This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk00: Ladies and gentlemen, and welcome to the ISC second quarter 2021 earnings conference call and webcast call. At this time, all participants are in the listen-only mode. Later, we will conduct question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press par, then zero on your touchstone telephone. I would now like to turn the conference over to your host, Mr. Jonathan Hackshaw, Senior Director, Investor Relations and Capital Markets. You may begin.
spk04: Thank you, Jerome, and good morning, everyone. Welcome to ISC's conference call for the quarter-ended June 30, 2021. On the call with me today are Jeff Stusik, President and CEO, and Sean Peters, Executive Vice President and Chief Financial Officer. Jeff will start us off by providing some opening comments about the quarter, followed by Sean, who will take us through the highlights of the operational and financial results for the quarter. Jeff will then make some closing remarks before we open up the call for the question and answer session. Before we begin, we would like to remind everyone that we will only be summarizing results today. ISCs and audited condensed consolidated interim financial statements and notes and management's discussion and analysis for the period ended June 30th 2021 have been filed on CDAR and are also available in the investor section on our website under financial reports We encourage you to review those reports in their entirety I would also like to remind you that any statements made today that are not historical facts are considered to be forward-looking statements within the meaning of applicable securities laws and The statements may involve a number of risks and uncertainties that are described in detail in the company's CDAR filings, in particular in ISE's annual information form for the year ended December 31, 2020, and ISE's unaudited, condensed, consolidated interim financial statements and notes, and management's discussion and analysis for the three and six months ended June 30, 2021. Those risks and uncertainties may cause actual results to differ materially from those stated earlier. Today's comments are made as of today's date and will not be updated except as required under applicable securities legislation. Today's conference call is being broadcast live over the Internet and will be archived for replay shortly after the call on the investor section of our website. With that, I would now like to hand the call over to Jeff Stusek.
spk06: Thank you, Jonathan, and good morning to everyone joining us for today's call. To date, 2021 has been an exceptional year for ISC. Our financial performance for the second quarter of 2021 is well above the previous year, where the impact of the COVID-19 pandemic was evident in our second quarter last year. Hence, the increase in the quarter this year is partly due to some recovery against the COVID-impacted quarter, but more importantly, it is also a result of strong growth over and above that in both our registry operations and services segments. For more details on the quarter, I'll now ask Sean to summarize our financial and operating performance for the quarter.
spk05: Thank you, Jeff, and good morning, everyone. I'll provide you with some of the highlights of the quarter on a consolidated basis and then provide some further commentary about each of our reporting segments and their performance for the reporting period. As Jeff said, our second quarter results were extremely strong, driven by a number of factors, including the ongoing economic recovery, as well as the addition of our recovery solutions business in our services segment. More specifically, on a consolidated basis, revenue for the quarter was $44.6 million, an increase of 44% compared to the second quarter of 2020, driven by higher transaction volumes in both our registry operations and our services segments. Our consolidated expenses were $34.6 million, an increase of $10 million compared to the same quarter last year, primarily from expenses from our new recovery solutions business and increased share-based compensation expenses from the strong performance of our share price. EBITDA was $13.6 million compared to $9.2 million in the same quarter last year, and our EBITDA margin for the second quarter was 30.5% compared to 29.5% in the same quarter in 2020. Adjusted EBITDA, which among other things removes the impact of the share-based compensation expenses, was 18.6 million for the quarter, compared to 10.4 million in the same quarter last year, with an adjusted EBITDA margin of 41.6% compared to 33.5% in the second quarter of 2020. As a result, net income was 6.5 million, or 37 cents per basic share and 36 cents per diluted share, compared to 4.5 million, or 26 cents per basic and diluted share in the second quarter of 2020. Turning to our business segments, Overall revenue in registry operations was $24 million for the quarter, up $7.8 million, or 48% compared to the same period in 2020, and was $43.2 million year-to-date compared to $31.7 million last year. Registry operations volumes in the second quarter of 2021 were propelled by the activity in the Saskatchewan real estate sector. In the first quarter, we experienced reasonably consistent transaction growth across all property value ranges. We again saw increases across all property value ranges in the second quarter, but with more significant increases in the higher value property ranges. This, combined with an increase in specific high-value transactions, which I'll touch on in a minute, led to a large increase in revenue in the second quarter. To the specific registries, revenue for the land registry increased to $17.9 million in the quarter, up by $6.7 million compared to Q2 2020. The increase in revenue is due to the exceptional results in the land titles registry, which continued to benefit from the activity in the real estate sector. High-value property registration revenue was robust in the second quarter at $1.7 million, more than three times the $0.5 million received during the pandemic-impacted second quarter