Invitation Homes Inc. (INVH) Earnings Call Transcript & Summary

Good morning, everyone. For those of you who don't know me, I'm Josh Dennerlein, Bank of America's senior analyst covering the residential REITs. We're extraordinarily pleased to have with us Invitation Homes' President and CEO, Dallas Tanner; Executive Vice President and CFO, Ernie Freedman; Executive Vice President and COO, Charles Young. [Operator Instructions]

Maybe to just kick things off, Dallas, I'd like to start off with what are the top reasons an investor should buy your stock today?

Josh, thanks for having us. Great question. First, I would talk about our strong third quarter results, and we're not yet seeing, really, any signs of seasonality in the business. That -- those fundamentals that we've experienced most of the year continue to accelerate. Second, the acquisition environment today has been improved, I'd say, even well beyond the first half of the year. We expect our prospects for external growth to remain robust, and we see a lot of opportunities to invest capital in a meaningful way. And I think third, our company is uniquely positioned as we can buy these homes one-off through MLS or some of our builder partners, but we're still able to do it in a way that's really impressive. And then I'd also add that if someone were going to look at our stock and why you would buy it, you'd have to think about the fact that we had peer-leading NOI growth for the past 4 years, really, across the sector. And then I think lastly, we're building a business that continues to get more efficient with time and distance. And you've seen that in some of our operating metrics, whether it's days to re-resident or things in the like of the customers staying longer and longer. So I just think the value proposition for being an investor in Invitation Homes historically has been really attractive for our shareholders, and we're equally as bullish about the future.

Yes. That's a great reason. I guess maybe just touching based on that, that you're not seeing any signs of seasonality. Like, I guess what's driving that kind of longer than normal kind of peak leasing period? And then any thoughts on maybe will it start to slow when we get into October/November? Or do you think kind of the strength just carries through?

Yes, Charles here. Good question. I mean, I think what we're seeing is just really healthy demand. We're at a place of really high occupancy. Before the pandemic, we were really running well, was uncertain what was going to happen. During the pandemic, well, what we found is there's lots of demand, that's interest in single-family homes and specifically, our markets. And so we've seen some migration across -- coming from the Northeast and other parts. We've been executing really well, as Dallas said, on days to re-resident. We've been able to move people out and in as fast as we ever have. And so with that lack of supply and interest has shown us that we really haven't seen a seasonality that we typically see this time of year. We're kind of holding and if not accelerating as we go into September. We'll see what happens in the future. But around the holidays, maybe there will be a little bit of slowdown. But I -- on a relative basis, I don't see it as a slowdown. The typical seasonality really has that new lease kind of slowing down. But right now, we're seeing -- we're not seeing any signs of that.

Yes. No, it's been impressive. You've kind of seen it across the board on the multifamily sector. So it's even looking like it isn't going to slow down. And maybe to explore your other comment on building a business that continues to get more efficient. I guess what -- maybe what key initiatives are you kind of working on at this point to kind of drive those operating efficiencies?

Yes. Utilizing technology has been a big part of our business. We've integrated the Smart Home technology in terms of our leasing, allowing our residents to utilize it as well. On the maintenance and turn side, we've been able to really drive down our turn times and get efficient there. We've introduced a new mobile app for maintenance that allows us to be much more efficient in terms of the residents can use that mobile app to take video or pictures of the troubled area. We can diagnose it prior to showing up and either resolve the problem without rolling a truck or roll the truck with better information, so we can resolve the problem quicker. These are the type of things that we've been able to introduce even with the pandemic going on and continuing to improve our business incrementally. We have stocked vans, where all of this -- where we're including equipment where we don't have to go and try to pick up parts. These are things that make us effective and efficient and create a great experience for the resident.

No, that's great. And then maybe switching up a little bit to the external growth side. Like, you recently announced that partnership with PulteGroup. Maybe could you remind us how that relationship works and what markets to target, maybe just start with high level? Hope to hear more about it.

