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00:02 Good day, ladies and gentlemen, and welcome to the QuinStreet Second Quarter Fiscal 2022 Financial Results Call. Today's conference is being recorded. 00:11 At this time, I would like to turn the conference over to Hayden Blair. Please go ahead..

00:17 Thank you, Laura. And thank you to everyone joining us as we report QuinStreet second quarter of fiscal year 2022 financial results. Joining me on the call today are Chief Executive Officer, Doug Valenti; and Chief Financial Officer, Greg Wong.

00:34 Before we begin, I would like to remind you that the following discussion will contain forward-looking statements. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those projected by such statements, and are not guarantees of future performance.

Factors that may cause results to differ from our forward-looking statements are discussed in our recent SEC filings, including our most recent 8-K filing made today and our most recent 10-Q filing. Forward-looking statements are based on assumptions as of today and the company undertakes no obligation to update these statements.

01:11 Today we will be discussing both GAAP and non-GAAP measures. A reconciliation of GAAP to non-GAAP financial measures are included in today's earnings press release, which is available on our Investor Relations website at investor.quinstreet.com. 01:27 With that, I will turn the call over to Doug Valenti. Please go ahead..

01:34 Thank you, Hayden. In the December quarter, our fiscal Q2, was a more difficult quarter than expected in the insurance client vertical as auto and home insurance carriers reduced spending aggressively through the end of the calendar year to offset high 2021 claim costs.

Insurance client spending bounced back strongly in January, up almost 80% over December with the reset of calendar year, and as we had expected and had been communicated by carriers.

02:14 Combined with the strength we're seeing in the rest of the client verticals and business, we were on a run rate in January to more than meet or beat the full fiscal year forecast we provided last quarter. But auto and home insurance carrier clients have once again significantly cut budgets and pricing in February.

We have just been digesting the adjustments this past weekend and through today. 02:46 The immediate impact of the insurance client cuts is a reduction in our outlook for this quarter and the rest of the fiscal year to reflect the lowered spending. That is reflected in the outlook numbers we put out today, with which we are obviously disappointed.

03:14 That said, due to the diversity of our business and the resiliency of our team and model, we still expect to grow revenue and generate between $40 million and $45 million of adjusted EBITDA this fiscal year.

We will also remain nicely cash flow positive with a strong balance sheet, even as we whether this continuing but still likely relatively short-term storm and insurance. 03:52 Our medium to long-term outlook remains exceptionally positive.

So, what is happening in auto and home insurance? Why are carriers cutting spending and pricing? While we are not privy to all of our clients and our workings, nor would it be appropriate for us to share any non-public details if we have them, some trends seen clear and publicly known. The claim cost environment is difficult and dynamic.

Rates that worked for the past couple of years are no longer working and factors are changing rapidly. 04:43 There is an increased frequency of claims as more folks go back to work and become more active generally.

Costs to repair were higher due to supply chain issues, demand outstripping supply, inflation generally and inflation specifically in the new and used automobile replacement market. 05:13 Carriers have begun to raise rates to reflect these increased costs, but we appear to be closer to the beginning than the end of that cycle.

And in some cases rate increases have not been enough to offset rising costs. Carriers are pausing writing business in entire states, and therefore, cutting marketing spending, while they analyze these factors and work to find a new higher rates to reflect the changing economics.

In addition, consumers are barking on switching or buying new policies as they encounter the initial wave of higher rates, making marketing spending less effective and efficient. 06:05 Net, we are in a period of a lot of uncertainty, change and importantly, transition in the auto and home insurance market.

And it is being reflected in pauses, reductions and volatility generally in marketing spend. How long is this transition period in auto and home insurance likely to last? We have served the auto insurance market for almost 15 years. And well over 20 years, if you count the predecessor company, we acquired to enter the client vertical.

