Hagerty Inc (HGTY) 2023 Q2 法說會逐字稿

Greetings, and welcome to the Hagerty Second Quarter 2023 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加哈格蒂 2023 年第二季度收益電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Mr. Jay Koval, Head of Investor Relations. Thank you, sir. You may begin.

現在我很高興向您介紹主持人，投資者關係主管 Jay Koval 先生。謝謝你，先生。你可以開始了。

Thank you, operator. Good morning, everyone, and thank you for joining us to discuss Hagerty's results for the second quarter of 2023. I'm joined this morning by McKeel Hagerty, Chief Executive Officer; and Patrick McClymont, Chief Financial Officer.

謝謝你，接線員。大家早上好，感謝您與我們一起討論 Hagerty 2023 年第二季度的業績。今天早上，首席執行官 McKeel Hagerty 也加入了我的行列。和首席財務官帕特里克·麥克萊蒙特。

During this morning's conference call, we will refer to an accompanying presentation that is available on Hagerty's Investor Relations section of the company's corporate website at investor.hagerty.com. Our earnings release, accompanying slides and letter to stockholders covering this period are also posted on the IR website. Our 8-K filing is also available there along with our earnings press release and other materials.

在今天上午的電話會議中，我們將參考一份隨附的演示文稿，該演示文稿可在該公司網站 Investor.hagerty.com 的哈格蒂投資者關係部分查看。我們這一時期的收益發布、隨附的幻燈片和致股東的信也發佈在投資者關係網站上。我們的 8-K 文件以及我們的收益新聞稿和其他材料也可以在那裡獲得。

Today's discussion contains forward-looking statements and non-GAAP financial metrics as described further on Slide 2 of the earnings presentation. Forward-looking statements include statements about our expected future business and financial performance and are not promises or guarantees of future performance. They are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations.

今天的討論包含前瞻性陳述和非公認會計準則財務指標，如收益演示幻燈片 2 中進一步所述。前瞻性陳述包括有關我們預期未來業務和財務業績的陳述，並非對未來業績的承諾或保證。它們面臨各種風險和不確定性，可能導致實際結果與我們的預期存在重大差異。

For a discussion of material risks and important factors that could affect our actual results, please refer to those contained in our filings with the SEC, which are also available on our Investor Relations website and at sec.gov.

有關可能影響我們實際結果的重大風險和重要因素的討論，請參閱我們向 SEC 提交的文件中包含的內容，這些文件也可以在我們的投資者關係網站和 sec.gov 上找到。

The appendix of the presentation also contains reconciliations of our non-GAAP metrics to the most directly comparable GAAP measures that are further supplemented by this morning's 8-K filing.

演示文稿的附錄還包含我們的非 GAAP 指標與最直接可比的 GAAP 指標的對賬，今天上午的 8-K 備案進一步補充了這些指標。

And with that, I will turn the call over to McKeel, our Founder and CEO.

接下來，我會將電話轉給我們的創始人兼首席執行官 McKeel。

Thanks, Jay, and good morning, everyone. We appreciate you taking the time to join our second quarter 2023 earnings call. Hagerty has a track record of delivering double-digit written premium growth over the last 2 decades and one team Hagerty has been hard at work positioning the company to sustain these high rates of growth over the coming years. We do this by solving problems for car lovers through providing the products and services that these enthusiasts need to enjoy their prized possessions.

謝謝杰伊，大家早上好。感謝您抽出寶貴時間參加我們的 2023 年第二季度財報電話會議。哈格蒂在過去 20 年裡保持了兩位數的保費增長，並且哈格蒂團隊一直在努力使公司在未來幾年保持這種高增長率。為此，我們通過提供汽車愛好者享受其珍貴財產所需的產品和服務來解決他們的問題。

So I'm proud to report that we continue to deliver robust top line momentum during the first half of 2023, fueled by high teens written premium growth, and we significantly grew profitability despite ramped-up technology spend as we build out our buy and sell marketplace and prepare to launch the State Farm commercial partnership over the coming months.