Yes. Great question, Josh. We've been focused, really, for the last year in terms of how do we want to participate in new products and how do we do it in a way that's meaningful that will set up, call it, near-term pipeline, but really building out a strategy for the long haul. And we've taken the approach to be capital light with a few strategic partners. One of them is just Pulte Homes. As you mentioned, Pulte, the nation's second largest homebuilder, sees the world pretty similar to how we do in terms of where household supply is warranted and where we want to try to find meaningful ways to invest capital and bring additional supply into the marketplace. We structured that in a way that is both, I think, accretive for both platforms, while also allowing Pulte to be great at what they do and allowing us to be great at what we do, which is really the operation of the real estate post-closing. And so we have an ability to get under the hood early with them and look at specific developments and maybe new areas of opportunity where we could be a synergistic partner and maybe providing more scale in the neighborhood over time. And so we've now got, I would say, somewhere between 1,200 and 1,500 of our first units identified across multiple markets. We have communities in California we'll be building, we have communities in Georgia, parts of Florida, Texas, and Phoenix, I think, really in kind of this first batch of homes. And the goal is to try to build somewhere around 7,500 homes initially over the first 5 years together. We are thankful for Pulte as a partner. We think there's a lot of ways that we can bring value to things they are doing. They certainly are going to bring value to our strategy in terms of bringing in new product. New is always great, but really, you want a product that's built and designed for your customer to meet those needs. So whether that's hard surface floorings in a way that will help mitigate some of our CapEx exposure over time, or just being thoughtful around the way we design our bathrooms and things like that. So there's a number of ways that the partnership will be beneficial for our shareholders. And I think -- and more importantly, it allows us to be a partner in the marketplace versus a competitor. It doesn't alienate us from doing work with other builders, the same way it wouldn't alienate Pulte from selling to other operators. But when you line up to be strategic, you're going to spend the time together, it's certainly going to create a lot of opportunities hopefully for both companies. So I think right now, we've got a pretty bullish perspective in terms on how this partnership can continue to develop, hopefully, grow.

Yes. You kind of touched on a little bit on -- in your last kind of comment there, but I guess maybe exploring that more, like, why did you decide to pursue development this way versus doing it on your balance sheet?

Yes. No, happy to answer. We've been pretty vocal of the fact that we haven't had really any interest in being a homebuilder ourselves. There's a lot of risks that comes with that. I mean, just the headlines I've been reading the last 30 days from some of the public builders, delays around doors and windows, cost of goods sold pre- things that are happening in their businesses are all very tricky to manage. And by the way, I think that's why they're the experts. This is what they do at the end of the day. They build homes and they manage the supply chain that includes both the way they look at land acquisition plus the operational side of homebuilding. We don't feel that, that's necessarily a core competency we need to have right now internally. Now I reserve the right to say, "Never say never." But in today's environment, I think it's a pretty tricky thing to be a really good homebuilder, and we like the advantage we have of partnering with the different builders at different times in the cycle, which sometimes will be accretive to Invitation Homes and give us maybe a competitive advantage, sometimes may be better for the builder. At the end of the day, we're running a capital-light model. Charles and I don't have to hire tens of dozens of staff to buy 2,000, 3,000 homes a year from builders. It's just structuring and being smart on the structure and the strategic kind of value of us being a preferred customer versus us having to run a whole separate business line and make sure that we're feeding that business line to keep it efficient. We're not going to have to staff up 1 bit to buy 2,000 or 3,000 homes a year from builders in the way that we're doing it. We can do it in a way that I think is pretty competitive, if not maybe better than running our own homebuilder program.

Makes sense. And for this strategic relationship, too, how much control over the product do you have before -- like before it's built or over what you buy? Like, presumably, maybe how something is built for rent versus, like, someone to own it might be a little bit different. So just kind of curious how involved you'll kind of be on that end so you can get, like, the best margins for the business.

Yes. I would say, look, on the R&D side of it early on, we have an ability to really weigh in on floor plans, square footages, things like that. Pulte is obviously one of the best in the country. And so they're going to -- they give us a lot of options in terms of what we want to put in the home in terms of the fit and finish standards. But we certainly have a strong opinion about what those are. Things like luxury vinyl plate flooring, or in parts of the Southwest, you may want to go with, like, a 24-inch tile. Those are things that we weigh in on early and we have a sense of what that kind of finished deliveries look and feel like. But with Pulte, they already have fantastic footprint. In our 80,000 homes, we own a lot of Pulte Homes, quite frankly, prior to the partnership. So we're very familiar with the product. We know what it is that they bring to the table kind of in their new community format. I think where we have an opportunity to be even more strategic is around how they lay these out within a master plan. There will be many communities where we have our products sprinkled in amongst homeownership. And then there will be some opportunities where some particular sections or submarkets of a master plan will be single-family rental. That will allow us to explore a few things around amenity-based thinking and the types of, call it, updated value propositions we can offer our residents. And that's -- to us feels pretty powerful. I think we'll get a lot smarter on that over time as we start to take in some of these deliveries, but we're really excited about the prospects of being able to be under the hood early. Our teams work really well with Pulte and other builders for that matter. But in the strategic nature of how much volume we're going to try to do with Pulte over the next several years, it has been very collaborative. And so it's what -- it's a partnership we're extremely excited about.

