Good day, and welcome to the QuinStreet Fourth Quarter and Fiscal Year 2022 Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to QuinStreet Investor Relations. Please go ahead..

Thank you to everyone joining us as we report QuinStreet's Fourth Quarter And Fiscal Year 2022 Financial Results. Joining me on the call today are Chief Executive Officer, Doug Valenti; and Chief Financial Officer, Greg Wong. Before we begin, I'd 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 upcoming 10-K. Forward-looking statements are based on assumptions as of today and the company undertakes no obligation to update these statements.

Today we'll be using both GAAP and non-GAAP financial 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. With that, I'll turn the call over to Doug Valenti. Please go ahead, sir..

Thank you, Hayden. Welcome, everyone. As indicated in our press release, fiscal Q4 played out pretty much as expected. Monthly auto insurance revenue in the quarter stabilized at a level generally flat with February and March.

Results in auto insurance are likely to continue to essentially bounce along the bottom for the next couple of quarters as carriers continue the process of raising their rates in response to inflation and supply chain pressures.

We expect a positive inflection in auto insurance marketing budgets and revenue in January as one, carrier combined ratios reset for the new calendar year; and two, consumer shopping for insurance increases in reaction to the higher rates. Our noninsurance pipe vertical revenue results were good.

We grew revenue there at a strong double-digit rate year-over-year. Even given current conditions in auto insurance and the complicated macro environment generally, our team executed well and our results and outlook are good.

We are EBITDA and cash flow positive with a strong balance sheet containing over $95 million of cash and no bank debt and we continue to invest aggressively in a long list of exciting big growth initiatives.

We are investing across the business, including to be ready to fully benefit from the other side of this rate transition period in auto insurance. I think it's important to note that our investments have been paying off. We now have 3 9-figure revenue legs on our more balanced and diversified business platform.

They include auto insurance, home services and what we call our credit-driven client verticals comprised of personal loans and credit cards. All 3 represent big total addressable markets and enormous untapped opportunities for our future growth.

Also, our new product pipeline is easily the most exciting ever adding new dimensions and vectors of growth and promising transformative new levels of value to our clients and the channel and competitive advantage and increasing margins to us. Overall, we have the most balanced business and best mix of big scale opportunities in company history.

The future is really bright and not just the long term. We are very likely to be growing at strong double-digit rates at big scale with rapidly expanding margins and cash flows in the back half of this fiscal year as the auto insurance market normalizes. That is the most likely scenario and we are well positioned for it.

We plan to continue to invest aggressively in these big opportunities and growth initiatives and in our product and technology capabilities to scale profitably and sustainably for the foreseeable future. We also plan to remain nicely EBITDA and cash flow positive while doing so and to maintain a strong balance sheet. Turning to our near-term outlook.

And a reminder, we just entered our new fiscal year, fiscal year 2023 on July 1. We expect revenue and EBITDA results for the full fiscal year 2023 to be at least flat to fiscal 2022. In other words, we expect to grow this year.

Auto insurance challenges will likely continue through the end of the calendar year and then inflect positively beginning in January, our second half. Noninsurance client verticals are expected to continue to grow at strong double-digit rates throughout the fiscal year.

It is hard to give more specific guidance given the complexity of the environment and remember, we are only 1 month into our new fiscal year. We'll of course update our outlook for the full year as the year progresses.

We expect business dynamics and results for fiscal Q1, the current quarter ending in September, to be similar to what we saw in the June quarter with a little added conservatism in auto insurance as carriers enter the heavy weather season and with a little lower EBITDA mainly reflecting that auto insurance conservatism, but also the impact of routine annual increases in employee compensation coincident with the beginning of the new fiscal year.

So specifically for fiscal Q1, we expect revenue to be between USD 135 million and USD 140 million and adjusted EBITDA to be between USD 3 million and USD 3.4 million.

I want to reiterate that overall we expect to remain EBITDA and cash flow positive throughout fiscal 2023 despite the challenges in auto insurance and we expect to maintain our strong balance sheet while continuing to invest aggressively in opportunities and future capabilities across the business.

Now I wanted to make a few more comments on our business relative to the macroeconomic environment. First, we have included contingency planning for a possible recession in developing our FY 2023 expectations.

