Centene Corporation (CNC) Earnings Call Transcript & Summary

Hi, everyone. I'm Steve Baxter, the healthcare services analyst. Thanks for coming to the Wells Fargo conference this year. We're pleased to be joined by Centene, a leading health plan focused on government-sponsored coverage, most notably Medicaid. In the company, we have Sarah London, CEO; Drew Asher, CFO; and Jennifer Gilligan from Investor Relations. Thank you for being here today. Before we launch into my questions, Sarah, Drew, do you have any opening remarks you wanted to start.

Yes. Maybe I can just give a quick update on what we've been up to since our Q2 call. We started the quarter with a good July. And then in August, we purchased another $200 million worth of shares in the 60s, and we expect to exceed our original $1.5 billion share repurchase target in 2023. And then just a couple of weeks ago, I'm sure many of you saw that we hit a major milestone in our value creation plan and portfolio review with the Circle transactions, which is, again, very pleased with finding the right buyer for that asset. Under the hood of a $1.2 billion enterprise value is about $250 million worth of debt that we'll shed and then the vast majority of the remaining proceeds, so think about $900 million or so will go to share repurchase. And so all told, we expect the Circle transaction will be about $0.03 to $0.04 accretive to 2024 assuming a Q1 close, Q1 '24 close. The remaining core business is performing well, continues to perform well from a Medicaid standpoint, redeterminations are progressing. We've shed about 900,000 members at this point, which is roughly 40% of the way through our expected total and remain in line from both a membership and an acuity standpoint and continue to have really constructive conversations with our state partners, not just in the rate and acuity lane, but also seeing increased partnership and interest from the states in working with us to help make sure that members have coverage continuity as we go through this process. From a Medicare standpoint, we're obviously gearing up for annual enrollment period. We feel really good about our PDP positioning this year. Our outlook from a Star standpoint has not changed from the Q2 call. Again, our focus in this cycle is really about programmatic improvement. And so we still expect to see about 2/3 of our members in contracts that are improving year-over-year from a Star standpoint and expect to see roughly 90% of members in 3-star or above plans which, again, is a delta from the 50% of members that we had below 3 stars coming into the cycle. So really pulling up those underperforming contracts and teeing up that membership base to be able to hit 85% of members in at least 3.5 stars by October of 2025. And then Marketplace continues to deliver strong growth and perform in line with our plan. And so if we sort of take a step back going into the fall, we're feeling really good about our at least $6.45 of EPS in 2023 and remain confident that we will beat $6.60 in 2024. So that's where we stand, and I'm happy to answer any questions.

Okay. Great. Yes. Well, we saw the 8-K this morning. So kind of have to start on the utilization side, given how much focus there has been there. Just give us the latest on what you're seeing on utilization front? I guess, like any change with kind of how Q2 played out versus maybe where the accruals came in, anything that you've seen since then, whether there's any notable items to call out across the various businesses?

Yes, no change in Medicaid or Marketplace pretty stable in those areas, consistent with the discussion in Q2. Medicare where a lot of the attention has been in non-inpatient, largely outpatient area, including surgeries. As we look at July incurred, as we sit here today and have a claims pick for July incurred, that's slightly below the June incurred, which as you'll recall from the earnings call, for Q2 was a little bit below the May pop. So slightly better, but it's still a watch item. And as we said on the Q2 call, it wasn't like alarming. But it did drive a slightly higher HBR in the second quarter than we were expecting. So it was sort of worthy of discussing.

Okay. And then kind of moving into the redetermination of the discussion. I mean, externally, as we look at it, some of the headline numbers around terminations, especially in the earlier stages, like I think certainly look higher than maybe I think it seems like maybe the government was expecting with some of the actions they've taken and statements they've made. I guess when you're seeing things play out from your perspective, how are you guys looking at the actual terminations? How are you seeing the membership changes play out? What are you seeing in terms of people that are able to rejoin the plan? Has there been any change, I guess, in how you've seen month-to-month, the termination cycle and the membership impacts playing out differently?

