Newmark Group Inc

NASDAQ:NMRK

Earnings Call Transcript 2018-Q4

[Operator]

Good morning. My name is Jody and I'll be your conference operator today. At this time, I would like to welcome everyone to the Newmark’s Fourth Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]

Thank you. I'll now turn the call over to Jason McGruder, Head of Investor Relations. Sir, you may begin when ready.

[Jason McGruder, Head, IR]

Good morning.

We issued our fourth quarter and full year 2018 financial results press release and a presentation summarizing these results this morning. You can find these documents at ir.ngkf.com.

Unless otherwise stated, the results provided on today's call compare only the fourth quarter and our full year of 2018 with the year earlier period. We'll be referring to results on this call only on an adjusted earnings basis, unless otherwise stated. We may also refer to adjusted EBITDA. Please see today's press release results on the Generally Accepted Accounting Principles or GAAP. Please see the sections in the back of today’s press release for the complete definitions of any such non-GAAP terms, reconciliations of these items to corresponding GAAP results, and how, when, and why management uses them.

I also remind you that the information on this call regarding our business that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Such statements involve risks and uncertainties. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements.

For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to risk factors set forth in our most recent, Form 10-K, Form 10-Q or Form 8-K filings.

I'm now happy to turn the call over to our host, Howard Lutnick, Chairman of Newmark Group, Inc.

[Howard Lutnick, Chairman]

Thank you, Jason. Good morning and thank you for joining us for Newmark's fourth quarter 2018 conference call. With me today are Newmark's CEO, Barry Gosin; our Chief Financial Officer, Mike Rispoli.

Newmark had a record quarter, generating 37% revenue growth, 50% improvement in post-tax earnings-per-share, and 71% improvement in the adjusted EBITDA. I'm pleased to report that the Company's Board of Directors declared a qualified dividend for the fourth quarter of $0.09 per common share. In addition, at the end of November, we successfully completed our spinoff from BGC Partners, simplifying Newmark's corporate structure.

With that, I'm happy to turn the call over to Barry.

[Barry Gosin, CEO]

Thanks, Howard.

Good morning, everyone. Our strong performance in the fourth quarter capped a year of exceptional growth, as we generated strong double-digit increases in revenues, pretax earnings and adjusted EBITDA in 2018.

Newmark continued to significantly outpace the industry and capture market share, driven by robust quarterly results across virtually all of our business lines and by a 20% year-over-year quarterly improvement in revenue per producer. Nearly 90% of our topline growth for the quarter was organic, as we continued to attract leading professionals across all of our business lines.

Some of the key areas in which we have recently invested include senior housing capital markets, hotel investment sales and financing; industrial services; retail leasing; multifamily debt origination and valuation advisory. In addition, our recent acquisitions include RKF, a leading retail leasing platform; and Jackson Cooksey, a Texas-based tenant representation firm. We also continued to invest in our industry-leading technology for use by both our clients and our professionals.

In terms of our overall market view, U.S. office and industrial market conditions held steady during the fourth quarter as absorptions strengthened, vacancy rates continued to improve, moving rental rates modestly higher in many markets. Multifamily volumes remained strong as this property type has attracted the highest sales volume for the past seven quarters, now surpassing office sales volumes. Industrywide U.S. multifamily investment sales recorded a record of $173 billion in 2018. We estimate U.S. investment sales and industrywide originations were up approximately 7%. Newmark's 23% increase in full-year volumes across investment sales, mortgage brokerage and origination therefore compares very favorably to the overall market.

Industrywide leasing activity remained strong in many markets in 2018. For 2019, Newmark Research expects the overall commercial leasing and investment sales to be flat to slightly higher. The MBA expects overall originations to be up 2% in 2019. We expect to outperform these metrics.

I'm very proud of our outstanding accomplishments this year, led by Newmark's partners and employees who embrace a strong culture of collaboration and data-driven technology. We are well-positioned to continue our momentum, driving profitable growth, strong returns on investments, and significant value for our shareholders and clients.

With that, I'm happy to turn the call over to Mike.