That's interesting about the amenity-based and stuff. Is that something that any of your kind of current locations are kind of where you have clusters you might have, like, you already have amenities? Or would that be something totally new that would add value to, like, future kind of developments?

I think there's 2 types, right? Like the first type would be if you have scale and density in one geographic area, are there things within the neighborhood and the HOA that can be amenity-based programs that offer some sort of value upside? We do have a lot of that today just in several neighborhoods that we own. Pool and tennis, for example, in Georgia, is a very standard, call it, amenity-based program to a lot of the HOAs. And so we can certainly do things like that with our partners when we have enough scale and density. I think the second part of it is really on the ancillary or customer opportunity upside, where we, through our product offerings, can offer things that are -- go well beyond just a standard lease. We do some of that today in terms of things like Smart Home systems, door lock and alarm, thermostat control. And then we also do it with third-party partners and things like pest control and Terminix, which is a national partners of ours. So I think that those amenities in terms of what people can opt into, regardless of what community they live in, will continue to expand on our product offerings as we look for ways to enhance the overall customer experience, which, by the way, obviously, is super accretive to our bottom line. But I think, more importantly, it allows a sticky factor to build into the resident base and a value proposition that should feel that they're getting more out of this arrangement with our company than just the lease. And we're making things simpler, and we're providing a number of different opportunities for them over time.

Yes, imagine just kind of having everything done too. That's kind of a nice way to live in a home. And maybe kind of stepping back with the strategic relationship. Is this something you think you can expand to other homebuilders out there? Like, would you want to? And then is it something that you could replicate with others?

Well, we definitely have good existing relationship, both with some of the publics and some of the private builders today. If you just -- if we were just to kind of look at our -- call it, our last 6 months of run rate, 2 or 3 out of every 10 homes we buy are coming through some form of a builder channel right now. And we do that as pretty powerful in terms of our ability to have many of these partners at the local level helping us source opportunities. We definitely look at our partnership with Pulte as much more strategic in nature, but it doesn't preclude us from doing things with other builders. We like where we're at right now. We're going to really focus with Pulte on trying to find ways to create value. But there's certainly -- these types of things can lend themselves to other opportunities. There's no doubt.

And how do you think about growth through your different growth channels? You have the acquisitions, the preferred builders, and now PulteGroup. Like, what kind of volumes do you think you can run through each channel? And then maybe it's great to kind of touch on the yields you can achieve through all 3.

Well, I would say kind of 2 things. One, I really want to kind of shy away from trying to say how much volume we'll get through one particular channel, but I think you calling out that there are multiple channels to our business model is really important. We truly are a channel-agnostic business. We really want to hunker down and focus on investing capital in the right locations in the parts of the country where we think it's going to lend itself to an outperformance, both from how we view our asset price appreciation and also how we think about revenue growth over time and distance. And if you look at where in the portfolio it's currently constructed, we are really anchored in with nearly 70%, 75% of our revenue coming out of the West Coast and really the Sunbelt in Southeast. That's where the households are forming at almost 2x the U.S. average. So as we think about how to diversify those channels, I think, historically, we've been pretty much a one-off kind of company buying big majorities of our portfolio through end-user resales in the MLS, some with iBuyers, but that represents about 6.5 million transactions that can happen in the U.S. at any given time. I think where you'll start to see our ratios kind of level a little bit more is like what I talked about before, somewhere between 20% and 30% of our acquisitions right now coming through production, which means we're also investing in new supply. That's a really important headline. We're not necessarily always buying something that should be designated for a resale channel. We hope that our purchasing power and our ability to invest capital in new communities will also extend itself to builders building more quality supply and bringing that into the housing market. We view that as really important. But we would expect that some of these digitally native channels like the iBuyer channels and ways for people to buy and sell homes will continue to expand. We think that those would start to mature over time and distance. But still vast majority of our sourcing will still continue to be one-off. And that's why we feel like it's important to have people on our team that are in-market, investing capital every day. Our run rates are really good right now. We're excited about our prospects for growth beyond just some of these strategic partnerships we've been talking about with builders. We think that supply is starting to open up a little bit more. And we have massive amount of demand for our product right now. We're pre-leasing 60% to 70% of our product before it ever turns. Just that once we've had a notice of somebody leaving, that home is going to sell 60%, 70% -- or lease, excuse me, 60% or 70% of the time before that customer moves out. And getting better and more efficient at how we identify which homes in our portfolio are smarter or how they lease quicker will also influence our investment thesis going forward.