Yes. Again, at a high level, we're tracking in line with our expectations from both a membership and acuity standpoint. I think part of what we're seeing in terms of membership industry-wide is the fact that a number of states sort of stepped into redeterminations with a bolus of patients upfront, whether that was through the sort of auto eligibility process or there were just target populations. We know certain states were going as these populations more aggressively than others. CMS is obviously watching this pretty closely. One of the things that we're seeing that I think may help sort of harmonize the public data from what we actually see in terms of net membership. And we touched on this on the Q2 call, is the degree to which members who may be dropping for procedural reasons are pretty quickly reenrolling. And so if you look across the last 5 months or so, we're seeing about 15% of members that are rejoining, but that's sort of the average across those 5 months. If you look back at April, for example, it's closer to high 20s, almost 30%. And so as each month progresses, we're seeing those numbers climb, not clear where it will settle out. But if you think about settling out in the high 20s that helps, I think, reconcile a little bit the sense that there is a high number that are rolling off, perhaps because of procedural reasons that are coming back. The other thing that's worth noting is about quarters of those members that are rejoining or rejoining without any gap in coverage. And about 95% of those members that are rejoining have 1 month or less gap. So it's a pretty quick turn for a lot of those members, not a lot of coverage continuity, not a lot of churn from our standpoint.

And is it too early to tell when you look at some of the members that are rejoining are you able to continue their coverage without an actual break in their coverage. Is there any notable difference to call out in terms of how those people look from a utilization point of view? Or are they maintaining coverage because they plan to use services? Or are they maintaining coverage just because they're eligible and they found their way back.

In general, folks are finding their way back through sort of normal course utilization, like perhaps a pharmacy refill, right? So not some -- necessarily some major incident. More, again, kind of normal patterns of utilization and the fact that the premiums are there to cover that because there's no gap, means we're not seeing a huge difference necessarily in the rejoiners in terms of utilization pattern.

Okay. And you mentioned that acuity seems like it's tracking in line with your expectations. I guess just talk a little bit about what your expectations are and what you're actually seeing on the acuity front at this stage?

Yes. So we went through this on the Q1 call where we basically pulled forward the entire 2024 planning process so that we -- for '23 and '24, we could establish a baseline of acuity estimates as well as estimates on rate relief and rate action. So that's what we're tracking against and we're tracking right on with acuity and rates. So pretty pleased with achieving that early on, and there's some more runway to go here in redeterminations. But we made those estimates based upon a number of things. I mean we look at 0 utilizers, for instance, TANF and 0 utilizers 2019 to 2023, TANF flat. Expansion, up a little to no surprise, shipped actually down. So there's that. We look at the 0% to 25% HBR cohorts. We look at other insurance coverage, those with COB claims. And then we're constantly doing levers versus stayers analysis including netting the members that come back in. And that -- I mean, we're doing that weekly so that we can continue to confirm that we're on track for our acuity estimates.

Okay. And you made some positive comments on the 7/1 rate cycle and the fact that I think all the states that updated and finalized rates provided an acuity adjustments as we externally look at these rate updates and we're trying to assess kind of the moving parts, I guess what's your perspective on how states are going about developing these acuity adjustments? Because it's great to have an acuity adjustment. I think what we're all kind of struggling with externally is like what's the magnitude of acuity adjustment that's actually needed in our states appropriately reflecting that level of acuity in rates?

Yes. So far, we've had success, and we've been working with the states for over a year. In terms of laying the foundation giving them hypotheticals leading up to April 1 when the redeterminations commenced. And feeding them the data, some of the data I just referred to, to say, hey, if this cohort gets redetermined -- for instance, like if you isolate an expansion, Medicaid expansion population, probably more likely to have heavier redeterminations. Here's what the actuarial sort of estimate would be. So working with the states and their actuaries and they've been engaging. They haven't been sticking their head in the sand and saying, "Hey, come back in 6 months when you actually have some real data. Now we do have real data. So they're able to pull the first few months of redeterminations. As Sarah said, we're almost 40% through our 2.3 million to 2.4 million members. So that actually helps marrying data with hypothetical estimates to actual data we've seen since April 1. So every state attacks it differently. Some states have risk scores by member like in Medicare or Marketplace. And so that's an element as well. So really pleased, never satisfied but pleased with the engagement and the fact that now 13 out of our 14 states that have rate changes between 7/1 and 10/1 in the normal course have given us rates, and they all include a positive acuity adjustment. And the last one is just sort of dragging their feet, and we expect that to come through.

I would just add one thing to that, which is it's easy to focus on the math, but part of what makes what Drew just described possible is the power of being an incumbent in many other states and the fact that our actuarial teams have built multiyear relationships with their counterparts. And so there's a level of trust, there's a level of open dialogue. And when you get down to -- again, it's science, right? But the question of what data to use and what we're seeing, the openness of the states that have those conversations, I think, has a lot to do with the fact that we've built those relationships over the years.

