Welcome to the Altisource Second Quarter 2015 Earnings Conference Call. [Operator Instructions]. I'd now like to introduce your host for today's conference, Michelle Esterman, Chief Financial Officer. Ma'am you may begin..

Thank you, operator. We first want to remind you that the earnings release, Form 10-Q and quarterly slides are available on our website at www.altisource.com. These provide additional information investors may find useful.

Our presentation today contains forward-looking statements made pursuant to the Safe Harbor provisions of the Federal Securities Law. Statements in this conference call and in our press release issued earlier today, which are other than historical fact are forward-looking statements.

Factors that might cause actual results to differ materially are discussed in our earnings release as well as our public filings. The company disclaims any intent or obligation to publicly update or revise any forward-looking statements regardless of whether new information becomes available, future developments occur or otherwise.

Joining me for today's call is Bill Shepro, our Chief Executive Officer. I would now like to turn the call over to Bill..

Good morning and thank you for joining today's call. This morning I plan on providing an update on the progress we’re making on our 2015 strategic initiatives and Michelle will discuss our financial performance. I'm very proud of our team.

Over the last several months we came together as an organization to align our cost with our revenue and as you can see from our financial results we accomplished our objectives.

In addition our product offerings are being well received by the market, as demonstrated by new client wins, advance discussions with several large prospects and an increase in our fee activity.

With respect to the wins we are recently selected by a Top 10 bank as part of a competitive bid process to manage the bank's REO portfolio and provide certain pre-foreclosure services. We’re also awarded a contract with a large resale client in our financial services segment.

During the quarter we achieved proforma adjusted net income of $45.7 million and largely completed the execution of our cost reduction initiatives driving a return to our historically higher gross profit and operating income margins. Michelle will discuss our financial results in greater detail in a couple of minutes.

Providing high quality compliant services to Ocwen remains a priority for us. During the second quarter we hired a Chief Client Officer with extensive experience in the software and managed services industries to continue to drive and expand upon our customer centric corporate culture.

He is fully dedicated to supporting Ocwen to ensure that we continue to meet their needs. Turning to slide 7, our 2015 strategic initiatives are centered on advancing our real estate and mortgage market play strategy to diversify and grow our customer and revenue base.

We’re making good progress on our four initiatives and believe we’re largely on track to achieve the objectives we set out for this year.

These initiatives are growing our origination services and origination technology businesses attractive clients to our comprehensive default related businesses, expanding our innovative online real estate marketplace and growing our property management and renovation services businesses.

Beginning with our origination services and technology businesses, the opportunity continues to be very large and is growing at the Lender One members, Wholesale One members and Mortgage Builder Customer base grows. While there continues to be more work to do, we believe we’re making progress.

As part of our continuing efforts to increase value by expanding our origination related product and services we recently acquired CastleLine for $37 million.

The purchase price is comprised of both cash and stock with a meaningful portion payable over the next four years including a component that it's contingent and continued employment of the founders.

CastleLine is a specialty risk management and insurance services firm that provides financial product and services to parties involved in the origination, underwriting, purchase and securitization of residential mortgages.

CastleLine is the leading provider of certified loan insurance products which are designed to protect mortgage market participants from losses caused by mortgage underwriting defects. The certified loan insurance program is driven by CastleLine's propriety certification process.

In order to mitigate CastleLine's insurance risk, the certified loan program is reinsured through several A invest [ph], A rated reinsurance carriers. In addition, CastleLine owns and operates a specialty insurance brokerage business. The acquisition provides three primary revenue streams when combined with our other Altisource businesses.

One, CastleLine earns insurance premiums, two CastleLine earns brokerage commissions and other recurring fees, and three Altisource earns revenue from loan underwriting and other related services.

The acquisition of CastleLine aligns with our strategy of continuing to help mortgage market participants safely and securely increase production and reduce costs. Further provide Altisource with additional high margin scalable products. As part of the transaction we’re welcoming a highly talented leadership team.

With respect to Lenders One and Wholesale One, the opportunity is as great as it has ever been. The members are spending a few billion dollars a year on origination related products and services.

In this regard we’re expanding the suite of products and services we offer to address the needs of the cooperative members and other customers, as we continue to expand upon the value proposition to our customers we’re optimistic that our revenue growth will accelerate.

