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Greetings, and welcome to the Hagerty Third Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jay Koval, Head of Investor Relations. You may begin.

Thank you, operator. Good morning, everyone, and thank you for joining us to discuss Hagerty's results for the third quarter of 2025. I'm joined this morning by McKeel Hagerty, Chief Executive Officer and Chairman; and Patrick McClymont, Chief Financial Officer. During this morning's conference call, we will refer to an accompanying presentation that is available on Hagerty's Investor Relations section of the company's corporate website at investor.hagerty.com. Our earnings release, slides and letter to stockholders covering this period are also posted on the IR website as well as our 8-K filing. Today's discussion contains forward-looking statements and non-GAAP financial metrics as described further on Slide 2 of the earnings presentation. Forward-looking statements include statements about our expected future business and financial performance are not promises or guarantees of future performance. They are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For a discussion of material risks and important factors that could affect our actual results, please refer to those contained in our filings with the SEC, which are also available on our Investor Relations website and at sec.gov. The appendix of the presentation also contains reconciliations of our non-GAAP metrics to the most directly comparable GAAP measures that are further supplemented by this morning's 8-K filing. And with that, I will turn the call over to McKeel.

Thanks, Jay, and good morning, everyone. We appreciate you taking the time to join Hagerty's Third Quarter 2025 Earnings Call. While many of us are putting away our special cars in the fall after another fun driving season, we at Hagerty are breathing a sigh of relief that 2025 was a relatively benign year for catastrophes after a challenging start with the California wildfires. As our reinsurers have pointed out to us, even in the worst of hurricane years, our book of collectible vehicles tends to significantly outperform what their models would have predicted. Our members love their cars and they will find ways to drive them to safety. Building trusted relationships with our members through the years of delivering on our brand promise enables us to develop new products such as the recently launched Safe Storage Concierge, which provides guaranteed shelters for cars in hurricane-prone areas such as Tampa and Miami. While we hope our members never need to use the program, if they do, we will be there for them, regardless of the type of vehicle that they love, leading to lower claim frequency and consistently strong and stable underwriting results year after year as we add new members. Let me dig into the highlights from the first 9 months of 2025 shown on Slide 3. Total revenue increased 18%. New business count fueled by a 13% increase in written premium and 14% growth in commission revenue, an acceleration from the first half results as State Farm policy conversions ramp up month-over-month. October came in even stronger than September, delivering the highest Policy in Force or PIF growth in our history. Earned premium in our risk-taking entity, Hagerty Reinsurance, increased 12% and membership, marketplace and other revenue jumped 54% due to the launch of our European auction business, plus growth in inventory sales and private transactions. Moving to profitability. During the first 9 months of the year, our operating margins jumped another 350 basis points, resulting in net income gains of 73% to $121 million and adjusted EBITDA growth of 46% to $153 million. High rates of compounding growth with a relentless focus on operating efficiencies are resulting in sustained margin expansion as we work towards doubling our policies in force to 3 million by 2030. Hagerty has become one of the largest MGAs in the specialty vehicle insurance business, thanks to omnichannel distribution, best-in-class service, valuation and underwriting capabilities, not to mention a brand unlike any other with a Net Promoter Score of 82 that towers over the industry's average score of 37. Our direct business is adding new members efficiently, thanks in part to our unique ability to drive a disproportionate number of people in Hagerty's funnel on the strength of the Hagerty brand and low-cost referrals. And our distribution team has been working diligently to cultivate relationships with the leading carriers in the U.S. as the majority of the specialty cars we seek to insure sit within their bundled policies. With that, we announced yesterday that we had signed a new partnership with Liberty Mutual and Safeco. Liberty Mutual is the seventh largest auto insurer in the U.S. and has built a sizable collector car program over the past decade under the Safeco brand. Hagerty will help Liberty Mutual engage and retain their customers through a combination of our excellent customer service and expertise at valuing, underwriting and handling claims on collectible vehicles. We are very excited to work closely with the Liberty Mutual team to help ramp up this partnership into 2027. Moving on to Slide 4. A reminder of our 2025 strategic priorities built around 3 themes: simpler, faster and better integrated. First is to expand our specialty insurance offerings to protect more of the collectible market, including modern enthusiast vehicles with the launch of our Enthusiast Plus program. Second is to simplify and better integrate our membership experience across our products and services, creating revenue synergies and driving cost efficiencies as we engage with our members in a unique and authentic way. Third is to expand our marketplace business internationally, leveraging the trust we have built in the United States. This includes 2 recent European auctions in Belgium and Switzerland, plus this past weekend's auction at the Wynn, Concours and Las Vegas, bringing our global vehicle value sold at Broad Arrow Live Auctions to $240 million through November 1. We are methodically building Hagerty and Broad Arrow into the most trusted brands for people to buy and sell special vehicles and live auctions work synergistically with our private sales transactions and financing business. And finally, we are investing in the technology re-platforming that will enable additional efficiency gains shown on Slide 5. Slide 6 shares details on the new fronting arrangement with our strategic partner, Markel, that we discussed in late July. As a reminder, we have been moving towards assuming more of the premium and risk associated with our high-quality underwriting and this 2% fronting arrangement would allow Hagerty to control 100% of the premium and risk commencing in 2026, a 25% increase compared to the current 80% quota share. We are excited to continue partnering with Markel as we build out our own capabilities to deliver a seamless experience for members with greater operational control, not to mention drive increased profitability from the additional underwriting and investment income. Let me now turn the call over to Patrick to share more details on our results and increased 2025 outlook. Patrick?