因此，我很自豪地向大家報告，在青少年保費增長的推動下，我們在2023 年上半年繼續保持強勁的營收勢頭，儘管隨著我們建立買賣業務，技術支出不斷增加，但我們的盈利能力仍顯著增長市場並準備在未來幾個月內啟動 State Farm 商業合作夥伴關係。

Let's dig into the first half results shown on Slide 3 of our investor deck, including total revenue jumped 28% during the first 6 months of 2023 to $480 million. Written premiums and commission revenue both grew 17% during the first half.

讓我們深入研究一下投資者幻燈片 3 中顯示的上半年業績，其中 2023 年前 6 個月的總收入躍升 28%，達到 4.8 億美元。上半年保費收入和佣金收入均增長17%。

The Hagerty brand is strong and our superior value proposition is resonating with consumers in an industry suffering from unprecedented inflationary pressures. In fact, in the first half of 2023, we added a record number of new policies surpassing the very robust numbers we delivered during 2021.

哈格蒂品牌實力雄厚，我們卓越的價值主張在遭受前所未有的通脹壓力的行業中引起了消費者的共鳴。事實上，在 2023 年上半年，我們增加了創紀錄的新保單數量，超過了我們在 2021 年交付的非常強勁的數量。

In our risk-taking entity, Hagerty Reinsurance, first half earned premium jumped 34% due to the growth in written premium and our increased level of quota share to 80%. We have continued to assume more of the risk and premium associated with our strong and stable underwriting capabilities.

在我們的風險實體 Hagerty Reinsurance，由於承保保費增長以及我們的配額份額增加至 80%，上半年賺取的保費增長了 34%。我們繼續承擔更多與我們強大而穩定的承保能力相關的風險和溢價。

Membership, marketplace and other revenue increased 53% during the first 6 months. This growth was fueled by 20% membership growth, $12 million of marketplace revenue described on Slide 4 and a 12% increase in other revenue, including sponsorship and event admission revenue.

前 6 個月，會員、市場和其他收入增長了 53%。這一增長的推動因素包括 20% 的會員增長、幻燈片 4 中描述的 1200 萬美元的市場收入以及 12% 的其他收入增長（包括贊助和活動入場收入）。

Finally, regarding our commercial partnership with State Farm, shown on Slide 5, we are excited to announce that we will soon begin writing new policies in 4 initial states under the 10-year agreement. Good things take time, and we are confident that the State Farm Classic-plus program is the beginning of a very fruitful commercial partnership that will be a win-win for both companies.

最後，關於我們與 State Farm 的商業合作夥伴關係（如幻燈片 5 所示），我們很高興地宣布，我們將很快開始根據 10 年協議在 4 個初始州制定新政策。好事需要時間，我們相信 State Farm Classic-plus 計劃是富有成效的商業合作夥伴關係的開始，這對兩家公司來說將是雙贏。

Now over the last several calls, we have talked at length about our intense focus on managing expense growth so that we can return to historic levels of double-digit profitability in short order. We are pleased to announce that our year-over-year margin improvement is running ahead of expectations. First half adjusted EBITDA of $41 million increased $31 million. And we also delivered positive operating income and net income during the first 6 months of 2023.

在過去的幾次電話會議中，我們詳細討論了我們對管理費用增長的高度關注，以便我們能夠在短時間內恢復兩位數盈利能力的歷史水平。我們很高興地宣布，我們的利潤率同比改善超出了預期。上半年調整後 EBITDA 為 4100 萬美元，增加了 3100 萬美元。 2023 年前 6 個月，我們還實現了正營業收入和淨利潤。

Our team is executing well on our profitable growth ambitions, and we are positioned to deliver on our 2023 key initiatives shown on Slide 6. As a reminder, they include first, delivering high rates of revenue growth powered by a sustained double-digit written premium gains as well as incremental revenue from membership and marketplace.

