Yet Another Value Podcast - A roundtable on Angi $ANGI

Episode Date: May 12, 2021

Dickson Pau, Tom Moore, and Bill Henry, three first years at Columbia Business School, discuss their investment thesis for Angi. The three pitched ANGI in the Pershing Stock Challenge (placing second!), and they go into the due diligence they did putting their investment thesis together, the potential upside they see at ANGI, and all of the different risk factors they thought about.The first Yet Another Value Podcast on ANGI: https://youtu.be/J2trsM41DTUSpring Graham and Doddsville (ANGI pitch on p. 24): https://www8.gsb.columbia.edu/valueinvesting/sites/valueinvesting/files/Graham%20%20Doddsville_Issue%2042_v8.pdfTom's Twitter: https://twitter.com/FriarTom15Dickson's Twitter: https://twitter.com/DicksonPauChapters0:00 Intro and backgrounds2:40 Why they chose ANGI for their pitch7:10 Dickson's DD booking ANGI projects15:00 Takeaways from ANGI expert calls22:20 Fixed price: the most exciting piece of ANGI28:30 How the team views ANGI's new CEO36:20 Why hasn't ANGI hit their merger targets?40:40 Is ANGI's near term decline in service requests concerning?45:50 ANGI's struggles with service providers52:20 Competition risk57:00 Laying out the long term case for ANGI1:00:30 Closing thoughts

All right. Hello, and welcome to the yet another value podcast. I'm your host, Andrew Walker. And with me today, I'm happy to have three guys on the podcast. We've got Tom Moore, Bill Henry and Dixon Powell. Guys, how's it going? Doing really well. Thanks for having us, Andrew. You're excited to be here. Hey, we're excited to be here. I'm excited for you guys to come on. Let me start this podcast the way I do every podcast. And that's by pitching you, my guest. Might be especially important because I'm sure people are wondering, why do you have have three people on today. But you guys, all of you are, I believe, second years at Columbia at Columbia's MBA program. You all entered the Pershing Stock Challenge. You did a pitch on one of my favorite companies. We've done a previous podcast on them. I'll put it, I'll put a link to that in the show notes. Did a pitch on Angie's list. I thought it was great. I know it's gotten great feedback so far, and that's because the work was really good. It came in second, you know, in my heart it was number one. But I thought it was just great work. And I'm excited to have you guys on so we can talk a little bit about Angie. And normally we dive right into the podcast right now. But since we've got three

people on and you guys are MBAs, maybe just two sentences we can, each of you can give your background. And Dixon, you're the top left of my screen. So just two sentences background, what you're up to and all that type of stuff. Sure. Thank you so much again, Andrew, for inviting us, really excited. So I'm Dixon. I was going to raise in Hong Kong before business school has spent five years of this small investment firm. We invest a across Asia and I was a journalist. So I've been passionate about investing for a long time. I'm really excited to be able to join the Columbia Business School program, meeting a lot of great people. And this summer, I'm going to intern at a little price. Perfect. Perfect. Bill, your bottom left.

So, Bill, if you want to give a little bit of your background. Sure. Bill, Henry, prior to Columbia, I spent my entire career in fixed income the last couple years, credit research. Lastly, at City doing health care. So moving to growth and Angie was quite a change from the more value oriented credit side of stuff. And then this summer I'm interning at Cicale advisors. Perfect. And Tom saved the best for last. What are you up to? Let's do it. Yeah, so I'm Tom. I was working at PWC and management consulting doing mostly strategic planning and forecasting, but always wanted to move into the investment side. And so that brought me to Columbia. We're all actually first years at Columbia. And then this summer, I'm going to be interning at Tensell Capital,

which is small to mid-cap equities out in San Francisco. So, yeah, again, excited to be here. Perfect. All right. So backgrounds up the way. Let's dive into Angie's list. I guess my first question would be you guys had a whole universe of stocks out there to choose. You know, what made you guys settle on Angie's as the one that you were going to pitch? And Tom, I guess I'll turn it over to you, and then anyone can chime in if they want to add anything. Sure. So first off, the criteria that we got from Pershing Square for the competition this year was to look for multi-baggers. So names with the potential for 5x and 5 years, 10x and 10 years in the U.S. with at least a billion of market cap. So that kind of limited our universe to things with really significant upside.

Maybe not exactly the first principles approach that we would have had if it wasn't a competition. But as we looked around, especially January and February, with a huge run-up and growth names, we didn't see a lot that looked undervalued. if you assumed some significant multiple compression going forward. And I had actually listened to another podcast during the match spin from IAC time frame, did a bit of research on IAC and gotten a little bit obsessed with the company. So we figured even if we get a couple of months into the research process, you know, we're not in love with the company. We thought it would be time well spent.

But yeah, been on Angie, for those who aren't familiar, it's about a $7 billion market cap company. It's the leading home services marketplace. And so when you want a plumbing or contracting job done on your house, you go to Angie's List or Home Advisor. So service professionals would pay Angie's list for advertising or pay Home Advisor for leads when the customer puts in their information on the site. And so about 90% of revenues come from leads in advertising in 2020,

and the rest comes from fixed price or what they're calling Angie Services, which is almost Uber-style one-click booking for primarily lowered value jobs, but it's growing quickly. And so I would definitely recommend the podcast you did with the Boyer Value Group guys if folks listening aren't familiar with the company. As we were looking at Angie in January, when we selected, it was trading a pretty reasonable valuation, a little less than five times revenues, you know, 30-ish times, 2019 even done, had generally generated a ton of free cash flow, favorable working capital, and really good prospects for future growth through this fixed price services aspect that they're really investing in. And it's a huge total addressable market that's more than 80% offline today. And Angie's the market leader.

So we thought they were poised to get kind of an outside share of the eventual move. move online. And so the questions were really on its ability to execute on fixed price, which seem like an opportunity to generate kind of a variant view through research as opposed to just saying, you know, hey, we think this multiple is going to regress to the mean or something along those lines. And then, you know, one of the things we liked about it as individual investors was that before an eventual spin from IAC, you have limitations on the type of institutions who can own it since IAC has got about an 84% share of the free flow in about a $7 billion market cap company.