Thank you, and good morning, everyone. Let me dig into the third quarter results shown on Slide 7 and 8. We delivered 18% growth in total revenue to $380 million. New business count gains, combined with industry-leading retention of 89% drove a 16% increase in written premium. As expected, written premium growth accelerated in the third quarter, resulting in 2-year rate growth exceeding 30% as we ramp conversion of State Farm's 525,000 Classic policies to their new Classic Plus program, powered by Hagerty. Commission and fee revenue grew by 18% to $137 million. Earned premium increased 13% to $187 million. Our loss ratio came in at 42% for the quarter in the first 9 months of the year, resulting in year-to-date combined ratio of 89%. In Membership, Marketplace and Other Revenue jumped 34% to $56 million. As McKeel mentioned, we have quickly established ourselves as a leading auction house with unparalleled automotive expertise for our customers. We also continue to build our online marketplace, offering 240 Barn Find vehicles from the first tranche of The Generous Collection in October with more collections to follow over the coming months. Turning now to profitability, shown on Slide 9 and 10. We reported an operating profit of $34 million in the third quarter, an increase of 240% as operating margins jumped 590 basis points to 9%. G&A increased 17% due to higher software licensing costs from our technology transformation as well as the professional fees associated with the August secondary offering of shares from Kim Hagerty's estate and the Markel fronting arrangement. Salaries and benefits grew 44% due to higher year-over-year incentive compensation accruals, thanks to our strong financial outperformance this year. As a reminder, last year's incentive compensation was negatively impacted in the third quarter due to elevated cat losses from Hurricane Helene. Excluding professional fees and incentive comp, we are holding core growth in G&A and salaries and benefits to the mid- to high single digit range. This increase is due to merit and selective headcount additions to support future growth. We had a fair bit of activity on the tax front this quarter. Given the sustained improvement in our profitability, we concluded that the company will generate sufficient future taxable income to realize a portion of our deferred tax assets. As a result, $38 million of the valuation allowance was released and recorded as an income tax benefit. In connection with the release, we remeasured our tax receivable agreement liability resulting in an expense of $29 million, which was the driver of negative $21 million in interest and other income. Third quarter interest income from our investment portfolio was $11 million and interest expense was $2 million. In total, we delivered third quarter net income of $46 million compared to $19 million a year earlier, an increase of 143%. Net income to Class A common shareholders was $19 million after attribution of earnings to the noncontrolling interest and accretion of the preferred stock. GAAP basic earnings per share was $0.18 and diluted came in at $0.11. Adjusted EBITDA increased 106% to $50 million in the quarter. And we ended the quarter with $160 million in unrestricted cash and $178 million of total debt, which includes $75 million in back leverage for our portfolio of collateralized loans. Let me wrap up with our updated outlook for 2025, where we again increased full year expectations for revenue and profits shown on Slide 11. We now expect 14% to 15% revenue growth and are increasing our assumptions for margin expansion. This should result in net income of $124 million to $129 million, equating to growth of 58% to 65% and adjusted EBITDA of $170 million to $176 million, an increase of 37% to 41% compared to 2024. The net income range also includes a $6 million year-to-date net impact from the valuation allowance benefit of $38 million, partially offset by the increase in TRA liability of $32 million. In summary, we are delivering on our 2025 strategic priorities and are well positioned to accelerate profit growth and cash flow generation as we move into 2026 and 2027, fueled by high rates of organic growth in new members. Our brand strength and omnichannel distribution enable us to grow profitably during both good and bad times, making us truly differentiated from most P&C carriers, where profitability is dependent on the rate cycle. When you combine multiple growth levers with ongoing operating efficiencies, we believe we are pulling together all the ingredients necessary to create shareholder value over the coming years. With that, let us now open the call to your questions.

