in refinance origination revenues of 40% year over year as a result of our growing client base and net market share gains.
Bryan: With the increase in refinance origination revenues net revenue margins increased 810 basis points on a year over year basis to 52, 1% in the second quarter.
Bryan: We launched one new client in two channels in Q2, and we expect that our new tier one titled client will go live in the coming months. Our sales efforts are in full swing as we are confident that this is the time to amplify our efforts to capture more market share over.
Bryan: Over the past five years, we've consistently expanded our client base steadily bringing new clients onto our platform.
Bryan: However, the full impact of this growth hasn't yet been reflected in our results due to the current state of the refinance market.
Bryan: We believe this growing client base represents a coiled spring poised to create significant momentum as market volumes rebound.
Bryan: With nearly $10 million outstanding mortgages with rates above, 6% and nearly 7 million mortgages above six 5% the pool of rate term refinance candidates continues to grow.
Bryan: Americans also have record levels of equity in their homes, 82% of borrowers have at least 30% equity, which could become a readily accessible source of cash in a recessionary environment.
Bryan: Turning to Canada revenues for the segment were up 11% on a year over year basis, and net revenue margins remain near all time highs at 19%.
Bryan: We launched two new clients in Canada during the second quarter.
Rodrigo Pinchout: With that I'll hand, it over to Rodrigo Rodrigo.
Thank you, Brian and good morning, everyone. The second quarter has historically market the trough period of our fiscal year due to purchase market seasonality, which affects our appraisal business in the U S and Canada, Inc.
Rodrigo Pinchout: Contrast relative changes in interest rates are the biggest driver of refinance volumes for our U S appraisals and U S title segment.
Rodrigo Pinchout: We estimate that addressable mortgage origination market volumes were down both sequentially and year over year due to a rising interest rate environment.
Rodrigo Pinchout: The average 30 year rates mortgage mortgage rate increased by 20 basis points from Q1 2025 compared to a decrease of 60 basis points in 2024 from fiscal Q1 to fiscal Q2.
Rodrigo Pinchout: Turning to our segmented financial performance I'll start with our U S. Appraisal segment, where we recorded revenues of $26 7 million down 18% from the same period last year due to lower addressable market volumes.
Rodrigo Pinchout: Revenues from purchase mortgage originations were down 26% and revenues from refinance originations were down 11% in line with lower addressable market volumes associated with this quarter's rising interest rate environment.
Rodrigo Pinchout: Home equity revenues were down 12% year over year, mainly due to a lower addressable markets for home equity transactions, partially offset by net market share gains with existing and new clients home equity revenues accounted for 25% of the segment's revenues in Q2.
Rodrigo Pinchout: U S appraisal net revenue was $7 3 million for the second quarter down from $9 2 million in Q2, 'twenty four and net revenue margins decreased by 100 basis points modest modest mostly due to the distribution of transactions volume as it relates to geographies clients and product mix.
Rodrigo Pinchout: We posted net revenue margins of 27, 3% in Q2, 25, which remains well within our target operating model range.
Rodrigo Pinchout: Second quarter U S appraisal operating expenses were down 2% year over year to $4 7 million due primarily to lower salaries and benefits costs.
Rodrigo Pinchout: We posted U S appraisal adjusted EBITDA of $2 6 million compared with $4 4 million from the second quarter of fiscal 2024 as lower net revenue was partially offset by lower operating expenses.
Rodrigo Pinchout: Turning to our U S. Federal segment second quarter revenues increased 11% year over year to $2 3 million and refinance origination revenues were up 40%, mainly due to net market share gains with clients and higher refinance mortgage market origination volume.
U S titled Net revenue was $1 2 million up 32% from the second quarter last year and Thats revenue margins increased to 52, 1% from 44%, mostly due to higher volumes serviced which diluted our fixed cost as well as higher proportion of it.
Rodrigo Pinchout: <unk> order volumes that closed.
Rodrigo Pinchout: <unk> operating expenses were up 29% year over year, mainly due to hiring additional sales personnel to accelerate market share increases and to a lesser extent increased variable cost associated with higher volumes.
Rodrigo Pinchout: We recorded an adjusted EBITDA loss of $2 1 million for the U S. Federal segment compared with $1 7 million loss, we recorded in the second quarter of fiscal 2024.
Rodrigo Pinchout: In Canada second quarter revenues increased 11% year over year to $8 3 million, primarily due to higher market volumes and net market share gains with existing and new clients for appraisal services and assurance inspections.
