The Baldwin Insurance Group, Inc. (BWIN) Q1 2021 Earnings Report, Transcript and Summary

Greetings. Welcome to BRP Group Incorporated First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Austin Rock, Director of Strategy and Partnership. Thank you. You may begin.

Welcome to BRP Group's First Quarter 2021 Earnings Call. Today's call is being recorded. First quarter 2021 financial results supplemental information and Form 10-Q were issued earlier this afternoon and are available on the company's website, at ir.baldwinriskpartners.com. Please note that remarks made today may include forward-looking statements, including certain expectations related to COVID-19 and other matters. Forward-looking statements are subject to risks and uncertainties, and a variety of factors that may cause actual results to differ materially from those contemplated by such statements. For a more detailed discussion of those factors, please refer to the company's earnings release for this quarter and to our most recent SEC filings including our most recent Form 10-K, all of which are available on the BRP website. During the call today, the company may also discuss certain non-GAAP financial measures. For a reconciliation of these measures to the most closely comparable GAAP measures, please refer to the company's earnings announcement and supplemental information, both of which have been posted on the company's website at ir.baldwinriskpartners.com and can be found in the company's SEC filings. I will now hand the call to Trevor Baldwin, Chief Executive Officer of BRP Group.

Thank you, Austin. Good afternoon, everyone. Welcome to our first quarter of 2021 earnings call. We appreciate you taking the time to join us in your interest in BRP Group. We had another very strong quarter in Q1, generating more revenue in this single quarter than we reported for the entire full year of 2019. Continued momentum in the MGA of the Future led the way for this quarter's strong growth. We were also bolstered by strong early performance from the high-quality partner firms that joined us throughout 2020. In addition to accelerating trends during the quarter across all segments for core commissions and fees which excludes contingents and other income. For the quarter, we recorded total year-over-year revenue growth of 182% to $153 million and organic revenue growth of 14%. The MGA of the Future grew 56% during the quarter, and we remain incredibly excited about its trajectory, given the momentum that has thus far carried into the second quarter, and as we head into the summer months, historically, the MGA of the Future's seasonally strongest part of the year. We also successfully launched our new private flood insurance product in April. Across the balance of our business, momentum continues to build, particularly as we begin to lap COVID impacted months of 2020 as highlighted by double-digit year-over-year organic core commission revenue growth, which excludes contingents and other income during March in each of our operating groups. As a result of this momentum, which we saw continue into April, we currently expect high teens organic growth to the overall business in the second quarter, above our target 10% to 15% range. On the partnership front, closed deal activity was relatively light during the quarter as we anticipated. Partnership activity has picked up meaningfully. And our pipeline continues to gain momentum, as we have multiple signed letters-of-intent for deals in a broad range of sizes. Currently, we expect most of the deals under LOI today to have effective closing dates in third quarter. We remain committed to carving out an exclusive niche as the partner of choice for the industry's premier independent firms, maintaining an incredibly tight filter for evaluating partnership opportunities. We are focused only on firms we believe to be of uniquely high quality with strong track records of organic growth, because ultimately, this year's partnerships accrued in next year's organic growth. That's how we think about assessing partnership opportunities philosophically, but it also describes how the organic growth calculation works. It's worth noting that several of our high-quality partnerships in 2020 will enter the organic growth calculation in the next several months and the inclusion of firms like Rosenthal and Trinity Benefit in our organic growth calculation gives us added confidence in our organic growth expectations. Finally, we remained steadfastedly focused on continuing to thoughtfully invest for the future across our technology, infrastructure and talent base to build on our recent success. In closing, we're proud of the performance we've been able to generate thus far in 2021, and the significant momentum we were carrying into the second quarter, all of which is made possible by our exceptional colleagues, who continue to work tirelessly to deliver for our clients and stakeholders. To all of our colleagues, a huge thank you. You are the reason our business continues to be in the strongest position it has been in the firm's history. With that, I will turn the call over to Brad to go into more detail on our Q1 results.

