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spk03: Greetings. Welcome to the BRP Group Incorporated First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Austin Rock, Director of Strategy and Partnerships. Thank you. You may begin.
spk05: Welcome to BRP Group's first quarter 2021 earnings call. Today's call is being recorded. First quarter 2021 financial results, supplemental information, and Form 10-Q were issued earlier this afternoon and are available on the company's website at ir.balgwinriskpartners.com. Please note that remarks made today may include forward-looking statements, including certain expectations related to COVID-19 and other matters. Forward-looking statements are subject to risk, and uncertainties, and a variety of factors that may cause actual results to differ materially from those contemplated by such statements. For a more detailed discussion of those factors, please refer to the company's earnings release for this quarter and to our most recent SEC filings, including our most recent Form 10-K, all of which are available on the BRP website. During the call today, the company may also discuss certain non-GAAP financial measures. For reconciliation of these measures to the most closely comparable GAAP measures, please refer to the company's earnings announcement and supplement our information, both of which have been posted on the company's website at ir.baldwinriskpartners.com and can be found in the company's SEC filings. I will now hand the call to Trevor Baldwin, Chief Executive Officer of BRP Group.
spk11: Thank you, Austin, and good afternoon, everyone. Welcome to our first quarter of 2021 earnings call. We appreciate your taking the time to join us and your interest in BRP Group. We had another very strong quarter in Q1, generating more revenue in that single quarter than we reported for the entire full year of 2019. Continued momentum in the MGA of the future led the way to this quarter's strong growth. We were also bolstered by strong early performance from the high-quality partner firms that joined us throughout 2020. in addition to accelerating trends during the quarter across all segments for core commissions and fees, which excludes contingents and other income. For the quarter, we recorded total year-over-year revenue growth of 182% to $153 million, and organic revenue growth of 14%. The MGA of the future grew 56% during the quarter, and we remain incredibly excited about its trajectory given the momentum That has thus far carried into the second quarter, and as we head into the summer months, historically, the MJ of the Future is seasonally strongest part of the year. We also successfully launched our new private flood insurance product in April. Across the balance of our business, momentum continues to build, particularly as we begin to lap COVID-impacted months of 2020, as highlighted by double-digit, year-over-year organic core commission revenue growth which excludes contingents and other income during March in each of our operating groups. As a result of this momentum, which we saw continue into April, we currently expect high teams organic growth for the overall business in the second quarter, above our target 10% to 15% range. On the partnership front, closed deal activity was relatively light during the quarter, as we anticipated. Partnership activity has picked up meaningfully, and our pipeline continues to gain momentum as we have multiple signed letters of intent for deals in a broad range of sizes. Currently, we expect most of the deals under LOI today to have effective closing dates in third quarter. We remain committed to carving out an exclusive niche as the partner of choice for the industry's premier independent firms. maintaining an incredibly tight filter for evaluating partnership opportunities. We are focused only on firms we believe to be of uniquely high quality, with strong track records of organic growth, because ultimately, this year's partnerships accrue to next year's organic growth. That's how we think about assessing partnership opportunities philosophically, but it also describes how the organic growth calculation works. It's worth noting that several of our high-quality partnerships from 2020 will enter the organic growth calculation in the next several months. And the inclusion of firms like Rosenthal and Trinity Benefits in our organic growth calculation gives us added confidence in our organic growth expectations. Finally, we remain steadfastly focused on continuing to thoughtfully invest for the future across our technology infrastructure and talent base to build on our recent success. In closing, we're proud of the performance we've been able to generate thus far in 2021 and the significant momentum we are carrying into the second quarter, all of which is made possible by our exceptional colleagues who continue to work tirelessly to deliver for our clients and stakeholders. To all of our colleagues, a huge thank you. You are the reason our business continues to be in the strongest position it has been in the firm's history. With that, I will turn the call over to Brad to go into more detail on our Q1 results.
