Hamilton Insurance Group, Ltd. Q2 FY2025 Earnings Call

Hello, and welcome to the Hamilton Insurance Group Earnings Conference Call. As a reminder, this call is being webcast and will also be available for replay with links on the Hamilton Investor Relations website. I'd now like to turn the call over to Darian Niforatos, Vice President, Investor Relations and Finance. Please go ahead.

Thanks, operator. Hi, everyone, and welcome to the Hamilton Insurance Group Second Quarter 2025 Earnings Conference Call. The Hamilton executives leading today's call are Pina Albo, Group Chief Executive Officer; and Craig Howie, Group Chief Financial Officer. We are also joined by other members of the Hamilton management team. Before we begin, note that Hamilton financial disclosures, including our earnings release, contain important information regarding forward-looking statements. Management comments regarding potential future developments are subject to the risks and uncertainties as detailed. Management may also refer to certain non-GAAP financial measures. These items are reconciled in our earnings release and financial supplement. With that, I'll hand it over to Pina.

Thank you, Darian, and hello, everyone. I'm excited to report another profitable quarter for Hamilton, including excellent underwriting results with a combined ratio of 86.8% and underwriting income of $67 million. Investment income was also significant in this quarter at $149 million, reflecting strong returns from both the Two Sigma Hamilton Fund and our fixed income portfolio. Bottom line, net income was $187 million for the quarter, representing an impressive annualized return on average equity of 30.2%. Before providing some more commentary on the quarter, I want to take a minute to speak about our recently announced management appointments. Megan Graves, CEO of Hamilton Re, decided to retire after 5 years of transformational leadership. Megan will be missed, and we're incredibly grateful for her many contributions to Hamilton's growth and success during her tenure. As we announced and as part of a seamless execution of our succession planning, Adrian Daws, CEO of Hamilton Global Specialty, will succeed Megan as CEO of Hamilton Re from September 1. At the same time, Alex Baker, our Group Chief Risk Officer, will take over from Adrian as CEO of Hamilton Global Specialty. Adrian and Alex are both seasoned industry professionals with strong track records and a clear alignment to our strategy. Given this and the strength of our broader Hamilton team, we are confident about continuing our positive performance trajectory. Additionally, Tim Duffin, currently our Chief Underwriting Officer for Bermuda, will step into a newly created role of Group Chief Underwriting Officer as of January 1, 2026. Tim's proven leadership, business acumen, and strong industry relationships will provide further positive direction and momentum for our company. These appointments reflect the depth and breadth of talent in our organization. They also reinforce our commitment to our strategic imperative of being a magnet for talent by providing growth opportunities to employees within our organization. We are very pleased and indeed privileged to have such strong leaders in our group. While still on the topic of being a magnet for talent, it is important to note that in addition to being able to promote from within, we have also had great success in attracting exceptionally qualified external leaders for open positions, most recently for the positions of Group Chief Information Officer and Group Chief Risk Officer. We recently announced the appointment of Raymond Karrenbauer as Group Chief Information Officer. Ray has years of relevant industry experience and will join us in September. We have also hired Russ Buckley as Group Chief Risk Officer. Russ is an experienced industry professional who is known to many on our executive management team, including me, as we have worked together in the past. Russ will be joining us shortly. Turning now to some of the highlights of our impressive second quarter results. Hamilton delivered strong top line growth with gross premiums written increasing by 18% in the quarter. This growth is reflective of the fact that we are still overall in an attractive underwriting environment and, as always, focused on proactive cycle management. This means that we leaned into areas or specific deals where the returns were attractive and pared back our writings or exited deals where this was not the case. Bermuda led the way on growth, up 26%, driven predominantly by targeted casualty reinsurance business and new specialty reinsurance classes, both of which benefited from our AM Best rating upgrade to A. More specifically, I can share that premiums directly tied to the rating upgrade were approximately $50 million in the second quarter and include growth in select casualty classes that are seeing healthy rate increases and in our new credit bond and political risk offerings, which are classified as specialty and had a great take-up this quarter. We also moderately grew our position in property tax during the 6/1 and 7/1 renewals, a combination of increased participations on our existing portfolio and new business. On the flip side, and consistent with what I said earlier about cycle management, we decreased our writings in property D&F insurance and certain specialty reinsurance classes which did not meet our return thresholds. Moving on to our International segment, which houses Hamilton Global Specialty and Hamilton Select, gross premiums written grew 11% in the quarter. Starting with Hamilton Global Specialty, gross premiums written were up 7%, which reflects targeted underwriting actions as the market evolves into one requiring a higher level of discipline. For example, we reduced our writings in cyber insurance, where pricing did not meet our hurdle rates; at the same time, with over 20 lines of business in Hamilton Global Specialty, we targeted growth in areas which are more attractive, for example, personal accident business, which is well priced and where we are a respected market leader. Hamilton Select continued its strong trajectory with growth of 52% over the same quarter last year. We are seeing a healthy flow of business into our U.S. E&S operation. This reflects the relevance of our offerings, the talent in our operations, and the relationships we enjoy with our producers. As you've heard from others, professional lines classes continue to experience some pricing pressure, so we wrote less of that business in Select again this quarter. On the other hand, pricing in excess casualty, general casualty, and small business remains attractive, so we directed more of our growth towards those lines where we can also retain tighter terms. Next, I'll speak to the recent reinsurance renewals. However, I will be brief as I'm sure most of you will have heard a similar story from our peers. As we reflect on the midyear renewals, there was a healthy balance of supply and demand. Property catastrophe deals saw some rate pressure midyear, particularly in the middle and upper layers of core non-loss affected programs. Despite this, since we are coming off of historical highs and the effects of the market reset of 2023, pricing for cat business still remains attractive with terms and conditions holding firm and attachment points even increasing in some instances. The casualty market remains attractive, as you've heard from others, with continued strong underlying rate increases. And while not a big part of our portfolio, we are also starting to see rates flatten out in the D&O space. Our strong underwriting top line continues to drive growth in our balance sheet with our investment portfolio growing along with our loss reserves. With respect to the latter, and as we have consistently said, we remain vigilant on our loss reserve position so that we can continue to preserve our ability to have favorable reserve development, something we have experienced every year since the inception of this company. As we have mentioned before, the second quarter is when we conduct our regularly scheduled review of casualty reserves. Following this quarter's casualty review, we decided to strengthen some of our casualty reserves by $18 million in Bermuda, which was mainly related to discontinued business. We also released some event-specific property reserves this quarter as the claims experience has trended more favorably compared to our initial more prudent estimates. Overall, our reserve development was favorable for the quarter and year-to-date. In closing my remarks, I just want to say how proud I am of the results we delivered this quarter and that I look favorably toward the foreseeable future for several reasons: our well-diversified and well-scaled platforms, our strong balance sheet and ratings, the strong client and broker relationships we have established, and last but by no means least, the world-class team of Hamilton professionals who know how to navigate all market cycles. While the market may be coming off historic highs in some areas, there is no one market, and the key is to focus on rate adequacy. It is still an attractive place to do business, particularly for astute and disciplined underwriting organizations like ours. With that, I will turn the call over to Craig.

