Rocket Companies, Inc. (RKT) Earnings Call Transcript & Summary

Good morning, and thank you for joining us at the 2021 JPMorgan TMC Conference. I'm Rick Shane, Head of Consumer Finance Research; and I'm joined by my colleague, Tien-Tsin Huang, Head of Payments, Processing and IT Services research. On behalf of the team at JPMorgan, it is our pleasure to be speaking with Jay Farner, CEO of Rocket Companies. I think one of the things that actually makes this chat especially fun is that Jay is not only the CEO of Rocket, but is the company's long-time spokesman. He's both a familiar face and a very familiar voice. I would point out that this is actually not a coincidence. It's actually consistent, I think, with the broader vision of Rocket Companies with a management team with a hands-on, highly engaged style that requires leading from the top, but also involves willingness to really roll up their sleeves and be operators. With that in mind, I will tell one quick story before we get going. Last February, the company went out and purchased computers so that all of their employees could quickly transition to work-from-home. I think that the statistic is that by April 1, more than 97% of Rocket employees were working from home full time. Well, that took foresight. It's actually not really what stands out here. Between February and June, in an industry that by reputation scales poorly, Rocket moved all of their employees home and gained share from competitors who simply couldn't keep up. In Rocket's first year as a public company, volume doubled to $320 billion, and Rocket generated over $8 billion of adjusted income. In my mind, more than anything, this is the valuation of Rocket's disruptive positioning at the crossroads of technology and of financial services. That's what happens when strategy and tactics align. With that, it is our great pleasure to welcome Jay Farner, CEO of Rocket Companies. Jay?

Hey, thanks for that great story. I can remember, in January and February, watching the news from overseas about COVID and coming to a decision that the right move was to go out and make those purchases, even though at that point in time, there was uncertainty whether or not COVID would actually be a problem here in the States. And so I guess our thought process was, if we're prepared and nothing happens, our team members will all have a full work-from-home setup for the future. And if we're prepared, and of course, we have to work from home, we won't skip a beat. So you're right. I think we got about 98% of our team members working from home. I think we accomplished it in about 4 days actually. In mid-March, we set up drive-through computer and monitor pickups and had everybody come around and get their equipment. So a great story, and I'm even probably more excited that we're past that now. And we're now actually starting to bring thousands of team members back into the office, which would be very exciting as well.

That's great. And like I said, it's something, in all of the conversations that we've had together, that really does stand out and I think is unique to Rocket. We have about 35 minutes. We have a lot of topics we want to cover. Tien-Tsin and I will sort of go back and forth. We'll set you up with some topics and some questions around that.

As the mortgage guy in the room, I have to start with the competitive dynamics that we're seeing in the wholesale channel. One of your competitors has continued to comment and really be pretty aggressive in terms of creating a competitive environment for broker share and broker business. How do you see this at this point manifesting within the business? We're not just talking about shifts in market share and how it's impacting gain-on-sale, but really, how are the brokers thinking about this? Because I'm assuming, given the depths of your relationships, you're highly engaged with what their -- how this works for them.