spk02: Thanks, Trevor, and good afternoon to everyone on the call. For the first quarter, we generated revenue growth of 182% to $152.8 million. The revenue growth was driven once again by our hybrid growth model, namely outsized organic growth combined with contributions from new partnerships. We once again generated double-digit organic revenue growth on a year-over-year basis, recording 14% organic growth for the quarter, thanks primarily to particularly strong performance from our specialty segment, driven by the MGA of the future, as well as accelerating trends during the quarter in all our segments. This was despite some headwinds in organic contingent income revenue across our middle market and mainstream segments. Given that partnerships are an important portion of our ongoing growth strategy, in our regulatory filings, we also provide revenue metrics on an unaudited pro forma basis. This provides investors with a more apples to apples comparison as if our 2021 partnerships had been acquired on January 1st, 2021. For the first quarter of 2021, unaudited pro forma revenue was 153.3 million. Unaudited proform information should not be relied upon as being indicative of the historical results that would have been obtained if the partnerships had occurred on that date, nor the results that may be obtained in the future. GAAP net income for the first quarter was 30.6 million or 32 cents per fully diluted share. Adjusted net income for the first quarter of 2021, which excludes share-based compensation, amortization, and other one-time expenses was 42.5 million. or 44 cents per fully diluted share. A table reconciling GAAP net income to adjusted net income can be found in our earnings release and our 10Q filed with the SEC. Adjusted EBITDA for the first quarter of 2021 rose 276% over the prior year period to 52.7 million. As a reminder, in Q1 2020, we had 54.2 million in revenue. Thus, we almost generated as much adjusted EBITDA this Q1 as we did revenue last Q1. Adjusted EBITDA margin was 35% for the first quarter of 2021, compared to 26% in the prior year period. As a reminder, our adjusted EBITDA margins are seasonal in nature, with Q1 being the strongest quarter. We typically record lower margins throughout the balance of the year. For the second quarter, we would anticipate an adjusted EBITDA margin approximately 150 to 200 basis points lower than the 16% we experienced in the same quarter of 2020, which is entirely timing related as a result of seasonality of the business changing given our M&A success. For the full year, we now expect 150 to 200 basis point margin increase in adjusted EBITDA margin relative to last year's 18%. Our MGA of the future platform continues to outperform. growing 56% during the quarter compared to the prior year period. The results were driven by continued growth in renters and supplemented by the master tenant liability product we launched in the fourth quarter of 2020. As a reminder, our master tenant liability product allows property managers to identify tenants without renter's insurance and obtain insurance for their units. It's a particularly exciting product for us given our multifamily expertise and existing client bases across both the MGA and our middle market business. Also related to the MGA of the future, we successfully launched our new private flood product in April and continue to work on the launch of our Florida homeowners product later this year. We don't anticipate flood and home to begin meaningfully contributing to growth in the MGA until 2022. But as we've previously stated, we believe our ability to launch additional products in the MGA continues to be a key component to our long-term success, and we will remain focused on doing so. Within renters, policies in force increased by over 41,000 from December 31st, 2020 to 566,000 as of March 31st, as compared to an increase of 27,000 over the same period last year. As of May 8th, policies and force have increased further to approximately 582,000. Since our last earnings call on March 11th, we also turned on an additional 250,000 units, bringing the total unit count in which our renter solution is available to roughly 8.5 million, providing a nice runway for continued future growth. Finally, we took advantage of our larger size and fantastic performance during a tough COVID economy, coupled with our revolving lenders' willingness and increased our leverage covenants to six times versus five times. Today, this gives us additional margin of safety, and we thought accepting an offer to relax covenants is always in our shareholders' best interest. With that, I will now turn the call over to Chris.
spk10: Thanks, Brad, and good afternoon, everyone on the call. A few closing remarks before we hit Q&A. In summary, we are excited about the trends we are seeing in the business. Q2 has started off with the potential to be one of our best, if not the best, quarters ever as a public company from an organic growth standpoint and in terms of meaningful progress on our partnership pipeline. We believe we are uniquely well positioned for a confluence of macroeconomic factors that should further support our relative performance, including a favorable insurance rate environment, the continued reopening of the broader economy, and the opportunity to be a beneficiary of anticipated tax legislation both in that we are not a significant corporate taxpayer over the near term and in potential partners wanting to sell in front of capital gains tax increase. With that, I thank you for your time. I will now open up the call for Q&A. Operator?
spk03: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.
spk12: Our first question is from Elise Greenstan of Wells Fargo.
spk03: Please state your question.
spk04: Hi, thanks. Good evening. My first question I guess I'll start with on the margin side. So the margin came in a good amount above expectations this quarter. If you guys were at a 35, I think you would guide it to around a 30. You can just kind of, you know, spend a bit more time explaining, I guess, what might be upside this quarter. And if the first quarter was better, you know, is there the potential for the out quarters of the year to potentially come in better than planned as well?
