Good morning, and welcome to the RE/MAX Holdings First Quarter 2019 Earnings Conference Call and Webcast. My name is Carol and I will be facilitating the audio portion of today's call. At this time, I would like to turn the call over to Andy Schulz, Vice President of Investor Relations. Mr. Schulz?

Thank you, operator. Good morning, everyone, and welcome to RE/MAX Holdings first quarter 2019 earnings conference call. Please visit the Investor Relations page of remax.com for all earnings-related materials and to access the live webcast and the replay of the call today. If you are participating through the webcast, please note that you will need to advance the slides as we move through the presentation. Turning to Slide 2. Our prepared remarks and answers to your questions on today's call may contain forward-looking statements. Forward-looking statements include those related to agent count, franchise sales, financial measures and guidance, brand expansion, competition, technology, housing market conditions, dividends, strategic and operational plans, and business models. Forward-looking statements represent management's current estimates. RE/MAX assumes no obligation to update any forward-looking statements in the future. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those projected in forward-looking statements. These are discussed in our first quarter 2019 financial results press release and other SEC filings. Also, we will refer to certain non-GAAP measures on today's call. Please see the definitions and reconciliations of non-GAAP measures contained in our most recent quarterly financial results press release, which is available on our website. Joining me on our call today are Adam Contos, our Chief Executive Officer; and Karri Callahan, our Chief Financial Officer. With that, I'd like to turn the call over to RE/MAX Holdings' CEO, Adam Contos. Adam?

Thank you, Andy, and thanks to everyone for joining our call today. Looking at Slide 3, our global agent count surpassed 125,000 agents for the firs time in our company’s history during the first quarter. Motto Mortgage expansion in the U.S., and strong international RE/MAX growth helped offset lower revenue stemming from challenging housing market conditions in the U.S. and Canada. Our agent centric differentiated business model and diverse revenue streams contributed to relatively resilient top and bottom-line performance, despite the 7% year-over-year decline in U.S. existing home sales this quarter. Moreover, during the past quarter, we continue to take bold steps to strengthen our market leading value proposition and position ourselves well for sustainable long-term growth. By continuously adding or enhancing essential tools, technology and training, we can recruit and retain the industries most productive agents and teams and help us support the growth of RE/MAX franchises domestically and internationally. To that end, we recently announced a business building referral relationship with Redfin, exclusive to participating RE/MAX agents in certain U.S. zip codes and most of Canada. This exclusive powerful tool is yet another example of how RE/MAX supports our network of entrepreneurial, highly productive agents and teams in helping to build their businesses. On the technology front, beta testing for our RE/MAX and booj platform is imminent. With the initial product rollout set to begin this summer, the deployment of our new technology will be a huge step forward for RE/MAX creating efficiencies and competitive advantages for agents and brokers alike. Training has always been an important part of our value proposition and RE/MAX university has been an industry leader and innovator for many years. In the first quarter, we took steps that will give education and professional development an even bigger role in the future success of…

Thank you, Adam. Good morning everyone. Moving to Slide 11. Our first quarter results highlighted the strength of our differentiated model. One built on multiple, primarily recurring fee-based revenue stream. Our 100% franchise relatively asset-light business provides inherent operating leverage, which translates into healthy margins and robust free cash flow. Despite the shifting market condition, the resiliency and strength of our business really tends to standout. Another competitive advantage is our strong balance sheet. Our net leverage position of just 1.6 times, combined with our enviable cash flow generation provides us with tremendous optionality. We converted over 65% of adjusted EBITDA to free cash flow on a trailing 12-month basis, excluding the marketing funds, despite the sharp downturn in existing home sales over the past six months. Generous cash flow means more capital available for those initiatives, which are likely to deliver the best returns. Our capital allocation priorities remain unchanged. We plan to continue to allocate capital to acquiring independent region, reinvestment to drive future organic growth, exploring other strategic acquisitions and partnerships, and returning capital to shareholders. Moving to Slide 12. Revenue increased to 71.2 million during the first quarter, you are most entirely for the acquisition of the marketing funds on January 1 of this year. Recall that the marketing funds are essentially a pass-through entity. We are contractually obligated to use all the money collected by the funds to support marketing campaigns that build brand awareness and support our agent marketing technology. The funds haven’t historically generated a profit and we don’t believe this will change in the future. Excluding the marketing funds, revenue was essentially comparable to the prior year as increases from our expanding Motto Mortgage business, robust international RE/MAX agent growth in the booj acquisition were offset by the challenging U.S. and Canadian…