[Operator Instructions] Our first question comes from the line of Hristian Getsov with Wells Fargo.

My first question is on the Liberty Mutual and Safeco partnership. Can you maybe provide some quantification of how much of a PIF tailwind or premium tailwind that could be for your book kind of on a go-forward basis? And in terms of like the financials, could we see something like a book roll later on in the partnership? Or I guess, how are you thinking about that long term?

Sure. Liberty Mutual and Safeco, we're excited. It's an important new partnership and it's very consistent with our overall partnership strategy, right? They chose to work with us, because they know we're going to deliver the right product for those customers. So it's an important and very consistent step in our strategy. Think of it as tens of thousands of customers. And so it's a good-sized opportunity. It's not sort of one of the State Farm type sized opportunity, obviously. And then we continue to work through the details with State Farm and -- I'm sorry, with Safeco and how we'll be working with them and with Liberty Mutual. It's a combination of -- we are doing a book roll. We're taking this business on. And so we'll be sharing some economics with them. And we're not going to give a lot of details on this because it's partner-specific. But think of it as another important step in the process as we build out the omnichannel distribution.

Got it. And then for the Enthusiast Plus rollout, any quantification on kind of like the PIF growth that's happening there? I know you're live only in a few states and it's still early on. And then I guess, sticking with that, like how should we think about like your loss ratios on a go-forward basis, given that should be a younger, newer car cohort? And how would that kind of impact your loss ratios as that kind of like becomes a bigger portion of your mix?

Well, what we've talked about before, this is McKeel, by the way, and again, welcome to the call. As we've talked about with Enthusiast Plus, it's early days. This is built on the knowledge that we've been gaining through years of what we referred to before as our Flex Program. So we're coming to it with a lot of knowledge, but we are opening up the underwriting aperture to be able to take on more types of risk. We are live in one state. We will start rolling out new states. And as far as loss results, it's too early to be speaking specifically about it. But we're excited about what we're seeing and so far, so good.

Our next question comes from the line of Charlie Lederer with BMO Capital Markets.

Just on the strong growth in written premium, the acceleration in the quarter, I guess when we back out the PIF growth, it looks like the pricing growth accelerated. Can you kind of parse that out for us? Is that State Farm-driven? Or what's causing the kind of the premium per policy or the pricing to accelerate?