And so, you know, we think there's going to be a lot of volatility in the short term around the monthly metrics that get released. But in the long term, we just kind of thought the market evolution to online was inevitable. And then you've got IIC at the helm to kind of shepherd them through it. So that made a lot of sense and was pretty attractive to us to get started on the research. Yeah. And you mentioned the volatility. And one of the things I've been kind of scratched my heads with was, you know,

I like the key, I thought the Q1 numbers looked great. Obviously, I always say on the podcast, I don't care about earnings. And then I talk about the last earnings. But the stock's been really down. One of the things I've been wondering is, is a lot of the volatility related to IEC is about to spin out Vimeo, and there's people setting the hedges and everything. It's a skinny-float stock, so it can be pretty volatile. But that's neither here nor there. Bill Dixon, did you guys want to add anything about into why you guys chose Angie, or should we switch over to kind of some of the due diligence sheeted on it?

maybe maybe just one thing to to further emphasize it's just really like this to stock because of the change that the companies is about to experience and generally we at least at the very beginning we saw a lot of bias against the fixed price and pre-price model because you just have been taken a long time for it to basically hasn't worked for quite a long time so we like tom we thought we could do a lot of edit work, primary research on top of that. And, you know, this is Perching Square ultimately is a stock pitch competition. And you have to tell a pretty nice story to get the best chance to win. So we thought there are enough elements in the NG stock for us to come up with a pretty good story at the end. Well, look, I agree you guys pitch a nice story.

And stories are they're critical in the capital markets these days, right? You look at a Tesla or it does. team stories, they lower your cost of capital, and they're hugely helpful. But Dixon, you mentioned a lot of the due diligence you guys did on the podcast, and y'all did a lot. I know you talk to a lot of investors who owned it, but you also went, you talked to management teams, you talked to service providers, you talked to, you did expert calls. And I know, I believe you even booked a project to come have a, an Angie, kind of through Angie, have somebody come out and fix your sink. So, Dixon, maybe I'll just stick with you.

Could you talk about some of the new diligence you guys did on Angie and maybe also talk about your experience booking a project through Angie. Sure, sure. So we did do quite a bit of work. This is one of the thing you have to do in hopes of winning the competition. So some of the things we did include, like you mentioned, we talked to, first of all, a lot of the existing investors. We've talked to some of the biggest investors, which really provide us a very good fundamental framework, understanding of the situation.

And then we also talked to the management team, like you said, we talked. very lucky, really surely by chance we were able to get in touch with Joey from IAC and also the new CEO Oshin. And we also commissioned a survey for service providers. We also did our own interviews with five to ten service providers who have been using the NG services and we just learned a lot about what they don't like about the service, what they think about this pre-price model and interestingly a lot of them don't really know about that model so far because like it's still more or less in beta mode right there's just they're going to push out this pre-price model going for it but yeah just getting to know how service providers

think about this this new offering was really helpful and of course we did another survey on the customer side to understand the current pain points they have and to really experience the whole looking like a situation i did like you mentioned i did um my own um house cleaning and sync fix so actually i did two do home service through the app i can talk a bit more about that first maybe so the first one i did was with the sync fix and i deliberately not choose the pre-price model i want to understand the the current generation model first um Two quick insight there is, well, I think it's pretty obvious, but the first thing is it's quite a pain to get a lot of calls after you input the service request. I remember putting in my request detailing my address, my phone number, my email, and the need to fix my stuck sync.

And I've been using calls, receiving calls ever since. I would receive like four or five calls in the same day. And if you don't pick them up, they're pretty persistent. They keep following your back, which is quite a hassle. But ultimately, I did pick up one call. Because at that point, we were still very early on in our research. And, you know, so I'm from Hong Kong, right? So I did not realize the living expense is so high here.

Just fixing a sink, the price quoted was something like $200. So it was a huge expense. I was not ready to commit that amount. Anyway, so I pick up the call and I talked to the guy and he told me that actually if I do not do it through the app or he will, the usual price in New York to fix a sink is around $100, $120. So that is the first thing we learn. The current tick rate for this pre-priced models, for example, for this sync fix

or plumbing service is fairly high already. It's like close to 50% if you think about it. Like normal, they will, the service providers will charge you 100 bucks. And Angie, for the pre-price option, they're looking to charge me like $230. So we find out that actually the tick rate is fairly high in the sense.

But so anyway, I booked a job for him because I do have the need to uncluck my sink. And then I talked to him quite a while, as he was doing his job and one of the things we i've learned from that experience is that well first of all they the service providers they really are on all of the platforms because it's really a marketing tool for them um and for them it's really frustrating because he he will be thinking of all this as marketing expense and not in a very sophisticated way in terms of tracking the return on investment over a period of time so for him it's really like i'm

spending, I think he said, like 4,000 a month just on marketing and all these different platforms, including Yelp, Google, all the service under Angie Home Services and all that. And the way he thinks about it is just, I'm spending the money and sometimes the whole week I might not get a job. Sometimes I get some. He's happy. And so I, at that point, I ask him, if Angie can offer you a job, a guaranteed job instead of you, instead of just a leap, what would that would that make a huge difference to you? And for him, because he operates his own shop, so he's more like a mom and mom and pop's operator.

And for him, it would make a huge difference because he has a lot of downtime. And if he can fill up his downtime, even if he received less than the price that he usually take, it would be good for him. Because at that point, the incremental cost for him is very low. especially his jobs constitute very little cost of good souls. It's really just his time, right?

It goes to your place, it fix your thing, and if he leaves it. So really, if you can provide him with jobs to fill up his downtime, he will be super happy about it. So this is, I guess, the first instance where we really understand, especially for these smaller operators, how valuable this pre-price service can potentially be. And in the second jobs, I did that through the, fixed price model. I get a house cleaning service, which is basically the bread and butter of

Handy. So that was the company that acquired in 2018. I spent a bit of time with the made. The tick rate there is actually even harder than 50%. She was telling me that on that day, she spent three hours at my place. And Handy or Angie paid her something like 45 bucks, I think. How much did you pay Handy for the three hours? And for the three hours, I think. And for the three hours, think I pay something like 130. Okay. Wow. So Angie kept 66% roughly of that. 60% percent. It was pretty high. But interestingly for her, it's she does basically most of her jobs for handy. And I asked her specifically about how much of her work comes from previous clients because I guess that's a big concern, right? The leakage issue. And for her, it's like 20%. So it's not

big. And she just, for her, it's just easier. Hendy gives her enough jobs to fill up her calendar and she's happy with the surface. So this, yeah, this is another confirming evidence that's the current tick rate is pretty high. And I think, and we think they're able to do so because it's really a much more convenient proposition for the customers. And for those customers who prevent a convenience more than just the cost they're willing to pay for it. So that's obviously two, kind of like, you know, end of one where you booked the job. I also know you guys did lots of expert calls on this. I don't know, maybe Bill or anyone, if you want to speak to kind of what the expert calls were telling you when you were due diligence in Angie.