Thanks Karri. Turning to Slide 15, RE/MAX and Motto continued to demonstrate their brand strength and influence. Multiple industry reports have again confirmed that 2-to-1 RE/MAX enjoys in per-agent productivity among large U.S. residential real estate brokerages. Initial feedback from our new service model and heavier emphasis on education are encouraging. Our new exclusive Redfin Referral Relationship offers new and exciting ways to create more business opportunities for RE/MAX agents and Motto Mortgage continues to extend its franchise reach. Looking ahead, we’re cautiously optimistic about the housing markets in the U.S. and Canada, and because RE/MAX agents perform well in virtually any market and given the ongoing investments and our value proposition, we’re confident about continuing to build our business and drive value for shareholders over the long-term. With that operator, let’s open it for questions.

Thank you. [Operator Instructions] Our first question today comes from Vikram Malhotra from Morgan Stanley. Please go ahead.

Thanks for taking the questions. I just wanted to understand the Redfin opportunity sort of relationship a bit more as you form this relationship. Can you sort of maybe give us more details on kind of how you see this over time impacting revenue or sort of – give us sort of the addressable market like how do you see this near-term and longer-term impacting the growth trajectory?

Good morning, Vikram. It's Adam. I'll start this and I'll hand it off to Karri here. This is a really exciting opportunity for existing RE/MAX agents who have been recognized as being the best in the marketplace by Redfin to participate in the extra referrals or leads that they have in the marketplace. So, Redfin approached us and said, hey, we've got Canada or the majority of Canada, as well as you know a great deal of zip codes in the U.S. that we eventually added on to this portion here of the lead relationship. And we don't – they don't have anybody to service them. So, they recognize that our agents who are – we have a lot of existing partner agents with them have been doing a great business. And so, they asked if we would be interested in that, and of course we said, yes, more business for our agents were all about that. So, it's been just a fantastic road to get there and we look forward to this, you know this two-year agreement that we have with them in order to generate some more business for our agents, as well as continue to make the RE/MAX network more attractive for people coming in looking to increase their business. And I'll let Karri get a little bit more into the micro of this.

Yes, thanks Adam. So, one of the things I think to keep in mind is just the exclusivity of the agreement. Obviously, many of our agents are going to choose to build their businesses based on repeat and referrals, just given the strength and the productivity of our network. But given the entrepreneurial nature of RE/MAX agents, we really wanted to look at other opportunities and other ways to deliver value in terms of those agents who look to grow and build and monetize their businesses from an exclusive source of online lead generation opportunities. From an economic perspective in the near-term, based on the two-year agreement, agents will have the opportunity to pay a reduced referral rate. We did just announce this a little over a month ago and onboarding is in the process right now. So, we've got thousands of agents that are in the process of being contacted as part of the program, you know [Technical Difficulty] who have been onboarded. It's still very early days in terms of how we evaluate the opportunity from a financial perspective. Nothing significant has at all has been included for the current year and we're just going to watch and see how this goes over time. We can definitely provide updates as we move on.

The fees to RE/MAX that structure has not changed at all with this right?

That's correct. So, no changes at all to the fees for us. Again, just looking at opportunities given the strength of our network to enable our agents to build their businesses if they choose to participate.