Thanks, Trevor, and good afternoon to everyone on the call. For the first quarter, we generated revenue growth of 182% to $152.8 million. The revenue growth was driven once again by our hybrid growth model, namely outsized organic growth, combined with contributions from new partnerships. We once again generated double-digit organic revenue growth on a year-over-year basis, recording 14% organic growth for the quarter, thanks primarily to particularly strong performance from our Specialty segment, driven by the MGA of the Future, as well as accelerating trends during the quarter in all our segments. This was despite some headwinds in organic contingent income revenue across our Middle Market and Main Street segments. Given that partnerships are an important portion of our own ongoing growth strategy. In our regulatory filings, we also provide revenue metrics on an unaudited pro forma basis. This provides investors with a more apples-to-apples comparison, is it for 2021 partnerships, had been acquired on January 1, 2021. For the first quarter of 2021, unaudited pro forma revenue was $153.3 million. Unaudited pro forma information should not be relied upon as being indicative of the historical results that would have been obtained if the partnerships that occurred on that date, nor the results that may be obtained in the future. GAAP net income for the first quarter was $30.6 million or $0.32 per fully diluted share. Adjusted net income for the first quarter of 2021, which excludes share-based compensation, amortization, and other one-time expenses, was $42.5 million, or $0.44 per fully diluted share. A table reconciling GAAP net income to adjusted net income can be found in our earnings release in our 10-Q filed with the SEC. Adjusted EBITDA for the first quarter of 2021 rose 276% over the prior year period to $52.7 million. As a reminder in Q1 2020, we had $54.2 million in revenue. Thus, we almost generated as much adjusted EBITDA this Q1 as we did revenue last Q1. Adjusted EBITDA margin was 35% for the first quarter of 2021, compared to 26% in the prior year period. As a reminder, our adjusted EBITDA margins are seasonal in nature, with Q1 being the strongest quarter. We typically record lower margins throughout the balance of the year. For the second quarter, we would anticipate an adjusted EBITDA margin, approximately 150 to 200 basis points lower than the 16% we experienced in the same quarter of 2020, which is entirely timing related as a result of seasonality of the business changing given our M&A success. For the full year, we now expect 150 to 200 basis point margin increase in adjusted EBITDA margin relative to last year's 18%. Our MGA of the Future platform continues to outperform growing 56% during the quarter compared to the prior year period. The results were driven by continued growth in renters, and supplemented by the master tenant liability product we launched in the fourth quarter of 2020. As a reminder, our master tenant liability product allows property managers to identify tenants without renters insurance, and obtain insurance for their units. It's a particularly exciting product for us, given our multifamily expertise and existing client bases across both the MGA and our Middle Market business. Also related to the MGA of the Future, we successfully launched our new private flood product in April and continue to work on the launch of our Florida homeowners' product later this year. We don't anticipate flooded home to begin meaningfully contributing to growth in the MGA until 2022. But as we've previously stated, we believe our ability to launch additional products in the MGA continues to be a key component to our long-term success. And we will remain focused on doing so. Within renters' policies in force increased by over 41,000 from December 31, 2020 to 566,000 as of March 31, as compared to an increase of 27,000 over the same period last year. As of May 8 policies in force has increased further to approximately 582,000. Since our last earnings call on March 11, we also turned on an additional 250,000 units bringing the total unit count, in which our renter solution is available to roughly 8.5 million, providing a nice runway for continued future growth. Finally, we took advantage of our larger size and fantastic performance during a tough COVID economy, coupled with our revolving lenders willingness and increased our leverage covenants to 6 times versus 5 times. Today, this gives us additional margin of safety. And we thought accepting an offer to relax covenants is always in our shareholders best interest. With that, I will now turn the call over to Kris.

Thanks, Brad, and good afternoon, everyone on the call. A few closing remarks before we hit Q&A. In summary, we are excited about the trends we're seeing in the business. Q2 has started off with a potential to be one of our best, if not the best quarters ever, as a public company from an organic growth standpoint and in terms of meaningful progress in our partnership pipeline. We believe we are uniquely well positioned for comprehensive macroeconomic factors that should further support our relative performance, including a favorable insurance rate environment, the continued reopening in the broader economy, and the opportunity to be a beneficiary of anticipated tax legislation, both in that we are not a significant corporate taxpayer over the near-term, and in potential partners wanting to sell in front of capital gains tax increase. With that, I thank you for your time. We'll now open up the call for Q&A. Operator?

At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question is from Elyse Greenspan of Wells Fargo. Please state your question.

