Getty Images Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 14, 2023

There are 9 speakers on the call.

Operator

Good afternoon, and welcome to Getty Images Third Quarter of 2023 Earnings Call. Today's call is being recorded. We have allocated 1 hour for prepared remarks and Q and A. At this time, I'd like to turn the call over to Steven Connor, Vice President of Investor Relations and Treasury at Getty Images. Thank you.

Operator

You may begin.

Speaker 1

Good afternoon, and welcome to Getty Images' 3rd quarter 2023 earnings call. Joining me on today's call are Craig Peters, Chief Executive Officer and Jen Laden, Chief Financial Officer. Before we begin, we would like to remind you that this call will include forward looking statements within the meaning of the Private Securities Litigation Reform Act of 19 95. These statements are subject to various risks, uncertainties and assumptions, which could cause our actual results to differ materially from these statements. These risks, uncertainties and assumptions are highlighted in the forward looking statements section of today's press release and in our filings with the SEC.

Speaker 1

Links to these filings and today's press release can be found on our Investor Relations website at investors. At gettyimages.com. During our call today, we will also reference certain non GAAP financial information, including adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA less CapEx, free cash flow and currency neutral growth rates. We use non GAAP measures in some of our financial discussions as we believe they assist investors in understanding the core operating results that management uses to evaluate the business. Reconciliations of GAAP to non GAAP measures as well as the description, limitations and rationale for using each measure can be found in our filings with the SEC.

Speaker 1

After our prepared remarks, We will open the call for your questions. With that, I will hand the call over to our Chief Executive Officer, Craig Peters.

Speaker 2

Thanks, Stephen, and thanks to everyone for joining our Getty Images Q3 2023 earnings call. I will start my remarks by addressing the recent court ruling with respect to claims by warrant holders following our de SPAC. We disagree with the ruling. We believe Getty Images acted in line with our obligations under the warrant agreement and with federal securities laws.

Speaker 3

We are appealing the portion of

Speaker 2

the judgment in favor of the plaintiffs. To proceed with the appeal, we are securing a surety bond We expect to begin amortizing the annual cost of the surety bond in Q4. Jen will take you through the company's full 3rd quarter financial results, but as usual, I will touch on our performance and progress at a high level. 3rd quarter 2023 reported revenue was $229,300,000 representing a year on year decline of 0.5% on a reported basis and a currency neutral decline of 1.3 Our adjusted EBITDA finished at $80,300,000 for the quarter. This reflects a reported year on year increase 3.4% and a currency neutral increase of 2.5% with EBITDA benefiting from disciplined actions Taken and maintained since earlier this year to manage costs in the current environment.

Speaker 2

While it was good to see the settlement of the writers strike, The Actors strike continued to equate to significantly reduced content production and PR activities across our media and entertainment customers for the entirety of Q3. While difficult to predict how quickly business can ramp up Following last week's settlement of the ACTR strike, we expect to see an adverse impact related to the strike through at least the end of the year. With increased global uncertainty, we saw the U. S. Dollar strengthen relative to our expectations and we continue to see weakness across certain geographic and customer markets.

Speaker 2

As a result, our reported results lagged our estimates and we expect the strong dollar to persist through the 4th quarter. We are also facing a tougher Q4 compare due to the unique timing of the 2022 Men's World Cup and the 2022 U. S. Elections. As a result of these factors, Jen will take you through updates to our full year guidance.

Speaker 2

As a company, we have previously seen and navigated similar challenges over our almost 30 year history. We remain focused on our customers, on our execution and on investing in the long term, but being cost disciplined in the short term in light of our near term environment. So with that as a backdrop, I'd like to highlight some of the progress we made within the quarter. In partnership with NVIDIA, we launched our generative AI service at the end of the quarter. The service is truly unique and addresses fundamental customer needs.

Speaker 2

Our model is trained solely with Getty Images' best in class content, addressing the legal risk that is pervasive in many other models We also believe this equates to higher quality outputs As a cake is only as good as its ingredients. With generative AI by Getty Images, users can be confident that the content they generate Safe to use in commercial settings and will not include any trademark brands, products, characters or identifiable people. It also does not produce deep fakes or emulate the style of specific artists, which we believe is valued by our editorial and creative customers respectively. We are rewarding our contributors with an ongoing share of each and every dollar we earn from the service. Last but certainly not least, the service and all of its outputs come with Getty Images uncapped indemnification.

