CoStar Group, Inc. (CSGP) on Q3 2021 Results - Earnings Call Transcript

Operator: Good day and thank you for standing by. Welcome to the Q3 2021 CoStar Group Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Bill Warmington, Vice President and Head of Investor Relations. Thank you. Please go ahead. Bill Warmington: Thank you, Sadie. Good evening and thank you all for joining us to discuss the third quarter 2021 results of the CoStar Group. Before I turn the call over to Andy Florance, CoStar’s CEO and Founder; and Scott Wheeler, our CFO, I would like to review our safe harbor statement. Certain portions of the discussion today may contain forward-looking statements, including the Company’s outlook and expectations for the fourth quarter and full year 2021. Forward-looking statements involve many risks, uncertainties, assumptions, estimates and other factors that can cause actual results to differ materially from such statements. Important factors that can cause actual results to differ include, but are not limited to, those stated in CoStar Group’s press release issued earlier today and in our filings with the SEC, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q under the heading Risk Factors. All forward-looking statements are based on information available to CoStar on the date of this call. CoStar assumes no obligation to update these statements, whether as a result of new information, future events or otherwise. Reconciliation to the most directly comparable GAAP measure of the non-GAAP financial measures discussed on this call, including EBITDA, adjusted EBITDA, non-GAAP net income and forward-looking non-GAAP guidance are shown in detail in our press release issued today, along with definitions for those terms. The press release is available on our website located at costargroup.com under Press Room. As a reminder, today’s conference call is being webcast, and the link is also available on our website under Investors. Please refer to today’s press release on how to access the replay of this call. And with that, I would like to turn the call over to our Founder and CEO, Andy Florance. Andy Florance: Thank you, Bill. You did an excellent job. Good evening, everybody. Total revenue for the third quarter of 2021 grew by 17% year-over-year to $499 million. That’s at the upper end of our guidance range at almost $0.5 billion in revenue for the quarter. Most encouraging, year-over-year revenue growth for CoStar reached double digits this quarter for the first time since before the pandemic. And that’s with a 10% revenue growth in the third quarter and 12% of revenue growth in September. Net bookings of $47 million for the third quarter include the strongest sales quarter in the history of CoStar, which are only dampened by a soft sales quarter for Apartments.com. Adjusted EBITDA of $144 million exceeded the high end of our guidance range, coming in $10 million ahead of the third quarter consensus estimates. Our marketplaces contained to deliver exceptional value to our customers as traffic to our sites increased 25% year-over-year. Our marketing campaigns generated over 4.6 billion impressions in the third quarter across Apartments.com, LoopNet and Ten-X. We are welcoming our newest marketplace, BureauxLocaux, the French commercial marketplace we acquired on October 1st, to our fast growing network of property marketplaces. U.S. apartment market is experiencing the highest unit absorption rate in decades, causing the lowest vacancy rates in decades and the highest rent growth in decades. The absorption rate, vacancy rate and the rental growth are well outside 1 to 2 standard deviations to normal ranges in the past 20 years. The rate of change is stunning and the market stats are best described as whipsawing or extremely volatile. The pandemic initially caused a sharp drop in occupancy high move volumes and slight rent declines. With the availability of vaccine, absorption shot through the roof and occupancy levels and rent growth soared. When you see it on a chart, the slope of the curve is unprecedented. For investment grade rate properties 50 units or more in the United States, the average occupancy range over last 20 years has been -- average occupancy rate has been 93%, 1 standard deviation to low side is 92.3% and 1 standard deviation to high is 93.7%. That’s a very tight range. Owners manage the range tightly to optimize for total revenue by moving unit rents using automated yield management systems. Last year occupancy rates, occupancy fell below the 20-year standard deviation low to 92%. Currently at 95%, the vacancy rate -- the occupancy rate is way above the top end of the standard deviation high of the past 20 years. 95% overall is a very high number. The 20-year average annual net absorption of apartment units is 218,000. This year, the annual absorption rate tripled that average with 658,000 units absorbed. Annual apartment rent growth is 12.4% which is the highest it’s been at any point in the past 20 years. The 20-year average is one sixth that number, at only 2%. The 20-year average rent for an apartment has been $1,250 per month, but today that number has climbed to $1,676 per month. The sky high rents are good for owners but make for major housing crisis. Investors and apartments are being richly rewarded with the average sales price of an apartment unit at $248,000 a door, which is 82% above the 20-year average. What does this all mean for Apartments.com? Well, our clients are doing very well, very, very well. But it also means that tens of thousands of large investment grade apartment buildings in the United States are now basically fully leased. 