ASTH - NASDAQ

Good day, everyone, and welcome to today's Astrana Health Third Quarter 2024 Earnings Call. [Operator Instructions] Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Today's speakers will be Brandon, President and Chief Executive Officer of Astrana Health; and Chan Basho, Chief Operating and Financial Officer. The press release announcing Astrana Health Inc. results for the third quarter ended September 30, 2024, is available at the Investors section of the company's website at www.astranahealth.com. The company discussed certain non-GAAP measures during the call. Reconciliations to most comparable GAAP measures are included in the press release. To provide some additional background on its results, the company has made a supplemental deck available on its website. A replay of this broadcast will also be made available at Astrana Health website after the conclusion of this call. Before we get started, I would like to remind everyone that this conference call and any accompanying information discussed herein contains certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as anticipate, believe, expect, future, plan, outlook and will include, among other things, statements regarding the company's guidance for the year ending December 31, 2024, continued growth, acquisition strategy, ability to deliver sustainable long-term value, ability to respond to the changing environment, operational focus, strategic growth plans and merger integration efforts. Although the company believes that the expectations reflected in its forward-looking statements are reasonable as of today, those statements are subject to risks and uncertainties that could cause the actual results to differ materially from those projected. There can be no assurance that those expectations will prove to be correct. Information about the risks associated with investing in Astrana Health is included in its filings with the Securities and Exchange Commission, which we encourage you to review before making investment decision. The company does not assume any obligation to update any forward-looking statements as a result of new information, future events, changes in market conditions or otherwise, except as required by law. Regarding the disclaimer language, I would also like to refer you to Slide 2 of the conference call presentation for further information. With that, I'll turn the call over to Astrana Health's President and Chief Executive Officer, Brandon Sim. Please go ahead, Brandon.

Thank you, operator. Good evening, and thank you all for joining us today. Adding to a strong first half of the year, the third quarter results we reported today continue to reflect the progress we are making as we build the nation's leading patient-centered care agnostic health care platform. As we continue to drive our mission to deliver high-quality, high-value and accessible care to communities across the country, I want to remind the audience of the 4 pillars we have executed on for years, which we believe will allow us to achieve that goal. First, we will sustainably grow our membership in order to bring better care to more Americans. Next, we will increase alignment with outcomes by responsibly taking on greater levels of total cost of care responsibility for our members through value-based and accountable care arrangements. Third, we will focus on achieving superior patient outcomes while managing total cost of care by empowering our providers with our technology and clinical infrastructure. And finally, we will continue to drive operating leverage across our business through our Care Enablement suite. I'll start with some key financial and operational updates for the quarter that reflect the success we are having driving each of these 4 operational imperatives. Then I'll provide an update on the close and integration of Collaborative Health Systems. And finally, Chan will discuss our financial performance and guidance outlook. Starting with financial highlights. We continue to execute at a high level, as Astrana Health revenue grew to $478.7 million. Adjusted EBITDA was $45.2 million, continuing to demonstrate our differentiated ability to grow profitably even while bringing on newer cohorts of membership. As we have previously guided, earnings cadence was different this year compared to last year due to a timing difference in when certain incentive dollars were received as well as the move to accruing ACO reach results throughout the year. To paint a clearer picture, on a year-to-date basis, adjusted EBITDA has grown 15% from $117.6 million in the first 3 quarters of 2023 to $135.3 million in the first 3 quarters of 2024. Moving on to core business updates. We continue to execute on our first strategic pillar, sustainably growing membership to bring better care to more Americans. Membership was around 1 million members as of September 30 and to set the stage for future membership growth, Astrana Care Partners Affiliates organically added over 200 primary care providers and over 900 specialists to our network across our core markets. We also continue to make progress on our second goal, increasing our responsibility for members' total cost of care and value-based arrangements. As of October 1, 2024, our full risk business makes approximately 61% of total capitation revenue compared to 46% as of October 1, 2023. And we continue to be on track to meet our previously stated goal of having around 2/3 of our capitation revenue coming from a full risk ecosystem by January 1, 2025. Moving on to utilization and cost trends in the third quarter. We continue to experience overall cost trends blended across all of our lines of business evolving, as expected, in the mid-single-digit percentage range. We believe that this is an ongoing reflection of our efforts to ensure access to high-quality care for members as well as to the technology-enabled care management, disease management, and care coordination programs that we operate for over 1 million members across the country. Diving a bit deeper into our utilization trends. For our senior lines of business, Medicare Advantage and ACO reach, we are experiencing stabilizing cost trends, which came in within our expectations. In our managed commercial book of business, we are seeing a slower trend than expected and for our Medicaid book of business, we are seeing higher trend slightly than expected. For our Medicaid business, excess cost trend relative to expectation was a few hundred basis points of increase due to an acuity rate mismatch because of Medicaid redetermination, a situation we expect to be resolved in the future as redetermination and rates renormalize. At a blended level, this was partially offset by lower-than-expected cost trend in our commercial book of business. We believe that our ability to manage overall cost trend within our predicted range is a feature of our payer and line of business agnostic platform as well as a testament to the investments we have made in care delivery and care coordination. Moving on to recent activity. Our acquisition of collaborative health systems has closed as of October 4, with integrations well underway in terms of people, processes and technology. As a reminder, CHS has a complementary footprint of around 2,500 primary care providers serving around 100,000 primarily senior members with a set of payer-agnostic relationships across the South, and the East Coast. Financially, we expect to see an approximately negative $4 million adjusted EBITDA impact in Q4 but continue to believe that we are on track for approximately $450 million of revenue contribution in full year 2025 and breakeven adjusted EBITDA contribution by the end of 2025 from this business. We will continue to provide updates about the progression of this business in future quarters. With the closing of CHS after the quarter end, Astrana Health now serves over 1.1 million patients in value-based care arrangements across 12 states. By deploying our technology platform and leveraging our operations to drive efficiencies and reinvesting those savings into improving access to care and enhancing local clinical capabilities for our patients, we have the unique ability to drive better patient outcomes and savings and risk-bearing arrangements. That approach is continuing to pay off, driving what we believe is sustainable profitability, even as we grow rapidly in communities across the country. I look forward to continuing to accelerate our reach and our impact as we strive to provide accessible, high-quality, high-value care to all. To conclude, I want to thank all of our teammates, new and old, our providers and our partners for their continued belief in our mission to transform health care delivery nationwide. With that, I'll turn it over to Chan Basho to discuss our financial performance and guidance outlook. Chan?