[Mike Rispoli, CFO]

Thank you, Barry, and good morning, everybody. In the fourth quarter, Newmark generated revenues $631.7 million, an increase of 37.2%. Our compensation expenses increased 21.6% to $343.1 million and improved by approximately 700 basis points to 54.3% of revenues. Non-compensation expenses increased 41.4% to $130.1 million. As a percentage of revenues, non-compensation expenses were unchanged at approximately 20%, despite the additional $22.4 million of pass-through expense related to ASC 606. More than 70% of our annual expenses are variable in nature and directly tied to revenue.

Turning to our quarterly earnings. Our adjusted EBITDA improved by 71.4% to $169.2 million. Our pretax adjusted earnings for the quarter were up by 74.3% to $148.5 million. Our tax rate for adjusted earnings was 18% for the quarter and 15% for the year versus 18% for full year 2017. While our full year tax rate declined due to lower U.S. corporate tax rates, it was higher than our previous outlook, largely due to our fourth quarter earnings outperformance. Our post-tax earnings increased 75.2% to $121.3 million. Our post-tax earnings per share increased 50% to $0.45.

Newmark's fully diluted weighted average share count for the quarter was 267.6 million. The year earlier weighted average share count was 233.4 million. Newmark's fully diluted weighted average share count increased mainly due to the first quarter 2018 sale to BGC of approximately 16.6 million exchangeable limited partnership units of Newmark for $242 million. Additionally, our share count rose due to equity-based compensation, front-office hires and acquisitions.

Going forward, we expect to take a number of steps to reduce share issuance. These include a greater percentage of cash for acquisitions, employee compensation and new hires. We expect our weighted average fully diluted share count to grow by between 5% and 7% year-over-year in 2019. In comparison, Newmark's weighted average fully diluted share count increased by 7% in 2018, excluding the units sold to BGC last year. Our share issuance outlook for 2019 assumes no material acquisitions, buybacks, or meaningful changes to the Company's stock price.

Moving onto the balance sheet. Including cash and cash equivalents and marketable securities, Newmark's total liquidity was $171.4 million. Our unsecured long-term debt was $537.9 million. Therefore, our net debt was $366.5 million. Total equity was $1,083 million.

During the quarter, we issued $550 million of senior unsecured notes due in 2023. To meet tax free spinoff requirements, the proceeds from this issuance were used to pay down pre-existing debt owed to or guaranteed by BGC. We also entered into a $250 million revolving credit facility, improving our financial flexibility. As a result of our greatly strengthened balance sheet, the Company's net debt to adjusted EBITDA has improved to 0.7 times as of yearend 2018 versus 2.6 times in the prior year.

Our balance sheet does not yet reflect the approximately $430 million of additional Nasdaq payments expected from 2023 through 2027 because the shares are contingent upon Nasdaq generating at least $25 million in gross revenues on an annual basis. Nasdaq generated gross revenues of approximately $4.3 billion in 2018.

Given the strength of our on and off-balance sheet assets, our $250 million credit facility, strong cash flow generation from the business and low leverage, we believe that we are well-positioned to invest for growth. And as a reminder, we will simplify our definitions of adjusted earnings and adjusted EBITDA, beginning with the first quarter of 2019. Please see the sections of today's press release titled, “Simplifying Non-GAAP Reporting Beginning in 2019” for additional details.

And with that, I'm happy to turn the call back over to Barry.

[Barry Gosin, CEO]

Thank you, Mike.

Our full-year outlook for 2019 is as follows: We expect to generate revenues in the range of $2.2 billion to $2.3 billion; we anticipated our 2018 tax rate for adjusted earnings to be in the range of 14% to 16%; we expect our weighted average fully diluted share count to grow 5% to 7%; we expect our earnings per share to be in the range of $1.55 and $1.65; we estimate our adjusted EBITDA to be in the range of $575 million and $610 million. Our outlook assumes no material acquisitions, investments or share repurchases.

Operator, we would like to open the call for questions.

[Operator]

[Operator Instructions] And your first question comes from the line of David Ridley-Lane of Bank of America Merrill Lynch. Please go ahead. Your line is open.

[David Ridley-Lane, Bank of America Merrill Lynch]

Good morning. Curious to get your thoughts on the capture rate that you are getting inside of mortgage debt brokerage from your multifamily investment sales. I know the goal is to get to 35% to 40% over time. Where did you finish in 2018? And what's kind of a reasonable pace of improvement for 2019?