Hi, thanks. Good evening. My first question on, I guess, I'll start with on the margin side. So the margin came at in a good amount above expectations this quarter on, you guys were at 35%. I think you had guided it to around 30%. If you can just kind of spend a bit more time explaining, I guess, what lies to the upside this quarter? And if the first quarter was better, is there the potential for the out quarters of the year to potentially come in better than plan as well?

Hey, Elyse. Good evening. This is Trevor. I'll have Brad answer that.

Yeah, I would say, M&A continues to impact the seasonality of our business. As we said on the call, we expect 150 to 200 basis points of margin expansion over our 2020 actual adjusted EBITDA margin for the full year 2021. So I would not expect to see that continuing margin expansion through the balance of the year. Yes, that's it.

Okay, that's helpful. Then in terms of organic. You guys called out I think some contingent headwinds. Yet, it sounds like away from that the business is trending well per how you've seen organic to start the quarter. Is there any way you can give us the - to start the Q2, sorry? Is there any way you can give us a sense of the headwinds that you saw in the first quarter? And are those headwinds persisting embedded within your second quarter guide?

Hey, Elyse. We feel like those headwinds are fully behind us. As a reminder, a lot of the loss ratio dependent contingencies hit in the first quarter. What I would say is we're seeing accelerating trends across our business and in March and April, which are the first 2 months that are lapping COVID periods in the prior year. Specifically seeing double-digit organic growth of core commission revenue across all 4 of our operating groups in the month of March, giving us a lot of confidence around the performance of the business and why we feel good setting an expectation of high teens organic growth for the second quarter, which is the highest expectation we've set as a public company.

And so, within that high teens outlook for the second quarter, the organic - what is that assuming? Is it assuming you're maintaining the similar level of growth for the MGA of the Future? Or is there just a conservative assumption for that business embedded within that?

I'd say, there is a degree of conservatism across how we look at setting expectations across our business. And we continue to feel really good about the MGA of the Future delivering on our 40% organic growth target to the year. And that's how we think about setting expectations.

Okay, thanks for the color.

Yeah, thanks, Elyse.

Our next question is from Meyer shields of KBW. Please state your question.

Great, thanks. Good afternoon, everyone.

Hey, Meyer. How are you?

I'm sorry, I'm good. How are you, Trevor?

Doing well.

Can we talk to like the pieces that come into play for flood and Florida homeowners to become a more meaningful growth driver, because it sounds like that's expected in 2022? I'm not disputing that at all, obviously. But I just so understand, what has to happen internally and externally for growth to really accelerate?

Yeah, I'd say, Meyer on the flood side, we successfully launched the product in April. And we're kind of fine-tuning that product set to - and continuing to expand the distribution across our internal distribution force. And as we sit here today, remain very excited about the impact that will have on our business in 2022 and beyond. I think the external market dynamics are such that this solution is going to gain a lot of traction. On the home side, I think we're in a similar scenario. The primary success factor is getting the product launch. We re-filed the home product in April and have a - are confident we'll be in a position to get that formally launched in the back half of the year, positioning us incredibly well to provide a unique solution in the Florida marketplace is experiencing significant challenges, as you well know. So the summary is we have the distribution. We feel like the product is built very well to fit the needs and be well received in the target clientele that we have, and the external market dynamics are frankly going to create an environment where the ability to sell that product is going to be significant.

Okay, that's very helpful. Thanks. Again, switch topics, I know last quarter there was some discussion about employment numbers at your insured clients. [Should we get it up] [ph] in terms of how that trended over the course of the first quarter? And maybe what you're seeing so far in the second?

Yeah, so I think how that bleeds in is 2 of the 3 months in the first quarter, were lapping non-COVID periods for January and February. If I look at the combined impact of rate and exposure on our organic revenue results, for the quarter, it was plus 1.4%. But you should think about rate pulling that way up and exposure being meaningfully negative. And so, that played out in January and February as we lapped those COVID periods, as we lapped - or non-COVID periods. As we lapped our first COVID period in March, we saw the organic underlying kind of exposure trends and organic growth profile across our business accelerate meaningfully and we've seen that continue into April. And so, all of that pointing towards our growing confidence around the outsized performance, that we'll continue to see from the business over the balance of the year.

Okay, perfect. Thank you so much.

Thanks, Meyer.