In the event of a recession, we would still expect to be at least flat in FY '23 revenue versus FY '22 with still positive cash flow and EBITDA. We have grown through both of the 2 previous recessions. Remember, we have been around for over 23 years.

Performance marketing is typically one of the last budgets to be impacted as the economy softens because by definition, clients can tie their spend directly to revenue. Further, our business helps consumers better shop and save for needed products and services.

In particular, consumer shopping for insurance tends to increase significantly in a softer economy.

Even more generally, our business footprint is well positioned for a downturn leveraged more to prime and homeowner consumers in our insurance, home services and credit card client verticals and to helping lower income consumers deal with the financial pressures of inflation or a downturn in our personal loans client vertical.

A second comment regarding the macroeconomic environment specifically with respect to the more direct effects on us from inflation. We are not seeing nor do we expect a big impact on our costs. Media is our biggest cost. It is largely unaffected by inflation and is actually typically more affordable a softening economy.

Increases this year to employee compensation, our second biggest cost, will be less than 1% of revenue, up a little from a more typical 0.5% historically, but still quite manageable and largely immaterial. A third point on the macro environment with respect to the strong dollar.

We have essentially no international revenue and we are actually positively leveraged to the strong dollar because almost 1/3 of our employees are in India. Fourth, regarding the macro context.

As we have noted in the past, we have little exposure to display advertising or Apple iOS tracking changes and we would not expect challenges in those areas to represent a meaningful risk to or impact on our business or results.

I'd note that trends in advertising are indicating some softening of display advertising and social media budgets, but again those areas are not our domain. Performance marketing, search traffic and higher intent media are our domains. Finally, an update on our share repurchase or buyback.

We bought back 1.7 million shares of our stock or approximately 3% of the shares outstanding last quarter for a total of $17 million, aligning our actions and money with our confidence in our business and opportunities. With that, I will turn the call over to Greg..

Thank you, Doug. Hello and thanks to everyone for joining us today. For the June quarter, total revenue was $146.5 million. Adjusted net income was $2 million or $0.04 per share. Adjusted EBITDA was $5.1 million. Overall, noninsurance client verticals made up 56% of Q4 revenue and grew 26% year-over-year. Insurance made up 44% of Q4 revenue.

Looking at revenue by client vertical. Our financial services client vertical represented 69% of Q4 revenue and was $128 million. Doug covered the details of what is going on in the insurance client vertical in his remarks.

Within our credit-driven client verticals of personal loans and credit cards, we continue to be pleased with our performance and execution in Q4 increasing revenue by 47% year-over-year and eclipsing $130 million annual run rate for those combined businesses.

Revenue on our own services client vertical increased 20% year-over-year to $44.3 million or 30% of revenue. We expect this early stage client vertical to continue to deliver double-digit organic growth for as far as the eye can see. Other revenue was the remaining $1.4 million of Q4 revenue. Turning to our full fiscal year 2022 performance.

We reported record revenue of $582.1 million. Our financial services client vertical represented 72% of full year revenue and was $417.1 million. Our credit-driven client verticals grew 73% year-over-year offsetting insurance effects. Our home services client vertical represented 27% of full year revenue and grew 18% year-over-year to $158.8 million.

Other revenue represented the remaining $6.2 million of full year revenue. Adjusted EBITDA for fiscal year 2022 was $31 million. Turning to the balance sheet. We generated $28.7 million of operating cash flow in FY '22 to close the year with $96.4 million of cash and equivalents and no bank debt.

As a reminder, last quarter we announced a share repurchase program reflective of the expected transitory nature of the insurance industry challenges, the strength of our underlying business model and financial position and confidence in our long-term outlook for the business.

During the June quarter, we repurchased 1.7 million shares of common stock at a total cost of about $17 million. In summary, we feel great about our business prospects and financial model.

For full year fiscal '22, our noninsurance client verticals grew 28% year-over-year and we believe that will support a period of fantastic total company growth when we get to the other side of this current environment in insurance.

As a reminder, the last time we exited a transitory cycle like this in 2017, we doubled our insurance business within 12 months. Looking forward, our objective is to continue to invest in our people, products and technologies to drive long-term growth in the business while also delivering positive adjusted EBITDA and cash flow to shareholders.

With that, I'll turn it over to the operator for Q&A..

[Operator Instructions]. And we'll take our first question today from John Campbell with Stephens Inc..