Speaker 2

In terms of the economics, customers pay to generate versus download, which better aligns to our costs and recognize the value of ideation. Initial customer feedback and engagement with the service has been really positive, and we have already introduced new features to the service such as being able to prompt in over 70 languages. And we're engaged with a limited set of customers to custom train models to their IP and brand needs. Alongside our amazing FreeShot offering and custom content, We're excited to offer a complementary new service that helps our customers elevate their creativity, save them time, save them money and does not expose them We continue to drive increases in our annual subscriber counts, primarily through iStock and Unsplash. We grew our annual subscribers by more than 88% and more than 35,000 of those subscribers were from our targeted growth markets outside of North America and Western Europe.

Speaker 2

We renewed our agreement as the authorized photographic agency with the Rugby World Cup to deliver an industry leading service in the creation and distribution of world class sports content. Getty Images is photographer or photographic partner to over 120 of the world's leading sports governing bodies, leagues and clubs Who come to us for our industry leading expertise in editorial operations, award winning photographic talent And unrivaled global distribution platform. Also in the quarter, we are pleased to partner with BBC Studios to launch a platform The platform gives our customers the opportunity to search BBC archive content online and opens up access to more than 57,000 newly digitized programs. The platform is a significant breakthrough making the BBC archival content more While it is a constant, I would be remiss if I did not call out the efforts of our world class team and partners We risk and sacrifice to cover events around the globe. Whether these are events and atrocities in the Middle East or Ukraine, The drama in U.

Speaker 2

S. Capital One Courts, the extreme weather events or natural disasters, humanitarian and wildlife crises, The list goes on. I'm extremely proud of the work and the important role it plays to engage and inform the public. And with that, I'll hand over to Jen to take you through the more detailed financials.

Speaker 4

As Craig highlighted, during the Q3, we continued to see pressure on our top line performance, increased FX volatility, But overall, stability in our adjusted EBITDA margin and strength across our underlying operating metrics. I'll start by talking about some of our KPIs. Note, as always, today's press release contains information on all 7 of our KPIs, which are recorded as of the trailing 12 months for LTM period ended September 30, 2023, with comparisons to the LTM period ended September 30, 2022. Total purchasing customers were 826 1,000 compared to 837,000 in the comparable LTM period. A slight pullback As we see some drop off in our a la carte purchaser volume as we continue to shift into subscription.

Speaker 4

Our revenue per purchasing customer remains strong at approximately $1100 per customer. We delivered another quarter of impressive growth in annual subscribers, Adding 95,000 to reach 202,000, an increase of approximately 88% over the corresponding period in 2022, fueled primarily by our e commerce subscriptions, including our iStock Annual and our Unsplash Plus subscription. This marks our 4th consecutive quarter of annual subscriber growth in excess of 50%. We continue to execute well against our geographic expansion efforts with approximately 35,000 new annual subscribers in our growth markets across LATAM, APAC and EMEA. We also continue to see growth in our core markets, which includes the U.

Speaker 4

S, Canada, France, Germany, Annual subscriber growth continues to expand our mix of revenue from subscription products, which rose to 55 as of Q3 2022. Our revenue retention rate for our annual subscribers was 94.5% compared to 103% in the 2022 LTM period. The decline was primarily driven by lower revenue retention rates on some of our smaller e commerce subscribers and a reduction in a la carte revenue Customers who previously exceeded their subscription download caps. Paid download volumes was up approximately 1% at $95,000,000 Our video attachment rate continues to grow, ending the quarter at 13.7%, up from 12.7% in Q3 2022. We continue to see opportunities to drive video adoption across our customer base and expect to see this metric continue to tick up.

Speaker 4

Turning to our financial performance, with revenue results reflecting adverse impacts from the Hollywood strikes, impacted by a more muted year on year benefit from FX than we expected due to a strengthening U. S. Dollar with respect to the euro and the pound in the second half of the quarter. Assuming rates hold relatively steady to where we see them Today, we now expect a more limited foreign currency tailwind in the 4th quarter than previously anticipated. Total revenue was down 0.5% year on year on a reported basis and 1.3% on a currency neutral basis.

