Earnings Call: Q1 2021

Apr 28, 2021

Good afternoon, and welcome to the Moelis and Company First Quarter 2021 Earnings Conference Call. All participants will be in listen only mode. Followed by 0. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Chet Mandel, Head of Investor Relations. Please go ahead. Good afternoon, and thank you for joining us for Moelis and Company's Q1 2021 financial results conference call. On the phone today are Ken Moelis, Chairman and CEO and Joe Simon, Chief Financial Officer. Before we begin, I'd like to note that the remarks made on this call may contain certain forward looking statements, which are subject to various risks and uncertainties, including those identified from time to time in the Risk Factors section of Moelis and Company's filings with the SEC. Actual results could differ materially from those currently anticipated. The firm undertakes no obligation to update any forward looking statements. Our comments today include references to certain adjusted financial measures. We believe these measures, when presented together with comparable GAAP measures, are useful to investors to compare our results across several periods and to better understand our operating results. The reconciliation of these adjusted financial measures with the relevant GAAP financial information and other information required by Reg G is provided in the firm's earnings release, which can be found on our Investor Relations website at investors. Moelis.com. I will now turn the call over to Joe to discuss our results. Joe? Thanks, Chad. Good afternoon, everyone. On today's call, I'll go through our financial results and then Ken will comment further on the business. We achieved $264,000,000 of revenues in the Q1, an increase of 72% over the prior year period. This represented our 2nd largest quarter of Our growth during the period was primarily attributable to increased levels of transaction completions. Our M and A activity remains robust as we are participating in assignments broadly across regions, sectors and deal sizes. We also continue to see strong levels of restructuring and capital markets In fact, our private funds advisory activity during the quarter was the highest it has ever been. Moving to expenses. Our compensation expense was Accrued at 59.3 percent consistent with our full year 2020 ratio. Our first quarter non comp expenses were $35,000,000 The increment over the expected $30,000,000 was primarily related to transaction related charges. The non comp ratio was a solid 13%. We expect our non compensation expenses to be close to $30,000,000 for the Q2 before possible transaction related charges. We achieved a quarterly pre tax margin of 29 percent exceeding our 25% target. Moving to taxes. Our underlying corporate tax rate was 26% for the Q1. The discrete tax benefits related to our equity award settlements contributed approximately $0.27 per share of EPS and resulted in an overall net tax benefit for the quarter. Regarding capital allocation, The Board declared a regular quarterly dividend of $0.55 per share and a special dividend of $2 per share, the second special dividend that we've declared in the last 5 months. In addition, we repurchased approximately 1,400,000 shares during the Q1. The dividends and the buybacks together approximate 250,000,000 and capital return to shareholders. We remain committed to returning 100% of our excess cash. And lastly, we continue to maintain a fortress balance sheet with We ended the quarter with $228,000,000 of cash and liquid investments. And I'll now turn the call over to Ken. Thanks, Joe, and good afternoon, everyone. We continue to see strong momentum in our business. The pace of our new client activity remains high There is a real and necessary desire to transact, driven in large part by the acceleration of long term strategic positioning caused by technological disruption in COVID-nineteen as well as the ready access to capital. Our M and A platform continues to be the biggest driver of activity, We're advising on a growing number of clients across both strategics and sponsors. Our restructuring team remains an active and steady contributor even with the backdrop of a healthier global economy. And finally, our Capital Markets franchise has quickly become a more meaningful part of our business with deep product experience across the capital structure on both the public and private side. We will now begin our question and answer session. Our first question comes from James Yaro with Goldman Sachs. Please go ahead. So I'd like to start with the restructuring and forgive me, I have a couple of questions here. So maybe you could talk about the cadence of the restructuring opportunity this year and whether you think the opportunity is the same size or different than perhaps last quarter's earnings? And then any way to size what portion of the revenue it was this quarter? And then if there's any way to think about when it peaked last year? Well, I don't believe it's peaked for us. I don't know for the market. We've always said our We don't break it out, but we've said restructuring is naturally 20% to 25% of our revenues, and it's actually in that range, probably at the high end of that range in 1st quarter. And that's on a good revenue, that's with a lot of M and A as well. And I continue to believe looking For the near term forward, it feels like it's going to continue or at least our backlog seems like that's going to continue. Again, so I don't know when it peaked because I'm not sure it peaked. And I think There's this feeling that there's a very good economy out there and maybe that will change restructuring. There are 2 things that I'm optimistic about. First of all, for restructuring, First of all is that the world changes rapidly every day. There