Just two quick questions on the guidance. So first, just relative to the first quarter guidance, it looks like you guys are calling for like a mid-to-high single-digit sequential decline in revenue. It seems like that's a period you guys historically have grown in.

Just I guess from a seasonality standpoint, you guys called out stabilization in insurance and kind of bouncing off the bottom.

So I guess what explains why you'd see that degree of a sequential decline from what you just posted?.

Really it's reflective, John, of what we indicated about insurance. We have been bouncing along the bottom.

But as we enter the heavier weather season, we expect to see clients be more conservative -- even more conservative with their budgets in defense of that weather season, which can create losses particularly from hurricanes particularly in the Gulf and the South and the Southeast.

We've seen a little bit of that already and so we've really just baked that in into the guidance..

Okay. That's helpful. And then on the full year guidance, I know you guys are kind of leaving that open and going to update us along the way.

But on the flat revenue just on my back of a napkin math, it looks like even kind of trough insurance rev for the remainder of the calendar year and maybe it looks like you've got to have just a modest recovery, maybe mid- to kind of high single digits out of insurance in the back half.

That to me seems awfully conservative especially just given the commentary around you guys doubling the insurance business coming out of the last cycle.

Is that about right? Am I thinking about the right assumptions there? And then Doug, also did you mention that the flat revenue already assumes a recession?.

We're not expecting -- we are not assuming in the -- if we were just flat, we would be assuming relatively modest uptick in auto insurance in the back half to your point, John, given this strength of continued growth in our other businesses. So as we said, it's hard for us to project exactly what's going to happen in insurance.

Everything indicates a January pickup. Again the loss ratios or the combined ratio, excuse me, will reset, consumers will have a lot higher rates that drives them to shop. We've seen this pattern a couple of times, a couple of big cycles historically. The carriers all have seen them. They all tell us to get ready, it's going to come.

It's going to be a big surge. So I would say it is likely conservative, but again it's been a pretty uncertain time in insurance. But I don't think we're going out on a limb resetting what we considered to be the floor of the guide.

In terms of recession, we ran a whole another model in terms of recession scenario, risk-adjusting businesses that we thought might be affected and going business by business and asking the folks running that business to do to a bottoms-up of what they thought the impact would be of a recession.

And when we ran that recession, it also came out that we would be at least flat in revenue with fiscal year 2022, which again I think you would -- you can read into that that is a pretty conservative floor we've set as far as an initial guide.

We just want to make sure folks know that we see under all the scenarios that we've run and modeled that we think are realistic and conservative, we think we're going to grow this year despite the first half being hampered by auto insurance..

Definitely understand. And if I could squeeze in just one more. Doug, just maybe refresh us on coming out of some of the past cycles.

Is it typically -- as you get into the new calendar year I guess as budgets get placed, is it pretty much a step function higher in spend or is it kind of built up over the years? What does that look like historically?.

Usually a step function. It's funny because you even saw it this past year. You may recall -- there are 2 dimensions to this. One is the just resetting annually the combined ratios and new calendar year budgets for the carriers. Typically, that in and of itself is a step function increase and we saw that this past year.

Recall we had -- insurance spending had dropped a lot in the late fall of 2021 and then January, we had a year that was up from even the preflattening or the previous cycle, huge January. And then the carriers realized that in fact the costs were much higher than they anticipated. They nearly dropped back down again in February and March.

That's why we refer to February and March rather than the first -- last quarter because the quarter was a little bit skewed by kind of a monster January so typically -- and that is consistent with what we typically see a big step function increase in January as combined ratios for the new year reset and there's kind of greenfield opportunity, new budgets, a whole new world to go after.

We expect that that will probably be the case again this January.

And then you have on top of that this time not unlike past rate raising cycles, the behavior of the insurers having raised rates so they have better economics, they can be more aggressive with marketing because they have more room to do so along with consumers reacting to those higher rates and shopping more aggressively.

And that's what I referred to I think a call or 2 ago as kind of a super cycle in insurance where you have the combined effects of the ratios resetting as they do annually plus consumers aggressively shopping because their rates are higher and they figure they might be able to get cheaper insurance elsewhere.

And I would add a third dimension this time, which is if in fact that's coincident with the softening of the economy, you get even more consumer shopping. The last time we went through one of these rate raise cycles in auto insurance, it was not coincident with the recession.

