QuinStreet Inc (QNST) 2022 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the QuinStreet Second Quarter Fiscal 2022 Financial Results Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Hayden Blair. Please go ahead.

Thank you, Laura, and thank you to everyone joining us as we report QuinStreet's second quarter of fiscal year 2022 financial results. Joining me on the call today are Chief Executive Officer, Doug Valenti, and Chief Financial Officer, Greg Wong.

Before we begin, I would like to remind you that the following discussion will contain forward-looking statements. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those projected by such statements and are not guarantees of future performance.

Factors that may cause results to differ from our forward-looking statements are discussed in our recent SEC filings, including our most recent 8-K filing made today and our most recent 10-Q filing. Forward-looking statements are based on assumptions as of today, and the company undertakes no obligation to update these statements.

Today, we will be discussing both GAAP and non-GAAP measures. A reconciliation of GAAP to non-GAAP financial measures are included in today's earnings press release, which is available on our Investor Relations website at investor.quinstreet.com.

With that, I will turn the call over to Doug Valenti. Please go ahead.

Thank you, Hayden. The December quarter, our fiscal Q2 was a more difficult quarter than expected in the insurance client vertical as auto and home insurance carriers reduced spending aggressively through the end of the calendar year to offset high 2021 claim costs. Insurance client spending bounced back strongly in January, up almost 80% over December.

With the reset of the calendar year, and as we had expected and had been communicated by carriers, combined with the strength we are seeing in the rest of the client verticals and business, we were on a run rate in January to more than meet or beat the full fiscal year forecast we provided last quarter. But auto and home insurance carrier clients have once again significantly cut budgets and pricing in February.

We have just been digesting the adjustments this past weekend and through today. The immediate impact of the insurance client cuts is a reduction in our outlook for this quarter and the rest of the fiscal year to reflect the lowered spending. That is reflected in the outlook numbers we put out today, with which we are obviously disappointed.

That said, due to the diversity of our business and the resiliency of our team and model, we still expect to grow revenue and generate between $40 million and $45 million of adjusted EBITDA this fiscal year. We will also remain nicely cash flow positive with a strong balance sheet, even as we weather this continuing but still likely relatively short-term storm in insurance.

Our medium to long-term outlook remains exceptionally positive. So what is happening in auto and home insurance? Wire carriers cutting spending and pricing. While we are not privy to all of our clients' inner workings nor would it be appropriate for us to share any nonpublic details if we have them, some trends seem clear and publicly known. The claim cost environment is difficult and dynamic. Rates that worked for the past couple of years are no longer working and factors are changing rapidly.

There is increased frequency of claims as more folks go back to work and become more active generally. Costs to repair are higher due to supply chain issues, demand outstripping supply, inflation generally and inflation specifically in the new and used automobile replacement market. Carriers have begun to raise rates to reflect these increased costs, but we appear to be closer to the beginning than the end of that cycle.

And in some cases, rate increases have not been enough to offset rising costs. Carriers are pausing writing business in entire states and therefore, cutting marketing spending while they analyze these factors and work to file new higher rates to reflect the changing economics.

In addition, consumers are balking at switching or buying new policies as they encounter the initial wave of higher rates, making marketing spending less effective and efficient. Net, we are in a period of a lot of uncertainty, change and importantly, transition in the auto and home insurance market. And it is being reflected in pauses, reductions and volatility generally in marketing spend.

How long is this transition period in auto and home insurance likely to last? We have served the auto insurance market for almost 15 years and well over 20 years, if you count the predecessor company we acquired to enter the client vertical. So we have seen some of these adjustment cycles.

The last one was in or around 2016, when higher incident frequency due to distracted driving from smartphones usage, combined with higher costs to repair bumper sensor technologies to significantly change underwriting economics. That cycle affected us for about 6 months. Then like now, no one is closer to or in closer communication with auto insurance carrier marketing clients than we are. Based on our actual past experience with similar cycles, and based on discussions with carriers, these cycles typically most negatively affect marketing budgets for somewhere around 6 months.

And based on that, we hope to be back to a more normalized market and positive to a more normalized market and positive momentum in the Auto Insurance client vertical, somewhere between late spring and early fall. Why 6 months? Two reasons. First, that is typically long enough for most carriers to analyze, adjust and file new rate models; and second, that is the length of a typical consumer policy period. So new rates will typically kick in no more than 6 months after the cycle starts.