Okay, great. So, just turning to Motto. You've had like pretty strong growth over the last few quarters. Can you just give us a sense of the 90 offices that are open and the others that are sourced, so how should we think about revenue contribution this year going into next year?

Yes, hi, good morning Vikram. So, as we think about – think about that, we continue to be really excited about the enthusiasm from a Motto perspective, the feedback that we're hearing from new franchisees, who are coming in for training are really excited about the value proposition, everything they're seeing is actually better than what their expectations are and we're continuing to see good performance in terms of the pipeline of interaction with the loan originators at Motto. In terms of revenue contribution for 2019, you know continue to believe as we've said previously kind of looking at that mid-single-digit millions of revenue contribution for this year and continue to think that franchise sales will be pretty consistent with what we delivered last year. And then as we continue to move forward in the year, we'll have more insight as to what that means for 2020 and beyond.

Okay, great. And Adam just last one, a high level. Some of – you know some of your peers and others in the marketplace have focused more on sort of the eye banking market and created a platform for that. Just sort of wondering what your thoughts are on that for RE/MAX?

Yes, we continue to monitor the market trends, and at this time, eye buyers is not something that we choose to participate in, but obviously the conversations continue and we continue to do our homework on that whole process as it evolves.

Okay, great. Thank you.

Our next question comes from Bose George from KBW. Please go ahead.

Hi guys, this is Tommy on for Bose. I wanted to check up on the independent region acquisitions. Could you just kind of share a few if you have any more conversations and anything might close in 2019? And just wanted to clarify, I don't know if you've ever disclosed this, but when you do acquire one, have you ever said like what multiple that's at or what the EBITDA contribution is from those?

Good morning, Tommy. We continue to foster those relationships, cultivate those with the independent regions, I mean, they're very close business partners of ours and at the same time, them coming to the table with one of those offerings is kind of lumpy if you will. It happens when it happens and obviously, we make the announcements as they occur. We have nothing to announce at this point. But the continued relationship with them, they're all on really good terms. So, we're happy with those. We don't disclose the multiples when we do make those acquisitions and I'll let Karri jump in a little bit more for some of the economics.

Yes, thanks Adam. So, when we look at it, obviously, the acquisition of the independent regions continues to be a primary leg of our capital allocation philosophy. And so, it's something that we're very focused on as Adam said in terms of just maintaining those relationships and evaluating, how we're deploying capital in terms of those opportunities that'll give us the best returns. And so, every independent region acquisition is different from a multiple perspective and we're looking at it. There's many ways you could look at it but – being historical or forward-looking, but we evaluate them, we want to pay a full and fair multiple that make sure that we're getting the best return on those investments for our shareholders. If we look back based on the recent independent region acquisitions that we've done, they've actually all performed a little bit better than our expectations across all key operating metrics, agent count revenue and earnings. And those are things that we're continuing to monitor and we'll continue to do on a prospective basis.

Okay. Switching gears to U.S. agent counts, I think you had mentioned is there is some positive trends in some recent months, are you able to quantify kind of what those trends have been specifically in like March and April?

No, we're not able to quantify those at this point. However, I think when you just look at the housing market trends and things like that, it just speaks to the resiliency of our business model and the strength of the RE/MAX network and we continue to see the positive indications of that on the back end.

Yes, I think...

Okay. Thanks.

I think then the one thing that I would add – yeah, Tommy, the one thing I would add to that is that we are seeing some nominal improvements to that, and I think everything is kind of been cautiously optimistic in terms of the feedback that we're hearing from our network around what the spring selling season is looking like.

Okay, thanks. And then just last one. With the Class A, Class B structure collapsing, is there any plans to increase the flow at this point?

Yes, I mean at this point in terms of what Dave's interests are, we don't have any update from him in terms of what that looks like. What we're really focused on right now is other investment opportunities as we look across the tools that we're providing, technology initiatives around booj, some of the training things and we're really focused on that. And if Dave were to decide to do any kind of transaction, you know we'd be ready to execute on that.