Sure. I mean, I can kick it off. I mean, we spoke to kind of experts within Angie and then I guess probably more, I guess, industry experts. And I think those were kind of, you know, the more interesting side of stuff and getting kind of the, on the almost underground, I guess, world of things. And there was a lot of interest in things when you talk to people. Like, there's actually a black market of leads that we didn't even know existed. There's these companies that essentially like barter leads to various codes and stuff like that.

So it can get, I guess, kind of ugly from that perspective. But, you know, I mean, I think a lot of the, you know, I guess existing experts and kind of of role companies push back a lot against Angie. And there is like, you know, there is a sense that a lot of providers use Angie as is kind of the start, you know, to kind of get their business off the ground. And then ideally they want to kind of build a book of business and then kind of graduate to where they kind of go word or mouth and they don't need to deal with the lead gen model just because of the pain points that kind of originate from that side of stuff as well as the marketing spend that is associated

with, you know, being on the platform, you know, from that perspective. Um, you know, I think this is kind of where you differentiate in Tom can probably pin a little bit more as like the sort of individual mom and pop are kind of one, two, three man shows versus these kind of almost private equity roll-up style companies that are happening much more, you know, seamless process. And they have people that are essentially there to just answer, you know, lead gens and kind of, you know, they're essentially advertising on Google themselves as opposed to, you know, going through the platform themselves. So I think that's kind of, you know, they, I guess the natural growth is you sort of see people start on Angie. And then, you know,

as a result of getting bigger, they can kind of move off the platform as it stands now. And I think that was kind of one of us, you know, the more interesting things, you know, that we came across. from that perspective. And then I think the other thing, too, is just on the pre-priced stuff is, I mean, I think a lot of, you know, older guys were pushing back on just, it's not possible this and that,

and a lot of questions around, they just don't think it's, you know, can happen. But I think, you know, when you actually started talking to them about why they thought that way, I know the one comment that really started out to us was we talked to a commercial plumbing operator in New York City

who did massive renovations for Columbia for, you know, multi-million dollar apartments. So, you know, you're looking at very, you know, specific and boutique things. and he was like, if you tell me the product, the space, the size, location, and kind of access points, he could price up a job behind his desk right now in a plumbing job. And I think that was one of the things that kind of gave us comfort that a lot of people underestimate how much

of the jobs will be kind of prepricable or at least you can get a lot further down the funnel than just kind of the lead gen, I have a problem, you know, send someone out to size it up and estimate it. And I think, you know, as you get further down that funnel, that's kind of where Angie's value becomes a lot more. Tell me if I'm being crazy or just say I haven't thought about it because as you said this, something came to mind. You know, I think about like open door or zillo and for years and they have not proven out, but for years the bear case when they were doing the eye buying was how the heck are

you going to buy a home? Like you need to get a guy in there and really do the inspection. And I think what they're starting to prove out is for 90 to 95 percent of cases, no. Like you can use demographics, obviously Google satellite images, everything. And you get pretty damn close using all that data on. pricing a house. And I would think it's probably the same or even easier for a plumber, right? Like I say plumber or for any Angie's thing, right? They say, hey, my sink is clogged, my toilet's broken. And a toilet is a toilet, right? They probably know 98% of cases they say, my toilet's broken and

it won't flush. And the plumber knows, oh, that's probably going to cost about $200. So am I thinking about that right? Or how would you response to that? Sure. Yeah. So I mean, I think they're the base cases they use with the satellite stuff I think is they're like that's where they really love is like using kind of the roof and the fencing cases and I think those are the biggest and most obvious ones like even just you know they talked about like pain points like if you know if the fence has to go over you know past a tree or something yeah you know very unique like that like that satellite can solve a lot of problems on the front end from that perspective so I think that helps from that perspective and I do think you know as sort of technology evolves to your point like i buying or

you know carvana you're buying and selling cars online you know to kind of put your stake in the ground say that this product will never, you know, go past this because technology doesn't exist, we think is, you know, limiting from that perspective. I mean, when we did talk to people, I think the interesting thing was there's, I think a lot of, you know, I guess education or I guess, you know, they need to get a lot more data on this product itself. I mean, I know the one plumber we talked to, we said pretty much, you know, every neighborhood in a, you know, in this, or every house in a specific neighborhood is probably going to be built by the same builder. So that means if you fix the sink for the neighbor, then you're going to know how to fix the sink for

you know the person across the street and i think that's a great point yep that's the information that i think is super valuable and then as you sort of build this up and i think there's probably some cross cells with like the zillows of the world is like you're going to have information on what's inside the house so then you can work with zillow and kind of know exactly like when the last time the water heater is updated what you know what is the piping and then you can kind of create that information um but there i do think there will be a little bit of more trouble because i mean buying a house I assume, like, the toilet fixture is probably not a massive part of that house buying. But there was some pushback by plumbers.

Like, there are certain things, like, they need to be there to kind of size it up and understand what the problem is. And, you know, when you have a homeowner that doesn't necessarily know it at this point, there is some pushback. And I think over time with VR or stuff like that, there's going to be a lot more use cases. Yeah, I guess, and I think you were alluding to this, but I guess what I was saying is nine times out of 10, you say my toilet is broken. and Angie can probably price that pretty well.

And then there's the one time out of 10 where the plumber gets out there and it's like, this isn't a toilet broken. Like you have a snake infestation in all your toilets. We need to get a lot more people in here. But yeah, I would think nine times out of 10 you consider it. And that's a great point on if a builder is building all the houses in a lot, then you get a data advantage, right? Because once you've done one or two houses in a certain subdivision, you can probably

price out all of the houses in the subdivision pretty quickly. Dixon, I think you might have wanted to say one thing on this or my next question is for Tom. But if you had something, please join in. I do. I just want to add, because during my discussion with the plumber, I did ask him about pricing. And one thing he did tell me is for a lot of the cases, he can pre-price a lot of his work.

