Digital Media Solutions Inc (DMS) 2023 Q1 法說會逐字稿

Good afternoon. My name is Hannah, and I will be your conference operator today. At this time, I would like to welcome everyone to the Digital Media Solutions first-quarter financial results 2023 conference call. (Operator Instructions) Thank you.

下午好。我叫漢娜，今天我將擔任你們的會議操作員。此時，我謹歡迎大家參加數字媒體解決方案 2023 年第一季度財務業績電話會議。 （操作員說明）謝謝。

Now I would like to pass the call over to Tony Saldana, DMS General Counsel.

現在我想將電話轉接給 DMS 總法律顧問托尼·索爾達納 (Tony Saldana)。

Thank you for joining us to discuss financial results for DMS for the first quarter of 2023. With me on the call are Joe Marinucci, Co-Founder and CEO; and Vanessa Guzmán-Clark, our Interim CFO. Earlier this afternoon, we posted our earnings announcement and a press release on our Investor Relations website. By now, everyone should have access.

感謝您與我們一起討論 DMS 2023 年第一季度的財務業績。與我一起參加電話會議的有聯合創始人兼首席執行官 Joe Marinucci；以及我們的臨時首席財務官凡妮莎·古茲曼-克拉克 (Vanessa Guzmán-Clark)。今天下午早些時候，我們在投資者關係網站上發布了收益公告和新聞稿。到現在為止，每個人都應該可以訪問。

Before we begin, I would like to call your attention to our Safe Harbor provision for forward-looking statements in our financial results press release. The Safe Harbor provision identifies risk factors that may cause actual results to differ materially from the content of our forward-looking statements. For a more detailed description of the risk factors that may affect our results, please refer to our financial results press release and our SEC filings.

在我們開始之前，我想提請您注意我們的財務業績新聞稿中前瞻性陳述的安全港條款。安全港條款確定了可能導致實際結果與我們前瞻性陳述的內容存在重大差異的風險因素。有關可能影響我們業績的風險因素的更詳細說明，請參閱我們的財務業績新聞稿和 SEC 文件。

In addition, management's commentary will include non-GAAP financial measures. Reconciliations between GAAP and non-GAAP financial measures can be found in the tables of our financial results press release, which we have posted to our Investor Relations website at investors.digitalmediasolutions.com. The additional financial and other information to be discussed on this call can also be found on our Investor Relations website.

此外，管理層的評論將包括非公認會計準則財務指標。公認會計原則和非公認會計原則財務指標之間的調節可以在我們的財務業績新聞稿的表格中找到，我們已將其發佈到投資者關係網站 Investors.digitalmediasolutions.com 上。本次電話會議討論的其他財務和其他信息也可以在我們的投資者關係網站上找到。

Now I'd like to turn the call over to Joe Marinucci, our CEO.

現在我想將電話轉給我們的首席執行官喬·馬里努奇 (Joe Marinucci)。

Thank you, Tony, and good afternoon, everyone. Welcome to our first quarter of 2023 earnings call. Our first quarter results are as follows.

謝謝你，托尼，大家下午好。歡迎參加我們的 2023 年第一季度財報電話會議。我們第一季度的業績如下。

Our first-quarter net revenue was $90.3 million, which, while down 17.2% year over year, was within our guidance of $90 million to $92 million. Our gross margin and variable marketing margin came in at 24.7% and 29.8%, respectively. Adjusted EBITDA came in at $3.4 million or a margin of approximately 4%, also within our guidance. Vanessa will add more details, dig deeper into the numbers, and go over our guidance for the second quarter of 2023 later in this call.

我們第一季度的淨收入為 9030 萬美元，雖然同比下降 17.2%，但仍在我們 9000 萬至 9200 萬美元的指導範圍內。我們的毛利率和可變營銷利潤率分別為 24.7% 和 29.8%。調整後 EBITDA 為 340 萬美元，利潤率約為 4%，也在我們的指導範圍內。 Vanessa 將在本次電話會議稍後添加更多詳細信息，深入挖掘數據，並回顧我們對 2023 年第二季度的指導。

We kicked off 2023 with a modestly positive first quarter, which highlighted the effectiveness of our diversified strategy across multiple verticals within DMS. In Q1, we carried out a strategic reorganization of our business and a thoughtful reduction in our workforce, a move that considerably cut our operating costs. The goal here was clear and simple: to focus more intently on the key solutions that are poised to drive our long-term growth.

我們以適度積極的第一季度拉開了 2023 年的序幕，這突顯了我們在 DMS 內跨多個垂直領域的多元化戰略的有效性。第一季度，我們對業務進行了戰略重組，並進行了深思熟慮的裁員，此舉大大降低了我們的運營成本。這裡的目標明確而簡單：更加專注於推動我們長期增長的關鍵解決方案。

Stepping into Q2, our momentum has slowed, as the positive trends from Q1 have reversed inside of our largest vertical: insurance. Typically, our Q2 is cyclically impacted as health insurance demand slows, and we tend to see trough-level performance for the year in this period. We're now seeing this coupled with unprecedented pressure in the auto insurance vertical, which has led to additional significant pullback in client marketing spend.