Interesting. That 60%, 70% kind of pre-leasing before the home turn, is that a jump from before the pandemic? Or was that kind of the run rate that you've always had? And...

No. It's definitely an increase, Josh. It's been a focus of ours, as I talked about in terms of the question around efficiencies. It's one area where we've utilized technology with digital floor plans and professional photographs, virtual tours. All these type of things have allowed our residents to preview the properties earlier, understand more about it. And given the fact that we're so occupied and there's such demand, they're looking upstream. And so we've gotten really good at that. Typically, we were less than 50%. This is a seasonal metric, so you start to get that 60%, 70% in the summer when demand is high. But even as we get towards a little slower season, we're still around that 50%, 60%. So this is definitely increasing something that we want to try to maintain going forward.

Okay. No, that's great. And how do you think about, like, bigger acquisitions like portfolio acquisitions? Anything you've been out there of size, whether it's on the market or not? Just kind of curious what the landscape looks like.

Yes. I think the way to think about it is we want them if they're out there, right? Like, it's simply like if there were some good opportunities to grab some M&A and to be able to add it, have it be accretive to our portfolio, that'd be terrific. That being said, I would say that we've seen some smaller transactions in the marketplace over the last year. We're seeing pricing really -- cap rates are really compressing on stabilized portfolios. You're starting to see high-quality portfolios trade in the mid- to high 3% caps kind of real time in today's environment. So it's not necessarily a bad time to be a seller. It's just there's a lot of capital trying to aggregate right now. I would expect to see maybe a bit more M&A in the coming years as portfolio season and investors are looking to monetize some of those returns. But right now, I would say, if somebody's got something of size or substance in the right markets, you're driving premium pricing that goes even maybe well beyond retail value at the end of the day.

Interesting. I -- for the cap rates, too, like, how much have they moved as a function of -- the home prices seem to be taking off everywhere. Is that really driving down the cap rates? And then do you think the cap rates are now justified given kind of the acceleration of rent growth we've seen in the single-family rental space?

Yes. I think cap rates are generally justified. I just think what you've seen is also rent growth follows a lot of that home price appreciation, right? And so we feel really confident we'd still buy in the low to mid-5s in our markets on a one-off basis. What's tricky is when you're buying at scale. There's definitely a premium to having a stabilized portfolio. The private markets have been recognizing that for the last couple of years. I think the public markets are now starting to appreciate stabilities of the cash flows and looking for ways that companies can operate at higher margins. So I would expect cap rates to continue to compress, quite frankly, in this environment. And I think finding somebody with a stabilized portfolio that can give you that diversified stream of cash flow is at a real premium. There just aren't that many great platforms out there. We feel fortunate that we think we've got the best platform in the business. And I think you'll continue to see that through the way that we operate our real estate. But a lot of smaller operators start to drive real premium values for what they own as the portfolio seasons and stabilizes. Capital is willing to pay for it, given the consistency of the asset class.

Interesting. And maybe speaking of brand growth, how do you think about your ability to capture your loss to lease, and I don't know if you have an estimate of maybe the loss to lease in your portfolio?