Our second initiative is to grow revenue from our comprehensive default related businesses by expanding the services we provide to our existing customer base and attracting new customers. We’re making very good progress. Recently a Top 10 U.S.

bank selected Altisource to provide certain pre-foreclosure services and manage all of it's REO including providing asset management, brokerage, online auction and title services. We began working on this transaction several months ago participating in a multi-phased competitive process.

In the third quarter we expect to receive this customers' existing portfolio and future flow. Our management and sales team continue to develop a robust pipeline of opportunities.

We’re in advance sales discussions with a couple of very large financial institutions for both our default and origination related services and continue to build relationships with banks and services.

With the reception and success we’re experiencing in the market we are investing in our sales and marketing team and recently hired two well respected sales executives with broad industry experience.

We’re also performing well with our existing customers, we sold more homes and hubs during the second quarter of 2015 than any other quarter in our history. As you can see on slide 10, over 9000 homes were sold over 1100 of which were from customers other than Ocwen.

This represents a 33% increase in the number of non-Ocwen home sold compared to the first quarter of 2015. With a recent win we expect this number to continue to grow.

Our third initiative is expanding our innovative online real estate marketplace, during the second quarter we transformed Owners.com into a national brokerage with a large team with real estate agent employees. Owners.com now provides a menu of services tailored for the growing self-directed real estate segment.

Many of today's home buyers perform a lot of the work that was historically performed by their real estate agent.

Data shows that home buyers are engaging in real estate agent much later in the home search process than they were five years ago indicating that buyers are finding the home they want to purchase and then engaging in agent to assist in the execution of the transaction.

We believe buyer should be rewarded for the portion of the work they do, to relaunch Owners site displays real estate listing directly from the local multiple listing services as well as homes offered directly through owners.

Today buyers can use Owners as their real estate agent and receive approximately half of the buy side commission for their effort in the search in buying process. Since the acquisition of owners we have worked to put the infrastructure in place to support our strategy, this is largely complete.

We’re now turning our attention to the user experience and local marketing. In this regard we have selected an award winning digital agency to partner with us in developing a world class user experience. From a marketing perspective we’re implementing our local marketing strategy and are initially launching in five cities.

Our strategy includes an integrated multi-channel campaign designed to establish the brands and acquire customers. Based on the results and feedback from the initial market roll-outs we will refine our marketing approach as we seek to optimize consumer awareness and adoption and expand into other geographies.

Our last [ph] initiative is growing our property management and renovation services business. We’re pleased with the revenue growth we’re experiencing from Altisource to residential. During the second quarter we generated $14.2 million of service revenue from assets owned by resi, a 23% increase from the first quarter.

We are well-positioned to continue to support resi as it grows it REO and rental portfolio. In addition to supporting resi we are focused on expanding the newest cooperative residential Investor One. Since the launch membership has increased to '14 and there is an access pipeline of prospects.

As we grow the membership the buying power of the cooperative strengthens improving the value proposition to the members which in turn drives revenue growth to Altisource.

In summary I'm pleased with our progress and results, we accomplished our objective of reducing our cost structure in-line with our revenue, on the revenue side of the equation we’re winning business including a new engagement to manage the Top 10 bank's REO.

We have also developed a strong pipeline of opportunities and continue to expand our relationships. We believe our initiatives will diversify and grow our revenue streams. I will now turn the call over to Michelle for a financial update.

Michelle?.

Thank you, Bill. This morning we reported second quarter 2013 service revenue of $236.6 million, adjusted net income attributable to shareholders of $54.2 million and adjusted diluted earnings per share of $2.62. Net income included out of the ordinary item that on a net basis increase net income by $8.5 million.

Absent these items, adjusted net income attributable to shareholders would have been $45.7 million. Slide 2 through 6, provide highlights of our results for the current quarter compared to prior period.

We’re very pleased with the results for the quarter, marking the third highest service revenue quarter and the second highest net income quarter in the company's history.

We continue to believe that the 2015 adjusted pretax income of $136 million at the mid-point of our scenarios is reasonable excluding the onetime gains recognized in the second quarter. While still preliminary, we also believe that our 2016 adjusted pretax income will be the same as or stronger than the midpoint of our 2015 scenarios.

We anticipate providing 2016 scenarios and assumptions later this year. Turning to service revenue. Second quarter 2015 service revenue was 10% lower than the second quarter of 2014 driven by the November 2014 discontinuation of the Lender One brokerage business. Fewer orders for property valuation services and lower equator revenue.