What happens next? The further we get in the transition period, the more consumers reach their renewal period and the more they get hit with increased rates from their current carrier. That usually drives a gradual then accelerating increase in the number of consumers that shop with other carriers and begins a positive super cycle in our business.

We clearly saw that and experienced it after the 2016 transition period. Why is our momentum so long -- why is our medium- to long-term outlook still exceptionally positive? While I just noted one key reason. This difficult transition period is likely to lead to increased consumer shopping activity in auto insurance in coming months and quarters.

And that should be a strong tailwind for our insurance business. Like we have seen before and especially when combined with the gains we have made and expect to continue to make in market share, quality results for clients, technology and media.

A second reason our medium to long-term outlook is still exceptionally positive is the strong momentum that continues in our non-insurance client verticals. Credit-driven client verticals continue to recover nicely, with client budgets and consumer activity growing at high rates.

Progress in Home Services, perhaps our biggest long-term market opportunity, continues to be strong and steady. Overall, non-insurance client vertical revenue grew 36% year-over-year in the December quarter. Those strong trends, combined with the eventual resurgence in insurance, bode well for coming quarters and years. The third reason our medium to long-term outlook remains exceptionally positive is the progress we are making with big, new growth initiatives, especially right now with QRP. QRP revenue is accelerating, despite the current challenges in Auto Insurance, which do affect the activity of our agency clients.

Multiple clients have moved into the ramp phase of their implementations of the platform. The pipeline also continues to grow and progress well, broadening our footprint for future growth and scale. We now expect QRP revenue to exceed $1 million per month by June based on actual projections from ramping agency clients.

Looking beyond this auto insurance transition period, we have never had a better combination of market opportunities, competitive advantages and exciting growth initiatives in the history of QuinStreet. I hate what is happening in auto insurance right now because of its near-term impact on our results. But I could not be more pleased with our position overall and our outlook for the future. And I cannot be more proud of our team, which is easily the best in company history and how they have navigated and executed to continue to deliver results and progress for long-term value creation in such a complicated environment.

With that, I will turn the call over to Greg.

Thank you, Doug. Hello, and thanks to everyone for joining us today. Revenue in the December quarter declined 7% year-over-year to $125.3 million. GAAP net loss was $5.6 million or $0.10 per share. Adjusted net income was $3.2 million or $0.06 per share. Adjusted EBITDA was $5.6 million.

Looking at revenue by client vertical. Our Financial Services client vertical represented 72% of Q2 revenue and declined 13% year-over-year to $90.2 million. Doug well covered the details of what is going on in the insurance client vertical in his remarks.

All other Financial Services businesses grew at double-digit rates or more in the quarter. Within our credit-driven client verticals, progress in revenue growth continue well ahead of our initial outlook for the year, and we continue to expect revenue in those businesses to return to pre-pandemic levels by June.

Our Home Services claim vertical represented 27% of Q2 revenue and grew 16% year-over-year to $33.8 million. Home Services remains in the very early innings and is perhaps our largest addressable market.

Our strategy is simple; one, expand our core trades, where we have well established client and media relationships; two, scale our growth trades, which are earlier in their development; and three, add new trades into the portfolio of offerings. We expect this multi-pronged growth strategy to drive double-digit organic growth for as far as the eye can see.

Other revenue, which consists primarily of performance marketing agency and technology services was the remaining $1.4 million of Q2 revenue. Turning to the balance sheet. We grew our cash balance by $6 million and closed the quarter with $115 million of cash and equivalents. In summary, while insurance spending remains volatile, momentum in non-insurance verticals remained strong.

Our confidence in our team, our competitive positioning and our growth initiatives, including QRP, remains at an all-time high. With that, I'll turn the call over to the operator for Q&A.

(Operator Instructions) We'll now take our first question from Jason Kreyer of Craig-Hallum.

Doug, I just wanted to step back and understand the cadence a little bit better. So if we kind of go back to when we last talked a quarter ago, it sounds like maybe there was a little bit of choppiness in the December quarter. I'm not sure if that was isolated to December or not. You saw the January rebound that we talked about last quarter that you had anticipated, but then it was kind of the move in recent weeks. And so one, I want to make sure that cadence is correct; and then two, curious if there was a little bit of volatility in December, I mean, what are you hearing from the carriers that lead you down the path of this 3- to 6-month kind of hesitation as opposed to just a shorter-term period of volatility?