Our next question is from Josh Shanker of Bank of America. Please state your question.

Hey, Josh.

Yeah. Good evening, everybody. How you're doing there?

Doing well. How about yourself?

Good, good. So I'm wondering what you can do in giving us some granularity on organic growth. Talking about benefits organic growth versus property and cash, the organic growth, organic growth from acquisitions, you did - obviously they acquired premiums for you, but those businesses have been growing at what pace they've been growing versus the pace of legacy businesses and whatnot. I mean, you can answer it anyway you want. But can you break it up into different sections, and then talk about the growth in different areas?

Yeah, absolutely, Josh. We'll hit some of that, I'm not going to dive into kind of specifics between benefits and property and casualty. But what I can tell you is the trends are accelerating across all of our segments, as we begin lapping the COVID period. As I mentioned earlier with Meyer, the impact of rate and exposure on the business for the quarter was plus 1.4%, rate pulling that meaningfully up, exposure pulling it meaningfully down. As we look at the core commission organic growth performance across the business, and take stepping aside from Medicare, it was high-single-digits to double-digits across Main Street, Middle Market, and Specialty and accelerating in March and into April. So feeling really good about the overall trends in that business, I'd say, specific to employee benefits, January tends to be the heaviest renewal period for that part of our business. That was lapping a non-COVID period. And so, you could expect a meaningful amount of the exposure pull down would have been seen in that January period, but overcome via the overall underlying growth in the business and clients. Specific to the 2020 partnerships, we continue to be very pleased with the overall performance of those businesses performing at or above on a macro level our budgeted expectations, which are double-digits in nature. I want to ask, Brad, also just provide a little bit more granularity around the overall revenue trends and seasonality we're seeing in those 2020 partnerships.

Yeah, thanks, Trevor. If you look at our actuals for Q1 and compare that to the pro forma Q1 that we've presented in our earnings supplement that the combination of purchase accounting and phasing of revenue under 606 resulted in a timing difference of about $11 million, which we expect to show up in Q3 and Q4. But as Trevor mentioned, our new partnerships very excited about their performance, they've performed in line with our expectations and our budget, which is reflective of double-digit organic growth.

And Josh, as a reminder, this is Kris. The partnerships are going to hit actual organic growth until the 12-month anniversary, but doing very well initially.

Thank you for the details. Can you talk about client engagement? And now we're in May, and the economy is opening, how is the day-to-day changing at, Baldwin, and maybe if it's not changing, we were always fully engaged, but maybe clients are more engaged and more willing to meet and whatnot? How are things evolving right now?

Yeah, Josh, we're certainly seeing the world reopen. Clients are more willing to get together in person, although, those trends differ regionally across the country. What I would tell you is the starkest change is that of the psychology of our clients. And there is growing momentum around the overall economic tailwinds that being provided by reopening, and many of our clients being very bullish on the trends in their overall businesses to the balance of the year. To that point, in particular, is noteworthy because BRP and insurance and financial services broadly, we are levered meaningfully to the reopening economy. And as our clients begin to rerate up their underlying exposure units that are used to price and ultimately set insurance costs, that flows through in a positive manner for our overall business. And so we feel like we are incredibly well positioned and levered to the growing tailwinds that we're seeing across the economy. And we're certainly sensing that positivity in the psychology of our clients, broadly speaking.

If I can get one more in, can you talk about the potential for that to play into the Medicare benefits business? I mean, is there a benefit to the reopening economy in those lines? Obviously, you have a significant presence or - I mean, I feel like those are non-cyclical businesses and non-economically sensitive business, or maybe I'm thinking about the thing correctly?

Yeah, I'd say that's accurate, Josh. The Medicare business historically has not been kind of positively or negatively correlated with the economy in a meaningful manner. What I would tell you is the way we go-to-market our Medicare business, it was negatively correlated to a pandemic environment, where our client constituency was not in a position to meet in person and get together. And so what we saw as people stuck with their existing plans, and there were less plan moves and changes during [AEP] [ph], as the world began reopening to the first quarter the amount of activity we're seeing across our agent base in the Medicare business has grown dramatically on a year-over-year basis. And we believe, we're well positioned to be a net winner of these reopening trends and the ability for people to get back out and, frankly, reevaluate Medicare options in the coming selling season that they didn't do this year as a result of the pandemic environment.

