Q2 2026 Andersen Group Inc Earnings Call

August 12, 2026

Speaker #1: And welcome to Anderson Group Q2 2026 earnings conference call. At this time, all participants are on the listen-only mode. A question and answer session will follow the formal presentation.

Speaker #1: If anyone wants to require operative assistance during the conference, please press star 0 on your telephone keypad. Please note this conference is being recorded.

Speaker #1: I would now like to turn the conference over to Greg Fixica, Managing Director, Investor Relations. Please proceed.

Speaker #2: Thanks. Thank you, LaTanya. And welcome, everyone, and thank you all for joining the Anderson call to discuss our second quarter earnings. I'm Greg Vistica, Head of Investor Relations, and joining us today are Mark Borsatz, our Chairman and CEO; Neil Livingstone, Chief Financial Officer; Bill Deckelman, Chief Legal Officer.

Speaker #2: with that, Bill, I'll turn it over to you to read our disclaimer.

Speaker #3: Okay. Thank you, Greg. before we begin, please note that certain statements made on this call are forward-looking statements within the meeting, a federal securities laws.

Speaker #3: These statements are subject to risk and uncertainties that could cause actual results to differ materially from those expressed or implied. These risk and uncertainties are described in our earnings release and SEC filings, including our 10Q for our second quarter of 2026.

Operator: Greetings, and welcome to Andersen Group Q2 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the conference over to Greg Vistica, Managing Director, Investor Relations. Please proceed.

Speaker #1: Greetings, and welcome to the Andersen Group Q2 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation.

Speaker #1: If anyone wants to require operative assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded.

Speaker #3: Except as required by law, we undertake no obligation to update any forward-looking statements; we will also reference certain non-GAAP financial measures today: reconciliations to the most directly comparable GAAP measures, are included in our earnings release and will be available on our website.

Speaker #1: I would now like to turn the conference over to Greg Fixica, Managing Director of Investor Relations. Please proceed.

Greg Vistica: Thank you, Latonya, and welcome everyone, and thank you all for joining the Andersen call to discuss our second quarter earnings. I am Greg Vistica, Head of Investor Relations, and joining us today are Mark Vorsatz, our Chairman and CEO, Neal Livingston, Chief Financial Officer, William Deckelman, Chief Legal Officer. With that, Bill, I will turn it over to you to read our disclaimer.

Gregory Vistica: Thank you, Latonya, and welcome everyone, and thank you all for joining the Andersen call to discuss our second quarter earnings. I am Greg Vistica, Head of Investor Relations, and joining us today are Mark Vorsatz, our Chairman and CEO, Neal Livingston, Chief Financial Officer, William Deckelman, Chief Legal Officer. With that, Bill, I will turn it over to you to read our disclaimer.

Speaker #2: Great. Thank you, LaTanya, and welcome, everyone. And thank you all for joining the Andersen call to discuss our second quarter earnings. I'm Greg Vistica, Head of Investor Relations, and joining us today are Mark Borsatz, our Chairman, and CEO; Neal Livingstone, Chief Financial Officer; Bill Deckelman, Chief Legal Officer.

Speaker #3: Now, Mark, I will turn the call over to you.

Speaker #2: Thanks, Bill. I'm going to cover, three things. I'm going to talk briefly, I'll highlight an overview of the financial information that was already distributed.

Speaker #2: I'm going to comment on a few, key financial factors that are probably not included in that information, but I think will be important to you in terms of, evaluating our company and, and the third thing I'm going to talk about is our transactional strategy.

Speaker #2: With that, Bill, I'll turn it over to you to read our disclaimer.

Speaker #3: Okay, thank you, Greg. Before we begin, please note that certain statements made on this call are forward-looking statements within the meaning of federal securities laws.

William Deckelman: Okay. Thank you, Greg. Before we begin, please note that certain statements made on this call are forward-looking statements within the meaning of federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks and uncertainties are described in our earnings release and SEC filings, including our 10-Q for our second quarter of 2026. Except as required by law, we undertake no obligation to update any forward-looking statements. We will also reference certain non-GAAP financial measures today. Reconciliations to the most directly comparable GAAP measures are included in our earnings release and will be available on our website. Now, Mark, I will turn the call over to you.

Speaker #3: These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks and uncertainties are described in our earnings release and SEC filings, including our 10-Q for our second quarter of 2026.

Speaker #2: I first want to thank our partners and our people. I think we had a very solid second quarter. I also want to thank our board for all the support that they've given, and also those investors that have taken this journey with us, along with the analysts who have given me a lot of good personal input, for which I'm extremely appreciative.

Speaker #2: So we had indicated in the call we had on May that we gave guidance for the second quarter at 13% increase in revenue, with a range of 190 to 205.

Speaker #2: we came in at about 217.7, so that's an increase of 23.7% of particular relevance is, or are organic growth rate was about 20.5%. I went back I have all of our financials, for the last 24 years, and I went back and looked at each quarter.

Speaker #3: Now, Mark, I will turn the call over to you.

Speaker #2: Thanks, Bill. I'm going to cover three things. I'm going to talk briefly. I'll highlight an overview of the financial information that was already distributed.

Mark Vorsatz: Thanks, Bill. I am going to cover three things. I am going to talk briefly. I will highlight an overview of the financial information that was already distributed. I am going to comment on a few key financial factors that are probably not included in that information, but I think will be important to you in terms of evaluating our company. The third thing I am going to talk about is our transactional strategy. I first want to thank our partners and our people. I think we had a very solid second quarter. I also want to thank our board for all the support that they have given and also those investors that have taken this journey with us, along with the analysts who have given me a lot of good personal input, for which I am extremely appreciative.

Speaker #2: I'm going to comment on a few key financial factors that are probably not included in that information, but I think will be important to you in terms of evaluating our company. And the third thing I'm going to talk about is our transactional strategy.

Speaker #2: And I, I stopped at about year 7 or 8 earlier. This is the best second quarter we've had in terms of percentage growth, which, considering the size that we're getting in terms of revenue, is particularly relevant.

Speaker #2: On the adjusted EBITDA side, we came in at for the second quarter, a little under 46 million versus about 30 million for 2025. So we had an increase of about 54%.

Speaker #2: for the first half, our revenue was about 458 million, or an increase of over 74 million, which is 19.3%. Now, keep in mind, the inorganic revenue was really nominal in the second quarter, so most of that growth rate is just pure organic.

Speaker #2: So we had indicated in the call we had in May that we gave guidance for the second quarter at a 13% increase in revenue, with a range of $190 to $205 million.

Mark Vorsatz: We had indicated in the call we had on May that we gave guidance for the Q2, a 13% increase in revenue, with a range of $190 to $205 million. We came in at about $217.7 million, so that's an increase of 23.7%. Of particular relevance is our organic growth rate was about 20.5%. I went back. I have all of our financials for the last 24 years, and I went back and looked at each quarter, and I stopped at about years 7 or 8 earlier. This is the best Q2 we've had in terms of percentage growth, which considering the size that we're getting in terms of revenue, is particularly relevant. On the Adjusted EBITDA side, we came in at, for the Q2, a little under $46 million, versus about $30 million for 2025. So we had increased about 54%.

Speaker #2: We came in at about 217.7, so that's an increase of 23.7% of particular relevance is or are organic growth rate was about 20.5%. I went back.

Speaker #2: Our adjusted EBITDA year-to-date is up 41 over 41%. And if you look at our margin and compare it, June 30, 2026 to June 30, 2025, we're at 26.8% versus 22.6%.

Speaker #2: I have all of our financials for the last 24 years, and I went back and looked at each quarter. I stopped at about year 7 or 8 earlier.

Speaker #2: Keep in mind we're still investing in global mobility and consulting and so the margins would be much higher but for those investments. Several key statistics that I think are relevant if I were sitting in, on the other side of the call.

Speaker #2: This is the best second quarter we've had in terms of percentage growth, which, considering the size that we're getting in terms of revenue, is particularly relevant.

Speaker #2: On the adjusted EBITDA side, we came in for the second quarter a little under $46 million, versus about $30 million for 2025. So we had an increase of about 54%.

Speaker #2: I mentioned Dan DePauli has been working on our productivity, while the productivity growth has been modest year-to-date. It's at an increasing rate. So for the first half of the year, our productivity has increased 3.9%.

Speaker #2: For the first half, our revenue was about $458 million, or an increase of over $74 million, which is 19.3%. Now, keep in mind, the inorganic revenue was really nominal in the second quarter.

Mark Vorsatz: For the H1, our revenue was about $458 million, or an increase of over $74 million, which is 19.3%. Keep in mind, the inorganic revenue was really nominal in the Q2, so most of that growth rate is just pure organic. Our Adjusted EBITDA year-to-date is up over 41%. If you look at our margin and compare it 30 June 2026 to 30 June 2025, we're at 26.8% versus 22.6%. Keep in mind, we're still investing in Global Mobility and consulting, and so the margins would be much higher but for those investments. Several key statistics that I think are relevant if I were sitting on the other side of the call. I mentioned Dan DePaoli has been working on our productivity. While the productivity growth has been modest year-to-date, it's at an increasing rate.

Speaker #2: That may not sound like a lot, but what I had indicated before is if we add an hour a week based on our effective rate, that's about 40 million at the bottom line.

Speaker #2: So most of that growth rate is just pure organic. Our adjusted EBITDA year-to-date is up 41 over 41%. And if you look at our margin and compare it, June 30, 2026 to June 30, 2025, we're at 26.8% versus 22.6%.

Speaker #2: Our rate per hour continues to be very strong. it's come in year over year, at a 10.1% increase. we had a rate adjustment in July, so I would expect we'll we may get some modest improvement on that in the second half of the year.

Speaker #2: I'll talk about the, client selectivity issue in a minute, because I think that's a big factor in our growth of clients that's driving that number.

Speaker #2: Keep in mind, we're still investing in global mobility and consulting and so the margins would be much higher but for those investments. Several key statistics that I think are relevant if I were sitting in on the other side of the call.

Speaker #2: And then I indicated on the last call that the one statistic I am particularly focused on, and I mentioned that based on accountants today, of which they track about 60 tax firms, we've been number one last year in revenue per professional.

Speaker #2: I mentioned Dan DePauli has been working on our productivity. While the productivity growth has been modest year-to-date, it's at an increasing rate. So for the first half of the year, our productivity has increased 3.9%.

Speaker #2: And our revenue per professional through the first half of the year was up 16.4%. That's a very, very important statistic in how I view our business.

Mark Vorsatz: For the H1 of the year, our productivity has increased 3.9%. That may not sound like a lot, but what I had indicated before is if we add an hour a week, based on our effective rate, that's about $40 million at the bottom line. Our rate per hour continues to be very strong. It's come in year-over-year at a 10.1% increase. We had a rate adjustment in July, so I would expect we may get some modest improvement on that in the H2 of the year. I'll talk about the client selectivity issue in a minute, because I think that's a big factor in our growth of clients that's driving that number.

Speaker #2: On the client side, on a growth basis, we added over 1,300 clients, which was 10.6% increase. We had a modest net increase because we've had some clients where we've either completed work or we've had clients where we terminated the relationship because we didn't view it as productive as we would like.

Speaker #2: That may not sound like a lot, but what I had indicated before is if we add an hour a week, based on our effective rate, that's about 40 million at the bottom line.

Speaker #2: Our rate per hour continues to be very strong. It's come in year over year at a 10.1% increase. We had a rate adjustment in July, so I would expect we may get some modest improvement on that in the second half of the year.

Speaker #2: on the attrition rate, because that may be an issue that you're focused on, Alexa LaBianca, I give her a shout-out. She tracks all this stuff in HR.

Speaker #2: I'll talk about the client selectivity issue in a minute because I think that's a big factor in our growth of clients that's driving that number.

Speaker #2: we actually while our attrition is up a little bit, we have a rating system of 1 to 5 with 5 being the highest, and we probably have a lousy curve because if you're below 4, you maybe you shouldn't be working here.

Mark Vorsatz: I indicated on the last call that the one statistic I am particularly focused on, and I mentioned that based on Accounting Today, on which they track about 60 tax firms, we've been number 1 last year in revenue per professional. Our revenue per professional through the H1 of the year was up 16.4%. That's a very important statistic in how I view our business. On the client side, on a gross basis, we added over 1,300 clients, which was 10.6% increase. We had a modest net increase because we've had some clients where we've either completed work or we've had clients where we terminated the relationship because we didn't view it as productive as we would like. On the attrition rate, because that may be an issue that you're focused on, Alexa LaBianca, I give her a shout-out. She tracks all this stuff in HR.

Speaker #2: 70% of our attrition was at ratings of 1 to 3. I view that as a positive, not a negative. Kelly Rath, who runs a recruiting group, has done a terrific job.

