RE/MAX Holdings reports strong Q3 results with all-time high agent count and optimistic outlook despite housing market challenges.

Colby - Moderator - (00:01:23)

Good morning and welcome to the RE/MAX Holdings third quarter 2025 earnings conference call and webcast. My name is Colby and I'll be facilitating the audio portion of today's call. At this time I would like to turn the call over to Joe Schwartz, Senior Vice President of Finance and investor relations. Mr. Schwartz.

Joe Schwartz - Senior Vice President of Finance and Investor Relations - (00:01:45)

Thank you. Operator Good morning everyone and welcome to RE/MAX Holdings third quarter 2025 earnings conference call. Please visit the Investor relations section of www.remaxholdings.com for all earnings related materials including our standard earnings presentation and to access the live webcast and replay of the call today. Our prepared remarks and answers to your questions in today's call may contain Forward-Looking Statements. Forward looking statements include those related to Agent Count, franchise sales and open offices, financial measures and outlook, brand expansion, competition, technology, housing and mortgage market conditions, capital allocation, credit facility dividends, share repurchases, litigation settlements, strategic and operational plans and business models. Forward Looking Statements represent management's current estimates. RE/MAX Holdings assumes no obligation to update any forward looking statements in the future. Forward Looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those projected in Forward Looking Statements. These are discussed in our third quarter 2025 financial results press Release and other SEC filings. Also, we will refer to certain non-GAAP measures in today's call. Please see the definitions and reconciliations of non-GAAP measures contained in our most recent Quarterly Financial Results Press release which is available on our website. Joining me on our call today are Eric Carlson, our Chief Executive Officer, and Terry Callahan, our Chief Financial Officer. With that, I'd like to turn the call over to them.

Eric Carlson - Chief Executive Officer - (00:03:23)