All right. Well, thank you for all the answers and good luck with reopening.

Thanks, Josh.

Our next question is from Pablo Singzon of JPMorgan. Please state your question.

Hi, I just wanted to follow-up on your comments about organic growth, specifically on the commercial side. I think, Trevor, you had mentioned you expect double teen's growth for all segments in the second quarter. And the context of my question is that if you look at the growth that you posted last year, and this is based on my tracking, you posted 16% organic in Middle Market. So you're saying you think you can grow double-digits off that level? That's the first question.

Yes, we do.

Okay. And then the second question was on, I guess, so - this quarter, the weakest segments were Medicare and Main Street, you sort of touched on what happened in Medicare. And I presume what is happening in your markets, right? Florida is opening up pretty well. On Main Street, was it mostly just the contingents or were you affected [mainly by] [ph] face-to-face selling and people not being able to show up and that sort of thing?

Yeah. No, it's purely a contingent story, Pablo. I mean, the majority of our business is done over the phone, or electronically in Main Street, and so. And that's showing through in the underlying core commission organic trends we saw for the quarter end, and frankly, into April.

Okay. And then the last one for me, could you just comment, I guess, broadly in the deal environment like we're multiples now. I guess, you think you're still seeing value of their vicinity, what you're willing to pay and just general competitive environment for deals overall?

Yeah. So Pablo, the M&A environment is highly competitive, pricing continues to be at relative highs similar to where it was in the fourth quarter. What I would tell you is activity, is picked up meaningfully, our pipeline is robust. And we have partnership opportunities under LOI across a range of sizes. What I would say is where we see value in opportunities and growth, and we think growth is miss-valued. And that is, candidly a function of the types of buyers that are most prolific in our space, valuing kind of near-term margin rather than growth. And so we feel like there's significant opportunity for us to continue to find meaningful arbitrage via our focus on growth and pricing that effectively to create real long-term shareholder value.

Thanks for your answers.

Thanks, Pablo.

Our next question is from [Dan Shannon of Jefferies] [ph]. Please state your question.

Hi, thanks. Good evening. The question is a little follow-up on the M&A backdrop and last quarter, you talked about competence around the $120 million to $150 million in deployments this year, and just thinking about what you said and confirming that you're most of the deals that are either LOI or in the pipeline today or more third or fourth quarter weighted? Is that the right thing? It's a bit of air pocket here in the first half of the year.

Yeah, that's exactly the way to think about it, Dan. As we've talked about the first quarter and has been - was relatively light and we expect the second quarter from a closings perspective to be relatively light. But our pipeline is robust, activities meaningfully picked up. And we're in dialogue with an incredible slate of very high-quality organizations that we believe would be a really good fit with the BRP organization and bring significant value and growth opportunities.

Great. And then just to clarify, I heard correctly on the margin outlook for 2Q, it's going to be lower than the last quarter - I'm sorry, 2020 margin and want to just clarify why that would be?

Yeah, we continue to see seasonality shift in our business as a result of M&A. And as we communicated on the year end call continued to make meaningful investment in the business. So that's the reason for the shift in.

That's clarified, Dan. Our outlook for the full year margin remained it has frankly tightened on the bottom end up 50 basis points to 150 to 200 basis point margin accretion over last year's results.

Understood. Okay, thank you.

Thanks, Dan.

Our next question is from Greg Peters of Raymond James. Please state your question.

Hi, good afternoon. The first question, we're hearing about pockets of labor shortages. And we're hearing also about inflationary pressures. And I'm just curious how, Trevor, you might think these items will affect your customers and affect your business as we think about the next several quarters.

Yeah. Hey, Greg. Good evening. So what I would tell you is, we are definitely hearing from our clients around challenges finding talent, around supply chain challenges. And I think that certainly creating some near-term inflation pressure around wages and ultimately around products. What I will tell you specific to our business is we've done, we've spent a lot of time positioning ourselves is the destination to the industry's top talent, and that is paying off in states. As of April 23, we've hired 180 new people organically into the business this year. It compares to 54 new hires for that same time period last year. So specific to our business, while finding top-tier talent is always a challenge. We feel like our reputation as a premier destination in the industry, the way we behave, and frankly, stay true to our core values during the pandemic, have all positioned us incredibly well to be a net beneficiary of continuing to attract incredible talent and increase the intellectual capital, the capabilities and know-how that we have across our platform.