of 2020. Each high-value registration generates revenue of $10,000 or more and are typically seen in both commercial and large agricultural transactions. Turning to the personal property registry, revenue was $3.1 million for the quarter, up $0.7 million, or 28% from the same quarter in 2020. Volume largely returned to levels similar to those seen prior to the pandemic, up 19% during the quarter compared to the same period in 2020. Revenue grew at a greater rate than volumes due to pricing changes made in August of 2020. Registration revenue in the second quarter grew by 30% from 2020, due to volume growth of over 16% coupled with pricing changes. Average term length for personal property security registration setups, which impacts revenues, also improved modestly compared to the same quarter in 2020. Search revenue increased by 39% for the second quarter of 2021, a record quarter as a result of strong activity during the period where search volumes grew by 25% compared to the same period in 2020. Pricing changes contributed to maintenance revenue improving by 3% compared to the same quarter in 2020. However, volume declined by 4% in the second quarter. Revenue for the corporate registry for the quarter was $2.7 million, up 8% compared to the same period in 2020, with an 8% growth in overall transaction volumes. Registration, search, and maintenance revenue grew by 20%, 13% and 3% respectively during the quarter compared to 2020. A strong second quarter for the incorporation and registration of new business entities along with search activity drove the registration revenue growth. While annual returns and renewals saw a slight decline during the second quarter, increases in entity amendments drove maintenance revenue growth. The net result is that EBITDA for registry operations for the quarter was $13.2 million, up 76% compared to $7.5 million for the same period last year. In services, revenue for the second quarter was $20.1 million, an increase of $7.7 million, or 62% compared to the same period in 2020, and was $36.3 million year-to-date compared to $24.2 million last year, up 50% or $12.1 million. Revenue was higher in the second quarter of 2021 compared to the pandemic-impacted same period last year due to a return to pre-pandemic levels in certain transactions, combined with continued organic growth in regulatory and corporate solutions, as well as the inclusion of new revenue from recovery solutions. Turning to the specific divisions within services, Revenue in regulatory solutions for the second quarter was $15.5 million, an increase of 36% compared to $11.4 million for the same period in 2020. Revenue for this division grew in the quarter as a result of renewed level of transactions in automotive financing and KYC, combined with organic growth in equipment financing, strong new legal customer acquisitions supported by our Registry Complete software, as well as continued organic growth in new KYC customer verification transactions and other existing customer contracts. Revenue in recovery solutions in the second quarter was $3.2 million, representing an improvement over the first quarter of 2021. We've seen a steady increase in assignments from our bank partners. However, levels of recovery assignments continue to be impacted by last year's loan deferral programs and the ongoing stimulus provided by the federal government in response to COVID-19. Corporate solutions revenue for the quarter was $1.4 million, a jump of 42% compared to the second quarter of 2020. Revenue improved due to increased corporate filings, as well as the overall economy was more robust in the second quarter of 2021 compared to 2020, which was impacted by COVID-19, as well as organic growth from new customers onboarded since last year. EBITDA for services was $4.7 million for the quarter compared to $2.3 million for the same period last year, an increase of nearly 100%. Finally, technology solutions saw revenue of $3 million for the quarter, a decrease of $1.9 million compared to the second quarter in 2020. Revenue from external parties for the quarter decreased $1.8 million compared to the second quarter of 2020 and decreased $0.3 million year-to-date compared to the same period in 2020. The decrease was due to the timing of solution implementation projects, which impacts the timing of revenue recognition in the quarter and year to date as compared to the same periods last year. Revenue on our solution implementation projects will continue to be recognized in the quarters in which deliverables and milestones are achieved. As a result, EBITDA for technology solutions decreased $1.9 million for the quarter from the decreased revenue. Onto other items, our capital expenditures were $1 million for the quarter compared to $0.3 million for the same period in 2020. Capital expenditures in the current year were primarily related to system development work across our business segments, whereas last year they included costs for systems supporting our corporate activities. With respect to our debt, at June 30, 2021, the company had $71.3 million of total debt outstanding compared to $76.3 million at December 31, 2020. Further details on our debt and our credit facilities can be found in our MD&A and financial statements. From a liquidity perspective, as at June 30, 2021, we held $49.6 million in cash compared to $33.9 million at December 31, 2020. At June 30, working capital was $35.2 million compared to $28.1 million at the end of last year. Consolidated free cash flow for the quarter was $8.9 million, compared to $7.8 million for the same period in 2020. The increase was due to higher cash flow was provided by our operations, partially offset by an increase to current income taxes associated with the higher earnings and higher capital expenditures for the year. Finally, we also announced yesterday that our board of directors approved our quarterly cash dividend of $0.20 per share. The dividend will be payable on or before October 15th, 2021 to shareholders of record as of September 30th, 2021. I'll now turn the call back over to Jeff for some concluding remarks.