Eric thank you Joe and thanks to everyone for joining us this morning. We're pleased that the momentum we've built in the first half of the year continued into the third quarter. Our total RE/MAX agent count reached another all time high fueled by steady global growth and our best third quarter US Agent Count performance in three years. Based on feedback from the membership, we believe our mix of new ideas and products, along with our reinvigorated recent network events are enhancing our value proposition and generating great energy. At the same time, our constant focus is on operational excellence again drove profitability and margin performance that exceeded our expectations. And while existing home sales have yet to show sustained signs of recovery, our networks continue to perform resiliently from a macro perspective. The trends we saw in our RE/MAX National Housing Report earlier in the year continued in September as inventory increased 20% over September 2024 marking the 21st consecutive month of year over year growth. Additionally, new listings, which had slowed some over the summer, rebounded in September, growing 4.5% over August. We believe these sustained increases are constructive for housing and will help support increased transaction activity. However, affordability remains a challenge, particularly at the lower price points. Further downward movement in mortgage rates would be welcome news from an industry perspective, this year has seen consolidation activity on both a large and small scale. Given existing industry dynamics, we believe the current state of change creates exciting opportunities for our company and networks. We continue to have a robust franchise sales and conversion pipeline and are building on the momentum of recent additions including RE/MAX Hawaii, which catapulted RE/MAX to a number two market share position in the state. This momentum is bolstered by our innovations and ongoing enhancements to our value proposition, which has spurred a lot of excitement throughout our networks and the industry. I've never felt more positive about what lies ahead for our company and we're going to continue to evaluate all opportunities to drive enhanced value for all of our stakeholders. As of September 30th, our worldwide agent count of over 147,500 agents was another record high and US agent count had its best third quarter in three years. Although we're not where we want to be, the underlying agent fundamentals are encouraging. We said last quarter that May and June were the first two months of the year where our agent recruitment rate increased year over year. This positive Momentum carried into Q3 where the recruitment rate for each month of the quarter was higher than last year. Producing agents continue to be drawn to RE/MAX and the quality of our network was reflected in the recently released 2025 Real Trends verified City Rankings where we had more agents represented than any other brand. Although Canadian agent count was down slightly year over year, we saw modest sequential growth despite a continued challenging housing backdrop. We appreciate that being a broker and an agent is difficult in this market, and historically we know that the number of producing agents in the industry tends to correlate with the level of existing home sales. We're encouraged by the results in both the US and Canada given the current state of the markets, and our international agent count continues to be a bright spot, surpassing 73,000 agents. Momentum in agent recruiting has been fueled by many of our ongoing initiatives. Our Aspire program continues to be a success with approximately 1500 agents benefiting from the program. Although it's still early. Aspire is performing as intended, with an uptick in the recruitment of newer agents and a higher retention rate building on the strong reception and feedback from the network on Aspire and leveraging our voice of customer capabilities. We've introduced the Ascend and Appreciate programs in September. These optional economic models offer greater flexibility with respect to how and when a franchisee pays us, further supporting their ability to attract and retain quality agents. While these programs are new, the feedback from the network has been very positive. In addition to providing flexibility with respect to our economic models, we continue to lean heavily in innovation to deliver an elevated experience to all of our affiliates and the consumers they serve. Many of our new offerings, like the recently launched RE/MAX Marketing as a Service Platform, leverage the strength of our scale to create new competitive advantages. The platform is a data driven AI powered system that simplifies marketing for all of our affiliates. The offerings include automated listing packages, complimentary and paid campaign options, real time analytics and property videos created seamlessly with AI. We'll continue to add innovative products to the platform, all of which are designed to help agents save time, win more listings and grow their business. This marketing approach is a strategic shift as we're consolidating fragmented efforts into one seamless experience. Although we're just getting started, the initial click through rates and engagement results are very promising. We're seeing both the number of orders and users increase each week as and the current weekly order value is indicative of a low seven figure annual run rate. Notably, we are planning to expand the platform into some international geographies outside of the US And Canada, marking a tangible step to capitalize on the scale of our worldwide footprint, enhance the value proposition globally and diversify our revenue streams. In addition, we continue to innovate on the exciting initiatives we launched last year. Leveraging our digital assets Our lead concierge program has been outperforming expectations this year and we continue to evaluate and add new lead sources. The RE/MAX Media Network is on track with our revised expectations. We anticipate it will have a seven digit revenue contribution by the end of 2025. We remain optimistic about the long term potential of these initiatives. Our story is being told loudly and proudly through the voices of our franchisees and agents both online and offline. Whether agents are leveraging our Max Engage platform or other mediums, our momentum continues to build. Throughout our many events over the past several months, excitement and a feeling that something is different about RE/MAX has emerged as a constant theme and that excitement is carrying forward in our ability to recruit top industry talent to our executive team. We're thrilled to have Vic Lombardo on board as as our new President of Mortgage Services in his role Vic will oversee the growth of our mortgage business, including Motto Mortgage, wemo and Future Evolutions designed to grow our mortgage offerings. In Vic's first two months, he's rolled up the sleeves, dug into the operations, surfacing a number of innovative ideas to drive growth and add additional revenue streams and increase the operational efficiency. We're already putting foundational pieces in place and we look forward to sharing more details on our strategy in February. While the mortgage market remains challenging, we've seen a modest uptick in refi volumes in the last couple months. Our franchisees and LOS continue to persevere and we're optimistic about the growth potential for our mortgage business. In addition to Vic, Tom Planigan, our new Chief Digital Information Officer, joined us at the end of September. Tom, a member of the 2025 Swanopool Power 200, is a great cultural fit and his impressive Track record includes 20 years as a real estate innovator and executive in leadership roles covering both technology and marketing. Tom is leaning in to the potential of AI both to improve the customer experience and to make us more efficient in our day to day operations. Not only is he an industry leading technologist, but his experience in ancillary businesses will also be a great asset as we continue to explore future growth strategies. As we look to the future, we continue to lean in our networks and build on our momentum. We're focused on the tremendous opportunities that lie ahead for us and with a world class leadership team now in place, we believe we're well positioned for growth. In the current environment, we're focused on what matters continuing to grow our REMAX agent count, especially in the US and Canada, enhance and expand our value proposition, focus on improving our customer experience, grow our mortgage business and concurrently diversify our top line drivers as we execute with excellence across our brands. As we move into the last couple months of the year and prepare for 2026, I want to emphasize that we're in a new era, one defined by clarity, purpose and action. With that, I'll hand it over to Kerry.

Terry Callahan - Chief Financial Officer - (00:12:20)