spk11: Hey, Elise. Good evening. This is Trevor. I'll have Brad answer that.
spk02: Yeah, I would say M&A continues to impact the seasonality of our business. And as we said on the call, we expect 150 to 200 basis points of margin expansion over our 2020 actual adjusted EBITDA margin for the full year 2021. So I would not expect to see that continued margin expansion through the balance of the year.
spk04: Okay, that's helpful. Then in terms of organic, you guys called out, I think, some contingent headwinds, yet it sounds like away from that the business is trending well, you know, per how you've seen organic to start the quarter. Is there any way you can give us a sense of, you know, the headwinds that you saw in the first quarter? And are those headwinds persisting? embedded within your second quarter guide?
spk11: Hey, Elise. We feel like those headwinds are fully behind us. As a reminder, a lot of the loss ratio dependent contingencies hit in the first quarter. What I would say is we're seeing accelerating trends across our business in March and April, which are the first two months that are lapping COVID periods in the prior year. specifically seeing double-digit, you know, organic growth of core commission revenue across all four of our operating groups in the month of March, giving us a lot of confidence around the performance of the business and why we feel good setting an expectation of high teams organic growth for the second quarter, which is the highest expectation we've set as a public company.
spk04: And so within that high teens outlook for the second quarter, the organic, what is that assuming? Is it assuming you're maintaining the similar level of growth for the MGA in the future, or is there just a conservative assumption for that business embedded within that?
spk11: I'd say, you know, there's a degree of conservatism across how we look at setting expectations across our business, and we continue to feel really good about the MGA of the future delivering on our 40% organic growth target for the year. And that's how we think about setting expectations.
spk04: Okay. Thanks for the cover.
spk11: Yeah. Thanks, Elise.
spk03: Our next question is from Meyer Shields of KBW. Please state your question.
spk08: Great. Thanks. Good afternoon, everyone.
spk11: Hey, Mayor.
spk08: How are you? I'm sorry. I'm good. How are you, Trevor?
spk11: Doing well.
spk08: Can we talk through, like, the pieces that come into place for flood and Florida homeowners to become a more meaningful growth target? Because it sounds like that's expected in 2022. I'm not disputing that at all, obviously. But I just don't understand what has to happen internally and externally for growth to really accelerate.
spk11: Yeah, I'd say, Mayor, on the flood side, you know, we successfully launched the product in April. And, you know, we're kind of fine-tuning that product set to, you know, and continuing to expand the distribution across our internal distribution force. And as we sit here today, remain very excited about the impact that we'll have on our business in 2022 and beyond. I think, you know, the external market dynamics are such that this solution is going to gain a lot of traction. On the home side, I think we're in a similar scenario. The primary success factor is getting the product launched. We refiled the home product in April and have a, you know, are confident we'll be in a position to get that formally launched in the back half of the year. positioning us incredibly well to provide a unique solution in the Florida marketplace that is experiencing significant challenges, as you well know. So the summary is, you know, we have the distribution. We feel like the product is built very well to fit the needs and be well received in the target clientele that we have, and the external market dynamics are frankly going to create an environment where the ability to sell that product is going to be significant.
spk08: Okay. No, that's very helpful. Thanks. Again, flip topic. I know last quarter there was discussion about employment numbers at your insured clients. Can we get an update in terms of how that trended over the course of the first quarter and maybe what you're seeing so far in the second?
spk11: Yeah, so I think, you know, how that bleeds in is two of the three months in the first quarter, we're lapping non-COVID periods for January and February. If I look at the combined impact of rate and exposure on our organic revenue results for the quarter, it was plus 1.4%. But you should think about rate pulling that way up and exposure being meaningfully negative. And so that played out in January and February as we lapped those COVID periods. As we lapped or non-COVID periods. As we lapped our first COVID period in March, we saw the organic underlying exposure trends and organic growth profile across our business accelerate meaningfully, and we've seen that continue into April. And so all of that pointing towards our growing confidence around the outsized performance that we'll continue to see from the business over the balance of the year.
spk12: Okay, perfect. Thank you so much. Thanks, Mary.
spk03: Our next question is from Josh Shanker of Bank of America. Please state your question.
spk06: Hey, Josh. Yeah, good evening, everybody. How are you doing there? Doing well. How about yourself? Good, good. So I'm wondering what you can do in giving us some granularity on organic growth, talking about benefits organic growth versus property and cash, the organic growth. organic growth from acquisitions you did, you know, they're obviously acquired premiums for you, but those businesses have been growing at what pace they've been growing versus the pace of legacy business and whatnot. I mean, you can answer it any way you want, but can you break it up into different sections and talk about the growth in different areas?