Rodrigo Pinchout: <unk> revenue was up 11% to $1 $6 million with a 10 basis points, increasing net revenue margins in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024, as we continue to leverage our platform.
Rodrigo Pinchout: Canadian adjusted EBITDA was $1 million up from 900000 in the second quarter of fiscal 2024.
Rodrigo Pinchout: In total second quarter consolidated revenue and net revenue were down 11, and 13% year over year to $37 3 million and $10 1 million, respectively as lower U S. Appraisals segments revenues were partially offset by an increase in revenues from our U S. Fido.
Rodrigo Pinchout: And Canada segments.
Rodrigo Pinchout: We recorded a consolidated adjusted EBITDA loss of $1 9 million compared with positive consolidated adjusted EBITDA of 700000 in the second quarter of fiscal 2024.
Rodrigo Pinchout: We continue to successfully navigate through unprecedented market uncertainty in our business is well positioned to face. The current macro environment. We have a very strong balance sheets with no debt and cash of $45 7 million down from $49 million at December 31st 2020.
Rodrigo Pinchout: Due to the timing of changes in working capital and a modest adjusted EBITDA loss.
Bryan Bryan: With that I'll turn it back over to Bryan Bryan.
Rodrigo Pinchout: Thank you Rodrigo.
Bryan Bryan: The business delivered solid performance in the second quarter, reflecting continuing operational discipline resilience and growing momentum in our title business.
Bryan Bryan: We posted double digit year over year revenue growth in U S title in Canada, and we continued to leverage our network management model and disciplined cost management to drive net revenue and EBIT margin improvements we.
Bryan Bryan: We delivered leading performance on scorecards, and we launched three new clients.
Bryan Bryan: As we've experienced in the past economic and financial market uncertainties can create significant opportunity for the mortgage industry. We continue to closely watch the impact of policy decisions in the United States on the 10 year Treasury yield, which is a leading indicator of mortgage rates.
Bryan Bryan: Even minor decreases in interest rates like those we saw last fall can have a significant positive impact on origination volumes, especially from today's historically low volumes, we have the capacity to take on more volume with our existing operating cost base and we are ready to scale.
Bryan Bryan: We remain confident that the U S mortgage origination market represents a significant growth opportunity for our business.
Bryan Bryan: Under our target operating model, we believe that our U S. Appraisal segment has the potential to deliver $50 million to $65 million and adjusted EBITDA and our U S title business could generate $30 million to $45 million of adjusted EBITDA.
Bryan Bryan: We look forward to leveraging our model to continue to demonstrate the through cycle earnings potential of our business in line with our focus on scale and market share growth.
We continue to focus on the things, we can control, which is solid execution of our strategy broadening our client base and deepening our customer relationships, particularly in U S title, where we have significant runway for growth.
Bryan Bryan: With $46 million in cash and no debt sound cost discipline, and a growing client base real matters remains well positioned to capitalize on mortgage market improvements.
Bryan Bryan: With that operator wed like to open it up for questions now.
Speaker Change: Thank you as a reminder to ask a question. Please press star one wondering your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Bryan Bryan: Please stand by while we compile the Q&A roster.
Speaker Change: Our first question comes from the line of Donald Michel Bliss with BMO capital markets. Your line is now open.
Speaker Change: Hey, good morning.
Speaker Change: Bryan could you maybe expand on how your customers are reacting to that.
Speaker Change: Current conditions and the uncertainty.
Speaker Change: I guess with respect to the discussions you're having with you for other channels or.
Speaker Change: Title and other opportunities and also in terms of just the behavior in the market.
Speaker Change: The stats are taking versus the nonbanks.
Speaker Change: Yeah.
Speaker Change: Sure Fair enough. Thanks. Thanks for the question. So how are customers reacting to whats going on.
Speaker Change: I assume you mean Santos a fair bit south of the border.
Speaker Change: So I think I think one of the one of the opportunities for us, which frankly started last fall.
Speaker Change: But definitely continues is this opportunity in title and the focus that we've had on our title pipeline.
Speaker Change: So I think as we continue to be top of scorecard and perform incredibly well with our existing customers than us.
Speaker Change: We're in the throes of quite a few rfps and so I think it's actually because of some of the uncertainty in the market I think it's just continuing the momentum that we've had.
Speaker Change: Some of the big lenders starting to look to put rfps in place around title and so.
Speaker Change: If I take a look at the Rfps that we've had on the go we've talked about closing our second big tier one and so we continue to move that forward, both technically and through contracts and we're feeling very good that we're going to see volume in the upcoming months.