Thank you, Pina, and hello, everyone. Hamilton had another strong quarter with net income of $187 million equal to $1.79 per diluted share, producing an annualized return on average equity of 30.2%. We had operating income of $162 million, equal to $1.55 per diluted share, producing an annualized operating return on average equity of 26.1%. We also increased book value per share by 8.3% this quarter to a record $25.55. These results compare to net income of $131 million or $1.20 per diluted share and annualized return on average equity of 23.6% and operating income of $136 million or $1.24 per diluted share and annualized operating return on average equity of 24.4% in the second quarter of 2024. Turning to our underwriting results. Hamilton continues to grow top line at an impressive double-digit rate. In the first half of 2025, gross premiums written increased to $1.6 billion compared to $1.3 billion this time last year, an increase of 17%. Our first half combined ratio was 99.1%. All 3 of our operating platforms, Hamilton Global Specialty, Hamilton Select, and Hamilton Re, were able to strategically grow in lines of business that were most attractive while shrinking those lines that did not meet our underwriting targets. Now for some more detail on our quarterly underwriting figures. Hamilton had underwriting income of $67 million in the second quarter compared to underwriting income of $65 million in the second quarter of last year. The group combined ratio was 86.8% compared to 84.4% in the second quarter of 2024. In the second quarter, the loss ratio increased 1.6 points to 52.8% compared to 51.2% in the prior period. The increase was primarily driven by the current year attritional loss ratio, which was 53.0% compared to 51.6% in the prior period. This increase was driven by a change in business mix toward the casualty class and a specific large loss in our Bermuda segment, which I'll cover shortly. We had favorable prior year attritional development of 0.5 points in the quarter, driven by specialty and property classes, offset by certain casualty classes, which I'll discuss when I cover the segments. This compares to 0.4 points of favorable development in the second quarter of last year. The expense ratio increased 0.8 points to 34.0% compared to 33.2% in the second quarter of last year. The increase was mainly driven by the acquisition expense ratio due to the shift in mix of business. As always, I'd encourage you to use the full year 2024 attritional loss and expense ratios as an indication of where we expect the current book to perform. Next, I'll go through the second quarter results by reporting segments. Let's start with the International segment, which includes our specialty insurance businesses, Hamilton Global Specialty and Hamilton Select. For the first half of 2025, International gross premiums written grew to $715 million from $632 million, an increase of 13%. This was primarily driven by growth in all classes, meaning our property, casualty, and specialty classes. In the second quarter, International had underwriting income of $27 million and a combined ratio of 89.3% compared to underwriting income of $19 million and a combined ratio of 91.0% in the second quarter last year. The decrease in the combined ratio was primarily related to the loss ratio decreasing by 3 points, mainly due to favorable prior year development, partially offset by a higher expense ratio. The prior year attritional loss ratio decreased by 2.8 points compared to the second quarter of last year. This was driven by favorable development in all classes, meaning our property, specialty, and casualty classes. The expense ratio increased 1.3 points to 40.0% compared to 38.7% in the second quarter of last year. The increase was primarily driven by the acquisition expense ratio due to increased profit commissions and a change in business mix. I will now turn to the Bermuda segment, which houses Hamilton Re and Hamilton Re U.S., the entities that predominantly write our reinsurance business. For the first half of 2025, Bermuda gross premiums written grew to $841 million from $693 million, an increase of 21%. The increase was primarily driven by both new and existing business in casualty and property reinsurance classes, including nonrecurring reinstatement premiums related to the California wildfires. In the second quarter of 2025, Bermuda had underwriting income of $40 million and a combined ratio of 84.3% compared to underwriting income of $46 million and a combined ratio of 77.4% in the second