進入第二季度，我們的勢頭已經放緩，因為第一季度的積極趨勢在我們最大的垂直領域（保險）內發生了逆轉。通常情況下，隨著健康保險需求放緩，我們的第二季度會受到週期性影響，我們往往會看到這一時期今年的業績低谷。我們現在看到這種情況加上汽車保險垂直領域前所未有的壓力，導致客戶營銷支出進一步大幅縮減。

That said, we remain optimistic as we anticipate the P&C insurance markets will normalize when loss ratios correct. And in health insurance, we are now outside of enrollment period windows when marketing spend would be higher. When those enrollment periods open again later this year in Q3 and Q4, we expect to regain momentum in this vertical.

儘管如此，我們仍然樂觀，因為我們預計當損失率糾正時，財產和意外傷害保險市場將恢復正常。在健康保險方面，我們現在已經超出了營銷支出會更高的註冊期窗口。當這些招生期在今年第三季度和第四季度再次開放時，我們預計將在這一垂直領域重新獲得動力。

Despite these temporary fluctuations, we also maintain a positive long-term outlook as a diversified approach gives us the agility to swiftly adjust to market trends that result in shifts in ad spend. This is true for both our brand direct and marketplace solutions and is visible in our verticals as well.

儘管存在這些暫時的波動，我們仍保持積極的長期前景，因為多元化的方法使我們能夠靈活地迅速調整導致廣告支出發生變化的市場趨勢。這對於我們的品牌直接解決方案和市場解決方案都是如此，並且在我們的垂直領域也很明顯。

As a reminder, those verticals are property and casualty insurance, health insurance, career and education, e-commerce, consumer finance, and home services, which we added with the recent acquisition. As we've discussed in the past, we monitor both our enterprise customers and our SMBs, which include the insurance agents we serve.

提醒一下，這些垂直行業是財產和意外傷害保險、健康保險、職業和教育、電子商務、消費金融和家庭服務，我們在最近的收購中增加了這些垂直行業。正如我們過去所討論的，我們監控我們的企業客戶和中小企業，其中包括我們服務的保險代理人。

For Q1, exclusive of our recent acquisition, we closed with a significant enterprise customer count of 291, up from 285 last quarter. For Q1, ARPU for significant enterprise customer was $1.3 million, flat from last quarter. For Q1, SMBs on the DMS platform totaled 6,477 active insurance agents, down from 7,712 agents in Q4 2022.

第一季度（不包括我們最近的收購），我們的重要企業客戶數量從上季度的 285 家增加到 291 家。第一季度，重要企業客戶的 ARPU 為 130 萬美元，與上季度持平。第一季度，DMS 平台上的中小企業共有 6,477 名活躍保險代理人，低於 2022 年第四季度的 7,712 名代理人。

The reduction in active SMBs in the quarter is tied to volatility in insurance and various state pauses at the carrier level. We expect our SMB count to recover once stability returns to insurance.

本季度活躍中小企業的減少與保險波動和運營商層面的各種狀態暫停有關。我們預計一旦穩定恢復保險，我們的中小企業數量就會恢復。

The breakout by vertical of revenue for Q1 is as follows: property and casualty insurance, $38 million in Q1 revenue, which was 39% of total revenue for the quarter; e-commerce, $18 million in Q1 revenue, which was 19% of total revenue for the quarter; career and education, $15 million in Q1 revenue, which was 16% of total revenue for the quarter; and consumer finance, $18 million in Q1 revenue, which was 19% of total revenue for the quarter.

第一季度收入垂直細分如下：財產險，第一季度收入 3800 萬美元，佔該季度總收入的 39%；電子商務，第一季度營收 1800 萬美元，佔該季度總營收的 19%；職業和教育，第一季度收入 1500 萬美元，佔該季度總收入的 16%；消費金融，第一季度收入 1800 萬美元，佔該季度總收入的 19%。

To comment further on property and casualty insurance as our largest vertical, although down significantly quarter on quarter, performance was mostly in line with our expectations for what we expected in the vertical in Q1. However, with pressure continuing to mount and the negative trend we see here in Q2, the floors once again moved, and the stability we thought was settling in appears to have faded. This continues to pressure our business during Q2.

進一步評論財產和傷亡保險作為我們最大的垂直領域，儘管季度環比大幅下降，但業績基本符合我們對第一季度垂直領域的預期。然而，隨著壓力持續增加以及我們在第二季度看到的負面趨勢，地板再次移動，我們認為穩定的穩定性似乎已經消失。這繼續給我們第二季度的業務帶來壓力。

The volatility of this underwriting cycle has been extraordinary. At some point, this shall pass as inflation subsides and rate increases cycle through. With consumers continuing to price-shop, we do continue to believe that property and casualty carriers will eventually aggressively return to growth mode once loss ratios normalize and underwriting stability is restored.

本次承保週期的波動性非常大。在某個時候，隨著通貨膨脹的消退和加息的循環，這種情況將會過去。隨著消費者繼續價格購買，我們仍然相信，一旦損失率正常化並且承保穩定性恢復，財產和意外傷害承運人最終將積極恢復增長模式。

Outside of property and casualty, diversity in our customer mix and our verticals is what continues to differentiate DMS. With the recent acquisition, we've added another vertical marketplace solution in home services, and we expanded our brand direct business internationally.

除了財產和傷亡之外，我們的客戶組合和垂直行業的多樣性是 DMS 持續脫穎而出的原因。通過最近的收購，我們在家庭服務領域增加了另一個垂直市場解決方案，並且我們在國際上擴展了我們的品牌直接業務。

During the quarter, we saw positive trends in both e-commerce and consumer finance, with both verticals showing quarter-on-quarter growth of 14% and 43%, respectively. These are areas we're going to continue to focus on.