So we are seen some of these adjustment cycles. 06:52 The last one was in or around 2016 when higher incident frequency due to distracted driving from smart phones usage, combined with higher cost to repair bumper sensor technologies to significantly change underwriting economics. That cycle, affected us for about six months.

Then like now, no one is closer to or in closer communication with auto insurance carrier marketing clients than we are. Based on our actual past experience with similar cycles and based on discussions with carriers, these cycles typically most negatively affect marketing budgets are somewhere around six months.

And based on that, we hope to be back to more normalized market and positive to a more normalized market, and positive moment in the auto insurance client vertical somewhere between late spring and early fall. 08:12 Why six months? Two reasons. First, that is typically long enough for most carriers to analyze, adjust and file new rate models.

And second, that is the link of a typical consumer policy period. So new rates will typically kick in no more than seven months after the cycle starts. 08:44 What happens next? The further we get in the transition period, the more consumers reach their renewal period and the more they get hit with increased rates from their current carrier.

That usually drives a gradual and then accelerating increase in the number of consumers that shop with other carriers and begins a positive super cycle in our business. We clearly saw that and experienced it after the 2016 transition period.

09:20 Why is our momentum so long-term -- why is our medium to long-term outlook still exceptionally positive? Now I just noted one key reason. This difficult transition period is likely to lead to increased consumer shopping activity in auto insurance in coming months and quarters. And that should be a strong tailwind for our insurance business.

Like we have seen before, and especially when combined with the gains we have made and expect to continue to make in market share, quality results for clients, technology and media. 10:05 The second reason, our medium to long-term outlook is still exceptionally positive. There is a strong momentum that continues in our non-insurance client verticals.

Credit-driven client verticals continue to recover nicely with client budgets and consumer activity growing at high rates. Progress in Home Services, perhaps our biggest long-term market opportunity continues to be strong and steady. Overall, non-insurance client vertical revenue grew 36% year-over-year in the December quarter.

Those strong trends combined with the eventual resurgence in insurance bode well for coming quarters and years. 11:01 The third reason, our medium to long-term outlook remains exceptionally positive, is the progress we are making with big new growth initiatives, especially right now, with QRP. QRP revenue is accelerating.

Despite the current challenges in auto insurance which do affect the activity of our agency clients. Multiple clients have moved into the ramp phase of their implementations of the platform. The pipeline also continues to grow and progressed well, broadening our footprint for future growth and scale.

We now expect QRP revenue to exceed $1 million per month by June based on actual projections from ramping agency clients. 12:01 Looking beyond this auto insurance transition period, we have never had a better combination of market opportunities, competitive advantages, and exciting growth initiatives in the history of QuinStreet.

I hate what is happening in auto insurance right now. Because of its near-term impact on our results. But I could not be more pleased with our position overall and our outlook for the future.

And I cannot be more proud of our team which is easily the best in company history and how they have navigated and executed to continue to deliver results and progress for long-term value creation in such a complicated environment. 13:00 With that, I will turn the call over to Greg..

13:05 Thank you, Doug. Hello, and thanks to everyone for joining us today. Revenue in the December quarter declined 7% year-over-year to $125.3 million. GAAP net loss was $5.6 million or $0.10 per share. Adjusted net income was $3.2 million or $0.06 per share. Adjusted EBITDA was $5.6 million. 13:34 Looking at revenue by client vertical.

Our Financial Services client vertical represented 72% of Q2 revenue and declined 13% year-over-year to $90.2 million. Doug well covered the details of what is going on in the insurance client vertical in his remarks. All other financial services businesses grew at double-digit rates or more in the quarter.

14:01 Within our credit-driven client verticals, progress and revenue growth continue well ahead of our initial outlook for the year. And we continue to expect revenue in those businesses to return to pre-pandemic levels by June. 14:19 Our Home Services client vertical represented 27% of Q2 revenue and grew 16% year-over-year to $33.8 million.