is a lot of leverage in the system. And oftentimes, And the last one that I think is underappreciated is that, well, number 1, we have the best restructuring team on Wall Street, so that's another reason. And second, They are very good at doing out of court restructurings. And I think that's a very unique attribute Is being able to fix companies without going through the Chapter 11 process. Most companies would prefer that, and our team is very good at it. And I think in an economy like this where there are opportunities to be innovative around capital structure, that's a really that's an asset that might keep us busy Longer. Makes a lot of sense. And then in terms of the hiring environment, how competitive is it out there in terms of bringing in new talent? And how should we think about how this could impact the comp ratio for the year? And are you seeing stronger competition from some of the bulge bracket We're not at the senior level having any issues with the bulge bracket. Most of our senior bankers don't really want to go back. I don't think we have a lot of problems. There's a lot of talent hunting out there for junior talent and that's So we see that all everywhere. I'd say the environment for talent is Similar to what it's been, there are people looking and there are people available. I think one of the differences is it's a little it may get more expensive because you've had financial Stocks run up in the last year or maybe year and a half. And remember, we have to pick up a lot of deferred You pick up deferred. So I think the overall expense of hiring people has gone up. Possibly, If you look at our own stock, it's more expensive to hire our own people on deferreds and it's pretty that's common across the street. And I think a lot of firms have their stocks And comp is probably a little higher. So either marginally more expensive and it's always been competitive. So I'd say Most people don't they're making a life decision and I think it's always been competitive to get them to leave a place that they're at and change. So it's about the Same. Okay. That makes sense. And then if you could just touch on your non compensation costs over the longer term I'll take I think you're thinking more about travel and I know Joe had some thoughts on the quarter. But the Again, no one knows, but I because the marginal differential I think you're talking about is travel Yes, T and E. Obviously, we're going to give back some of this because we've gone almost 0 or very marginal. I think though that a lot of travel is going to change and my guess is that we end up somewhere with a third to a half of our But I'm not quite sure. I can't say that I know that. I just think we're going to eliminate Some of the more commodity travel that can be done by Zoom and over the phone call, but the real relationship building travel, I think, will be pretty intense and might even be elevated Maybe the back half of next year when everybody tries to catch up and go see somebody they haven't seen in 2 years. Okay. Thanks so much. The next question is from Devin Ryan with JMP Securities. Please go ahead. Hey, Ken. Hey, Joe. How are you? Hey. Maybe just start here with a bigger picture question. So looking back, the company went public in 2014, revenues were around $500,000,000 and Obviously, we'll see how this year plays out, but a lot of momentum and so $1,000,000,000 or maybe even something higher doesn't seem unreasonable. So You're roughly a double from when you went public. And so as you look out into the future here and think about kind of the next double from here, maybe just talk a little bit about What some of the big drivers of that might be, whether it's the M and A business still having kind of a lot of white space The international opportunity, just love to maybe think about broad strokes of what some of the bigger and most compelling opportunities are to kind of take revenues to the level. Devin, I think it's not well, there is white space. We have white space. But what's even more Encouraging to me or what's really almost stunning to me, I'd say, and it's why I think it's the busiest time I've ever seen in my Life. And the reason is, a few years ago, maybe only 10 or 15 years ago, it would take a decade To build a business to the point where we kind of would be interested at our minimum fee level or where we'd want to participate. I don't know many companies that got to be worth $1,000,000,000 15 years ago in a short period of time. And today, that could be weeks, I mean, months, I mean, it's there are new companies being formed, created And reaching relevant value in record time. So like When you say how deep is the M and A market, I would suspect there is like 30 to 50 companies or more It didn't exist 18 months ago that are in our that are in the range of something we'd want to talk about. I'm sure a light on that by the way. So the creation of value and by the way and also the creation of market cap, so the revaluation It is amazing. The amount of middle market companies that are now worth $5,000,000,000 to $10,000,000,000 fairly rapidly, that's a large fee event for us and they are in transition and other companies are looking to buy them to fill in their digital strategy. So look, I think that the creation of market capitalization alone And then the need for almost every company in the world to rethink how they go to market, ESG, digital, climate change, The amount of change going on is also rapid. So I think the velocity and lastly, again, something we didn't even talk about, The amount of capital going to alternatives, which are in the business of transacting. And you put all that together, and I think it's what's leading to The incredible robustness of this market and I don't see it stopping. I mean, I guess, It could. There