In 2014, equator revenue included the amortization of acquisition related deferred revenue which was fully amortized by November of 2014.

These declines were partially offset by impressive growth in Hubzu revenue from a higher number of non-Ocwen homes sold, revenue from mortgage builder which was acquired in September of 2014 and revenue from other technology related projects.

Turning to margins, growth profit and operating income as a percentage of service revenue in the second quarter of 2015 were largely consistent with the same quarter in 2014, this represents a substantial improvement over the first quarter of 2015 and is reflective of this success we had in adjusting our cost structure to align with our revenue.

Adjusted net income attributable to shareholders in the second quarter of 2015 a $54.2 million with 15% lower than the second quarter of 2014 primarily from revenue mix in the financial services segment and lower revenue in the mortgage services segment partially offset by $8.5 million out of the ordinary items.

As you can see on slide 4, we have recognized a fee out of the ordinary items during the quarter at net to an $8.5 million increase in net income. The first item relates to the equator earn-out.

During the quarter we paid the former owners of equator $500,000 to settle any future liability for earn-out consideration and as a result recognized a $7.6 million increase in earnings. We continue to be very pleased with the equator business and our success in cross selling our default related services to equator's customers.

The second item relates to our investment in HLSS stock. During the second quarter we sold all of our HLSS shares and recognized the gain of $1.4 million. This reflects the difference between the market value of the HLSS stock at March 31, 2015 and the amount we have received in the second quarter to liquidate our position.

The third item relates to our debt, during the quarter we repurchased $16 million of our senior secured term loan at 91% at par and recognized a gain of $1.1 million on extinguishment.

Finally we incurred $800,000 during the quarter for severance expense and compensation related to employees that were eliminated in connection with their cost savings initiative which is now largely complete.

From a cash perspective we generate $70.7 million of cash from operations in the second quarter representing 30% of service revenue, operating cash flow improved over the first quarter from potentially higher net income and collections of accounts receivable.

During the second quarter we liquidated our position in HLSS generating 28.1 million of cash. We use cash from operations and a portion of the cash from the HLSS to repurchase $40 million of our common stock, invest $17.5 million in facilities and technology and purchase $16 million of our debt for $14.7 million.

As a capital life services business we expect to generate significant cash from our operations in 2015, throughout the remainder of the year we will continue to access our capital allocation strategy. Based on the environment we may continue to repurchase some of our stock and debt during the balance of the year.

While our view may change we anticipate that the total amount we spend on repurchases of stock and debt in the second half of 2015 will be less than the total amount we spent in the first half of the year. In closing we remain focused on supporting Ocwen and delivering high quality and compliant services to Ocwen and all of our customers.

We believe we’re focused on the right strategic initiative to diversify and grow our revenue and customer base and believe our recent new customer wins further demonstrate our value to the market. We’re excited about our opportunities and look forward to updating you next quarter.

I would now like to open the call up for questions, operator?.

[Operator Instructions]. Our first question comes from Mike Grondahl with Piper Jaffray. Your line is open..

Two questions, here, the first one could you talk a little bit about there was 279,000 non-GSE delinquent loans and the revenue per loan was 486.

The revenue per loan was a little higher than what I thought and the actual loan count was a little bit lower, could you just provide a little bit of color on the drivers behind those?.

The historical decline really from the first quarter to the second quarter is the highest as borrowers use their tax refunds and their bonuses to make mortgage payments and the remaining quarters have historically remained relatively consistent and we see no reason why that would not continue this year.

With respect to the revenue per delinquent loan. This quarter is higher than the first quarter really due to seasonality and also the revenue -- the impact of revenue that was historically a component of reimbursable expense revenue becoming service revenue..

So it's a fair number, it's seasonally higher but it's except for that seasonality it's reasonable it's clean..

That’s right..

And then secondly just related to 2Q, tech services revenue increased and cost of revenue decreased in 2Q from 1Q, what's -- can you help describe that a little bit?.

Sure. On the revenue side of the equation we were selling additional services to some of our customers and this resulted in higher revenue during the quarter.

On the cost side of the equation we realized the benefit of some of the cost reduction initiatives that took place in the first quarter and largely saw the benefit of that in the second quarter, in that segment in particular some of the elimination of staff happened late in the first quarter but the full benefit of those reduction initiatives were reflective in the second quarter..

Mike, I think it's important to mention that those reductions were not related to the technology that we provide to Ocwen, they were related to some of the other longer term initiatives that we decided to discontinue. We actually invested more in our technology for Ocwen in the second quarter..