Speaker #2: And our revenue per professional through the first half of the year was up 16.4%. That's a very, very important statistic in how I view our business.

Speaker #2: We have a great recruiting team. the first half of this year for 26 hires, we've had the best year we've ever had in 24 years with acceptance rate.

Speaker #2: On the client side, on a gross basis, we added over 1,300 clients, which was a 10.6% increase. We had a modest net increase because we've had some clients where we've either completed work, or we've had clients where we terminated the relationship because we didn't view it as productive as we would like.

Speaker #2: Most of our candidates have, have multiple offers. we're not just competing with accounting firms, but we're competing with law firms. By way of example, in San Francisco, probably about 70 to 75 percent of our hires are lawyers.

Speaker #2: our acceptance rate is track tracking for 2026 starts at about 73%. When we were WDIS, we would run at about 36. When we flipped the, the Anderson brand, we were at about 65.

Speaker #2: On the attrition rate, because that may be an issue that you're focused on, Alexa LaBianca, I give her a shout-out. She tracks all this stuff in HR.

Speaker #2: there's probably a lot of factors involved, but I think execution is a very important one, certainly being public and the brand, I think, is, is also particularly relevant.

Speaker #2: We actually while our attrition is up a little bit, we have a rating system of 1 to 5 with 5 being the highest, and we probably have a lousy curve because if you're below 4, you maybe you shouldn't be working here.

Mark Vorsatz: While our attrition is up a little bit, we have a rating system of 1 to 5, with 5 being the highest, and we probably have a lousy curve, because if you are below 4, maybe you should not be working here. 70% of our attrition was at ratings of 1 to 3. I view that as a positive, not a negative. Kelly Rath, who runs our recruiting group, has done a terrific job. We have a great recruiting team. The H1 of this year, for 26 hires, we have had the best year we have ever had in 24 years with acceptance rate. Most of our candidates have multiple offers. We are not just competing with accounting firms, but we are competing with law firms. By way of example, in San Francisco, probably about 70% to 75% of our hires are lawyers. Our acceptance rate is tracking for 2026 starts at about 73%.

Speaker #2: The, the last topic I'm going to touch on briefly, and then I'm going to turn it over to, Neil. Is the transactions. I don't call these acquisitions because these are our partners.

Speaker #2: Seventy percent of our attrition was at ratings of 1 to 3. I view that as a positive, not a negative. Kelly Rath, who runs our recruiting group, has done a terrific job.

Speaker #2: I have been involved in transactions for over 40 years, and I will tell you, I've done hundreds, if not 1,000 transactions, and some of them very large.

Speaker #2: We have a great recruiting team. The first half of this year for 26 hires, we've had the best year we've ever had in 24 years with acceptance rate.

Speaker #2: And it's been my observation that the reason transactions don't work isn't because of economics, it's because of culture. Our whole process in identifying firms and, and having to collaboration agreement and working with those firms and how we interact with the firms comes down to values.

Speaker #2: Most of our candidates have multiple offers. We're not just competing with accounting firms, but we're competing with law firms. By way of example, in San Francisco, probably about 70 to 75 percent of our hires are lawyers.

Speaker #2: we want to be best in class. We want to make this a better place for the next generation. We think we can do those types of things, and also reward our investors.

Speaker #2: Our acceptance rate is tracking for 2026 starts at about 73%. When we were WTAS, we would run at about 36. When we flipped the Anderson brand, we were at about 65.

Speaker #2: That's a really, really important litmus test for us. I would say the acquisitions are taking longer than I would hope, and a little longer than expected, and I'll comment about what the economics of that will be.

Mark Vorsatz: When we were WTAS, we would run at about 36. When we flipped to the Andersen brand, we were at about 65. There is probably a lot of factors involved, but I think execution is a very important one. Certainly being public and the brand, I think is also particularly relevant. The last topic I am going to touch on briefly, and then I am going to turn it over to Neal, is the transactions. I do not call these acquisitions because these are our partners. I have been involved in transactions for over 40 years, and I will tell you, I have done hundreds, if not a thousand transactions, and some of them very large. It has been my observation that the reason transactions do not work is not because of economics, it is because of culture.

Speaker #2: There are probably a lot of factors involved, but I think execution is a very important one. Certainly, being public and the brand are also particularly relevant.

Speaker #2: as you've seen now, because we had to disclose for financial purposes, we included two acquisitions that we did on Monday and Tuesday. So we now have signed 16 transactions.

Speaker #2: The last topic I'm going to touch on briefly, and then I'm going to turn it over to Neil, is the transactions. I don't call these acquisitions, because these are our partners.

Speaker #2: I have been involved in transactions for over 40 years, and I will tell you, I've done hundreds, if not a thousand, large transactions. And it's been my observation that the reason transactions don't work isn't because of economics; it's because of culture.

Speaker #2: Eight of those have closed that represent over 130 million of revenue. That based on our 2025 revenue, and I'm sure the analysts will be all over this, would be about a 15 and a half percent increase in our revenue.

Speaker #2: Over and above what the inorganic revenue will likely be for this year. We had originally planned that we would do about 55 million of inorganic revenue.

Speaker #2: Our whole process in identifying firms and having the collaboration agreement, and working with those firms and how we interact with the firms, comes down to values.

Mark Vorsatz: Our whole process in identifying firms and having the collaboration agreement and working with those firms and how we interact with the firms comes down to values. We want to be best in class. We want to make this a better place for the next generation. We think we can do those types of things and also reward our investors. That is a really important litmus test for us. I would say the acquisitions are taking longer than I would hope, and a little longer than expected, and I will comment about what the economics of that will be. As you have seen now, because we had to disclose for financial purposes, we included 2 acquisitions that we did on Monday and Tuesday. We now have signed 16 transactions. 8 of those have closed. That represent over USD 130 million of revenue.

Speaker #2: One of the analysts had sent Greg a note, which he forwarded to me, and I thought we would address it on this call so we could deal it in a comprehensive fashion.

Speaker #2: We want to be best in class. We want to make this a better place for the next generation. We think we can do those types of things, and also reward our investors.

Speaker #2: We are going to come in far short of that. So it is likely that we will probably come in at somewhere around 25 to 30.

Speaker #2: That's a really, really important litmus test for us. I would say the acquisitions are taking longer than I would hope, and a little longer than expected.

Speaker #2: It's not because of a lack of opportunity, it is because it these transactions take longer than we would hope. We've added additional resources. We now have three full-time lawyers in-house.

Speaker #2: And I'll comment about what the economics of that will be. As you've seen now, because we had to disclose for financial purposes, we included two acquisitions that we did on Monday and Tuesday.

Speaker #2: Working on the transactions. And ProCop, who leads that group, spent 20 years at Sidley in Austin and was a partner, and then 10 years as a partner at Winston Strong.

Speaker #2: We've add we've added now two more people in the finance side. We have four full-time people on finance. We're supplementing that with our skills internally, because we have about 60 people in the US in M&A.

Speaker #2: So we now have signed 16 transactions. Eight of those have closed, that represent over $130 million of revenue. That's based on our 2025 revenue, and I'm sure the analysts will be all over this. That would be about a 15.5 percent increase in our revenue over and above what the inorganic revenue will likely be for this year.

Mark Vorsatz: That based on our 2025 revenue, and I am sure the analysts will be all over this, would be about a 15.5% increase in our revenue over and above what the inorganic revenue will likely be for this year. We had originally planned that we would do about USD 55 million of inorganic revenue. One of the analysts had sent Greg a note, which he forwarded to me, and I thought we would address it on this call so we could deal it in a comprehensive fashion. We are going to come in far short of that, so it is likely that we will probably come in at somewhere around USD 25 million to USD 30 million. It is not because of a lack of opportunity. It is because these transactions take longer than we would hope. We have added additional resources. We now have 3 full-time lawyers in-house working on the transactions.

Speaker #2: We have deep skills in cross-border taxation. But there are requirements for us to go through from a regulatory standpoint, which sometimes takes the deals a little bit longer.

Speaker #2: As we do deals in each country, we're building a prototype, and I hope in the future those deals will go a little bit faster.

Speaker #2: We had originally planned that we would do about $55 million of inorganic revenue. One of the analysts had sent Greg a note, which he forwarded to me, and I thought we would address it on this call so we could deal with it in a comprehensive fashion.

Speaker #2: We're not changing our guidance at 980 million to a billion of revenue, because I think that our organic performance will continue to be anticipated.

Speaker #2: We are going to come in far short of that, so it is likely that we will probably come in somewhere around 25 to 30.

Speaker #2: I would say we also had a strong July. The third quarter is our biggest quarter because September is our busiest month in revenue, and August is our second busiest month.

Speaker #2: It's not because of a lack of opportunity. It is because these transactions take longer than we would hope. We've added additional resources. We now have three full-time lawyers in-house.

Speaker #2: So I actually view this as a positive. we're being deliberative. We're being measured. We're being disciplined about these transactions. but we're going to do this right.

Speaker #2: Working on the transactions. And ProCop, who leads that group, spent 20 years at Sidley and Austin and was a partner and then 10 years as a partner at Winston Strong.

Mark Vorsatz: Ed Prokop, who leads that group, spent 20 years at Sidley in Austin and was a partner, then 10 years as a partner at Winston & Strawn. We have added now two more people in the finance side. We have four full-time people on finance. We are supplementing that with our skills internally because we have about 60 people in the US in M&A. We have deep skills in cross-border taxation. There are requirements for us to go through from a regulatory standpoint, which sometimes takes the deals a little bit longer. As we do deals in each country, we are building a prototype, and I hope in the future those deals will go a little bit faster. We are not changing our guidance at $980 million to $1 billion of revenue because I think that our organic performance will continue to be much higher than we had originally anticipated.

Speaker #2: We've added two more people to the finance side. We now have four full-time people in finance. We're supplementing that with our internal skills because we have about 60 people in the US in M&A.

Speaker #2: We're not going to do it fast. We have quite a pipeline. this year, last year, every other year, we do a global partner meeting, which we had one in November in Las Vegas.

Speaker #2: We have deep skills in cross-border taxation. But there are requirements for us to go through from a regulatory standpoint, which sometimes takes the deals a little bit longer.

Speaker #2: This year, there are regional partner meetings. So we have meetings in Singapore, in Athens, in Barcelona, in Atlanta, and in Cancun. And I'm bringing our deal team with me to Singapore, Athens, Barcelona, and Cancun, and I would say our dance card is completely full with meetings with new groups that want to join.

Speaker #2: As we do deals at each country, we're building a prototype, and I hope in the future those deals will go a little bit faster.

Speaker #2: We're not changing our guidance at $980 million to $1 billion of revenue, because I think that our organic performance will continue to be much higher than we had originally anticipated.

Speaker #2: So we have quite the pipeline. I would say our biggest challenge right now is maintaining our discipline on doing this thoughtfully and correct. I believe we have enough existing deals where we have active conversations, that at a pace of two to three a month, we have enough deals in process through the end of next year.

Speaker #2: I would say we also had a strong July the third quarter is our our busiest month in revenue, and August is our second busiest month.

Mark Vorsatz: I would say we also had a strong July. The Q3 is our biggest quarter because September is our busiest month in revenue, and August is our second busiest month. I actually view this as a positive. We are being deliberative, we are being measured, we are being disciplined about these transactions. We are going to do this right. We are not going to do it fast. We have quite a pipeline. Last year, every other year, we do a global partner meeting, which we had one in November in Las Vegas. This year they are regional partner meetings. We have meetings in Singapore, in Athens, in Barcelona, in Atlanta, and in Cancun. I am bringing our deal team with me to Singapore, Athens, Barcelona and Cancun. I would say our dance card is completely full with meetings with new groups that want to join.

Speaker #2: So I actually view this as a positive. We're being deliberative. We're being measured. We're being disciplined about these transactions. But we're going to do this right.

Speaker #2: So while there is a little bit of slippage in terms of timing of closing, and so the deals we just announced, we've now completed a little over 130 million of deals this year, in terms of annualized revenue.

Speaker #2: We're not going to do it fast. We have quite a pipeline. This year, last year, every other year, we do a global partner meeting, which we had one in November in Las Vegas.

Speaker #2: Some of that revenue will slip into 2027, but our organic performance for 2026 is so strong that we'll compensate for that differential. those are generally positive things.

Speaker #2: I always say, you know, when Kelly Rapp sends me a note and says that we had a 73% acceptance rate, much like how I deal with my children, who are both adults, I say, "What happened to the other 27%?" So we obviously have areas for improvement.

Speaker #2: And I would say our dance card is completely full with meetings with new groups that want to join, so we have quite the pipeline.