could be an external event, but without an external event that I can't foresee, it feels like it's going to continue. Yes. Thanks, Ken. Great color. And maybe this is somewhat interrelated, but kind of more In the near term, obviously, the STACK market has been kind of a big development, and I know you're very Familiar with what's going on there and involved. And just thinking about the amount of SPAC IPOs that we saw in the Q1, more than All of last year, there's tremendous amount of company or SPACs out that are going to be looking for targets. And just kind of thinking about, I guess, maybe the opportunity That's creating for Moelis to be involved with SPACs. Also maybe bigger picture kind of how that's affecting kind of sponsor clients And is that crowding out opportunities for them? Or do you think it will? And on the flip side, I think they're all benefiting So just maybe kind of some thoughts on how that is also affecting activity within Moelis or the outlook for your M and A activity. So I think this back market is here to stay. You're going to have valuation and repricing changes and also Refocus, I think, was focused for a while on hyper growth companies in certain industries. Maybe it'll move a little more to cash flow. But again, Devin, I think what is interesting is the rise of what I call the very large late stage venture almost venture capital And there's a huge hole in that market where these companies are getting to 3 to 5 to 10, I mean, of private Market capitalization, and when you say private equity, private equity wasn't actually formed To fund that kind of hyper growth, high-tech type companies. Now, I think they were going to try to. Look, I think they were in a good position over time to say, hey, we're the best way to fund these. We get to see 5 year projections. We get to see due diligence. But the SPAC market has moved into that space and almost bridged a market that didn't exist 3 years ago, which is very large high growth companies that need a lot of capital to get to the next stage. And it's like I was saying before, those companies are being created weekly. And so I think there's a lot of specs out there, but there's a lot of growth And a lot of great entrepreneurs and a lot of and there's a lot of businesses that you might not have heard about, but they're fundamentally changing the world and disrupting, and They're going to meet each other, and I think that's a funding source that will continue, and I think it's additive. So it's a long way of saying, I think you have private equity Be booming in their own asset class. I think this is almost a new class of a very late stage venture and it's needed. The next question is from Ken Worthington with JPMorgan. Please go ahead. Hi, good afternoon. So I can clearly see and knew that the business is doing particularly well in which typically is seasonally slower quarter. What areas maybe were more subdued either by region or by Service, what hasn't been working quite as well as the majority of the business? And What might be the outlook there? By the way, Ken, First time since we've been public. You were not the first question. I'm very, very disappointed. It's like when Lou Gehrig ended his streak there. So I just want to note that. Drop the ball. What's slow? Look, It's the classic study. I think it's the parts of the economy, and we're pretty strong across most of the sectors that are important. But of course, things like retail or There's not much to do. There's not much aggressiveness. I even think even the restructuring part of retail sort of got in cycle early last year and that's not and maybe, I'd say oil and gas, that part of the world is still slower than most. But really those are very episodic. Those are very unique as to what they're facing. Most of the rest of our sectors were pretty busy. I'm trying to think of one that you would consider Outside of those 2, which seems fairly obvious on the outside, I don't know one that I don't know another one that I'm missing that would have been unusually slow. Yes. And then Europe, cross border Asia, anything Stand out as being slower or weaker than the other regions or is everything sort of White hot by region 2. As usual, the U. S. When things are slow, the U. S. Is the busiest. When things are hot, the U. S. So I think the U. S. Stands out again in terms of its velocity of transactions. But interestingly, I think We had at WhiteHawk, we had a very substantial and very good business in almost every region you mentioned. I think in every region you mentioned to be clear. The next question is from Steven Chubak with Wolfe Research. Please go ahead. Hi, good afternoon. Good afternoon. I wanted to start off with a question just given some of the potential tax changes that could be forthcoming, whether it's Higher corporate tax rate or just changes to capital gains, how that's impacting any of the C level discussions that you guys are having? I haven't seen a lot. I assume there's a transaction or 2 we have where somebody thinks They're going to get a capital gain out before a tax increase. It's hard to define that because We don't get told that. They may be thinking that. I assume it's happening a little bit, but I don't see it driving Right now, I think the other things I talked about are what's driving the market. Now, If somebody put in place a 43% capital gains tax and said that's effective January 1, 2022, you might see some real step up in activity, but I don't think people are expecting that. And for right now, I'd call it marginal and hard to measure. Okay. I appreciate that color. And I just wanted to ask a follow-up with regards to the restructuring outlook. And I appreciate a lot of the context you had provided earlier. The challenge, at least from my seat, is Every other corporate