spk06: Thanks, Sean. Both our registry operations and services segments have benefited from the strong, positive economic conditions in the sectors in which we operate. Registry operations has realized excellent results over the past 12 months despite pandemic conditions driven by robust activity in Saskatchewan, particularly in the real estate sector. At present, we expect volumes to continue to show strength and stability in the near term, although the potential impact from COVID-19 and its related variants for the balance of the year continues to be unknown. Services volumes are also expected to remain robust, and regulatory and corporate solutions, while volumes and recovery solutions are expected to remain unchanged so long as federal or other pandemic subsidy programs are in place. At present, we expect those subsidy programs to end in the fourth quarter of 2021. For the balance of the business, our new technology, combined with our focus on our customers, continues to drive new customer acquisition. In technology solutions, Project implementation and product development work continues, although with some delays. While this work is planned to be completed in the latter part of the year, we expect overall activity in this segment to be lower as new sales continue to be delayed due to government worldwide focus on COVID-19 over the past year. We continue to look for additional opportunities with existing customers, but some of the larger new opportunities are notably delayed. While our confidence in ISE's strength and long-term potential endures. We recognize that uncertainty remains for the last half of the year from the potential outcomes of COVID-19 and its variants. As such, we will not be providing formal guidance, financial guidance for the year. Overall, ISE has performed extremely well in the first half of 2021 and remains an extremely robust business that is poised to continue to thrive and grow in a post-pandemic world. With that, I'll hand the call back to Jonathan.
spk04: Thanks, Jeff. Jerome, we'd now like to begin the question and answer session, please.
spk00: Ladies and gentlemen, if you have a question at this time, please press the star and then the number one key on your touchstone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. And your first question. comes from Stephanie Price with CIBC. Your line's open.
spk02: Hi, thanks for taking my question. Morning, Stephanie. Registry operations has been obviously strong for several quarters. Just curious about what you're seeing in Q3 and your comfort level and kind of sustainability at these higher levels.
spk05: Hi, Stephanie. It's Sean. Good morning. And thanks for the question. You know, our outlook sort of sets that out. We have seen extremely strong transaction levels, as you noted, in Q1 and Q2. And our current outlook is that we expect to see that continue with some strength for Q3 and for the balance of the year, with probably some expectation of a return to more normal seasonality, which, as you know, Q2 and Q3 are usually our stronger quarters, with Q4 and Q1 being a bit slower. So that's our current outlook.
spk02: Okay, thanks. That's helpful. And then just kind of sticking with the outlook in terms of Paragon and the recovery solutions division, you mentioned that, you know, federal subsidy programs you think could end in Q4. Just curious on your comfort level with that timing and how to kind of think about that Paragon business post the expiry of those subsidies. Just given this new opportunity, I'm just trying to understand, you know, is there potentially a spike in revenue, or is it more of a measured increase over several quarters as things kind of work through the backlog?
spk05: Yeah, it's Sean again. So our comfort with, to the first part of the question, our comfort with that coming off in Q4, that's our current expectation based on as good of information as we have, probably the same that you're hearing. That could be extended. We don't really have control over that. The business has performed pretty stable, pretty steady through this COVID pandemic. We bought it during COVID. We knew what the levels were like, and they've remained pretty consistent. We also know that it performed really well in a strong economy prior to COVID. Our expectation is that once those federal programs come off, it would probably be over a few quarters, and I'm not sure what a few is, a couple for sure, as defaults start to occur, as people start to get into defaults and the banks start to act on that. I don't think it's an immediate spike, sort of the month or the quarter that the federal programs come off. I think there'll be some time as that works through the bank's normal recovery processes and then on to us.