Some services remains in the very early innings and is perhaps our largest addressable market. Our strategy is simple. One, expand our core trades where we have well-established client and media relationships. Two, scale our growth rates which are earlier in their development. And three, add new trades into the portfolio of offerings.

We expect this multi-pronged growth strategy to drive double-digit organic growth for as far as the eye can see. Other revenue, which consists primarily of Performance Marketing agency and technology services was the remaining $1.4 million of Q2 revenue. 15:18 Turning to the balance sheet.

We grew our cash balance by $6 million and closed the quarter with $115 million of cash and equivalents. In summary, while insurance spending remains volatile, momentum in non-insurance verticals remains strong. Our confidence in our team, our competitive positioning and our growth initiatives, including QRP remains at a long time high.

15:50 With that, I'll turn the call over to the operator for Q&A..

15:57 Thank you. [Operator Instructions] We will now take our first question from Jason Kreyer of Craig-Hallum. Your line is open, please go ahead..

16:27 Hey guys, good afternoon. Doug, I just wanted to step back and understand the cadence a little bit better. So if we can go back to when we last talked a quarter ago. It sounds like maybe there is a little bit of choppiness in the December quarter.

I'm not sure if that was isolated to December or not? You saw the January rebound that we talked about last quarter that you had anticipate, but then it was kind of the move in recent weeks. And so, one, I want to make sure that cadence is correct? And then two, curious if there was a little bit of volatility in December.

I mean what are you hearing from the carriers that lead you down the path of this three to six months kind of hesitation as opposed to just a shorter-term period of volatility?.

17:17 Yeah. Thank you, Jason. I think you got the cadence generally right. We started to see some effects on budgets late last year, particularly in September they began after Ida, kind of was a straw that broke the camel's back on loss ratios for the calendar year, I think we talked about that for 2021.

We saw -- the carriers indicated to us that they are becoming that strong in January as they reset loss ratios for the new calendar year, and then we are full speed ahead, full steam ahead. We got actual budgets, we begin setting up even the systems and pricing and budgets in our systems for the carrier is going into January.

17:59 Our January came ensure enough, we hit the ground running hard, carrier is spending hard, prices went up, volumes went up, we were up almost 80% in January over December, very consistent with -- in fact a little bit ahead of our forecast for the second half of the fiscal year.

18:15 And then late last week over the weekend and yesterday we got new pricing from carriers for February, which was right back to January-ish. I'm sorry to December-ish again and the feedback we got was -- and a bunch of states got closed down by a bunch of carriers.

In other words, they quit spending in certain states because loss ratios were excessive. 18:38 So what the carriers are dealing with is, a loss ratio environment that is changing rapidly and doesn't fit their current rates and so they like everybody else, they're losing money per customer. They don't want to make it up in volume.

And so it's going state by state now, reassessing their rating models. Some have already increased rates and pricing in various states, some are in the process of doing so, some have paused states while they're in the process of doing so.

19:11 So in general terms, the feedback we're not getting is, we -- the carriers expect that we would be running hard right now, but as we started to try to run hard, we found out that the loss ratio issues associated with this period, which transition out of COVID, and inflation and all the other things, are worse than we had anticipated and affecting our economics worse than we had anticipated.

And so we're going to step back reduce, pause spend, figure out how to re-underwrite, re-rate and relaunch. And so that's the period we're going to. So, I think we and they -- January came out just like we thought. And then the January results just started coming in and they weren't working for the carriers.

20:02 This is I think all public at this point. They certainly filed publicly, some very big carriers have announced rate increases and announced they got to increase again.

So what usually happens is, they take some period of time to figure out the new variables, to figure out the new economics, re-rate, refile, reopen states and then they move forward.

And as I indicated in my discussion and in our discussions with carriers that has typically historically been about a 6-month bottom and they expect that this time it seems like it probably will be about a 6-month bottom and that puts us in -- as we calculate it and as we look at the entire cycle that we think that we returned to pretty good insurance market and spending again and even quite good if you look at historic trends when re-rating happens in the late spring to early fall timeframe.