Speaker 4

Included in these results are certain impacts of the timing of revenue recognition, which contributed Approximately 4.40 basis points to the year on year revenue growth in the quarter. With positive momentum in our subscription business, Annual subscription revenue increased 12.6% on a recorded basis and 11.8% on a currency neutral basis, driven by further gains across our premium access and e commerce subscription offering. Creative revenue was $145,200,000 flat year on year and down 0.8% on a currency neutral basis. Creative results reflect pressures in the Agency segment, which was down double digits year on year as well as impacts from the Hollywood strike with production houses largely dormant in the quarter. Creative revenue from annual subscription products grew 16.9% year on year and 16% on a currency neutral basis, led by Premium Access, our largest subscription product.

Speaker 4

Within our e commerce business, Our successful customer acquisition efforts drove growth in our annual iStock subscription products of 15.2% on a recorded basis and 14.2 percent currency neutral. We also saw 8.1% year on year for 8.3% currency neutral growth in our custom content subscription, which provides customers with cost effective, Customized, exclusive and project specific content to meet their needs. Editorial revenue was 79,900,000 in Q3, a decrease of 2.3% year on year and 3.3% on a currency neutral basis. The decline was driven by archive and entertainment, which were negatively impacted by the Hollywood strike as well as the However, we did see gains in sports, which benefited from our team's extraordinary coverage of the 2023 FIFA Women's World Cup. Geographically, we saw year on year currency neutral growth of 3.8% in EMEA, while the Americas and APAC remains a consistent metric for us with Q3 at 73.4% compared with 72.2% in Q2 of 2022.

Speaker 4

Total SG and A expense was $97,300,000 up $5,700,000 year on year with our expense rate increasing to 42.4% of our revenue, up from 39.7% Last year, the higher year on year expense was due to higher staff costs, primarily $9,200,000 Stock based compensation related to divesting of employee equity awards compared with $2,800,000 of equity based comp in Q3 of 2022. Excluding stock based compensation, SG and A decreased year on year 0.8 percent to $88,100,000 in the quarter. As a percentage of revenue, SG and A excluding stock based comp With 38.4 percent of revenue, roughly flat to 38.5% of revenue in the prior year period. The 0.8% year on year decline in spend is largely a result of the proactive cost actions executed earlier this year, which remain in place. The larger of these cost actions are across marketing reductions and the hiring freeze.

Speaker 4

We anticipate maintaining these actions at least through to the end of the year. Adjusted EBITDA was $80,300,000 up 3.4% year over year and up 2.5% on a currency neutral basis. Our adjusted EBITDA margin was 35%, an increase of 130 basis points from 33.7% in Q3 2022. This expansion in EBITDA margin is a testament to our fiscal discipline, CapEx was $12,400,000 a decrease of $3,300,000 from Q3 of last year. Prior year CapEx included costs for our London office relocation and acquisition of imagery related to the Q4 2022 Launch of our Unsplashed Us subscription, driving some of this year on year decrease.

Speaker 4

CapEx as a percentage of revenue was 5.4% versus 6.8% in the prior year. Adjusted EBITDA less CapEx was $67,900,000 compared to $62,000,000 in Q3 last year. Adjusted EBITDA Less CapEx Margin was 29.6%, up from 26.9% in Q3 2022. Free cash flow was $12,800,000 down from $33,200,000 in Q3 2022. The decrease in free cash flow primarily reflects the impact of our year to date financial performance and working capital changes related to Timing of receivables and payables.

Speaker 4

Free cash flow is dated net of cash interest expense of $38,300,000 in Q3, an increase of $2,600,000 over the prior year. Cash taxes for the quarter were 7 point Our ending cash balance on September 30 was $113,500,000 down $7,800,000 from Q2 2023 and an increase of $41,700,000 from our ending cash balance in Q3 of 2022. As of September 30, we had total outstanding debt of $1,383,000,000 which included $300,000,000 of 9.75 percent senior notes, dollars 639 point $6,000,000 USP term loan with an applicable interest rate of 9.99 percent And 443,600,000 of euro term loans converted using exchange rates as of September 30, 2023, with an applicable interest rate of 9%. Year to date, we have applied $47,800,000 towards debt pay down, including a voluntary $20,000,000 payment in the 3rd quarter. We ended the quarter with a net leverage of 4 point 2 times, down from 4.4 times at year end 2022.