Thank you Eric. Good morning everyone. As Eric mentioned, we are pleased with our third quarter operational results and overall financial performance. Our third quarter profit came in at the high end of our expectations and our top line results were solid despite. A housing market that continues to be. Slower than anticipated, highlighting the resilience of our financial model. Some of our notable quarterly financial highlights included total revenue of 73.3 million, adjusted EBITDA of 25.8 million, adjusted EBITDA margin of 35.2%, an increase of 40 basis points over the third quarter of 2024 and adjusted diluted EPS of $0.37. Looking closer at revenue excluding the marketing funds, revenue was 55.1 million, a decrease of 5.6% compared to the same period last year, driven by a decline in organic revenue of 5.4% and adverse foreign currency movements of 0.2%. The decline in organic growth was principally due to lower U.S. agent count and to a lesser degree, certain incentives related to modifications to the company's standard fee models, including our Aspire program. This decrease was partially offset by contributions from our marketing services, including our lead concierge and REMAX media network initiatives. As mentioned, margin performance improved thanks to our focus on ongoing operational efficiencies. Third quarter selling, operating and administrative expenses decreased 3.5 million or 9.7% to 32.5 million. This reduction was primarily due to certain lower personnel and events expenses, partially offset by higher investments in technology on our flagship website and increased bad debt and legal fees. Despite the challenging broader macro and housing environment, our ongoing evaluation of every aspect of our business is paying off. The cash generative nature of our business converted approximately 60% of adjusted EBITDA to adjusted free cash flow this quarter and our total leverage ratio decreased to 3.41 times as of September 30th. Importantly, our total leverage ratio is now below the 3.5 times level at which we are afforded greater flexibility from a capital allocation perspective and we expect to remain below the three and a half times level at the end of the year. From a capital allocation perspective, our priorities remain unchanged. We are strategically reinvesting in the business and will continue to build our cash reserves. We also believe that we can now evaluate returning capital to shareholders because at the current price, repurchasing our shares is an attractive use of capital. Now onto our guidance. We are pleased with our Q3 financial performance and are encouraged by the growing excitement from our network and early returns from our initiatives. However, we remain pragmatic about the realities of the current housing market and continued uncertainties in the broader macro environment. As a result, we are tightening the top end of our full year revenue and adjusted EBITDA ranges. Our fourth quarter and full year 2025 outlook assumes no further currency movements, acquisitions or divestitures. For the fourth quarter of 2025, we expect agent count to increase 0 to 1.5% over fourth quarter 2024 revenue in a range of 69.5 to 73.5 million, including revenue from the marketing funds in a range of 17 to 19 million and adjusted EBITDA in a range of 19 to 23 million. And for the full year 2025, we now expect agent count to increase 0 to1.5% over full year 2024. Revenue in a range of two hundred and ninety to two hundred ninety four million, including revenue from the marketing funds in a range of 72 to 74 million, a change from 290 to 296 million. And adjusted EBITDA in a range of 90 to 94 million, a change from 90 to 95 million. With that operator, let's open it up for questions.

OPERATOR - (00:16:36)

Thank you. We will now begin the question and answer session. And if you'd like to ask a question, please press Star, then the number one on your telephone keypad to raise your hand and enter the queue. If you'd like to withdraw your question at any time, simply press Star one again. Thank you. Your first question comes from the line of Anthony Pallone with JP Morgan. Your line is open.

Anthony Pallone - Equity Analyst - (00:16:59)

Great, thanks. Good morning. Just Eric, I think you mentioned there were, there were two programs. You talked about seven figure contributions potentially. I think it was marketing and maybe it was Aspire. But I was wondering if maybe you can give a little bit more color around, you know, can we expect to see that level of incremental revenue in 2026 and maybe what would the margin perhaps look like or just a bit more detail on what that trajectory might be?

Eric Carlson - Chief Executive Officer - (00:17:26)