That's exactly what we saw in 2016, both in terms of timing and reaction. 21:09 And if you look at the numbers for 2018, the surge was pretty aggressive after the down within about a year and a half, our insurance business -- auto insurance business, I think had more than doubled.

So we certainly don't like what's happening, it is something that does happen in insurance, but there are significant changes in the environment that incremental underwriting changes and price changes don't account for.

It is understandable that this period is more complicated, given how COVID has been and given the effects of COVID on supply chains and inflation and auto pricing, but doesn't make it any of us painful for us to go through.

The only good news is, we feel very good about the other side and obviously, we are well equipped to weather this and still stay -- still grow revenue for the year and stay nicely positive in terms of cash flow and profits..

22:08 I appreciate all the context. And I want to ask the question just on concentration. Now it certainly sounds like you're hearing that across the board from pretty much all carriers.

But I was under the assumption that as we got to kind of late summer, early fall a year ago, some carriers had already started to make adjustments to rate cards based on some of these trends already emerging.

So maybe you can just humor me and kind of talk about concentration if you seeing big changes across carriers? Or is everybody really taking the same drastic cuts?.

22:44 I would say -- I can't say everybody. And I'd say that -- but I'd say, it is not isolated to any single -- for any small group of carriers. This is across the board issue. And different carriers are in different phases of their program to re-underwrite, re-rate, file, reopen.

So it's a pretty complicated picture, but it's -- if there is a spectrum from one carrier to everybody, but further toward the everybody side of the equation than it is one carrier side of the equation..

23:26 Okay. And then just the last from me..

23:28 We're seeing it with all of our biggest clients..

23:31 Okay..

23:32 Which make up the vast majority of our revenue..

23:35 Can you talk maybe about what you think you guys can do over this period of the next three to six month, just a better position QuinStreet for more market share gains on the other side of this?.

23:48 Yeah. I think everything we've been doing. I mean what -- we are -- we have aggressively worked to get closer to all of the big carriers so that we can -- and all of our big media partners to do a much better job of understanding the segmentation and the value of every segment. And that is now ever more valuable because it's changing.

And so the more precise we can allow them to be about their segmentation and targeting, and the more precise we can allow them to be about their value and pricing for those segments, which is exactly what QNP does the better off we are.

So we are doubling down on deepening our relationships with all of the carriers to help them understand how to translate in this period, not just underwriting rates, but segment value which is changing as you can well imagine.

24:42 And so I would say that we're going to continue to be very, very close to all of the client and we're closer now to more big carriers than we've ever been. There is a time and we weren't nearly as close to the agent-driven models as we are now.

And now there are some of our closest best relationships with whom we get, who've had enormous growth and have great relationships built on performance. 25:05 So I think that's what we're good at. I think we're the best at that, and I think we're going to do -- we're going to double down on that, and I think it bodes well for this period.

The other thing is we're going to keep investing in QRP, and getting that product out because that will help the agencies, and they -- with all these states shut down for different carriers agencies, our need and want all the assistance they can get to be more productive. So we're going to keep doing that.

25:32 And of course, we'll keep working on our other verticals. And we have double and triple-digit growth in our credit-driven verticals which are big businesses and really solid double-digit -- strong double-digit growth as far as I can see in Home Services. We're working on that.

So we'll keep working all the vectors and hopefully, position us best for the other side. And in the meantime grow what we can control..

26:01 I appreciate all the transparency from you. Thank you..

26:05 Thank you, Jason..

26:10 Thank you. Will now take our next question from John of Stephens. Your line is open, please go ahead..

26:17 Hey guys, good afternoon..

26:19 Hey, John..

26:20 Hey, from a big picture standpoint, I mean, you guys are clearly bode up around the long-term outlook on the business. It sounds like the insurance side of things is going to be more of a transitory event. I think your guidance, obviously, implies that kind of recovery just exiting the fiscal year.