spk11: Yeah, absolutely, Josh. We'll hit some of that. I'm not going to dive into kind of specifics between benefits and property and casualty, but What I can tell you is the trends are accelerating across all of our segments as we begin lapping the COVID periods. As I mentioned earlier with Mayer, the impact of rate and exposure on the business for the quarter was plus 1.4 percent, rate pulling that meaningfully up, exposure pulling it meaningfully down. As we look at the core commission organic growth performance across the business and, you know, Stepping aside from Medicare, it was high single digits to double digits across Main Street, middle market, and specialty, and accelerating in March and into April. So feeling really good about the overall trends in that business. I'd say specific to employee benefits, January tends to be the heaviest renewal period for that part of our business. you know, that was lapping a non-COVID period. And so, you know, you could expect a meaningful amount of the exposure pulldown would have been seen in that January period, but overcome via the overall underlying growth in the business and clients. Specific to the 2020 partnerships, we continue to be very pleased with the overall performance of those businesses and performing at or above on a macro level are budgeted expectations, which, you know, are double digits in nature. I want to ask Brad to also just provide a little bit more granularity around the overall revenue trends and seasonality we're seeing in those 2020 partnerships.
spk02: Yeah, thanks, Trevor. If you look at our actuals for Q1 and compare that to the pro forma Q1 that we've presented in our earnings supplement, The combination of purchase accounting and phasing of revenue under 606 resulted in a timing difference of about $11 million, which we expect to show up in Q3 and Q4. But as Trevor mentioned, you know, our new partnerships, very excited about their performance. They performed in line with our expectations and our budget, which is reflective of double-digit organic risk.
spk10: And Josh, as a reminder, this is Chris. The partnerships aren't going to hit actual organic growth until the 12-month anniversary, but doing very well initially.
spk06: Thank you for the details. Can we talk a little bit about client engagement? And now we're in May, and the economy is opening. How is the day-to-day changing at Baldwin? And maybe it's not changing. We were always fully engaged, but maybe clients are – more engaged and more willing to meet and whatnot. How are things evolving right now?
spk11: Yeah, Josh, we're certainly seeing the world reopen. Clients are more willing to get together in person, although those trends differ regionally across the country. What I would tell you is the starkest change is that of the psychology of our clients. And there is growing... momentum around the overall economic tailwinds that are being provided by reopening, and many of our clients being, you know, very bullish on the trends in their overall businesses through the balance of the year. So that point in particular is noteworthy because, you know, at BRP and insurance and financial services broadly, we are levered meaningfully to the reopening economy. And as our clients begin to re-rate up their underlying exposure units that are used to price and ultimately set insurance costs, that flows through in a positive manner for our overall business. And so we feel like we are incredibly well-positioned, and lever to the growing tailwinds that we're seeing across the economy, and we're certainly sensing that positivity in the psychology of our clients, broadly speaking.
spk06: If I can get one more in, can we talk about the potential for that to play into the Medicare benefits business? I mean, is there a a benefit to the reopening economy in those lines? Obviously, you have a significant presence. I mean, I feel like those are non-cyclical businesses and non-economically sensitive businesses. Or maybe I'm thinking about the thing correctly.
spk11: Yeah, I'd say that's accurate, Josh. The Medicare business historically has not been kind of positively or negatively correlated with the economy in a meaningful manner. What I would tell you is the way we go to market our Medicare business, it was negatively correlated to a pandemic environment. where our client constituency was not in a position to meet in person and get together. And so what we saw is people, you know, stuck with their existing plans, and there were less planned moves and changes during AEP. As the world began reopening to the first quarter, the amount of activity we're seeing across our agent base in the Medicare business has grown dramatically on a year-over-year basis, and we believe we're well-positioned to be a a net winner of these reopening trends and the ability for people to get back out and, frankly, reevaluate Medicare options in the coming selling season that they didn't do this year as a result of the pandemic environment.
spk06: All right. Well, thank you for all the answers, and good luck with reopening.
spk12: Thanks, Josh.
spk03: Our next question is from Pablo Singzon of JP Morgan. Please state your question.