本季度，我們看到電子商務和消費金融都呈現出積極的趨勢，兩個垂直領域的季度環比增長分別為 14% 和 43%。這些是我們將繼續關注的領域。

I'd also like to reinforce that we're continuing to invest in our technology, data, and media capabilities, which empower us to innovate and create solutions that provide value for consumers and advertisers alike. In Q2 2023, we plan to continue to focus on developing these vertical-agnostic data-first solutions which power growth across our customers and a multitude of verticals in our brand direct and marketplace segments.

我還想強調的是，我們將繼續投資於我們的技術、數據和媒體能力，這使我們能夠創新並創造為消費者和廣告商提供價值的解決方案。 2023 年第二季度，我們計劃繼續專注於開發這些與垂直領域無關的數據優先解決方案，以推動我們的客戶以及我們的品牌直接和市場領域的眾多垂直領域的增長。

And again, we believe that digital performance marketing, which is the primary DMS solution, will win as it is a pure play for ROI performance, thus, de-risking customer ad spend. As noted during last quarter's call and as noted earlier in this call, we closed the acquisition of ClickDealer and HomeQuote at the end of Q1.

我們再次相信，作為主要 DMS 解決方案的數字效果營銷將會獲勝，因為它純粹是為了提高投資回報率，從而降低客戶廣告支出的風險。正如上季度電話會議和本次電話會議早些時候所述，我們在第一季度末完成了對 ClickDealer 和 HomeQuote 的收購。

Moving into Q2, we've seen stability in both the home services vertical and the international markets we now cater to. Although we're in the early stages, we feel this stability demonstrates the likelihood of positive progress in growth in both of these areas.

進入第二季度，我們看到家庭服務垂直市場和我們現在迎合的國際市場都保持穩定。儘管我們還處於早期階段，但我們認為這種穩定性表明這兩個領域的增長有可能取得積極進展。

To summarize, for our go-forward 2023 plan, we'll drive business growth through the following strategies: expanding the number of existing significant enterprise customers along with average spend per customer, helping our clients acquire, grow, and retain their customers; continuing to add SMBs to our platform; investing in our technology, data, and media capabilities; managing cost; and finally, focusing on the integration of the recently closed ClickDealer acquisition to further diversify our customer base and vertical serve while strengthening our brand direct and marketplace solutions.

總而言之，對於我們的 2023 年展望計劃，我們將通過以下策略推動業務增長：擴大現有重要企業客戶的數量以及每個客戶的平均支出，幫助我們的客戶獲取、發展和留住客戶；繼續將中小企業添加到我們的平台；投資我們的技術、數據和媒體能力；管理成本；最後，重點關注最近完成的 ClickDealer 收購的整合，以進一步使我們的客戶群和垂直服務多樣化，同時加強我們的品牌直接和市場解決方案。

Now I have the pleasure of turning the call over to Vanessa, who'll provide more details on our financial results.

現在我很高興將電話轉給瓦妮莎，她將提供有關我們財務業績的更多詳細信息。

Thanks, Joe, and good afternoon, everyone. I'll begin by discussing our financial results for the first quarter and conclude with our guidance for the second quarter. All comparisons are on a year-over-year basis, unless otherwise noted.

謝謝喬，大家下午好。我將首先討論我們第一季度的財務業績，最後以我們對第二季度的指導作為結束。除非另有說明，所有比較均按年比較。

Net revenue was $90.3 million. While down 17.2% year over year, it was within guidance. Insurance accounted for approximately 39% of our total revenue in Q1, which was down 49%.

淨收入為 9030 萬美元。雖然同比下降 17.2%，但仍在指導範圍內。保險業務約占我們第一季度總收入的 39%，下降了 49%。

The breakdown of the insurance business was as follows. Auto contributed 66% of total insurance while health was 23%, followed by life at 6% and home at 5%. The decline in revenue reflects the impact of lower carrier demand while this industry restabilizes.

保險業務的明細如下。汽車保險佔保險總額的 66%，健康保險佔 23%，其次是人壽保險（6%）和家庭保險（5%）。收入下降反映了該行業恢復穩定期間運營商需求下降的影響。

DMS continues to be a diversified digital performance advertising business. Career and education, which was approximately 16% of our total revenue in Q1, was down 2%. E-commerce represented 19% of our total revenue and was up 14%. Consumer finance accounted for 19% of our total revenue and was up 43%.

DMS 仍然是一家多元化的數字效果廣告公司。職業和教育業務約佔第一季度總收入的 16%，下降了 2%。電子商務占我們總收入的 19%，增長了 14%。消費金融占我們總收入的19%，增長了43%。

Gross profit was $22 million for Q1, equating to a 25% margin versus a 29% margin in Q1 2022. The margin percentage decline was driven by continued margin compression within the insurance across both auto and health. Variable marketing margin was 29.8% compared to 35% in Q1 2022.

第一季度的毛利潤為 2200 萬美元，相當於 25% 的利潤率，而 2022 年第一季度的利潤率為 29%。利潤率下降的原因是汽車和健康保險領域的利潤率持續壓縮。可變營銷利潤率為 29.8%，而 2022 年第一季度為 35%。

Moving now to our segment results, which include inter-company revenue. Q1 2023 brand direct solutions gross margin was 22.7% compared to 20.9% in Q1 2022. Q1 2023 marketplace solutions gross margin was 21.3% compared to 27.9% in Q1 2022. And Q1 2023 technology solutions' Q1 gross margin was 74.2% compared to 88.6% in Q1 2022.