我們的團隊正在很好地實現我們的盈利增長目標，並且我們有能力實現幻燈片6 所示的2023 年關鍵舉措。提醒一下，它們包括首先，在持續兩位數的保費推動下實現高收入增長率收益以及來自會員和市場的增量收入。

Given the strong first half results and continued business momentum, we are increasing full year revenue growth expectations to 23% to 27%, fueled by written premium growth of 13% to 15%. Second, continuing our evolution into a vertically integrated insurance business, we believe this will create meaningful value for consumers as we increase our control by reducing the frictional costs inherent in the current structure And third, significantly improving the profitability of our business through cost containment and operational efficiencies. Given the strength of our first half results, we are upgrading our full year outlook for adjusted EBITDA to a range of $60 million to $80 million, which implies over 7 points of margin expansion from 2022.

鑑於上半年的強勁業績和持續的業務增長勢頭，在保費增長 13% 至 15% 的推動下，我們將全年收入增長預期提高至 23% 至 27%。其次，繼續向垂直整合的保險業務發展，我們相信這將為消費者創造有意義的價值，因為我們通過減少當前結構固有的摩擦成本來增強控制力。第三，通過成本控制和成本控制，顯著提高我們業務的盈利能力。運營效率。鑑於上半年業績強勁，我們將調整後 EBITDA 的全年預期上調至 6000 萬至 8000 萬美元，這意味著自 2022 年起利潤率將擴大 7 個百分點以上。

In summary, we are on a path to becoming a leaner, stronger and more profitable company that can self-fund these high rates of growth. Our productivity initiatives will drive cash flow generation over the coming years which when combined with our recent capital raise of $105 million, should position us to continue to invest and to execute on our long-term growth ambitions and to allow us to save driving a car culture for future generations. We believe this strategy will create value for our stakeholders, including members, partners and investors.

總而言之，我們正在成為一家更精簡、更強大、利潤更高的公司，能夠為這些高增長率提供自籌資金。我們的生產力計劃將在未來幾年推動現金流的產生，再加上我們最近籌集的 1.05 億美元資金，將使我們能夠繼續投資並實現我們的長期增長目標，並讓我們能夠節省開車時間為子孫後代創造文化。我們相信這一戰略將為我們的利益相關者創造價值，包括會員、合作夥伴和投資者。

Let me now turn the call over to Patrick to cover the financials in more detail.

現在讓我將電話轉給帕特里克，以更詳細地介紹財務狀況。

Thank you, McKeel, and good morning, everyone. McKeel shared some of the first half figures, so let's dig into the second quarter results shown on Slide 7 and 8. We delivered 27% growth in total revenue in the second quarter to $261 million with written premium growth of 16% in large gains in marketplace and membership. Hagerty's brand strength can be seen in the 88% retention and quality of written premium growth with strong contributions from new business count and rate. Commission and fee revenue grew 15% to $110 million due to the written premium gains.

謝謝你，麥基爾，大家早上好。 McKeel 分享了上半年的一些數據，所以讓我們深入研究幻燈片7 和8 中顯示的第二季度業績。我們第二季度的總收入增長了27%，達到2.61 億美元，承保保費增長了16% ，在市場和會員資格。 Hagerty 的品牌實力體現在 88% 的保費保留率和保費增長質量，以及新業務數量和比率的強勁貢獻。由於承保保費收益，佣金和費用收入增長了 15%，達到 1.1 億美元。

Membership, marketplace and other revenue jumped 44% to $24 million, benefiting from an increase in total paid members, a transition to single-tier pricing for membership at $70 per year and an additional $5 million in marketplace revenue from the successful Porsche 75th anniversary auction in June and growing contribution from our online marketplace.

會員、市場和其他收入躍升44%，達到2,400 萬美元，這得益於付費會員總數的增加、向每年70 美元的會員單級定價的過渡以及保時捷75 週年紀念拍賣的成功帶來的額外500 萬美元的市場收入六月，我們的在線市場貢獻不斷增加。

Earned premium grew 35% to $127 million, driven by new written premium growth and another 10-point increase in our contractual reinsurance quota share in 2023 to roughly 80%. Our loss ratio, including cats, came in at a stable 42%. Our book performs differently from daily drivers because our customers take good care of their toys.