Right. The second question I had is more technical. But I did observe that there was pressure on your free cash flow in the first quarter relative to a year ago. I assume, there's some timing differences. But maybe you could give us some color around what happened with free cash flow in the first quarter and what we should be thinking about free cash flow for the full year, whether you want to talk about it in the context to conversion ratio, or you want to talk about it in the context of what you did last year, and if you expect it to grow? Just some additional perspective around that would be helpful?

Yeah, Greg, this is Brad. So we look at cash flow from operations net of AR and AP, because of the fact that we hold fiduciary cash on our balance sheet. So timing of receipt or payment of that fiduciary cash can have a large impact on our operating cash flows, which you've seen this quarter. When removing that AR/AP cash flow impact, our free cash flow for the quarter was $44 million, which is an 80%, free cash flow conversion from adjusted EBITDA. We communicated in the past that we would expect that to be approximately 70% conversion for the full year. So that's how you can be thinking about.

Right. Thanks for the answers.

Thanks, Greg.

Our next question is from Elyse Greenspan of Wells Fargo. Please state your question.

Hey, Elyse.

Hi, thanks for taking the follow-up. I guess I wanted to come back on. You guys had mentioned, you changed your covenant twice. You could take your leverage up to 6 times versus the normal 5 times. So I guess, it sounds like your activity could be more elevated later this year. So is that just to give you the flexibility, just depending upon how deals materialize later in 2021?

Hey, Elyse. It's Brad. So we're a significantly larger business now with continued outperformance. So we believe it was prudent to take a relaxed covenant that was offered by our banking group. This gives us more flexibility to take leverage above 4.5 times for a short period of time to get a large deal done. However, we still plan to operate the business at 3.5 to 4 times. And I'll let Chris comment a little on the M&A aspect.

Yeah, Elyse, I would just add on my kind of quick comments at the end of the prepared remarks. We're really excited about Q2, both on the organic side and on what's coming down the partnership pipeline. And I think added flexibility in situations like that is always key.

And then, so it also sounds like the 125 to 150 of M&A for the year is still the guidance, it just might be more weighted to the Q4. Is that a correct statement?

Yeah, we remain confident in the M&A outlook, Elyse, and we would expect it to be a weighting that's heavily skewed to Q3 and Q4.

Okay. And then you mentioned, you said the pipeline is robust. I think you said something about LOI's range of sizes. And then, you don't typically, right, like want to go into all the details. But is there a way to give us the size, smaller, larger deals, like kind of what size deals are embedded within the pipeline today?

Yeah, Elyse. We don't want to give too much. But obviously, we've done some large deals last year and I think the pipeline this year where we sit right now, as well as deals under LOI would reflect some of the stuff we did last year.

Okay and as you got conversations with potential buyers, given that there is - the economy is getting better. Vaccines are being rolled out and we're kind of on the flipside of COVID, has the discussions around deal changed, meaning like more paid-up front versus earn-outs? Have you seen kind of a switch in payment versus perhaps discussions? You were talking about discussions you guys had about a year ago when there was more uncertainty.

Yeah, I mean, if I'm comparing to a year ago, yeah, valuations have ticked up. If I'm comparing to the third and fourth quarter, I'd say it's relatively the same. Remember, a year ago, at least we were in kind of the peak of uncertainty relative to COVID and what the impact that was going to have on the insurance brokerage industry and the economy broadly. But relative to kind of the type of discussions and the tenor of those conversations, very consistent with what we are seeing in Q3 and Q4, if anything, I just say there's growing confidence from potential sellers around their ability to achieve results that are in the upper end of the potential earn-out result as a result of the broader economic and rate environment that persists.

Okay, that's helpful. Thanks for the color.

Thanks, Elyse.

We have reached the end of the question-and-answer session. I will now turn the call back over to Trevor Baldwin for closing remarks.

Thank you, everyone, for joining us for our Q1 2021 earnings call. As you heard this evening, we remain incredibly excited around the position our business is for the balance of the year. We believe we're well positioned and levered to reopening and to the growing economic tailwinds that we're seeing across our client base. And we look forward to talking with you soon. Take care.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great evening.