Q2 2025 Marcus & Millichap Inc Earnings Call

Greetings and welcome to the markets and millichap second quarter, 2025 earnings conference call.

As a reminder, this call is being recorded. I would now like to turn the conference over to your house to your host Jack cornet. Thank you. You may begin.

Thank you, operator. Good morning, and welcome to Marcus and millichap second quarter, 2025 earnings conference call.

With us today are our President and Chief Executive Officer, Hessam Nadji, and Chief Financial Officer, Steven DeGennaro.

Before I turn the call over to management, please remember that our prepared remarks and the responses to questions may contain forward-looking statements.

Words such as May will expect believe estimate. Anticipate goal, and variations of these words and similar expressions are intended to identify forward-looking statements.

Show results can differ materially from those implied by such forward-looking statements due to a variety of factors.

Including but not limited to General economic conditions and commercial real estate market conditions, the company's ability to retain and attract transactional professionals.

Companies ability to retain its business philosophy and partnership culture amid competitive, pressures companies ability to integrate new agents and sustain, its growth and other factors discussed in the company's public filings, including its annual report on form. 10K filed with the Securities and Exchange Commission on February 27th. 2025

Although the company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can make no assurance that its expectations will be attained.

company undertakes, no, obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise,

In addition, certain financial information presented on this call represents non-GAAP financial measures.

The company's earnings release which was issued this morning and is available on the company's website represents a Reconciliation to the appropriate Gap. Measures and explains why the company believes such Gap measures are useful to investors.

This conference call is being webcast. The webcast link is available on the investor relations section of the company website, at www.marcus.com, along with the slide presentation, you may reference during the prepared remarks

CEO, Assam Nagi.

Thank you. Jacques. Good morning and Welcome to our second quarter 2025 earnings call.

Our business continued to show Improvement during the quarter despite ongoing headwinds from the prolonged Market, disruption, and a degree of added volatility from the initial tariff announcements.

At the same time, we're encouraged by the upward trajectory of internal metrics and several positive Market factors which I will highlight shortly.

total revenue for the second quarter was 172 million representing approximately 9% growth year-over-year with some notable ships in Revenue mix

Brokerage Revenue grew 4%. While our financing Revenue posted an impressive 44% gain over the second quarter of 2024.

We're open on our financing Revenue was driven by 3 key factors including contributions, from the recent additions to our IPA Capital markets team and their ability to execute larger transactions.

Healthy gains among the majority of our Originators, thanks to a gradually improving lending environment and progress toward integrating financing and investment sales.

The integration of services has particularly been strong among our IPA multifamily sales and capital markets teams, resulting in sizable gains in our agency debt origination over the last two years.

The company's Private Client brokerage business reflected revenue and transaction growth of 10.3%, and 12% respectively. After lagging larger transactions, for the past, several quarters.

The increased momentum in the second quarter is attributed in part to our expanded, client, Outreach and price Discovery as more sellers aligned with more realistic asset values.

We're seeing Improvement in loan terms and more lenders quoting on our Private Client, financing assignments as well.

Private Client Apartments, showed, solid gains. While net lease retail showed the largest year-over-year increase as prices in cap. Rates are finally, resetting at a faster pace.

By contrast, our revenue from larger transactions valued at $20 million and above declined by nearly 12% for the quarter.

This was driven by some clients temporarily going pencils down in the aftermath of the initial tariff announcements in April, resulting in fewer sales, as well as a tough comparison given Marcus & Millichap's outside growth in the segment over the past year.

The company's 20 million plus brokerage Revenue, grew an average of 38% year-over-year. Over the past 4 quarters as our team capitalized on institutional Capital returning to the market.

As a proxy, this compares to a 27.5% average growth rate for the same period for $20 million plus sales volume in the overall market as reported by RCA.

We continue to pursue long-term growth in our Private Client business, as well as larger transactions predominantly executed through our IPA division, which has a healthy Pipeline and listening inventory, moving forward.

MMI has a unique position of leading the Private Client Market which remains highly fragmented. While making progress on leveraging significant runway for future expansion of our IPA division at the same time.

It's just a debit off with a quarter, was a million and a half dollars, as we continue to balance cost controls with strategic Investments critical to long-term growth.