has indicated that we're seeing restructuring rebates to pre pandemic levels. And Just wanted to get a sense as to whether, 1, are you comfortable at least indicating or should we be comfortable underwriting, I should say, 20% to 25% of your revenue still being from restructuring even with the better backdrop that you had cited. I guess just secondarily, if you can just provide maybe a little bit more perspective in terms of what are some of the other idiosyncrasies that are maybe driving greater resiliency In your business relative to some of your peers? So I would feel comfortable in the near thinking that we're going to stay at 20% to 25% and as far as like for the relevant future that I could see. I would tell you the biggest risk to that Because I think that the numerator changes to the high side and shrinks the ratio because of the strength of M and A More so than that restructuring shrinks, if that makes sense. And Again, I do believe we have the best team. It's a phenomenal team. We've kept it together. We have a lot of the people who are young, who are Junior bankers 7 or 8 years ago are now moved up and bringing in their own fees. They're very innovative. They tend to keep companies from filing Chapter 11 and when you have access to capital markets and you can figure out ways to use them To stave off bankruptcy, I think that's a real asset and it could be why we continue to have a good level because Right now, you don't have to go, but there's a good chance that there's a solution that is innovative and around the markets and not Just going through Chapter 11, I think that's a specialty of ours. Thanks for that color. And just one quick tippy tat, I guess numbers or modeling question. Could you share just where the banker count as well as where the MD count stands as of the end of the quarter? I think you have it in front of me. So I think the MD count as of today is 127 and the banker count is 6 18. That's as of today. At the end of the quarter, it was a little less, 126 and 615. Okay, great. That's perfect. Thanks for taking my questions. Thank you. The next question is from Brennan Hawken with UBS. Please go ahead. Hey, good afternoon. Thanks for taking my questions. Just want to circle back, Joe, to Some of the comments that you made on non comp in the prepared remarks, they were quick. You guys jumped right to it here today. So I might not have gotten it right, but and I appreciate not messing around and just getting straight to it. But Non comp came in a little bit heavier than we were expecting and that was suggested last quarter. It looks like it's in that other line. So wanted to try to understand maybe what was there, were there some one time items in there, just Understand the composition of that divergence versus the prior expectations. And then I think, Joe, you had said $30,000,000 in non comp per quarter before transaction related. Can you kind of put a little bit more Context around that so we can understand how to frame, does that mean basically that when as revenue is humming, You guys are going to have some transactional related expenses, which will flow through that line. And If that's the case, why didn't we see that last year? Thanks. Sorry, I know it's a multi parter. Joe? Yes. So let me start with the first part of your question. The $5,000,000 is made up of a combination of professional fees As well as new CECL reserves that related to some aged receivables. On those reserves, Most of that, we fully expect to collect. So this is just a function of the new GAAP and how we it's more formulaic. There's less judgment involved and ultimately we absorbed some additional costs this quarter that we weren't expecting. So ultimately We view both those things as episodic, and we continue or I continue to believe that $30,000,000 is the underlying Run rate and that really assumes continued light travel for the Q2. We're thinking travel might Does that answer your questions? It does, but it sort of leads to more CECL reserves. Jesus, Ken, you're a bank, You're No, but unfortunately receivables are credit And it applies to everyone. And we you had to create a methodology around it. And ultimately, We had a few $1,000,000 that ultimately emerged in that due to some aged receivables. But again, we fully expect To be collected in the short term. Okay. So and is it that based upon how Sometimes these receivables can age. We should expect this might crop up from time to time and that it's basically Related to just a little bit of a lag to billing and there might be some noise in that regard. It could be. Yes, it could, but it should be unexpected. We're pretty good about keeping on top of this. There were just some specific client situations that gave rise to this, but it's nothing to be alarmed about, it's nothing that concerns us. Got it. Yes, sure. And you said that was like $2,000,000 or $3,000,000 of the $5,000,000 Yes, exactly. Got it. Okay. All right. When we think about the quarter And this was quite a quarter for specs. And Ken, you were Early to embrace this emerging trend in the middle I seem to remember it being the July call last year when You particularly flagged how this was powerful, this shift. And you were it was prescient. How much of a factor were capital markets? We spent a lot of time this afternoon talking about restructuring, And that's fair, but and it's helpful, but I'm curious about capital markets. I think capital markets last year It was a record setter for you guys, if I'm remembering this correctly. How did the quarter fair? What was like the pace? Was it running hotter than it did last year? And as we've seen SPAC start to slow, Has that had a likewise impact on your capital markets business or are you staying busy? I think our capital markets guys regret coming over here