quarter of last year. The increase in the combined ratio was primarily related to the loss ratio with increases on the current year and prior year attritional loss ratios. The acquisition expense ratio was also higher than the second quarter of last year. The Bermuda current year attritional loss ratio increased 3.7 points to 54.2% in the second quarter compared to 50.5% in the second quarter of last year due to a change in business mix, including more casualty reinsurance business and the Air India airline loss this quarter. The Bermuda prior year attritional loss ratio increased by 2.5 points to 2.0 points in 2025 compared to a favorable 0.5 points in the second quarter of last year. As Pina mentioned, in the second quarter, we did our regularly scheduled casualty reserve reviews, which resulted in an $18 million charge on certain casualty lines, with the majority coming from our discontinued lines of business. This represents only about 1% of our casualty reserves and about 0.5% of our total reserve position. To be clear, we completed our casualty reserve reviews and strengthened our reserves based on our review and not because of any third-party review. Our actions are consistent with our reserving philosophy of being quick to react to adverse development trends and slow to release reserves until we have more certainty. The Bermuda expense ratio increased by 0.6 points to 28.0% compared to 27.4% in the second quarter of 2024. This was driven by an increase in the acquisition expense ratio due to the change in business mix, partially offset by a decrease in the other underwriting expense ratio. Similar to my comment about the group ratios, I'd encourage you to use the full year 2024 attritional loss and expense ratios for the segments as a guide for how we expect the current segment books to perform. Now turning to investment income. Total investment income for the second quarter of 2025 was $149 million compared to investment income of $96 million in the second quarter of 2024. The fixed income portfolio, short-term investments, and cash produced a gain of $62 million for the quarter compared to a gain of $20 million in the second quarter of 2024. As a reminder, this includes the realized and unrealized gains and losses that Hamilton reports through net income as part of our trading investment portfolio. The fixed income portfolio had a return of 2.2% in the quarter or $58 million and a new money yield of 4.3% on investments purchased this quarter. The duration of the portfolio was 3.4 years. The average yield to maturity on this portfolio was 4.3% compared to 4.7% at year-end 2024. The average credit quality of the portfolio remains strong at Aa3. The Two Sigma Hamilton Fund produced an $87 million gain or 4.4% for the second quarter of 2025. The fund had a net return of 10.1% through the first half of 2025. The latest estimate we have for the Two Sigma Hamilton Fund year-to-date performance was 8.2% through July 31, 2025, a decrease of about 1.9% in July. At this stage, the fund is still ahead of achieving our planned target of 10% for the year. The Two Sigma Hamilton Fund made up about 39% of our total investments, including cash investments at June 30 compared to 40% at March 31, 2025. Now turning to capital management. In 2024, we announced a $150 million share repurchase authorization by the Hamilton Board of Directors. During the second quarter of 2025, we put a 10b5-1 share repurchase plan in place. With that, we were able to repurchase $35 million of shares this quarter. After the close of the quarter, we repurchased an additional $15 million of shares as of the end of July. All shares were purchased at a discount to book value. With $62 million remaining under our share repurchase authorization, we're able to continue repurchasing shares and growing the business, all while maintaining our strong capital position even during times of uncertainty. We will revisit additional share repurchase authorizations in the future as appropriate. Next, I have some comments on our strong balance sheet. Total assets were $8.9 billion at June 30, 2025, up 14% from $7.8 billion at year-end 2024. Total investments in cash were $5.3 billion at June 30, an increase of 11% from $4.8 billion at year-end 2024. Shareholders' equity for the group was $2.6 billion at the end of the second quarter, which was a 10% increase from year-end 2024. Our book value per share was $25.55 at June 30, 2025, up 11% from year-end 2024. Thank you. And with that, we'll open up the call for your questions.