Josh, this is Ernie. It's a good question and kind of in a unique situation that we haven't seen before in our business. We really have 2 books when you think about our business. We have our renewal book and our new lease book. And remember, our renewal book's about 75% of what we do because we have a very low turnover in our business. And historically, pre-pandemic, we really didn't have a loss to lease in our renewable book. We actually had a little bit of gain to lease. That's because after someone's lived with us for a year, we would renew them. We try to renew them at a minimum to market, but often, we're getting anywhere between 2% to 5% above market because we provide a good service. We provide service on a relative basis better than we think a mom and pop can. And so we think there's a premium to being with us once people have had that experience for a year. You can see in our numbers that we posted here in the third quarter of 2021 that the market rents have moved almost 20% on a year-over-year basis, but our renewal rates have been about 7%, 8% increases. So we've actually, for the first time in a long time, really, since we've been doing this, have built up a loss to lease in our renewal book. That hasn't existed before. You put on top of that the more traditional loss to lease when you look at where new leases are coming in. And again, you can see we're getting close to 20% increases in what we're doing today. Historically, we run a loss to lease, probably that's 1 point or 2 of our portfolio when you combine those 2 books. Today, we're probably in the high single digits. So it's a pretty significant loss to lease. And so just the earn-in from the leasing activity we've done this year and then catching up to market rents that may still be moving higher really sets up for a nice potential for what revenue growth would look like in 2022.

Do you think this is the new dynamic where you're constantly going to have a loss to lease? I would also imagine over time, like as the asset class is more institutionalized and you might be able to put -- rate might be able to just grow kind of faster and faster as everyone kind of gets on board. So -- but curious what your thoughts are.

Well, Josh, historically, in the residential space, you typically have a loss to lease. It's a cyclical business. You certainly have seen that in the multifamily business for a long period of time. It's probably less cyclical in our business. We certainly demonstrated that in the last 2 years. It was interesting at the beginning of the discussion, Josh, when you mentioned that the multifamily guys are putting out really nice new lease rates this year. But remember, last year, they were doing concessions of 1 month, 2 months, or in some cases, 3 months. So you're comparing a concessed period last year to a non-concessed period this year, and those numbers are still just consistent with what we're doing. And last year, we didn't have concessions. Last year, new leases were up about 4%, 5% this time of year for us. So it is really true growth. So I do think you always have an embedded loss to lease over the long term, because on a cyclical basis -- in a cyclical business, you typically go up over the long term over -- some growth rate over inflation. I think we're in a unique period right now with the size of the loss to lease. It's hard to think that for long periods of times we're going to see the kind of growth that we've seen on a year-over-year basis. That's generally not sustainable. It certainly hasn't been in my career, and all of us in this room have been doing this for a long period of time. But I think what's interesting this time, Josh, is because we have such a large embedded loss to lease that's building in our renewal book, it's likely that when things do kind of start working back down to historical norms, it's when we -- it's likely to be more of a gradual decline in terms of the rate of growth versus a drop off that you may have seen in past cycles. So we'll just have to see how this plays out. But I think we've set up for -- certainly for the near term and medium term some pretty special results with regards to what we can do from a rent growth perspective. And because of just the general dynamics that -- and the macro fundamentals around supply and demand, it doesn't feel like in past cycles, this goes away very quickly. Like it might in multifamily business, for instance, when they start comparing a nonconcessed period in '21 to a nonconcessed period in '22.

Interesting. And with the rent growth that we've seen, has there been any issues maybe on affordability? Has the rent-to-income ratio changed at all in your portfolio?

Josh, it's interesting. It's actually gotten a little bit stronger for us. We measure it on a trailing 12-month basis. Looking at it just over the 12 months, the rents, say, moved in and the incomes. And we've seen incomes increase with the rent increases. As of June 30, our income -- we measure income-to-rent. Our income-to-rent ratio is actually a 5:1, which is kind of at a historical high for us. We typically are between 4.7 to 4.8 to 1. Sometimes we get down to like 4.5 or 4.6 in the 5 years that I've been here, 6 years I've been here. This kind of trended between 4.7 and 4.8. And right now, we're at 5:1. So our average incomes have increased, our households $118,000 up to $120,000. So at least at this point, we're not seeing stresses on those ratios.

No, that's fair for you guys. And then we kind of talked about in the very beginning that you're -- one of the -- you're looking at making things more efficient across the portfolio. Any way to quantify, I mean, like the potential margin expansion that you could get from here?