Well, yes, I think this is not anything new in this industry. Over the 25 years that I've been participating, there's always going to be someone who is competing with you. I think as the leader in the space, that is kind of the -- an honorable spot that you find yourself in, that others are trying to strive and achieve what you've been able to achieve. In wholesale, in particular, the -- I would say, the last 90 days have kind of been the normal changes we would expect as interest rates start ticking up. So some noise around trying to encourage people to go to one partner or another, for us, it was very beneficial. We had some of the largest growth we've ever seen in our partner channel in March. Our wholesale volumes look great. But usually, as this works the way through the cycle, you'll see people adjusting margin first because that's the one lever that you have in wholesale. Now when we think about that channel and our partner channel, we're fortunate. We've got an incredible brand that our broker partners can rely on. We've got the best service in all of the mortgage industry, both on the origination side and the servicing side, that they know their clients can experience. Our turn times are at record levels right now, especially important in the purchase market. We've got stability. If we were to go back 12 months, there was a lot of questions about who would survive some of the challenges that occurred in March or April, and we were there for our partners onboarding their volume when others could not. So we're in a great spot, and now we're just doubling down. I was in Indianapolis, Friday, watching time trials. Our Rocket Pro TPO car was out there. We're sponsoring the first-ever female woman driver and women-owned team. It's never been done before in Indy. They made the grid, so they will be racing on Sunday before Memorial Day, but that's our strategy. These relationships are important. They're critical. We'll continue to build them. We'll build them the right way, doing the right thing. And what we've watched over the last 25-plus years that I've been here is that that's what matters. You invest in the technology. You invest in the relationship. You do the right thing. And people are pretty smart. They know where to vote and send their loans, and we imagine that channel will continue to grow. Fortunate for us too, it's one of many ways that we generate loan volume. And so we've got the flexibility to do different things over there while we're also making adjustments and changes to continue to grow in all the other areas that we originate loan volume as well.

Got it. And not only that, but Sully, the dog, managed to get his voice on the tape as well. So the true work-from-home experience. Tien-Tsin, I know you had some questions on this topic as well.

Well, I was just going to -- you mentioned that you've seen pricing like this before, but just thinking about -- I think, Rick and I, we get this question a lot in terms of pricing between the DTC and the retail market versus wholesale. Like do you see that persisting? Or is there a clue here in terms of how pricing might evolve across the different channels?

Yes. Normally, when we look at it, pricing is going to be fairly kind of steady or even. It's that the wholesale channel and the direct-to-consumer work differently, meaning that the price that the originator has paid is kind of taken out of the margin. And so you'll see a gap there. You'll also notice that if you're a wholesaler, really, I mentioned this before, the only lever you have to pull as you see production fall off is price. And so sometimes, for a period of time, you might see additional pressures on the wholesale side that you won't experience on the direct-to-consumer side. And so I think we're seeing a little bit of that right now. Our focus, Rocket Logic, all the technology that we built, our ability to underwrite process and close a mortgage at a lower cost than anybody else is critical because as people decide to take price down, they're going to eventually get to a spot where they can no longer take it down without having a company that's not profitable. And so that usually happens, and then people will start bringing price back up. All the while, we're profitable. And so we've got a unique advantage there as well. But I think you're going to see things stabilize a bit. We're very comfortable with where our direct-to-consumer pricing is right now. Sometimes, people will bring that up. Well, is it an 1/8 different in interest rate a quarter, different interest-rated? Day-to-day, market-to-market, home price to home price, it can be, but people aren't deciding where they're getting their financing over an 1/8 in interest rate. People are deciding where they get their financing over the company providing it, the quality of that company, the service they provide, the stability that they bring to the table. And so we've really leaned into that in the last 35 years, recognize that people trust us. And so we have to be, I guess, less price-sensitive than others because we have all those other attributes we're able to bring to the table to grow our market share.

Got you. Rick, before I switch to tech, any follow-ups on that? I think you're on mute, Rick.

Sorry about that. I was going to say, with all of the topics we have to cover with Jay, we should probably move on.

Yes. Let's do it. Let's do tech real quick, Jay. So thematically, in a tech conference, obviously, a lot of focus on digitization and the shift to digital from legacy. And I've heard you, and you've alluded to technology so many times, and as I've gotten to know you and the company, right, technology is critical to the culture of the company. So the question is this. From a tech perspective, just thinking about your tech as a differentiator, especially if you think about it versus other tech pure-plays, your front, mid-, back office, just walk us through how much of an edge tech is for you, just holistically as a company, as you approach the market, whatever from a go-to-market standpoint or just from a talent-hiring standpoint, whatever you want to cover on tech, that will be great to hear from you.