in September. They haven't slept. Brennan, it's funny because we're producing across the board. There's lots of privates and very innovative transactions. I think, Joe, we tried to look specs, it was fairly minimal in the quarter. Yes. It was modest in the context. I mean, again, Capital Markets has historically been kind of 2% to 4%. I think this quarter, we saw 10% Because a big part of it, SPACs, I think we made some money, we were called book runner on a few. And that's a good fee. It's not a M and A type fee. But it puts you also inside of a now you're the company's banker and there should be other things that come in the future. So yes, we didn't see like the there weren't a bunch of big de SPACs, which is where the fees would be. It was more the beginnings the capital markets raising the money. Right, which you would think could end up turning into the de SPAC Down the line? Look, that's the point is to stay with them through pipe. Now you have the ability to do the pipe, which is a Decent fee event and the de spec. Right. And how about the more recent velocity? It seems as though there's been a bit of a slowdown Some of those markets, have you seen that too or has it not has that velocity not really slowed for you all? You're talking about SPACs specifically? And capital markets, both SPACs and capital markets more broadly. Well, capital markets broadly, no. And in fact, the M and A market just continues to go from strength to strength. And so and similar with The broad based capital markets and but let me say on SPACs, there was a point here where the SEC came out And said they want to change some accounting. That affected that was just sort of like a 4 week hiatus as people tried to find an accountant that was available to redo their financials. It really became a backlog like sort of everybody, if you were in mid transaction or you were going public, you To redo your financials. So yes, there has been a hiatus that was caused by that in the SPAC market in almost everything. Got it. Okay. Thanks for the color. The next question is from Michael Brown with KBW. Please go ahead. Great. Hi, Ken. Hi, Joe. Hi. Maybe just to start off, And maybe kind of close the loop here. Obviously, you had some very positive comments on the momentum that you're seeing across the business, but I was just hoping you could characterize your backlogs, specifically for advisory. I think You had said on the last call that they were running at record levels. They never had been at that really had never been at that level before. So Just curious after this Q1 how they stack up relative to last quarter? I think significantly higher. We're at our highest levels. I don't want to get used to reporting that, but they continue to increase. And we have a thing called NBRC New Business Review Committee and the amount of Submissions is up significantly over any period we have ever seen. Okay, great. Great. Very impressive. And then to follow-up on some of the SPAC Commentary, obviously, there's going to be a lot of M and A activity industry wide related to the de spackings The de specking process has specified targets. What is your general timeline on when you think That activity will really pick up meaningfully. Is kind of the back half of this year A fair expectation or because there's kind of a lag between when the old supposed to be announced and ultimately close, is it more like a 2022 event? Just trying to think through how that could play out looking forward? I think it will start again quicker than you think. One of the reasons, there was a I think there was a repricing of a lot of pipes. There were a lot of deals that were Negotiated in, I think, January, February that then did their LOIs and went to the pipe market. And there was a change in, look, It's really an IPL market in some sense and there was a change in that market. There was pretty significant change in how I call it almost hyper growth, but high growth companies were valued. And so the pipe market started to, I think, reprice. And I think there's a lot of transactions out there under LOI that are both waiting for their accounting so that they And our repricing pipes as we speak and changing values. And so I don't know that you won't see a summer of de spec. But I think it will be pretty look, again, there's 500 of them. I don't see them all, but I think that's going on and I think it will be pretty even. Like I said, there's a lot of growth companies. It is a bridge. It's a new way of raising capital almost very, very late stage venture in large chunks of money. Those companies need capital and they want to grow and they're going to come and I think it will be fairly significant once this hiatus, Both accounting and repricing is over and that should be I think that's in the next 3 or 4 weeks. Okay. That's interesting comment there. And maybe just one last one from me. Obviously, Saw the 8 ks about the changes to the Board structure to shift to a Controlled company. One of my interesting observations is a correct. Thank you for that Very important. But one of my key observations there was that after the announced Resignation of the Co Presidents and COO that there would be just 5 members on the Board and 3 of which were independent. I know that this is really a Board matter, but just curious if you could give some comments about the desire to grow the size of the Board and bring in maybe bring in more independent One more. But I don't really want to have a gigantic Board. We've got a good Board. We can make decisions. Last year when COVID hit, I think we're moving very rapidly to make decisions. I think we have enough. I don't really see the benefits of having what I would consider a pretty unwieldy board, both And the ability to move. So we're going to have an independent