現在來看我們的部門業績，其中包括公司間收入。 2023 年第一季度品牌直接解決方案毛利率為 22.7%，而 2022 年第一季度為 20.9%。2023 年第一季度市場解決方案毛利率為 21.3%，而 2022 年第一季度為 27.9%。2023 年第一季度技術解決方案毛利率為 74.2%，而 2022 年第一季度為 88.6% 2022 年第一季度的百分比。

Looking at operating expenses, we continue to focus on driving efficiency in our business through consolidation and reduction of operating expenses. During Q1, operating expenses were $32.5 million, down $2 million when compared to first quarter in the prior year. This is the result of our continued focus on cost reduction and business optimization.

在運營費用方面，我們繼續致力於通過整合和減少運營費用來提高業務效率。第一季度運營費用為 3250 萬美元，比去年第一季度減少 200 萬美元。這是我們持續關注成本降低和業務優化的結果。

Now on to business profitability. Our adjusted EBITDA for the quarter was $3.4 million, generating a margin of 4%; down $7.1 million, driven primarily by lower revenue and margin compression; and offset by $1.9 million of lower operating expenses.

現在談談業務盈利能力。本季度調整後的 EBITDA 為 340 萬美元，利潤率為 4%；減少 710 萬美元，主要是由於收入下降和利潤壓縮；並被 190 萬美元的運營費用減少所抵消。

Our net loss was $20.7 million versus net loss of $5.4 million for the same quarter, driven by warrant expense as a result of share price volatility, interest expense resulting from the impact of rising interest rates, and cost related to the acquisition of ClickDealer and HomeQuote.

我們的淨虧損為 2070 萬美元，而同一季度的淨虧損為 540 萬美元，原因是股價波動導致的認股權證費用、利率上升影響產生的利息費用以及收購 ClickDealer 和 HomeQuote 的相關成本。

Shifting our focus to the balance sheet and liquidity, we ended the quarter with $20.1 million in cash and cash equivalents, which was down approximately $1.6 million compared to the same quarter last year. As a reminder, we did close and fund the most recent acquisition with cash from our balance sheet on March 30, 2023.

我們將重點轉向資產負債表和流動性，本季度末我們的現金和現金等價物為 2010 萬美元，比去年同期減少了約 160 萬美元。提醒一下，我們確實於 2023 年 3 月 30 日完成了最近一次收購，並用資產負債表中的現金提供資金。

At quarter-end, our total debt was $256.6 million, and we have $10 million of our revolving facility remaining undrawn. Our credit facility includes a debt-to-EBITDA covenant requirement of 4.5 times. As of March 31, our net leverage was 4.46 times debt to EBITDA. We believe we have sufficient sources of liquidity and remain mindful of our obligations, given current economic volatility.

截至季度末，我們的總債務為 2.566 億美元，還有 1,000 萬美元的循環貸款尚未提取。我們的信貸安排包括 4.5 倍的債務與 EBITDA 契約要求。截至 3 月 31 日，我們的淨槓桿率為 EBITDA 債務的 4.46 倍。我們相信，鑑於當前的經濟波動，我們擁有充足的流動性來源，並始終牢記我們的義務。

Turning over to our outlook. For Q2, we now expect net revenue in the range of $90 million to $93 million and adjusted EBITDA of $3 million to $6 million. This updated guidance reflects the previously mentioned pullback in marketing spend, cost reduction, and the most recent acquisition performance.

轉向我們的展望。對於第二季度，我們目前預計淨收入在 9000 萬美元至 9300 萬美元之間，調整後的 EBITDA 為 300 萬美元至 600 萬美元。這一更新的指導反映了前面提到的營銷支出的縮減、成本的降低以及最近的收購業績。

Our guidance range for gross margin is 23% to 26% and variable marketing margin range is 29% to 34% for Q2. When we come back in August for our Q2 2023 earnings, we will provide Q3 guidance growth drivers across DMS and our recently completed acquisition and the positive impact of our previously announced restructuring plan.

我們對第二季度毛利率的指導範圍是 23% 至 26%，可變營銷利潤率範圍是 29% 至 34%。當我們在 8 月份回顧 2023 年第二季度收益時，我們將提供 DMS 的第三季度增長驅動因素指引、我們最近完成的收購以及我們之前宣布的重組計劃的積極影響。

In summary, as Joe noted, we remain heads-down and focused on our strategic growth initiatives. These are items we believe we can control. And we are pleased with the progress we are making along with the associated positive trends. Still, we believe we will continue to face headwinds in the coming quarters, with an unsettled insurance market and further shifts in consumer behavior.

總之，正如喬所指出的，我們仍然埋頭苦幹，專注於我們的戰略增長計劃。這些是我們相信我們可以控制的項目。我們對所取得的進展以及相關的積極趨勢感到高興。儘管如此，我們相信未來幾個季度我們將繼續面臨不利因素，保險市場不穩定，消費者行為進一步轉變。

Despite these headwinds, we are confident we have the right people, processes, and technology in place to be agile and successfully navigate our company through these volatile times and execute our growth initiatives. With that, we thank you for your interest in DMS, and I'll turn the call over to the operator for Q&A.

儘管存在這些不利因素，我們相信我們擁有合適的人員、流程和技術，能夠保持敏捷，成功引導我們的公司度過這些動蕩的時期並執行我們的增長計劃。在此，我們感謝您對 DMS 的關注，我會將電話轉給接線員進行問答。

(Operator Instructions) David Marsh, Singular Research.