Yes. Thank you, Jason. I think you got the cadence generally right. We started to see some effects on budgets late last year, particularly in September, they began after Ida, kind of was a straw that broke the camel's back on loss ratios for the calendar year. I think we talked about that for 2021. We saw -- the carriers indicated to us that they're becoming that strong in January, as they reset loss ratios for the new calendar year, and then we were full speed ahead, full steam ahead, and we'd got actual budgets, so we began setting up even the systems and pricing and budgets in our systems for the carriers going into January.

January came and sure enough, we hit the ground running hard, carriers were spending hard. Prices went up. Volumes went up. We were up almost 80%. In January over December, very consistent with, in fact, a little bit ahead of our forecast for the second half of the fiscal year.

And then late last week, over the weekend and yesterday, we got new pricing from carriers for February, which was right back to January-ish -- I'm sorry, to December-ish again. And the feedback we got was -- and a bunch of states got closed down by a bunch of carriers. In other words, they quit spending in certain states because the loss ratios were excessive. So what the carriers are dealing with is a loss ratio environment that is changing rapidly and doesn't fit their current rates.

And so they -- like everybody else, if they're losing money per customer, they don't want to make it up in volume. And so they're going state by state now, reassessing their rating models. Some have already increased rates and pricing in various states. Some are in the process of doing so, some have paused states while they're in the process of doing so.

So in general terms, what the feedback we're now getting is say we -- the carriers expected that we would be running hard right now. But as we started to try to run hard, we found out that the loss ratio issues associated with this period, which -- of transition out of COVID and inflation and all the other things are worse than we had anticipated and affecting our economics worse than we had anticipated.

And so we're going to step back, reduce pause spend, figure out how to re-underwrite, rerate and relaunch. And so that's the period we're going through. So I think we and they -- January came out just like we thought. And then January has also started coming in and they weren't working for the carriers. This is, I think, all public at this point. They certainly filed publicly. Some very big carriers have announced rate increases, have announced they've got to increase again. So what -- now this -- what usually happens is they take some period of time to figure out the new variables, figure out the new economics, rerate, refile, reopen states and then to move forward.

And as I indicated in my discussion, and our discussions with carriers that has typically historically been about a 6-month bottom, and they expect that this time, it seems like it probably will be about a 6-month bottom. And that puts us in, as we calculate it and as we look at the entire cycle that we think that we return to pretty good -- a pretty good insurance market and spending again and even quite good if you look at historic trends when rerating happens in the late spring to early fall time frame.

That's exactly what we saw in 2016, both in terms of timing and reaction. And if you look at the numbers for 2018, the surge was pretty aggressive after the down. Within about 1.5 years, our insurance business, Auto Insurance business, I think, had more than doubled. So we certainly don't like what's happening. It's something that does happen in insurance, that there are insignificant changes in the environment that incremental underwriting changes and price changes don't account for. It's understandable that this period is more complicated given how COVID has been and given the effects of COVID on supply chains and inflation and auto pricing. But it doesn't make any less painful for us to go through. The only good news is we feel very good about the other side. And obviously, we are well equipped to weather this and still stay -- still grow revenue for the year and stay nicely positive in terms of cash flow and profits.

I appreciate all that context. And I want to ask the question just on concentration. Now it certainly sounds like you're hearing that across the board from pretty much all carriers. But I was under the assumption that as we got to kind of late summer, early fall a year ago, some carriers had already started to make adjustments to rate cards based on some of these trends already emerging.

So maybe you can just humor me and kind of talk about concentration, if you're seeing big changes across carriers, or is everybody really taking these same drastic cuts?

I would say, I can't say everybody -- and I'd say that -- but I'd say it is not isolated to any single or any small group of carriers where -- this is an across-the-board issue. And different carriers are in different phases of their program to re-underwrite, rerate, file, reopen. So it's a pretty complicated picture, but it's -- if there's a spectrum from one carrier to everybody, it's much further toward the everybody side of the equation than it is the one carrier side of the equation.

Okay. And Just the last one for me...

We're seeing it with all of our biggest clients -- which make up the vast majority of our revenue.