I think you're going to be faced obviously with the dynamic of whether investors believe in it or not. You guys have a really strong balance sheet. I think a $115 million of cash.

I'm just curious about what you guys are thinking about as far as buybacks and how that might change if there is any kind of noise or dislocation in the stock as you kind of navigate through the turbulence on the insurance side?.

26:57 Yeah, I think it's a good question, and I would say that it's something that has been discussed at the board level and will probably continue to discuss. And I think to your point, we kind of watch and see what happens to this period.

And combination of how the investors react with -- how the business continues to perform and if we see a pretty significant dislocation between those two, I'd say that not unlike we have in the past, we would be very open to considering doing things for that cash in terms of capital allocation and buybacks and the like I'd say.

27:37 We just had this conversation at the board level a couple of board meetings ago. And so it's not something that we never think about. As you know, we've done it a few times in our history and at one point did a $50 million buyback.

So I think we're open to it and we will -- to your point, we're probably more open to it tomorrow than we were yesterday..

27:57 Yeah, makes sense. On the non-insurance rev growth. I mean that was very strong. I think 36% which you guys said. If you back out the Home Services business, I think that obviously implies fairly sharp growth at the credit-driven product.

So I don't know if you can maybe talk or provide a bit of color around the sources of that strength? And maybe more specifically, if you can kind of outline the personal loans and credit card run rates and how that's looking kind of pre-pandemic levels?.

28:25 Yeah, we expect those two businesses combined will be well beyond -- pretty close to pre-pandemic levels this quarter and well beyond that in next quarter. So the June quarter. And both businesses are doing very well.

I mean, I think once growing in the 70-ish percent year-over-year range at decent scale, pretty good scale and then the other is growing at triple digits, at good scale. So those two businesses combined are meaningful to us '10s and 10s of millions of dollars. I think combined $100 million yet, but they're getting close.

Is that right?.

29:06 Yeah. I agree with that. Yes. And.

29:10 And we may -- and Greg, we exit the year of those two running at $100 million, is that right?.

29:18 Yes. Yes, I'd explain that..

29:20 So that gives you sense for their scale, John. These are pretty big business, it is going at really high rates and we're seeing kind of all the vectors in those businesses working. We are gaining share in media, we're seeing more traffic from media, we are getting -- we have more client that we've ever had.

We have closer relationship with those clients and getting more budget from those clients and better pricing for those clients than we ever had. So those businesses are firing on all the right cylinders. And it's dominantly associated with coming out of COVID, and the banks themselves, banks broadly define lenders, issuers, et cetera.

Having really strong balance sheets after the last few years of conservatism, low interest rates, et cetera.

30:17 And those two things combined are creating a great environment for strong growth and catch-up really because we are still -- remember we're still catching up, and we expect growth beyond the catch-up, so we should catch up to pre-pandemic. As I said probably this quarter, if not this quarter for sure next quarter.

And then I see a lot of momentum to continue very good trends in those businesses over the few years..

30:45 Okay, that's very helpful. Thanks guys..

30:48 Thank you, John..

30:53 Thank you will now take our next question from Jim of Barrington. Your line is open, please go ahead..

31:02 Thanks.

I was first wondering whether the recent trend given the chip shortage to fewer new cars and more used cars has had any perceptible impact on the level of repair cars?.

31:18 We're told it has, Jim, whether it's the -- what we told is that, the increase in pricing of used cars is having a pretty significant impact on claim costs, the policies that have that replacement costs, which I guess most now do.

And so the replacement cost of used cars, as you know, are pretty dramatically -- used -- and new cars too for that matter are pretty dramatically because of the general circumstances in the auto market..

32:02 Okay. And just to sort of an observation. If there is a trend to repricing to higher levels on the part of all the carriers. It doesn't seem to create much of an incentive to switch.