Speaker 4

We will continue to remain disciplined deploying our capital to what we believe is its highest and best use with a continued emphasis on our balance sheet optimization and further deleveraging. Based on the foreign exchange rates and applicable interest rates on our debt balance as of September 30 And taking into account $355,000,000 of interest rate swap agreement, our 2023 cash interest expense Now turning to our guidance. Based on our expectations that the 4th quarter will continue to see top line and FX pressures, We are lowering our 2023 guidance as follows. We expect revenue of $900,000,000 to $910,000,000 down 2.3% to 1.2%. Assuming current FX rate hold, the revenue guidance includes an overall FX year to date and an estimated tailwind of approximately $3,100,000 in the Q4 of 2023.

Speaker 4

We expect adjusted EBITDA of $287,000,000 to $295,000,000 down 5 to 2.9% on a currency neutral basis. Included in the adjusted EBITDA expectation There's an approximate $1,600,000 adverse impact from FX, which includes the $2,900,000 year to date impact and an estimated tailwind of approximately $1,300,000 in the Q4 of 2023. In addition, the revised adjusted EBITDA guidance reflects the change to how we are classifying legal fees associated with the warrant litigation. The $6,400,000 in legal fees incurred year to date through Q3 and the $1,100,000 These expenses are now included in loss on litigation, which is a below the line item and is excluded from adjusted EBITDA. As I just mentioned, this guidance assumes continued macroeconomic pressures, adverse impacts from the Hollywood strike and pressures on our agency business through Q4.

Speaker 4

It also assumes costs related to other ongoing litigation And increased cost tied to operating as a public company. We believe that the proactive approach we have taken To control costs and our ability to stay nimble while focusing on improved execution will best position the company to deliver on the updated guidance in the current economic environment. With that, operator, please open the call for questions.

Operator

Thank you, ma'am. Ladies and gentlemen, we will now be conducting a question and answer session. Our first question comes from Ron Javeh of Citi. Please go ahead.

Speaker 5

Great. Thanks for taking the questions. Maybe one for Craig and one for Jen. Craig, on the Hollywood strikes, now that they're close to being done And understood the impacts continue here into 4Q. Help us understand a little bit more how this might play out into 2024 as things might normalize going forward?

Speaker 5

I think that'd be helpful. And then Jen, on the cost side with gross margins expanding in the quarter and 35% EBITDA margins, talk to us about the outperformance maybe in gross margins

Speaker 3

On the strike, first, let me start off by saying, I think it was the impacts have been a bit more severe than even Jen and I and the management team Projected in our last call. So we've seen a softer

Speaker 2

part of

Speaker 3

the business within entertainment and in media And production side of things, than even we forecast. I think that is a good starting for context, especially as we look into Q4. We're not expecting any significant reversal of that in Q4. We do expect that we will start to see the reversal of that in Q1. Likely, Still some ramp as productions come back online.

Speaker 3

So we probably won't be at full kind of full back to business across those elements of the business until probably Q2. So that's our

Speaker 2

best current view based

Speaker 3

off the conversations that our teams are having across the industry. So I guess what we're saying is, it was a little bit more impactful in a full Q3 than what we projected at the end of Q2, or we're seeing at the end of Q2. Q4, we expect that to continue. We could expect improvements over Q1, but Not fully back to 100% until Q2.

Speaker 4

Yes. And on the margin side, gross margin, you're right, a slight tick up to the 73% range. We've seen That number before, as you know, we're pretty consistently around 72%. That can swing up or Down nearly entirely due to the product mix in the quarter. But as we think about what we'd expect to see that land out, I would A history of north of 30%, 35% is a touch higher than certainly what we've been trending to.

Speaker 4

But as we spoke to in the prepared remarks, We did have a significant amount of very proactive cost measures that we took pretty early on in Q2 At the very first time of what we thought was going to be some top line pressure. So we're seeing the benefits of that margin. But again, as we think about what We'd expect to see that stabilize that I would anchor ourselves down to that 32% give or take range as what we'd expect to see normally.

Speaker 5

Okay. Thank you, Craig. Thank you, Jen.

Speaker 3

Thank you.

Operator

Our next question comes from Danny Pfeiffer of JPMorgan. Please go ahead.

Speaker 6

Hey, thanks for the questions. I just have 2. Can you maybe talk about what you've been seeing from your news or media customers since the start of the Middle East conflict? And then for the second, last quarter you mentioned You saw corporate customer deal timeline shift and slightly reduced inbounds. Can you maybe speak to what you saw from those customers in 3Q?

Speaker 6

Thanks.