If there's a need to change the whole pipe, he knows what we'll quote up front. So the way we really think about it is, Angie, if they can institutionalize all this different data knowledge from all this service providers, they will have that data advantage over other competitors. But it's not like it's totally foreign right now. It's just within the heads of various different service providers,

like maybe the service providers knows this zip codes fairly well, and to the point of the build we just made, knows all the structures of this neighborhood well that he can price pretty accurately. So for engine challenges, just institutionalize that knowledge within the database. Yeah. Perfect. Well, let me switch you. Let's, I want to do a little bit more on the upside and then I'm going to get to some bare pushbacks. But, you know, I'm pretty clear on the end vision for Angie, right? Like you're talking, hey, we want to build up a marketplace for local services, plumbers, electricians, getting your house cleaned all this. So I'm pretty clear on the end game. But I think there's a lot of balls moving in the air when it comes there, right? Like you've got the new payments that they talk about, which I think is super interesting. We've got a new CEO who came from, they bought Handy. He was originally the founder of Handy. So we've got that and he's kind of, I think he's really.

flesh out the vision there. They're starting to make some traction with getting service providers on. They're rebranding the whole company. There's just a lot of moving parts here. So Tom, maybe I can turn it over to you. When I say all of those different movie price, obviously fixed price is one. What are the most exciting to you? What are the most exciting to you, I guess? Yeah, we really see fixed price as the one piece is kind of the engine that is going to drive this into a true marketplace model over the long term. And so once you have fixed price is kind of the engine, then you can start and you're getting good at pricing that fixed price, then you have the opportunity to layer on something like a subscription. And so for a customer subscription, which they're pricing at about 20%, it's about $30 a year, but you get 20% all of your fixed price services for that year.

So they're being very aggressive on the pricing side. And the reason for that is once you have a subscription and you're using the app, you do about seven service requests per year, as opposed to, 1.8 in the current state for your average customer. And so when you think about ENG spending, you know, 50% of revenues on sales and marketing each year, that really has the opportunity to move the needle when you have, you know, a much lower cost of acquisition per service request. One of the things that's really interesting about payments, which you mentioned, is that, you know, on the earnings call this week, they said, Oshin said that it was about a $100 million

run rate, so about $2 million a week. And in December of last year, they said that they were doing. about a million a week. And so it's growing really rapidly. And one of the interesting things that they mentioned was that about a third of the customers using Angie Pay are non-Angie booked customers. So that means that the service provider was the one who likes to use the Angie pay product, booked the service, not through Angie, and then made the user or the customer download

the Angie app in order to pay them. And so when you talk about really attractive ways to get those customers and push down that customer acquisition cost, which is a huge opportunity for better margin growth. We think that's really powerful. And then, you know, there are some really nice optionality around other pieces. So one is the partnership with a firm, which allows you to spread your payments over about six weeks. So maybe you can do a larger home renovation project than you would have otherwise.

And then another is with Rilogy. So Rilogy finances home improvements before somebody sells their house. And now they're partnering with Angie to actually get. the work done on that piece. And so when you think about what fixed price kind of enables them to do is it allows them to price things and schedule, you know, projects all at a much higher take rate. You know, Dixon mentioned that, but the improved unit economics on the fixed price product are pretty impressive. So when you think about Angie doing about $20 billion of GMV and revenue of about a billion dollars in the marketplace.

That's about a 5% take rate, but we backed into it about a 32% take rate on the fixed price side. So pushing those things forward really improves the moat, should improve the supply, all at much better economics. And so we kind of see that as a starting point that enables a lot of the optionality on the other pieces. That's perfect. And then I think this is the best point for it. Joey had a quote on the call where he said, somebody said, hey, you said some people are

using Angie's home services seven times already in the fixed price model. And I thought people got seven jobs done per year. So how is that working? And he basically said, and I'm paraphrasing because I'm doing it for a minute. But he said, look, it's a lot more convenient when you just have someone come over to house. You've already paid. They do the work and they're gone and you don't have to haggle. You don't have to pay at the end. He said that convenience is probably drives jobs per year up for every consumer. And it reminded me of like, I take a lot more cabs now because Uber is so gosh, darn convenient. You know, whereas going into a taxi. in the old days. The taxi was often dirty. You had to pay at the end. It just wasn't that great.

And that was the first time it got me thinking the convenience of the fixed price model and the convenience of just you might get recurring services done or it really will. It kind of could expand the TAM. And I'll just stick with you, Tom, if you want to, if you want to add anything onto that. Yeah, we think that's exactly right. And so, you know, obviously a lot has to go right in order to get there in terms of expanding the TAM. But, you know, when we surveyed customers, they said they rated themselves a 2.9 out of five in terms of their ability to recognize what a fair price is. And it's worse for millennials. And so it's, you know, unsurprisingly. But that's not surprising because when Dixon said, when he said he got a quote for was it 140 to fix a sink. I was

like, I'm not sure if it would cost $20 to fix a sink or $2,000 to be honest with you. So that makes a lot of sense. Absolutely. But yeah. And so, you know, and then the other ancillary benefit is that you're capping the price that you're going to have to pay as a consumer. And so a big part of the business model for the average service providers that we talk to is we're going to go in there. We're going to try to avoid giving a quote over the phone. And then we're going to get in there. We're going to look at it.

And then we'll give you a quote there. And maybe it's more expensive than you would have guessed. But hey, I'm already on site. You don't want to have to go through the hassle of like finding somebody else, re-agocating with them. And then they're also going to try to find a couple of other things that they can work on in the house. And so I think that's a real value proposition to a customer is just being able to say one click, I am going to be done with this project and it's going to be

happened soon and I can just check it off my to do list as opposed to three weeks from now, somebody's going to come to my house. I don't know how much I'm going to have to pay. And I just expect this to be a hassle. So yeah, I do think that can totally make sense in terms of expanding the team. I think that's exactly right. You know, so many times I've had somebody come out to do a project and they come out and they quote higher than I thought or they do it and then they're trying to get me to pay more. It's like, look, if you've got this fixed price where you pay, you know exactly how much. You're probably a little bit incrementally more likely to do jobs. Dixon, I want to turn over to you. Look, this is, I love this story. I think all of us agree there's a

upside optionality, but it's a hard slog. And I think Bill and I in a second are going to talk about the history here of how it's been a long slog. But to execute, you've got to execute here, right? They've got to execute. This is a new business model. It takes building. And the most important person to executing is the CEO. Angie just hired a new CEO. This will be their third one since they got the Angie Home Advisor merger done, what was it, in 2017. So there's been some change at the top. And I think people look at that and they say, that's a concern. So could you talk for a second about the new CEO and how you guys are viewing him?