在新承保保費增長以及 2023 年我們的合同再保險配額份額再增加 10 個百分點至約 80% 的推動下，已賺保費增長了 35%，達到 1.27 億美元。我們的損失率（包括貓）穩定在 42%。我們的書的表現與日常駕駛不同，因為我們的客戶會很好地愛護他們的玩具。

Now turning to profitability, as shown on Slide 9, we reported a second quarter operating profit of $17 million, an increase of $15 million over the prior year period. Operating profit this quarter also included a $3 million charge, primarily related to the impairment of leases for facilities we are no longer using and are actually working to sublease. In the aggregate, we delivered second quarter net income of $16 million compared to a net loss of $6 million a year earlier.

現在轉向盈利能力，如幻燈片 9 所示，我們報告第二季度營業利潤為 1700 萬美元，比上年同期增加 1500 萬美元。本季度的營業利潤還包括 300 萬美元的費用，主要與我們不再使用且實際上正在轉租的設施的租賃減值有關。總的來說，我們第二季度的淨利潤為 1600 萬美元，而去年同期的淨虧損為 600 萬美元。

The year-over-year change in net income was primarily driven by the significantly improved operating margin as we successfully execute on our profitable growth ambition.

淨利潤的同比變化主要是由於我們成功實現了盈利增長目標，營業利潤率顯著提高。

Net income also includes a $4 million swing in fair value adjustments related to our private and public warrants. GAAP earnings per share was $0.03 based on our 84 million weighted average shares of Class A common stock outstanding. Our adjusted EBITDA during the second quarter was $34 million, an $18 million improvement over the $16 million in the prior year period.

淨利潤還包括與我們的私人和公共認股權證相關的 400 萬美元公允價值調整波動。根據我們已發行的 8400 萬股 A 類普通股的加權平均股計算，GAAP 每股收益為 0.03 美元。第二季度調整後的 EBITDA 為 3400 萬美元，比去年同期的 1600 萬美元增加了 1800 萬美元。

Let me now move on to our upgraded 2023 outlook shown on Slide 10. As McKeel mentioned, given this consistently strong and visible top line momentum in our business, we are increasing our outlook for total revenue growth to a range of 23% to 27%, powered by written premium growth of 13% to 15%, 2 points higher than previously anticipated.

現在讓我繼續討論幻燈片 10 中顯示的升級後的 2023 年前景。正如 McKeel 提到的，鑑於我們業務持續強勁且明顯的營收勢頭，我們將總收入增長前景提高至 23% 至 27% ，受保費增長13% 至15% 推動，比之前預期高出2 個百分點。

Our rate increases are locked and loaded and the Hagerty brand is on track to add a record 25 million new members in 2023, creating a powerful base of auto enthusiasts to provide our products and services.

我們的費率上漲已鎖定並加載，Hagerty 品牌有望在 2023 年增加創紀錄的 2500 萬新會員，為提供我們的產品和服務建立強大的汽車愛好者基礎。

Moving down the P&L. We have again increased our profit expectations for the full year. We now expect net income in a range of negative $12 million to positive $8 million and full year adjusted EBITDA of $60 million to $80 million, $5 million higher than prior EBITDA expectations of $55 million to $75 million.

損益表向下移動。我們再次上調全年盈利預期。我們現在預計淨利潤將在負1200 萬美元至正800 萬美元之間，全年調整後EBITDA 為6000 萬美元至8000 萬美元，比之前EBITDA 預期的5500 萬美元至7500 萬美元高出500 萬美元。

Before I wrap up, I wanted to highlight Slide 11, which shares some additional details related to the $105 million capital raised from strategic investors at the end of June. We raised $80 million of convertible preferred equity at Hagerty, Inc., including $50 million from State Farm to support our growth initiatives. This includes our continued evolution into a lower-cost full stack carrier with the products that allow us to widen the aperture of our underwriting while maintaining historical combined ratios.