That’s right..

In terms of your diversification efforts, Bill, where are you making the most progress in terms of sort of near to medium term revenues and where you may be behind a little bit?.

Mike it's really interesting, I think what we’re seeing in the default related business, there has been some environmental changes, you’ve had some of the -- there are very few players that offer the full suite of end to end services for servicers today.

There has been some consolidation of companies through acquisitions and some companies that we are providing these services got out of it and got out of it.

And so today we’re just one off just a few that provides, the full suite of end to end services for loans servicers and the second component is we’re seeing, there is an increasing focus as you can imagine on hiring firms that have -- that have a very strong focus on compliance as well and so we think environmentally there is a shift towards fewer people that can provide the full suite of services, that also have very, very strong and also have very, very strong focus on compliance and as a result we’re getting more interest on the default related services than I frankly would have expected and these are -- they are competitive but we’re having -- we’re getting very, very good feedback from our prospects on our services and the quality of our offerings.

That’s one component of it. The second component is, we are beginning to see on the origination side much more interest in our fulfillment services from some very large originators.

And this is again, in most cases, these are competitive processes, they take a long time to close, but when they close we think they could be very to move the needle revenue for us..

Do you know the number of REOs that the top 10 bank has, can you disclose that?.

Yes, we're not at liberty to disclose it, it's less than what we are receiving from the other top 10 banks that we closed on a couple of -- several months ago, a quarter or two ago. But we are going to provide more services to them beyond just REO. We're also going to be providing some pre-foreclosure services.

I think it's a little bit premature and we are under confidentiality agreements was not much I can disclose..

Okay. And in the other I guess you guys call them all large prospects.

Is that primarily on the default side all we're in the spectrum are they?.

No, we're seeing both on the default and on the origination side..

And do you think those prospects are making decisions in 2015, will we know by year-end who put their choosing?.

Yes, Mike, we do expect the decision should be made this year whether we start receiving business or not the New York continues to go by the more likely than not through the integration, the time to complete the sales process and then the integration. We probably won't start receiving revenue until next year or toward the end of this year.

--late this year, --early next..

Okay. And then just lastly Michel you said something about 2016. Can you repeat that? I didn't completely get all that. You were talking about; I think the average of scenario A and B and in the adjusted pre-tax of $136 million.

Can you repeat what you said about 2016?.

Sure. Eric said while it's still preliminary, we also believe that our 2016 adjusted pre-tax income will be the same as or stronger than the mid-point of the 2015 scenario..

Okay. That's robust.

What's leading you to say that? Is it the progress you're seeing on the diversification efforts or is a slower attrition of the delinquent non GSE loans?.

Michael, let me take it, it's Bill. We would expect portfolio going under normal circumstances you have the normal CPR and reduction in delinquencies. And we believe we can largely, we can offset the reduction and Ocwen portfolio in delinquencies from the new business that we've already won. And hope to win over the next quarter too.

Along with the progress we're making in our origination business.

So we think that the, the default related business with new customers and the new origination wins will largely offset the decline that we would anticipate from the run-off of our current portfolio and a decline in delinquencies Ocwen portfolio and then we also believe in, it's again very early, but we believe we're going to make some really good progress over time on our online real estate business.

And, but we've got a lot of work to do to prove, it's going to be successful. But what we feel very good about it.

And then lastly our renovation business I think is making some real progress and to extent is able to continues to buy out of sort residential, continues to buy more portfolios and we also just simply continuing to manage its growing portfolio of REO and rental homes that offers us another good opportunity to grow revenue and help offset some of those declines we've experienced from Ocwen and that's assuming, by the way that Ocwen doesn't continues to just have normal runoff.

Although it’s possible that could change although I've no information one way or the other with respect to that..

Thank you. Our next question comes from Bob Evans of Pennington Capital. Your line is open..

First if I missed this, but what is your ending share count at the end of the quarter..

And the 10-Q, to be disclosed, its 18.7 million..

Okay. And I know you were a more aggressive buyer of your stock. Should we, again and I'm sure it's valuation dependent somewhat, but should we expect you to use your free cash flow to do a combination of share buyback and pay down of debt..

We anticipate being much more modest than our share buybacks in the second half of the year than when we were in the first offerings based on what we know today and we'll certainly consider the buybacks based on where we are, where the share price is trading and where we see the value in the stock.