Yes. I think we still have some opportunity to grow into a higher margin, Josh, but we'll probably end up this year around 68% margin, which is a really nice increase from where we were just a few years ago. Certainly, with the outsized rent growth where we see, over the near term, that we would expect to outpace expense growth, that should help improve margins as well. And then, of course, we're at a 68% margin this year, and that's when we still have an outsized number for bad debt relative to what we have had historically. You can see that in our numbers. I mean, through the first half of the year, our bad debt is almost 2%. Historically, it's only been 40 basis points. So the fact it wasn't happening right now, we almost see a 70% from a margin perspective. I think you'll see further increases from some of the efficiencies that Charles talked about. You'll probably see some further increases on the margins -- for margins with regards to the ancillary services that we continue to roll out. So it's simply our higher-margin businesses for us. So if you look at our footprint today in the markets that we're in, as margins do vary in cities pretty significantly from mark-to-market, just hold that constant, we continue to grow the company, and we continue to see some top line growth that's ahead of our expense growth. Getting to 70% margins, you can certainly say, this is going to be in our near future.

Okay. Great. And then one of the things that comes up as, like, a risk for single-family rentals, just like, I mean, a political or regulatory risk. I guess, is there anything you're watching as far as regulatory risk? And how can you kind of divert or mitigate that risk?

Yes. I mean we're watching all of it. And unfortunately, we've kind of been pulled in some of the political wins of the day, it feels like, in terms of the subcommittee stuff on the coronavirus and things like that. And look, we take a step back and we try to stay as big picture as we can on this stuff. One, we're in a business of housing. Housing is always going to be sensitive from a community and, I would even say, a political perspective. And we've been active in stating local issues over the last 10 years, whether it was rent control initiatives that would spur or disencourage investment in communities, but also making sure that we're doing things in a way that's thoughtful and that provides quality of choice. I think where we try to be the most active is in educating policymakers and, really, legislators on what it is that we do. And there's still a misconception out there around, I think, companies that are aggregating scale in the single-family business, that we're somehow doing something differently than what's been done for the last couple of hundred years for this country. We're not. We're just providing better service. We're doing the exact same thing. So I think making sure that, that narrative is understood. The power of these platforms, quite frankly, is what you've seen be able to work during the pandemic with COVID and things like that. We've been able to modify or restructure literally tens of millions of dollars, if not hundreds of millions of dollars in payment plans, and work with customers to make sure that we can help them through the pandemic. And I don't think smaller landlords have that flexibility or capabilities, quite frankly. It's a lot of work to try to help people today find rental assistance as some of these things that are out there for them. If you don't have a team full of resources that can dedicate time for some of this, you're at a real disadvantage. We, fortunately, can do that. We're able to help a lot of people, something we're really proud of. So I think that the latter being some of the tactical things that I'm talking about, that's how you use the platform to make sure that your message is being heard in a way that can be meaningful. And I think on the policy and advocating side, you just have to be consistent with it. It's a marathon approach. And the political wins will always sift one way and then it's -- kind of swings to the other side of it. We got to make sure that we're somewhere in the middle, always walking people through why businesses like ours matter in terms of the entire housing ecosystem. And then also making sure that we're understood in terms of what it is that we offer, what is the differentiated approach to housing that we offer and why is it beneficial for people. We've been doing that now for 10 years. We'll continue to do more of it. But yes, paying very close attention to kind of the different goings on of the day and making sure that we're active in the discussion.

Yes. And also, it seems like -- you mentioned it, I think, very early on that you're helping add supply through, like, some of your strategic relationships, like in PulteGroup. So that probably is helpful. We're about out of time. We have 3 rapid-fire questions that we've been asking all the companies. We're hoping we'd get your responses to them as well. I'll go through them real quick. The first one is, which of the following is the greatest challenge facing U.S. public REIT today, a, fed action and higher rates; b, supply chain issues, which include labor and logistics; or c, flows to nontraded REITs?

I would say the supply chain issues.

And then over the next 5 years, which markets will outperform, urban coastal or Sunbelt?

Sunbelt, I think.

And then for your company's office plans post pandemic, will you, one, have no change from pre-pandemic; two, leave it up to the individual teams within the organization; three, offer hybrid; or four, go full remote?

I think in, like, the medium term, we're probably more 3, with the goal of trying to get as close to #1 as we can over time.

Okay. Awesome. Well, I really appreciate the time. Thank you, Dallas, Ernie, Charles. Good luck with the rest of the conference.

Thanks, Josh. Appreciate it. Have a good day, everyone.

Thank you.

Thanks.