Mark Vorsatz: We have quite the pipeline. I would say our biggest challenge right now is maintaining our discipline on doing this thoughtfully and correct. I believe we have enough existing deals where we have active conversations that at a pace of 2 to 3 a month, we have enough deals in process through the end of next year. While there is a little bit of slippage in terms of timing of closing, and so the deals we just announced, we have now completed a little over $130 million of deals this year in terms of annualized revenue. Some of that revenue will slip into 2027, but our organic performance for 2026 is so strong that we will compensate for that differential. Those are generally positive things.

Speaker #2: I would say our biggest challenge right now is maintaining our discipline on doing this thoughtfully and correctly. I believe we have enough existing deals where we have active conversations that, at a pace of two to three a month, we have enough deals in process through the end of next year.

Speaker #2: We still have areas for improvement in pricing. We have significant areas of improvement from productivity. even though we've added gross client increase of 10%, I think we could do a much better job in that area.

Speaker #2: we had a an internal board, our US board, call yesterday. Where we spent a fair amount of time talking about how we can do a better job on business development.

Speaker #2: So while there is a little bit of slippage in terms of timing of closing, and so the deals we just announced—we've now completed a little over $130 million of deals this year.

Speaker #2: And we're going to have a call on Sunday to talk through that in greater terms. We're starting to see some continued modest improvement in integration.

Speaker #2: But we're just scratching the surface. Now, the way I look at it is, at 20% organic growth, better than 20% organic growth for the second quarter, and as my partners know, I'm never happy.

Speaker #2: In terms of annualized revenue, some of that revenue will slip into 2027, but our organic performance for 2026 is so strong that we'll compensate for that differential.

Speaker #2: Those are generally positive things. I always say, when Kelly Rapp sends me a note and says that we had a 73% acceptance rate, much like how I deal with my children, who are both adults, I say, "What happened to the other 27%?" So we obviously have areas for improvement.

Speaker #2: I look at this and say, "The glass is half full, but it's half empty. Let's focus on how we can fill up the rest of the glass." I'm very confident that we're going to continue to execute, and we're going to do, an even better job going forward.

Mark Vorsatz: I always say, when Kelly Rapp sends me a note and says that we had a 73% acceptance rate, much like how I deal with my children, who are both adults, I say, "What happened to the other 27%?" We obviously have areas for improvement. We still have areas for improvement in pricing. We have significant areas of improvement from productivity. Even though we have added gross client increase of 10%, I think we could do a much better job in that area. We had an internal board, our US board call yesterday, where we spent a fair amount of time talking about how we can do a better job on business development, and we are going to have a call on Sunday to talk through that in greater terms. We are starting to see some continued modest improvement in integration, but we are just scratching the surface.

Speaker #2: So that's my overview. I'm going to turn it over to Neil.

Speaker #1: Hey, Mark. Thanks very much, and good afternoon, everyone. Thanks for joining us today. Obviously, we, you know, we appreciate the ongoing interest in, in Anderson.

Speaker #2: We still have areas for improvement in pricing. We have significant areas of improvement from productivity. Even though we've added gross client increase of 10%, I think we could do a much better job in that area.

Speaker #1: so our third earnings call is a public company. I'm going to cover our aspect of our financial performance that Mark has not already covered.

Speaker #2: We had an internal board, our US board, call yesterday. Where we spent a fair amount of time talking about how we can do a better job on business development.

Speaker #1: and let me just start back with, with revenue. So to reiterate the top-line numbers for the quarter for the second quarter, revenue of 217.7 million.

Speaker #2: And we're going to have a call on Sunday to talk through that in greater terms. We're starting to see some continued, modest improvement in integration.

Speaker #1: that equates to a 41.7 million or 23.7% increase year over year. included in that is 5.5 million of revenue from acquisitions that were closed during the second quarter.

Speaker #2: But we're just scratching the surface. Now, the way I look at it is: at 20% organic growth—better than 20% organic growth—for the second quarter, and as my partners know, I'm never happy. I look at this and say, "The glass is half full, but it's half empty."

Mark Vorsatz: Now, the way I look at it is at 20% organic growth, better than 20% organic growth for the Q2. As my partners know, I am never happy. I look at this and say, "The glass is half full, but it is half empty. Let us focus on how we can fill up the rest of the glass." I am very confident that we are going to continue to execute, and we are going to do an even better job going forward. That is my overview. I am going to turn it over to Neal.

Speaker #1: So if you take those out, excluding acquisitions, organic revenue increased 20.6% year over year for the quarter. That result exceeds the midpoint of the second quarter revenue guidance previously provided, by around 10%.

Speaker #2: Let's focus on how we can fill up the rest of the glass." I'm very confident that we're going to continue to execute, and we're going to do an even better job going forward.

Speaker #1: So equating, we think, to a solid top-line beat, for the quarter. we've provided first half information, as well. Mark's mentioned the revenue for, for first half.

Speaker #2: So that's my overview. I'm going to turn it over to Neil.

Speaker #1: which was up 19.4% or 17.9% on an organic-only basis. Going forward, and you'll note, in, in the 10Q, we are now including last 12 month in financial information in the MD&A section, of, of, of our quarterly reports.

Speaker #1: Hey, Mark. Thanks very much, and good afternoon, everyone. Thanks for joining us today. Obviously, we appreciate the ongoing interest in Andersen. This is our third earnings call as a public company.

Neal Livingston: Hey, Mark. Thanks very much. Good afternoon, everyone. Thanks for joining us today. Obviously, we appreciate the ongoing interest in Andersen. Our third earnings call as a public company. I am going to cover aspects of our financial performance that Mark has not already covered. Let me just start back with revenue. To reiterate the top-line numbers for the quarter, for the Q2, revenue of $217.7 million. That equates to a $41.7 million or 23.7% increase year over year. Included in that is $5.5 million of revenue from acquisitions that were closed during the Q2. If you take those out, excluding acquisitions, organic revenue increased 20.6% year over year for the quarter. That result exceeds the midpoint of the Q2 revenue guidance previously provided by around 10%, equating, we think, to a solid top-line beat for the quarter.

Speaker #1: I'm going to cover our aspect of our financial performance that Mark has not already covered. And let me just start back with revenue. So to reiterate the top-line numbers for the quarter for the second quarter, revenue of 217.7 million.

Speaker #1: this is intentional to provide additional insight on the annualized performance of the business, excluding some of the seasonal effects that Mark mentioned, driven by US tax filing deadlines.

Speaker #1: That equates to a 41.7 million or 23.7% increase year over year. Included in that is 5.5 million of revenue from acquisitions that were closed during the second quarter.

Speaker #1: so looking at the last 12 months ended June 30th, 2026, our revenue was 913 million. That equates to a year over year increase of 176 million or 18%.

Speaker #1: and again, taking out the inorganic piece of that on an organic-only basis, that equates to a revenue increase of 17.2%. So solid, solid top-line momentum.

Speaker #1: So equating, we think, to a solid top-line beat for the quarter. We've provided first half information as well, Mark's mentioned the revenue for first half.

Speaker #1: Breaking that down by, breaking that revenue down, the growth in the second quarter was underpinned by, solid growth across all of our service lines and US regions.

Neal Livingston: We have provided H1 information as well. Mark has mentioned the revenue for H1, which was up 19.4% or 17.9% on an organic-only basis. Going forward, and you will note in the 10-Q, we are now including last 12-month financial information in the MD&A section of our quarterly reports. This is intentional to provide additional insight on the annualized performance of the business, excluding some of the seasonal effects that Mark mentioned, driven by US tax filing deadlines. Looking at the last 12 months ended 30 June 2026, our revenue was $913 million. That equates to a year-over-year increase of $176 million or 18%. Again, taking out the inorganic piece of that on an organic-only basis, that equates to a revenue increase of 17.2%. Solid top-line momentum.

Speaker #1: Which was up 19.4% or 17.9% on an organic-only basis. Going forward, and you'll note in the 10Q, we are now including last 12 month in financial information in the MD&A section of our quarterly reports.

Speaker #1: we had no large non-recurring items of revenue, for the second quarter. specifically, I'd call out business tax services, which reported strong growth of 36.9% for the quarter.

Speaker #1: And, accounted for 39.2% of revenues. And our largest service line, private client services, also reported solid growth, of approximately 17% for the quarter. Mark mentioned it, but we are seeing positive momentum in consulting and mobility.

Speaker #1: This is intentional, to provide additional insight on the annualized performance of the business, excluding some of the seasonal effects that Mark mentioned. This is driven by U.S. tax filing deadlines.

Speaker #1: So, looking at the last 12 months ended June 30, 2026, our revenue was $913 million. That equates to a year-over-year increase of $176 million, or 18%.

Speaker #1: Whilst continuing to invest, the revenue from those service lines, is up, on, on a, on a, on a year over year basis. Mark mentioned some of the underlying drivers, that contributed to that growth.

Speaker #1: And again, taking out the inorganic piece of that, on an organic-only basis, that equates to a revenue increase of 17.2%. So, solid top-line momentum.

Speaker #1: I will add one, which is, increase in volume, up 5% as measured by chargeable hours for the first half of 2026. So alongside the pricing increase and the productivity increases, that Mark already mentioned, a nicely balanced picture in terms of underlying revenue drivers.

Speaker #1: Breaking that down by breaking that revenue down, the growth in the second quarter was underpinned by solid growth across all of our service lines and US regions.

Neal Livingston: Breaking that revenue down, the growth in the Q2 was underpinned by solid growth across all of our service lines and US regions. We had no large non-recurring items of revenue for the Q2. Specifically, I would call out Business Tax Services, which reported strong growth of 36.9% for the quarter and accounted for 39.2% of revenues. Our largest service line, Private Client Services, also reported solid growth of approximately 17% for the quarter. Mark mentioned it, but we are seeing positive momentum in consulting and mobility whilst continuing to invest. The revenue from those service lines is up on a year-over-year basis. Mark mentioned some of the underlying drivers that contributed to that growth. I will add one which is increase in volume, up 5% as measured by chargeable hours for the H1 of 2026.

Speaker #1: We also added headcount for the quarter. albeit at a more moderate pace compared to prior periods, on, on a net basis. Just a reminder that, as part of our 2026 pricing strategy, we introduced a 3% tax surcharge.

Speaker #1: We had no large non-recurring items of revenue for the second quarter. Specifically, I'd call out business tax services, which reported strong growth of 36.9% for the quarter.

Speaker #1: And accounted for 39.2% of revenues. And our largest service line, private client services, also reported solid growth of approximately 17% for the quarter. Mark mentioned it, but we are seeing positive momentum in consulting and mobility.

Speaker #1: We've discussed that previously for client contracts that were signed, from the second quarter of 2026. this is obviously contributed to the year over year revenue increase.

Speaker #1: and, is over and above, the rate increase that, that Mark mentioned previously. So overall, the picture is one of revenue growth that is well diversified, across practice lines, US regions, and, and by driver.

Speaker #1: Whilst continuing to invest, the revenue from those service lines is up on a year over year basis. Mark mentioned some of the underlying drivers that contributed to that growth.

Speaker #1: Turning to net income for the second quarter, we recorded a net loss on a gap basis, of 10.1 million. That compares to a net loss of 96 million, for the second quarter of 2025.

Speaker #1: I will add one, which is an increase in volume, up 5% as measured by chargeable hours for the first half of 2026. So, alongside the pricing increase and the productivity increases that Mark already mentioned, it's a nicely balanced picture in terms of underlying revenue drivers.

Neal Livingston: Alongside the pricing increase and the productivity increases that Mark already mentioned, a nicely balanced picture in terms of underlying revenue drivers. We also added headcount for the quarter, albeit at a more moderate pace compared to prior periods on a net basis. Just a reminder that as part of our 2026 pricing strategy, we introduced a 3% tax surcharge. We discussed that previously for client contracts that were signed from Q2 2026. This has obviously contributed to the year-over-year revenue increase and is over and above the rate increase that Mark mentioned previously. Overall, the picture is one of revenue growth that is well diversified across practice lines, US regions, and by driver. Turning to net income for Q2, we recorded a net loss on a GAAP basis of -$10.1 million.

Speaker #1: earnings per share for the second quarter was negative 8 cents per share basic, and negative 9 cents per share on a diluted basis. That is also in line with previous guidance, where we indicated a net loss and negative earnings per share for the second quarter.

Speaker #1: We also added headcount for the quarter, albeit at a more moderate pace compared to prior periods on a net basis. Just a reminder that, as part of our 2026 pricing strategy, we introduced a 3% tax surcharge.

Speaker #1: for the first half of 2026, we recorded net income on a gap basis of 7.6 million. That compares to a net loss of 45.4 million, for the same period of 2025.

Speaker #1: We've discussed that previously for client contracts that were signed from the second quarter of 2026. This has obviously contributed to the year-over-year revenue increase.