Thanks, Brandon. Turning to our financial performance. We reported total revenue of $478.7 million, a 37% increase from the prior year period. This growth was driven by our continued progress in the transition to full risk as well as additional contributions from the CFC acquisition. Adjusted EBITDA for the quarter was $45.2 million, a 13% decrease from $52 million in the prior year period. As Brandon previously mentioned, our cadence in earnings was different this year compared to last year due to timing differences related to the recognition of certain incentive dollars and ACO reach performance. As a result, viewing financials on a year-to-date better reflects the growth of our business. We reported adjusted EBITDA of $135.3 million for the 9 months ending September 30, 2024, up 15% from $117.6 million in the prior year period. Similarly, while net income attributable to Astrana for the quarter was $16.1 million, down 27% from $22.1 million in the prior year quarter. On a year-to-date basis, net income attributable to Astrana was $50.1 million, up 4% from $48.4 million in the prior year period. Earnings per diluted share for the quarter stood at $0.33, down from $0.47 in the prior year period. Year-to-date earnings per diluted share were $1.04 compared to $1.03, a 1% increase from the prior year period. From a balance sheet perspective, we remain well capitalized, ending the quarter with $348 million in cash and cash equivalents and total debt of $442 million compared to $325 million in cash and $446 million in debt at the close of the previous quarter. As we adjust our full year outlook to incorporate CHS' financial contribution, we're revising our guidance ranges. For revenue, we now expect between $1.95 billion and $2.03 billion, up from our prior range of $1.75 billion to $1.85 billion. We anticipate adjusted EBITDA to range somewhere between $165 million to $175 million compared to our previous outlook of $165 million to $185 million. Lastly, we now project earnings per diluted share to be between $1.06 to $1.19 compared to our prior guidance range of $1.12 to $1.36. To conclude, Astrana Health has made significant progress this year through strategic growth and disciplined execution. Looking ahead, we're focused on the seamless integration of acquisitions and new provider partners, strengthening our financial position and delivering sustainable value for our members, providers, payer partners and shareholders. We appreciate your continued support and confidence in Astrana Health. With that, I'll turn it over to you, operator, for questions.