在結束之前，我想強調一下幻燈片 11，其中分享了與 6 月底從戰略投資者籌集的 1.05 億美元資金相關的一些其他細節。我們在 Hagerty, Inc. 籌集了 8000 萬美元的可轉換優先股，其中包括從 State Farm 籌集的 5000 萬美元，以支持我們的增長計劃。這包括我們不斷發展成為成本更低的全棧承運商，其產品使我們能夠擴大承保範圍，同時保持歷史綜合比率。

We also have a $25 million commitment of long-term debt financing from State Farm for Hagerty Re. This capital tops off our cash and liquidity, positioning us to progress to a self-sustaining cash generating model and demonstrates the conviction of our strategic investors.

State Farm 還承諾為 Hagerty Re 提供 2500 萬美元的長期債務融資。這筆資金補充了我們的現金和流動性，使我們能夠邁向自我維持的現金生成模式，並表明了我們戰略投資者的信念。

In summary, we are well on our way towards achieving our 2023 plan for strong revenue growth and margin expansion. Importantly, we are laying the groundwork that will power our results over the coming years as we look to sustain our commission growth, add incremental profits from assuming more of the risk from our stable underwriting while also building out our marketplace platform.

總之，我們正在順利實現 2023 年收入強勁增長和利潤率擴張的計劃。重要的是，我們正在為未來幾年的業績奠定基礎，因為我們希望維持佣金增長，通過承擔更多穩定承保的風險來增加增量利潤，同時建立我們的市場平台。

With that, let us now open the call to your questions.

現在讓我們開始回答您的問題。

(Operator Instructions) Our first question comes from the line of Mark Hughes with Truist Securities.

（操作員指令）我們的第一個問題來自 Truist Securities 的 Mark Hughes。

Patrick, you mentioned the rate increases are locked and loaded. kind of refresh me on what you're getting in terms of rate, the average rate these days?

帕特里克，你提到加息已鎖定並加載。請讓我了解一下您的費率情況，這些天的平均費率？

I guess the way to think about 2023, what we're guiding to now in terms of total written premium growth is sort of mid-teens. And of that kind of 2/3 of it is coming from rate and the bottom is from volume. So think about rate as high single, touching double-digit rate increase and then the balance is coming from growth in units.

我想，從 2023 年的角度來看，我們現在指導的總承保保費增長約為 10 左右。其中 2/3 來自利率，底部來自交易量。因此，將利率視為高單位，觸及兩位數的利率增長，然後平衡來自單位的增長。

How much perhaps are you being helped in terms of units or perhaps not by just the dislocation in the broader personal lines market that maybe the appetite of some of your competitors is not what it used to be. And so therefore, you're seeing more policyholders migrate to your alternatives. Is that a dynamic?

也許您在單位方面得到了多少幫助，或者也許不僅僅是因為更廣泛的個人保險市場的混亂，也許您的一些競爭對手的胃口不如以前了。因此，您會看到更多的保單持有人轉向您的替代方案。這是動態嗎？

There is some evidence of that. So the appetite is reflected in rate, obviously. And so rates are going up across the board, and that is causing some folks to shop. And so when we're winning new business and when we can track what's going on and the customers give us the information, yes, some of it is the fact that our rates are viewed as quite competitive right now based on what's going on more broadly in the market.

有一些證據表明這一點。因此，顯然，食慾反映在利率上。因此，價格全面上漲，這促使一些人購物。因此，當我們贏得新業務時，當我們可以跟踪正在發生的事情並且客戶向我們提供信息時，是的，其中一些事實是，基於更廣泛的情況，我們的費率目前被視為相當有競爭力在市場上。

Yes, yes. And then the online marketplace, kind of give us the update of your progress there?