Yeah, certainly. Tony, thanks for being on today. A couple things we're talking about is, as you know, over the past four, six quarters we've really been talking about, you know, bringing more value to the network and helping them, you know, win more business, do it in less time and, you know, bring some profitability back to brokerages and help agents make a little bit more money. Part of that is, you know, our marketing efforts that we rolled out about, I don't know, eight or 10 weeks ago. And we're seeing really good engagement on our marketing as a service platform. So that's one of the platforms that we talked about being a seven digit revenue opportunity that certainly is continuing to grow. We're seeing great response, engagement, usage. And I think the most important thing, Tony, is it's actually working, right? So when you think about marketing a listing or, or an open house or just marketing in general, it's good to see that engagement and that return. So we're seeing customers come to our site, we're seeing higher engagement with properties. You know, we're seeing, you know, more customers wanting to, you know, you know, click through and grab an agent. All these things are good to help our folks kind of win listings. And really it's a spend that's happening kind of in the market, but in a disaggregated way. And so what we've done is created a platform through process technology and, and AI to help that spend one to lower the cost for agents, but also to be more effective in the marketplace. So we think that's a big opportunity not only in the US and Canada where it's deployed today, but also internationally. And we're working on several markets in the fourth quarter to start that rollout to help monetize that international opportunity that you all have so politely pointed out to me many times in the past. In addition, we have the RE/MAX Media Network which we've spoken about a bit in the past. And part of, you know, obviously marketing as a service is help driving traffic to the website. You know, I will tell you that, you know, we are, we're building the plumbing, we've got good infrastructure in place. I think closer to, you know, the end of the year you'll see, you know, kind of a new approach for us on dot com and dot CA. But advertisers are, you know, are liking what they're seeing. We have work to do. But you know, they are, they're seeing good engagement with their products. We're seeing good engagement from consumers when they have an ad kind of on a site that, you know, helps, helps our brand, helps their experience. So, you know, we're working through kind of the foundational aspects of the program. But that definitely is a seven digit figure in 2025. It will continue to grow in 2026 and beyond. Yeah. Tony, one thing that I would add in addition to everything that Eric said from a strategic perspective, because we are really excited about the engagement that we're seeing from a marketing as a service perspective, the margin profile, from just a financial standpoint, it does look a little bit different than our core business. So kind of looking in that kind of high single digit, low double digit margin contribution perspective. But with all of that said, we. Just think there's tremendous opportunity in terms of driving the top line from that perspective. Just given the engagement we've seen from the network and the overall performance with consumers who have interacted with the product over the last couple of months. Okay. On the RMN side, the margin profile will be different too. It'll be higher than our normal margin profile.

Anthony Pallone - Equity Analyst - (00:21:03)

I see. Okay. And then just one other one just on MA and the sector in general. Can you give us any thoughts on where you there and also whether or not that that has any implications on just. You mentioned your recruitment rate and whether you're seeing, you know, people move around as a result of M and A in the space.

Eric Carlson - Chief Executive Officer - (00:21:27)

Yeah, great question. You know, look, I think last time we talked about us building momentum within our network and really being focused, kind of our strategy and our value proposition. We're seeing great enthusiasm from the network right now. My opening remarks, we talked about a little bit. Some of the events, the last five, six events since the last time we spoke have been kind of categorized from the network as best event ever, which is really encouraging. Meaning the way we're showing up the tools, the services, the engagement we're providing is resonating with the network. That along with some of the programs, whether it's the marketing as a service or some of the new economic models, whether that's Aspire, Ascend or Appreciate, they're resonating. And so we're seeing good engagement levels there and we're seeing good recruitment rates through the Aspire program. With all that being said, you know, there will be continued consolidation in the market. Obviously, since the last time we spoke, there's a big announcement. We think that that just brings additional opportunity for us and could help accelerate our strategy. But obviously, you know, we are open for business. We are seeing a lot of inbound requests. Meaning, hey, something's happening over at ReMax. What is that? I want to talk more about that. Maybe I've got a contract up. Maybe I'm independent, feeling pressure. But we are definitely seeing a lot more inbound activity here, which is very encouraged for our franchise sales and our network to capitalize. Maybe some of the, you know, the market conditions, but also just the opportunity on what we built to join kind of this. This momentum that we've got on the market right now. Okay, thank you.

OPERATOR - (00:23:17)

Your next question comes from the line of Nick McAndrew with Zummon. Your line is open.

Nick McAndrew - Equity Analyst - (00:23:24)

Hey, guys. Thanks for taking my questions. Eric, maybe one for you to start. I think just with Aspire, Ascend and Appreciate now live, could you maybe just walk through what type of agent you're trying to attract with kind of each of those models and maybe just how franchisees are thinking about those optional models in practice. And I mean, are most rolling them out selectively for recruiting or for the existing agent base they already have? Or maybe if you could just add any color there, that'd be helpful. Thank you.

Eric Carlson - Chief Executive Officer - (00:23:50)