Expenses were impacted by 1-time factors and the timing of certain items in the second quarter which will level off in future quarters as Steve will cover in his presentation.

Not withstanding, the near-term pressure on profitability, We Believe investments in Talent technology key industry and client events.

Client Outreach programs, research and Market intelligence are essential to our competitiveness.

We're also modernizing production support through the adoption of AI and centralized resources to lower costs over time, while improving speed and output.

It's important to note that our current cost structure includes the expensing of Investments made over the past several years, particularly in the retention and acquisition of experienced producers.

Revenue production for many of these professionals remains below potential due to market conditions.

Given the caliber of the professionals. We have retained an acquired. We expect the return to production capacity and historical track record to be positive forces in the recovery with expense leveraging.

These indicators are especially constructive as our main obstacle to faster recovery over the past 18 months has been the drag on our sales force's productivity.

Pricing on certainty, extended closing timelines, and an elevated ratio of transactions, delays, and cancellations have limited new business development bandwidth.

Other positive indicators include Traction in our auction business, which is creating a new Revenue stream and also showing success as an alternative marketing chat for our sales force.

Marcus and chaps auction division. So 273 transactions over the past 12 months, which accounts for 27% of all commercially auctioned Assets in the US.

We're aggressively growing this complementary business by adding experienced auction specialists in key regions and further educating our sales force on leveraging this platform for their clients.

Although the market is still characterized by a wide, but ask spread and frequent sentiment swings. The passage of time and realism are fostering incremental Improvement in the transaction Market.

We believe the worst of the character of in volatility is behind us, as investors sentiment and capital markets, have stabilized. And the broader economy continues to show resilience

That recently passed tax package is expected to be a Tailwind for commercial real estate. Given its favorable Provisions for our sector.

The preservation of the 1031 tax deferred exchange or in statement of the 100% bonus depreciation and expanded support for opportunity Zone, Investments are viewed as key advantages by investors.

The recent slowdown in the labor market and retail sales has increased the odds of rate Cuts this year.

On certainty regarding the impact of higher tariffs on consumers and corporate profits, as increased in recent weeks, could lead to a more significant slowdown in the coming months. However, demand for commercial real estate appears to be solid for most property types given the overall strength of the economy, while the recent pullback in construction bodes well for generally healthy property fundamentals.

The rising tide of return to office is another Catalyst for improvement in the hardest, hit asset class, while record low home affordability, fostered record, apartment absorption in the second quarter.

Demand for industrial. And Retail is somewhat impacted by the Tariff factor. And hotels are seeing some weakness from the fall-off in tourism.

Retail is benefiting from very little new Supply over the past decade, which has helped me to show up occupancies to the best levels in at least 15 years.

Industrial construction starts are rapidly falling, which should bring relief to a number of overbuilt metros.

looking ahead. We believe these Dynamics will be favorable across all our business segments.

Our strategies on wavering driven by investment in Talent, technology further expansion of capital markets capabilities, growing them in my brand and positioning the company to opt for form throughout the recovery.

As I reported last quarter, we initiated a broad-based management reorganization on May 1 to streamline decision-making and execute strategies more consistently across the firm.

Compositions were Consolidated and others reassigned. While our most effective brokerage Executives were promoted with expanded responsibilities,

Importantly, our team is energized with heightened accountability and focus on the most critical initiatives for the company.

These priorities include raising agent production.

Growing the sales force with experience and new professionals and improving the adoption of tools and Technology. We've rolled out in recent years,

1 of the key areas with additional resource, allocation is a recruiting team and tools as we have discussed on previous calls the elevated, dropout rate of trainees as a result of the pandemic.

Unusually competitive, labor, market, conditions, and the market dislocation of the past 3 years resulted in declines in our sales force.

In recent quarters, we've also proactively terminated individuals unlikely to succeed in a tougher market environment, which we believe is critical in fostering a high standard of performance.

At the same time, several initiatives are working that are designed to generate higher quality. Albeit fewer new agent candidates which we believe will result in productivity gains in the years ahead.

Listing producers.

We remain confident in the long-term potential for mmi's Unique platform, and the opportunities that lie ahead including billing, our Core Business and expanding into adjacent businesses that add value to our clients and sales force.