Speaker Change: We've also got another tier one where we're engaging now in that RFP with them and so that's more our yearend goal with us some of the non banks to address that size than us.
Speaker Change: The biggest service providers in the U S. Now we are in.
Speaker Change: RFP conversations with them and Theres a couple of tier two so I mean that.
Speaker Change: On the title side of the business I think we're seeing some some continued momentum fan us and I think a lot of it has to do with some of the uncertainty in the market as well as we mentioned this RF refinance pool of opportunity that continues to grow and now is.
Speaker Change: And the numbers of 10 millions, that's over 6% and 70% of that $7 million over six 5%. So I think with all of that I think that's sort of what we're seeing at least on the on the title side of the business with particular customers. The other interesting interesting thing we've seen in this past quarter, specifically is a couple of the big <unk>.
Speaker Change: Tier one lenders have come out quite publicly Santos and talked about.
Speaker Change: The regulatory environment and the impact on their businesses with the regulation. That's in place now and so what's encouraging for US I think around that is there's definitely quite a push for.
Speaker Change: Some of those tier one leaders that they want to get back in the market win more market share and and really try and drive more and more for us origination volume into the pipes. So I'll take that also is a positive and we've actually seen that in some of our numbers from the last quarter with some of our big players really stepping up and starting to accelerate.
Speaker Change: <unk> their volume growth compared to the the average across our customer base. So I think that's how I would address that at least.
Speaker Change: At least as far as what's going on I think politically furnace.
Speaker Change: That's very helpful color. Thank you.
Speaker Change: And then just a quick one on <unk>.
Speaker Change: Expenses, obviously, the Canadian dollars.
Speaker Change: Well I guess the us dollar rather SaaS had.
Speaker Change: Bit of a move.
Speaker Change: <unk>.
Speaker Change: In light of that and just some of the investments you're making how should we think about the opex trajectory in the near term.
Speaker Change: Sure I'm going to get Rodrigo to address that Dennis yes.
Speaker Change: The devaluation of the Canadian dollars as we shared before <unk>.
Speaker Change: It helps our business as as you know.
We have a lot of expenses in Canadian dollars and we have most of our revenues in U S. Dollars. As you know we report in U S dollars. So overall.
Speaker Change: The devaluation of the Canadian Canadian piece of either U S dollars. It should help a help so our operating expenses.
Speaker Change: Sure.
Speaker Change: To get lower if I can put it that way as we report in U S dollars.
Speaker Change: Yes. The question was just we've had quite a move in the other direction no. So if we think about.
Speaker Change: The impacts going forward and then in the context of other investments you may or may not be making just what would be your thoughts on the opex trajectory.
Speaker Change: Yes.
Speaker Change: You know, it's impossible to call FX rates at this point.
Speaker Change: Wednesday or other direction, but we feel like it was almost like a recovery from the decline we saw a couple of quarters ago. So I would say it's back to normal.
Speaker Change: So we are not expecting or foreseeing any major changes going forward and thats were going to continue to invest in the in the areas that we have let you guys know that we are investing and so we're going to continue to invest in our platform and in the tech work that we're doing which we think will have us set up for some really.
Speaker Change: Success in the fall and the spring, which is when a lot of that tech is going to hit in.
Speaker Change: Land and then on the sales title side, we're starting to see I think the benefits of those investments. So those two we're going to continue to take it to.
Speaker Change: Keep the level of investment that we've got today.
Speaker Change: Great I'll pass a lot again.
Speaker Change: Thank you. Thank you. Our next question comes from the line of Martin <unk> with <unk> capital markets. Your line is now open.
Speaker Change: Good morning, Thanks for taking my question.
Speaker Change: Do you think that rocket acquisition recent acquisitions well.
Speaker Change: Cause them to will it benefit they are partners like real matters and do you think it will.
Speaker Change: Accelerate the timeline for them to do some rfps, especially entitled.
Great question, Martin So listen I can't of course speak for rocket, but if I just take a look back in time, and especially with our relationship with rocket Martin I go back historically and I take a look at the bump in volume.
Speaker Change: The Brexit.
Speaker Change: So there was a little bit of Brexit RFID. So there was a good bump in volume in 2016, and frankly that opened the door.
Speaker Change: On the appraisal side of the house for us to become a provider and partner with rocket. So that's sort of how we kicked off the relationship when there was.
Speaker Change: A real increase in volume.
Speaker Change: So if we think about today rockets publicly stated their ambitions around moving market share and so they have very strong ambitions to move market share by 2027.