I think you guys said you all had a chance to get him on the phone. Yes, happy to do so. So we spent three minutes with Oshin. I think the punch library is that we do like him quite a lot. And I think we could explain elaborate on that with two angles. The first one is experience. You know, the first question we got at the Persian Square Challenge was on Ocean. And Gillian, the lady basically alluded to the fact that when he sold Angie to, sorry, when he sold Handy to Angie,

it was at a lower valuation than what Handy was value at before. for that. So she was trying to hint that, yeah, this, he was not able to really grow handy to a billion dollar enterprise. Should we think of that as a negative? For us, I think we actually think of that as a positive because of his experience of handling Handy in the down cycle. So for those of you who do not know history, Handy was founded in 2012. Back then, there was the time when everyone was trying to found a company to be the the Uber of something, the gig economy. So a lot of hundreds of millions of dollars were poor into this industry,

a lot of different verticals. But when the economy was slowed down a little bit, when things turns rough, a lot of this business, which have been like spending like crazy on marketing and acquiring customers and service providers were simply not able to adapt. And a lot of them felt. So the main competitors of Handy also have to shut down. So I see, especially personally, I see the fact that he was able to maneuver handy. They have to change strategy a little bit, change the product focus, they have to downsize.

I think that those all highlights to his ability to really identify what the business really requires to succeed. And his experience going through that cycle, I think should add a lot to Angie going forward. So that is the first point. And then the second is really his vision. So early on, when we look into the business, very quickly we understand that a lot of concerns are on the bottleneck on the supply side. We talked to some service providers, and one of the consensus view they have is they don't really feel like they are the customers to the company, even though they are the one who generate money, profits for Angie because they pay for the lead. So our concern is maybe the companies is too customer focus and they're not catering enough to, on the service provider side. When we first talked to Joey, we asked him the same question, like which side of the marketplace are you taking care of more of at the moment?

And he would be telling us he thinks all consumer marketplace ultimately die or thrive based on your customers. So we're a little bit disappointed, to be honest, at that point, thinking that maybe there's still two focus on the customers. So we asked the same questions to the O'Sheen, and I really like the way he explains his vision. So yes, first of all, he confirmed that customers are the basis of everything the company does. The company exists because customers have the need for the home services. But the company doesn't really serve the customers directly. they do so through the service providers. So in order to really serve the customers the best possible,

the service providers have to be equipped to be able to do so. So for Angie, he's really going to focus on making it easier for the service providers to provide the service to the customers. And he's going to do so through the payments we talk about, through potential calendars integration scheduling potential like bulk purchase for materials so you can reduce costs for the service providers and all that but the key thing I want to highlight is really I think he has the whole fission really clear out he understands the way the value really goes through the whole industry from from the same point of Angie and he knows the steps

he needs to take what has been lacking in the company before. So, for example, one of the other things he did is we noticed that through Lincoln data, he's really trying to increase the capability of NGOs in terms of the engineering, programming skills they have to really turn Angie from just a marketing-oriented company to one that's more product-focused. Because right now, how well the algorithm works, how well they can match the service providers to the customers, those are key. Before, it's really, people would say,

Angie is a glorified call center, and I guess we couldn't really argue against that. But going forward, in order for the pre-price or fixed price to succeed, they have to make the product right. And I would think he understands all this point, and he's quickly working on all of those points. Tom, I think you wanted to add something. Yeah, maybe one quick point to add on to that.

Well, first, we think that just the appointment of O'Shea, by IAC really speaks to their willingness to invest in a fixed price product. You know, one of the things we were curious about on was are they going to prioritize cash flow and profitability in the short term? And so are there, they're going to be maybe an unwillingness to kind of cannibalize the cash cow lead generation business. And so, you know, appointing Oshin to us really signals that, hey, we're all in on this. And we really think that's the right move from a strategic perspective.

And then, you know, second to Dixon's point, like it's a real question mark that they'll be able to kind of transition from this like almost sleepy smile and dial marketing organization to one that's really tech focused. But when we talk to ex-Handy employees, we got the impression that O'Sheen and then Umong, who also comes from Handy, who's the new head of Angie Fix Price where really high energy lived it and breathed it. And so maybe the history with Handy, we don't have a lot of details on it. We can't necessarily point to it as, you know, smashing success. But when we talk to people, we think that we hear that that's, they really crushed it and they get it. And, you know, we also think IAC is actually given them the green light to kind of clean

house, especially on the technology inside. And so you have a new chief technology officer who also comes from handy. And so, you know, we think that, you know, again, execution is a question, but all of the right steps are kind of being taken from that perspective. Perfect. And I will say, I have not gotten to talk to O'Shea yet, but, you know, obviously I've done some due diligence. I've talked to people who have encountered him. And all of the due diligence I've done separately have spoken very highly to him. And I thought he did a fantastic job with the Q1 earnings call again of just really laying out the vision. So we've talked to some bull cases, you know, let's turn to some bare pushbacks. And there are a lot of them. And I certainly have concerns. I think the

first and most obvious is, you know, if you go back to the Angie home advisor or service master, whatever it was called then merger back in 2017, they've basically missed every target that they said they were going to do. And, you know, I think we could point to reasons why they missed individually, but the growth rate in particular is much lower than they thought. Bill, maybe you could talk to us about, you know, why have they missed the major targets they laid out and why that that's maybe it's a concern, but why you're not too worried about it when you guys were thinking through this idea. Sure, yeah. So, I mean, I think just starting off, I mean, the big reason is just the online penetration and growth just has not happened that they thought

it would be when we talked to an ex-angi employee that was, he pretty much confirmed that. He was just like management had, you know, targets that they expected to be online. So when the merger happened, I believe the sales like he said it was about 90% offline. And now there's not an exact number. It's still over 80%. I have a feeling it's probably in the mid 80s. So you're looking at like 1% moving online per year, which is just not a lot in this kind of e-commerce world. I think that's been, you know, the biggest thing. And, you know, a lot of, you know, we can get into kind of reasons on that. And then I think to Dixon's point, there's been a lot of money flowing into kind of this industry as a whole online. So there's been kind of competition.