We may I buy shares back and also buy some debt although we expect in total, will be much more modest than the first half year..

Okay. And can you also comment on follow-up to Mike's question. In terms of the deal on the pipeline, can you give us a sense of scale in terms of what you view a large deal.

And do you know, I mean are we talking $25 million deals, $60 million deals or $5 million dollar deals, just trying to get a sense of what's in there that can help provide the diversification you're looking for..

I can't give any more specifics on this particular deals, Bob.

But on the deals were on the customers we're talking to, they'll move the needle deals, big, big they range anywhere from a million or a million and half dollars of service revenue amount and we anticipate the margins will be largely inline right with our mortgage service segment margins to so a couple of million dollars a month.

So, the meaningful deals we're not going to win all of them, but the reception we're getting is very positive..

Okay. So and basically your confidence for next year's earnings comes from, what you expect under diversification as well as your existing core business..

The core business with our, in our assumption as we put together and the scenarios is that, at least the NR-2 scenarios is that Apple's Portfolio continues to decline through the normal run off, as well as the decline in delinquencies and that we will replace that decline with growth in our default related businesses are servicer support businesses and origination businesses with other customers..

Thank you. Our next question comes from Matt Leavitt of Nomura. Your line is open..

I think most of my questions have been already answered, but I guess a little bit more on the 2016 number. Is the right way to think of that on an EPS basis, you know the midpoint that you guys have for 2015 is 618 so on an EPS basis you're kind of saying that that should be about the same or higher on a preliminary basis for 2015..

Yes, I think we said pre-tax. I don't think we've commented on earnings per share. The midpoint, our scenarios was a $136 million for '15..

And then I guess lastly on capital allocation, can you talk a little bit about your decision -- you're thinking behind repurchasing shares and buying that debt in the previous quarter. Clearly, spent a lot of debt free cash flow on that, on that agenda..

Yes, I think there are two things with respect to the share buyback.

One was we thought that the stock was cheap and two, in anticipation of the capital on transaction where we knew we were going to use some shares and we thought it made sense to shares and that it was important to the for the seller, we wanted to buy back some of those shares that we knew we were going to issue.

And on the debt, the debt doesn't mature until December 2020, but we bought capital management to some of our operating cash flow to reduce the debt and we're able to do so at a discount and then we are going to continue to evaluate doing that in the second half of the year..

[Operator Instructions]. Our next question comes from Fred Small of Compass Point. Your line is open..

I may have missed it, but can you walk through sort of what drove the higher revenue per delinquent loan per quarter, it was up or both, but not and GSE loans?.

Yes, I think we've covered it earlier, but really as you know, over the first quarter. The increase is really due to seasonality with more asset management revenue and also from the impact of revenue that was historically a component of reimbursable expense revenue becomes service revenue..

Okay. How much of the increase was related to the change in revenue recognition..

Yes, we haven't broken that out separately fragment..

Okay. I mean relative to last year with this quarter have been sort of in line with right I mean last year, the seasonal impacts increased the number of a lot too..

We don't have that analysis at our fingertips, and there is a fair amount that's tied to the movement into service revenue of reimbursable expenses and some of it was tied to just the usual seasonality experience in the summer months..

Okay, got it. And I think the when you guys brought on HSBC last year, that was couple hundred, was it a couple hundred REO a month that that was sort of driving the business..

Fred. We're not disclosing the name of our best customer, may be out there in the public eye, but we're -- I think we said at the time would be about 200 to 400 reforms among and I think we're it's among the lower end of that range. But, we are receiving those referrals..

Okay. And just in terms of scale relative to that. You said that this that the new bank customer would be around the same size or a little bit smaller..

So in terms of the REO business, we expect that the number of referrals will be lower, but we are going to do additional work. We're going to do certain pre-foreclosure services for them as well, which will drive additional revenue to us and again we're not at Liberty of saying much more than that..

Okay, got it.

If I just look at the overall sort of though the margin was really strong in the Mortgage Services segment, how much of that was due to the rebound in the margin was due to cost reduction do you think versus actual sort of increases in margin content on the revenue side?.

You mean service mix or do you mean is that at the second half of your question, Fred..

Sure. Yes.

Yes, so there was a component that was service revenue mix if you compared to the first quarter and certainly the impact of our cost savings initiatives payroll and our margin improvement..

I was just wondering if you have a sense of sort of how much drove each part?.