是的是的。然後在線市場可以向我們提供您的最新進展嗎？

Yes. Mark, McKeel here. We're actually very, very pleased. What we're trying to do with that team is balance this balance of sell-through rates and the amount of competitive bidding per lot. So we started off with the steady drumbeat of sort of 1 car per day, call it. And now we're, I think, touching 3. We've also started testing rolling through larger groups of cars that spill out over a period of days. And the idea is to make sure for the consignors that we maintain that level of strong bidding and getting above their estimates when it comes to a reserving kind of practice. So we're very, very pleased with it, and we look forward to seeing that kind of growth continuing ahead. So -- good stuff.

是的。馬克，麥基爾在這裡。我們實際上非常非常高興。我們試圖與該團隊一起做的是平衡售出率和每批競爭性投標數量之間的平衡。所以我們從每天一輛車的穩定節奏開始，就這樣吧。我認為現在我們已經達到了 3。我們還開始測試在幾天內溢出的較大組汽車中的滾動情況。我們的想法是確保發貨人能夠保持強勁的出價水平，並在涉及保留的做法時超出他們的預期。所以我們對此非常非常滿意，我們期待看到這種增長繼續下去。所以——好東西。

And I guess I would say one more thing about the digital auction platform. And this is being developed completely by our own digital product teams, and we are rolling out new features, new capabilities every 2 weeks in a sort of traditional agile sprint methodology.

關於數字拍賣平台，我想我還要再說一件事。這完全是由我們自己的數字產品團隊開發的，我們每兩週就會以一種傳統的敏捷衝刺方法推出新功能、新功能。

Our next question comes from the line of Greg Peters with Raymond James.

我們的下一個問題來自格雷格·彼得斯和雷蒙德·詹姆斯的對話。

This is Sid on for Greg. I believe last quarter, you mentioned your book is skewed more towards physical damage. And it seems like physical damage has been more sticky for some of the larger, more traditional auto carriers and understanding your target customer is different. But with the loss ratio ticking up this quarter, I'm just curious to hear your perspective on what you're seeing there.

這是格雷格的席德。我相信上個季度，您提到您的書更傾向於物理損壞。對於一些規模更大、更傳統的汽車運營商來說，物理損壞似乎更加棘手，並且對目標客戶的理解也有所不同。但隨著本季度損失率的上升，我很想听聽您對所看到的情況的看法。

When you say sticky, can you just clarify kind of what -- I wasn't quite sure there Sid, can you help me?

當你說“粘性”時，你能澄清一下——我不太確定 Sid，你能幫我嗎？

Yes. It seems like -- from just some of the disclosures we've seen, it seems like physical damage just continues to run a little bit higher from a severity perspective than some of the other components.

是的。從我們所看到的一些披露來看，從嚴重程度來看，物理損壞似乎繼續比其他一些組件更高一些。

Look, our mix at 75% is physical damage, 25% liability when you look at our losses over time. And so we do skew very differently. What we're experiencing right now is -- our loss ratio, we think, is in a very good spot. We did see some liability pressure last year. We talked about that and we took -- we strengthened our reserves for that earlier this year. We're not seeing that now. We're seeing liability. The rate increases we're getting are flowing through, and so we're not seeing that same liability pressure right now. And then on the severity side, yes, inflation and things are more expensive, but we're right back to that low 40s loss ratio, so in a good spot.

你看，當你看看我們隨著時間的推移造成的損失時，我們的組合中 75% 是物理損壞，25% 是責任。所以我們的傾向確實非常不同。我們現在所經歷的是——我們認為，我們的損失率處於一個非常好的位置。去年我們確實看到了一些責任壓力。我們討論了這個問題，並在今年早些時候加強了我們的儲備。我們現在還沒有看到這一點。我們看到了責任。我們所獲得的利率上漲正在流動，因此我們現在沒有看到同樣的負債壓力。然後在嚴重性方面，是的，通貨膨脹和東西更加昂貴，但我們很快就回到了 40 多歲的低損失率，所以處於一個很好的位置。

(Operator Instructions) Our next question comes from the line of Pablo Singzon with JPMorgan.