Got it. Thanks guys.

Our next question comes from Anthony Paolone from JP Morgan. Please go ahead.

Alright. Thank you. Good morning. My first question is on your technology platform roll out that's upcoming. Can you talk about what some of the initial features are going to be and also whether or not some of the key items are just purely for productivity and helping agents or are there any direct revenues back to RE/MAX for these services?

Good morning, Tony, it's Adam. We're really excited about this initial roll-out starting this summer and it's predominantly CRM, but it is a – you know more than anything it's an agent developed CRM. So, they had a big part in putting this whole thing together and the excitement in the network really shows that. So, with respect to agent productivity, the technology platforms that we are pushing to the street are designed to create those efficiencies in how they run their business, how they cultivate their customer relationships. So, I do believe that a good CRM gives the agents more time to do business with our customers, as well as allows them the ability to cultivate greater relationships with those customers in order to magnify that repeat and referral business based at RE/MAX agents are so well known for. Otherwise, no, we don't have a monetization piece to that for the economics of it. We have provided technology for no additional cost to our agent base and that's what we intend to continue to do at this point.

Yes, I think a couple of things I would add on to what Adam was saying, because I think it's important to note. Adam mentioned the CRM, which is really the center and the focal point of the platform, but we really are designing it to be a holistic platform across five verticals. So, in addition to the CRM, including apps, websites, lead management and routing, and then reporting as well. So, really making it a comprehensive platform not only for the agents, but consumer facing as well. And so, we continue to be excited about that and continue to think about what that infrastructure means, not only domestically here in the US, but what that mean to our differentiated and very much competitive advantage of our global footprint as well over time. So, as Adam said in terms of near-term revenue not something for 2019, but as we look forward into the future, there could be additional opportunities.

Okay, I understand. And then maybe staying a bit on that with you Karri on the expense side, as you looked at SG&A overall, how much do you now think you're spending on call it technology related items, whether it's your personnel or otherwise what piece of SG&A is that and how do you think about that growth into the future?

Yes, I mean that's something that we haven't specifically disclosed or called out, it's all included in the guidance numbers. As we look at it going forward, what we want to do is make sure that we're really evaluating and managing the cost structure to be able to not only reinvest back in the business to drive that organic growth, but really rely on the inherent leverage in the business over time, because it's there especially if we can leverage the booj platform and accelerate U.S. agent count growth and Canadian agent count growth, accelerate model sales. And so, we just are managing the business more holistically.

Okay. And then just in terms of the network, with a tough start to the year on the housing side just generally speaking, what's the ability to kind of look in and see how the profitability of your franchisees is going and whether there's any things were to stay challenged. Would there be any challenges coming back to you all as the year progresses from either franchisees running into financial trouble or anything of that nature?

Yes, I mean, that's a great question Tony. I mean, one of the things that we've really done with the changes to our service model is really evaluate how we can provide differentiated services to our franchisees based on different kind of parts of their lifecycle. One of those key tenants is around broker profitability, helping them evaluate everything in terms of their revenue opportunities from a recruiting and retention perspective, as well as looking at their cost structure and thinking about how the things that we're offering here around technology, training and other tools can help them from a profitability perspective. And so that's the key focus of ours right now given everything that we're focused on.

Okay. I guess as you look out to the future, I mean, one of the things that strikes me as one of the key components of your business model is what you've referred to in the industry I guess as desk fees and as the world gets increasingly virtual like, is that an area where you could see push back or I don't know perhaps as the industry recharacterized?