12.5% of the U.S. investment grade apartment communities are now 99% leased or more. This is unprecedented. You’ve likely heard anecdotal stories of every major apartment building in some neighborhood having long waiting lists. When a community becomes 99% leased, they may love Apartments.com, but they can lower their advertising level to us. They want to continued presence on our marketplace, but they do not need hundreds of leads a month with zero or one apartment available. Our renewal rates have remained high during this period but thousands of communities that are essentially full have reduced their spend with Apartments. During this high occupancy marketing condition, some may have reduced their spend by 50% or more, though that’s a typical. I believe this is a market anomaly that will resolve back to normal occupancy ranges within a few quarters. From Economics 101, when apartment community is fully leased, it has underpriced its apartments. An optimally full apartment community is about 93% leased. Over time, the automated yield management systems will keep pushing rents until occupancy falls back to 93%, as well as the current levels will draw additional supply, which we’re already seeing high levels of supply -- new supply. I believe the yield management systems were either maxed out by the implied rate of increase necessary to optimize occupancy or the property managers took the systems offline because they felt the potential rate of rent increases necessary to maintain optimal occupancy were outside of acceptable social norms for rent increases. One of the primary independent variables in the yield management systems is the number of leads coming into leasing office. More leads means more competition for available units, more competition means the owner can raise rents. We believe that Apartments.com is the primary source of these high value leads that are driving higher rents for the owners. More leads to a point are good. So, despite these wild unprecedented gyrations in the market, we believe that the demand for Apartments.com is stronger than ever. In the year to come, we believe there’ll be unusually high unit turnover and clients will want a steady lead flow during this great migration. In August, we surveyed more than 20,000 renters about their moving intentions. As a result of that survey, we expect apartment market will experience increased turnover, more out of market moves and lower renewals as we head into 2021 -- 2022. When asked, when do you think you will next move into a new residence, 53% of survey respondents said they will move by winter. When asked what do you plan to do when your current lease expires, only 24% of renters expect to renew within the same community, down from 47% pre-COVID. This all makes sense given the huge affordability changes and changing work-from-home policies. Last month, the National Apartment Association held its first in-person meeting post-pandemic, and I was able to meet with a number of clients. One conversation stands out to me. As we conclude a meeting with our largest client, the senior member of that team said that he wanted to make an important statement. He thanked us profusely for being the single most important partner to his firm. According to him, we were the single greatest source of leads for his communities and helped them have an amazingly successful year. He stressed how much he valued our relationship and how much he appreciates the great work we’re doing for them. I’ve had thousands of client meetings over the last 35 years. His comments were unprecedented in their positivity. Over the past five years, this client has tripled their annual investment with us and become well more than twice the size of our largest CoStar client. Yet while he’s thanking us profusely, his firm is reducing their spending level with us over the past few months by about 5% because of many of its communities were so full. Despite these market gyrations, I believe we have a fantastic relationship with this client and our relationship with them over the intermediate long term will grow and flourish. I believe they will continue to grow their investment in Apartments.com in the years to come, long past this current market condition. While Apartments.com sales were soft this quarter during this unprecedented high-leasing environment or highly-leased environment, the strength of our platform remains incredibly strong. Leads were up 39% year-over-year in the third quarter and visits were up 17%. This was partially driven by our biggest marketing quarter of the year, where we developed -- where we delivered 3.5 billion media impressions in the quarter. As we’ve discussed here and on our second quarter call in July, the increase in our site traffic, combined with a largely flat pricing, has meant a windfall value to our clients in terms of effective cost per lead. The average cost per lead has decreased about 35% in two years from $9.55 in 2019 to $6.24 in 2021. To address this imbalance, we began rolling out a new rate card for apartments in September. The rate card further segments our prices with larger communities who are receiving more value, commensurately paying higher rates. In September, we began testing the new pricing with 150 clients, representing about 700 properties. The average initial price increases were 7% and went smoothly. I informally pulled the apartment sales leadership team, and they were not aware of any related cancels. Some of discount eliminations are resulting in more significant revenue growth, though, and we’d expect to see more of that going forward. For example, in September, a Florida client with a 380-unit property with a Gold ad was spending $759, and they renewed and they’re now paying $1,399 for an increase of 84%. A Texas client with a 424-unit property with a Platinum ad was paying $1,349, and they renewed and are now paying $1,799 for an increase of 33%. We will continue to scale our right pricing campaign. And though it has not had an impact on this quarter, we believe that it will have impact in out quarters. Given the value of our client relationships and extreme volatility of the current multifamily markets, we’re moving cautiously to protect the long-term value of our franchise. Despite all the sales successes we’ve had over the last five years, there are many more prospects out there today than we have clients so far. Our estimated penetration of 5 to 100-unit buildings is less than 4% and in the 100-plus-unit buildings, our penetration rate is only about 50%. We believe that we have many, many years of growth ahead