Can you talk maybe about what you think you guys can do over this period of the next 3 to 6 months, just to better position QuinStreet for more market share gains on the other side of this?

Yes. I think everything we've been doing. I mean, we are -- we have aggressively worked to get closer to all of the big carriers so that we can -- and all of our big media partners, to do a much better job of understanding the segmentation and the value of every segment. And that is now ever more valuable because it's changing. And so the more precise we can allow them to be about their segmentation and targeting, and the more precise we can allow them to be about their value and pricing for those segments, which is exactly what QMP does, the better off we are. So we are doubling down on deepening our relationships with all of the carriers to help them understand how to translate in this period, not just underwriting rates but segment value, which is changing, as you can well imagine.

And so I would say that we're going to continue to be very, very close to all of the -- and we're closer now to more big carriers than we've ever been. There was a time when we weren't nearly as close to the agent-driven models as we are now. And now they're some of our closest, best relationships with whom we get -- we've had enormous growth and have great relationships built on performance.

So I think that's what we're good at. I think we're the best at that. And I think we're going to double down on that. And I think it bodes well for this period. The other thing is we're going to keep investing QRP and getting that product out because that will help the agencies. And with all these states shut down for different carriers, agencies need and want all the assistance they can get to be more productive. So we're going to keep doing that. And of course, we'll keep working on our other verticals.

And we have double and triple-digit growth in our credit-driven verticals, which are big businesses and really solid double-digit, strong double-digit growth as far as the eye can see in Home Services. So we're working on that. So we'll keep working all the vectors and hopefully position us best for the other side. And in the meantime, grow what we can control.

We'll now take our next question from John of Stephens.

From a big picture standpoint, I mean, you guys are clearly bulled up around the long-term outlook on the business. It sounds like the insurance side of things is going to be more of a transitory event. I think your guidance obviously implies that kind of recovery, just exiting the fiscal year. I think you're going to be faced, obviously, with the dynamic of whether investors believe in it or not. You guys have a really strong balance sheet, I think, $115 million of cash. I'm just curious about what you guys are thinking about as far as buybacks and how that might change if there's any kind of noise or dislocation in the stock as you kind of navigate through the turbulence on the insurance side?

Yes. I think it's a good question. And I would say that it's something that is -- has been discussed at the board level and we'll probably continue to discuss it. And I think to your point, we kind of watch and see what happens through this period and a combination of how the -- how investors react with how the business continues to perform. And if we see a pretty significant dislocation between those 2, I'd say that, not unlike we have in the past, we would be very open to considering doing things with that cash in terms of capital allocation and buybacks and the like.

And we just had this conversation at the Board level a couple of board meetings ago, and so it's not something that we never think about. Obviously, we know we've done it a few times in our history and at one point did a $50 million buyback. So I think we're open to it, and we'll -- to your point, we're probably more open to it tomorrow than we were yesterday.

Yes, makes sense. On the non-insurance rev growth. I mean, that was very strong. I think 36% is what you guys said. If you back up the Home Services business, I think that, I mean, it obviously implies fairly sharp growth out of a credit-driven product. So I don't know if you can maybe talk or provide a little bit of color around the sources of that strength and maybe more specifically, if you can kind of outline the personal loans and credit card run rates and how that's looking kind of pre-pandemic levels?

Yes. We expected that those 2 businesses combined will be well beyond pretty close to pre-pandemic levels this quarter and well beyond the next quarter, so the June quarter. And both businesses are doing very well. I mean, I think one is growing in the 70-ish percent year-over-year range, a decent scale, pretty good scale and then the other is growing at triple digits at good scale. So those 2 businesses combined are meaningful to us, tens and tens of millions of dollars.

I don't think combined, Greg, they are $100 million yet, but they're getting close. Is that right?

Yes. Yes, I agree with that. Yes.

And we may -- and Greg, will we exit the year with those 2 running at $100 million? Is that annual run rate?

I would expect it. Yes, I would expect that.

Yes. So that gives you a sense for their scale, John. These are pretty big businesses growing at really high rates. And we're seeing kind of all the vectors in those businesses working. We are gaining share in media. We're seeing more traffic from media. We are getting -- we have more clients than we've ever had. We have closer relationships with those clients and getting more budgets from those clients and better pricing from those clients than we ever had.