[Barry Gosin, CEO]

Well, the last quarter, we were actually 32%; for the year, we were closer to 19%?

[Mike Rispoli, CFO]

23% for the year.

[Barry Gosin, CEO]

23%, sorry. As we continue to embed the debt originators with the investment sales multifamily brokers, the capture rate rises. I mean, recently in last quarter, we had a portfolio in one of our markets, about $1.5 billion of the three separate properties and our capture rate was 100%. So, the opportunity to be nearby the step-ins of the industry towards using the same broker to provide the debt as a service and a benefit to the client is growing. So, we think that will continue to improve.

[David Ridley-Lane, Bank of America Merrill Lynch]

And then, as a quick follow-up. Could you talk about any puts and takes for 2019 margins that you would be calling out for next year?

[Mike Rispoli, CFO]

So, when we think about our margin, we continue to lower our comp and non-comp expenses as a percentage of revenue as we move forward. and as we continue to grow our revenue, we expect those margins to stay in 20% adjusted earnings -- margin 20% range and above. We do have the Nasdaq, which will come down year-over-year in our adjusted earnings because of the -- we got the puts, and value of those puts will come out of the earnings next year.

[Operator]

Your next question comes from the line of Jade Rahmani of KBW. Please go ahead. Your line is open.

[Jade Rahmani, KBW]

Touching on the market in terms of transaction volumes, can you comment on whether you saw any volatility in December and perhaps January, relative to typical seasonality or your expectations?

[Barry Gosin, CEO]

We -- obviously, had a good quarter. We continue to be optimistic about sales and market share. And there is enormous amount of capital available to invest. Some things are pricy, but we are feeling pretty good about the market.

[Jade Rahmani, KBW]

And in terms of bid list on transactions, have you seen any changes of note, any concentrations perhaps at the lower end of pricing or any other indicators?

[Barry Gosin, CEO]

As I said in previous calls, there are less bidders on any serious -- depends on what the product is. If it’s industrial, multi, better; on non-core properties, you may see less bidders on core investments, but there is still the pricing is still holding up and that at the end of the music, there is somebody there to pay the proper price for the assets.

[Jade Rahmani, KBW]

In terms of leasing trends, how much of the organic growth you're experiencing is driven by co-working and perhaps the tax sector more broadly?

[Barry Gosin, CEO]

Do you have any numbers Mike in terms of the…

[Mike Rispoli, CFO]

Yes. We saw a lot of activity in the co-working space and in the flex sector, both on the East Coast and the West Coast. And we do continue to see that trend going into 2019. They continue to take a lot of space in a lot of major markets around the U.S.

[Barry Gosin, CEO]

The place that it’s most affecting in the market there -- many building owners used to build prebuild or to capture the smaller tenants, and which was worth. So, that I think that the prebuild market is most impacted by that and the co-working flex working environment accepts a lot of that space. And then, the ability to have variable space for large corporates is something that is having an impact on the market. But it’s a market that’s here today and continues to grow. And the tech market is growing pretty rapidly in most of the major markets around the country.

[Jade Rahmani, KBW]

Are both of those sectors driving the majority of the leasing growth you're seeing?

[Barry Gosin, CEO]

No. I mean, it’s all over the lot. I mean, you have -- there is always a certain -- remember, we -- a lot of our business is renewal and consolidation. So, we do a lot of business, representing law firms around the country on their renewals. In some cases, they may be downsizing and some of the space picked up by others tenants. But, a lot of our activity has to do with companies just moving or renewing or even in the downsized market, they still have to sign leases, they still have to expand and they still need space.

[Jade Rahmani, KBW]

Turning to the mortgage brokerage business. Excluding Berkeley Point, it looks like your debt placement business grew almost 200% year-on-year. Any color as to whether that's driven by recruiting or any emphasis on placing debt more aggressively, perhaps debt fund clients, anything driving that outsized growth in mortgage brokerage?

[Barry Gosin, CEO]

We are winning market share; we’ve hired really great people. It’s a combination of the above. The collaborative, cooperative environment that we have, our leasing agents for buildings are generating opportunities for our mortgage brokers. Everybody is working towards the goal of the more synergy and more opportunities. I think, we are just winning market share.