Speaker #1: and the smaller net loss in the second quarter and then the swing from a net loss to net income for the first half of '26 is primarily attributable to combination of higher revenue and reduced equity-based compensation expense.

Speaker #1: And this is over and above the rate increase that Mark mentioned previously. So, overall, the picture is one of revenue growth that is well-diversified across practice lines, U.S. regions, and by driver.

Speaker #1: Turning back to non-gap measures and, and I'll try not to repeat, what Mark has already mentioned. But for the second quarter, we had adjusted net income of 39 million, with an adjusted net income margin of 17.9%.

Speaker #1: Turning to net income for the second quarter, we recorded a net loss on a GAAP basis of $10.1 million. That compares to a net loss of $96 million for the second quarter of 2025.

Speaker #1: This compares to 28 million and 16%, for the equivalent period in '25. Our adjusted EBITDA was 45.9 million, an increase of approximately 55%, with an adjusted EBITDA margin of 21.1%.

Neal Livingston: That compares to a net loss of -$96 million for Q2 2025. Earnings per share for Q2 was negative 8 cents per share basic and negative 9 cents per share on a diluted basis. That is also in line with previous guidance where we indicated a net loss and negative earnings per share for Q2. For H1 2026, we recorded net income on a GAAP basis of $7.6 million. That compares to a net loss of -$45.4 million for the same period of 2025. The smaller net loss in Q2 and then the swing from a net loss to net income for H1 2026 is primarily attributable to combination of higher revenue and reduced equity-based compensation expense.

Speaker #1: Earnings per share for the second quarter was negative $0.08 per share basic, and negative $0.09 per share on a diluted basis. That is also in line with previous guidance, where we indicated a net loss and negative earnings per share for the second quarter.

Speaker #1: And that compares to 29.7 million or 16.9% for the equivalent period in '25. So if you do the maths, you'll see that that is a margin increase for the quarter of approximately 420 basis points.

Speaker #1: For the first half of 2026, we recorded net income on a gap basis of 7.6 million. That compares to a net loss of 45.4 million.

Speaker #1: looking at the same numbers for the last 12 months, adjusted net income 240.6 million, with an adjusted net income margin of 28.8%, compared to 172.8 and 23.2%, for 2025.

Speaker #1: For the same period of 2025. And the smaller net loss in the second quarter and then the swing from a net loss to net income for the first half of '26 is primarily attributable to combination of higher revenue and reduced equity-based compensation expense.

Speaker #1: That's the adjusted net income. Adjusted EBITDA was 262.9 million, about a 46% increase, with an adjusted EBITDA margin of 28.8%. And that compares to 179.6 million, and a 23.2%, adjusted EBITDA margin for the same period in '25.

Speaker #1: Turning back to non-gap measures and I'll try not to repeat what Mark has already mentioned. But for the second quarter, we had adjusted net income of 39 million, with an adjusted net income margin of 17.9%.

Neal Livingston: Turning back to non-GAAP measures, and I will try not to repeat what Mark has already mentioned, but for Q2, we had adjusted net income of $39 million, with an adjusted net income margin of 17.9%. This compares to $28 million and 16% for the equivalent period in 2025. Our Adjusted EBITDA was $45.9 million, an increase of approximately 55%, with an Adjusted EBITDA margin of 21.1%. That compares to $29.7 million or 16.9% for the equivalent period in 2025. If you do the maths, you will see that that is a margin increase for the quarter of approximately 420 basis points. Looking at the same numbers for the last 12 months, adjusted net income $240.6 million with an adjusted net income margin of 28.8%, compared to $172.8 million and 23.2% for 2025. That is the adjusted net income.

Speaker #1: This compares to $28 million and 16% for the equivalent period in '25. Our adjusted EBITDA was $45.9 million, an increase of approximately 55%, with an adjusted EBITDA margin of 21.1%.

Speaker #1: So once again, doing the, the margin expansion, margin increase, that's an increase of 560 basis points, for the last 12 months. Why is that?

Speaker #1: And that compares million or 16.9% for the equivalent period in '25. So if you do the math, you'll see that that is a margin increase for the quarter of approximately 420 basis points.

Speaker #1: lots of underlying reasons for that, but, primarily what this does reflect is favorable operating leverage in our business, whereby if you look at our annualized revenue growth, it's consistently outpaced the growth in operating costs, excluding the non-cash equity restructuring costs and some of the stock-based compensation expense associated with the IPO and the vesting of class X aggregated units.

Speaker #1: Looking at the same numbers for the last 12 months adjusted net income, 240.6 million, with an adjusted net income margin of 28.8%, compared to 172.8 and 23.2% for 2025.

Speaker #1: costs have also improved, in Q2 for similar reasons. Cost of services has reduced from 128% to 79.7% for the second quarter. SG&A, decreased from 30.6% to 23.2%.

Speaker #1: That's the adjusted net income. Adjusted EBITDA was 262.9 million, about a 46% increase, with an adjusted EBITDA margin of 28.8%. And that compares to 179.6 million, and a 23.2% adjusted EBITDA margin for the same period in '25.

Neal Livingston: Adjusted EBITDA was $262.9 million, about a 46% increase with an Adjusted EBITDA margin of 28.8%, and that compares to $179.6 million and a 23.2% Adjusted EBITDA margin for the same period in 2025. Once again, doing the margin expansion, the margin increase. That is an increase of 560 basis points for the last 12 months. Why is that? Lots of underlying reasons for that, but primarily what this does reflect is favorable operating leverage in our business, whereby if you look at our annualized revenue growth, it is consistently outpaced the growth in operating costs, excluding the non-cash equity restructuring costs and some of the stock-based compensation expense associated with the IPO and the vesting of Class X Aggregator Units. Costs have also improved in Q2 for similar reasons. The cost of services has reduced from 128% to 79.7%. For Q2, SG&A decreased from 30.6% to 23.2%.

Speaker #1: and again, that, that is primarily related to equity-based compensation, changes. le-let me speak briefly to, to stock-based compensation, because that's an important part of our P&L.

Speaker #1: So once again, doing the margin expansion, margin increase—that's an increase of 560 basis points for the last 12 months. Why is that? There are lots of underlying reasons for that.

Speaker #1: for the second quarter, stock-based compensation expense was 48.2 million, of which 42 million, 42.3 million, to be exact, or 88% was linked to the vesting of class X aggregated units.

Speaker #1: But primarily what this does reflect is favorable operating leverage in our business, whereby if you look at our annualized revenue growth, it's consistently outpaced the growth in operating costs, excluding the non-cash equity restructuring costs and some of the stock-based compensation expense associated with the IPO and the vesting of class X aggregated units.

Speaker #1: And for the first half, that stock-based compensation expense number was 93.9 million, of which 83.4 million or 89% was linked to those, the vesting of those class X aggregated units.

Speaker #1: Again, as a reminder, that expense item is a non-cash and non-dilutive, expense with no cash flow or operational impact. I'll briefly cover our balance sheet and cash flow, and then also comment on, on the lockup and, and tax receivable agreement, because we do get those questions, from time to time.

Speaker #1: Costs have also improved in Q2 for similar reasons. Cost of services has reduced from 128% to 79.7% for the second quarter. SG&A decreased from 30.6% to 23.2%.

Speaker #1: as of the end of June, June 30th, '26, our cash and cash equivalents were 175.6, million. and investments in US Treasury securities of 2.1 million.

Speaker #1: And again, that is primarily related to equity-based compensation changes. Let me speak briefly to stock-based compensation, because that's an important part of our P&L.

Neal Livingston: And again, that is primarily related to equity-based compensation changes. Let me speak briefly to stock-based compensation, because that is an important part of our P&L. For Q2, stock-based compensation expense was $48.2 million, of which $42 million, $42.3 million to be exact, or 88%, was linked to the vesting of Class X Aggregator Units. For H1, that stock-based compensation expense number was $93.9 million, of which $83.4 million or 89% was linked to the vesting of those Class X Aggregator Units. Again, as a reminder, that expense item is a non-cash and non-dilutive expense with no cash flow or operational impact. I will briefly cover our balance sheet and cash flow, and then also comment on the lock-up and Tax Receivable Agreement, because we do get those questions from time to time.

Speaker #1: We had no third-party debt, and the company continues to maintain a conservative stance towards, financial leverage. Our net working capital, which we're defining as current assets less current liabilities, was stable at 220 million, as of the end of June, as compared to 260 million at the end of December 31st, 2025.

Speaker #1: For the second quarter, stock-based compensation expense was 48.2 million, of which 42 million 42.3 million, to be exact, or 88% was linked to the vesting of class X aggregated units.

Speaker #1: And for the first half, that stock-based compensation expense number was $93.9 million, of which $83.4 million, or 89%, was linked to the vesting of those Class X aggregate units.

Speaker #1: I'll repeat what we've said previously in terms of our funding needs. Historically, we've generated sufficient cash flow or cash to gen to meet our funding needs.

Speaker #1: we believe that the existing cash and cash equivalents cash flow from o-operations and the residual proceeds from the IPO will be sufficient to meet our foreseeable funding requirements.

Speaker #1: Again, as a reminder, that expense item is a non-cash and non-dilutive expense with no cash flow or operational impact. I'll briefly cover our balance sheet and cash flow and then also comment on the lockup and tax receivable agreement, because we do get those questions from time to time.

Speaker #1: On the lockup and tax receivable agreement, as of June 30th, 2026, we had not yet incurred any liability in connection with the tax receivable agreement.

Speaker #1: so I just wanted to make sure that is clear. and as a reminder, there are limits on the number of class X units and the paired class B shares that can be exchanged for class A shares post-expiration of the IPO lockup, in the middle of June.

Speaker #1: As of the end of June, June 30th, '26, our cash and cash equivalents were $175.6 million, and investments in U.S. Treasury securities were $2.1 million.

Neal Livingston: As of the end of 30 June 2026, our cash and cash equivalents were $175.6 million, and investments in US Treasury securities of $2.1 million. We had no third-party debt, and the company continues to maintain a conservative stance towards financial leverage. Our net working capital, which we are defining as current assets less current liabilities, was stable at $220 million as of the end of June, as compared to $216 million at the end of 31 December 2025. I will repeat what we have said previously in terms of our funding needs. Historically, we have generated sufficient cash flow or cash to meet our funding needs. We believe that the existing cash and cash equivalents, cash flow from operations, and the residual proceeds from the IPO will be sufficient to meet our foreseeable funding requirements.

Speaker #1: We had no third-party debt, and the company continues to maintain a conservative stance towards financial leverage. Our net working capital—which we're defining as current assets less current liabilities—was stable at $220 million as of the end of June, compared to $216 million at the end of December 31, 2025.

Speaker #1: there's a 10%, cap that's, re-relevant to us, in aggregate. and so we, we wanted to make sure, everybody understood, that, that, that position post-lockup.

Speaker #1: I'll just briefly re-iterate our, outlook and forward guidance. So we are reaffirming our 2026 full-year guidance, which is revenue in the range of 980 to 1 billion.

Speaker #1: I'll repeat what we've said previously in terms of our funding needs. Historically, we've generated sufficient cash flow or cash to meet our funding needs.

Speaker #1: That equates to annualized growth of approximately 18%. Adjusted EBITDA projected to be in the range of 225 to 250 million. That equates to growth of approximately 5%.

Speaker #1: We believe that the existing cash and cash equivalents, cash flow from operations, and the residual proceeds from the IPO will be sufficient to meet our foreseeable funding requirements.

Speaker #1: And adjusted EBITDA margin we are holding to a range of 22 to 23%. Briefly in closing, re-really proud of our second quarter results, which surpassed the previous guidance.

Speaker #1: On the lockup and tax receivable agreement, as of June 30, 2026, we had not yet incurred any liability in connection with the tax receivable agreement.

Neal Livingston: On the lock-up and Tax Receivable Agreement, as of 30 June 2026, we had not yet incurred any liability in connection with the Tax Receivable Agreement. I just wanted to make sure that is clear. As a reminder, there are limits on the number of Class X units and the paired Class B shares that can be exchanged for Class A shares post expiration of the IPO lock-up, in the middle of June. There is a 10% cap that is relevant to us in aggregate. We wanted to make sure everybody understood that position post lock-up. I will just briefly reiterate our outlook and forward guidance. We are reaffirming our 2026 full-year guidance, which is revenue in the range of $980 million to $1 billion. That equates to annualized growth of approximately 18%. Adjusted EBITDA projected to be in the range of $225 million to $250 million.

Speaker #1: So I just wanted to make sure that is clear. And as a reminder, there are limits on the number of Class X units and the paired Class B shares that can be exchanged for Class A shares post-expiration of the IPO lockup in the middle of June.

Speaker #1: we think this financial performance, i-is indicative of a business that, is performing well. and an affirmation of our no audit business model and some of the discipline around client selection that I know Mark is very passionate about, and our approach, our approach to client service.