Yeah, sure thing, Nick. Thanks for the question. A couple things. One is, you know, as I just mentioned. I think that the models and just the idea that there's choice is resonating with the network. Obviously, you know, brokerages and agents, you know, independent operators, and they have to make the best decision for themselves. I think in the last call we talked about a little on Aspire. You know, about 2/3 of the folks have joined or participating. But I think the important thing that we're seeing, and by the way, it's still a little bit new, but there are some positive green shoots. Meaning, you know, Aspire has not, it has, it has not taken away from any of the existing recruitment that we are doing organically for kind of highly professional, productive, more tenured agents. And so Aspire generally has been seen as kind of incremental. The other great thing that we're seeing is Aspire is definitely coming with higher retention rates than what we previously saw. So I think the idea that we've coupled education, kind of a formalized program and learning technology in order to become a productive professional agent and take some burden off the broker is really helping with that retention rate for agents. We're hoping here in the next two quarters that we'll see that productivity follow. We've got a tried and true partnership with the Buffini Group on 100 Days of Greatness. And so if those averages play out, we certainly think that we'll have additional productive agents kind of in that network within that 12 month program time, time frame Appreciates a little bit different. Appreciate is really about retirement. So obviously we've got a, you know, real estate agents enjoy retirement through this profession. We want to make sure that there's a place where they can stay at an affordable rate and still capitalize on their book of business. But no, they may not be as productive as they once were kind of in their heyday. And so we're seeing, we're seeing some adoption of Appreciate. Obviously that's a program that takes a little bit more time for the funnel to fill as folks, you know, tend to, you know, have a desire to roll off. And then on Ascend, you know, we're seeing decent adoption on Ascend for those folks that want to take advantage of, you know, a model which provides a lower fixed fee and a higher variable rate. And I think part of Ascend for me is also kind of putting our money where our mouth is, meaning we have to be in the business of helping folks win business that can be leads generated from our website, that can be other sources that can be on our dot com, I mean, a whole different variety. And so what we're now showing to the network is we're in it with you. Right. We'll take some risk on the financial side, but we're going to help you as an agent and a brokerage build your business. And I think that that stance alone has really resonated with a lot of the network and it's just really a philosophy of us leaning in to help support their business. Got it. Yeah, that makes a lot of sense. Thanks, Eric. And I guess just to follow up, I think just given all of the investment in digital tools and marketing capabilities this year, whether it's Lee concierge or the new marketing as a service platform, do you have any sense for just whether you're seeing any tangible uptick in productivity of agents or offices that are more actively engaged with these platforms versus those that aren't? Look, I think, you know, it's a long sales cycle. You know, some days you wish you were kind of like a consumer goods company just selling a bar of soap, but that's not the case. So what I said before Nick, and I think is helpful is like we're seeing additional engagement on listings, right. And so when you see that type of an activity that will lend itself to, I think our team winning more business and that will help improve productivity. So you know, when you roll out programs like these, like, you know, increased marketing or lead concierge with our sales cycle, it takes a while to actually see the results. But when you set out and you say, hey, these are a few things that I'd like to see initially to make sure that the program is kick started in the right way. We're seeing all those green shoots and we're seeing it actually exceed our expectations. So we're really optimistic on, you know, the work that we've done, which is very purposeful investments. One not only to, you know, help our agents and our brokers, but also to start to tell a different story about revenue diversification for our enterprise. And so we're really happy with the progress we've made and we're excited about the, you know, the reaction from the network and the usage of the tools.

Nick McAndrew - Equity Analyst - (00:28:59)

Great. Thanks guys.

OPERATOR - (00:29:05)

Your next question comes from the line of Matthew Erdner with Jones Trading. Your line is open.

Matthew Erdner - Equity Analyst - (00:29:11)

Hey, good morning guys. Thanks for taking the question. I'd like to kind of shift gears and talk about motto a little bit. You guys touched on some of the initiatives that you're doing there. But I kind of like to get your guys sense a little more in depth of kind of the changes you're making. There and get an idea of the profitability and if it's not profitable, kind of that outlook towards profitability. Thanks.

Eric Carlson - Chief Executive Officer - (00:29:37)

Yeah, great question. I think, I think I led you down a path with my opening remarks that we talk more about it in February. But let me give you a little bit of color right now. One is we've, you know, over the past six to 10 weeks since Vic arrived, we've really taken a new view of the mortgage opportunity. So that includes not only motto, our processing group, which we think that there's, you know, opportunities there to do a little bit about what we've done in real estate, quite honestly, and change the models, be a little bit less fixed and more variable. We've got to be in a position to help our network and our LOS really find business and capitalize on business, which not only helps the profitability of their business, but the value of owning a motto franchise and our value proposition, quite frankly. So it's a little early, Matt, to actually kind of go through some of the specifics. But what I would tell you is we've got a new outlook not only on the franchise business, but just capitalizing on the mortgage opportunity in general based on the number of transactions, connections with both consumers, agents, brokers and the footprint that we have both kind of, you know, in the U.S. canada, etc. So we're really excited about some of the items that we're working on right now, but it's just a bit early to talk through the, to talk through the strategy with. Y' all.