[Operator Instructions] First up, we have Ryan Daniels of William Blair.

Congrats on the quarter. This is Jack Senft on for Ryan. I wanted to touch on the updated guidance that now incorporates CHS. Can you just remind us on the top line and bottom line impact of adding CHS? I believe you said it was maybe a negative $4 million EBITDA hit in the fourth quarter. I'm just kind of trying to parse out the magnitude of the third quarter performance on your updated guide versus the CHS individual performance.

In terms of top line for CHS, in Q4, we're expecting about $200 million in additional top line in terms of adjusted EBITDA, going to be about a $4-ish million hit to EBITDA.

Okay. Perfect. And then if I could just sneak in a follow-up here. We recently saw a headline regarding, I believe it's called Proposition 35 in California. It's basically giving doctors in California a boost in pay for those that serve Medi-Cal patients. Can you guys just elaborate on what this is and maybe just if this will impact you? And if it is going to impact you, maybe like magnitude and then kind of how this impact each of your business lines?

Jack, this is Brandon. Thanks for the question. I'm just going to say a few quick words and then hand it off to Chan to discuss the financial impact. We just wanted to say that we're pleased to see increased Medicaid funding in California. It's a population that we think we spend a lot of investment and time on and it's something that we think is going to be great for those communities. Chan, do you want to discuss some of our anticipated impact?

Sure. Thanks, Brandon. So Jack, in terms of overall what this means to us, we value that the voters of California believe in Medicaid, believe in the fact of continuing to make sure networks are sustainable. And with this higher funding, we expect to continue to reach more Californians and continue to build high-quality networks. In terms of specifics for '26 and beyond in terms of where rates will really impact us. We are in ongoing discussions with payers, and we'll keep you apprised as those discussions continue.

Next up, we have Brooks O'Neil of Lake Street Capital.

I wanted to just pick your brains a little bit at a high level, recognizing your -- gradually expanding from your California routes across the Southeast and up into New England. I'm hoping you could give us a sense of physicians, payers and hospital players as it relates to capitated health care in the role you can play to help them be successful in what they're trying to do. And then I'd also love any color as it relates to major geographic variations on the theme you might discuss.

Brooks, this is Brandon. Thanks for joining the call and for the questions. It's good to hear from you. You have a great point. And as we've talked about many times, health care is very local. Each region is extremely different in terms of community that we're serving, in terms of the payer mix, demographics, social determinants that may apply or may not apply, et cetera. That's something we're taking into account as we look at drastically different communities, ranging from Texas to the Southeast to the Northeast. And I think what we're trying to focus on, which is our strategy is to reduce the variability that can be reduced while giving tools to local providers and clinical teams to appropriately address the actual needs of the community that they are serving. And so what I mean by that, for example, is that nationwide items such as claims variation, fraud, waste and abuse as well as care management protocols, which we strive to be evidence-driven are standardized by our technology platform, including our Pathways care management, disease management proprietary technology. However, at the local market level, we are working with regional leaders, regional chief medical officers to create the right network topology, whether that's primary care, specialty care or hospitals as well as the right relationships so that we can appropriately influence providers to succeed and help them succeed in value-based care contracts. So while I won't maybe go into detail of each particular region and its systems and its players, I think it is extremely important. It's a great point that you brought up that we're keeping in mind as we continue to grow.

Next up, we have Jailendra Singh of Truist Securities.

Apologies if I already covered this because I missed some of the prepared remarks. I want to ask about the medical cost trends. Did you have any update to your first half medical cost trend as more claims stood up? As a follow-up, you previously discussed reinvesting some of the upside you experience in medical claims back into the business to drive future growth. Just curious what areas are you reinvesting back into.

Thanks for the question. In terms of medical cost trend, despite having concentration in regions that are expressing higher-than-average trends such as LA, our ACO trend continues to be relatively lower than national. In terms of MA, I'd say we're also trending lower than regional trend, kind of low to single-digit numbers. Medicaid, on the flip side, has been trending higher. And we think as excess redetermination kind of works through the system, that trend will start to stabilize. In terms of how we are reinvesting, we continue to reinvest in our clinical programs, our care management programs to really continue and both provide the necessary care for our members that need it the most.

And just following on Medicaid. I mean, this is something some of the managed care companies talked about, the rate mismatch. Is that what you're referring to that you're seeing some rate mismatch on your book of business? Is that something kind of a manageable range? Just can you elaborate more on that?

