QuinStreet, Inc.

Good day, ladies and gentlemen, and welcome to the Queen Street 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 Queen Street's Second Quarter Fiscal Year 2022 Financial Results. Joining me on the call today, our 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 filing made today and our most recent 10Q 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 were seeing in the rest of the client verticals in business, we were on a run rate in January to more than meet or beat the full fiscal year forecast we provided last quarter. 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 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? Why are 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 had 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 find 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 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 six 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 six 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 six 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 six 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 medium to long-term outlook still exceptionally positive? Well, 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 Quinn Street. 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 could not 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 percent year-over-year to $125.3 million. Gap net loss was $5.6 million, or 10 cents per share. Adjusted net income was $3.2 million, or 6 cents 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 and 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 client 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 remains 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.

Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to lower your signal to reach our equipment. Again, press star 1 to ask a question. We'll now take our first question from Jason Crayer of Craig Helen. Your line is open. Please go ahead.

Hey guys, good afternoon. Doug, I just wanted to step back and understand the cadence a little bit better. So if we can 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, you know, curious, you know, if there was a little bit of volatility in December, I mean, what are you hearing from the carriers that leads you down the path of this three to six month kind of hesitation as opposed to just a shorter term period of volatility?

Yeah, thank you, Jason. I think you got the cadence generally right. You know, 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'd be coming back strong in January as they reset loss ratios for the new calendar year. And, you know, we were, you know, full speed ahead, full steam ahead. And we got actual budgets. And 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 spending hard. Prices went up. Volumes went up. You know, 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 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 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. we're going to step back, reduce pause spin, figure out how to re-underwrite, re-rate, and re-launch. 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 the January results just 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 and announced they've got to increase again. So what usually happens is they take some period of time to figure out the new variables, figure out the new economics, re-rate, re-file, reopen states, and then they move forward. And as I indicated in my discussion and our discussions with carriers, that has typically historically been about a six-month bottom And they expect that this time it seems like it probably will be about a six-month bottom. And that puts us in, as we calculate it and as we look at the entire cycle, that we think that we returned a pretty good insurance market in spending again, and even quite good if you look at historic trends when re-rating 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 a year and a half, our auto insurance business, I think, hit more than double. We certainly don't like what's happening. It's something that does happen in insurance that there are significant 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 it any less painful for us to go through. The only good news is we feel very good about the other side and Obviously, we're well equipped to weather this and 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 carrier. or any small group of carriers. This is an across-the-board issue. And different carriers are in different phases of their program to re-underwrite, re-rate, file, reopen. So it's a pretty complicated picture, but 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.

Okay.

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 three to six months just to better position Quinn Street for more market share gains on the other side of this?

Yeah, I think everything we've been doing. I mean, we are – We have aggressively worked to get closer to all of the big carriers 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 clients. 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'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. I think it bodes well for this period. The other thing is we're going to keep investing in QRP and getting that product out because that will help the agencies. And with all these states shut down for different carriers, the 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, you know, 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 I can see in home services. So we're working on that. So, you know, we'll keep working on the vectors and hopefully position us best for the other side. And in the meantime, you know, grow what we can control.

I appreciate all the transparency from you.

Thank you. Thank you, Jason.

Thank you. We'll now take our next question from John of Stevens. Your line is open. Please go ahead.

Hey, guys. Good afternoon.

Hey, John.

Hey, 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 know, 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, you know, noise or dislocation in the stock as you kind of navigate through the turbulence on the insurance side.

Yeah, 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. And I think to your point, we kind of watch and see what happens to this period and combination of, uh, of, of how the, the, how investors react with how the business continues to perform. And if we see a pretty significant dislocation between those two, I'd say that not unlike we have in the past, we would be very open to considering, um, doing things with that cash in terms of capital allocation and, you know, buybacks and the like. And as I, 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. As you 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.

Yeah. Makes sense. On the, on the non-insurance, Rev growth, I mean, that was very strong. I think 36% is what you guys said. If you back out the home services business, I think that obviously implies fairly sharp growth out of the credit-driven products. 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 at pre-pandemic levels.

Yeah, we expected that those two businesses combined will be well beyond, pretty close to pre-pandemic levels this quarter, and well beyond them next quarter, so the June quarter. And both businesses are doing very well. I mean, I think one's growing in the 70-ish percent year-over-year range at decent scale, pretty good scale, and then the other's growing at triple digits at good scale. So Those two businesses combined are meaningful to us, tens and tens of millions of dollars. I don't think combined, Greg, they're $100 million yet, but they're getting close. Is that right?

Yeah. Yeah, I agree with that. Yes.