Matthew Erdner - Equity Analyst - (00:31:14)

Got it. Yeah, I appreciate that. And then, you know, kind of as a follow up to that, you know, how do you guys, you know, plan on leveraging, you know, that agent network that you guys do have, you know, given that, you know, you guys are up there pretty much every year in terms of transaction side. So the opportunity opportunity there is pretty large.

Eric Carlson - Chief Executive Officer - (00:31:39)

Yeah, I mean, I think you're seeing us lean in a variety of different places. So whether that's providing services like the marketing as a service platform, which not only kind of improves agent execution on marketing at a lower price point, but also helps us to obviously improve the monetization event through either the agent or the consumer. The ReMax Media Network is a perfect example. LEED Concierge is an example. And obviously some of the high level hints that I provided to you on mortgage are also examples. So you're just seeing us lean into our business and really think about what else can happen through the agent or the consumer transaction. And I think that the other item we're really working on is what happens post close. I come from a place where we were dead set focused on the consumer experience and we are focused here on the customer experience for brokers, agents and that end buyer or seller to improve that not only before the transaction and when they're shopping or researching a particular property or an agent or a brokerage, but also during the transaction to make it as easy as possible to do business with us and our network and then also to make sure that we're nurturing those folks post close in a value added way. So not just an email once a month, but making sure that it's meaningful to help them with their home buying and home ownership experience.

Matthew Erdner - Equity Analyst - (00:33:13)

Got it. That's very helpful. Thank you guys.

OPERATOR - (00:33:19)

Your next question comes from the line of Tommy McJoint with KBW. The line is open.

Tommy McJoint - Equity Analyst - (00:33:26)

Hey, good morning guys. Thanks for taking the questions. The first one is just around you guys called out the organic revenue impact, as you know, facing some impact from the modifications to the standard fee model. Are you guys able to put some magnitude around that number? And then should we think about that as sort of run rating or does it lap after a year? How should we think about that?

Eric Carlson - Chief Executive Officer - (00:33:58)

Hey, good morning, Tommy. So great question. I think as Eric said, we're really excited about the Aspire program.

Terry Callahan - Chief Financial Officer - (00:34:04)

It's really deriving the benefits that we had hoped for in terms of increased recruitment rates for newer agents. And also we're seeing, you know, churn decline in that cohort as well. And we knew kind of from the. Very beginning that there would be a little bit of an upfront investment as those agents came on board, got trained up and then started to produce transactions. And so we do think it is a little bit of a short term investment cycle because as those agents continue to, you know, get ingrained in our tools and services, you know, start leveraging marketing as a service, really lean into our education and become the trusted professional that is the Hallmark of the ReMax brand. We think that that will dissipate over time. It was just a little bit of a near term headwind as they're onboarded. So Eric mentioned it's about 1,500 agents and so that's kind of the quantity. But we think it is, you know, near term in nature and we absolutely think it's a, you know, it was, it was a prudent choice because as Eric said, we're really trying to partner with our franchisees, help them build their businesses and help us really kind of create that flywheel for agents to participate in the other tools and services that we're offering holistically from a brand perspective.

Tommy McJoint - Equity Analyst - (00:35:23)

Okay, thanks. And then in the sort of capital allocation priorities, returning capital through buybacks has been on the list, but toward the lower end for a while now, I guess. Is anything different now that would make you guys more interested in buying back shares now? Should we expect to see some buybacks by year end? Any more commentary around that?

Eric Carlson - Chief Executive Officer - (00:35:50)

Yeah, it's, you know, it's a great question. I think, you know, the biggest thing. From our perspective right now that was great to see this quarter is we. You know, you know, we've done a. Very good job from a deleverage perspective. You know, our TLR is now below. That three and a half times level, so we do have some more flexibility. So from a capital allocation perspective, you know, we're continuing to, you know, allocate or evaluate all of those options where we think that we're going to allocate capital to the areas where will get the highest returns. So there's a lot of things going on right now from a strategic perspective in terms of the additional value and services and initiatives that are ongoing. But obviously now with that deleverage, we'd like to get down a little lower, but you know, below that three and a half times. And given where we're trading, you know, we think that returning capital is a great use of capital and more to come.

Tommy McJoint - Equity Analyst - (00:36:42)

Thanks. Thank you.

OPERATOR - (00:36:48)

With no further questions in queue, I'd like to turn the conference back over to Joe Schwartz for any closing comments.

Joe Schwartz - Senior Vice President of Finance and Investor Relations - (00:36:55)

Thank you, operator. That concludes today's call. Thank you all for joining us today.

OPERATOR - (00:37:02)

This concludes today's conference call. You may now disconnect.