Our first question comes from Hristian Getsov with Wells Fargo.

Can you provide more color around the reserve increases in the discontinued lines in terms of what accident years was that? And were those covered by your LPT? And then sticking with that, with the casualty reserve review done, did that lead to any change in your underlying loss picks, particularly like on the Bermuda side? Because I think it's a little bit hard for us to see since you didn't quantify the Air India loss, like how much uptick there was versus the prior year?

I'm going to just lead off very high level, and then I'm going to pass the baton over to Craig. I think it's really important to note that the amount of increase overall was modest here in the context of our annual review of this line. Craig is going to give you more detail on that. And as you rightly pointed out, the increase stems from lines of business that we discontinued as part of the strategic transformation. You might recall when I joined in 2018, the first thing we did was take a look at the entire portfolio, and we re-underwrote that entire portfolio, exiting a number of lines, and that is what this stems from. Craig, do you want to add on top of that?

Yes. Sure, Pina. First of all, this is $18 million. It's a very manageable number for us. It represents about 0.5 points of our overall reserve position, about 1% of our total casualty reserves. As Pina mentioned, it comes from discontinued lines of business, business that we no longer write, things like commercial auto and clients that we no longer do business with. So that's what it relates to. Hristian, you asked with respect to the years. The years are 2020 and prior. And you also asked whether it was impacted by the LPT. We do not have a loss portfolio transfer with the Bermuda book. This was essentially all related to the Bermuda book. The casualty reserves in the International segment were favorable throughout this process and review. I think your other question was also, did this cause us to change any of our loss picks? The answer is, no, it did not cause us to change any of our loss picks for this. What we essentially did was we reviewed all the runoff patterns for these discontinued lines, and that's what it impacted. You may recall in the third quarter last year we actually did make a change in our casualty reserves for the social inflation impacted lines of business. We did that in the third quarter, and that continued into the fourth quarter and into 2025. So those changes were made in the third quarter in 2024. The other thing you may want to just know, one large loss that we had this quarter with respect to those reserves which is impacting the attritional loss line was the Air India loss. We took a $6 million charge for that loss. We booked the full limit on our exposure for that loss this quarter, and that was out of the Bermuda segment. The Bermuda segment writes aviation reinsurance. It does not write aviation insurance.

Got it. And then for my follow-up, can you talk about what you saw in the quarter in terms of property pricing, particularly for your portfolio? And maybe if you could quantify how much of your property book skews towards large accounts versus SMEs? And then if you want to go a step further, if you could maybe potentially size the property exposure in your E&S portfolio?