Okay. And then I think the way that you guys developed your plan to get to $6.60 or beat $6.60, I think as you said today, included compared to 2022, I think about 50 basis points of Medicaid pressure in 2023 and then another 50 basis points in 2024. I know some of that's offset by the PBM, but call it like 100 basis points in aggregate of sort of MLR reset on the Medicaid side. I guess, can you just speak a little bit about how that estimate was kind of determined? And do you feel like that puts you in a place where you think you're at a sustainable level of Medicaid MLR? Or do you think then there's opportunity to improve -- continuing opportunity to improve as maybe some of the acuity gets fully reflected into the rates from there.

So if you track us closely, you'll know that we gave some pretty specific roll forwards like last year, it was 89.6% for Medicaid HBR last year, being 2022. This year, we expected 89.8%. Next year, we expect 50 basis points higher than that, minus the 20 for the ESI PBM benefit to get to 90.1%. So we've given a really, really sort of pinpoint specific guidance. I do think if you look back over time, it's our job to manage this business in, call it, the mid- to high 89s. And so with a jump off in 2024, but 90.1% being our target. I do think there's opportunity to sort of get that 30, 40 basis points back. Whether we can do it all in '25 is a question. But over the next couple of years, yes, I mean it's incumbent on us, and we've proven we can do it, pre-pandemic. I go back to the Q1 call and pull the transcript, I recited 2015 to 2019. HBRs for Centene stand-alone and WellCare stand-alone. Centene averaged 89.6%, WellCare average 89.5%. So I do think there's an opportunity there. if you guys think about margin expansion opportunities beyond sort of that 2024 baseline and beyond Medicare.

Okay. And then how should we think about -- obviously, I think it's $10 billion of Medicaid premium you expect cumulatively to roll off because of Medicaid redeterminations. How are you thinking about managing through the G&A deleverage and implications of that?

One of the benefits of starting -- literally starting our annual operating plan process in Q1 leading up to the Q1 earnings call, which is probably 6 months ahead of time, was also establishing SG&A targets by department, by business, thinking about volume shifts, marrying that with the value creation work and these multiyear initiatives that we've embarked on. So I feel good about the road map that we have and that the entire management team and the company has been working on to sort of match cost structure with the size of the business because you're right, we expect, call it, about a $7 billion drop in '24. I mean some of that we're getting in '23 in Medicaid that we've sort of been talking about for the last year or so pursuant to the redetermination estimates.

Okay. And then as we think about the long-term growth of Medicaid as we move past Medicaid redeterminations, I think like one thing that a lot of people have been waiting for is sort of the next RFP cycle. Obviously, that's a big part of what Medicaid is such an exciting growth story and really over the past 10 or 15 years. How are you guys thinking about that? Obviously, states are very operationally focused on managing redeterminations? Do you think as that slows down, that there could be more of a focus on outsourcing these high-acuity populations? Or what's kept states from maybe moving more quickly with high acuity population than they have?

Yes. I think we saw -- we definitely saw a slowdown during COVID for obvious reasons, right? I think an RFP process wasn't going to work. You couldn't even bring people into the room to score it. But we've seen in the last 18 months, we've seen that pipeline really start to unfreeze. And so acceleration not just in terms of some of the states that -- we're not in, there might be opportunities for us. But as the states that we're in, come around and think about their standard core RFP cycle, starting exactly to your point to think about, is this an opportunity to bring another population. And as we talk, it's interesting, as we talk to the governors within each state regardless of their political leaning, they really do see managed care as an opportunity to create budget certainty and to deliver better health outcomes. And so it is -- we are seeing more acceleration, I think, in terms of specialized population. There have been a number of foster care programs that have been added in we are -- expect that when the Georgia RFP comes out, the signals suggest that there will be maybe the component to that. And so we're starting to see that pick up, and we're able, again, to have conversations with those states about why that works, right, and demonstrate outcomes from other states to give them confidence that picking up an additional LTSS population or something like that is going to make sense. The other thing I would say is that with broadly speaking, sort of budget pressures, right, against the states had strong budgets coming out of the pandemic. But if you think about where we are in terms of inflation and just other kind of budgetary pressures, that's another catalyst typically for moving programs into a managed disposition because it gives them certainty in what is almost always the largest line item in their budget.