Yes, sure. Sure. Yes. I mean look, tech has been everything for our organization in the last 25 years. I can remember the e-mail Dan sent in the late '90s talking about the Internet and how if we thought about it differently and built the technology properly, that we can then leverage it, market to it and grow market share, and that's what we've been doing. Tech was critical for us as we went into 2008 and 2009, when we were able to convert lead channels that others could not convert, and certainly, skill and our great sales force, our Cloud Force, was helping that happen, but the technology behind the scenes, scoring leads, routing leads, all of those things, integrating our marketing. In 2014, '15, as we thought about Rocket Mortgage, did our market research, understood what first-time homebuyers were looking for, tech again stepped in. But now, more than ever, if you were to say to me, "Jay, which one of those was most important?" What's happening right now is the most important. We're seeing a lot of our competitors focus on the front end. And that is important, right? You have to have a nice user interface. You have to make sure that clients can navigate your system, that your partners can navigate your system. But how do you get step change? How do you really transform the industry? An industry that was at 60- or 90-day close times a few months ago, that usually averages 30- to 40-day close times, how do you go to 10? You go to 10 by leveraging technology, and that's what's going to change the game. So that's where our efforts have been. I spent some time, when I first became CEO, of also running our product strategy team, because I wanted to get really close to understanding how our competitors, not in the mortgage space, but in the software building space, built software and trying to understand how we could improve from a product strategy perspective, a full stack perspective. And so we've been on that journey for 3 or 4 years now, and I'm watching the pace of our builds increase, right? So we're getting faster and better. That means we can do more and leverage our tech teams even more. And so now, our focus has been behind the scenes. Rocket Logic, you'll hear us talk about a lot. The traditional process of originating a mortgage, starting to gather information, spend days or weeks gathering more information and finally make an underwriting decision, that's got to go away. You have to make an underwriting decision at the point of sale. And Rocket Logic is what's allowing us to do that. We're doing that with our retail group. We're doing that now with our partner group. And so you'll see that speed things up because we know, if we've got certainty at that point of sale, everything else changes in the back of office. There's so much more efficiency that can be gained at back of office that brings down cost and that increases pull-through, right? Pull-through is a -- in the mid-'80s or '90s, are unheard of in the mortgage space, but that's where we're striving to go, and we are making incredible progress. That means every loan you work on, every client you take care of, there's very little waste in the system. Everything is closing and generating revenue. So really, that's our focus today, back kind of -- moving the back of the office to the front at the point of sale, delivering that certainty to our clients, to our originators and then streamlining the entire process. So that's kind of like -- I won't call it the silver bullet because in this business, there's never an exact silver bullet, but it's certainly a critical portion of our Mortgage business. And I'll just touch on this. I think it's important. We're not just doing it in Mortgage. We made an announcement here in Rocket Auto not too long ago that we've come -- we've just had a partnership. Because we stand in between clients who want cars and dealerships and -- that want to sell cars, and we're really creating a marketplace. And so investing in technology with AutoFi to ensure that we can plug into thousands of dealerships, really having unlimited inventory and then leverage our sales and our marketing to drive lead flow, a critical move for us. And so we're thinking about where are those efficiencies, where does tech really play or make a difference. We've seen it in Mortgage. We're doing it in Mortgage. We're seeing it in Auto. I already touched on our earnings call the increase we saw at Rocket Homes as we grow out our MLS platform. But then tie the entire ecosystem together, we saw 300% growth there in the first quarter of the year. So in every part of our business, we see tech being kind of the leading thing to differentiate us from our competitors.

So Jay, you mentioned that, right, in fintech, mortgage tech is pretty high. There's quite a few well-capitalized firms that are out there doing some interesting things, more on the point solution front. So are you seeing some success with some of these software providers working with maybe your smaller niche competitors that are maybe narrowing the gap from a product standpoint that can start to chip away and maybe do a little bit more damage than what you're used to seeing?