We continue to evaluate a number of acquisition opportunities in both areas, undeterred by the bid-ask spread we've experienced on the M&A front over the past two years.

our Capital position and strategy, which balances returning Capital to shareholders while maintaining significant buying power remain key advantages that were committed to building on for our shareholders clients and the mmit

With that, I will turn the call over to Steve for more details on our results.

Thank you, Assam.

As mentioned, total revenue for the second quarter was 172 million and increase of 8.8% compared to 158 million for the same period last year.

Year to date, total revenue was 317 million up 10.4% compared to 287 Million last year.

Breaking down Revenue by segment. Real estate brokerage commission for the second quarter, accounted for 82% of total revenue or an increase of 4.4% to 141 million year-over-year.

Increase included, 12%, growth in transaction volume to 8 billion dollars 1375 transactions.

Partially offset by a 7% reduction in the average commission rate.

Average transactions, size increased to 5.8 million up from 5.6 million a year ago.

This was driven by an increase of 3% in the Private Client segments and a notable 26% increase for larger transactions.

The increase in larger transaction volume drove. An overall 3%, lower average fee per transaction. And a 12 basis, point, decrease in overall average commission, rate

Year to date, real estate brokerage commission, accounted for 84% of total revenue or 265 million and increase of 8% year-over-year.

Improvement included 14% growth in transaction, volume to 14.7% of transactions, partially offset by a 5% reduction and the average commission rate.

Average transaction size year to date was $5.8 million, up from $5.4 million a year ago, reflecting a higher proportion of revenue from middle market and larger transactions over a 6-month period.

Within brokerage for the quarter, our core Private Client business accounted for 66% of brokerage revenue, or $94 million, up from 63% and $85 million in the same period last year.

5 client transactions, grew 15% in volume and 12% in transaction count.

Or the quarter, our Middle Market and larger transaction. Segments together, contributed 30% of brokerage revenue, or 42 million compared to 33% and 45 million last year.

While combined dollar volume in these segments Rose, 10% due to larger average deal size as noted earlier.

The number of transactions decreased by 8%. A number of institutional clients temporarily paused activity to reassess market conditions following the introduction of tariffs in early April.

To reiterate Ham's earlier Point larger. Transactions. Have been a significant driver of year-over-year Revenue growth in the preceding 4, quarters outpacing the market but also creating a tough comparable.

In contrast Private Client investors became more active as restrictive, lending at local banks and Credit Unions began to ease.

Revenue from our financing business which includes mmcc grew 44% year-over-year to 26 million in the second quarter up from 18 million last year.

Strong growth was driven primarily by an 86% increase in transaction, volume totaling 3.4 billion dollars across 409, financing transactions, an increase of 50% year-over-year.

Average commission rate was down 12 basis points as expected due to an increase in larger. More complex deals, closed in the quarter.

The overall performance reflects the continued momentum in the scaling of our financing platform.

Accounted for 39% of loan originations in the quarter compared to 32% last year.

For the 6-month period. Financing Revenue was 44 million a 36% increase compared to the last year.

This growth was driven by a 47% rise. In transaction count, totaling 5.3 billion dollars in volume up 53% year-over-year

Revenue primarily from leasing and consulting and advisory fees was $5 million in the second quarter, consistent with the same period last year.

For the 6-month period other Revenue totaled, 8 million compared to 10 million in the prior year.

Now, looking at expenses, total operating expense for the quarter was $181 million compared to $166 million a year ago.

For the 6-month period total operating expenses were 344 million compared to 316 Million last year.

Year-over-year increases in absolute dollars for both the quarter and six-month period are largely attributable to the increase in cost of services resulting from higher revenue.

Cost of services for the quarter was 107 million or 61.9% of Revenue the same as last year.

For the 6-month period cost of services totaled 195 million or 61.4% of Revenue up 60 basis points year-over-year.

Increase was primarily driven by Revenue growth and more senior producers, who closed deals.

Sgna expenses for the quarter. Were flat sequentially with q1 at 72 million or 41.5% of Revenue compared to 65 million or 41% of Revenue in the same period last year.

the year-over-year increase reflects 1-time, expenses, related to the reorganization and contingent consideration, due to the outperformance of an acquisition, as well as timing of, when certain expenses were incurred this year versus last year,

Other factors included an incremental increase in marketing allowance by the higher revenue and investments to expand central production support, as well as talent acquisition and retention.