spk01: Hi. I just wanted to follow up on your comments about organic growth, specifically on the commercial side. I think, Trevor, you had mentioned you expect double teens growth for all segments in the second quarter. And the context of my question is that, you know, if you look at the growth that you posted last year, and this is based on my tracking, you posted 15% organic in middle market. So you're saying you think you can grow double digits off that level? That's the first question?
spk11: Yes, we do. Okay.
spk01: And then the second question was on, I guess, so, you know, this quarter, the weakest segments were Medicare and Main Street, you sort of question what happened in Medicare, and I presume, with what's happening in your markets, right? Florida's opening up pretty well. On Main Street, was it mostly just the contingents or were you affected by, you know, face-to-face selling and, you know, people not being able to show up and that sort of thing?
spk11: Yeah, no, it's purely a contingent story, Pablo. I mean, the majority of our business is done over the phone or electronically in Main Street. And so... And that's, you know, showing through in the underlying core commission organic trends we saw for the quarter and, frankly, into April.
spk01: Okay. And then the last one for me, could you just comment, I guess, broadly in the deal environment? Like, where are multiples now? You know, I guess do you think you're still seeing value out there vis-a-vis what you're willing to pay and, you know, just general competitive environment for deals overall? Sure.
spk11: Yeah, so Pablo, the M&A environment is highly competitive. Pricing continues to be at relative highs, similar to where it was in the fourth quarter. What I would tell you is activity is picked up meaningfully. Our pipeline is robust, and we have partnership opportunities under LOI across a range of sizes. What I would say is where we see value and opportunity is in growth, and we think growth is misvalued. and that is candidly a function of the types of buyers that are most prolific in our space, valuing kind of near-term margin rather than growth. And so we feel like there's significant opportunity for us to continue to find meaningful arbitrage via our focus on growth and pricing that effectively to create real long-term shareholder value.
spk12: Thanks for your answers. Thanks, Pablo.
spk03: Our next question is from Dan Shannon of Jefferies. Please state your question.
spk07: Hi, thanks. Good evening. The question is a little follow-up on the M&A backdrop, and, you know, last quarter you talked about confidence around 120 to 150 million in deployments this year, and Just thinking about what you said in confirming that most of the deals that are either LOI or in the pipeline today are more third or fourth quarter weighted, is that the right thing? It's a bit of an air pocket here in the first half of the year?
spk11: Yeah, that's exactly the way to think about it, Dan. You know, as we had talked about, you know, the first quarter was relatively light, and we expect the second quarter from a closings perspective to to be relatively light. But our pipeline is robust, activity is meaningfully picked up, and we're in dialogue with, you know, an incredible slate of very high-quality organizations that we believe would be a really good fit with the BRP organization and bring significant value and growth opportunities.
spk07: Great. And then just to clarify, if I heard correctly, on the margin outlook for 2Q, is 2Q It's going to be lower than the last – I'm sorry, 2020's margin, and want to just clarify why that would be?
spk02: Yeah, we continue to see seasonality shift in our business as a result of M&A, and as we communicated on the year-end call, continue to make meaningful investment in the business. So that's the reason for the shift in.
spk11: But to clarify, Dan, our outlook to the full year margin – has frankly tightened on the bottom end up 50 basis points to 150 to 200 basis point margin accretion over last year's results.
spk12: Understood. Okay. Thank you. Thanks, Dan.
spk03: Our next question is from Greg Peters of Raymond James. Please state your question.
spk09: Good afternoon. We're hearing about pockets of labor shortages, and we're hearing also about inflationary pressures. And I'm just curious how, Trevor, you might think these items will affect your customers and affect your business as we think about the next several quarters.
spk11: Yeah. Hey, Greg. Good evening. So what I would tell you is we are definitely hearing from our clients around challenges finding talent, around supply chain challenges, and I think that's certainly creating some near-term inflation pressure around wages and ultimately around products. What I would tell you specific to our business is we've spent a lot of time positioning ourselves as the destination for the industry's top talent, and that is paying off in spades. As of April 23rd, we've hired 180 new people organically into the business this year. It compares to 54 new hires for that same time period last year. So specific to our business, while finding top-tier talent is always a challenge, we feel like our reputation as a premier destination in the industry is The way we behaved and, frankly, stayed true to our core values during the pandemic have all positioned us incredibly well to be a net beneficiary of continuing to attract incredible talent and, you know, increase the intellectual capital, the capabilities and know-how that we have across our platforms.