Honestly, I wish I could say that we were because now that we're a publicly traded company, our thoughts around acquisitions, bolt-on acquisitions and those sorts of things, are probably at the highest level ever, right? With a platform that can scale the way that we've scaled and our desire to continue to grow, the thought of being able to go out and buy some great technology bolted on and get a significant change in our business is really attractive to us. Unfortunately, we're not really seeing that today. We're seeing a lot of folks work on some of the kind of front-end data collection application components of the business. But when it comes to really changing the workflow, speeding that up, we think the gap is actually kind of widening between where we're at and where our competitors are at right now.

Okay. No, that's interesting. May I ask one more, Rick, if you don't mind, just on that front?

Yes.

So if you're not finding those point solutions, your ability to hire developers and engineers, there is a fight for talent, again competing in all facets of tech, not just mortgage tech and fintechs, are you able to find the developers that you need to build out these capabilities, Jay?

Yes, absolutely. I think this is one of the important reasons that we took the company public. So as an industry leader, people are drawn to us, people in the mortgage space, outside of the mortgage space. I think some of the great things that we're doing here in the City of Detroit are exciting for a lot of folks. So we'll get kind of transplants from Silicon Valley or other places because people want to be part of this mission that we're on. But there's 2 other really important components. Component number one is that they can share in the value that they create by being a shareholder in our organization. So that was really important, and that's one of the reasons that we took the company public. The other is that we're more than a mortgage company. And so as people come here and recognize the mission that we are on to transform Americans' lives when it comes to any complicated or difficult transaction, buying a home, getting a mortgage, buying a car, getting a personal loan, we're thinking about other avenues that we'll probably talk about as we get into the later part of this year, that's exciting because you can come here and you can participate in different technology builds, not one thing, "Hey, I'm just in the mortgage business." So that's been a draw that I think has helped us bring in tech talent that others can't get as well.

Got it.

Before we leave technology, and Jay, you talked about this and it's the way we think about it as well, when you consider your current workflow, do you think you're in a point -- approaching the point of diminishing returns? Or is there really that opportunity to change the step function to go from 20 or 25 days down to 5 or 10?

Well, there's some regulation that will limit how quickly we can actually take an application and close. But if we kind of put that to the side and think about the experience the client has being ready to close, I think there's massive room to continue to improve. And even when we think about the actual closing date, there's still significant room where we can improve. The industry, I'm sure, could get better. But for us, we're demonstrating it. We launched something here, as part of our [ Rocket Labs ] initiative, as we started this year, we've got over 30% of our volume now running through this system called [ Velocity ]. And we're seeing it to be true, that if you collect the data, all the data, the right data and decision right upfront, you can significantly condense the cycle time. And then I want you to think about that. It removes all the extra phone calls, e-mails, text. It limits the risk the capital markets takes on for hedging the loan. It improves the client experience, so referrals continue to grow. I mean all of the positive things that can occur from closing that loan quickly is what we're seeing. And so we'll continue to expand that test pilot group. As we've just touched on, I think that technology, along with that kind of the workflow that we've built around that, will be a significant advantage for us here as we get into '21 and beyond.

It's funny, one of the conversations we often have with investors is they will say, "Well, I can apply for a mortgage online." And my response is, "Well, yes. But when you apply for mortgage online, you don't know if that's actually emerging in the lender's office, coming out of a fax machine, or if it is, in fact, going into Rocket's end-to-end solution, where it's a series of apps and technology solutions that flow it through, as opposed to, yes, they're gathering data on the Internet but not handling it anywhere in an efficient way."