[Howard Lutnick, Chairman]

I think, one of the most interesting things I’ve seen Newmark create is that rather than just having a GSE business, they now offer clients the ability to clear the market. Meaning, we will search in every possible category, whether that’s insurance companies, whether that’s any possible outcome to get you the lowest price for your mortgage. And that has grown the business or having a full ecosystem of selling multifamily financing with the agencies, and now being able to offer those same clients clear the market has been able to garner a much larger percentage of the overall multifamily business coming our way, a better product for clients. And that's why you are seeing it drive it because in the old days if we didn't get a GSE transaction, we got nothing. Now, if we don’t get the GSE transaction, we are helping place that with insurance company or otherwise and really valuing ecosystem. And I think, that's why you are seeing this collective drive value across the market in various ways, extraordinary job of building that ecosystem.

[Barry Gosin, CEO]

But it’s also across the capital stack. And we are evolving every level of the capital stack, raising equity, mezzanine, track equity, things. We have programs that allow an owner investor partner to be able to recap its property whether it’s a refinance, a sale, raise additional equity, buyout partners. I think, we have to be prepared to provide all those services. And as long as we do, we will have a bigger market share and we will have more touch points with the client.

[Jade Rahmani, KBW]

And suffice it to say, I assume you expect that business, the debt placement business at the Berkeley Point to grow in 2019?

[Barry Gosin, CEO]

Yes, we do. We've hired a series of originators. I mean, we just hired a team that we embedded. We hired two teams which didn’t -- where our investment sales operations didn’t have debt located; they are now together. So, in two separate markets, so just in those markets alone, not to mention the ability to have our investment sales brokerage get accustomed to the importance of capturing the debt. To service our clients, it’s not only that we sell the building but it’s a benefit to the clients to be able to underwrite and know going into an acquisition how it’s going to be looked at by Freddie or Fannie or insurance company right at the onset of their acquisition and their interest in the acquisition.

[Mike Rispoli, CFO]

And the other thing I would add to that is and I think Howard said this, as you put together the GSE business with the non-originated lending business, mortgage brokerage and the investment sales on the multifamily side, that’s a business we’ve grown 25% year-over-year and we've done $35 billion of transactions across those categories. So, we just continue to put those together. Whether it comes from GSE or more investment sales or more mortgage brokerage, we just think we will outgrow the market in that space.

[Jade Rahmani, KBW]

In terms of the value of equity compensation, you said you expect to grow the share count 5% to 7%, which should be about $142 million to $200 million of value, based on the current stock price. I think, that's about 8% of the fee revenue guidance. So, in terms of accounting, if you were to decide not to issue those shares and to issue cash, would that all be -- would 100% of that be expensed, and so it would impact your fee revenue margin or your -- sorry, your adjusted earnings margin as a percentage of fee revenues by about that same 8%?

[Mike Rispoli, CFO]

So, when you think about the share count growth, it’s compensation to employees, it’s compensation for new hires and some of the tuck-in small acquisitions that we have on our horizon. So, you have to look across all the categories and where we issue equity compensation. Some of it is acquisition accounting and then some of it is just equity accounting for the employees. But, I guess, the answer is that, wouldn’t all -- not all of it is going to brokers as sign-ons or brokers as part of their equity compensation.

[Howard Lutnick, Chairman]

I think we can reduce the issuance and keep the retentive nature as the scale of our brokers have substantial equity in the Company. That is something that we can do and we think we have factored that into our guidance. So, I think we -- while it will be slightly more expensive, we think because of the scale of the Company, we’re driving up our margins otherwise, and this would just offset that. So, as Mike said before, by us saying we are comfortable with the margins now, we have the flexibility to reduce our share issuance and that will be offset by the -- as our scale grows, we would have margin improvement otherwise and those two will offset each other equally, a pretty balanced margin, where we are now to slight improvement.

[Operator]

Your next question comes from the line of Alexander Goldfarb of Sandler O'Neil. Please go ahead. Your line is open.

[Alexander Goldfarb, Sandler O'Neil]

I just have just two questions for you. I realize it’s a busy morning. The first one is on your EBITDA. You guys have clearly been delivering on double-digit growth, whether it’s revenue per producer or your various topline revenue lines and driving EBITDA growth. But, when you boil it down to EPS for 2019, we are looking at sort of mid-single-digits. Are there things that you guys can do now that you are totally independent to sort of match EPS growth to be commensurate with the double-digit EBITDA growth that you guys are delivering?