I'll start with insurance. We noticed some pressure on property D&F insurance in both our International and Bermuda segments. However, the pricing remains attractive, especially considering it's coming off seven consecutive years of increases. We aim to maintain discipline and not contribute to market declines, which is why we are selectively reducing larger business accounts that are experiencing the most pricing pressure. The accounts we are keeping tend to be midsized to smaller ones. As for Hamilton Select, we are currently not writing property in that entity. Regarding property reinsurance, pricing has been very deal-specific this year, ranging from a decrease of 15% to an increase of 50%, depending on loss history and peril exposure. This business is coming off historic highs and continues to benefit from the market reset, with higher attachment points and tighter terms and conditions implemented at the start of 2023. We still find this business attractive, and as I mentioned earlier, we have moderately increased our property cat portfolio midyear.

Your next question comes from the line of Michael Zaremski with BMO Capital Markets.

It's Dan on for Mike. Maybe just sticking with the Select business. I think that business performed a little bit better quarter-over-quarter just in terms of the absolute growth rate. Just want to understand maybe, are you guys seeing a lot of MGA competition in your Select business? Or how should we think about that growth capability for the rest of the year?

Yes, I'm pleased to address that. We are very excited about the progress of our Hamilton Select business. The demand for our products has been strong, which reflects the capabilities of our team. We continue to experience a steady influx of business into our operations and are focusing on areas like general casualty, excess casualty, and small business where the rates are more favorable. We have slightly reduced our involvement in professional lines, which are still facing challenges. We do not work with MGAs in the Hamilton Select portfolio; all underwriting is done in-house. While we are noticing some influence from MGAs, who may be taking a more aggressive approach, we are still enjoying a robust flow of business in our specific niche of hard to place risks and feel confident about our underwriting practices.

That's helpful. Regarding the growth in Bermuda casualty, I think you had set an $80 million target from that upgrade. I heard it was around $50 million for this quarter. Could you provide a new outlook on that figure for the year?

Yes. Let me elaborate on that in general terms before addressing your specific question. Firstly, as many in the industry have noted, we are seeing significant rate increases in the casualty market, especially in general and excess casualty. Our growth is occurring on both the insurance and casualty reinsurance sides, with the latter seeing the bulk of the growth this quarter. There are several factors contributing to this, and we feel optimistic about this growth. As previously mentioned, we are starting from a smaller base compared to many of our competitors, which helps drive our growth, particularly following our AM Best rating upgrade. This upgrade has opened doors to business we have been pursuing for years, especially at a time when other markets, which may have been overexposed during softer periods, are reducing their involvement. This situation offers us the chance to step in when pricing is at its highest in some time. Our strategy focuses on selectively supporting our top-tier clients across various classes, all of whom we recognize for their solid underwriting practices. These clients typically accept rate increases, manage their line sizes responsibly, have robust claims teams, and maintain a significant retention of their business, ensuring they have a stake in the outcomes. Our participation levels are modest as we aim to build a well-diversified portfolio, with each deal undergoing rigorous actuarial review. This context is important to understand the growth trajectory. We have benefited greatly from the AM Best upgrade, and as we anticipated, we aimed for $80 million this year, matching the previous year. So far, we've achieved $40 million in the first quarter and $50 million this quarter, putting us slightly ahead of our expectations. Looking ahead, after experiencing the benefits of this upgrade for a full year, we expect growth to moderate as we continue through the cycle. Nonetheless, we anticipate that strong premiums driven by ongoing rate increases will continue to yield gains.

Great. That's helpful. And then maybe for Craig on share repurchase levels. That pace accelerated a little bit versus 1Q, and I understand there was some timing nuance just given the filing status and the window that was open for that. And then heard $15 million in July. So I was just wondering, is this the right run rate for the future? And just wondering how we could think about that with wind season coming up.

So first of all, I appreciate the question. I guess the answer is it depends, right? So first, we put a 10b5-1 share repurchase plan in place this quarter, which allowed us to continue buying for the entire quarter. So that was the difference between that and Q1, as you mentioned. We buy back these shares for a couple of reasons. One is capital management, and the other is to take advantage of the share price because we think that the company is currently undervalued. So if those conditions stay, we will continue to buy because we think it's accretive. We think it's accretive to all shareholders, it's accretive to earnings per share, it's accretive to book value per share, it's accretive to ROE. We're going to be able to continue to buy. We have plenty of capital to be able to do that. But I will tell you that we will be diligent about buybacks during the wind season as it progresses.