（操作員說明）David Marsh，Singular Research。

Hi, thanks for taking questions. So first, did I miss something with regard to Rick Rodick? I didn't see any type of an announcement.

您好，感謝您提出問題。首先，我是否錯過了一些關於里克·羅迪克的事情？我沒有看到任何類型的公告。

Hey, David. Good afternoon. This is Joe speaking. Good to have you on the call. Rick retired in the beginning of Q2, and there was a filing for that. But there was not an announcement.

嘿，大衛。下午好。這是喬在講話。很高興您接聽電話。里克在第二季度初退休，並為此提交了一份申請。但沒有任何公告。

Okay, got it. And then, I guess, next -- the expense side came in a little bit higher than expected here. Were there some one-timers in the cash operating expenses, in particular G&A, that might fall out going forward?

好，知道了。然後，我想，接下來——費用方面比預期的要高一些。現金運營支出中是否存在一些一次性支出，特別是一般管理費用，未來可能會消失？

That's a great question. We do have some costs associated with the recent reduction in our workforce, which -- a one-time consumption. They are part of our Q1, and moving forward, you'll see the savings from those.

這是一個很好的問題。我們確實有一些與最近勞動力減少相關的成本，這是一次性消耗。它們是我們第一季度的一部分，展望未來，您將看到這些帶來的節省。

Okay. Can you quantify that in the quarter -- that impact in the quarter? Hello?

好的。您能否量化本季度的影響？你好？

Yes, it's approximately about 400,000.

是的，大約是40萬左右。

400,000. Okay. And then just kind of turning to the top line, could you just -- it sounds like things continue to be a bit challenging. I mean, what needs to happen here to turn the corner and get revenues back into a growth trajectory?

400,000。好的。然後轉向頂線，你能不能——聽起來事情仍然有點具有挑戰性。我的意思是，這裡需要發生什麼才能扭轉局面並使收入回到增長軌道？

Hey, Dave. This is Joe speaking again. Another good question. So if you think through the go-forward plan and the objectives -- so just focusing on significant enterprise customers and vertical diversity, that's going to be critical here. If you look at e-commerce and consumer finance, we saw growth in both of those segments in the Q1 period, whereas insurance was down significantly and continues to be pressured.

嘿，戴夫。這是喬又在說話。另一個好問題。因此，如果您仔細考慮未來的計劃和目標，那麼只需關注重要的企業客戶和垂直多樣性，這在這裡就至關重要。如果你看看電子商務和消費金融，我們發現這兩個領域在第一季度都出現了增長，而保險業則大幅下滑，並繼續面臨壓力。

So if you think through the back half of the year, we've got the e-commerce holiday shopping season that will come in the Q4 period. And now we get the benefit of not only a domestic e-commerce holiday shopping season, but also an international holiday e-commerce shopping period. So just focusing in key areas of the business where there is growth.

因此，如果您考慮今年下半年，我們將在第四季度迎來電子商務假日購物季。而現在我們不僅享受到了國內電商假日購物季的好處，還享受到了國際假日電商購物季的好處。因此，只需關注有增長的關鍵業務領域。

And then beyond that, looking at insurance, I know recoveries extremely hard this year. And the outlook is not great right now. However, I guess, the one positive that we can point to is that consumers are continuing to price-shop as rate increases pull through. And I think it's generally true for all carriers, that they have pricing increases approved in at least some of the states, and they're waiting for, behind that, consumers renewal cycles to pull through.

除此之外，看看保險，我知道今年的恢復非常困難。而且目前前景並不樂觀。然而，我想，我們可以指出的一個積極因素是，隨著加息的結束，消費者繼續在價格上購物。我認為對於所有運營商來說，這通常都是正確的，他們至少在一些州批准了漲價，並且他們正在等待消費者續訂週期的結束。

And when that starts happening, and they get the benefit of their increased pricing when those renewals pull through, there will be some recovery. And it's taken quite some time for those state-by-state increases to pull through. We should see some of that in Q3.

當這種情況開始發生時，當這些續訂完成時，他們會從提高的價格中受益，將會出現一些復甦。這些逐個州的增長需要相當長的時間才能實現。我們應該在第三季度看到其中的一些。

So it's hard to bet on an insurance recovery, so for the time being, we're focused on areas of the business where there is growth. We do have open enrollment periods later in the year in health insurance. Historically, Q2 is going to be cyclically our down period or trough-level performance and then up from here through the end of the year.

因此很難押注於保險恢復，因此目前我們將重點放在有增長的業務領域。我們確實在今年晚些時候開放了健康保險投保期。從歷史上看，第二季度將是我們業績的周期性下滑期或谷底水平，然後從此時開始直至年底。

Got it. Thank you. Let me pause there, and let some other people get some questions in.

知道了。謝謝。讓我暫停一下，讓其他人提出一些問題。

Marvin Fong, BTIG.

馬文·方，BTIG。

Good evening. Thanks for taking my questions. I guess, maybe just to start, it sounded like the captive agent count was down, and I can appreciate the headwinds that might be causing that.

晚上好。感謝您回答我的問題。我想，也許只是開始，聽起來俘虜特工數量減少了，我可以理解可能導致這種情況的逆風。

Just curious, I mean, how historically -- or what are your expectations for how this group will recover once the insurance carriers get pricing back? Do you expect the snapback to be as quick as they came down, or it should be a little more gradual? And then I have a follow-up.