I think that's 100% right. And look, I'm not going to go into all of the things, but I'll give you some examples. So you're at our Rocket Homes site and you're saving a home. You're not saving a home. We're collecting that data. We understand the clients' desires, what they're looking to achieve. That informs our decision-making. You're talking to an LO, or loan officer, here at the company via text or e-mail or maybe over the telephone. Our speech analytics are looking at the words that you're saying, the emotion that you've got behind them, that's informing what we're going to be doing with that lead. Our Rocket Logic is assessing the situation to determine if there are gaps or changes, if there's something occurring in your particular area and we need to reroute an appraisal if an appraisal is required. So all of these things -- we just launched Overnight Underwrite, right? We're here in Detroit. One of the things I watched growing up is that they build cars 24 hours a day. Right now, we need more chips to build cars, and I know they're working on that. But if we can build a car 24 hours a day, why can't you build a mortgage 24 hours a day? And so if you submit your loan for approval, between the technology and our team members, you'll wake up the next morning and you'll have an approved loan. So there are real meaningful things occurring, not to even get into the data models that we've been building, we talk a lot about the data, the 220 million records or households that we have on file here, but real models that assess that loan, assess where the client is at and then determine how does the client get routed. Is this loan going to take longer? Can we speed it up? Who should be dealing with the loan if it requires a human being's help? All of these things behind the scenes, I can't buy them, and you asked this question before. There's not a company out there that I can go and buy and bring it in. That had to be built over years of collecting the data and understanding the data and applying it to our systems that are proprietary to us. And so not only did we demonstrate in 2020 that we had the ability to scale, but 2021 is going to show that we have the ability to really be strategic about how we process, underwrite and close loans and how we market for mortgages.

Got it. Okay. Hey, Tien-Tsin, we're going to go a little off-script because we have some fun questions at the end that would be a shame if we miss. So if you want to jump ahead to the transition to public company topics?

Jay, we work with a lot of other companies like from IPO, to speaking at a conference like this. I know Rocket's been around for a while and has been run for its owners for quite some time. Talk to us a little bit about that transition to being public and what you're doing differently. Any surprises there because that transition isn't always easy for small companies, let alone a larger one like yours.

Yes, it's a great question. And you get a lot of advice from a lot of folks who've been through this and then you do it yourself and you learn. I still spend time speaking to CEOs who've run public companies for 15, 20 years, so I can continue to learn and get more thoughtful about everything that we're doing. You mentioned, the company has been running for its owners. It has. And we're still running it for its owners. We just have more of them now. But our decision-making, we believe, is about how do we really bring value, and I don't mean value by having a slight increase in profitability from 1 year to another, I mean, value in terms of transforming the industry, right? This industry has been -- very kind of similar for 20 -- 15, 20 years now. And we've seen the changes in how an application may be taken, but there is still an incredible amount of work to be done. It's highly fragmented. We're the largest at 9% or 10% market share. But the thought of somebody owning 15% or 20% market share is a very logical one. It's out there for the taking, not only here in mortgage, but if you look at the auto, a space that we're in right now, same situation, highly fragmented, great demand, but inventory scattered across the country. How do you transform that and grab 1%, 2%, 3% market share? Those are big numbers. So we're on this journey and those are the investments that we're making in ensuring we get there. The stock price will go up. The stock price will go down in the short run. But in the long run, the stock price will reflect the real value that we've created in this business by transforming these industries. Just like the stock price has reflected the value that we've created, going from a 3-man broker shop in Michigan, to the largest lender in the country or in the world, right? So that's the journey that we're on. And there's 2 other things that I'll point out going public has done. Going public makes you even better because it makes you really thoughtful about everything that you're doing, right? It's like a laser focus. You put even kind of more energy and effort into your decision-making and to ensuring that all of your leaders in the company are focused. We just actually went through a restructure. I was meeting with our new business channel leaders. I told them I was going to be on this call. And we've created these leaders to bring real focus and clarity to each 1 of the 7 areas that we know we can grow. So that's, I think, a benefit of going public. It's just a laser beam focused on what you want to achieve as a business.