So even kind of their market shares stagnated or even, you know, I think it has kind of gone down a little bit just given, you know, I mean, if you go into specifics, like in, you know, Google changed their algorithm, Google started to kind of become a competitor within this space, which kind of disrupts their business model. So then Google's starting to take share and then you kind of have, I know, Tom will touch on competitors a little bit. But, you know, you have, you know, Yelps and then you have some startups that are starting to kind of break into it. You know, I think that's where kind of the fixed price and kind of creating that bigger boat is that kind of is what excites us because, you know, as it stands. Now they are at threat through this lead gen model just because it's not great and Google can kind of do the same thing, but Google can't do the fixed price. But I mean, I think kind of taking that step back and just, you know, why hasn't the online growth, you know, really happened? I mean, I think some of it is just the homeowner of the consumer is an older demographic. That's quickly changing, but just, you know, the average age of a homeowner is not necessarily a millennial and they're not an on-demand user, they're not apps, iPhone savvy. But obviously, the millennials now the largest home hire, so that, you know, that should change

from that perspective. But then, you know, I think the biggest issue is, is the online process that much better than the offline process? And I think the lead gen model, it's really not, right? Because it's essentially the same thing as the word of mail. You still have to go out, solicit the, you know, jobs, solicit quotes from various vendors. Then you have to talk to them. And, you know, it's essentially the same process as the offline.

And I think that's probably the biggest thing that they underestimated is this market is not going to be as, you know, necessarily as easy to, I guess, disintermediate as other kind of online marketplaces are because, you know, you have to provide a value to both sides of the marketplace and just providing a legion just was not, you know, offering that. Bill, if I could ask you one quick question there, you said this market is not going to be as easy to penetrate, and that's because it's very hyper-local. And I think I agree with you. And I think both me and IAC would say, yes, it's going to be difficult and it's going to take work. But that's one of the big options. That's one of the great things about this, because if we're

successful for anyone else to go recreate that, that's going to be a huge moat. Would you agree with that? Or would you give some pushback there? No, I mean, I think we all wholeheartedly agree with that. I mean, that's the great opportunity to create that great moat is it is difficult. And I think, the, you know, exciting part is if, you know, they're able to solve it, too, is it just kind of is going to become, you know, probably a one, two, three player market at most. Like, I think we looked at, in Oregon, there are about 40 service providers who do repair on sort of appliances. So in order to add that supply, you're going to have to control a lot of that market to be meaningful to these suppliers from that perspective. And it is difficult, to your point, you have

to price up 200,000 jobs, you know, across the country in different locations, different houses, et cetera. But if you're able to do that, then Google can't just come in there and disrupt that. So there is a lot of value from there. Perfect. And I think we're going to come back to service providers in a second, but let me switch to a different thing for years. And I somewhat subscribe to this. Probably the biggest bullcase on Angie has been, IAC has basically said, look, we are IAC. We know how to fund and build marketplace businesses. And they've got great success, right? Expedia, Match.com, Ticketmaster, and 10 others I'm forgetting about. And they've said, Angie has the most consumer demand.

Getting consumer demand when you're doing a marketplace is the hardest thing. Yes, there are questions. Yes, it'll be tough. But in the end, we have the consumer demand. And because we have that, we're going to be able to get this funding. So I guess I have two questions. A, do you agree with that? And B, one of the thing that probably jumped out to me the most on the Q1 call on the

bare side was they kind of hand waved way, oh, by the way for the next two quarters service requests are going down, which, you know, if you believe. if consumer demand is the most important thing, service requests going down, it kind of screams red flag. So Tom, I think I'll turn it over to you, if you don't mind. Could you address both of those? And if you forgot one or the other, I'm happy to remind you. Yeah, I'll take the back half of it first. So we, you know, we saw that raised, I guess, our eyebrows, but, you know, looking at it on like a monthly basis, if you assume mid single digit declines over the next few months, that's still on a two-year stack basis.

That's high single digits, low double-digits, service request growth since 2019. And so, you know, while it's not gangbusters growth, when your starting point is about only 50% of service requests being monetized by Angie. So that means that when somebody inputs a service request as a customer, Angie is only able to sell that lead to a service provider in their area who does that type of work about 50% of time in 2020. that's a long way to go on the supply side before you start bumping up against needing to invest a lot more in terms of the customer acquisition than they are today. So that was the second point. Do you mind hitting the first one again? I think the first point was just, and you were starting to get there, you know, the biggest full argument has been we are IAC, we know how to fund consumer marketplace businesses,

Angie has the demand. That's ultimately what's most important and we'll figure it out from there. Do you agree or disagree with any of those pieces of the argument? Yeah, it's a really interesting question. When I think about it over the long term, I tend to think that the most important piece is going to be their ability to keep out their competition and put up barriers to entry. And so Bill talked a little bit about Google. You see Amazon dabbling and putting together home services products mostly for putting together a TV or something you bought on Amazon. Facebook has the marketplace. And I think Ben Thompson has this awesome piece on Sturisdekery, which is called playing on hard mode. But he basically talks about when you aggregate the supply, you aggregate

the demand and you actually do the execute the transaction itself, it becomes much more difficult to disintermediate through something like, you know, flights and hotels and booking.com, for example, where Google has 100% the ability to like web scrape that data. And so that's why we think that just execution and building on kind of this self-reinforcing data advantage is what keeps out the long-term competition. And for us, what the most important thing in the short term is getting enough supply so that when customers who are interested in booking a fixed price and they log onto the app and they're clicking through it and they're like, hey, you know, I saw this for maybe

200 bucks, but when I clicked through, it said, hey, I'll send you your lead to three to four people. And so when you're that customer and you're like, oh, okay, now I have to go through this lead generation model. I think that speaks to we really need to bring the supply up as fast as we can. And so, yeah, thinking about, you know, some of the guidance that they just gave on the Q1 call, it was lower margins than originally expected. And a big piece of that was the investment in the fixed price going forward. And to us, that's a signal that they can start pulling some of the more creative levers that they have in terms of improving liquidity and SP retention. because you can do things like the way that Uber does

when you do a certain number of rides, you get a bonus. Or you can start to do things like if you are a loyal service provider, we can pull forward some of the most reliable customers that we know the best. And we can send those to you because we want to make sure that you're continuing to have a really good experience.

And so maybe they won't be as aggressive in paying the service for riders more, but we think that there's a lot that they can invest in order to improve the liquidity because even though they have a huge number of service providers. It's a relatively low share of their overall jobs that get done through Angie. And so if you push that lever, we think there's a lot of opportunity. Yeah. No. And for those you watch it on YouTube, you might have seen me smile when Tom mentioned

Ben's piece on playing on hard mode. Because when I read it, the first thing I thought was what Angie's doing, they're not playing on hard mode. They're playing on like extreme God mode, expert difficulty mode. But I do think that is probably the path to the most profit here. So we talk service requests here. Let's talk, you know, the other big bear case, and I think Dixon started to address it a little bit actually when he was talking, but the other big bear case here is the service providers. For years, the service requests have gone up and, you know, monetization and transactions have actually flowed, lagged way behind that because they've had trouble getting enough

service providers on here to fulfill all that demand. So, you know, IAC says we have the demand, eventually the supply will follow. But for years, the supply, it's maybe it's followed. but it's been at a much lower rate than demand. So, Bill, I'm going to toss it back over to you. Can you talk a little bit about, you know, their ability to get service providers on the platform and why you think longer term they will follow the demand? Sure, yeah.