Speaker #1: There's a 10% cap that's relevant to us in aggregate, and so we wanted to make sure everybody understood that position post-lockup. I'll just briefly reiterate our outlook and forward guidance.

Speaker #1: so that's it from me. Thank you very much for listening, and with that, we'd be happy to take any questions.

Speaker #2: Thank you. We will now conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad.

Speaker #2: A confirmation tone will indicate your line is in a question queue. You may press star two if you would like to remove your question from the queue.

Speaker #1: So we are reaffirming our 2026 full-year guidance, which is revenue in the range of 980 to 1 billion. That equates to annualized growth of approximately 18%.

Speaker #2: For participants using Speak Recruitment, it may be necessary to pick up your handset before pressing the star one at this time. One moment while we pull for the first question.

Speaker #1: Adjusted EBITDA is projected to be in the range of $225 to $250 million. That equates to growth of approximately 5%. The adjusted EBITDA margin, we are holding to a range of 22 to 23%.

Speaker #2: The first question comes from Tony Kaplan with Morgan Stanley. Please proceed.

Neal Livingston: That equates to growth of approximately 5%. Adjusted EBITDA margin, we are holding to a range of 22% to 23%. Briefly in closing, we are really proud of our Q2 results, which surpassed the previous guidance. We think this financial performance is indicative of a business that is performing well, and an affirmation of our no audit business model and some of the discipline around client selection that I know Mark is very passionate about, and our approach to client service. That is it from me. Thank you very much for listening. With that, we would be happy to take any questions.

Speaker #3: Hey, good evening. This is Greg Parish on for Tony. Thanks for taking our, our question. Congrats on another great result. maybe just to start with business tax, it was really fantastic quarter there, specifically.

Speaker #1: Briefly in closing, really proud of our second quarter results, which surpassed the previous guidance. We think this financial performance is indicative of a business that is performing well and an affirmation of our no audit business model and some of the discipline around client selection that I know Mark is very passionate about and our approach to client service.

Speaker #3: maybe anything to call out on what drove the strength there?

Speaker #4: I'll, I'll make a couple comments as Mark Porsatin, and I'll let Neil respond. you know, I think some of it is client focus. I often say that a couple of the considerations in why our financial performance continues to be very strong, and this isn't like we just had a good quarter.

Speaker #1: So that's it from me. Thank you very much for listening. And with that, we'd be happy to take any questions.

Speaker #2: Thank you. We will now conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator: Thank you. We will now conduct a question and answer session. 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 would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that is star 1 at this time. One moment while we poll for the first question. The first question comes from Toni Kaplan with Morgan Stanley. Please proceed.

Speaker #4: We've had 96 good quarters. So we've never had a down quarter in revenue or net income for the US in 24 years. Part of it is client selection.

Speaker #2: A confirmation tone will indicate your line is in a question queue. You may press star two if you would like to remove your question from the queue.

Speaker #4: pursue and our business development strategy. When we started out, we had to do that just to survive. Today, we we're a little bit better than that.

Speaker #2: For participants using Speak Recruitment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one at this time.

Speaker #2: One moment while we pull for the first question. The first question comes from Tony Kaplan with Morgan Stanley. Please proceed.

Speaker #4: And I'd say the other thing are the types of services that we're providing to those clients. So we're not providing services that I would consider to be more commoditized.

Speaker #3: Hey, good evening. This is Greg Parish on for Tony. Thanks for taking our question. Congrats on another great result. Maybe just to start with business tax, it was really fantastic quarter there, specifically.

Speaker #4: So we don't do audit work. We don't do, you know, for the most part, large-scale tax compliance engagements. So the reason I think we drive so well on the pricing side is because we try to build relationships with clients.

Greg Parrish: Hey, good evening. This is Greg Parrish on for Toni. Thanks for taking our question. Congrats on another great result. Maybe just to start with Business Tax. It was a really fantastic quarter there specifically. Maybe anything to call out on what drove the strength there?

Speaker #3: Maybe anything to call out on what drove the strength there?

Speaker #4: And the reason they hire us isn't necessarily because we're the lowest cost provider. They hire us because they think we can add the most value.

Speaker #1: I'll make a couple of comments as Mark Porsatin, and I'll let Neil respond. I think some of it is client focus. I often say that a couple of the considerations and why our financial performance continues to be very strong, and this isn't like we just had a good quarter.

Mark Vorsatz: I will make a couple comments just Mark Vorsatz, and then I will let Neal respond. I think some of it is client focus. I often say that a couple of the considerations in why our financial performance continues to be very strong, and this is not like we just had a good quarter. We have had 96 good quarters. We have never had a down quarter in revenue or net income for the US in 24 years. Part of it is client selection. It is the type of clients that we pursue and our business development strategy. When we started out, we had to do that just to survive. Today, we are a little bit better than that. I would say the other thing are the types of services that we are providing to those clients. We are not providing services that I would consider to be more commoditized.

Speaker #4: And that's a focus that we drive through the organization across the board. It's, it's embedded in our business development strategy, that we wanna help our clients be successful, and we wanna help them from a financial perspective achieve their objectives.

Speaker #1: We've had 96 good quarters. So we've never had a down quarter in revenue or net income for the US in 24 years. Part of it is client selection.

Speaker #4: Neil, you wanna add some comments?

Speaker #5: I come off mute. No, that's well said, Mark. Thank you. Not, nothing to add. Thanks for the question, Greg.

Speaker #1: It's the type of clients that we pursue and our business development strategy. When we started out, we had to do that just to survive.

Speaker #3: Great. Thanks for the color there. and just as a follow-up, maybe just add some color on the acquisitions this week. I think six of the eight were US-based consulting firms, but you can correct that if that's wrong.

Speaker #1: Today, we are a little bit better than that. And I'd say the other thing are the types of services that we're providing to those clients.

Speaker #3: just given how fast technology is evolving with AI, how do you judge the capabilities of these firms? And, you know, what really gives you confidence in their ability to continue to grow as technology evolves?

Speaker #1: So we're not providing services that I would consider to be more commoditized. So we don't do audit work. We don't do for the most part, large-scale tax compliance engagements.

Mark Vorsatz: We do not do audit work. We do not do, for the most part, large-scale tax compliance engagements. The reason I think we drive so well on the pricing side is because we try to build relationships with clients, and the reason they hire us is not necessarily because we are the lowest cost provider. They hire us because they think we can add the most value. That is a focus that we drive through the organization across the board. It is embedded in our business development strategy that we want to help our clients be successful, and we want to help them from a financial perspective, achieve their objectives. Neil, you want to add some comments?

Speaker #1: So, the reason I think we do so well on the pricing side is because we've tried to build relationships with clients, and the reason they hired us isn't necessarily because we're the lowest-cost provider.

Speaker #3: Thanks.

Speaker #4: So I would say, there's a couple of factors involved. First of all, we know these firms very well. So I-I'll, I'll I'm gonna highlight several of the firms that have joined us.

Speaker #4: So Zander Folkman, they are not just a talent management firm. They are the benchmark of talent management firms. Unfortunately, Jack passed away about three or four weeks ago.

Speaker #1: They hire us because they think we can add the most value, and that's a focus that we drive through the organization across the board.

Speaker #1: It's embedded in our business development strategy, that we want to help our clients be successful and we want to help them from a financial perspective achieve their objectives.

Speaker #4: But they have a very deep bench, and Joe is a superstar. Those two individuals have written 21 books on the subject. They are the standard.

Speaker #1: Neil, do you want to add some comments?

Speaker #4: They are best in class. And it's totally consistent with our strategy around being in the C-suite. We wanna be where the real decision makers are.

Speaker #3: Come off mute. No, that's well said, Mark. Thank you. Nothing to add. Thanks for the question, Greg.

Neal Livingston: I come off mute. Well said, Mark, thank you. Nothing to add. Thanks for the question, Greg.

Speaker #2: Great, thanks for the color there. And just as a follow-up, maybe just add some color on the acquisitions this week. I think six of the eight were U.S.-based consulting firms, but you can correct that if that's wrong.

Greg Parrish: Great. Thanks for the color there. Just as a follow-up, maybe just add some color on the acquisitions this week. I think six of the eight were US-based consulting firms, but you can correct that if that is wrong. Just given how fast technology is evolving with AI, how do you judge the capabilities of these firms and what really gives you confidence in their ability to continue to grow as technology evolves? Thanks.

Speaker #4: We're not interested in dealing with the head of procurement. We wanna deal with the CEO. We wanna deal with the board. We wanna deal with the people that make the decisions around the company.

Speaker #2: Given how fast technology is evolving with AI, how do you judge the capabilities of these firms, and what really gives you confidence in their ability to continue to grow as technology evolves?

Speaker #4: So we have a forum to provide services to those groups to help them be successful. I was so impressed with them when we first started recruiting them, that we hired them to do a program for us.

Speaker #2: Thanks.

Speaker #4: They've none thou now done a program for 75 of our partners. So it's a group that we know very well. Amy Daniels out of Chicago, Amy used to work at Anderson.

Speaker #1: So I would say there's a couple of factors involved. First of all, we know these firms very well. So I'm going to highlight several of the firms that have joined us.

Mark Vorsatz: Well, I would say, there is a couple of factors involved. First of all, we know these firms very well. I am going to highlight several of the firms that have joined us. Zenger Folkman, they are not just a talent management firm. They are the benchmark of talent management firms. Unfortunately, Jack passed away about three or four weeks ago, but they have a very deep bench, and Joe is a superstar. Those two individuals have written 21 books on the subject. They are the standard. They are best-in-class, and it is totally consistent with our strategy around being in the C-suite. We want to be where the real decision-makers are. We are not interested in dealing with the head of procurement. We want to deal with the CEO. We want to deal with the board.

Speaker #1: So Zander Folkmann, they are not just a talent management firm. They are the benchmark of talent management firms. Unfortunately, Jack passed away about three or four weeks ago.

Speaker #4: Amy has a very close relationship with Rosa DeLuna, who is the head of our Chicago office. In fact, their husbands were roommates together in college.

Speaker #4: So this isn't like dialing for dollars here, where we said, "Well, geez, let's go talk to somebody." We have a long-time relationship. Her firm out of Chicago is also in the talent management space and gives a lot of depth.

Speaker #1: But they have a very deep bench and Joe is a superstar. Those two individuals have written 21 books on the subject. They are the standard.

Speaker #1: They are best-in-class, and it's totally consistent with our strategy around being in the C-suite. We want to be where the real decision-makers are.

Speaker #4: SPR, Rob, we've talked to for a long time. Joe Karczewski, one of our best partners, it's been a client of Joe's for over 30 years.

Speaker #1: We're not interested in dealing with the head of procurement. We want to deal with the CEO. We want to deal with the board. We want to deal with the people who make the decisions around the company.

Speaker #4: Long-time relationship. I've spent a fair amount of time with, with Rob and working through some of the technical aspects of the deal. We traded two or three notes today.

Mark Vorsatz: We want to deal with the people that make the decisions around the company so we have a forum to provide services to those groups to help them be successful. I was so impressed with them when we first started recruiting them that we hired them to do a program for us. They have now done a program for 75 of our partners. It is a group that we know very well. Amy Daniels out of Chicago. Amy used to work at Andersen. Amy has a very close relationship with Rosa De Luna-Frede, who is the head of our Chicago office. In fact, their husbands were roommates together in college. This is not like dialing for dollars here where we said, "Well, geez, let us go talk to somebody." We have a long-time relationship. Her firm out of Chicago is also in the talent management space and gives a lot of depth.

Speaker #1: So we have a forum to provide services to those groups to help them be successful. I was so impressed with them when we first started recruiting them, that we hired them to do a program for us.

Speaker #4: Because in every deal, we're giving RSUs to the managers and directors as a retention tool, but also because we want these people to participate in the financial upside of the business.

Speaker #1: They've now done a program for 75 of our partners, so it's a group that we know very well. Amy Daniels out of Chicago—Amy used to work at Andersen.

Speaker #4: Strategically, what you will see while we will be opportunistic and we will continue to do deals in multiple jurisdictions, you'll see a focus on the US, North America, Canada, and Mexico.

Speaker #1: Amy has a very close relationship with Rosa DeLuna, who is the head of our Chicago office. In fact, their husbands were roommates together in college.

Speaker #4: We announced a deal with, Alonzo Montes firm in Mexico. I've known Alonzo for a very long time. They have been with us for 11 years.

Speaker #1: So this isn't like dialing for dollars here, where we said, well, geez, let's go talk to somebody. We have a long-time relationship. Her firm out of Chicago is also in the talent management space and gives us a lot of depth.

Speaker #4: Now, I've known his father much longer than that because his father started at Arthur Anderson in 1968. And his father and I were partners together at Arthur Anderson for 15 years.