For the 6-month period sgna totaled 143 million or 45.1% of Revenue down from 46.6% in the prior year.

Our ongoing expense discipline is aimed at improving operating leverage, and delivering long-term value.

For the second quarter, we reported a pre-tax loss of 3.7 million. Compared to a pre-tax loss of 3.4 million in the prior year.

As we've discussed on many prior calls income taxes are highly variable and can fluctuate greatly from period to period. Due to the relationship between expenses that are non-deductible for tax purposes to project, it pre-tax income for the full year.

During the quarter, we changed our tax methodology to the actual year-to-date method because it was determined to be more appropriate than the annual effective tax rate method.

This is due to the fact that nominal changes in projected annual learnings can result in significant variability in the annual effective tax rate. The result was an outsized tax expense of 7.3 million which led to a net loss of 11 million for the quarter or 28 cents per share compared to net loss of 5.5 million or 14 cents per share for the prior year.

The newly adopted methodology, brings the effective income tax rate for the 6-month period. Ending June 30th, the 12.5% compared to 14.6% for the same period last year under the old methodology.

Year to date. We reported a net loss of 15.5 million or 40 cents per share in the current year as well as the prior year.

Adjusted ibaa. For the second quarter was 1.5 million compared to 1.4 million in the same period last year.

For the 6-month period, adjusted IBA was a loss of $7.3 million compared to a loss of $8.6 million in the prior year.

Moving to the balance sheet.

We are well capitalized with no debt and 333 million in cash. Cash equivalents and marketable, securities a modest increase from 330 Million last quarter after paying a 10 million dividend and repurchasing shares for 7 million dollars in the quarter.

Common stock at an average cost of $30.28 per share.

Since the program's launch in August of 2022, we've repurchased more than 2.3 million shares, returning $76.4 million to shareholders.

Altogether over the past 3 years. We have returned a total of 190 million of capital to shareholders through a combination of dividends and share repurchases.

Last week, our board declared the next Semi Annual dividend of 25 cents per share payable on October 6th, the shareholders of record as of September 15th.

We remain committed to a balanced long-term capital allocation strategy, which includes investing in technology recruiting and retaining The best-in-class. Producers, strategic Acquisitions and returning Capital to shareholders.

Notwithstanding macro uncertainties that remain. We are encouraged to see signs of Market stabilization supported by improved listing activity. A stronger pipeline, a better lending environment and renewed investor engagement.

As further Clarity emerges, we expect transactional activity to improve.

Looking ahead for the third quarter cost of services as a percentage of Revenue should follow the usual pattern as Revenue builds through the year and be sequentially higher than the second quarter.

Sgna on a dollar basis is expected to be relatively flat in the third quarter, compared to the second quarter.

With the change in tax methodology, discussed earlier tax expense, is expected to be in the range of dollars to a million dollars for the third quarter.

With that operator. We can now open the call for Q&A.

Thank you. We’ll now be conducting a question.

If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we call for your questions.

Our first question comes from the line of Blaine Heck with Wells Fargo. Please proceed with your question.

Great. Thanks. Good morning. Um, this um, can you talk a little bit more about the shifting Trends, and transaction volume, and the different size segments, uh, especially in the private market segments, uh, which saw transaction Revenue increase year-over-year, while the middle and large Market. Uh, Revenue came up on on a little tougher comps, uh, first, I guess, do you expect

That relative trend is expected to continue in the near term. Additionally, I think you mentioned a few factors for this, including improved client outreach. Can you expand on what you're doing differently with respect to outreach and maybe how much of the uplift you think is attributable to that versus price discovery and better financing availability?

Good morning, Blaine. Let me address the last part of your question first because, uh, for the last 18 months, we have, uh, consistently executed marketing campaigns and elevated the client outreach. Uh, only to have a lot of our sales force's time go to doing opinions of value and really holding our clients' hands through, uh, an extreme level of market uncertainty and, uh, you know, limited debt, uh, options, and so on. That didn't consummate in transactions?

So what we're seeing is that, uh, as the market starts to find more alignment on, uh, adjusted pricing and the bank and credit union component of the finance Market.