Yes. So on that one, I guess we would encourage you to think about that -- think about that on a trailing 12-month basis. Our business is very seasonal. And so if you're taking kind of -- I think if you look on a quarterly basis, you've got in your -- I think in your numerator, you've got something that's a seasonal quarter number. And then your denominator, you've got something that's a much more smooth total policies in force number. So I encourage you to think about that on a trailing 12-month basis. If you do, you'll see it's much smoother than what sort of the quarterly analysis would say. What this quarter, I think trend-wise, what we're going to see over the next couple of years is that kind of metric should actually decelerate, just because of what's happening with State Farm, right? So State Farm is coming in with a lot of policies that are typically single car and they're typically a bit lower than what our core book has been traditionally. And so we may see that that kind of written premium per PIF will start to trend down a little bit, just because of that. After we get through this massive intake of State Farm, the 525,000 cars, then you'll see that return to more historical levels. It's really tough to do year-over-year quarterly comparisons. For example, last year, we were just getting going with State Farm. And so that created a little noise in the third quarter of 2024. This year, it's ramping up. And as it's ramped up, there's a pretty meaningful change in what those -- what the premium per policy is. And so it's really hard to do this sort of at the aggregate level. The general trends you should focus on is in our core traditional book. We get typically 2%, 3% price increases over the long haul, much, much lower than what you see in daily driver. And we think that's a competitive advantage. We're able to win business because of that. So we do get price increases, but typically that low single digits. I talked about State Farm, the dynamics there. And then over time, Enthusiast Plus, that will come with higher premiums per policy. This is -- will ramp up over the next few years, but that will change the dynamic as well. So hopefully, that's helpful. As always, there's mix, there's seasonality. There's a lot of things that go into a metric like that.

That is helpful. Maybe you can help us triangulate, I guess, the upside to your guide in the quarter on revenue and EBITDA. I guess, at a high level, how much was from underwriting versus marketplace? And I guess as we think about the strength in marketplace from some of the new business you talked about, how should we think about that trending from here, since there's some seasonality in that business, too, I think?

Yes. So the marketplace business, particularly live auctions and private sales, we are having a good year. It's a young business, a growing business growing quickly. And this year, it exceeded our expectations. And so that is reflected in the increase in guidance. When you think about that business heading into next year, we should continue to see growth. We're pretty close to a full calendar. And so we've got the 4 auctions domestically and 4 in Europe. We may add 1 or 2 next year. And there's always the chance that there's a single owner sale that pops up. But the event growth will -- we're not going to add 3 new auctions next year. And so what we're going to be looking for there is now we've got a full calendar and the ability to continue to drive more volume through each of those auctions. And so I'd assume the growth rate in live auctions will decelerate next year, still grow, but it will decelerate just because we're not adding to the calendar. Private sales this year was a big year. And so we've got to take a look at that. And some of that's episodic, some of that we think is sustainable and can grow. But this year was very, very strong in that regard. And that does get reflected in the increased earnings guidance. Is that helpful?

Yes. Yes. And if I could just sneak in one more. On Slide 16 of the earnings deck you guys put out, I think the chart on the right is a new slide or a new exhibit, I guess, the $35 million collectible car target market. Can you kind of talk us through that slide? And yes, I'll leave it there.

Sure. We can talk it through. It's not a new one. This is one that we've had out there for quite some time. I think the key intuitions from this, we have strong market positions in older cohorts. And so if you go back to pre-war cars, 1950s cars, 1960s, we've got good penetration in those cohorts, but still room to grow. And so we do see growth in those cohorts. And kind of with each decade, our penetration tends to be lower, right? So it's strongest in sort of the pre-war in the 1950s, still strong, but a little bit less as you get into the '60s, et cetera. We know that there's those 11.1 million cars out there. We've got those in our database. We know where they are. And so currently, we were about 14% penetrated and there are opportunities to grow that. Post 1980 and this is just when VIN numbers became industry-wide, and so it's just that's the demarcation point. Post 1980, you can see our penetration is much lower at 3.1%. We've done a ton of work on those post-1980 cars to make sure that we really understand what in that broader 35 million do we think is core addressable. And so that's that Hagerty target market. And so we think there's about 24 million vehicles that could fit for our program. And because we're so lightly penetrated there, that's where a lot of our efforts go. And that's a big driver behind the Enthusiast Plus product. We needed to be able to price for more modern vehicles that may get used more frequently and that's why we designed that new program and launched that initially in Colorado with more to come. Every decade, you end up with a certain cohort of cars that end up being collectible. That has not changed. And so we want to make sure that we've got a product in place and marketing in place that we can continue to grow with the market. Is that helpful?