Speaker Change: And with both the redfin and the Mr. Cooper acquisition there is.
Speaker Change: Fairly significant volume opportunities there Mr. Cooper has not been a customer of ours. So that for US is all incremental upside volume opportunity. So if we take a look at it we sort of run some numbers and there is sort of half a million orders there over the next couple of years that in our view are going to find it.
Speaker Change: Their way back.
Speaker Change: Back into on the appraisal side, the sort of share that we have with them today and probably more importantly, what it opens up I think for us.
Speaker Change: As an opportunity on the title side. So rocket of course has been a major target for us.
Speaker Change: Moving.
Speaker Change: In the title moving us in the title is a partner of theirs and so Martin with all this incremental volume and the ambition around market share gains.
Speaker Change: Our view is that this definitely will open up the RFP title conversation and frankly move it along.
Speaker Change: And I think that for us is probably the biggest opportunity in the I'll call it near term so.
Speaker Change: In summary, I think there is shorter term opportunity on the appraisal side of the business simply by the Mr. Cooper volume coming onto the rocket platform longer term I think the real opportunity is for us to start moving the RFP conversations with rocket along which I think is a 2026 ambition of ours.
Speaker Change: Thank you very much to victory.
Speaker Change: Thank you and as a reminder to ask a question at this time. Please press star one one touchstone telephone.
Speaker Change: Our next question comes from the line of Robert Young with Canaccord Genuity. Your line is now open.
Speaker Change: Hi.
Speaker Change: Like to ask.
Speaker Change: If you could expand on the opportunity with <unk>.
Speaker Change: That service provider that you said you have an RFP opportunity with in title and then obviously you just talked about Mr. Cooper.
Speaker Change: Is it about the servicing businesses.
Speaker Change: What is the opportunity for a real matters.
Speaker Change: I think for me at least that's our new.
Speaker Change: Category of potential customer there.
Speaker Change: Sure. So I mean, it's.
Speaker Change: Kind of Mr. Cooper falls into the same category as they are one of the biggest service providers are big servicing shops in the U S.
Speaker Change: Rob and so the one that we're talking to is of the same elk.
Speaker Change: And.
Speaker Change: So they are a very significant player in the servicing space. The way servicing generally works is these are the organizations they kind of manage the mortgage collect the payments and so they get a very good understanding of that.
Speaker Change: Significant customer base of mortgage owners and so what their job is robin what they really focus on is then going and expanding or building on top of the base that they've got as well as with the base. They have because of the data they have got on each of those customers.
Speaker Change: We're able to target those customers at the right time to refinance them. So there is a really significant refinance opportunity within those portfolios. That's frankly, what they do besides just servicing theyre really focused on re upping all those customers and refinancing them, so thats, where the real opportunity.
Speaker Change: As for us when they refinance they of course need both an appraisal and title work done and so again. Our view is this is a real opportunity for.
Speaker Change: For the future again building buildings for a long term franchise value in both sides of the business, but definitely the title side of the business. This is a real opportunity for us.
Speaker Change: Do you think these <unk>.
Speaker Change: Services Servicers would be similar to tier one bank and the way the allocate share what they use.
Speaker Change: Balanced scorecard or allocate share gradually or would this be.
Speaker Change: Where you could add a lot of volume in a short period of time.
Speaker Change: Well they are going to be significant volume players. So they are in the same realm as tier ones as far as volume goes Rob So I'll check give a checkmark on that as far as uptake and how fast we can build our share with them. They do manage very similarly to the big tier ones around performance.
Speaker Change: And scorecards and those sorts of good things so.
Speaker Change: So that is definitely how we will increase our market share.
Speaker Change: My assumption is it will take a little bit for us too.
Speaker Change: Move with them simply because we haven't had them on our appraisal platform as we have had lots of our other customers that were looking at on title so there'll be a.
Speaker Change: Very similar to bringing on a new customer or there'll be a ramp and.
Speaker Change: To see as I say a lot of it Rob depends on this refinance pool, thats growing and and the timing of when a lot of that refinance comes to market. If the volumes significant then our view would be our market share opportunity is probably SaaS.
Speaker Change: If it is still in the lower market. Then we're definitely you have to build market share.
Speaker Change: Okay and then last question for me, just maybe clarifying something you said earlier.
Speaker Change: You suggested that.
Speaker Change: Fashion in the U S not hoping for recession, obviously, but I think suggested that that's potentially driving RFP activity higher can you just explain that if I heard that right and then I'll pass line.