Speaker 3

Yes. Thanks, Danny. Again, thanks for making time for the call. On the News Media side of things with respect to the Middle East, Clearly, it's a critical story for our clients to be covering. We are very grateful not only for the staff that we have in that market covering the crisis, but also for our partners that are investing and risking Their staff in those markets and I would call out specifically Asian France Press and Anadolu is 2 critical partners to So it is something that is consuming a lot of cycles in the media.

Speaker 3

Therefore, It is something where we're seeing a lot of our imagery be utilized to narrate that story and provide visibility into that story. And but I wouldn't expect it to have a financial benefit within the company. Really, it's a shift in the news cycle into that consumption and that consumption actually from our perspective can be quite costly to So operating in war zones It's not something that is without cost. So certainly, I think Getty is playing its normal important role Within bringing visibility into those events, we don't take that role lightly in any way, shape or form, and we're very proud of our staff and we're proud of our partners The take on that coverage. On the corp side of things, in terms of the corporate segment, would say that we saw a continuation of what we saw and spoke to in Q2.

Speaker 3

Again, there were certain Parts of the corporate market, we mentioned technology. We mentioned some of the things like the crypto space where that softness Carried over and continues, but I don't think it got worse. I did mention On the media, entertainment and production side of things, that was probably it was worse in Q3 than what we projected and certainly what we saw in But in the corporate, we're continuing to still see that kind of conservatism and continuing to see that Kind of concentrated within certain submarkets of Midmore. I am hopeful that we start to see that loosen up a bit. But at this point in time, we didn't see anything really different from Q2 to Q3 in those areas.

Speaker 5

Thanks.

Speaker 2

You got it.

Operator

Our next question comes from Mark of The Benchmark Company. Please go ahead.

Speaker 7

Hi, good evening, Craig and John. Craig, just curious what the how the pipeline is developing for your GenAI product and if you could make Is that tangible in any way in terms of revenue in a rough time line? That would certainly be helpful. Jen, just a question on revenue year over year revenue impact from iStock subscription conversion to From a la carte, I'm just trying to get a sense of how much dilutive that was in the quarter. And then net of that, If you look at your last 12 months subscription retention, it declined about 400 bps quarter over quarter to roughly 95%.

Speaker 7

I'm just curious what might be driving that? Is that premium access subscription revenue declining In absolute dollars or what might be driving that? Thanks.

Speaker 3

Yes. Okay. I'll throw it to Jen on the iStock item. I'll handle the rev I'll just reiterate some of Jen's remarks that are upfront, which a lot of that is our push into smaller subscriptions, which do have a naturally lower Rate of revenue retention, but we've also seen some of our media clients in the premium access side of things not move into overage not only due to the strike, but also due to the macro ad landscape. We've seen Some pullback on those, as Jen mentioned in her remarks.

Speaker 3

On the Gen AI side of things, I'm not going to be able to, Mark, give you any The customers were hearing really good feedback. I spent a good chunk of the quarter actually engaged with our customers. In fact, today, Omnicom put out a press release of their own about how they were engaged with us in the early stages of the development process And moving in now into the commercial side of things. But it's one that we are selling a service that is Fully indemnified and legally clear. So it is one that goes through the hoops that you would expect in terms of the Corporate contracting side of things, whether that's legal or sourcing, etcetera, to make sure that these technologies are as clean and as advertised.

Speaker 3

So we're still working through our pipelines, but the good news is those pipelines are growing. I still would set the expectation that we We don't expect any material revenues in this calendar year, and we'll start to probably try to give you a better visibility of how that's progressing in 2024, but I would still expect it to be a fairly limited amount of revenue to the company overall in 2024.

Speaker 4

Yes, on the subscription space, I think Craig, you touched on the revenue retention. But more broadly, That growth in annual subscribers is actually is something we feel really good about. We mentioned in the prepared remarks, it's a 4th straight quarter Where we've seen the year on year growth in that count being north of 50%. And at its face value, that's a great metric. But when you pull that At least 50% in the quarter of the new annual subscribers that we've taken on are new customers to Getty Images.

Speaker 4

We touched on in the prepared remarks that these are customers who a good portion of them exist in some of the growth markets that we very deliberately have been trying to And then we're also seeing customers move into subscriptions in the core market. So the mix of where we're seeing that growth It's really positive for us over the long term. As Craig noted, we do see a step back in the revenue retention rate as a result of some of these subscribers being on those smaller e commerce subscriptions. But when we look at a broader metric, which is just revenue Per purchasing customer, that remains fairly consistently north of $1100 So overall, it's a good metric for us and we're Excited to see where that continues to go.