board and it'll probably be more to Spread the workload around and get some expertise, but I'm not that interested in building a gigantic board. Okay, great. Thanks for taking my questions. The next question is from Jim Mitchell with Seaport Global Securities. Please go ahead. Hey, good afternoon. Maybe just a question. I mean, everyone's been pretty Optimistic about activity, it seems like dialogues are strong. It doesn't sound like there's been any yet pushback on valuation from financial Sponsors or anything, are you sensing any hesitation at all creeping into Dialogues just based on valuation or is it, hey, we're in a recovery and it doesn't matter? Well, that would be unkind to some of our clients to say they don't care. But let's just say that things are trading. There's There are not a lot of deals that go broken, because and that usually means people are getting their value. And I'll tell you one of the things that is I always say this in a bull market, people find a way to get around issues. I'd say in a bear market, a pebble looks like a boulder. You're running down a deal and a little pebble in the road comes up. And if things are negative, everybody goes, oh, we don't know how to get around the pebble. And in a bull market, you could put a boulder in front of a deal and people drive right over it. So and so things accelerate, they close quicker, They reach agreement quicker and I think you're seeing some of that and that will continue I think as the recovery happens. But I don't want to say people aren't trying to find value. They are trying to find value People do have limits as to where they want to go, but we are finding most processes find a buyer. Right. Okay. Well, that's helpful. And maybe just on the dividend, is there A level of cash we think about going forward prior to COVID you guys were pretty consistent with 2 specials a year. Are we kind of back in that Flow, and is there a way for us to think about what kind of a minimum cash level you prefer to keep and what how we can better Estimate excess for you guys? In a second, I'll let Joe do that. So one of the reasons, look, I do think about too, because We talk about it and we don't like to hold it for more than a we don't like to hold it. We have it in treasury bills earning nothing. And we don't think that's a good use of your capital, our shareholders' capital. So as soon as we get it to a large enough amount, which is usually In kind of 6 month cycles, it's large enough to be administratively good to pump it out. This year, Because we were conservative going into the crisis, we ended up with more cash at the end of the year. And then the reason we paid a $2 dividend, right, I think 3 months ago, we paid it and we're doing another 2. One of the reasons was also the Q4 was so strong that by the time we had Organized and paid a $2 dividend. It was so strong that we ended up probably with more cash from that quarter We wanted to get that paid in 2019 in case tax rates moved and it meant something To the organizations that got the dividend, we thought it was prudent to get that money out the door. So we had to declare it before we really had a Total understanding of how what that quarter was going to be. So this timing is a little strange because of the We didn't pay the Q2. We wanted to get it back. We had a tax change. The short answer is going forward, we probably will If times are good and we probably would go to twice a year. And Joe, you want to talk about what you consider minimal cash? Yes. So our minimum capital remains around $50,000,000 after earmarked amounts for things like taxes and bonuses. And as Ken said, our primary focus is beyond that amount, we consider it excess And we just want to distribute it or return it in some form. The next question is from Jeff Harte with Piper Sandler. Please go ahead. Hi, good afternoon guys. Couple of kind of cleanups and maybe a strategic one. Cleanup wise, Joe, as far as the share count creep outlook goes, is it impacted at all by The ramp up and kind of price we've seen recently or should we still think of the same kind of quarterly creep going forward? Yes. The creep is kind of With prices being stable are somewhere around 800,000 to 900,000 shares per quarter. So when you have a lift under the share price, it will ultimately accelerate that and that's why you saw something Wind up asking us every quarter, but is there anything to highlight as far as 2Q closings kind of having revenues pulled back into the Q1? I mean the pull forward you're referring to, it was a couple of transactions that added up to, I think, about 11,000,000 Okay. And then, you mentioned earlier the SPAC book runner and seeing you guys show up in the equity underwriting lead tables to catch our eyes. Is your involvement there really something an opportunity within SPAC specifically or do you guys give any thought to Kind of equity underwriting business beyond SPACs going forward? Yes. One of the things that got me interested last year in Beefing up is we have done 2 direct registered placements on utility companies, of substantial size. And I started to and by the way, we had done equity. I mean, it was equity, direct equity. So I kept I started to think there is a virtual method to do this without the overhead of all the trading floor overhead. And yes, we are talking about ways and programs and different things that we think are innovative around Equity offerings with the equity light, virtual or light, asset light, I think we can do more and more in that space. It's not just specs. Okay, interesting. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Ken Moelis for any closing remarks. I appreciate all the support and I look forward to talking to you at the next quarter. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.