Has begun to show Improvement. Those factors combined together with the persistent, uh, push to be in front of clients in active dialogue with them. Even when they didn't pull the trigger to bring a listing to Market or maybe, uh, bring back a listing. That was, uh, not uh, sellable in the last 12 or 18 months, but today is sellable because of the realistic price expectations and price adjustments um or altogether leading uh to a more successful conversion, rate of all the client dialogue we've had in the last 18 months to actual transactions.

So that, that's the inner workings of the combination of our internal efforts.

Transactions.

Uh which has mentioned multiple times has been a point of frustration because that extra time in really being the advisor to the client even when they don't pull the trigger on a transaction combined. With the at a time it's taken to Market listings and then to really nurture transactions through the closing process or often they're falling out. Or there's a, you know, the hiccup in financing. And so on has, uh, dragged our productivity down significantly. We're starting to see that Improvement take shape and it showed up in the Private Client business in Q2 more. So than any other quarter since really, our recovery began in 2024

The related to the first part of your question on the mix.

There's really no change in our strategy at all. As I mentioned in my formal remarks on pursuing share gains and expansion, the Private Client business is a core focus, of course.

...and continuing to build out our larger, more institutional segment of the business through IPA and through veteran, Eminem agents that do private client transactions that tend to be larger.

Both strategies are intact. Both market opportunities are intact.

Uh, it was an aberration in the second quarter after, you know, multiple quarters of breakneck, uh, increases in both revenue and transaction count in the 20 million plus segment to have experienced, uh, a little bit of a market, uh, you know, volatility post, uh, the tariff announcements.

And and a temporary Pause, by a number of our clients that, uh, are back in the market and and the pipeline is moving forward. So I don't anticipate any ongoing, uh, issues or pullbacks in the expansion of our 20 million dollar, plus larger account business and, uh, continued progress on our Private Client side.

Uh, that's a great color. Thanks. Um, somewhat related to that the press release and some of your comments, noted, that all sales volume was up around, 12% year-over-year. The commission rates decrease, which I found a little surprising, given the year-over-year increase in private Market Revenue, which I would think would come with higher commissions. I guess, can you talk about any dynamics, that might be changing with respect to those those commission rates and and what caused that decline relative to last year?

Sure. The answer is found in the mix of our uh, larger transactions actually in the quarter that dixline and the number of 20 million transactions was more pronounced in the 20 to 30 million dollar range where obviously more of our transactions tend to fall. And it's significant increase in the company's hundred million dollar plus transactions where we closed 10 of those in the quarter at a much lower average fee. Uh, obviously as the price goes up the, the percentage, um, commission, uh, applies to that value is is lower. And therefore, really that a lot of it came from that, uh, more so than any any, uh, other factors.

So that that is what pressure of the average average fee?

Okay, that makes sense. Um Steve just with respect to the tax accounting change. Is this more of a 1-time hit in the second quarter relative to the prior methodology? Or is this change likely to continue you know to to weigh on results, relative to kind of ours and and maybe your internal prior expectations under the previous method.

Yeah. Uh, Blaine. Let me sort of walk through the uh, the entirety of the uh, of the tax uh, discussion and in the process. I'll, uh, I'll get to your answer. Uh, We've regularly in, uh, in this forum talked to, uh, over the last couple of years about the potential volatility in our, uh, our tax rate, uh, from from period to period. Particularly as we're operating on a relative basis, uh, you know, around the break even Point, uh, during the quarter, as we mentioned, uh, on the call and in the, in the release we did change. Our tax methodology to, what's referred to as the year to date method. Uh, we deemed that more appropriate than the, uh, prior method, uh, the annual effective tax rate method, that annual method is what's required under, uh, the the accounting rules, except in certain circumstances, and those circumstances, uh, uh, became relevant to us, uh,

Change those circumstances generally are when small changes to our forecasted uh, profitability for the year. Uh if it can result in, you know, large swings in the in the tax rate. So on a uh, a go forward basis. As we said, in our in the prepared comments, it's more appropriate for us to express the tax obligation in terms of dollars. Uh uh, certainly for Q3 in Q4, there's no difference between the 2 methodologies. So things, uh, things normalize their uh, and I guess in, in terms of

Expressing, uh, the normaly that changing to this methodology, it creates uh, the on a year-to-date basis. Our tax rate

Uh, this year was 12 and a half percent, and last year was 14.6%. So uh, with the uh swings that we've experienced, uh uh over the last several quarters, including this quarter, uh things have uh evened out uh on a year to date uh basis. So again Q3 uh uh We've expressed in a dollar from a dollar standpoint. Uh, the tax, obligation Q4 things. Uh, things normalize uh, between the 2 methods.