Speaker #1: SPR, Rob, we've talked to for a long time. Joe Karczewski, one of our best partners, has been a client of Joe's for over 30 years.

Mark Vorsatz: SPR, Rob, we've talked to for a long time. Joseph Karczewski, one of our best partners. It's been a client of Joe's for over 30 years. Long-time relationship. I've spent a fair amount of time with Rob and working through some of the technical aspects of the deal. We traded 2 or 3 notes today because in every deal, we're giving RSUs to the managers and directors as a retention tool, but also because we want these people to participate in the financial upside of the business. Strategically, what you will see, while we will be opportunistic and we will continue to do deals in multiple jurisdictions, you'll see a focus on the US, North America, Canada, and Mexico. We announced a deal with Alonso Montes' firm in Mexico. I've known Alonso for a very long time. They have been with us for 11 years.

Speaker #4: Okay? They share our values. They share our culture. We have an intimate familiarity. And what's already transpiring, we had a board call this morning, and I commented several I made several comments to our board related to the transactions that are generating transactions.

Speaker #1: Long-time relationship. I've spent a fair amount of time with Rob and working through some of the technical aspects of the deal. We traded two or three notes today.

Speaker #4: Alonzo and I have a call within the next two weeks with a law firm in Mexico that's approached us. That would like to merge into the business.

Speaker #1: Because in every deal, we're giving RSUs to the managers and directors as a retention tool, but also because we want these people to participate in the financial upside of the business.

Speaker #4: we've already. Identified what we think is the best private client service practice in Ireland that we're advancing conversations with because they have a relationship with our colleagues in Ireland.

Speaker #1: Strategically, what you will see is that, while we will be opportunistic and continue to do deals in multiple jurisdictions, you'll see a focus on the US, North America, Canada, and Mexico.

Speaker #4: our group in New Zealand sent me a note yesterday that they have two deals that have been approached since they've been announced that they're part of Anderson and part of the public company.

Speaker #1: We announced a deal with Alonzo Montes' firm in Mexico. I've known Alonzo for a very long time. They have been with us for 11 years.

Speaker #4: So what you'll see strategically is we will do deals in North America. Because of the relationship with the United States and Canada and Mexico.

Speaker #4: We obviously announced the UK. Kevin Hindley, who's the managing partner there, we've worked with him for a long time. I helped to recruit Kevin when he came to the firm.

Speaker #1: Now, I've known his father much longer than that because his father started at Arthur Andersen in 1968. And his father and I were partners together at Arthur Andersen for 15 years.

Mark Vorsatz: Now, I've known his father much longer than that because his father started at Arthur Andersen in 1968. His father and I were partners together at Arthur Andersen for 15 years. Okay? They share our values. They share our culture. We have an intimate familiarity. What's already transpiring, we had a board call this morning, and I made several comments to our board related to the transactions that are generating transactions. Alonso and I have a call within the next 2 weeks with a law firm in Mexico that's approached us that would like to merge into the business. We've already identified what we think is the best Private Client Services practice in Ireland that we're advancing conversations with because they have a relationship with our colleagues in Ireland.

Speaker #4: That group was originally started by a former Anderson person. Paul Finland, who has been affiliated with us for many years, used to run our law firm called Garrett's, where we had 1,000 lawyers in the UK.

Speaker #1: Okay? They share our values. They share our culture. We have an intimate familiarity with what's already transpiring. We had a board call this morning, and I made several comments to our board.

Speaker #4: at Arthur Anderson. These are people we've known for a long time. You will see more deals in France, Germany, Italy, Spain for obvious reasons.

Speaker #1: Regarding the transactions that are generating activity, Alonzo and I have a call within the next two weeks with a law firm in Mexico that's approached us.

Speaker #1: That would like to merge into the we think is the best private client service practice in Ireland that we're advancing conversations with because they have a relationship with our colleagues in Ireland.

Speaker #4: And we will be generating activity in, in Asia as well. Now, we can walk and talk and chew gum at the same time. So we can have a lot of conversations.

Speaker #4: So you'll see some other deals in Latin America. More deals in Africa. Interesting phenomenon is that in South Africa, they may allow in the region legal services to be provided outside of the country, where the regulatory issue is more like it might be in the States and the United States.

Speaker #1: Our group in New Zealand sent me a note yesterday that they have two deals that have been approached. Since they've been announced that they're part of Andersen and part of the public company.

Mark Vorsatz: Our group in New Zealand sent me a note yesterday that they have 2 deals that have been approached since they've been announced that they're part of Andersen and part of the public company. So what you'll see strategically is we will do deals in North America because of the relationship with the United States and Canada and Mexico. We obviously announced the UK. Kevin Hindley, who's the managing partner there, we've worked with him for a long time. I helped to recruit Kevin when he came to the firm. That group was originally started by a former Andersen person. Paul Finlan, who has been affiliated with us for many years, used to run our law firm called Garratts, where we had 1,000 lawyers in the UK at Arthur Andersen. These are people we've known for a long time.

Speaker #1: So what you'll see strategically is we will do deals in North America, because of the relationship with the United States and Canada and Mexico.

Speaker #4: So we see a lot of opportunity in these spaces we're looking at groups that we have a, a significant relationship with, where we believe that we can help leverage them into our business model and can add a lot of value to our clients.

Speaker #1: We obviously announced the UK, Kevin Hindley, who's the managing partner there. We've worked with him for a long time. I helped to recruit Kevin when he came to the firm.

Speaker #1: That group was originally started by a former Andersen person. Paul Finland, who has been affiliated with us for many years, used to run our law firm called Garrett's, where we had 1,000 lawyers in the UK.

Speaker #1: Great. Thanks very much for that. That color is very helpful. thank you again, and congrats again on the, really strong quarter. Thanks.

Speaker #2: Thanks, Greg. if I could say to the analysts, let's just ask one question this time around. And if we have time for follow-ups, we'll follow up.

Speaker #1: At Arthur Andersen, these are people we've known for a long time. You will see more deals in France, Germany, Italy, and Spain for obvious reasons.

Mark Vorsatz: You will see more deals in France, Germany, Italy, Spain for obvious reasons, and we will be generating activity in Asia as well. Now, we can walk and talk and chew gum at the same time, so we can have a lot of conversations. You'll see some other deals in Latin America, more deals in Africa. Interesting phenomenon is that in South Africa, they may allow in the region legal services to be provided outside of the country, where the regulatory issue is more like it might be in the States, in the United States. So we see a lot of opportunity in these spaces. We're looking at groups that we have a significant relationship with, where we believe that we can help leverage them into our business model and can add a lot of value to our clients.

Speaker #2: Thank you.

Speaker #3: The next question, comes from Andrew Nicholas with William Blair. Please proceed.

Speaker #1: And we will be generating activity in Asia as well. Now, we can walk and talk and chew gum at the same time. So we can have a lot of conversations.

Speaker #5: Hi, good afternoon. Appreciate you taking my question. wanted to ask on EBITDA and maybe margins broadly. another, like, really, really good quarter. In Q2, I understand you're reaffirming guidance on the top line, because maybe a little bit slower, cadence of, of deals.

Speaker #1: So you'll see some other deals in Latin America. More deals in Africa. Interesting phenomenon is that in South Africa, they may allow in the region, legal services to be provided outside of the country, where the regulatory issue is more like it might be in the States and the United States.

Speaker #5: But on, on the EBITDA front, I think even at the top end, it's implying a little bit of a, a step-down year over year in the back half, which doesn't sound consistent with kind of the mid-teens, mid-teens plus organic growth that, that your guidance implies.

Speaker #1: So, we see a lot of opportunity in these spaces. We're looking at groups that we have a significant relationship with, where we believe that we can help leverage them into our business model and can add a lot of value to our clients.

Speaker #5: So can you talk a little bit about the EBITDA guide, whether or not there's, there's some conservatism in there and in any potential impact from the deals you've announced?

Speaker #5: Thank you.

Speaker #4: Thanks, Andrew. So first of all, thank you for your note to Greg about you really nailed it about the inorganic revenue and that's why I wanted to address it on this call.

Speaker #2: Great, thanks very much for that. That color is very helpful. Thank you again, and congrats again on a really strong quarter. Thanks.

Greg Parrish: Great. Thanks very much for that. That color is very helpful. Thank you again, and congrats again on the really strong quarter. Thanks.

Speaker #3: Thanks, Greg. If I could say to the analysts: Let's just ask one question this time around, and if we have time for follow-ups, we'll follow up.

Greg Vistica: Thanks, Greg. If I could say to the analyst, let's just ask one question this time around, and if we have time for follow-ups, we will follow up. Thank you.

Gregory Vistica: Thanks, Greg. If I could say to the analyst, let's just ask one question this time around, and if we have time for follow-ups, we will follow up. Thank you.

Speaker #4: I think what's really exciting is these are just timing issues for us. Okay? A-and some of the countries, it just takes a little bit more time to get deals done because we're actually in some markets, we are creating the strategy.

Speaker #3: Thank you.

Speaker #4: The next question comes from Andrew Nicholas with William Blair. Please proceed.

Operator: The next question comes from Andrew Nicholas with William Blair. Please proceed.

Speaker #5: Hi, good afternoon. I appreciate you taking my question. I wanted to ask about EBITDA and maybe margins more broadly. Another really, really good quarter. In Q2, I understand you reaffirmed guidance on the top line because of maybe a little bit slower cadence of deals.

Andrew Nicholas: Hi, good afternoon. Appreciate you taking my question. Wanted to ask on EBITDA and maybe margins broadly. Another really good quarter in Q2. I understand you reaffirmed guidance on the top line because maybe a little bit slower cadence of deals. But on the EBITDA front, I think even at the top end, it is implying a little bit of a step-down year-over-year in the back half, which does not sound consistent with kind of the mid-teens, mid-teens plus organic growth that your guidance implies. Can you talk a little bit about the EBITDA guide, whether or not there is some conservatism in there and any potential impact from the deals you have announced? Thank you.

Speaker #4: So getting regulatory issues, even approved in Canada, took us three or four months to get that approved. yes, I will say that Neil advocated, increasing our guidance on adjusted EBITDA, and I said no.

Speaker #4: Okay? Does that mean I'm any less bullish about it as I've shared with you before? We haven't borrowed money since the first quarter of 2008, since we went private.

Speaker #5: But on the EBITDA front, I think even at the top end, it's implying a little bit of a step-down year over year in the back half, which doesn't sound consistent with kind of the mid-teens, mid-teens-plus organic growth that your guidance implies.

Speaker #4: Okay? I'm a conservative guy. And while I am very bullish on our third quarter, and I think you'll see an increase in our adjusted EBITDA on the third quarter 'cause it's clearly every year our best quarter.

Speaker #5: So can you talk a little bit about the EBITDA guide? Whether or not there's some conservatism in there and any potential impact from the deals you've announced?

Speaker #4: We're gonna continue to be relatively modest about how we communicate things. you know, I had played when I was younger, I played football in high school and college.

Speaker #5: Thank you.

Speaker #4: Thanks, Andrew. So, first of all, thank you for your note to Greg—you really nailed it about the inorganic revenue, and that's why I wanted to address it on this call.

Mark Vorsatz: Thanks, Andrew. First of all, thank you for your note to Greg about you really nailed it about the inorganic revenue, and that's why I wanted to address it on this call. I think what's really exciting is these are just timing issues for us. In some of the countries, it just takes a little more time to get deals done because we're actually, in some markets, we are creating the strategy. Getting regulatory issues even approved in Canada took us 3 or 4 months to get that approved. I will say that Neal advocated increasing our guidance on Adjusted EBITDA, and I said no. Does that mean I'm any less bullish about it? As I've shared with you before, we haven't borrowed money since Q1 2008, since we went private. I'm a conservative guy.

Speaker #4: And when our team scored a touchdown, I didn't give any high fives. I looked around on the field to see if there were any flags.

Speaker #4: And then I ran down again on the kickoff team. We have a lot more work to do. Now, do am I any less bullish?

Speaker #4: I think what's really exciting is that these are just timing issues for us, okay? And in some of the countries, it just takes a little bit more time to get deals done, because actually, in some markets, we are creating the strategy.

Speaker #4: I'm even more bullish. We've had two outstanding back-to-back months. Far exceeded my expectations. when we gave guidance at 13% for the second quarter, that was conservative.

Speaker #4: So, getting regulatory issues—even approved in Canada—took us three or four months to get that approved. Yes, I will say that Neil advocated increasing our guidance on adjusted EBITDA, and I said no.

Speaker #4: Did I think we'd come in at 23.7? if you had said to me in May, take the over-under on 23.7, I would have been a little bit balanced in my view.