So those businesses are firing on all the right cylinders and it's dominantly associated with coming out of COVID and the banks themselves, banks broadly-defined vendors, issuers, et cetera, having really strong balance sheets after the last few years of conservatism, low interest rates, et cetera.

And those 2 things combined are creating a great environment for strong growth and catch up really because we're still -- remember we're still catching up, and we expect growth beyond the catch-up. So we should catch up to pre-pandemic. As I said, probably this quarter, if not this quarter, for sure, next quarter. And then I see a lot of momentum to continue very good trends in those businesses over the next few years.

We'll now take our next question from Jim of Barrington.

I was first wondering whether the recent trend, given the chip shortage to fewer new cars and more used cars has had any perceptible impact on the level of repair costs?

We're told it has, Jim, whether it's the -- what we're told is that the increase in pricing of used cars is having a pretty significant impact on claim costs for policies that have that replacement cost which, I guess, most now do. And so the replacement cost of used cars, as you know, are pretty dramatically -- and used -- and new cars, too, for that matter, are up pretty dramatically because of the general circumstances in the auto market.

Okay. And just sort of an observation, but if the -- if there is a trend to repricing to higher levels on the part of all the carriers, it doesn't seem to create much of an incentive to switch, so why advertise? And it does seem like it's the same sort of reactionary impact you get from any other consumer product. Like during COVID, there was a lot of -- there were a lot of advertisers who had cut back in general because the -- there wasn't much incentive to bite at the buying end.

And so I'm wondering if -- how you're looking at that and whether -- whether you think that just because something has happened in the past, like over this 3- to 6-month cycle, how do you have the confidence that this would be repeated given this sort of increased variability month-to-month, you've sort of been pointing out? That it seems like there's a bit of a quandary here in the -- it's not going in the favor of wanting to create an incentive to try to save money by changing to a different carrier.

Well, the carriers -- remember, we make money if people shop. And so what the industry tells us they have seen forever and what we have seen in the past 15-plus years is that when there is a round of rate increases, consumers now are motivated to shop because all they know is their rate went up, and they wonder if they can go shop somewhere else and save money.

The fact that others are raising rates, too, may or may not matter. In general terms, when consumers shop, if they actually shop efficiently because of the complexity of insurance, auto insurance pricing and the segmentation and pricing and dependency on individual carrier economics and portfolios, et cetera.

In general terms, if a consumer actually does efficiently shop for car insurance, they tend to save between $400 and $700 a year. So despite the fact that rates increasingly won't -- because of the fact that rate increases are happening across the board, what the industry has seen historically and what we have seen is that drives consumers to at least go out and see, Hey, maybe I wonder if I could save money somewhere else.

A large number of those consumers will actually save money because they're actually shopping their insurance. And so we expect that cycle to repeat itself. The industry expects that cycle to repeat itself. The industry, the clients tell us, it's always worked that way. And again, in our experience, we saw it in 2016, was the last time we saw the most relevant comparator.

We saw it, and we saw it in a pretty big way and everybody raised rates back then to -- because the effects are happening for everybody. Distracted driving was increasing frequency. Bumpers sensors were increasing repair costs. And then there was an ice storm in Texas, which happened too, but that was more of a -- like the Ida thing, more of a temporal thing. But then those 2 things structurally changed underwriting. Everybody had to rewrite, rerate, relaunch. And there was a huge surge that, as I said, we more than doubled our insurance business in I think 18 months. Greg, am I getting that -- am I getting that number right?

That's right. Yes, that's right.

So this is -- that's the way the industry has worked historically. But don't take my word for it. I think that's probably pretty easily researched. But that's the way it has happened and we're told it has always happened in auto insurance from folks that have been running those companies for a long time.

All right. Well, that's a reasonable point. The $400 to $700 they might save might be not from what they're paying now, but what they might have to be paying relative to the new claims and you can help them search through the complexity a little bit and come to some comparative conclusions. So as long as they're shopping, that's what your game is.

And then the other thing, you mentioned QRP getting up to about $1 million per month in revenue by June. I know that should be a fairly high margin business, but how quick does it get to a pretty good bottom line results from that $1 million per month you think you can generate?

We're into the 80% contribution margin on that pretty fast, probably at the -- probably at the $1 million a month level. Greg, if you think about the cost in that, $1 million dollar a month?

Yes, I think that's fair.

We're probably then at about -- we're probably at that point, right at about an 80% contribution margin.