[Mike Rispoli, CFO]

So, as you seen in our guidance and it’s tough at the midpoint, our revenue growth, we are projecting around 10% based upon what we know today, people that we have in house say, and EPS is up about 5% and that is factoring in the 5% to 7% share count dilution that we have mentioned earlier. We are always looking at ways to drive EPS higher, we are looking at ways to lessen the share count dilution and we will continue to look at that all the time.

[Alexander Goldfarb, Sandler O'Neil]

But, it sounds like it’s the share count that’s really the dilutive, offset there.

[Mike Rispoli, CFO]

Yes, between revenue growth and EPS growth, that's the difference. And of course, we are just generating a lot of cash flow from the business. We plan to continue to invest that cash flow back into the business to continue to grow our EPS, to continue to grow our EBITDA. We have invested significant amount of 2018 and we plan to continue to do the same next year in 2019.

[Barry Gosin, CEO]

We also have invested a lot of money where much of what we are doing has -- is still gestated. So, we have lots of things that are developing organically that are ramping up and that haven’t hit our earnings, and we expect that it will be full blown. You also have, if you look at the multifamily space, we talk about the ramping up and the capture of debt. But, the other aspect of it, as we continue to add pieces to the multifamily, we have more solid looks at portfolios. So, we're growing the platform as a national platform. And our production being number two in the multifamily space has not -- the portfolio amount of business that we do is below what we should be. And there is an opportunity to get more of that business. And the same goes in investment in office and industrial and all those categories. As we continue to put the athletes on the field, in the locations that they need to be as an institution that’s representative as a full, global institution, we are going to continue to build market share on large, structured transactions that are not obvious in the production today.

[Mike Rispoli, CFO]

So, I would add to that as we continue to drive those cross selling synergies and opportunities to the topline, that will translate to additional EPS growth, the additional EBITDA growth over time.

[Alexander Goldfarb, Sandler O'Neil]

Okay. And then, just second to that point, capital wise for external, if you are not going to issue as much shares for acquisitions, do you guys feel that you have to come back to the capital markets to raise cash or you feel that you have sufficient capital internally to do the acquisitions you want to do?

[Mike Rispoli, CFO]

So, I think if you look at our balance sheet, we have $171 million of liquidity, we have $250 million line of credit revolver available to us. We generated significant amounts of cash flow from the business in 2018. We expect that to continue into 2019. So, we think we have adequate capital to continue to invest and grow this business.

[Operator]

Your next question comes from the line of Patrick O'Shaughnessy of Raymond James. Please go ahead. Your line is open.

[Patrick O'Shaughnessy, Raymond James]

I wanted to ask about DC and potential rule changes in the privatization of the GSEs. Obviously, the Trump administration has started to maybe take intangible steps. How do you see that process unfolding? And how do you currently think of the potential ramifications for Newmark?

[Barry Gosin, CEO]

We don’t see any near term changes that affect the GSE business, Fannie and Freddie. We operate across the entire multifamily ecosystem. And given the growth and strength of this asset class and our broad strength across the platform, we expect to grow that business irrespective of how things may change.

[Patrick O'Shaughnessy, Raymond James]

A question on the flexible work space strategy for you guys. how would you describe your flexible workspace strategy? And how does your investment in no Knotel fit into that?

[Barry Gosin, CEO]

Look, we’ve recognized early on the importance and the changing structural aspect of the variability of space for large corporations. We invested Knotel pretty early. We do a lot of business with WeWork as well and same with Industrious and Spaces and all the other players in the industry. So, we think that it’s an add-on to what we do. We think our brokers put small tenants in the co-working facilities. We get paid commissions for that. So, we think it’s just part of the continuum of the real estate lifecycle. And it’s a good one.

[Patrick O'Shaughnessy, Raymond James]

And then, maybe one last one for me. So, now that you’ve put up a couple of quarters after getting your credit ratings and obviously the spin has been complete, any progress in working with the rating agencies and potentially getting -- I think it was S&P to get you guys up to investment grade.