我只是好奇，歷史如何——或者您對保險公司恢復定價後該群體將如何恢復的期望是什麼？您預計回彈會像下降一樣快，還是應該更漸進一些？然後我有一個後續行動。

Hey, Marvin. Good afternoon. It's Joe speaking. Good to have you. So just to clarify if the question is specific to the insurance agents, to the SMBs. Is that correct?

嘿，馬文。下午好。說話的是喬。很高興有你。因此，我想澄清一下這個問題是否特定於保險代理人或中小企業。那是對的嗎？

Yes.

是的。

So what we've seen here -- and this is specific to Q1, and the way that we measure this, we're basically looking at spending in the quarter. So this doesn't go back for a full year. This is just the recent trend here in 2023.

所以我們在這裡看到的——這是第一季度特有的，我們衡量這一點的方式，我們基本上是在關注本季度的支出。所以這不會回到一整年。這只是 2023 年的最新趨勢。

So there's been some changes with the carriers on subsidy, and subsidy goes directly to those independent -- the captive agents. And as subsidy moves as result of market fluctuations and decisioning at the carrier level, the agent spend will move. And we've seen periods in time where they go dormant for a quarter, for potentially two quarters, and then they come back on.

因此，運營商的補貼發生了一些變化，補貼直接發放給那些獨立的——自營代理商。隨著補貼因市場波動和運營商層面的決策而變化，代理商支出也會發生變化。我們已經看到他們休眠一個季度，可能兩個季度，然後又回來。

We have an experienced and seasoned team that manages our relationships with the agents. Those relationships are still open. So as we see recovery come through -- as I just mentioned with David, different carriers getting increases through on the different state levels. As those renewals pull through, we expect those agents to reactivate quite quickly here.

我們擁有一支經驗豐富的團隊來管理我們與代理商的關係。這些關係仍然是開放的。因此，當我們看到復甦的實現時，正如我剛剛與大衛提到的那樣，不同的運營商在不同的州層面上獲得了增長。隨著這些更新的完成，我們預計這些代理將在這裡很快重新激活。

So although it's down for the first time since we've been reporting this, it's something that can recover quite quickly. And you could see significant movement -- as you just saw down, you could see significant movement up in the quarter.

因此，儘管自我們報告此事以來這是第一次下降，但它可以很快恢復。你可以看到重大的變動——正如你剛剛看到的下跌一樣，你可以看到本季度的重大變動。

Okay, great. Thanks for that. And then my last question just -- you alluded in the script to additional liquidity, should you guys require it. Just could you elaborate on, potentially, the additional sources of liquidity you might have -- you're considering -- is another equity here, a potential solution within the next 12 months, or how would you characterize your liquidity outlook?

好的，太好了。感謝那。然後我的最後一個問題是——你們在劇本中提到了額外的流動性，如果你們需要的話。您能否詳細說明您可能擁有的額外流動性來源（您正在考慮）是另一種股權，是未來 12 個月內的潛在解決方案，或者您將如何描述您的流動性前景？

That's a great question. Thank you. Our credit facility debt-to-EBITDA rate requirement is 4.5. We are expected to be in compliance. We are in compliance for Q1, and we are expected to be in compliance in the foreseeable future with it.

這是一個很好的問題。謝謝。我們的信貸額度債務與 EBITDA 比率要求為 4.5。我們預計將遵守規定。我們遵守了第一季度的規定，預計在可預見的將來也將遵守這一規定。

At this point, we have approximately $10 million left in our revolver we can draw upon. And we closed Q1 with a cash balance, $20 million, so we do have enough resources in terms of liquidity at this time.

此時，我們的左輪手槍中還剩下大約 1000 萬美元可以動用。我們第一季度末的現金餘額為 2000 萬美元，因此目前我們在流動性方面確實有足夠的資源。

And if I could sneak in one more, could you speak to the revenue contribution of HomeQuote you're expecting in the second quarter, just so we can have an idea of the organic growth that you're guiding to? Thanks.

如果我可以再透露一下，您能否談談您預計第二季度 HomeQuote 的收入貢獻，以便我們了解您所引導的有機增長？謝謝。

Hi, Marvin. It's Joe again. So we haven't carved that out yet because we just acquired it. So we're not reporting on home services as a segment or guiding home services as a segment is what I meant.

嗨，馬文。又是喬。所以我們還沒有把它解決掉，因為我們剛剛獲得它。因此，我們並不是將家庭服務作為一個細分市場進行報告，也不是將家庭服務作為一個細分市場進行指導，這就是我的意思。

We'll report on it as a segment when we come back to track the quarter, but we have not guided it yet. So you'll get a lookback on it, and then it will be included in our guidance going forward as it has been.

當我們回來跟踪本季度時，我們會將其作為一個部分進行報告，但我們尚未對其進行指導。因此，您將對其進行回顧，然後它將像以前一樣包含在我們的未來指南中。

Got you. Okay. That sounds good. Thanks, Joe. Thanks, Victoria (sic, "Vanessa").

明白你了。好的。聽起來很好。謝謝，喬。謝謝，維多利亞（原文如此，“凡妮莎”）。

Thank you, Marvin.

謝謝你，馬文。

Maria Ripps, Canaccord.

瑪麗亞·里普斯，Canaccord。

Great. Good afternoon, and thanks for taking my questions. First, can you maybe talk about some of the dynamics that impacted your Q2 outlook versus your prior guide? Is it largely related to the P&C vertical? Or did your outlook for other verticals and perhaps maybe expected contribution from the recent acquisition changed as well since you shared your initial outlook?