So, I mean, I think at the end of the day, I mean, a marketplace, a wise man that when we talked to him said, the marketplace value is the value that it provides the suppliers to aggregate demand. And, you know, I mean, I think we agreed with that. And, you know, I mean, it will eventually, you know, follow through. I think what you've kind of, you know, seen recently as to your point, is, you know, people say supply is tight and the supplies tight across the country and there's like a labor, skilled labor shortage. But you've still seen growth of supplier. So there's still, you know, they're still seeing some value on the platform from that side of stuff. And what you've seen is kind of the jobs provider has flatlined for the most part.

And then, you know, obviously the providers has not grown in unison with sort of the demand, you know, that you've seen. So, I mean, there is obviously some opportunity there from that person. perspective. I think what we kind of looked at it is, you know, how do you provide value? And I think it kind of goes back to, you know, not only providing the jobs, but, you know, as of now, you're changing kind of the dynamic with the fixed price. A lot of it is. So now they're paying Angie, right, a marketing expense. But when you go to the fixed price, Angie now becomes paying them. And that changes the dynamic of that relationship. So now it's more Angie's calling you with a job as opposed to, you paying Angie and then getting a lead and then having to chase down all these leads, drop what you're doing. And then call them because I think one of the data was the chance of like succeeding and getting a job was like increased exponentially if you called within five minutes. So you're in the middle of a call and then someone sends you a lead. You have to call them back and try to, you know, get that lead versus Angie will know where you are, what you're doing. And then they'll be like, all right, well, you just got a new job, you know, a mile away. Why don't you go do this? You know,

it completely kind of changes that dynamic or that relationship. So I think that's one of the more important things that I think, you know, a lot of the bears sort of miss from that perspective, you know, that will be huge from that perspective. And, you know, at the end of the day, it's, you know, it's reducing friction as many ways as possible. And, you know, when there is kind of the supply demand imbalance, I will say like the marketplace is probably, you know, finding that demand is a little less valuable to the supply from their perspective, but there are other ways to do it. I know when we talked to O'Sini was like, even if they're not getting jobs, we want them to be on the platform. And I think that goes to all the, you know, ancillary jobs,

the scheduling, the materials, sort of doing a lot of the booking, you know, on the end side of that stuff. And just having them kind of intertwined in that. And then, you know, I think Tom mentioned, and that was the interesting thing when we looked at Handy was they actually had a rewards program

for your rating and how many jobs you did on the platform itself would increase how much you got paid. And we would assume that Angie's going to roll out something, you know, similar to that, which is going to kind of increase your incentive to be on the platform. And then once you kind of get to that 40% was the number we heard, once Angie kind of controls or any platform controls 40% of your business, that's when, you know, the kind of dynamic of the relationship changes a lot.

Yeah. And I just think there's a lot of optionality there. Like we've discussed the Angie providing financing and payments. I think that's big, you know, something like Angie providing a firm payments for building a deck and stuff. I would guess if you're a small, if you're a small debt contractor out there, you probably can't get your customers a firm payments on your own. But if you go through Angie, you can.

So that I would, I would also think like paying for all. that lumber if you're a contractor probably cause stuff. Lumber Twitter is going berserk, if any of you follow Lumber Twitter. But, you know, over time, Angie could probably not just provide financing on the consumer side, but provide some type of financing on the provider side, which their size, their scale, and their data would allow them to do, which I think that's big. Dixon and Tom, I'm going to go to Dixon because, Tom, my next question for you, but Dixon, I see you popped off mute. Did you want to add anything here? Yes, I want to make sure we leave the call not leaving the wrong impression.

said we were a little bit disappointed after talking to Joey. I want to make sure I have fixed that. So one of the great points Joey shared with us is that within this equation of demand and supply, the third key thing is really surprising. And historically, under the literature model, they think they have no control over price. But if they could really implement successfully the pre-price or fixed price model, they will have control. They will gain control for pricing. And with pricing, you can better match supply in demand.

Like when supply is really tight, you could increase the price so you can attract more suppliers back onto the platform. And there's some other ways to think about it. For example, we know the service providers are population as a whole is pretty fairly old, aging rapidly. And a big portion of them will be thinking of retiring, right? So under the career model, like if you're 60 plus 70 years old, maybe you have much less intensive to continue. But if under the pre-price model, it's Angie can give you a job easily. You don't have to call anyone yourself, don't have to follow up. It might encourage you to stay, maybe spend 30% of the free time in the industry continue for a few more years.

So I'm trying to say there are a lot of little ways really improve the supply. situation. They might be incremental, but all of them added together, it could be quite meaningful in anyway. Yeah, and I could be speaking out of my butt here, but I could even imagine how you'd have something where you have surge pricing, right? And maybe you're a plumber and you're ready to retire, but you could stay on the Angie platform. And if there's, you know, five water mains break, Angie could call you up and be like, we'll pay you $500 to do an emergency job right now, which, you know, if you're just a plumber who's making your business through word of mouth, you're not going to have that opportunity once you retire because you've shut

your word of mouth pipeline down. And that's a niche case. But that's what, you know, that is a case that technology and the scale and the on-demand platform can serve. So let me turn to the last risk factor I get. And again, there's tons of risks with Angie. They are playing on super difficult mode. But I think the last risk would be competition, right? And when I look at the competitive landscape, you know, I think the ones most people are worried about is last year, Facebook came out with a, I can't remember if it was an announcement or just the information put out of rumor, but this sent the stock down 10% where they want to get into the home provider list, home provider business. You could imagine this is a natural place for Amazon to play in.

Lowe's in Home Depot. I don't think this is quite their bread and butter, but you could see how they could play. I would think something like next door at some point could maybe back into it, but Facebook and Amazon are probably your big boogeyman here with Google rating in there as well. So Tom, let me toss it over to you. Can you talk about the competitive risk here? Yeah, yeah, we can. So mentioned, you know, the improved barriers to entry that you get through something like a fixed price product through kind of the ecosystem control that you get there. But just going back to the lead generation business, which is still, you know, very much the bulk of the revenues and the profits today, we think that there are fewer barriers to entry there.