Our next question comes from the line of Michael Phillips with Oppenheimer.

Patrick, I guess, first, I want to make sure I heard you correctly on your comments on some of the expense items, the salaries, benefits and G&A. I think you said for the 2 combined mid-single digit growth. Was that right? And if so, what time period were you talking about?

That's what it should be this year, for 2025 versus 2024.

And that was the 2 combined, correct?

Correct.

Okay. I guess more high level, what's -- is there any impact on the growth of your Driver Club membership in the near term maybe from adding on State Farm and then maybe also because of -- would that also be impact any growth potential, I'm thinking negative growth potential kind of headwinds to growth there because of State Farm and maybe also because of Safeco?

Well, so great question. And the way the Hagerty Drivers Club is typically sold is it's an add-on to the policy purchasing process. So somebody comes in, they get a quote and that's the same, whether it's a direct consumer or through an agent or through one of our big partners, including State Farm. Then the second piece of the transaction is how we sell Hagerty Drivers Club, which is a $70 package with the features that we have in it. So pretty much wherever we are filling the top of the funnel and bringing it down through quote and application, we will see a lift in Hagerty Drivers Club. And our job is to make sure it's attaching well and attaching efficiently and that we can offer it along the way. The way we think of Hagerty Drivers Club, it's a product package, but it's part of our membership strategy, which is when you treat somebody like a member, they're more engaged. There's longer lifetime value and it's all part of the core strategy. So more insurance means more Hagerty Drivers Club.

Okay. No, perfect. I guess is the uptick of that not the same from State Farm and possibly from Safeco, as it is from your traditional business?

It's too -- it's too soon to say, obviously, with Safeco, as we mentioned in the beginning of that. That is a book roll strategy there. So this is not just we put a product on their shelf and they're selling Hagerty. This is Safeco, who had a collector car program and they are going to exit that program and roll that business to us, but it's too soon to know exactly how we will be attaching there as part of that kind of book roll process. With State Farm, it's obviously our biggest new thing. The process is slightly different. The attach rates have been a little bit lower than our sort of standard through the front door process, but we're endeavoring to get that up to where it matches, if that helps.

Our next question comes from the line of Mitchell Rubin with Raymond James.

This is Mitch on behalf of [ Greg ]. My first question today, I was wondering if you could help quantify the sensitivity of your net investment income to the rate cuts and if the fronting shift change is going to have any impact on your view of liquidity of asset allocation?

The first one was investment sensitivity relative to the recent Fed rate cut is what you're saying?

Yes.

I don't have it in front of me. Patrick?

Yes. Mitch, appreciate the question. We have allocated most of the investments into high-grade corporate and government bonds, duration of 2 to 3 years. So it's not sitting in money market accounts. So we think we're pretty well protected there.

And my follow-up question, you had talked a little bit about the seasonality to the marketplace. Is there any seasonality to the loss ratio and acquisition costs in the fourth quarter?

So the way we think about loss ratio, there's, of course, seasonality in the underlying business because our business is so seasonal. Typically, what -- and we talked about this in other calls, in the first and second quarter of the year, we accrue to our planned loss ratio for the year. In the first quarter, it's a relatively quiet quarter from a seasonal perspective. The actual loss activity is going to be quite low in the first quarter. In the second quarter, it's starting to ramp up as we get into season. And so typically you'll see we're going to book to plan basically in Qs 1 and 2. Q3 is the first quarter that we may make an adjustment to that, which is based upon experience, we're now deep enough into the year that it may warrant an adjustment. And then obviously, in Q3, you've got some information on cat season, not complete, but most of cat season has unfolded. And then in the fourth quarter, that's when we'll make any final adjustment. So that's our policy. So far this year, we have been booking to plan. That's why you're seeing the 42%. And then in the fourth quarter, we'll make any final true-up. Fourth quarter underlying business is one of the more quiet quarters, right? Anything that's more north, you're going to have less driving activity. People put the cars to bed for the winter and so you just see less activity. What was the other part of the question?