Yes, I'd like to call it reality TV. Everybody is zooming in and watching you at all times. There's nowhere to hide and things like that. And I've heard your vision. Clearly, Rick and I have talked about it. The vision makes a lot of sense over a 5-, 10-year horizon and the share you're going after. But also, you have a quarter to think about and then annual guidance to potentially think about or if people are looking for the out in the next year. So from an investment standpoint, Jay, like how are you changing your investment philosophy from a short term to, to not sacrifice what you want to do from a long term? Can you discuss -- I know we led nicely with the investing in the PCs and doing the right thing. That's going to -- that created a great opportunity, but there's a cost of doing that from a public a company standpoint, if you follow my question here.

Well, but you just made -- you've probably made the most important point. So I think the cost of doing that was like $10 million or maybe less. The benefit of doing it was billions of dollars of profit. If we hadn't bought those computers, in March or April, we wouldn't have been originating loans. So we -- if you are thinking about what's best for your company and best for your team members, 9 times out of 10, that will also result in what's best for your shareholders. So look, we try to give guidance that we think is -- hopefully gives all of you great confidence, right? When we give our guidance, it's thoughtful. We're telling you information based on what we know. And what I really look for is progress. In this business, It's hard to decide if you were successful or not successful in any given quarter. There's things outside of your control. The 10-year Treasury certainly went up faster than anybody had expected in the first part of this year. But what are the positives? What are the things that show me that we're making progress? Was it market share gain in certain areas? Was it great learnings in marketing that we can turn on? Was it incredible process as we saw in the first quarter in Rocket Logic to quickly reduce turn times? As long as we are making great progress that will transform this business and bring long-term value and even short-term value, I'm very, very happy. And so I spend probably less time worrying about what that number is each quarter as long as our guidance is obviously spot on and people know where we're headed and more thinking about, "Hey, did we continue to get wins?" Because those wins will add up. Those wins will separate us from our competition. We've been in markets like this before as rates rise. It creates opportunity. It can be a little bit painful here and there. But if you have the strength to continue to move forward and continue to invest, it doesn't take years to realize those moments of success. Pretty quickly, those investments will pay off for you. So I'm not sure I quite answered your question. I don't spend a lot of time thinking about or adjusting dials to make a number at the end of a quarter. I rely on our team to give us great guidance. And besides that, I'm looking for the technology, the Cloud Force, the brand and the growth and get those wins there. The rest will take care of itself.

That's great. It's interesting. We talk about that all the time, which is that 2019 was a year where Rocket invested aggressively in the business. And that was reflected in the results. And those were conversations that you certainly had with investors in terms of what the profitability looked like in 2019. And one of the things that we've come to believe is the investments that you made in 2019, not anticipating the environment that you encountered in 2020, only enhances your confidence that you need to be consistently investing because literally, the world can change in 3 months. And if you had not built up the partner channel, for example, 2020 would still have been a fantastic year, but the growth that you'd achieved there, which will continue into '21, into '22, would not have manifested.

Yes. That's exactly right. The investments we're making in 2020 around home purchase and real estate, somebody may have said, "Look, I'm not sure in April that people are going to be buying a lot of houses in a pandemic." But we made the investments, and now we're in a red-hot purchase market. And what encourages me, same with the Auto business, we're growing. And this is a red-hot market, but inventory is the most challenged I've ever seen it in Homes. Inventory is the most challenged I've ever seen it in Auto. So if we can grow in those type of markets, then imagine what will happen as we start seeing more inventory available to us. It just reinforces you got to keep making the investments. No one has a crystal ball to know what will happen in any given quarter or in any given month. But if you're there, if you built the right thing, then you'll be able to take advantage of it. So that's what we'll continue to do.