And we may – and, Greg, will we exit the year with those two running at $100 million? Is that – I would expect – Annual running?

Yes.

Yes, I would expect that. So that gives you a sense for their scale, John? These are pretty big businesses going at really high rates. And we're seeing kind of all the vectors in those businesses working. We're gaining share in media. We're seeing more traffic from media. 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. Those businesses are firing on all the right cylinders and it's, you know, dominantly associated with coming out of COVID and the banks themselves, banks broadly defined, lenders, issuers, et cetera, having really strong balance sheets after the last few years of conservatism, low interest rates, et cetera. And those two things combined are creating a great environment for strong growth and catch-up, really, because 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.

Okay, that's very helpful. Thanks, guys.

Thank you, John.

Thank you. We'll now take our next question from Jim of Barrington. Your line is open. Please go ahead.

Thanks. 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. 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 clause, which I guess most now do. And so the replacement cost of used cars, as you know, pretty dramatically, and new cars too, for that matter, pretty dramatically because of the general circumstances in the auto market. Okay.

And just sort of an observation, but 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. You know, like during COVID, there were a lot of advertisers who cut back in general because, you know, there wasn't much incentive to bite at the buying end. So I'm wondering how you're looking at that and whether you think that just because something has happened in the past, like over this three to six 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? It seems like there's a bit of a quandary here and it's not going in the favor of you know, 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. Right. 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 increase, well, 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. You know, and again, in our experience, we saw it in 2016 is 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, too, because the effects were 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 like the Ida thing, more of a temporal thing. But then those two things structurally changed underwriting. Everybody had to rewrite, rewrite, relaunch. And there was a huge surge that, as I said, we more than doubled our auto insurance business. And I think 18 months. Greg, am I getting that? Am I getting that number right?

That's right. Yep, that's right.

So this is, you know, that's the way the industry has worked historically. But, you know, 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 and 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 a million per month in revenue by June. I know that should be fairly high margin business, but how quick does it get to pretty good bottom line results from that 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 million-dollar-a-month level, Greg, if you think about the cost in that. Yeah, I think that's fair enough. Yeah, we're probably at that point right at about an 80% contribution margin.

Okay. All right. That's helpful, too. Thank you very much. Thank you, Jim.

Thank you. We'll now take our next question from Max of Lake Street. Your line is open. Please go ahead.

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

Yeah, 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 in. AM1 for personal loans, which is now our third largest business and growing like crazy. And modernizing home services, which is a one plus one equals three from our old home services business and where we've got now the scale to see good strong double digit probably 20th percent per year growth for as far as literally as far as I 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, thank you.

And then I want to shift to more of the model here. You kind of had to 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, you want to take that?

Sure. Yeah, 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 in 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 dealing with challenges and volatility within insurance, but we also worry in our seasonally lightest quarter is the December quarter. So it's really just the lower top line on top of a very similar semi-fixed cost base.

Okay. Thank you, guys.

That's it for me.

Once again, ladies and gentlemen, if you have a question, please press star 1. We'll now take our next question from Chris of Singular. Your line is open. Please go ahead.

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

Yeah, hey, Chris, this is Greg. That's just a one-time charge that we took to revalue or, you know, fair value adjust the fair value of an earn out associated with an acquisition we did last year. Um, that acquisition has been performing better than we expected. So we had to adjust the fair value of the earn out. So that's, that's what that was of about 2.7 million, which is a good thing, which means it's performing better than originally planned.

Right, right. Okay, great. And then, um, You know, you guys mentioned, okay, so three to six months you see more volatile times for insurance. You know, why is that? Why is it three to six months? Why is the timing there the way it is?

Yeah, that's the time that this is a, 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 in talking to the carriers about the typical time it takes to re-rate 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 six-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 timeframe, we look at where the carriers are and what the carriers are telling us about their plans to re-rate and reopen states. That puts us into, we think, the late spring, early fall timeframe. So it's, you know, and again, it's, Historically, there's two main drivers of that six-month bottom. One is within six months, most large carriers 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. The second reason is that most consumer insurance policies are a six month term. Your auto insurance is probably a six month term. That means that you're going to, you know, depending on where you are in that six 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 it kind of begins the shopping cycle. that the industry talks about and that we have experienced also ourselves. So those are the two main determinants. The time it takes to re-rate, re-launch, and the second is the average consumer behavior based on the fact that they're going to get a rate increase.

Okay. All right. All right. Great.

Thanks, Doug and Greg. Thank you, Chris.

Thank you. A replay of today's call will be available for a week starting at 5 p.m. Pacific time today. The replay can be accessed by calling 17194570820 and entering passcode 4351235. This concludes today's call. You may now