Okay. And then as we think about these RFPs, not in addition to the potential greenfield opportunities for the industry, you're going to have a lot of defense to do in terms of RFP procurements coming up. RFP has obviously been a huge strength of the company historically. I think you're essentially in every Medicaid managed care program in the country. There's been a couple more uneven results more recently. I guess, as the company has kind of deep dived into maybe some of the unsuccessful reprocurements. Have you learned something that's been able to inform the RFPs that you're in process in today that gives you greater confidence in your ability to sustain those books of business?

Yes. We've been really thoughtful about looking at across the company, just areas where we can continue to strengthen performance. I will say that I think we have the best BD team in the business. And so one of the things that the value creation plan has helped us do is to marry up a really strong BD function with really strong operations and execution because those 2 things have to go together. I talk about the idea of competing on promises kept, not just promises made. And embedded in that is actually, I think, a key component to how we succeed -- continue to succeed going forward, which is leveraging the power of incumbency. So we are, as you said, in many, not all, there are still a few that we can look at, but many of the Medicaid managed care programs in the country. And that means that we're in there every day with our state partners. We understand where they want to take the program from innovation standpoint, we understand what the governors are worried about, whether it's staffing shortages, whether it's behavioral health. And so we can be modifying our delivery in real time, not just on paper in an RFP process and point to community investments. And the fact that we take a local approach, which is the other thing that I think really differentiates us and the feedback that we've gotten top to bottom from the states is that, local boots-on-the-ground approach and the ability to be responsive to the state's needs is a huge differentiator. So leaning into all of that. I think we've gathered up those lessons learned and making investments in the right place. And I think taking that strength forward as part of the plan.

Okay. And then for Florida, in particular, obviously, that's one that is the most near term and I think people are probably the most focused on at this point. Just remind us how you guys are thinking about Florida in particular. I think you mentioned at the Investor Day, there might have been a little bit of a specific plan around Florida just given some of the membership dynamics post WellCare? Like what should we be keeping in mind about the approach in Florida RFP.

Yes. We have -- we do have strong membership in Florida because of the combination of Centene and WellCare. And again, we expected or the company expected that we may have to shed members when that merger happened and the mentality in Florida and the Governor who was then the Governor, and is still the Governor is competition is great. And if you're good, there's no reason why you shouldn't be managing as many members you can. And so our team has been gearing up for really strong RFP response. Obviously, the submission date got pushed to October, which just gives us even more time to polish our answer and demonstrate our commitment to the state. But in general, we think about our Medicaid portfolio as a portfolio. So there are states where we have same-store growth because we just don't -- we're newer into the state, Delaware as an example, where there's just natural opportunity to grow into a state. And then as we think of the long term, a 12% to 15% EPS CAGR, thinking about where there are natural balances of market share. Iowa is an example of that. So we take a pragmatic view, but we're always there to win and serve as many members as we can.

And then appreciate pivoting a little bit. I appreciate the update on Stars that the thinking hasn't changed there for payment year 2025. As you look more at the competitive landscape for 2024 in MA, and I gave some initial comments on the call about I think what you're thinking from a premium perspective for MA in 2024. Is any of that change or any kind of refinement to your thinking on how MA membership might shake out as we move into 2024. You've got a better sense of the competitive landscape?

Yes. So no change from what we said in the second quarter call where we expect about a $16 billion revenue stream down from $20 million. That's sort of in the construct that we laid out on the Q1 call also to get to our $128 billion of premium and service revenue next year. And then one thing we do have more visibility on than we did in late July as our PDP positioning. So really pleased. We expect to grow PDP next year. We already have 4.4 million members in PDP and expect to grow that. We're below the benchmark in 30 out of the 34 regions. The other 4 were de minimis. Our value product is very well positioned as we're leveraging our improved cost structure with ESI, our new PBM partner next year. And so really pleased with how we came out in that bid process. And that's important for a few reasons. Number one, it's a good business on a stand-alone basis. Sure, it's only $2.5 billion this year, but that will grow next year, which is nice. Number two, we've got $45 billion of pharmacy spend that we control. We hire a PBM, they're our partner. We do network solicitations. We help with manufacturer contracting and work hand-in-hand with our PBM. Almost half of that $45 billion is through PDP. So as that grows, we're taking pharmacy spend from others and consolidating it at Centene, and then we can leverage that across all of our businesses. So that's another exciting aspect not directly related to the P&L of PDP. And then third, we've got 4.4 million members, once again, expect to grow that next year nicely. And that becomes a long-term feeder for Medicare Advantage, especially as we look out over the next 3 to 5 years and getting more competitive, turning that business around, but having that bolus of sort of active members with a Centene experience through our WellCare product. So really excited about how that has shaken out. I know your question was about Medicare Advantage, but we'll get more information on that when the landscape files come out.