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

One quick one. Are you guys still fighting premium growth headwinds against those discontinued lines that you called out from the transformation process? Or that's been long last and you're just truing up the reserves now?

Tom, regarding premium growth, I want to highlight that last year we achieved a 24% increase in our premium. So far this year, in the first half, we've grown by 17%. We still anticipate double-digit growth in premium, although at levels lower than what we've seen in the past. Since 2017, we have consistently achieved double-digit premium growth each year. However, we have established a culture of underwriting discipline that will be reflected over time, allowing us to strategically determine when and where to grow our portfolio for optimal risk-adjusted returns.

Okay. Got it. And then was the – the higher profit commission that you called out that drove the higher expense ratio, was that an anomaly this quarter? Or is that a reset in those agreements? And is the level in 2Q a good one to assume going forward?

So the way the profit commission works is it's based on the underlying book of business. If the underlying book of business performs properly and there's a profit commission on certain lines of business, it's not on all lines, but as those continue to perform, that's when you'll see that come through. You'll typically see it at the same time we try to accrue it in the same quarter that, that profit commission is earned. So again, it's on certain lines of business. It could be in the International segment or it could be in the Bermuda segment depending on those lines. So it's not a normal run rate.

Your next question comes from the line of Hristian Getsov with Wells Fargo.

I just had one follow-up. Was there any change in your reserves related to the U.K. verdict on the Russia-Ukraine aviation losses?

Hristian, this quarter, there was no change in our reserve for the quarter. We booked, as a reminder, a fulsome reserve 3 years ago in 2022 taking into account all the potential losses, including aviation. And at this point, there's no new certainty around those potential losses for us to make a change in our loss estimate this quarter.

Got you. And then just one more follow-up. I noticed your interest expense dropped by $1 million quarter-over-quarter, but your debt was essentially flat. What was the driver of that?

So first, let me go back to the other question real quickly about the Ukraine expense. One of the things I will say is that we did book a loss 3 years ago at $79 million. We still have about 75% of that held in reserves as IBNR. So just to answer that question first. As far as the interest expense goes, I appreciate you asking that question. It's a multifactor answer. One is the SOFR rate, which is where our term loan is based, is a floating rate, and that rate is down about 100 basis points year-over-year. So that's number one. Second, we had 2 reductions in our margin around our letters of credit, one, because of our ratings upgrade, and two, because our banking partners have really recognized our credit story. And when we renewed those facilities, we got lower rates. So certainly, we are a better credit than we were even 3 years ago.

Your next question comes from the line of Michael Zaremski with BMO Capital Markets.

I have a follow-up regarding the company's overall underwriting expense ratio. I'm curious about the challenges related to acquisition costs due to the current mix, and I'm looking to understand the narrative around other expense ratios and how they might improve over time, as well as your focus on this area. While there has been some improvement year-to-date, it hasn't been as significant as last year, so I'd appreciate an update on this timeline.

Yes, I understand. Dan, the expense ratio consists of two parts: the acquisition expense ratio and other underwriting expenses. The changes in the acquisition expense ratio are primarily due to the mix of business, which is why we are seeing an increase attributed to both that ratio and profit commissions. However, we expect continued margin improvement in other underwriting expenses, which we can control, and that ratio has been declining since 2019. Looking at the overall picture, we have previously mentioned the total expense ratio for the full year 2024 is at 33.1%, and currently, for year-to-date in 2025, it stands at 33.2%. We are right on track when viewed from a full-year perspective.

Your next question comes from the line of Matthew Carletti with Citizens Capital Markets.

Just a quick one probably for Craig. Just how should we be thinking about tax rate going forward?

Matt, that's a great question. Overall, we're very focused on taxes. We believe we still maintain a strategic competitive advantage regarding the global minimum tax since we are deferred for 5 years. We won't start paying the global minimum tax until 2030. Currently, our effective tax rate remains in the low single digits, compared to the 15% global minimum tax rate. So, for us, it's a 5-year deferral on that.

Thank you. That will conclude our question-and-answer session for today. Now I'll turn the call back over to Pina Albo. You may begin.

I just want to thank everybody for joining us on our call today. We appreciate the opportunity of sharing our story and the positive trajectory that we're on and also the opportunity to answer your questions. We look forward to speaking to you again next quarter.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.