spk02: That's helpful, thanks. And then just finally for me, the Regulatory Solutions Division obviously also had very strong organic growth in the quarter. Just wondering if you can break down kind of that main drivers of the growth in terms of new customer wins and additional KYC sales versus maybe a COVID recovery from last year.
spk05: Yeah, from a percentage basis, we don't disclose that. But I would say that if you look at prior years, You could sort of equate what we saw in 2021 here was a return to what we would call sort of 2019 and roughly what 2020 would have been without COVID. Everything sort of above that, which is meaningful, is a result of customer acquisition. We've been acquiring customers throughout the COVID period, and now as the economy starts to recover more, that's going to, you know, really help our results. But from a straight percentage, you know, we don't have that broken out, but we can tell what a normal sort of level of activity from financial institutions or car captives are, and that we expect is a recovery from COVID. And then the rest is all new customers as well as just organic growth with existing customers.
spk02: Okay, that's helpful, Colin. Thanks so much.
spk05: Thanks, Stephanie.
spk00: And our next question comes from Paul Trever with RBC Capital. Your line is open.
spk03: Thanks very much and good morning. Just looking at technology solutions, technology solutions, I understand the implementation delays, but how should we think about new customer activity, the sales pipeline? Are you still seeing interest from customers in terms of making new deployments and new investments in solutions there.
spk06: Yeah, great question, Paul and Jeff. As most folks that are dealing with government as a client base, the larger sort of projects that governments would have undertaken certainly are delayed. I think the silver lining in this from a government and COVID perspective, is governments realize they need to be more online and more available for different service channels than they certainly currently are. We remain optimistic about the technology solutions business, but where we are at right now is seeing that sort of impact of COVID and the distraction, I would say, of governments on economy and health initiatives, appropriately so. And so we looked for that to, you know, come back with some strength, possibly even stronger than, you know, pre-COVID levels at some point. You know, again, you know, we do have active projects underway that are really exciting, the IAA project that we've announced, and we continue to work through you know, we think is substantial and we're excited about. We do have current customers that we continue to support on our technology solutions piece. But, you know, that's what we're seeing in this sort of short term and then sort of how it looks going forward.
spk03: Okay, that's helpful. Turning to regulatory solutions, you mentioned the MD&A, the soft launch of registry complete. You know, just hoping that you can provide solutions some metrics or commentary in terms of like the uptake, you know, where you see the uptake going, you know, how quickly you plan to ramp that from a soft launch to more of a broader launch.
spk05: Thanks, Paul. So, you know, we did soft launch in in August of last year. And I would say that we probably are considered fully launched now and won't do much more of a formal splash on that. The uptake has been very, very positive. So we did develop that in conjunction with some of our largest customers. So it serves the needs that they're looking for. It's also a great platform to be able to onboard smaller customers. And so We're seeing uptake both from our existing customers as we move them over onto that new platform, as well as a great deal of interest from new customers who are smaller and maybe didn't have access to the same sort of technology before. So, you know, we think it will continue to be strong and it's well known in the market right now.
spk03: Just lastly, I know it's a fluid environment, but with restrictions being lifted in Saskatchewan and reopening in general, how do we think about the return of expenses related to travel and entertainment? How quickly or not are you planning on lifting that back up?
spk05: Good question, and something that we're We're working through sort of continuously, while the use of Zoom and Teams and all of that has been very effective during COVID, there's certainly no substitute for some of the things that we do that would be better in person. Our current view, of course, is impacted by whatever the provincial and federal health guidelines are. But for the balance of 2021, we don't expect that any return to travel or in-person will be material to our results. We might see, as we get into third or even early fourth quarter, some return to travel, but the numbers are not going to be significant to 2021 results. As we move into 2022, we would hope to see a bit more of a return to normal and you know as jeff was talking about in the technology solutions a lot of that business is done in person meeting with governments and uh so we would we would expect to see some return to normal uh hopefully in 2022. great thanks for taking my questions and your next question comes from um jesse uh pinlock with uh coremark securities your lines open
spk08: Hey, good morning. Just on the services business, you continue to highlight the new customer relationships that you're winning. I'm just wondering if you kind of speak to the sustainability of the ability to continue to add more clients here. And then have you noticed just any competitive response to the success that you've been seeing?