Speaker Change: Okay.
Speaker Change: Sure well I think just broadly speaking Rob.
Speaker Change: When there is economic and financial market uncertainty.
Speaker Change: It just creates significant opportunities within the mortgage industry. So again, if I look back and I mentioned 2016, if we look at Covid when there is uncertainty in the market.
Speaker Change: And that drives lenders to start thinking about the what if scenarios on.
Speaker Change: What could happen and so this refinance pool that is building a lot of lenders are looking at that and if recession were to hit then most likely interest rates are going to need to be managed I am not going to call. The market suggests what's going to happen, but if that were to happen then rates would go down.
Speaker Change: And as we've said, there's not a lot of downward movement that needs to happen in the rates.
Speaker Change: For there to be a real opportunity for a very significant portion of the market to refinance. So that's why I think these rfps are continuing to move with with the same momentum.
Speaker Change: Because a lot of those lenders are looking to the future and making sure that they've got their basis covered when that refinance volume comes online.
Speaker Change: Okay. Thank you appreciate that our pipeline no problem.
Speaker Change: Thank you. Our next question comes from the line of Richard Tse with National Bank Financial Your line is now open.
Richard Tse: Thank you.
Speaker Change: Two part questions.
Speaker Change: Can you maybe update us on your aspirations for data and then the second one I don't know its early but you have sort of talked about adjacent acquisition opportunities in the past and so I guess the question on that side as well.
Speaker Change: Why not maybe look at some of those <unk> got quite a bit of cash valuations are probably low.
Speaker Change: Arguably you probably have some capacity given things are still fairly quiet. So I know there may be little bit offbeat questions, but just kind of curious what your thoughts would be on those.
Speaker Change: No problem Richard Yes, so on the on the data front, we've talked about doing some organic work right now which is what we have been doing.
Speaker Change: But we do continue to look at acquisition opportunities Richard I think up until now over the past couple of quarters. We havent found a really great fit but we will continue to look at those continue to look at building out the organic work that we're doing and hopefully there'll be a marriage between those.
Speaker Change: At some point in upcoming quarters.
Speaker Change: So thats on the data front and again with the data that we've got we continue to see looking ahead at long term franchise value. There is definitely a real opportunity for us to monetize the data in a very robust way.
Speaker Change: On the I think you said.
Speaker Change: Acquisitions that are.
Speaker Change: Adjacent thank you adjacent acquisitions.
Speaker Change: We again, we would we would prioritize that we've been looking and we've been open about looking at the title side of things and so we continue to keep our eyes open we've been participating in conversations around that so again that would be something that we continue to look at and then.
Speaker Change: Those are I think really are the two areas, where we sort of focused our management's time and energy when it comes to looking at potential outside opportunities and I'm aligned with you Richard on your comments around valuations et cetera that they still are some pretty healthy valuation. So I'm not sure that that's come down <unk>.
Speaker Change: Significantly, but we're going to continue to look at those as it makes sense.
Speaker Change: And of course that all being said Richard we continue to really drive the core business keep an eye on making sure that we're making the headway we want both from a performance market share.
Speaker Change: And new customer standpoint building out the sort of stable in the future.
Speaker Change: Okay, great. Thanks, and just last one for me you have.
Speaker Change: A reasonable amount of cash on the balance sheet. So.
Speaker Change: Is it sort of the same amount that's kind of required as before just to sort of give comfort to your customers or is there an opportunity to may.
Speaker Change: Maybe deploy some of that capital.
Speaker Change: Buybacks from wherever it may be.
Just kind of wanted to get an update on that.
Speaker Change: Sure sure Richard So again, we are trying to be financially prudent as much as we can we want to keep our healthy balance sheet.
Speaker Change: Brian suggested before Theres several discussions about Rfps and that's a key question right showing liquidity.
Speaker Change: Our healthy balance sheets, it's one of the first questions. We we get when we participate on those rfps. So at this point.
Speaker Change: We feel it's prudent to maintain our balance sheet as is.
Speaker Change: And as soon as we have more visibility to any changes in the market looking forward.
Speaker Change: <unk>.
Speaker Change: We believe we can then start shrinking.
Speaker Change: Deeper into capital allocations and how to allocate our capital.
Speaker Change: <unk>.
Speaker Change: Perhaps some better returns.
Speaker Change: Great. Thank you.
Speaker Change: Thank you Adam.
Speaker Change: Currently showing no further questions at this time. This does concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker Change: Thank you.
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