Speaker #4: Okay? Does that mean I'm any less bullish about it, as I've shared with you before? We haven't borrowed money since the first quarter of 2008, since we went private.

Speaker #4: Okay? So I would just say this. We're gonna continue to focus on those areas and improvement in the firm. We're not taking anything for granted.

Speaker #4: Okay? I'm a conservative guy. And while I am very bullish on our third quarter and I think you'll see an increase in our adjusted EBITDA on the third quarter because it's clearly every year our best quarter.

Speaker #4: We get up every day and we I always say to people what I do for a living is I pound rocks. And I just get up early and I work late and we pound rocks and we're gonna continue to give our clients the best-in-class service that we can.

Mark Vorsatz: While I am very bullish on our Q3, and I think you'll see an increase in our Adjusted EBITDA in Q3 because it's clearly every year our best quarter, we're going to continue to be relatively modest about how we communicate things. When I was younger, I played football in high school and college, and when our team scored a touchdown, I didn't give any high fives. I looked around on the field to see if there were any flags. Then I ran down and got on the kickoff team. We have a lot more work to do. Am I any less bullish? I'm even more bullish. We've had two outstanding back-to-back months. Far exceeded my expectations. When we gave guidance at 13% for Q2, that was conservative. Did I think we'd come in at 23.7?

Speaker #4: We're going to continue to be relatively modest about how we communicate things. I had played when I was younger, I played football in high school and college and when our team scored a touchdown, I didn't give any high fives.

Speaker #4: And fortunately, our clients have been very generous with us in rewarding us with new business and new business opportunities. And so Andrew, I will say I will volunteer.

Speaker #4: I looked around on the field to see if there were any flags. And then I ran down again on the kickoff team. We have a lot more work to do.

Speaker #4: That for some of the projections that we looked at multi-year, that we probably have 100 million of revenue that has joined us that will not hit in the 2026 numbers at all.

Speaker #4: Now, am I any less bullish? I'm even more bullish. We've had two outstanding, back-to-back months—far exceeded my expectations. When we gave guidance at 13% for the second quarter, that was conservative.

Speaker #4: 100 million of annualized revenue. So as you guys evaluate or re-evaluate your projections, you should think about that. And you should probably also understand that, we have quite a few conversations going.

Speaker #4: Did I think we'd come in at 23.7? If you had said to me in May, take the overrider on 23.7, I would have been a little bit balanced in my view.

Mark Vorsatz: If you had said to me in May, "Take the over-under on 23.7," I would have been a little bit balanced in my view. I would just say this, we're going to continue to focus on those areas of improvement in the firm. We're not taking anything for granted. We get up every day and I always say to people what I do for a living is I pound rocks, and I just get up early and I work late and we pound rocks, and we're going to continue to give our clients the best-in-class service that we can. Fortunately, our clients have been very generous with us in rewarding us with new business and new business opportunities.

Speaker #4: I can't guarantee anything. What I would say, realistically, is I would be disappointed if we didn't sign another 8 to 10 deals between now and the end of the year.

Speaker #4: Okay? So I would just say this, we're going to continue to focus on those areas and improvement in the firm. We're not taking anything for granted.

Speaker #4: I think we're at a point where we can do two or three deals a month. It's not every month. Some months we get four or five.

Speaker #4: We get up every day and I always say to people, what I do for a living is I pound rocks. And I just get up early and I work late and we pound rocks and we're going to continue to give our clients the best in class service that we can.

Speaker #4: Some we don't get any. But I think that's a realistic benchmark for us to consider 'cause we're adding more resources in this area. And in some countries where we built the prototype, it's much easier for us to do a second and a third deal in that country.

Speaker #4: And fortunately, our clients have been very generous with us in rewarding us with new business and new business opportunities. And so, Andrew, I will say—I will volunteer—that for some of the projections that we looked at, multi-year, we probably have $100 million of revenue that has joined us that will not hit in the 2026 numbers at all.

Mark Vorsatz: Andrew, I will say, I will volunteer that for some of the projections that we looked at multi-year, that we probably have 100 million of revenue that has joined us that will not hit in the 2026 numbers at all, 100 million of annualized revenue. As you guys evaluate or reevaluate your projections, you should think about that. You should probably also understand that we have quite a few conversations going. I can't guarantee anything. What I would say, realistically, is I would be disappointed if we didn't sign another 8 to 10 deals between now and the end of the year. I think we're at a point where we can do 2 or 3 deals a month. It's not every month. Some months we get 4 or 5, some we don't get any.

Speaker #4: And the process is much quicker.

Speaker #2: Thanks, Martin.

Speaker #3: The next question, comes from Kevin McVee with UBS. Please proceed.

Speaker #6: Great. Thanks so much. Obviously, a, a lot to like here. Mark, I think one of the it's hard to say understated, but understated parts of the story is, is the client success you have, right?

Speaker #4: $100 million of annualized revenue. So, as you guys evaluate or re-evaluate your projections, you should think about that. And you should probably also understand that we have quite a few conversations going.

Speaker #6: And maybe help us understand why you continue to add at such a high level, you know, my sense is there's probably some incubation that that's kind of perpetual.

Speaker #6: But help us understand that client ad motion a little bit.

Speaker #4: I can't guarantee anything. What I would say, realistically, is I would be disappointed if we didn't sign another 8 to 10 deals between now and the end of the year.

Speaker #4: So, so I would say, Kevin, some of it's our frame of reference. Some of it's orientation. If you look at the groups that joined us and if you look at the original group, we had to go get business to survive.

Speaker #4: I think we're at a point where we can do two or three deals a month. It's not every month—some months we get four or five.

Speaker #4: Okay? you know, when I was a partner at Arthur Anderson, I used to say most of our partners thought business development was answering your telephone.

Speaker #4: Some we don't get any. But I think that's a realistic benchmark for us to consider because we're adding more resources in this area. And in some countries where we've built the prototype, it's much easier for us to do a second and a third deal in that country.

Mark Vorsatz: I think that's a realistic benchmark for us to consider because we're adding more resources in this area. In some countries where we've built the prototype, it's much easier for us to do a second and a third deal in that country, and the process is much quicker.

Speaker #4: Okay? we're not in that position. We're never gonna be in that position. We're always gonna have an edge. And we go out and we hustle.

Speaker #4: Okay? And now we've got a responsibility not just to each other and to our people, but we got a responsibility to our investors. And so we are putting more and more energy you know, what I've said my strategy initially was let's build the platform.

Speaker #4: And the process is much quicker.

Speaker #3: Thanks, Martin.

Andrew Nicholas: Thanks, Mark.

Speaker #4: The next question comes from Kevin McVee with UBS. Please proceed.

Operator: The next question comes from Kevin McVeigh with UBS. Please proceed.

Speaker #4: We checked that box. We got 1,100 locations. We started with six. Many of those groups will end up becoming part of the public company.

Speaker #6: Great, thanks so much. Obviously, there’s a lot to like here. Mark, I think one of the—it's hard to say understated, but understated parts of the story is the client success you have, right?

Kevin McVeigh: Great. Thanks so much. Obviously, a lot to like here. Mark, I think one of the, it's hard to say understated, but understated parts of the story is the client success you have, right? Maybe help us understand why you continue to add at such a high level. My sense is there's probably some incubation that's kind of perpetual, but help us understand that client add motion a little bit.

Speaker #4: The second was let's build out content. We're probably 50% of the way there. my anticipation is that Anderson Consulting organically in the second half of next year should be in the black.

Speaker #6: And maybe help us understand why you continue to add, at such a high level, my sense is there's probably some incubation that's kind of perpetual.

Speaker #4: We're hoping global mobility will be in the black in 2028. We're continuing to make continued investments in those areas because we think we can differentiate ourselves in the marketplace.

Speaker #6: But help us understand that client ad motion a little bit.

Speaker #7: So I would say, Kevin,

Mark Vorsatz: I would say, Kevin, some of it's our frame of reference, some of it's orientation. If you look at the groups that have joined us, and if you look at the original group, we had to go get business to survive. When I was a Partner at Arthur Andersen, I used to say most of our partners thought business development was answering your telephone. We're not in that position. We're never going to be in that position. We're always going to have an edge, and we go out and we hustle. And now we've got a responsibility not just to each other and to our people, but we've got a responsibility to our investors. We are putting more and more energy. What I've said my strategy initially was, let's build a platform. We checked that box. We've got 1,100 locations. We started with 6.

Speaker #4: Some of it's our frame of reference. Some of it's orientation. If you look at the groups that joined us, and if you look at the original group, we had to go get business to survive.

Speaker #4: I've already got two or three new businesses in mind. And we're very gradually gonna add resources in those because we're at a balanced profitability with investment.

Speaker #4: Okay? When I was a partner at Arthur Andersen, I used to say most of our partners thought business development was answering your telephone. Okay?

Speaker #4: And then I'd say the third thing that's a little bit different is, you know, we're not selling commodities. we're not selling audits. We're not selling large-scale tax compliance engagements.

Speaker #4: We're not in that position. We're never going to be in that position. We're always going to have an edge, and we go out and we hustle.

Speaker #4: Okay? And now we've got a responsibility not just to each other and to our people, but we've got a responsibility to our investors. And so we are putting more and more energy what I've said my strategy initially was, let's build the platform.

Speaker #4: What we're trying to do is build relationships with clients, establish value, sell value, and get paid something fair for it. Very easy for us in the US to quantify tax benefit.

Speaker #4: We check that box. We get 1,100 locations. We started with six. Many of those groups will end up becoming part of the public company.

Speaker #4: I had a situation just recently where a client of mine it's a family office. we identified an area of opportunity. That will be very extensive engagement for us.

Mark Vorsatz: Many of those groups will end up becoming part of the public company. The second was, let's build out content. We're probably 50% of the way there. My anticipation is that Andersen Consulting organically in the H2 of next year should be in the black. We're hoping Global Mobility will be in the black in 2028. We're continuing to make continued investments in those areas because we think we can differentiate ourselves in the marketplace. I've already got 2 or 3 new businesses in mind, and we're very gradually going to add resources in those because we're going to balance profitability with investment. Then I'd say the third thing that's a little bit different is we're not selling commodities. We're not selling audits. We're not selling large-scale tax compliance engagements.

Speaker #4: The second was, let's build out content. We're probably 50% of the way there. My anticipation is that Andersen Consulting, organically, in the second half of next year, should be in the black.

Speaker #4: But we think we can save that client $200 million. And I think the cost for that client are gonna end up being somewhere between 3 and 5 million dollars.

Speaker #4: We're hoping global mobility will be in the black in 2028. We're continuing to make investments in those areas because we think we can differentiate ourselves in the marketplace.

Speaker #4: And it will be more along the lines of a flat fee for services. The principle is an entrepreneur. And if I were to say to him, "Hey, you've got an opportunity to make 50 to 1 on your investment in 12 months.

Speaker #4: I've already got two or three new businesses in mind, and we're very gradually going to add resources in those, because we're at a balanced profitability with investment.

Speaker #4: What do you think?" He's not gonna ask me what my billing rate is or how fast I read. So a lot of that is our client selection and the types of services that we provide which is why as you've observed over the last five or six years that you've had information for, we continue to be able to improve our pricing because it's the types of services that we're providing.

Speaker #4: And then I'd say the third thing that's a little bit different is we're not selling commodities. We're not selling audits. We're not selling large-scale tax compliance engagements.

Speaker #4: What we're trying to do is build relationships with clients, establish value, sell value, and get paid something fair for it. It's very easy for us in the U.S. to quantify tax benefit.

Mark Vorsatz: What we're trying to do is build relationships with clients, establish value, sell value, and get paid something fair for it. Very easy for us in the US to quantify tax benefit. I had a situation just recently where a client of mine, it's a family office, we identified an area of opportunity that will be very extensive engagement for us, but we think we can save that client $200 million. I think the cost for that client are going to end up being somewhere between $3 million and $5 million, and it will be more along the lines of a flat fee for services. The principal is an entrepreneur.

Speaker #6: Superb. Thank you.

Speaker #4: Thanks, Kevin. Appreciate it.

Speaker #3: The next question comes from Toby Summer with Truist. Please proceed.

Speaker #4: I had a situation just recently where a client of mine—it's a family office—we identified an area of opportunity that will be a very extensive engagement for us.

Speaker #4: Thanks. I wanted to talk to you about your, senior hires or organic hires. And if you could talk about the, the profile of, where they're coming from and what you see their, revenue generation look like and how it compares to the existing, staff at that level.

Speaker #4: But we think we can save that client $200 million. And I think the cost for that client are going to end up being somewhere between 3 and 5 million dollars.

Speaker #4: Resident within the organization. So Toby, what we, we look at two different areas. One is entry level. These are typically people coming out of graduate school or undergraduate.