spk06: Thanks for the question, Jesse. Yeah, so we're really proud of the tool, as Sean mentioned. The Registry Complete platform was built in conjunction with a large law firm and they defined the requirements and we built it. It is a fantastic tool that has scalability. It's really easy to onboard clients. We believe that our service proposition, our fair approach to pricing, really is a sustainable sort of model. And our customers, we continue to strive for high levels of customer satisfaction and that retention. We always say we've got to win that on a day-by-day basis, and we are, not just with new customer acquisitions, but the retention of others. So we're really comfortable in the space. I wouldn't comment on sort of competitor reaction per se, but there's nothing of significance that is affecting us. And I remain really pleased with the new customer acquisition and the customer retention in our services business. Okay.
spk08: And then just kind of coming back to technology solutions, you've been very forward with some of the challenges in the business because of the pandemic, but can you just elaborate a little bit more on the extent of some of these delays and how, how, you know, maybe that's changed from what you're expecting six months ago.
spk05: Uh, I think I got, you broke up for us a little bit there, Jesse, but I think you're asking for the delays and versus what we were thinking six months ago. Is that right?
spk08: Yeah. Or even just relative to, uh, to three months ago, it just sounds some of the wording that you use, it sounds like, like you may be becoming a bit more, um, You know, things just continue to be prolonged, maybe more than you expected just one or two quarters ago. And I'm wondering if that's the case.
spk05: Yeah, I think it is the case. I think we did see some impact from COVID early on. So we were in a couple of projects when COVID hit and There was an immediate impact and an immediate delay as our government clients or jurisdictional clients had to figure out how to work from home, which meant they also had to figure out how to test if we're putting in new systems and project manage from home. So we saw an initial delay there. As that technology sort of got set up and people were used to working from home, we did see through the course of the fall more of a return to sort of normal cadence of normal being now online. But as the pandemic has gone on, I think more and more distractions have just caused, as Jeff was talking about in governments, have caused governments to start focusing on other things. And so we've seen delays. I wouldn't call them specifically COVID or technology related, just delays. which are actually fairly normal for us in these government contracts. There's quite often unexpected delays or scope changes or those types of things. So I think just in the last three or four months, those have become a bit more for us, and that's why we see that in the second quarter here.
spk08: Understood. Thank you for the callers.
spk04: Thanks, Jesse. Operator Jerome, could we have the next question, please?
spk00: Your next question comes from Stephen Boland with Raymond James. Your line is open.
spk01: Morning. Again, I just want to thank you for the disclosure in your package. It's very comprehensive. It makes things very easy to update. I guess the only question I have now is your balance sheet. I think it's a record cash balance sheet. Your debt is on a manageable level. Your free cash flow is very strong compared to your dividend. What would you say is your capital allocation plans? Another short follow-up. Thanks.
spk06: Thanks for the question, Jeff, here. Yeah, you know, I think you're very accurate. You know, the stability and the strength of the balance sheet continues to shine through. We're a strong, robust free cash flow business, which we are not – upset with, that's a good place to be. I think that continues to create potential opportunities for us and the board to talk about differences in capital allocation and some changes there. We believe in the growth of the company, but we also, as Sean and I said right from the want to grow the business and look for ways to, you know, reward shareholders along the way as well. So, you know, I think, you know, this quarter was just yet another example of the resiliency of the business and the strength of the business, which just gives us some options. You know, we don't have a change in strategy around capital allocation, but I think this gives us some opportunities to think about that, you know, more directly and and certainly have that dialogue with the board on a regular basis, but no change at this point.
spk01: Okay. And then just the second question, we've seen a lot of M&A activity, not just in registry, but real estate conveyance, some here in Canada, but certainly internationally. And it seems like the multiples that are getting paid have inflated quite rapidly. Is that something that that you've seen? I presume you evaluate a lot of potential targets, but has it become untenable actually to transact at certain multiples now?