I think it's partially that. I think it's partially just as others have said, as we determine members are moving into other lines of business, we are seeing that net impact.

Next up, we have Michael Ha of Baird.

So firstly, I just wanted to confirm, is the narrowing of the full year EBITDA guide to the lower end of the range totally related to that CHS dilution in fourth quarter? And I guess, my main question is also on redetermination. Is that part of the guide update as well? Or are you expecting sort of that better exchange marketplace trend to continue offsetting this elevated utilization? And I guess, ultimately, sorry for the run-on question. Just given the magnitude of impact these large Medicaid plans are seeing and the fact that they've been blindsided by it, like what's your sense on like magnitude of concern? And do you have any sort of like risk corridors in place embedded in your contracts to potentially insulate or protect from any unexpected trends in Medicaid?

Thanks for the question. So kind of just breaking apart question number 1 in terms of how we're doing in -- or what we said in terms of guidance. As we said before, $4 million of that guidance is really associated with CHS. That, one, it's a variety of other items. Topic #2, in terms of Medicaid trend. We're seeing it more in terms of the change in the overall mix of Medicaid members, and we do expect that to normalize into next year, and we see margins starting to stabilize in mid- to late '25 going into '26.

Okay. And I guess, my second question. Just in terms of, I guess, Medicare Advantage, all the volatility, the headwind payers are facing not just this year, but next year in '26. I've spoken to a lot of the large MA plans, and they've expressly told me their appetite, their desire to increase global cap has gone up significantly. But really that one hurdle, and it's really a common thread amongst all of them, is there's a lack of quality value-based care providers and that's what's preventing them from increasing global cap. So I was wondering, are you seeing a notable increase in that appetite, that desire, from your payer partners? And just wrapping it all together, I guess, in addition to your full risk conversion, the tidal wave of growth. My question is, are you also on the organic growth front seeing this stronger tailwind from MA into '25 and potentially into'26?

We have seen payer partners being open to us moving towards full risk. We continue to operate in that ecosystem. And we have been doing it in a large way. So for us, it's not really as much something new. For us, though, it's very much thinking thoughtfully in terms of do we have the appropriate, I wouldn't necessarily call it guardrails, but our ecosystem in place to make sure we can best take care of members in that specific geography with that payer partner. And once we have that in place, we definitely are seeing the inbound focus by plans, and we're very much open to moving in that direction. But again, we're very cautious as we go down that path.

Next up, we have Jack Slevin of Jefferies.

Congrats on the quarter. Really nice work. Just a couple of quick ones. A peer of yours called out some significant challenges around Part D, and this maybe goes in line with the last question. But can you just speak to how you treat Part D risk in your contracts? Or can you remind me if you carve that out or sort of what the approach is on Part D overall in full risk deals?

Thanks for the question. Yes, we've heard some of the similar comments around risk-bearing provider groups in general and Part D as well as supplemental benefits. This is something that we, for many years, have been prudent around, we believe, because we have tried to minimize our exposure to Part D and supplemental benefits. So I'll just lump those together because we believe certain things are out of our control, and we would rather take risk on items that we have more visibility and more ability to coordinate the provision of. So to answer your question, in our contracts, we typically have either a corridor or a minimal level of risk related to Part D, which is, again, something we have negotiated from the start, even if that is at the expense of taking a lower percentage of premium dollar from an actuarial perspective. It's something we believe strongly in that when we take risk, we want it to be something we can actually improve for the patient, and we're going to continue doing that as we expand across the country.

Okay. Got it. That's really helpful. And then just my follow-up, a quick one. I wouldn't expect a change here, but just given all the moving pieces that we're seeing around the space, as you look at CHS coming in, is the outlook still that you think that, that will attract to breakeven in 2025?

Jack, yes. I think I mentioned it. But just to reiterate, we are expecting it to be breakeven adjusted EBITDA for the CHS business by the end of 2025.

Next up we have Ryan Langston of TD Cowen.

I guess, just first, any high-level puts and takes on 2025 other than the CHS acquisition that just closed that you would broadly point us to that we should be thinking about for modeling purposes?

I think, Ryan, the items would be our continued conversion to full risk as well as the growth of CHS. Those would be the 2 main items.