But as Greg reminded you and as I mentioned I think last call and the call before, we doubled our insurance revenue because of the factors I just talked about within 1 year of those rates being reset and the ratios being reset. So everything points to historic experience.

The carriers talking to us, the factors that we just outlined, everything points to a likely very strong second half assuming that in fact rates continue to get increased, which the carriers are doing state-by-state and are mostly having success.

Some of the carriers have had a lot of success, some are a little bit further behind and I think there'll be even more success once we get through the November election cycle. So just everything points to it being very strong. We're not assuming a monster cycle in our initial what we think is kind of floor conservative guide.

We're doing that -- we're providing that because the fact is right now insurance is in tough shape and we're having to bet on it coming back because of everything we know. But I don't think we're going out on a limb here..

Next, we'll hear from Jason Kreyer with Craig-Hallum..

[Indiscernible] here for Jason. So, just a couple questions for you. First off, I was just wondering if you could just talk about the home services segment and how that's kind of progressing in this environment.

It seems that consumers may be pulling back on large ticket items, so I was just kind of wondering if that has any implications on your home services partners?.

Yes, we have not seen that. And it really depends on what part of home services you're in and we are largely on home improvement, most of the -- so, first of all, let me talk specifically about that. We have not seen that.

And in fact, this quarter home services continues to run at strong double-digit growth rates and we continue to see same kind of consumer behavior that we have seen for the past year plus.

So we're not seeing any weakening in the consumer in the home services business or weakening or slowing of that business as we sit here today and we're not hearing that about next month or the month after.

Generally, speaking, our home services business is really in home improvement, and then home improvement as Angie talked about a couple of weeks ago when they did their report on the whole segment a few weeks ago. Home improvement is actually in really good shape for a lot of reasons.

First of all, consumers have a lot of value in their homes because the prices have run up.

Second of all, the new housing market has slowed because of increased mortgage rates, which usually means consumers choose to invest in their current home than buying a new home, and so when you combine those factors with the fact that their home improvement verticals we're in, are largely not purely discretionary and the fact that home improvement by definition is leveraged to homeowners, who are prime consumers and prime consumers are in some of the best shape they have been in financially for 20 years according to all the commercial banks.

We don't expect a big slowdown there. Now in our recession contingency planning scenario, we did dock for home services business, about 20% despite from the plan that we have on a normalized environment.

We did that despite the fact that the team running that business came back to us and said hey, we think there's going to be some puts and takes, but net-net we don't think it's going to have any impact on our growth rate.

So, we were more conservative than the folks running the business and more conservative than I think we certainly should be based on what we're seeing now and if you take it through what's the likely impact is, so, no, we're not seeing a -- not seeing a slowdown..

Perfect.

And then just my second question here, just going back to the guide here with the declining revenue in the first quarter guidance, but in the full year to go -- plan to go flat, I was just wondering if you could kind of talk about your conviction in that early calendar year '23 rebound, and then just tied to that, it seems that this is now like the second or third time that carriers have had to reprice policies in an effort to improve the combined ratio, so I'm just wondering what you might be hearing from them that may lead you to believe that they're going to get it right this time?.

Well, our conviction is high as it can be given that -- we're still trying to predict the future, but what gives us confidence is that, we've seen it before.

This is not our first auto insurance rodeo and we -- nor is it for our clients and everybody knows that combined ratios are going to reset in January and that rates are going to be higher and then historically we all know that's meant -- I meant bigger marketing budgets, aggressive consumer shopping, and therefore super cycle, which has led to outsized growth rates every time this happens.

So, it's consistent with history, it's consistent with any kind of decent -- with all the outlooks we know and any kind of decent analytics. So, I won't say quite high, but we're still predicting the future, which always makes us nervous.

I mean the -- what could go against that? I guess carriers -- if carriers can get the rates increased that would be a problem to date.

The carriers that went first and most aggressively for the rate increases for the most part, and gotten those rate increases through, there have been some state hold-outs, particularly in the Northeast where some of the states have not allowed as bigger rate increases as the carriers feel like they need given the environment, but in general terms, I think that at the end of the day, historically, sometimes when states hold out they eventually give in, because they have to have -- their citizens have to have auto insurance and if they don't allow carriers to price the auto insurance in a way that allows them to make money and the auto insurance just won't ride in those states and you have a whole another problem.