（操作員指令）我們的下一個問題來自摩根大通的 Pablo Singzon。

So your investment income has picked up, and I think you'll incur incremental financing costs over the balance of the year, just given the capital raise. Can you talk through your expectations for those items? And I suppose as I look at your guidance, I think net income went up by $1 million EBITDA by $5 million. Is the gap there, all financing?

因此，您的投資收入有所增加，而且我認為，僅考慮到融資，您將在今年剩餘時間內承擔增量融資成本。您能談談您對這些項目的期望嗎？我想，當我查看您的指導時，我認為淨利潤增加了 100 萬美元，EBITDA 增加了 500 萬美元。缺口有嗎，都是融資嗎？

Well, net income is so tricky for us because there are so many different pieces to it. We've got the warrant liability. We've got the noncontrolling interest. So it's difficult to give sort of a quick reconciliation. You do raise a good point, which is we're now earning on our cash balances, both within the MGA business and Hagerty Re. We're earning pretty significant interest income right now just based on where interest rates are, and we're very safely invested in very short term, but the rate increase is really benefiting us. And so we will see that and you'll see that our -- that net interest income line is going to continue to be positive.

嗯，淨收入對我們來說非常棘手，因為它有很多不同的部分。我們有認股權證責任。我們擁有非控股權益。因此，很難進行快速和解。您確實提出了一個很好的觀點，那就是我們現在通過 MGA 業務和 Hagerty Re 的現金餘額賺取收入。僅根據利率水平，我們現在就獲得了相當可觀的利息收入，而且我們在短期內進行了非常安全的投資，但加息確實使我們受益。所以我們會看到這一點，你也會看到我們的淨利息收入線將繼續為正。

On the financing, actually, the type of capital we raised because it's convertible preferred. So there's a dividend associated with that, but that's not hitting that interest income line, right? So we actually use [that] capital in the short term to pay off some revolver, so we're saving on interest income. And then we've got the benefit of higher rates right now. And so you'll continue to see a positive on that line for the balance of the year.

實際上，在融資方面，我們籌集的資金類型是因為它是可轉換的首選。所以有與之相關的股息，但這並沒有達到利息收入線，對嗎？因此，我們實際上在短期內使用這些資本來償還一些左輪手槍，因此我們節省了利息收入。然後我們現在就得到了更高利率的好處。因此，在今年餘下的時間裡，您將繼續看到這條線的積極表現。

Pablo, I'm happy to follow up with you after the call on some of the moving parts, but you also see the restructuring line is $3 million for the quarter, which would hit net income, not adjusted EBITDA. So that accounts for the majority of the delta.

Pablo，我很高興在電話會議後跟進一些變動部分，但您也看到本季度的重組額度為 300 萬美元，這將影響淨利潤，而不是調整後的 EBITDA。所以這佔了三角洲的大部分。

Yes. Yes. That makes sense, McKeel. And then the second question, I guess for Patrick, just on expenses, right? I think you've demonstrated good cost control here. But the question I had is, how do you see the cost base trending from here, I guess, in dollar terms, right, as the impact of your cost savings work their way through the P&L? And looking forward as you continue to invest for growth, are we sort of a trough here and maybe expenses start growing reasonably from here?

是的。是的。這是有道理的，麥基爾。然後是第二個問題，我想對於帕特里克來說，只是關於費用，對吧？我認為你們在這裡表現出了良好的成本控制能力。但我的問題是，您如何看待從這裡開始的成本基礎趨勢，我想，以美元計算，對吧，因為您的成本節省的影響通過損益表發揮作用？展望未來，當您繼續投資增長時，我們是否處於低谷，也許支出從這裡開始合理增長？

Well, if you look at the numbers, the line items in 2023 that we really focused on, are trying to make in that cash cost curve would be salaries and benefits. And the year-over-year, we're up 0.6%, right? So I think really strong accomplishment there. And then G&A, it's only up 2.8% year-over-year. So all the steps that we took to take cost out of the business and try to bend that cost curve are really paying off and that's going to continue.