Okay. And then just real quick on the follow-up. Are you booking any economics in MSSP in 3Q? Or do we have any economics anticipated in the guidance for 4Q?

We don't have any economics in 3Q or associated with MSSP. As we've said before, as we get more comfortable with the program, we'll get to a point where we can start accruing for it. But at this time, we are booking things on a cash basis. So we would be booking our shared savings from the program in Q3 of next year.

Next up we have Adam Ron of Bank of America Merrill Lynch.

I was going to ask about 2025 as well. But one thing you didn't mention -- or a couple of things you mentioned on the puts and takes for next year is, one, around Medicare. So I know you've been doing a lot of work on risk adjustments. I'm curious if you think that, that is a material tailwind next year. And then also, alignment has been calling out that this year, there was unit cost pressure in Medicare Advantage that the government is fixing for next year through higher rates in the L.A. County, so the 5% benchmark increase in Medicare Advantage. Wondering if you think that's a significant tailwind. And then lastly, on Medicare. Our payers in your markets cutting benefit significantly, so all in on risk adjustment rate and benefit cuts. Like do you see significant MA margin expansion next year? And then on the headwind side, you kind of mentioned Medicaid redetermination. We don't think it's going to be fixed until '25 and '26, but I guess, if it's still a year-over-year tailwind.

It's Brandon. Thanks for the question. Yes, I apologize. That was not a completely fulsome list of puts and takes. I think that's something we typically guide towards later in the year. But to answer your questions, I would agree with you that Medicare MLR has tailwinds associated with it, especially given -- I think we alluded to it in the prepared remarks as well or Chan, when he answered the question, especially considering the concentration of members we have in certain counties such as Los Angeles, which have a larger benchmark adjustment. And that adjustment not only impacts Medicare Advantage, but also the ACO reach as well. So it's something that we expect to be a tailwind in Medicare Advantage. We continue to move members into full risk arrangements in Medicare Advantage. That's part of the bridge towards getting us to that 2/3 rate by January 1, 2025. So there's going to be tailwinds there as well. And organic growth based on the new book of business in terms of CHS as well as our existing markets will continue to fuel growth. On the tapes, those newer cohorts of members are going to be probably a gross margin drag for some period of time. We typically guided to around 2 years. So new members can take -- can eat into profitability relatively speaking. We also, as Chan mentioned, anticipate further Medicaid redetermination trends. Again, we're talking about a few hundred bps, not 5%, 10% necessarily, but still an impact and a headwind that we're looking at. And there are going to be continued new market development costs going into next year as well.

Okay. And then kind of another cleanup question on ACO REACH. Is there any way you could update what's happened to your versus expectations?

Adam, I'm going to let Chan, our CFO, answer this question.

Adam, great to hear from you. I think on the ATO REACH, we're in line with expectations and where we budgeted the program for the year.

Next up, we have

This is

Thanks for the question. I believe it was actually not far off from the 61%, but I will let Chan confirm that number.

So we have CHS coming on probably, I think, 7 days into this -- into Q4. So with CHS, we'll be exceeding that benchmark that we set for us this year.

Just to be clear, the 61% did not include the CHS impact. So the 61% was kind of the stand-alone number.

Got it. Okay. Helpful. And then just as my follow-up. I guess, any update on the Anthem partnership for primary care clinics? I think you guys said last quarter that you were expecting to add a couple of clinics this year. Are those on track? And I guess, any early takeaways from the partnership so far?

Yes. We are continuing to evaluate new sites for a clinic. We have identified a site and that's in progress as we speak. We also have now attributed a few thousand members to our first clinic, and so things seem to be going well. I think it still doesn't rise necessarily to the level of materiality, so to speak. But I think as we continue to prove out the model, especially during this AEP period, we look forward to further expansion with our value partner.

It looks like our final question in queue comes from David Larsen of BTIG.

I think you had about 30% of members in full risk. What could you get that up to over, say, 2.5 or 5 years? Could that get up to 60%? And what kind of revenue impact would that have on your overall book of business?

Dave, good to hear from you. In terms of our book of business and where we think we can go long term, I think we're always going to have a portion of our business not in full risk because as we continue to grow, as we continue to evolve, it takes time for ecosystems to get to a point where we feel comfortable. And there's also certain lines of business where it may not make sense. I'd probably go to maybe 50% long term if -- to kind of go to your question relative to the 30% that you laid out.