So, the cycle is more difficult and longer this time because of how much inflation and how much cost have increased, but I don't blame that on the carriers, I blame that on the environment and I think they're -- what we're seeing is that some of the carriers have really gotten done very effectively in the vast majority of the states and the others are close behind them.

So, I don't see anything that -- I don't see anything that doesn't suggest that the back half is going to be quite strong based on everything that -- everything and how that we've seen historically, and that all lines up with what we're hearing perspective..

We now hear from Jim Goss with Barrington Research..

I wanted to -- I don't mean to beat a dead horse, but in terms of the resetting of the combined ratios, I'm just wondering, isn't that influenced by competition and market share gain in our efforts to gain market share vis-a-vis the other companies and does that throw a wrench into the notion that things improve as quickly as they do or I know you said historically it sort of work itself out pretty smoothly, but it seems like it's taken quite a bit longer this time around because I think we've been talking about this for at least a year or 2?.

Hasn't been 2 years, but the softness started back, Greg, I think it was last September..

Yes, mid-September timeframe..

So, you certainly are accurate, when it feels like it's getting to be a year, and it is longer largely because it's again the -- this is probably, well it's not probably, this is the worst period of rapid, the escalating inflation combined with constrained supply chains in the last 50 to 70 years.

So, it's a very unusual environment for them to have to adapt to, but and so not disappointing, but I'd say not surprising that it's taking them as long as it's taking them.

The notion, I mean, I don't think you will find some carriers trying to figure out how to get an advantage during this period in terms of gaining share as others raise their rates, but we as you look carrier by carrier that is not by any means the dominant and I would say not even a significant factor, the main factors are without a rate increase, I can't make money, and you hear that from all the public carriers and we hear it from the mutuals as well.

And so they are not anxious to go and steal share when every time they run a new policy to lose money on it. They don't want to lose money dollar client and make it up in volume. So, I would say this time, less than any other time, that's a factor because the economics are so upside down..

And I was a couple of minutes late getting on the call because there were 3 events today, and so if -- I apologize, if you talked about this that the auto chip shortage seems to have thrown a wrench into a lot of things and it would seem like it's probably changed the mix of new cars versus used cars and it seems like we're still waiting for that to work itself out.

I'm just wondering how you contextualize that as part of what we're dealing with?.

Yes, I don't know specifically how the auto chip supply chain issues are affecting it.

I do know that what we've been told by clients and what clients has stated publicly, including in some written releases over the past month or so is that used car pricing has been a big -- has had a big negative impact on the economics, and so -- because a lot of these policies, I guess, have these replacement causes and then when they go to replace a vehicle with a similar vehicle, that similar vehicle cost 20%, 30% or 40% more than it did before and that has been called out specifically by some of the public carriers as one of the primary drivers of the combined ratio issues that they're having.

So that probably isn't close Jim, to your point by the fact there aren't enough new cars and so therefore, demand for vehicles generally shifts more -- skews to be used than it would normally and that would be pure conjecture on my part, but I can tell you that the cost of automobiles, particularly used automobiles has been called out specifically by some of the carriers as a driver of this combined ratio or loss cost issues..

Okay, and one final one, are there any new consumer verticals you have your eye on , potential or you're in early stage of development?.

Yes, we -- the main category of new consumer verticals is really in what we would call trades, but you might consider sub verticals in home services. We're currently at scale in about 4 or so home services verticals and arguably really just 1, if you want to say real scale. We have a presence in 16 and we think we can be in dozens.

And so, part of what we do every day in our home services client vertical is work to scale some of the 16 that we have some level of presence in and work to add more to that list of dozens that we will eventually be in, and so that in terms of investment and activity against new verticals -- new consumer verticals, that's the main one for us.

That said, we have entered new verticals in financial services and banking, what we call broadly banking, which used to be very narrowly defined as kind of source of funds for savings accounts and CDs and now includes brokerage accounts, wealth management, financial advisory, and many others, and those are all new verticals to us.

We are entering new areas of credit cards. We're very, very highly leveraged to prime and super prime as we're adding more mid-prime and sub-prime offerings there, which are new verticals to us and there is client coverage there, which means that media economics can be better if we can have those matches for our consumers.

We're adding new segments in personal loans. We're highly reliant today and focused on debt consolidation and in fact credit card debt consolidation and there are a number of other used cases in personal lending and other ways for consumers to get bond money if they are on the prime or subprime side.