Hi, Tony, that's been a discussion in the industry for decades really, you know the desk fee, the fee model things like that and ultimately what it boils down to – we have a particular segment of the marketplace that we go after and that is the full time producing agent who runs their business as a business. And there are nominal business expenses affiliated with any brokerage model itself. There's been no brokerage model or pricing model over the decades that has actually emerged as being dominant in the industry. We don't anticipate that there will be, because there's something for everyone in our space and we want to go after the top time producing agents. We've always said that we go after the top 20% in the industry. We'd like to have half of the top 20%. And I think we have a lot of runway, we're continuing to increase our value through our technology offering, our training and our marketing tools that we continue to roll out. So, cost is an issue in the absence of value and we continue to increase our value and a lot of our agents say that you know this is fantastic, you're giving me good cost synergy. So, that's the way we view the marketplace and how we run the business.

Great. Thank you.

Our next question comes from Jason Deleeuw from Piper Jaffray. Please go ahead.

Good morning. Thanks for taking the question. I'm trying to get a sense if home sales, if the market environment improves, do you think RE/MAX agent recruitment will improve? I'm just trying to get a sense, what are kind of the puts and takes on the US agent count. Is it you know franchisees losing agents to competition or is it just franchisees not able to find agents to hire or are they just cautious to hire given the market environment? I'm just trying to get a sense of some of the puts and takes there.

That's a great question, Jason, and good morning. It's always been the big mystery in the real estate spaces. Okay, what does an agent want, why will they move things of that nature? And really ultimately it boils down to a personal reasons that people move from brokerage to brokerage and it's about good leadership and fostering a great environment that can help them build their business, and that's what we focus on RE/MAX is that environment that helps them achieve their goals and removes the limits from above them and we continuously see that in discussions with our agents who are growing their business. That being said, when you look at the macro of the housing industry, compared to agent count, traditionally we have tracked with the housing market when it comes to our recruiting and retention in our agent growth. So, when you look at the emerging signs out there right now that everybody alludes to at this point, it causes a cautious optimism for us. So, we're looking forward to that. And I'll let Karri jump a little deeper into this.

Yes, and Jason you know kind of with the three things that you mentioned around the macro trends around existing home sales competition and our franchisees being selective, I think we would say yes to all of those things. We are seeing some challenges more at the top end of the funnel than the bottom and that was really apparent earlier in the quarter, and so I think it's definitely all of those things in addition to what Adam was talking about.

Okay, thanks. That's helpful. And then just on the Redfin agreement, it was good to see that and drive more leads to the RE/MAX agents. I was just wondering, as you look out in the marketplace, are there any other additional opportunities that you could, lead gen, referral agreement? Are there any other players out there that generate enough leads that it would be worthwhile for RE/MAX agents?

That's something that we're always looking at. We're always looking at other lead generation opportunities that fit our business model, fit the RE/MAX agents and what they are looking for. We're very customer-centric business. We say we're a business that builds businesses and those businesses are brokerages and our agents’ businesses. So, you know we're always pursuing those things. We don't have anything else to announce at this point, but that is a constant search that we are always in.

Yes, and I think the one thing that I would add to that, because I agree with everything that Adam was saying. On the Redfin agreement itself, I think right now we are focused on that as well and making sure that we're focused on that opportunity and evaluate how we can – how we can work collaboratively with Redfin in order to maximize that relationship and potentially deliver [Technical Difficulty] that benefits everyone.

Alright. Sounds good. Thank you.

Our next question comes from Chris Gamaitoni from Compass Point. Please go ahead.

Good morning.

Good morning Chris.

So, I want to follow-up on that comment. What do you mean more challenges at the top end of the funnel versus the bottom? I was not sure what that means?

Yes, so just as we look at new ads that are coming in to the system versus those agents who are leaving the system. If we look on a quarter-over-quarter basis, there's been more pressure on recruiting than on retention.

Okay. And I wanted to focus on new franchise growth and retention. What's the – what type for your new franchise is coming on? What type of brands are they coming from? What value proposition are resonating with them from the brokerage owner perspective, not the agent perspective?