Okay. And on the drug spend side of things, just in terms of how that works contractually for the PBM, is that something that potentially shows up as incremental savings to you in 2024? Or do you need to wait until you get to like a market check? Or I guess how should we think about that -- playing out and translating through the organization?

Well, we certainly negotiated sort of guarantees and metrics for 2024. But as we grow and the manufacturers here that we're growing and we've got access to such a rich set of data as well as the claims spend for sort of higher utilizing Medicare members compared to like a commercial national account member. That helps because we're constantly refining the formulary and figuring out how to maximize access and the cost structure with our PBM partner in to. So that should pay dividends over the next few years.

Okay. And then -- so we think about the path forward for the Medicare Danish book, I mean, we know based on the revenue you kind of gave us for next year in the PDR. And I think you said that sense you think will be running in the $6.60 number for 2024 of sort of like structural cost for the MA business. It feels like that's maybe like a minus 4% on the margin side. And obviously, you have aspirations that that's going to be a positive margin business over the next several years as you work through Stars and other initiatives. I guess, give us a sense of beyond the impact from Stars how you think about bridging from where we're going to be in 2024 to where you hope to be in the future on the positive side?

Stars is the biggest lever. I mean it's a major lever -- getting 85% 3.5 star by October 2025, like Sarah outlined, that's a big lever, especially in the duals population, where you can run a D-SNP product with a 3.5 star. And then anything we can sort of push into 4-star would be incremental. Clinical initiatives, we continue to do better. The pharmacy cost structure I just talked about, helps the MAPD part of MA. And then SG&A, we still need to do better on SG&A and distribution. And so all those things are working in tandem, but the biggest lever is that stars improvement over the next few years.

And as you're retrenching a little bit around the dual side of the population, and you kind of made the comments, and you made the comments before that 3.5 stars is adequate to be competitive on that side. I guess, how should we think about that dynamic? Because intuitively, if you're competing against 4-star plans that have the benchmark advantage, that does seem like it's a pretty big hurdle to overcome. Just talk about how 3.5 stars kind of helps you get to where you need to be competitively.

The biggest element is that if you're a full dual, you're 100% caution or protected. And so there's an element of not having to burden the member regardless of the Star score. And so it's sort of the bid mechanics and sort of the math of getting to 3.5. So you may not be able to maximize the profit opportunity compared to someone that happens to have their dual business in the 4-star mainstream contract and some do and some don't even with some of our larger competitors. So you can run a good business at 3.5 for duals. We're not going to stop at 3.5. I mean some of that work will push contracts into 4, but our goal is to nail that 85% for October of 2025.

Well, I would just add that I think the logic of the HealthEquity Index that CMS introduced is meant to some degree to account for the fact that it is just harder to get a duals population above 3.5 right? And so if you're high performing on that population, essentially getting normalized up to 4 is the equivalency right from an algorithmic standpoint rather than trying to overshoot from standpoint. So I think that comes into the mix and gives us the opportunity by teeing those core plans up at 3.5, again, like you said, some will tip into 4 naturally. But then we get the more efficient push into 4 to be able to be competitive in that space.

I remember that from the WellCare, that discussion. And then we talked about redeterminations from the Medicaid perspective. Obviously, you guys are on both sides of that when you think about the exchanges in the Marketplace business. What are you seeing at this point in terms of enrollment in marketplace for people that are coming out of Medicaid redeterminations. And how does that look from a financial profile? I know normally, there's dynamics around special enrollment period membership that are not necessarily ideal when it comes to things like risk adjustment. But I guess how are you seeing the growth come in on the exchange side of the business this year?

It's still early. We are -- we do track those transitions, certainly from our own book and to the extent we can, figuring out these coming in from other plans. The expectation would be that those numbers may be slightly higher acuity, but we're not seeing any pressure in the marketplace book from that. One of the things that's been really interesting actually, it goes back to my earlier comment about states leaning in, in terms of partnering with us. As the process has gotten real and people are dropping off who are eligible for Marketplace, the states have started to ask how do we make it easier to enroll members directly in the marketplace. And some of the states have actually come to us and said, so we just auto enroll them. If they're in a Centene Medicaid plan, can we just drop them on to Ambetter because there's actually no cost burden. And it's a much more efficient way to do it. And the governors have stepped in and given the Medicaid directors latitude to do that. So I think we'll start to see that pick up as people who drop realize that they want that coverage and that it's free. The broker community has mobilized pretty significantly against that opportunity. And so I think we'll start to see that pick up and still targeting that 200,000 to 300,000 catchment opportunity.