spk09: Great. The second question I had is more technical, but I did observe that there was pressure on your free cash flow in the first quarter relative to a year ago. I assume there's some timing differences, but maybe you could give us some color around what happened with free cash flow in the first quarter and what we should be thinking about free cash flow for the full year, you know, whether you want to talk about it in the context of conversion ratio or you want to talk about it in the context of what you did last year and if you expect it to grow, just some additional perspective around that would be helpful.
spk02: Yeah, Greg, this is Brad. So we look at cash flow from operations net of AR and AP because of the fact that we hold fiduciary cash on our balance sheet. So timing of receipt or payment of that fiduciary cash can have a large impact on our operating cash flows, which you've seen this quarter. When removing that ARAP cash flow impact, our free cash flow for the quarter was $44 million, which is an 80% free cash flow conversion from adjusted EBITDA. We communicated in the past that we would expect that to be approximately 70% conversion for the full year, So that's how you can be thinking about.
spk12: Great. Thanks for the answers. Thanks, Greg.
spk03: Our next question is from Elise Greenstan of Wells Fargo. Please state your question.
spk11: Hey, Elise.
spk04: Hi, thanks for taking the follow-up. I guess I wanted to come back on, you guys had mentioned you changed your confidence, right, so you could take your leverage up to six times versus the normal five times. So, I guess, you know, it sounds like fuel activity could be more elevated later this year. So, is that just to give you the flexibility just depending upon how deals, you know, materialize later in 2021? Hey, Lisa, it's Brad.
spk02: You know, we're a significantly larger business now with, you know, continued outperformance. So, you know, we believe it was prudent to take the relaxed covenant that was offered by our banking group. This gives us more flexibility to take leverage above four and a half times for a short period of time to get a large deal done. However, we still plan to operate the business at three and a half to four times. And I'll let Chris comment a little on the M&A aspect.
spk10: Yeah, at least I would just add on, you know, my kind of quick comments at the end of the prepared remarks. We're really excited about Q2, both on the organic side and on what's coming down the partnership pipeline. And, you know, I think added flexibility in situations like that is always key. Yeah.
spk04: And then, so it also sounds like the 125 to 150 of M&A for the year is still the guidance. It just might be more weighted on, you know, to, you know, the Q4. Is that a correct statement?
spk11: Yeah, we remain confident in the M&A outlook, Elise, and we would expect it to be, you know, a weighting that's heavily skewed to Q3 and Q4. Okay.
spk04: And then you mentioned, you know, you said the pipelines will bust. I think you said something about LOIs, range of sizes. I think we don't typically, like, want to go into all the details, but it's a way to give us a size of, smaller, larger deals, like kind of, you know, what size deals are embedded within the pipeline today?
spk10: Yeah, at least don't want to get too much, but, you know, obviously we've done some large deals last year, and I think the pipeline this year where we sit right now, as well as deals under LI, would reflect some of the stuff we did last year.
spk04: Okay, and as you had conversations with potential buyers, given that there's, you know, the economy's getting better, vaccines are being rolled out, and we're kind of on, you know, the flip side of COVID, has the discussions around deal changed, meaning like, you know, more paid up front versus turnouts? Have you seen kind of a switch in payment versus perhaps, you know, discussions, if you were talking about discussions you guys had about a year ago when there was more strategies?
spk11: Yeah, I mean, I mean, If I'm comparing to a year ago, yeah, valuations have picked up. If I'm comparing to the third and fourth quarter, I'd say it's relatively the same. You know, remember a year ago, at least, we were in kind of the peak of uncertainty relative to COVID and what the impact that was going to have on, you know, the insurance brokerage industry and the economy broadly. But Relative to the type of discussions and the tenor of those conversations, very consistent with what we were seeing in Q3 and Q4, if anything, I'd just say there's growing confidence from potential sellers around their ability to achieve results that are in the upper end of the potential earn-out results as a result of the broader economic and rate environment that persists.
spk04: Okay, that's helpful. Thanks for the call.
spk12: Thanks, Elise.
spk03: We have reached the end of the question and answer session. I will now turn the call back over to Trevor Baldwin for closing remarks.
spk11: Thank you, everyone, for joining us for our Q1 2021 earnings call. As you heard this evening, you know, we remain incredibly excited around the position our business is in for the balance of the year. We believe we're well positioned and levered to reopening and to the growing economic tailwinds that we're seeing across our client base. And we look forward to talking with you soon. Take care.
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