Yes. That's helpful. No, that was it.

Our next question comes from the line of Mark Hughes with Truist Securities.

You mentioned that the October PIF growth was really good. Do you feel like sharing any specific details? And what was the driver of the improvement in the month?

Well, Mark, you've been with us a while and it's nice to hear your voice again. What I will say is it's the State Farm flywheel beginning to really turn. We've been working on this integration for a long time. We started off the year -- we came into the year with kind of 4 states active for new business and our target is to finish -- our target was to finish the year with 25. We may be able to actually get up to 27 states. So this is what we've been planning for and the reality is really starting to hit us. So teams are excited. But normally, in this very seasonal business when things start to quiet down in October, we're really humming along. So it's an exciting time for us.

Okay. Very good. In the presentation on the page where you talked about the change with Markel, you mentioned you secure expanded underwriting and claims authority. Is that just kind of an operational pro forma change? Or is there anything material to your business with, I guess, that increased authority?

Well, some of it is technical. I mean, in reality, we've had this great close partnership with Markel for a long time. The underwriting decisions very templatized, pricing decisions really driven through the data that we were driving, all of those things through the years when it was just a quota share arrangement. By flipping this over to where we're taking 100% of the -- both the results and the risk of the program through a fronting arrangement, there are some technical new jobs that we'll be taking on as part of it. So some of it will be part of Patrick's organization on the finance side, a little bit of it will be part of Jeff Briglia's organization on the insurance side, but pretty minimal from a headcount and G&A standpoint. It's just sort of the last bits of the technical aspects of running that insurance company fully. So we've been preparing for it for months and we're ready to go.

Our next question comes from the line of Pablo Singzon with JPMorgan.

My first question is on guidance. Your EBITDA range for '25 suggests something like $20 million of EBITDA in 4Q at the midpoint, which is basically flat from last year on a much higher revenue base this year, right? Is there something that would prevent EBITDA growing in 4Q, maybe some quarter-specific expenses like bonus accruals or investments or the like? Or is it just talked out, because if you look at this year, you've basically grown EBITDA dollars every quarter by at least $10 million. So anything to call out for 4Q, I guess?

No, I don't think there's anything specific. Typically, the fourth quarter is seasonally a lighter quarter for us and has tighter margins. And so it could swing around a little bit. Right now that's our best guess with how things come together. There's nothing specific that we're sort of increasing spending on. So we'll just have to see how it unfolds.

Okay. And then, Patrick, second question, just as you sort of transition to the Markel agreement and I presume you'll provide more detail on the next call, but any foreshadowing in how you think EBITDA might trend next year versus this, right? And I'm not looking for specific numbers, but as you think about like the moving pieces, right? So investment income will enter EBITDA, there will be some cost deferrals in there, right? You'll retain more underwriting income, but then you lose some on the ceding commission -- or you'll retain more higher underwriting income and I think there will be some impact on the ceding commission expense as well. So if you sort of put all those items together, any sort of like big picture way to think about how EBITDA might be different versus this year?