[Mike Rispoli, CFO]

I think that S&P will continue to look at the Company. They had indicated they want to see, so maybe a year of track record after the initial ratings. Obviously, at a 0.7 times net debt to EBITDA, more than 10 times interest coverage, our credit metrics are pretty superb. And we continue to just operate the Company with a lot of available capital to continue to invest and grow this business. So, over time, though we think they will come to the answer of the rating agencies but it doesn’t really have much of an effect on us at this point. We are paying 6.125% for our long-term debt and that’s in place for five years.

[Operator]

Your next question comes from the line of Peter Christiansen of Citi. Please go ahead. Your line is open.

[Peter Christiansen, Citi]

Nice trends, gentlemen. I was wondering if you could talk about some of the drivers in the leasing market. You have been growing roughly mid to high-20s there for the last three quarters. So, you had slight step up in Q4, and I know there is some seasonality there. But can you give us a sense of what portion of that growth was organic? I know you had two deals this year.

[Barry Gosin, CEO]

We said, our organic growth was 90%. I mean, we have a relatively young group of athletes. We have people that are enormously talented that we’ve recruited over years. We continue to improve the platform, improve our brand. Our brokers continue to get better. We have provided them with infrastructure, technology, information that helps them differentiate themselves to the client. I think, our capital markets business, our understanding of new FASB rules and how it impacts the balance sheet and the P&L for Company is significant. I think, all of the different aspects of our business are focused on providing the most sophisticated product, including the aggregating information and data to provide a better understanding of the market and the market's future for our clients.

[Peter Christiansen, Citi]

And then, Mike, if we look at cash flow conversion this year, I think it was -- if we exclude the loan originations and sales portion, it looks like it is around 55ish percent of EBITDA. Do you see that conversion rate improving in ‘19? And what might be some of those factors?

[Mike Rispoli, CFO]

So, in 2018, we generated $296 million of cash flow from operations. But, there is really two things that I would like to point out there. One, Nasdaq added another $85 million to that, which the money came in, in the fourth quarter. And we invested over a $100 million back into producers and the business. So, if you look at our cash flow before those investments and including Nasdaq, it’s $490 million of cash flow from the business on a $552 million EBITDA. We continue to believe that we are going to generate significant amounts of cash flow from the business. And we will continue to reinvest in the business, in producers, and acquisition of companies and in strategic investments.

[Peter Christiansen, Citi]

And then, interest expense year-over-year were roughly 30ish kind of million. Is that how we should think about it?

[Mike Rispoli, CFO]

Yes, mid-30s; we’re at 6.125% on $550 million of debt, and we have the $250 million revolver, which is undrawn.

[Peter Christiansen, Citi]

And then, last one for me. Gentlemen, I was hoping you could discuss what you are seeing in the M&A environment, how it’s changed in the last couple of months? Do you see a number of opportunities still out there or how are valuations trending in your view?

[Barry Gosin, CEO]

We are seeing a lot of opportunities. The market is still incredibly fragmented, as we’ve said before. It’s important for everything we do to have a multiplier effect, so one and one has to equal three or four. So, we are very careful about what we buy. But, we have lots of interest and lots of -- as we get bigger, better, more differentiated, more accepted by institutions, we have way more interest from companies that want to be part of what we are creating here, and that’s the exciting part of what we are doing.

[Operator]

[Operator Instructions] Your next question comes from the line of David Ridley-Lane of Bank of America Merrill Lynch. Please go ahead. Your line is open.

[David Ridley-Lane, Bank of America Merrill Lynch]

Just a quick follow-up on that change in the mix of cash versus stock and recruiting new brokers, sort of [indiscernible] and might have impacts on your reported free cash flow. Could you quantify potentially what that could be?

[Mike Rispoli, CFO]

So, all of that was really built into the guidance that we gave for EBITDA and for earnings growth for next year as well as for share count growth. So, on acquisitions, obviously, that’s just -- we feel opportunistic and we have a good target, and we may be able to get more cash and little bit less equity than in the past.

There are no further questions in the queue. I'll turn the call back over to Barry Gosin.

[Barry Gosin, CEO]

I would like to thank everybody for joining us today. And we look forward to speaking you again soon.

[Howard Lutnick, Chairman]

Thanks everyone. Have a good day.

[Operator]

This concludes today's conference call. Thank you very much for joining the call.