And so, we're adding new coverage of segments in personal loans and we're adding new products in insurance.

We've been historically almost 100% direct budgets with direct carriers and we are very early stages of doing more and more leads to agent networks and that's being enhanced by some of the QRP activities and some of the project activities we have with some of the big carriers to improve the integration with those agencies in those agent networks.

And so -- but in terms of -- and so you can hear that we define our verticals broadly enough, that a lot of the new business will be within those broad definitions that are new quite significant incremental opportunities for us. In terms of new beyond insurance, credit cards, home services, personal loans, and banking, not imminent.

We have plenty of capacity in those defined -- in that defined footprint to do billions and billions of dollars of revenue and pretty much all we can stand, remember we've actually did some businesses in order to better focus on the places we thought had the best opportunities.

Over the past couple of years, we exited education, we exited B2B, we exited the mortgage, and it seems like we -- actually, it seems like there's one I'm forgetting, Greg.

So, lots of new greenfield opportunities, lots of big opportunities in our current footprint, plenty to keep us growing at high rates for very long time to come, and no brand new named vertical footprint areas that we are likely to enter imminently that we're opportunistic and we'll see how things develop..

[Operator Instructions]. We'll now hear from Chris Sakai with Singular Research..

I just had a question on the demand and the use of QRP in this environment, insurance environment, and then I wanted to ask about your thoughts, and are we at the bottom, I know last quarter, it seemed like you thought we were at the bottom as far as repricing goes and stuff like that, I wanted to get your thoughts on that?.

You bet, Chris. In terms of QRP, we're making a lot of great progress and not surprisingly, and I think I mentioned this last call, the call before, given the insurance environment, it's the activity and the progress of that pipeline has slowed pretty substantially pretty significantly.

We're still making progress, but the agencies themselves have lost carrier coverage in budgets and they are dealing with that more than they're dealing with brand new product integrations and so that pipeline has definitely slowed.

I would say, our enthusiasm has not diminished at all for that project that product in this long-term opportunity and we would expect it and we are making -- still making good progress, just not as rapid progress as we were before given what's going on in insurance and we still would expect as insurance comes back that pipeline and progress will accelerate once again and we think again that's one of the biggest new opportunities both in terms of impact on our clients in the channel as well as impact on us that we've ever worked on.

So, working hard at it and yes, the progress has slowed because of what's going on in insurance environment, but no less enthusiastic and no less excited about where we're going.

In terms of the bottom of the repricing, as I indicated we've been bouncing along the bottom for 5, 6 months now, I think that the only risk between us in January now is the one I indicated, which is carriers now have to look at facing August and September, potential weather events, and if they -- I think if we have a normal weather season, we are likely to be pretty flat plus or minus $1 million a month, over the next, until we get to January.

If we have a bad hurricane season, I'd say that there can be a further reduction in auto insurance. I think we have guided for an average to worse than average hurricane season. So, I think we're in pretty good spot, but if we have a really, really bad hurricane season that could have more of an effect on auto insurance.

I don't think it would be that meaningful to our results given that we still have the other businesses cranking along and we would still expect and we know that combined ratio is going to reset in January and we'll be off to the raises on a new cycle..

Okay. And maybe this one is for Greg.

It looks like gross margin declined by 1% sequentially, just wondering what was happening there, if you had any could share anything there?.

Yes, Chris. The decline in gross margin both sequentially and year-over-year is really twofold and it's all insurance related.

So, the first would be, it's just a loss of operating leverage against the lower insurance revenues as we're carrying more employees than we typically would at these revenue levels as we keep investing through this transitory period insurance, so we come out the other side much stronger.

So, second would be also associated with auto insurance as our medium margins are lower than they typically would be due to the macroeconomic pressures in auto where pricing is down from carriers.

So, we're temporarily running a lower margin than we would in a normal environment, so that's it, both of those impacts, I expect those both would correct themselves as carriers begin to spend again and the top line leverage comes back and as you get normalized pricing and we get our margins back in those businesses, so those are the impacts in there, both of it might be in a pretty short term until we see the cycle turn..

And that will conclude the question-and-answer session for today. The replay information will be available on the QuinStreet's Investor Relations website. Thank you for your participation. You may now disconnect..