Speaker #4: I would say today, probably about 70% of our in our new hires have interned with us. And this is a program that we implemented about 15 years ago.

Speaker #4: I did the initial program. Dan DePauli now does it. We do what we call an intern connect program in St. Charles every year. It's a great way to get all of our summer interns together.

Speaker #4: We typically have somewhere probably around 300 to 400 people. And all of those people, we've had an opportunity to work with. And I would say we probably give offers to about 75% of those people.

Speaker #4: And we probably get about an 80% acceptance rate or better. So at the entry level, we've done a much better job of getting people on board that are known quantities.

Speaker #4: about 15 years ago, I analyzed some information. And I found that our, our retention rate for people who had interned with us were about was about 50% better than the retention rate of people that did not intern with us.

Speaker #4: On the lateral side, it's more driven by focus and needs. we're expanding our tax controversy project, practice. we're in discussions with a lateral hire from a major, US law firm.

Speaker #4: I'm not sure if we're gonna do that deal. I'm not sure if we'll be able to get it done. But we've targeted an area there where we see a lot of opportunity.

Speaker #4: Where we can go to clients and represent them in a way that will quantify for a tax benefit that many of the accounting firms don't do extensive tax controversy work.

Speaker #4: Maybe they handle an audit. On the federal level, they don't do appeals. On the f on the state level, they don't do appeals. And they certainly don't do tax litigation.

Speaker #4: So more of that, Toby, is driven by our targeting what our needs are. In our internal call yesterday, two of the areas I focused on, Silicon Valley and I could just say Silicon Valley, Silicon Valley, and Silicon Valley.

Speaker #4: Because the marketplace is reminding me right now of 1998. if you've seen the housing prices, number one market for rent increases in the United States is San Francisco.

Speaker #4: Explosive there was an article in the in the paper about three months ago, the San Francisco Chronicle, that said unless you're prepared to overbid on a house for a million dollar by a million dollars or more, don't waste your time writing an offer.

Speaker #4: This the explosion in artificial intelligence, about 50 of the top 100 companies in the world are in Silicon Valley. And then the other market that I find particularly interesting we talked about this yesterday.

Speaker #4: We have not given it near the level of attention we should. Is a huge migration of wealth to Florida. And we've got three different locations in Florida that we see that as a market that we're not serving adequately.

Speaker #4: We see adding additional resources there. There was a recent article some of these numbers are staggering. The potential transition from this generation of wealth is 125 trillion dollars.

Speaker #4: We see ourselves at a, a, a significant competitive advantage in servicing that market. And it and the value that we think we can bring to the relationships it tends not to be price sensitive.

Speaker #4: Because we're able to quantify cost benefit. So one of the things we're gonna do on Sunday in addition to, to moving forward with implementing a more comprehensive business development program for selected directors and managers is to talk specifically about which markets in the United States we wanna prioritize adding resources and making more investments.

Speaker #4: The interesting thing is if you looked at our top five offices in terms of maturity, that would be Southern California, Northern California, Chicago, Boston, and New York.

Speaker #4: The margins the worst margin is 27.7%. The best margin is Northern California at 38.8%. We see as we mature some of the markets in Texas and Florida, build out further in Seattle, we see moving the margin higher.

Speaker #4: Because we think we'll get more critical mass, more economies of scale. And more resources. Thanks for the question, Toby.

Speaker #6: Thank you.

Speaker #3: Next question comes from Mark McConn with Baird. Please proceed.

Speaker #5: Hey, good afternoon. And let me add my congratulations. Terrific, organic performance. I was wondering if we could if we could, focus on the, on the inorganic growth in terms of just the, the range of acquisitions that you've recently announced.

Speaker #5: I know that you know them extremely well, Mark. I was wondering if you could give us a little bit more feel in terms of, you know, what the growth rates have been with these various organizations.

Speaker #5: Either you know, as a consolidated group or individually. and, and also if you could talk a little bit about the terms, that you that you purchased them under.

Speaker #5: did it follow, you know, kind of the, the blueprint that we've talked about before? in terms of, cash upfront relative to, SBC and earn-outs, etc.?

Speaker #4: Yeah. I would say for the most part, the basic concept's the same. We made an exception for the UK. Because the UK over the last five years has had annual revenue growth of over 30%.

Speaker #4: Now, a lot of that work is coming from the network. I would say probably 85% of their work is coming from the network. We see the UK for us as being a potential huge market.

Speaker #4: We currently have about eight affiliations in consulting. We're starting discussions with those groups about merging them into the public company. I would suggest that probably over the next couple of years, we will focus on adding a law firm there.

Speaker #4: So while today in the UK we have about 20 million of revenue in tax, I view that as a market potential between tax, legal, and consulting.

Speaker #4: Down the road as big as high as 600 million. Okay? So we did that deal at 12 times earnings. I'm very transparent. Everybody knows the deals.

Speaker #4: Most of the deals are at 10 times earnings. we accommodate in some ways where maybe somebody is a little bit older. and wants a little cash sooner.

Speaker #4: But the basic construct, Mark, is the same for every deal. Now, as we view these deals, we view them at in some markets as, a, a an ability to add other groups systematically.

Speaker #4: So for example, we have active conversations with two consulting groups in Mexico. our law firm that we just added in Mexico, I've asked both the two consulting groups that we would both waive conflicts.

Speaker #4: Because we could streamline those deals and get them on board. One of those consulting groups, since they've been affiliated with us, has already done three acquisitions of their own.

Speaker #4: And so we see the ability to leverage that presence in those markets. As far as the margins go, what I can speak more authoritatively with is what we're doing in, in tax and legal globally.

Speaker #4: The growth rates last year were a little over 13% collectively. In revenue. So not much different than the United States. The margins are pretty much all over the map.

Speaker #4: But as part of the deal, we have a contractual agreement on what their compensation in total can be as a percentage of revenue. And that is what drives the economics of the of the transaction.

Speaker #4: So if you say you wanna continue to take most of the money out, then it's probably a, a lower acquisition price that we're paying.

Speaker #4: If you want to say, hey, last year I made 500 grand, pay me 300 and that's a sustainable partner compensation in our market. And we're gonna capitalize on an after-tax basis the other 200 grand.

Speaker #4: We do that. And, and our teams now we've been through enough deals now. We've signed 16 deals. We've closed 8 of those. My hope and desire is the other 8 will get closed by the end of the year.

Speaker #4: But probably later in the fourth quarter. That's why we're not gonna have a lot of revenue from those deals. But as I indicated earlier, there's probably 100 million of revenue at least that will be from existing deals that we've already signed that will come in next year that we won't have in 2026.

Speaker #4: So as you think about your projections, you might wanna take that into consideration. Did I get your question adequately, Mark?

Speaker #5: You did. Thank you.

Speaker #3: The next question comes from Jason Haas with Wells Fargo. Please proceed.

Speaker #7: Hey, good afternoon. And thanks for taking my question. I'm curious if you could talk more about how you're integrating, technology and AI, into your process.

Speaker #7: Thank you.

Speaker #4: Sure. Thanks, Jason. So as I think I've mentioned before, we started off, about a year ago. We entered into an agreement with the University of San Francisco.

Speaker #4: We have now, they have an agreement with An with Anthropic, we also are using Accordance in that program. We've done four pilot programs. We did one in November, one in December.

Speaker #4: We debriefed on those. We worked with the University of San Francisco on restructuring those. Jeff Malo has been running that program and doing a terrific job.

Speaker #4: We launched our internal program on May 8th. We've now trained, I think, over 500 of our people. It's a systematic process. It's both a technical and non-technical program where you actually are, are given, projects to do, both technical and non-technical.

Speaker #4: we're seeing this in our system. I had a technical matter last week that I used it for, which was a project that we have a fixed fee on.

Speaker #4: It has to do with the liquidation of certain trusts. And I was able, able to identify a strategy on how to do that liquidation.

Speaker #4: And I used, artificial intelligence to refine the, the technical sources and then literally an hour I was able to draft a memorandum with all the technical sources that normally would have taken me 6, 8, 10 hours.

Speaker #4: Well, we're doing systematically we will move more of this to fixed pricing or project pricing. Now, we're always gonna be in time and materials.

Speaker #4: Because we're a relationship business. And because we spend time with our clients so there will always be some component of our practice time and materials.

Speaker #4: However, I think we'll see systematic improvement. Because more of our work is going to fixed fee. I have a current situation right now where we're gonna do over 50 valuation projects for a client.

Speaker #4: And those valuation projects are all gonna be done on a fixed fee basis. And so we wanna share the efficiency with our client, but we don't wanna

Speaker #1: Want to give away the efficiencies We think there's a way to do things much more efficient that the client saves money , and we are more profitable .

Speaker #1: And that's a program that we're going to systematically implement . I'm hoping that we'll be done with it in the US by the end of this year .

Speaker #1: I'm hoping that after October 15th , which is our heavy recurring compliance time period , that we will continue to advance our our strategic approach on how we implement that .

Speaker #1: And it's really going to be implemented , in my opinion , in three different ways . One is identifying client opportunities . And I've used this as an example before cost segregation studies .

Speaker #1: Anybody who's done an acquisition or improvement over $50 million is a huge client opportunity for cost SEG study . I have one client .

Speaker #1: We did a project for in December that generated a $19.9 million deduction for the client . So the client didn't have to pay any taxes last year Huge value add .

Speaker #1: So one is identifying those those opportunities . The second is using artificial intelligence to source solutions . And then the third component is using artificial intelligence for implementation .

Speaker #1: I sent out a note to our partners today that was forwarded to me by somebody that runs a litigation support practice . That's part of our US affiliation about some of the challenges .

Speaker #1: The big four are having , because some of the artificial intelligence solutions that are being implemented are not being done with much supervision .

Speaker #1: And I can tell you , there are two firms I'm aware of outside of the United States that have been fine because of hallucinations in their work product .

Speaker #1: So we think that it's not that artificial intelligence is going to replace us . We think that people who understand artificial intelligence are going to be people that are going to drive the marketplace .

Speaker #1: So it's a combination . There's a human component . There's a technology component , and it's something we're very focused on . We view it as a tailwind , not as a headwind .

Speaker #1: We see it as an opportunity for us because we're not running these massive projects where you load up a bus and send people out on an audit .

Speaker #1: Okay . As I've said on numerous conversations before , in the next five years , I think our business model will go from six professionals per partner to three and a half professionals per partner .

Speaker #1: And there will be a lot more profitable Our partners will be a lot more productive in terms of their charge ability or their client work .

Speaker #1: We think we'll have a flatter pyramid , and I've gone through with our board about 3 or 4 months ago , and analysis on that to show them how it will drive our profitability geometrically , because we make four times as much profit on a director as we do on a new associate .

Speaker #1: So our pyramid will continue to evolve , but we don't have 500 000 people in India that are doing compliance type services I think as you've seen with some of the layoffs , many of the larger firms , they've got a challenge .

Speaker #1: They've got to figure out how to deploy this . I don't know what they're going to do with all these people , particularly on some of the leverage types of services they have So we think we're well positioned .

Speaker #1: Jeff has done a terrific job . He is all over this . We have regular conversations . He's on our U.S. internal board .

Speaker #1: He talked about this yesterday on our call . We think we're pretty well position . We don't we don't overestimate where we are .

Speaker #1: But we do think we're making systematic progress . And we're measuring it

Speaker #2: That's great . Very helpful color . Thank you

Speaker #3: Thank you . At this time , I would like to turn the call back to management for closing comments

Speaker #4: Thank you . LaTonya Mark . Neil , would you like to make some closing comments ?

Speaker #1: I just want to thank everybody for attending . I want to thank continue to thank our partners and our people because this is a people business .

Speaker #1: Our product are our people and they enable us to be successful . I want to thank the investors for the loyalty that you've extended .

Speaker #1: I want to thank the analysts because I've learned a lot from you guys . I've done a lot of transactions over 40 years .

Speaker #1: I've done probably over 500 . I've done over 500 transactions just in our firm . And but it's continued to be a learning process .

Speaker #1: I want to thank our directors . We have an all star board . Our board is superb . We had a call earlier today .

Speaker #1: We are blessed to have such talented people . All five of our outside directors understand the profession's . It's a refreshing conversation to have with them and they challenge me and I love challenges .

Speaker #1: I love to be challenged and they're going to continue to challenge me . And I think we have a lot of opportunity ahead of us .

Speaker #1: Neil comments

Speaker #5: Yeah . Thanks , Mark . Great , great summary . I just want to appreciate everyone who's dialed in today . There's a lot of you on the line .

Speaker #5: We know that . And we really welcome your engagement . This is about building relationships with our investors . We're a people business and it's important that we we invest in and we build those relationships .

Speaker #5: So I really appreciate your engagement . Thanks very much

Speaker #4: Thank you everybody .