Okay. And then just any sense for what kind of revenue lift that could imply?

I think it's going to be pretty significant. I don't want to kind of box myself in a number here, so I'll probably leave it at that because it depends on line of business. It depends on geography that -- there's just so many factors. I wouldn't be doing the question justice, if I just took a swing at it. It's a great question.

And then can you just provide some color around like 2025, I guess, premium increases by your health plan partners. They're usually like in, let's call it, the mid- to high single-digit range. Will Astrana benefit from that? Will you capture a portion of that? Just any thoughts there would be helpful.

Are you speaking specifically about MA?

Yes.

So puts and takes there as we -- one of our counties with a large majority of our members, L.A. County has fee-for-service benchmarking increases. As Brandon was mentioning before, that will help in terms of overall rates. We have certain planned partners where star ratings are going up in terms of paid star ratings. And we also do have some other plants that are going down, so it's a bit of a wash. We've seen slightly improved benefits year-over-year. And we have the full kind of -- we have the full V28 kind of flowing into the model. Sorry, 2/3 of V28 flowing in. So in terms of a net basis, I'd say we're looking at revenue being maybe flat to maybe a couple basis points below, but I don't see any material changes.

Okay. And then, Brandon, one of the questions I'm asked all the time is your technology infrastructure, how are you able to drive good margins when a lot of your peers are very challenged in the space, especially in the MA space? Can you maybe just highlight the tech infrastructure? Just any color or thoughts or updates there on your ability to sort of, in a very timely way, identify what your cost trend is, how that's different from some of your peers? And just any more color there would be great.

Dave, thanks for the question. We've always been fairly adamant about building out some purpose-built tools internally in order to ensure that we can operate our value-based care platform appropriately in terms of cost and managing that cost. So for example, I think one of the biggest items we've spoken about on these calls is the fact that we operate primarily in a delegated environment. Not only in terms of delegated financial risk, but also in terms of delegated services that we provide which are payer like in nature. And so our ability to process, approve and deny prior authorization requests in a real-time fashion, our ability to process claims and build our own networks and ensure that we're able to manage those networks appropriately is part of the model. And then I think the other part I talked about in an earlier response to a question, I believe, in terms of minimizing variants when appropriate in terms of clinical protocol and clinical care management while still allowing the flexibility for local care teams to express that view, so to speak, into their local communities as appropriate for those communities. So I think it's a combination of those 2 as the core kind of pillars. I always hesitate to bring this up, but -- and I think in a future quarter, we'll discuss this a little more. But we are also finding some pretty interesting uses for AI and our technology stack ranging from patient summaries to our prior auth automations to even claims automation, but that's something we think is more of a '25 factor.

That's very helpful. And then just one more quick one. Some of the plans have talked about higher inpatient acuity is the way that they describe it. In my mind, what that means is because of the 2 midnight rule, there are fewer observation cases and those cases are counted as inpatient cases, which result obviously in a higher cost. And then some have also talked about higher specialty trend possibly because of the Inflation Reduction Act and the coinsurance and catastrophic coverage plan design. There's basically less out-of-pocket cost for the members, which is increasing specialty spend. Are you seeing any of this in your book? Is this weighing on your margins at all or not really?

That's a great question. We have never really taken advantage of some of the maybe margin prior to the 2 midnight rule. I think others have spoken about this as well, but given the contracting landscape in the health care ecosystem in California, that's not really as much of a factor, frankly. And so when that happened, it also was not much of a factor for us. It has not really been a drag on margin really at all in our experience. On some of the other items, is that something that's kind of a constant balance that we work with, with the plans in order to figure out how we design a benefit package, how we design a formulary and co-pays and otherwise, kind of all has to go together to ensure that costs are not spiraling out of control for one reason or another. I also didn't mention earlier partially the limitations of risk on things that we can and cannot control. We are, at the end of the day, not a plan despite partnering with some plans to create some provide specific plans or offerings. But I would say, overall, for the items that you mentioned, we don't view those as large risks to the business, and we haven't experienced them as a large headwind so far this year.

At this time, there are no further questions in queue.

All right. Thank you, everyone, for joining our third quarter 2024 earnings call. We look forward to seeing you again next quarter. And if you are ever in Los Angeles or Las Vegas, we remain open to meet with you in person. Thank you again, and have a good evening.