So why advertise? And it does seem like it's the same sort of reactionary impact you get from any other consumer product like during COVID there was a lot of advertisers who cut back in general, because there wasn't much incentive to bite at there buying end.

So I'm wondering if -- how you are looking at that and whether you think that just because something has happened in the past, like over this three to six month cycle. How do you have the confidence that this will be repeated given this sort of increased variability month to month you've sort of been pointing out.

It seems like there is a bit of a quandary here and it's not going in favor of planning to create an incentive to try to save money by changing it to a different carrier?.

33:20 Well, the carriers -- Remember, we make money if people shop..

33:25 Right..

33:27 And so what the industry tells us, they have seen forever, and what we have seen in the past 15 plus years is, when there is a round of rate increases consumers now are motivated to shop because all they know is their rate went up and they wonder if they can go shop somewhere else and save money.

The fact that others are raising rates too may or may not matter. In general terms when consumers shop, if they actually shop efficiently because of the complexity of insurance -- auto insurance pricing and the segmentation in pricing and dependency on individual carrier economics and portfolios, et cetera.

34:11 In general terms, if a consumer actually does efficiently shop for car insurance they tend to save between $400 million and $700 million a year. So despite the fact that rates increase won't -- because of the fact the rate increases are happening across the board.

What the industry has seen historically and what we have seen is that, drive consumers to at least go out and say, hey, maybe I wonder if I can save money somewhere else. A large number of those consumers will actually save money because they're actually shopping their insurance.

34:45 And so we expect that cycle to repeat itself, the industry expects that cycle to repeat itself. The industry's big clients tell us it always works that way.

And again in our experience, we saw in 2016's last time we saw the most relevant compare, we saw it and we saw it in a pretty big way and everybody raise rates back then too, because the effects are happening for everybody. 35:11 Distracted driving was increasing frequency, bumpers sensors we're increasing repair costs.

And then there is a nice storm in Texas, which happened too, but that was more like the Ida thing, more of a temporal thing, but then those two things structurally changed underwriting, everybody had to rewrite, rerate, relaunch, and there was a huge surge that as I said, we more than doubled our auto insurance business.

And I think 18 months, Greg and.

Am I getting that number right?.

35:39 That's right. Yes, that's right..

35:43 So this is -- that's the way the industry has worked historically, but don't take my word forward. I think that's probably pretty easily researched, but that's the way it has happened and we're told it is always happened in auto insurance from folks that have been running those companies for a long time..

36:00 Well, that's a reasonable point. The $400 to $700 they might save might be not from what they're paying now, but what they might have to be paying relative to the new claims and you can help them search through the complexity a little bit and come to some comparative conclusions. So as long as their shopping, that's what your game is.

36:26 And then the other thing, you mentioned QRP getting up to about $1 million per month and revenue by June.

I know that should be fairly high margin business, but how quick does it get to pretty good bottom-line results from that $1 million per month you think you can generate?.

36:48 We're into the 80% contribution margin on that pretty fast. Probably at the -- probably at the $1 million month level. Greg, if you think about the cost in that? The main dollar -- yeah, we're probably then at about -- we're probably at that point right at about an 80% contribution margin..

37:11 Okay. All right, that's helpful too. Thank you very much..

37:16 Thank you, Jim..

37:21 Thank you. We will now take our next question from Max of Lake Street. Your line is open, please go ahead..

37:29 Hey, guys. I just want to turn back towards the balance sheet of $115 million in cash. Can you go a little deeper into like future investments? I know we talked about buybacks, but inorganic opportunities may be outside of the insurance vertical.

What do you guys seeing in that?.

37:46 Yeah. With the last couple of acquisitions we made to your point, have been outside the insurance vertical to boost verticals that we thought we could really build big and win big, and one for personal loans which is now our third largest business and growing like crazy.

And modernizing Home Services, which is a one plus one equals three from our Home Services business and where we've got now to scale to see good strong double-digit, probably 20-ish percent per year growth as far as -- literally as far the eye can see. So we are -- that is exactly our first priority for cash, and for capital.