So we actually -- there's a fair number of things that we'll need to spend time with our investors and our analysts on that are changing for next year. So the big one is we're moving from Article 5 to Article 7. So our disclosure will be more consistent with an insurance company. And that's a result of moving to 100% of the risk and continue to grow that business. A consequence of that is, yes, we will have the investment income move kind of above the line, right, whereas now it's below the line. That's just geography. That will be hopefully pretty easy for people to get their heads around. Disclosure will look different, right? We no longer have --balance sheet disclosure looks different. So we'll spend time walking people through that. And then the change in the Markel relationship also is meaningful. And we previewed this back in August in advance of when we did the equity offering and we shared with the market sort of a page that reconciles big picture how to think about that. The key thing is on a go-forward basis, we're no longer going to have the commission income related to that activity. That still happens internally, but that gets eliminated upon consolidation. And as you mentioned, we're also now in a world where we're going to have deferred acquisition cost. So we're sorting through all those changes. And our plan is on the fourth quarter call next year we're going to -- Jay and I will work hard to create a road map and kind of walk people through exactly what the changes are. I think directionally, it all goes back to this is a business that our insurance business, putting aside State Farm, which is kind of the pig going through the snake, wonderful, beautiful pig. Putting that aside, we're going to grow in the kind of low teens written premium. And now we're going to own 100% of that business instead of 80% of that business, because of the change with Markel. Layer on top of that State Farm, you've got incremental commission activity from that. So the business is growing. We have proven that. We've been able to drive margin expansion. Those things will continue. The presentation of it is going to get complicated or different. And so we just need to walk everybody through that.

Our next question comes from the line of Tommy McJoynt with KBW.

Just staying on that topic, one piece perhaps you can kind of help us drill into a little bit just is the policy acquisition costs that will start getting deferred and amortized over the policy term. Can you give us some early indications to how impactful that can be? Because it does seem like that could be a material change that could be accretive to earnings.

Not at this time. I need to make sure that we nail it all down and we're very clear on what the outcome is and share that with everybody. It's just still work-in-progress.

Okay. No problem. And then going back to the marketplace side, that business line has seen very strong revenue growth this year. Can you help us map how much of that is falling to the bottom line? It looks like the sales expense has been rising in tandem and I know there's some sort of cost of goods sold there. So I'm just wondering what are the incremental margins on this revenue growth in that marketplace line?

Yes, it's a good question. And we plan for that business to be slightly operating profit positive this year. And it's certainly more so, but that more so is measured in single-digit millions of dollars, because it's still a relatively small business. So it's definitely flowing to the bottom line, but we're not at a scale yet where you're talking about many millions of dollars. The private sale business, it's just a little bit tricky because it is so episodic. We've had a very, very good year and the team has done a phenomenal job. But when we think about what does that mean for next year, that's one of those ones that's hard to predict. The way to think about that business, though, is essentially, we're making brokerage commissions, right? Sometimes we're actually buying things and reselling those and making some merchant economics. But oftentimes, it's really just an agency trade or maybe it runs through our balance sheet, because we do actually take title for a moment in time, but we're not really taking risk. And so if you think about our auction business, where you're talking about kind of 10%-ish type buyers premium, the private sale business is not at that level. It can be high single digits, but it also can be low single digits. And so you're making those kind of fees. And then your expenses related to it, a lot of the commissions that get paid to the frontline people. And then there's some operating cost overhead associated with it. So it's a good business. On a contribution basis, it's very profitable. But right now it's -- it contributes to the bottom line, but it's not something that's fundamentally changing the outcome. Is that helpful from a framework standpoint?

Yes, that is.

Ladies and gentlemen, there are no further questions at this time. I would like to turn the floor back over to management, McKeel Hagerty for closing comments.

[Audio Gap] support. We are highly encouraged by our results over the first 9 months and we have a long straightaway in front of us. Given the long lead times in the insurance industry, you will always need to plan and think long term out as you launch both products such as Enthusiast Plus and you cultivate new partnerships, including State Farm and now Liberty Mutual and Safeco. And sustaining our double digit growth trajectory year after year requires investing in our teams and technology so that we can scale up efficiently and deliver compounding profitable growth. And that is exactly what we're doing at Hagerty. We are executing with excellence on our near-term objectives, while investing in the company to capitalize on our growth potential over the next decade. With that, we hope you and your families have a great holiday season and to consider searching through Hagerty Marketplace to find that perfect gift for your loved ones. Our team has pulled in some amazing collections and no reserve vehicles looking for the perfect owner, so happy shopping. Until then, never stop driving.