for Apartments.com just through new client acquisition. Overall, we continue to believe the U.S. apartment market is a $6 billion to $8 billion revenue opportunity for Apartments.com. CoStar had its strongest new bookings quarter of all time in the third quarter with net bookings up 57% sequentially and up over 500% year-over-year. The record performance was driven by multiple factors, including the growing success of our upsell program, high renewal rates, new product and information capabilities, the return of annual price increase for renewals and continued economic recovery. Based on our sales success in the third quarter, we now expect revenue growth for CoStar of 13% in the third quarter, returning to our long-term historical revenue growth rate. Historically, we sold multiple versions of the CoStar product across two dimensions: separate functionality modules for basic property information, comparable sales data and tenant information; and separate geographic coverage for local, regional, state, national and global. 18,000 of our 30,000 CoStar clients had a version that was less than the full CoStar offering, so they were able to take -- they were not able to take full advantage of the CoStar product capability. On July 1st, we started selling only the single comprehensive global integrated CoStar platform and began a 12 to 18-month process of upgrading those 18,000 accounts. This is a win-win in which clients get access to CoStar’s unmatched breadth and depth of information and analytics on commercial estate globally, while we streamline product development, marketing and support. Since the start of the program in July 1st, we have upgraded about 3,000 or 18% of those 18,000 eligible accounts, generating $7 million in annual sales. With a strong starting point, we remain confident the upsell process will generate $30 million to $40 million in incremental annual revenue. Of the almost 1,300 clients we surveyed in the third quarter who upgraded or had a conversation of upgrading, about two-thirds gave us a Net Promoter Score of 9 or 10. We think the favorable reactions from clients reflect the higher value they’re receiving from the incremental capabilities of CoStar’s single integrated platform. Again, the CoStar sales team delivered their best quarter of net new business generation ever, 8% higher than the extraordinary fourth quarter of 2017, back when Xceligent filed for Chapter 7 bankruptcy, and 27% higher than the first quarter of 2018 when we sunsetted LoopNet Premium Searcher. On a per rep net sales level, the team is 1.5 times more productive than pre-pandemic. And these performance results are not just tied to our initiative and pricing actions, we signed up nearly 20% more new customer agreements in Q3 2021 versus the quarterly pre-pandemic average in 2019. In the first quarter of 2021, we integrated commercial mortgage-backed security loan information to CoStar, CMBS data, providing our customers valuable insights into more than $1 trillion of outstanding commercial loans made to over 100,000 commercial properties. Our clients have taken advantage of that highly detailed loan financial data with approximately 60,000 unique users collectively accessing that data over 800,000 times year-to-date. Next month, we plan to launch CMBS Analytics, which aggregates CMBS loan and property data across over 1,000 markets by property type, representing over 3 million CoStar properties. In addition to analytics, we’ll also release prepayment information, historical loan commentary and status and information on 150,000 disposed loans. We estimate the CMBS data generated over $3 million of net new annualized revenue in the third quarter. CoStar Lender, a new analytic tool that helps lenders with the underwriting, monitoring and regulatory reporting of commercial real estate loans, is progressing on plan. We are walking clients through the system and their feedback has been very positive. We’re on schedule for release in the first quarter of 2022. The first Lender release will focus on portfolio risk analytics and surveillance to help lenders meet regulatory and accounting requirements along with a loan screening tool for originators and underwriters. Subsequent releases will focus more on loan origination and underwriting as we broaden the solution to cover the entire lending cycle. These lender tools are specialized high-value applications and so will be priced at a premium to our standard CoStar offering. As such, we estimate they represent a potential incremental annual revenue opportunity of over $300 million. In mid-October, CoStar further broadened its international coverage with the launch of the Montreal market, the 18th largest city in North America by population. Montreal is the sixth market for CoStar and Canada since the launch of Toronto in 2014. CoStar currently tracks about 33,000 properties in Montreal with about 238,000 properties in Canada overall. Last Friday, marked the two-year anniversary of the great acquisition of STR. The uneven recovery of the hospitality industry continued in the third quarter, but STR’s revenue continued to grow at an impressive 13% year-over-year. Their quarterly renewal rate on our business remains strong at 94%. An encouraging sign of the recovery of the health of the industry, STR continues to add to the number of hotels that provide data to us. In August, this number reached 70,000 hotels, which is an all-time high. Separately, we’re seeing good progress in P&L -- new contributors to P&L and forecast is quite impressive. Back on April 1st, CoStar Suite subscribers received access to highly-detailed data on 90,000 new and enhanced hotel properties. In mid-September, we reached another milestone with a cumulative 1 million property views of that data by CoStar subscribers. While still early, the CoStar sales force campaigns targeting high-quality hospitality leads have generated over $2 million in new annualized revenue. Our LoopNet marketplaces delivered another strong performance in the third quarter with revenue growth of 17%. Growth in revenue from our Premium Diamond, Platinum and Gold