We don't break that our on the call..

Okay. And then just in terms of increasing traction with Lenders One. What do you think are the sort of top one or two things that you can do to get more traction, turn more that in the revenues, because the membership seems to stay pretty strong..

Yes, so I think where we're very, very focused on making sure we continuing to grow what we call the preferred investor base those are lenders or correspondent lenders that want to buy loans from the numbers and particularly new entrants into the space, love their ability to grab market share, very, very quickly from our members by becoming a preferred investor.

So that's one way we can move the needle. We're continuing to develop operational cost savings for the members we're going announce, for example, we think we're going to be having lower their medical costs, for example. So we're working on those.

And then we're also going to work on ways in which we can help the members to deliver a potentially that fall out. So we have several initiatives and then the last point is, I think there is a very strong interest in fulfillment services, we've signed.

I think 50 or 60 contracts, -- to that but we've signed a lot of contracts in the fulfillment space and we're beginning to see some real traction and we saw while still modest we saw some nice revenue growth in that area of the business from the first quarter to the second, and we expect that to continue to grow nicely..

Those are contracts you've signed with when you say but just a few contracts.

Those are with actual Lenders One members?.

Correct..

And I think just on 2016, when you talk about offsetting the sort of run-off in Ocwen business on the default side, is there a good way to think about that in turn.

I mean, you lose, I guess sort of ongoing revenue and Hubzu revenue on REO sales right now, you're running around 8000 quarter on -- this quarter was 7000 or 8000 a quarter on the Ocwen sales.

Does that sort of move down in progression with their portfolio as it runs off just normal sort of CPR, CDR or does that potentially increase like as the losses move through that portfolio to their sales become an increasing percentage of defaulted loans..

Yes. Fred, I think we do give those two scenarios where we estimate what we think are going to -- the revenue will generate from Ocwen will look like over time. And we believe the new business, will offset that decline can answer your second question, their loans and foreclosure that ultimately become our yield.

So, that and is a very long tail to that revenue. So that will continue to occur. But again, a lot depends on interest rate environment and on the very strong and modifying borrowers and all that will have an impact on the revenue we generate from our portfolio. But we've been, if we look back the last couple of years.

I think we've done a very good job estimating were delinquency rates would be and what the CPR would look like, and we look at CPR as the loan count CPR, not another traditional UPBCP, CPR because it's a loan count that that really matters to us. So, I think you can look for those scenarios to help you with your modeling..

[Operator Instructions]. Our next question comes from Jade Rahmani with KBW. Your line is open..

I was wondering if you could provide any additional color on the single-family rental cooperative and how that's going. Maybe you could touch on how many entities have joint so far. And also what the initial market acceptance and has been for that..

Sure. So we're really, really early in the process, I think we said we have 14 or 15 Members as so far, there is a very, very attractive pipeline of members that are interested. We're still trying to slightly different cooperative Lenders One.

We expected ultimately to be much, much bigger than Lenders One and so we're trying to tweak some of our processes in terms of to make it easier to get members to sign up which we think will begin to accelerate the membership.

But of course the bigger the membership is the more buying power we have, the more value we provide to the membership, the more members we can generate. So we hope to get that whole ecosystem for that network effect, if you will going over the next quarter or two.

But the reception has been very good and we've also signed, I think 21 or 25 preferred vendors up. They help lower their costs, so there's a real value proposition to those that joined, we just got to make it easier to sign up these numbers, and we're working on that..

And what's the process to identify and attract new members, is it mainly conference attendance or using correspondents or anything?.

No, we're taking more of a digital marketing and online approach here. So we're working, the business units working very closely with our marketing team and we're doing online marketing to attract prospective members.

We're actually having a dialog around how to grow this every couple of days, we have a lot of good ideas I don't discuss them on the call, its proprietary but we're very optimistic, we're going to have to grow the membership..

Thank you. Our next question comes from [indiscernible]. Your line is open..

I missed the participant's traction of the Castleline transaction and how many shares are you going to issue as a part of that transaction?.

It was 495,000 approximately..

And what was total.

I'm sorry, what was the question..

What was the total purchase consideration?.

The total purchase consideration of $37 million..

Some was in cash, some was in stock and some of it’s paid out over time, over four years..

Thank you. This does conclude the question-and-answer session. I would like to turn the call back to Michelle Esterman for closing remarks..

Great, thanks everyone for joining today. Have a great day..