spk06: It's probably somewhat, I'd say that's a somewhat accurate sort of depiction of what we're seeing in the acquisition market space. We have a particular strategy around acquisition, which is We look at the right business at the right time for us at the right price, and we're willing to not pull the trigger on an acquisition if we can't fulfill all of those. Our acquisition track record, I would say we're batting 1,000 on that as good acquisitions that have been successful additives for us in the business, and we don't plan to change that. And if multiples become... In your words, but I would also share it on Tenable, we're not going to overpay for a business just because it's shiny. It's in a shiny new bubble. It needs to make sense for us financially. So we're okay if we go a few number of quarters not acquiring something because it didn't fit our criteria. because when we do bring one to market, we do want to land it and we do want it to be successful. So, yeah, that's a long answer to, yeah, I think we're seeing some of that in the marketplace. I don't know if this is a short-term trend or this is a long-term. We'll have to get our heads around that. But for now, that's where we're sitting with it. Okay. Thanks very much.
spk04: Thanks, Stephen.
spk00: And your next question comes from Trevor Reynolds with Acme Capital. Your line is open.
spk07: Morning, guys.
spk04: Morning, Trevor.
spk07: A couple questions here. Just on the Saskatchewan market, obviously the housing market has been very strong. Just curious if there's any potential headwinds given the dry weather and crops potentially being impacted.
spk06: Sure. I think there's always that potential. I think it's really important to remember that Saskatchewan's economy is pretty diversified and agriculture, although important, isn't the only driver in the economy. I think the agricultural sector is likely to get hit a little bit from the dry crop conditions and the like. That might be offset with an increase in in things like oil price and activity in the, in the fields that way. So it's hard to speculate. I'm not going to say there isn't going to be headwinds, but we do see strength in this, in this marketplace. And, and as, as we alluded to in the, in the comments, we, we do see a continued robustness in this, in this Saskatchewan business. And so, you know, there's, there's potential headwinds, but I, I'd say that'd be an isolated view without looking at the entire picture, including potash and other sort of activities that drive the economy, manufacturing and the like.
spk07: Got it. Thanks. And then on the registry complete side, are you actively marketing that or is it basically just word of mouth that's driving the increase on that side of things?
spk06: it's, you know, we're actively marketing it. You know, we're... I'll tell you, the number of new customer acquisitions, we don't need to spend a lot of money on marketing because it is sort of marketing itself in many ways, but it isn't in a quiet corner and hopefully people will come. You know, we have sales teams that are dedicated on selling that and and so that's front and center for us with that space.
spk07: Got it. So you expect the growth to continue on that side of things?
spk06: Yeah, we're really excited about the business, and it's a winner from a customer standpoint, so there's no reason to believe that chant continues.
spk07: Got it. Last one, just... Current cost structure, are you comfortable with everything, employment levels, and just maybe touch on that.
spk05: Yeah, I think generally we are. We've done fairly well through the pandemic in terms of staff levels. I think we commented last quarter, and the same would hold true this quarter, that we're probably a little light in a couple of areas, and as we see the economy return, We'll probably add a few staff, but again, nothing significant. We've retained most of our staff through the pandemic, and so just need to add a few more in a few select areas to support the growth.
spk07: Got it. Thanks for taking my questions.
spk04: Thank you.
spk00: And your next question, we have follow-up from Stephanie Price with CIBC. Your line is open.
spk02: Hi. I just had one follow-up. When you kind of discussed the delays in government spending in the technology solutions division, just curious if you're seeing that more broadly across larger, you know, potential government land privatizations and things like that.
spk06: Welcome back, Stephanie.
spk02: Thanks.
spk06: Yeah, it's... Yeah, there's sort of two ways to look at this. And so, you know, I think it's accurate to say... And I have said that the government's focus has been on the economy and health. What COVID has done, though, is really brought to light some of the technology deficiencies that governments are seeing, are facing, and COVID forced that. And some governments weren't able to effectively deliver registry operations during COVID with staff at home. which just speaks to having a world-class operator like ISC available. And we actually think in the long term this will accelerate this market, not slow it down. It will probably accelerate in the long term. Just in the short term, as governments are finding their feet, we're seeing some challenges. But I actually think in this role of having a world-class operator Private sector operator, running your registries for governments is more logical than ever. And so I actually see this as an emerging marketplace, and it's going to accelerate, not decelerate.
spk02: That's helpful. Thank you.
spk04: Thanks, Stephanie.
spk00: All right. Thank you. So there are no further questions at this time. I'll hand over. The call back to Jonathan Hatchaw.
spk04: Thank you, Jerome. With no further questions, we'd like to once again thank all of you for joining us on today's call and for all your questions. And we look forward to speaking with you again when we report our third quarter. Thanks and have a good day.
spk00: Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. Hear me all disconnect.
Disclaimer