好吧，如果你看一下這些數字，我們真正關注的 2023 年的項目，就是試圖在現金成本曲線中實現的項目將是工資和福利。與去年同期相比，我們增長了 0.6%，對嗎？所以我認為那裡取得了很大的成就。然後是 G&A，同比僅增長 2.8%。因此，我們為降低業務成本並試圖彎曲成本曲線而採取的所有措施確實得到了回報，而且這種情況將繼續下去。

We're starting the budgeting process in the next month or so for 2024, and we'll give guidance on how things come together in the early part of next year. But we're really focused on driving margin expansion. And we turned the corner, right? So we will produce a profit this year. It will be modest. And what we want to do is continue to expand margins in 2024. Some of that will be top line growth, right? This business incredibly grows, written premium in the mid-teens and with our marketplace business that's growing quite quickly. And so there's just operating leverage that comes from that, that will help with margin expansion, but we're going to keep focused on keeping the cost under control.

我們將在下個月左右啟動 2024 年的預算流程，並將在明年初就如何整合提供指導。但我們真正專注於推動利潤率擴張。我們已經轉危為安了，對吧？所以今年我們會盈利。這將是謙虛的。我們想要做的是在 2024 年繼續擴大利潤率。其中一些將是收入增長，對嗎？這項業務的增長令人難以置信，保費在十幾歲左右，而且我們的市場業務增長得相當快。因此，由此產生的運營槓桿將有助於利潤率擴張，但我們將繼續專注於控製成本。

Okay. And then last for me. Patrick, you had mentioned rate benefit contributing about 2/3 of premium growth. Does that rate benefit include the increase in the agreed values for the vehicles?

好的。然後最後對我來說。帕特里克，您曾提到費率福利貢獻了約 2/3 的保費增長。該費率優惠是否包括車輛約定價值的增加？

Yes, that would be baked into that. Although there's not a lot of valuation change right now going on.

是的，那會被融入其中。儘管目前估值沒有發生太大變化。

We have reached the end of our question-and-answer session. I'd like to turn the call back over to Mr. Hagerty for any closing remarks.

我們的問答環節已經結束。我想將電話轉回給哈格蒂先生，讓他作結束語。

Thank you, operator, and thanks to all of you for your continued support. We are once again operating from a position of strength. One team Hagerty is providing unparalleled customer service for auto enthusiasts. This results in an industry-leading Net Promoter Score of 83, which helps fuel retention and new business. Our omnichannel distribution allows us to capitalize on this brand strength through Hagerty's direct-to-consumer channel as well as cultivating new commercial partnerships such as our State Farm partnership. And we are well on our way towards delivering the bottom line growth that will fund our growth ambitions and creating value for our shareholders.

謝謝運營商，也感謝大家一直以來的支持。我們再次處於強勢地位。 Hagerty 一支團隊正在為汽車愛好者提供無與倫比的客戶服務。這導致行業領先的淨推薦值達到 83，這有助於促進保留和新業務。我們的全渠道分銷使我們能夠通過 Hagerty 的直接面向消費者的渠道充分利用這一品牌優勢，並培養新的商業合作夥伴關係，例如我們的 State Farm 合作夥伴關係。我們正在穩步實現盈利增長，為我們的增長目標提供資金並為股東創造價值。

We hope to see as many of you as we can out in Monterey next week for the car festivities that includes the Pebble Beach Concour and Monterey races and our very own gathering called Motorlux. And if you're at that direction, please look us up. But until then, never stop driving.

我們希望下週能在蒙特雷見到盡可能多的人，參加汽車慶祝活動，其中包括圓石灘汽車大賽和蒙特雷比賽以及我們自己的名為 Motorlux 的聚會。如果您正朝著那個方向，請查找我們。但在那之前，永遠不要停止駕駛。

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

謝謝。今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與，祝您度過美好的一天。