Speaker 3

Yes. And I would just add to that, Jenn. Mark, I think one of the things that we haven't talked about that we actually I feel pretty good about in the business. We know that there's a lot of impact, strike in currency and items. But we're seeing paid download growth within the business.

Speaker 3

We're seeing customer counts and volumes hold up quite well. We're seeing good solid renewals across the mix. And I think what we're seeing when we look and watch what we're seeing elsewhere in the marketplace of which you cover some of those, We're not seeing the same levels of decline across our licensing business. And our creative business is actually holding up Quite well. As Jen mentioned, our revenues are down more in the editorial side of things for the reasons we referenced earlier.

Speaker 3

But We are seeing really good durable kind of customer commitment into the business across Creative. We're seeing that across our e commerce business holding up on a relative basis quite well. So those are some areas that we feel good about where I can point Some strength and hopefully, so we'll get to add back some things in the coming quarters as the markets normalize a bit.

Speaker 7

That's all helpful. Maybe I could squeeze one last one in. On the agency business, just curious how that pays a quarter over quarter basis, revenue growth and are we starting to see that sort of baseline? Concentration there has obviously come down. Just curious If you've kind of seen the trough there.

Speaker 7

Thanks.

Speaker 3

We were in Q3, we did not see the trough. As Jen mentioned, we were continuing to be down double digits In that segment of the business,

Speaker 2

I would say it was

Speaker 3

a little bit more uneven. So there is some good news in there and combined with some bad news. But so I hope that some of the activities that we're taking on And engagement with those agency clients around things like generative AI, are going to bode well, going out into the future. In Q3, we were down kind of consistent to where we were in Q2. And but hope again that we'll see some

Operator

Thank you. Our next question comes from Tim Nollen of Macquarie. Please go ahead.

Speaker 8

Hi, thanks very much. Could I ask for some follow-up on the warrant situation, please? Just if you could help explain a bit more what the Financial impact to you is, if it's $88,000,000 or so of damages, you have $60,000,000 of insurance, Against that? Then do we need to worry about that net difference there as a potential payout that you're going to have to make? And if you could explain how the surety bond works, please?

Speaker 8

You mentioned the amortization of it. If you can give the terms or just how that works in general, it'd be very helpful. Thanks.

Speaker 3

Okay. I'll pass to Jen on the bond side of things. I'll do my best to cover off on the initial parts of the judgment and the Exposure with respect to the warrant. So first off, I'll reiterate, we disagree with the ruling and we have every intent to appeal. And we think the facts are in our favor.

Speaker 3

And we think we did everything right under the warranty under the warrant agreement As well as with securities law. So that's first and foremost, I think that this is not something that we view as settled. With respect to the warrant, I think you largely got it right, Tim. There's insurance up to that 60. There's Underneath that is covered legal costs plus judgment.

Speaker 3

There will be an inflator on The judgment as we appeal, if it were to ultimately come to that. So that's why we're taking a bond that's greater than Ultimately, the judgment itself, in order to cover that. And so, yes, I mean, The exposure, if we were in fact to lose on appeal and exhaust our options of continuing to take this forward, you would basically be Those net amounts.

Speaker 8

Right. So around $30,000,000 or $40,000,000 let's see $60,000,000 around $30,000,000 or so

Speaker 4

Tim, you probably haven't had a chance to come through the filings yet, but what you'll see on there is We've booked a loss on litigation of about $112,500,000 and then netted against that Is the insurance recoverable of $60,000,000 So in that loss on litigation is going to be damages, interest, pre and post judgment And then legal fees. And then as we obtain the bond, we will start to amortize the cost of That bond from the time we place the bond through to however long the bond has been placed to that same loss on litigation account. Okay.

Speaker 2

And the

Speaker 3

cost of that bond is roughly between the 1% 2% range.

Speaker 4

Yes, it's hovering around the 1.5% range.

Speaker 3

Okay. I think I get

Speaker 8

the principles there. Thanks very much.

Speaker 2

Thanks, Tim.

Operator

Thank you. Ladies and gentlemen, that was the final question.

Speaker 3

Great. Well, thank you all for making time. Very much appreciated. Appreciate the questions and look forward to the next call. Thank you.

Speaker 4

Thank you.

Operator

Thank you. Ladies and gentlemen, that concludes today's event. Thank you for joining us and you may now disconnect your

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