We'll now take our next question from Max of Lake Street.

I just want to turn back towards the balance sheet at $115 million in cash. Can you go a little deeper into like future investments? I know we talked about buybacks, but inorganic opportunities maybe outside of the Insurance vertical, what are you guys seeing in that?

Yes, yes. Well, with the last couple of acquisitions we've made, to your point, have been outside the Insurance vertical to boost verticals that we thought we could really build big and win big at. AmOne for personal loans, which is now our third largest business in growing like crazy.

And modernizing Home Services, which was a 1 plus 1 equals 3 from our old Home Services business and where we've got now scale to see good, strong double-digit probably 20-ish percent per year growth for as far as -- just literally as far as the eye can see. So we are -- that is exactly our first priority for cash and for capital is continuing to find opportunities like that. Ours is still a very fragmented industry. We are still a very effective aggregator and consolidator of those type of businesses, and that is still job one for us when it comes to capital allocation and will continue to be for, I imagine, a long, long time.

Okay. And then I want to shift to more of the model here. You kind of had a step down here in gross margin. I was wondering if that's what you kind of expect for a run rate throughout the rest of fiscal year 2022, around 8%, I believe.

Greg, do you want to take that?

Yes, I'll take that one. The drop in gross margin is primarily due to just the loss of operating leverage. So you have lower revenue levels. Dropping on top of a fixed cost base that doesn't really change throughout the year. So gross margin will flux based on the amount of revenue you drive every quarter. Remember, the December quarter is not only were we're dealing with challenges and volatility within insurance, but we also -- we're in our seasonally lightest quarter, is the December quarter. So it's really just a lower top line on top of a very similar semi-fixed cost base.

(Operator Instructions) We will now take our next question from Chris of Singular.

Okay. I just I don't know if -- I got on the call late. But can you -- sharing to why there was an increase in G&A? I think there was about a $3 million increase there.

Yes. Chris, this is Greg. That's just a onetime charge that we took to revalue or fair value -- adjust the fair value of an earnout associated with an acquisition we did last year. That acquisition has been performing better than we expected. So we had to adjust the fair value of the earnout. So that's what that was of about $2.7 million.

Which is a good thing, which means the position is performing better than originally planned.

Right, right. Okay. Great. And then, you guys mentioned, okay, so 3 to 6 months, you see more volatile times for insurance. Why is that? Why is it through to 6 months? Why is the timing there, that -- the way it is?

Yes, that's the time that this is -- we've gone through these periods before and the carriers and the industry has gone through these periods a lot more than we have. And then talking to the carriers about the typical time it takes to rerate, relaunch and get those rates in place and to recover in a period like this, where there's a mismatch between current rates and pricing and claim costs.

Historically, it's been about a 6-month period in terms of across the bottom, maybe a year from total start to finish. This period looks like it probably began sometime around last September, really. And one of the other analysts asked that question about some of the rates because others had been seeing some of this and beginning to change rates. And so that puts us in the -- as we look at the time frame, we look at where the carriers are and what the carriers are telling us about their plans to rerate and open -- and reopen states, that puts us into, we think, the late spring, early fall time frame. So it's -- and again, it's -- historically, there's 2 main drivers of that 6-month bottom. One is by -- within 6 months, most large carriers are -- have the ability to very effectively take the data they're getting, rerun their underwriting models, rerun their rate models and launch those new rates and get them approved in the states where they need to. Obviously, they wouldn't be a big successful carrier if it took them a lot longer than that.

And the second reason is that most consumer insurance policies are a 6-month term. Your auto insurance is probably a 6-month term. That means that you're going to -- depending on where you are in that 6-month term, you're going to get a rate increase as soon as it's over. Once you get that rate increase, you're going to go shopping or some high percentage of folks are going to go shopping to find out if it was just their carrier. And if it was, can they save money elsewhere. And so that's where kind of begins the shopping cycle that the industry talks about and that we have experienced also ourselves. So those are the 2 main determinants. The time it takes to rerate, relaunch and the second is the average consumer behavior based on the fact that they're going to get a rate increase.

Thank you. A replay of today's call will be available for a week starting at 5:00 p.m. Pacific Time today. The replay can be accessed by calling (719) 457-0820 and entering passcode 4351235. This concludes today's call. You may now disconnect.