It is continuing to find opportunities like that or it still a very fragmented industry. We are still a very effective aggregator and consolidator of those type of businesses and that is still job one for us when it comes to capital allocation and we will continue to be for, I imagine, a long, long time..

38:51 Okay, thank you. And then I want to shift to more of the model here. You kind of has a step down here in gross margin.

I was wondering if that's what you kind of expect for a run rate throughout the rest of fiscal year 2022, around 8% I believe?.

39:06 Greg, you want to take that..

39:09 Yeah, I'll take that one. The drop in gross margin is primarily due to just the loss of operating leverage. So you have lower revenue levels. Dropping on top of the fixed cost base, that doesn't really change throughout the year. So gross margin will flex based on the amount of revenue drive every quarter.

Remember, the December quarter is not only where we are dealing with challenges and volatility within insurance. But we also -- wherein our seasonally lightest quarter is the December quarter. So it's really just the lower top line on top of a very similar semi-fixed cost base..

39:44 Okay. Thank you, guys. That's it from me..

39:53 [Operator Instructions] We will now take our next question from Chris Sakai of Singular. Your line is open, please go ahead ..

40:08 Okay. Hi, I am just -- I don't know if got in the call late.

But can you share why there was an increase in G&A? I think there was about a $3 million increase there?.

40:27 Yeah. Hey, Chris, this is Greg. That's just a one-time charge that we took to revalue or fair value -- adjust the fair value of an earn-out associated with an acquisition we did last year. That acquisition has been performing better than we expected. So we have to adjust the fair value of the earn-out, so that's what that was, about $2.7 million.

Which is a good thing, which means the position is performing better than originally planned..

40:58 Right, right. Okay, great. And then you guys mentioned -- Okay.

So three to six months you see more volatile times for insurance, why is that? Why is it three to six months? Why is the timing there the way it is?.

41:19 Yeah, that's the time that -- this is a -- we're going to be experienced before and the carriers in the industry has gone through, there is a lot more than we have and talking to the carriers about the typical time it takes to re-rate, re-launch and get those rates in place and to recover in a period like this where there is a mismatch between current rates and pricing and claim costs.

Historically, it's been about a 6-month period in terms of cost to bottom, maybe a year from total start to finish. This period looks like it probably began sometime around last September really. And one of the other analysts ask that question about some of the rates, because others had been seeing some of this is beginning to change rates.

42:09 And so that puts us in the -- as we look at the time frame, we look at where the carriers are and what the carriers are telling us about their plans to re-rating -- reopen states that puts us we think the late spring early fall timeframe. So it's -- and again it's historically there's two main drivers of that six month bottom.

One is, by -- within six months most large carriers have the ability to very effectively take the data they're getting and rerun their underwriting models, rerun their rate models and launch those new rates and get them approved in the states where they need to.

Obviously, there wouldn't be big successful carrier if it took them a lot longer than that. 42:55 And the second reason is that, most consumer insurance policies are 6-month term, your auto insurance is probably a 6-month term.

That means that you're going to -- depending on where you are in that 6-month term, you're going to get a rate increase as soon as it's over. Once you get that rate increase, you are going to go shopping or some high percentage of folks are going to go shopping to find out if it was just their carrier, and if it was, can they save money elsewhere.

43:22 And so that's where kind of begins the shopping cycle that the industry talks about and that we have experienced also ourselves. So those are the two main determinants. The time it takes to re-rate, relaunch and the second is the average consumer behavior based on the fact that they're going to get rate increase..

43:45 Okay. All right, great. Thanks, Doug and Greg..

43:50 Thank you, Chris..

43:57 Thank you. A replay of today's call will be available for a week, starting at 5:00 PM Pacific Time today. The replay can be accessed by calling 719-457-0820 and entering passcode 4351235. This concludes today's call. You may now disconnect..