On the -- let me add on the HBR. I feel pretty good about. In fact, that was part of the good July that Sarah mentioned, the commercial HBR, including the marketplace performance. There was a little bit heavier SG&A for first year commission because of the outstanding growth that Ambetter's had this year. And so as I sort of look at the 2023 guidance we have out there that we reaffirmed this morning and then where consensus sits. I'm guessing, the Street is struggling with the sloping of some of the HBRs and then thinking also about back to Medicare, the PDR in Q4. So we're good with sort of the consensus full year, which I think is $6.46, $6.47. But what we would suggest is shifting $0.30 to $0.35. We'll give it to you sooner from Q4 into Q3 and based on the sloping that we know. So sell side should take a look at their sort of models and think about the PDR as well. So excited to deliver earnings sooner to our investors, but that's something we wanted to make sure we covered. And I think commercial HBR might have something to do with it. I think it's probably going to be better in Q3 than what's being modeled macro by the Street.

Got it. Okay. That's good to know. And then just looking at the margin outlook for this year and the exchange business, obviously, a lot of moving parts with like a special enrollment period. I guess -- how do you think about where margins might settle out this year relative to your long-term targets? And it feels like you're kind of targeting margin improvement in that business for 2024 with your pricing. But love to also get an update on the pricing strategy for 2024 and kind of what you're seeing out there competitively at this point?

Yes. So the margin -- we came into the year expecting the peers -- barely peers into that 5% to 7.5% pretax. We're good on HBR. Once again, the SG&A is a little heavy, which is actually good SG&A to spend because you're growing. You've got a heavier year 1 commission. So that's keeping it just below that low end of our ultimate target range. And we should be well into that range the way we price, the way we're positioned for 2024 and the soft more year of all those SEP growth, that has proven to be good, valuable business in that full second year where you get a full year of risk adjustment versus a partial year. So pretty pleased with what we're seeing in Ambetter. And once again, that should be also a revenue driver for next year.

Okay. And then on the most recent earnings call, the company did seem to suggest a little more openness around like the M&A process. Can you talk a little bit about like what kind of assets do you think would make sense for the company? And just in contrast a little bit against the value you derive from buying your stock back at around 10x.

Yes. So just to be clear, the goal of talking about M&A is mostly to make sure that our investors don't think that we're going to let the pipeline dry up while we are focused on value creation plan, streamlining the business, focusing on the core. And the reality is that opportunities that are right down the fairway in disciplined growth for our core business are not just birds nest flying on the ground, right? These are opportunities that you need to cultivate over years, build relationships figure out what are the right assets. And so it was more to give confidence that we are keeping our eye on that ball, while we are doing all this other work, acknowledging the fact that any acquisition would have to meet the hurdle of accretion, the hurdle of strategic value. And then we would have to take into account what's the operational burden that we're putting on the company by doing this and is it worth it? And so if an opportunity were to come up, I think you would find that it was right down the fairway of one of our core businesses. And then as we look out into the future and we think about our thesis in terms of the growth of the marketplace chassis, what that's going to do to the individual market and disrupting group insurance what are the capabilities that we want to own in order to penetrate and start to pull share from that business. And so those are the other things that we are looking at, but I don't think that's near term.

But you're right to mention how attractive we think we are. And if you look at the remainder of this year, we expect to exceed as Sarah said, that $1.5 billion, we're $1.3 billion through August in terms of share buyback. We expect to exceed the $1.5 billion. Then we've got the proceeds. The vast majority of the $900 million of net proceeds, probably in Q1 as Circle closes. And then as a reminder, we've committed to buying back $3 billion of shares with operating cash flow in 2024. You start adding that up if this multiple stays, which I hope it doesn't. But if it does, I don't know that's another 12% of the company we'll be buying back. So as long as the market is trading us at below 10x, we're going to keep on buying ourselves.

Okay. Well, I think that's a good place to leave it. Thank you so much for your time. This has been a great discussion. Thank you.

Thank you.