And we think that it is something. that is relatively at risk to these other places. But, you know, we had survey data that rated Home Advisor the highest in ROI when it went relative to its other customers. And, you know, that was a subset of existing Home Advisor users, but we tend to think that the lead generation product is still compelling, even if it's not highly differentiated from the other kind of ad-focused. Tom, not a good job. What was, when you did that survey data and rough numbers, not exact or fine, but what was the ROI for advertising on Home Advisor versus what was the second best platform and what was the ROI there?

I might have to get back to you on that one. I don't have it in front of me. But yeah, there were questions around which platforms are you most likely to increase your spending on versus pull it back. And it tended to be Home Advisor coming in with like higher ROI. And then Google and Facebook were with it in terms of where they expected to spend more in the coming year. And so I think they were all ballpark pretty close to. each other, but I can follow up.

No, that's fine. Yeah, and please continue on competition if you wanted to add anything else. Sure. So when you kind of, in terms of where you see the competition for the lead generation product, you tend to see it in terms of the cost per paid click when you look at something like a Google search, for example. And so when you look at Angie's cost per paid click, it's about $6, which speaks to the level of competition in terms of kind of the lead generation arbitrage when you compare it

to something like thumbtack when you compare it to something like front door or even some of these like smaller lead aggregators that will buy the clicks and then sell them to somebody who can actually fulfill them. So we do see like the level of competition there and a lack of differentiation. But the big advantage in terms of moving that over to the fixed price product where you do have barriers to entry, in our opinion, is that there's a huge set of service providers on legacy lead generation from home advisor who haven't been moved over to the platform yet. And so when we talked to folks at the company and ex-employees, what we heard was that there's actually two separate sales staffs that are focused on, one, selling the lead product and then

two, selling the fixed price product. And so they're spending more energy on fixed price in terms of signing up new providers, as opposed to maybe potentially kind of killing a level of a golden goose in terms of the people who are paying for ads. And so we think that with Ocine at the helm and I see being pretty aggressive in terms of the rhetoric in terms of going off of after the fixed price. We think that that is ultimately the model. And we think that they have a ton of levers to pull in terms of bringing that existing supply over versus a company like a thumbtack trying to go out and double, triple the number of suppliers that they have and go into fixed price without the level of data that they have, you know, compared to Angie. And then on the big tech side, one of the things that we don't think Facebook and Google in particular, are going to want to do is to have to remediate issues or supplier versus customer conflicts

when the scope is different than what the customer actually put in. And so Angie has a huge team of people who are essentially doing exactly that based off of maybe this was an invalid lead. They know how to kind of handle those type of disputes. And yeah, in terms of just the manpower, we don't think that that's really Google and Facebook's bread and butter. So I'll leave there. Perfect.

All right. So I think we've talked about a lot. I want to be cognizant of time because we're coming up on the end. But look, I think your deck said this was a $45. Your kind of medium to long term target, I'll call it, was a $45 stock price. You know, I think my write-up said $60 stock price, but it stocks at 13. So what's $15 between friends here? But, you know, Dixon, maybe you could just wrap this up. The medium to long term for the company, tell me what the stock looks like to get to that kind of $40. $25 per share price target. Sure, sure. So we did try to be comprehensive with our valuations. We did like a DCF. We look into the earnings power. We expect the company to get five years later and all that. But the basics are basic that we do expect,

and we look at the gross profit growth more than the revenue because the fixed price has a different revenue recognition. So as they shift most perfect price, it will artificially increase the growth there. But for a gross profit, we're really thinking about something like a mid-teens annual growth in the next five years. And a lot of the ultimate value creation we do think will come from the increase in margins. And that would be mainly the function of tick rate increase. And if you look at the slides that we did for purchasing, we're expecting, like by 20, 2025, the overall tick rate will be above 6%, which versus comparing it to the current 5%

doesn't look that much of a difference, but it actually does because right now the margin as a percentage of GMV is very, very low. So you think about taking 5% of tick rate of the GMV and then the company right now has maybe around 10% EBITDA margin. You can quickly see that it's around half a percent. of GMD. So if the tick rate really does increase from 5% to 6% pitch point, that is an additional 1% increase. That would bring a lot of incremental margins to the bottom line, especially because we think like this is

the internet, this is the incremental cost is really fairly minimum. They're now investing a lot in R&D in pricing and all that, but yeah, you could scale fairly quickly. And we also believe that us, the customers enjoy the fixed price product much more. They will come back more often. And so, as Thomas alluded, we think the

customer acquisition costs could go down. It could also be the same on the service provider's side. So we do have some sort of margin target in our mind. Right now, because they are investing more heavily into the business, so they might not hit that target by

the next three, four years. But on the flip side, it might mean that they could increase the revenue even more rapidly than we think. So that's roughly the framework we have. Do you want me to talk about more specific numbers? No, no, I think that's fine. I think that's pretty good. And we do, of course, for conservative reason, we do put a lower exit multiple around 20 times EV Ibita, which we think it's pretty reasonable for dominant marketplace, combination.

that still expected to grow fairly rapidly after five years. That conservative 20 times, I'll exit multiple. I hear you there. Well, look, guys, this has been great. I think we've covered a lot. Bill, maybe I'll just flip it over to you. Are there any last thoughts you want to tit harder? Anything you think we should have covered that we didn't hit?

You know, I mean, not much. I mean, I think, you know, probably going back to the SP stuff, my answer probably wasn't the clearest. But, I mean, I think, you know, there is a lot of value that they, you know, the platform can provide in kind of, you know, giving those jobs and that dynamic, you know, moving to that fixed price will really, you know, I think that changes the game. And I think that's really, you know, why they're investing in it. That's why they're so excited about.

And I think that's why I think we kind of stumbled upon this when we kind of came to the stock. And, you know, I found it at a good time, obviously with the, you know, the pre-price, fixed price becoming a thing. And I think that, you know, really showed that that story has a lot of legs to run from that perspective. And, you know, we think that, you know, that will ultimately help provide a lot of the value to both sides of the marketplace. Perfect. Perfect. All right. Well, guys, this has been great fun. I think you guys have great work here. Really appreciate you guys coming on here. I know you are all getting ready for your internships. I'm sure your firms are going to be delighted

with the work you did because this was great work. And, you know, I'm just hoping after you're done with the internship, I can get you on for another pod and you guys can all pitch what you've been working on all summer and we can get some some unpaid labor that way too but uh guys i appreciate i appreciate it this was great work and uh we'll stay in touch have a good one guys thanks a thank you so much enter thank you