So, that's – predominantly our new franchisees typically don't come from a particular brand. It's mostly organic. A lot of independence. There are 83,000 brokerages out there in the U.S. or 83,000 brokerages licensed out there in the US. So, the pickings are many out there and it's about us finding the right people that fit in the right places throughout the footprint that we operate in, which obviously is all across North America. So, we look for the right person, not necessarily where they come from as far as the brand itself. That being said, we do also obviously see some conversions happening, conversions can be anywhere from like two or three agents, small independent brokerage all the way up to larger dozens or hundreds and those we look very carefully at to determine the operating synergies that they have and what they can gain out of coming to RE/MAX, as far as you know do they have full time producing agents, because a lot of brokerages don't that you see throughout the industry, which is probably one of the larger challenges of somebody converting to a brand of full time producing agents is sometimes they have to excuse a few from their office. But that being said, brokers come to us because we offer a brand in a system and that brand in a system creates synergies for their revenue and their time. Brokers need time to grow their business, and if they're spending all their time focusing on building their training and building their marketing and building their technology and aggregating all those things, they don't have time to grow their business and that's really one of the key aspects that RE/MAX provide is, we do all of those things and offer them up to the brokers to use if they'd like to. Obviously, they have to use our brand, but they can – they're free to pick their technology, their training things like that, but ours are top shelf, best-in-class, and we find that most of them utilize ours, which gives them that operating synergy and allows them to grow their business more than they were able to when they didn't have us.

That's helpful. The – following-up on the retention has not been an issue. Some other competitors have noted increasing competition and retention be an issue. What do you think that differencing or the distinction is that your brokerages aren't feeling that pressure?

Oh, yes, I mean I think Chris, we definitely are feeling pressure from a competitive environment just on a relative basis. The pressure is coming more from the recruiting side. From a retention perspective, we – it is a competitive environment and we are definitely not immune to that. However, the overall strength of the RE/MAX brand just as you look at our competitive advantage is around productivity. The strength of the brand, the global footprint and just the overall investments and the value propositions is really helping to make RE/MAX a little bit stickier and helping to differentiate us in the market.

And I'll add a little bit to that. I mean, when you look at the socially – the social psychology of the consumer today and I'll say consumer is, you know includes our current and future brokers and agents. Its – people want to know that you are evolving your business model and that is something that we're heavily focused on, you can see that through our technology evolution, our evolution in all of the stack of the 3 T's that we talk about our training, our marketing tools, and our technology, all of those things have been evolving this year already and we're still early in the year. So, that in and of itself allows us to place some great – some great opportunities in the hands of our brokers and then it just comes down to executing on the value that is delivered with those things in order to continue to recruit and retain.

Okay. And one final one is, has there been any pushback on from the brokers/owner side on to get the level of commission what you paid to RE/MAX?

Yes, I mean, as we look at just commissions across the network, we're not seeing significant commission pressure, that's obviously a much smaller percentage of our revenue. And so right now we're feeling like it's really highlighting the differentiation in the market and RE/MAX agents’ ability to go out and deliver the highest quality service to the consumer and earn their commission.

Okay. Thank you very much.

Our next question comes from John Campbell from Stephens. Please go ahead.

Hi guys, good morning.

Good morning, John.

Good morning.

Just back to booj and just kind of the broader tech offering for agents. It sounds like there aren't really any imminent plans to charge for it, but you're also not committing to that always being free. What could drive that decision-making process in the future, is that going to be based on the kind of product uptake or the efficacy of the product or that potential pricing be influenced by the pace of US or Canadian agent growth over the near kind of medium-term?

I think it's a combination of all of those things as well as our comfort level in the marketplace as far as, do we want to offer a premium model of something or something of that nature. And you know all of those things are up for consideration, but our key goal is to provide a good technology value to our agents and brokers and maximize the uptake of that. Obviously, nothing is worth anything if nobody is using it. So, we want to get some good market penetration amongst our agents and brokers and see where it goes from there. But our commitment to them is, we want to provide them some best-in-class tools in this technology space. I believe, we are fully capable of doing that and executing upon that. So, again, no commitments, but we'll see where it goes from now.