Okay, great. That's helpful. Um, just shifting gears, can you give us a little commentary on any additional external growth opportunities? You guys might be exploring, uh, how far, any of those discussions might might be. And, you know, how how you feel about pricing for opportunities that you're you're pursuing these days?

Sure, I'll take that 1. We have some active dialogue going on in our core business with some boutiques.

And, uh, uh, tuck in potential acquisitions. Uh, both on the, uh, company front and on large teams. That would be a nice fit to some of our metros and some of our product types. Those are ongoing, and we're encouraged by pretty much.

The majority of those discussions, I, I will say, uh, we have a couple of new opportunities that, uh, have opened up during the quarter. And those are more in the advisory and, uh, appraisal valuation, uh, space which we find very attractive as a bolt-on to both our finance business. A lot of those uh models have many many lenders as their clients and there's a lot of synergies there. And uh also as a synergistic opportunity for our larger deals through IPA uh so

That really kind of.

Gives you an idea of some new things. We're looking at that are not, uh, you know, re re-energized discussions from previous, uh, negotiations that did not consummate. Although, on the, on the brokerage side, there are some of those examples. I will say blame that the attitude toward valuations has improved in that. I think we're past the worst of the uncertainty in the marketplace that everybody was experiencing in 2023 and 2024 and optimism for a return to let's call it a more normal operating environment is pretty broad-based.

And so many of the entities that we're talking to, we're really trying to, uh, you know, Shore up their near-term, guaranteed value and near-term, you know, cash versus stocks, uh, you know, upfront versus earnout which didn't work for us. And I will say that, uh, some of that has has eased as more confidence that has returned to the market for the Outlook.

Very helpful. Uh, and and that leads to my last question, which is how do you feel about share repurchases here? You have about 64 million dollars of authorization left. Uh, you repurchase 7 and a half million during the quarter, you know, just taking into account the opportunity that you just mentioned for external growth that, that you

App in front of you along with, you know, the recent stock performance today included. I guess, how do you think of prioritizing your options for Capital deployment and and where do the repurchases fit?

In yeah, Blaine. I'll, I'll take that, uh, this is Steve. Uh, we were, as you point out, uh, active with respect to repurchases, uh, in the, uh, in the quarter, uh, at

Uh, you know, I think we'll, uh, we'll, uh, likely continue to be, uh, in the market there. Um, obviously balancing against, uh, other opportunities. The dividend. We, uh, our, our board just declared a continuation of, uh, of that the 25-cent per share semi-annual dividend. Uh, so that's an important part of, uh, returning Capital to, uh, to shareholders. Uh, and something that, uh, that that we value. Uh, we've got enough, uh, plenty of, uh, dry powder to, uh, entertain some of the, uh, the m&a opportunities that, uh, has some has, uh, has described. So I I don't see a significant change in, uh, in in our strategy, uh, going forward. Uh, I think we'll be in the market in terms of repurchases, the dividend again uh continues and uh m&a is uh very much still on the table.

Lane. The only thing I'll add to Steve's comments is that uh, we really worked hard for many years to position ourselves.

To be here where the balance sheet is strong enough to have a very diverse capital deployment strategy that includes very strong buying power, where any strategic opportunity or opportunistic opportunity for external growth is not going to be compromised because of our dividend policy or our share buyback policy. The term is strong enough and the...

Strong enough to truly be able to do both in a very balanced. Uh, fashion and keep us aggressive on the acquisition front and uh be very mindful of uh, you know, creating shareholder value uh, through Capital return.

Okay, great. Thank you, both.

Thank you.

Thank you. There are no further questions at this time. I'd like to turn the conference back over to Mr. Nnaji for any closing remarks

Thank you, operator. And thanks to all of you for joining our second quarter call. We look forward to seeing many of you on the on the field and as we travel across the country and look forward to having you on our next earnings call. Thanks and the call. This is

Thank you. This concludes today's teleconference. You may disconnect your lines this time. Thank you for your participation and have a wonderful day.