偉大的。下午好，感謝您回答我的問題。首先，您能否談談與之前的指南相比影響您第二季度前景的一些動態？它與財產保險行業有很大關係嗎？或者，自從您分享最初的展望以來，您對其他垂直行業的展望以及最近收購的預期貢獻是否也發生了變化？

Hi, Maria. Good afternoon; Joe speaking. So the majority of the impact, not all of the impact, would sit inside of insurance. And that would be property and casualty and also health insurance. So we'll break it into two.

嗨，瑪麗亞。下午好;喬說話。因此，大部分（而不是全部）影響將發生在保險範圍內。這將是財產和傷亡以及健康保險。所以我們將把它分成兩部分。

So as we closed Q1 and moved into Q2, there was significant changes in the carrier landscape; carriers closing states to paid marketing. We had a significant carrier close, a significant amount of states, to paid marketing. There was also budget capping there.

因此，當我們結束第一季度並進入第二季度時，承運商格局發生了重大變化；運營商關閉付費營銷。我們有一家重要的運營商，靠近很多州，進行付費營銷。那裡也有預算上限。

And the reason for that is, which I'm sure you're aware of this, new customers generally have higher loss ratios than renewal customers. So carriers are looking at effectively the value of the renewal customers in the portfolio and not allocating paid marketing dollars to new customers, especially in states where rate increases haven't gone through. So we did not anticipate that at the end of Q1, and that occurred pretty early in Q2.

其原因是，我相信您已經意識到這一點，新客戶的流失率通常比續訂客戶更高。因此，運營商正在有效地關注投資組合中續訂客戶的價值，而不是將付費營銷資金分配給新客戶，特別是在費率尚未上調的州。因此，我們在第一季度末沒有預料到這種情況，而這種情況在第二季度初期就發生了。

And then in health insurance, we're into a period of -- a lock-up period. There's no enrollment period open right now in either over 65 or under 65. And lock-up period spend has been very volatile in terms of where it actually comes in.

然後在健康保險方面，我們進入了一段鎖定期。目前，無論是 65 歲以上還是 65 歲以下，都沒有開放的註冊期。而且就實際支出而言，鎖定期支出非常不穩定。

So I think with health insurance, it's not so much that we don't expect to see the spend. It's more so that we see cyclical shift in the spend into the latter part of the year, specifically when the enrollment period is opened in October, so between now and then.

因此，我認為在健康保險方面，我們預計不會有太多支出。更重要的是，我們看到今年下半年的支出出現週期性變化，特別是在 10 月份招生期開始時，從現在到那時。

Although in Q3 ahead of the enrollment period, there'll likely be a small ramp-up. We don't expect there to be a significant change in health insurance, given what we're seeing with our advertising clients right now on the lock-up period. So those are the two major drivers behind the reduction in the performance this quarter.

儘管在註冊期之前的第三季度，可能會出現小幅增長。鑑於我們目前在鎖定期內看到的廣告客戶的情況，我們預計健康保險不會發生重大變化。因此，這是本季度業績下降的兩個主要驅動因素。

Got it. That's very helpful, Joe. And then my second question is -- so in the past, you talked about very high retention rate among your clients. Can you maybe just update us on where your retention rates have been over the past couple of quarters and just maybe talk about the pace and the process of new client acquisition in this sort of challenging environment?

知道了。這非常有幫助，喬。我的第二個問題是——過去，您談到了客戶的保留率非常高。您能否向我們介紹一下過去幾個季度您的保留率的最新情況，並談談在這種充滿挑戰的環境中獲取新客戶的速度和過程？

So we did see growth in the significant enterprise customers, albeit small in the quarter, and that looks back for a full year. So that's positive.

因此，我們確實看到了重要企業客戶的增長，儘管本季度增幅較小，但回顧全年情況也是如此。所以這是積極的。

And although we've not measured the customer retention data per se for this call or reported it as a KPI in earnings, generally, retention rates have been pretty consistent historically, especially when you look at our top customers. I do not believe that there's a material change there.

儘管我們沒有測量本次電話會議的客戶保留數據本身，也沒有將其報告為收入中的關鍵績效指標，但一般來說，保留率在歷史上一直相當一致，尤其是當您查看我們的頂級客戶時。我不相信那裡有實質性的變化。

As far as new customer acquisition goes, we have -- first of all, we have an established customer base, although they're spending less, especially in insurance. As many of our peers have reported, we still maintain strategic relationships with these customers, even with the SMBs and even if they're not spending as -- and the answer to Marvin's question, those relationships still exist. So when things turn, we've made the investments in the people, process, and technology to see spend scale back to historical levels with those customers.

就新客戶獲取而言，我們首先擁有成熟的客戶群，儘管他們的支出較少，尤其是在保險方面。正如我們許多同行所報告的那樣，我們仍然與這些客戶保持戰略關係，甚至與中小型企業保持戰略關係，即使他們不這樣做——馬文問題的答案是，這些關係仍然存在。因此，當情況發生變化時，我們對人員、流程和技術進行了投資，以確保這些客戶的支出規模回落到歷史水平。

And on the other side, we're expanding and we're looking at the categories that are growing in the business like e-commerce and consumer finance. And we have added some new customers in those categories. And then we have the recent acquisition, which we're early days there, where we added the home services vertical, where there's certainly new customers coming in as a result of that.