Okay. I'm going to move us because we have 5 minutes, and Tien-Tsin will share with you that this is the topic I was most interested in covering. Rocket has not only been successful because of a strategic vision in terms of how the industry was going to evolve, but it has always had a cultural vision in terms of how the company should be built. And one of the manifestations of that is your book of ISMs, which, during our due diligence, we actually received and saw for the first time. And you probably can't see it, but I will tell you, there is a compliment back there, which is that the book of ISMs for 2020 is sitting between the Chicago Manual of Style and Oh, the Places You'll Go. So it's a pretty good company. And by the way, that was not put there for that reason. It was put back on my shelf after I shared it with a family member, but it's -- that's where it resides. I got 2 questions on ISMs for you. From a business perspective, what's the ISM that's the most important to you?

I would speak to "Innovation is rewarded. Execution is worshipped." We have 20. They're all important. We use them quite often. But everything we've just been talking about here this last 30 minutes or so speaks to that, right? A lot of people can think about ways to innovate, but can they execute? Can they execute at scale? Can they fight through the challenges? And you know in the real estate and Auto and Mortgage business, between the regulation and the competition, there are a lot of challenges. Can you fight through that, and can you win? And so that's why I always talk to the team about we got to keep innovating, new ideas, fresh ideas, but we have to execute those ideas, have to turn into market share growth, profitability, margin, whatever the particular thing that we're working on might be. So I'd say that's the one that I probably use the most.

That was not scripted. That's been sitting on my laptop monitor since I read it. So I'm with you. That's...

There's an interesting story. Dan Gilbert is really the author of the ISMs. We provide guidance and feedback. But years ago, that ISM, we were discussing it, and Dan said, "Look, innovation is rewarded." And I sat back and said, "Look, I think we should add execution is worshipped because one without the other doesn't make for a great business." So that's probably one of the more collaboratives ISMs that we've had over the years for the reasons I just described.

It's personally meaningful because I'm pretty good at one of those and struggle with the opposite. It is a destination for me. Yes. This is a question I've been waiting to say for you. What's the ISM you've shared with your kids? What's the one when you go home at night and at family dinner say, "Hey, this is who I want us today?"

Yes. Well, I mean, I think the first one is "Do the right thing." I've got a 17-year-old, a 15-year-old and a 13-year-old. And as you probably can imagine, they're confronted with all kinds of decisions right now in their life, how they're going to treat other people, how they're going to show up at school, at sports. And so we talk about that quite often, which is you can't go wrong doing the right thing. And so let that be the kind of guiding principle. Knock on wood, so far, things are going pretty well, and we'll just keep teaching the ISMs.

Well, it's funny because while we don't have a book of ISMs, years ago, we had a culture training here at JPMorgan. And the thing that I took away from it and sits on my desk in San Francisco, where I have not been for some time, is a quote from Jamie that says, "Do the right thing, even if it's not the easy thing."

That's right.

And that particular statement drove that question because it is an ongoing topic of conversation at my family table because I agree with you. I mean it's a simple lesson, but it leads to great outcomes. And I will -- I'll wrap with this. As an employee -- you're a leader, I'm an employee. As an employee, knowing that my objective is to do the right thing is the most empowering opportunity that I have when I face that moment of ambiguity, knowing that if I do the right thing, my manager, up the food chain, all the way to the top of the organization, has my back, is -- gives me more confidence than anything else. So I share that view.

I couldn't agree more. And as you know, we've been building this business for 35 years. It's, for so many of us, our lives' work. And so this is one of -- like every business, and we talked about going public. There's even more pressure, right, to bring results and make sure you're growing, so that do the right thing has to be there. And whenever people are struggling, okay, what are we going to do? I always say the inches we need are everywhere around us, another great ISM, but find the inches, find the ways that we can get better and improve. Don't take the easy way out. Work hard. Find those inches. That's the stuff that will last -- that's just something to last a lifetime. That's the stuff that will really move our company forward.

I couldn't agree more. Look, we could have asked you a bunch of questions about margins and cost cuts, but we really wanted to get to know you. We appreciate your openness and willingness to engage in that conversation. I think it's very helpful for your investors. So thank you very much.

Of course, of course.

Thank you for the time.