Okay. And then I think you guys might have touched on this, I want to make sure I get this right. But with the Redfin exclusive partnership, I know you guys have a pretty high degree of autonomy with your agents, but are you guys recommending any change around the commission rates offered to consumers under that partnership or is there anything, I guess, in the agreement that requires RE/MAX agents to charge a little less than what they might have otherwise?

No, absolutely not. In fact, that was – that was the first caveat as we do not recommend nor do we ask our agents to do – operate their business any differently than they've been operating it before. And that's that our agents are free to charge the value that they feel is appropriate for their services. And that was something that was a big concern of ours up front, because you're right. I mean, Redfin has stated in the marketplaces that they operate in with the agents that they have, if he is a Redfin agent, then they offer a potential discount in their services. We view what we do as a different end of the marketplace. We provide high value, high service and our agents are – they set their commissions as they see fit, nobody tells them what they can charge and what they can't charge. So, it's up to them based upon the transaction. Every transaction in this space is different. So, that's – that was one of the first trigger points that we went through was maintain the value of our network, of our agents, and we're super excited about. In fact, 85% of these leads that they're going to be getting are buyer leads. So, you're not negotiating a seller commission at that point. These are excited buyers looking to go find their home and you know so the other 15% – the agent gets to sit down and explain to the home seller or during the listing presentation, here's what you get, and our agents are very skilled at this craft and they earn their value.

Okay. That's helpful. And then one quick follow-up for Karri, with the 1Q 2019 results, and then, I guess, what you're guiding for 2Q, it looks like you'll need a pretty big jump in incremental margin in the back half versus what you kind of saw in the first. It sounds like there's a step-up investment spend going on right now, but is that just a temporary type spin or is there something else boosting margins in the back half?

I mean, no, there's nothing else that's really boosting margins in the back half. I mean, the comps get a little bit easier in the back half of the year based on, obviously, as you know Q3 and Q4 were tough last year so. So, there's nothing really unusual.

Okay. Great. Thanks guys.

Our next question comes from Stephen Sheldon from William Blair. Please go ahead.

Hi, good morning. On the booj roll out, can you maybe talk at a high level about what type of adjustments or modifications you've been making to the platform as you've been testing and getting feedback from clients. And then along those lines, how much work still needs to be done before it's ready for a full roll out?

Yes, good morning Stephen. So, we have been in alpha testing for several months now. So, initially started that with several hundred testers and now we're well over a thousand people who are now in alpha. That alpha process has rate the feedback process, has really been on specific workflow. And what we've been able to do as part of that process is really see a lot of engagement. We've got about 60% engagement and about 90% to 95% of the people who have been in alpha are rating the product is easy to use. And as we've gone through alpha, basically almost real time we've been able to make changes to the software. So, in terms of how the functionality works, what the interface looks like, and things that would improve the overall usability of the product, we've actually been able to take from one workflow, make changes as we move into additional workflow [Technical Difficulty] the process. We will be rolling out beta, a little over 3,000 people here in the coming weeks, and it will look a little bit and feel a little bit different, because instead of having specific workflows, all of the parts will be connected together to give the user a little bit wider view of the system on a more holistic basis. So, we are feeling good about where we are in the development process, continue to look at a broader roll out later in the summer. And the feedback that we're hearing from the network is just resoundingly positive and I think the thing that's really exciting about it is, once it's – you know once it's rolled out and we get kind of past the beta phase, we'll be continuously innovating on new features and really engaging our network of highly productive agents, because it's really been developed by – for them with a lot of their input and that will continue in the future.

That's great. I guess, when you talk about a broader roll out, does that kind of mean that it would be generally available for all agents that choose to begin using it? Hello. [Technical Difficulty]

Ladies and gentlemen, it appears that we are having a technical delay. Please standby and we will resume our conference as soon as we are able. Thank you for your patience. [Ends Abruptly]