另一方面，我們正在擴張，我們正在關注電子商務和消費金融等業務中不斷增長的類別。我們在這些類別中添加了一些新客戶。然後我們最近進行了收購，我們還處於早期階段，我們增加了家庭服務垂直領域，因此肯定會有新客戶進來。

And then we have the international brand direct business, which also has new customers. So that's where our focus is. So they're new customers to us, retention customers for the acquisition, but we still treat them the same. There's opportunities to grow with them.

然後我們還有國際品牌直營業務，也有新客戶。這就是我們的重點。因此，他們對我們來說是新客戶，是收購後的保留客戶，但我們仍然對他們一視同仁。有機會與他們一起成長。

That's really the focus of the business and, of course, the sales teams. If there's opportunities out there, we're going to look to introduce new customers to the DMS solution.

這確實是業務的重點，當然也是銷售團隊的重點。如果有機會，我們將尋求向新客戶介紹 DMS 解決方案。

Got it. That's very helpful. Thank you very much.

知道了。這非常有幫助。非常感謝。

Jason Kreyer, Craig-Hallum.

賈森·克雷爾，克雷格·哈勒姆。

Hey, this is Cal Bartyzal, here for Jason. Just a couple of quick ones from me. Maybe, first, do you anticipate any impact from this recent CMS 48-hour rule changes?

嘿，我是卡爾·巴蒂扎爾，是為傑森服務的。只是我的幾個快速的。也許，首先，您預計最近的 CMS 48 小時規則變更會產生什麼影響嗎？

Hey, Cal. Good afternoon. Good to have you on the call. We currently -- we're in a lock-up period, as mentioned to Maria, where there's not an enrollment period currently active except [transactions].

嘿，卡爾。下午好。很高興您接聽電話。我們目前正處於鎖定期，正如瑪麗亞提到的，除了[交易]之外，目前沒有活躍的註冊期。

So we're working with our partners on how they plan to work with the 48-hour rule. We're going to have a collaborative process with the partners. Currently, we don't think that there's going to be a negative impact in terms of how it affects our ability to work with our advertising customers.

因此，我們正在與合作夥伴合作，研究他們計劃如何遵守 48 小時規則。我們將與合作夥伴進行協作。目前，我們認為這不會對我們與廣告客戶合作的能力產生負面影響。

It doesn't mean there won't be a change. It just means the revenue will be there. The process by which that revenue is realized is likely going to be impacted, to be determined, but we don't think it impacts revenue in its totality.

這並不意味著不會有改變。這只是意味著收入將會存在。實現收入的過程可能會受到影響，但我們認為這不會影響整體收入。

Perfect. That's helpful. And then maybe just last one from me. I know you kind of talked about some bright spots like e-commerce and finance. You're talking about going deeper and not wider. Can you just maybe highlight what's driving the growth in those bright spots and maybe how you're trying to capitalize on those areas going forward? Thanks.

完美的。這很有幫助。然後也許只是我的最後一篇。我知道您談到了電子商務和金融等一些亮點。你說的是更深入而不是更廣泛。您能否強調一下推動這些亮點增長的因素以及您未來將如何利用這些領域？謝謝。

Sure. So consumer finance -- it's really outside of mortgage where we see the growth. And it's similar to trends we see in insurance, although that there's rate increases that need to pull through and [how are] your demand issues behind that.

當然。因此，消費金融——它實際上是在抵押貸款之外的領域，我們看到了增長。這與我們在保險業看到的趨勢類似，儘管需要完成費率的上漲以及其背後的需求問題。

In consumer finance, you have consumers now aggressively price-shopping for alternative solutions with their credit cards, personal lending solutions, other solutions like credit counseling and debt refinancing. So it's those products that see growth in a down cycle like this, where we're seeing the opportunity in consumer finance with the advertisers as the consumer demand increases.

在消費金融領域，消費者現在正在積極地通過信用卡、個人貸款解決方案以及信用諮詢和債務再融資等其他解決方案來尋找替代解決方案。因此，正是那些在這樣的下行週期中看到增長的產品，隨著消費者需求的增加，我們看到了廣告商在消費金融領域的機會。

And then on the e-commerce side, that's more general flight-to-safety digital performance marketing, as I said on the call, pure play from an ROI perspective. Our customers were de-risking ad spend. We're leveraging our data, our technology, our media reach.

然後在電子商務方面，正如我在電話中所說，從投資回報率的角度來看，這是更一般的安全飛行數字績效營銷。我們的客戶正在降低廣告支出的風險。我們正在利用我們的數據、技術和媒體影響力。

So it's our down -- our ad dollars on the line. And we're matching them up with consumers with [intent] effectively delivering them customers to de-risking ad spend. So flight to safety and ad spend is what's benefiting us on the e-commerce side.

所以這是我們的損失——我們的廣告收入岌岌可危。我們正在將他們與消費者進行匹配，[意圖]有效地為他們提供客戶，以降低廣告支出的風險。因此，轉向安全和廣告支出是我們在電子商務方面受益的原因。

Perfect. Thanks so much.

完美的。非常感謝。

Thank you, Mr. Kreyer (sic, "Mr. Bartyzal"). There are no further questions at this time. This concludes today's conference call. You may now disconnect.

謝謝你，克雷耶先生（原文如此，“巴蒂扎爾先生”）。目前沒有其他問題。今天的電話會議到此結束。您現在可以斷開連接。