signature ads was 52% -- was up 52% in the third quarter with a number of ads as well as the average price per ad, both growing by strong double-digit amounts. Renewal rates remain very strong, reaching an all-time high on a rolling 12-month basis in the third quarter, which demonstrates the recognition by our customers the value and effectiveness of LoopNet advertising. Our LoopNet marketing campaign was in full swing in the third quarter and is expected to deliver 2.2 billion media impressions in 2021 across TV, streaming and social channels. Our inaugural campaign titled Space for Dreams featured prominently on major sports events, primetime TV, streaming services and a wide variety of digital channels. The campaign is targeting tenants who can search and find great spaces on LoopNet. In the third quarter, LoopNet marketplaces grew traffic almost 20% year-over-year and delivered a new quarterly high of almost 11 million unique visitors on an average monthly basis. In fact, our site traffic is now more than 40% above the pre-pandemic levels. Office vacancy remains very elevated by historic standards. We believe that LoopNet is uniquely positioned as the ideal marketplace for brokers and owners to market, to help fill those painful current and potential vacancies. We continue to make progress expanding our direct sales channel for LoopNet. New hires and training were launched in the third quarter, and we currently have 32 salespeople dedicated to selling only LoopNet. Our goal is to have 50 dedicated LoopNet sellers by the end of the year or more, and continue to hire aggressively throughout 2022. Our CoStar Info sales team will continue to sell both CoStar and LoopNet in the foreseeable future. Overall, I’m very happy with the value and the performance of our LoopNet marketplaces and the growth potential before us. Today, our signature ad listings only represent about 7% of the highest-valued properties across the U.S. And so, I believe we are well positioned to continue strong double-digit growth for many years to come. Our residential business delivered strong 3Q results with our Homesnap product revenue growing almost 40% year-over-year and SaaS revenue growing almost 45%. Homesnap Pro registered users grew 15% to 777,000. Total agent subscribers to Homesnap Pro+ grew 53% to over 67,000 at the end of the third quarter. At the end of the second quarter, we repurposed approximately 60 salespeople from Homes.com to Homesnap. Upon completion of their training, the group went into production in mid-July. The results have been outstanding. In their short time selling Homesnap, Homes.com transplants have generated over $5 million in annualized revenue. The average monthly reoccurring revenue generated by these new salespeople at Homesnap is about 70% higher than when they were selling at Homes.com. Throughout 3Q, we eliminated or winding down the vast majority of the products and banner ads sold through the Homes.com website. We refocused the Homes.com team to improve and optimize the Homes.com site and implement a new experience for agents and consumers using the platform. For the first time ever, consumers can come to Homes.com or a major real estate portal, and connect directly to the listing agent, consistent with our Your Listing, Your Lead philosophy. Consumers are no longer served up buyer agents with -- who know nothing about the property or the buyer. And that’s been a major pain point for consumers with other competing residential sites. So, we’re doing something completely different, and hopefully, it will be a much better experience for the agents and the buyers. Now, in addition, we’re increasing the content of Homes.com to give consumers expanded options to find a place to live. Starting in August, Apartments.com listings are now appearing on the Homes.com site, adding over 800,000 apartment availabilities for consumers to choose from. This added content not only improves traffic to Homes.com but is expected to add millions of unique monthly visitors to Apartments.com, benefiting both of these marketplaces. The response to these changes has been very encouraging so far. Proper lease generated and sent directly to listing agent were up over 60% since we acquired Homes.com compared to the same period last year. Two weeks ago, we announced a very important new partnership with the Real Estate Board of New York or REBNY, to create Citysnap, the first-ever consumer-facing search website and mobile app for New York City’s residential listing service or connected to that unique feed of data that the agents maintain. Citysnap will provide complete, accurate and real-time residential listing data to agents, building owners and most importantly, homebuyers and tenants. The new site and app will go live in the middle of 2022. Citysnap will offer consumers and brokers multiple advantages. It will be free to list on Citysnap, so that means we have all of the listings, not just the paid listings. We will connect potential buyers and renters with listing agent consistent with our Your Listing, Your Lead philosophy, and make collaboration possible through access to Homesnap’s suite of tools. The thing that makes Citysnap partnership revolutionary however is promoted listings, where you can find promoted listings on the internet for just about any other product these days, including apartments on Apartments.com and the commercial property of LoopNet, you don’t see that for residential homes in the U.S. until now. As far as our partnership with the Real Estate Board of New York, we will be able to offer promoted listings on Citysnap. So agents and consumers will be able to buy preferred placement and features to increase market exposure. In a few weeks, we’ll be attending the National Association of Realtors Conference. The annual NAR conference is the industry’s largest trade show, drawing thousands of residential property professionals from across the country. As we did with our customers in the apartment industry, we won our presence at this show to be assigned to residential real estate brokers and agents that we intend to partner with them and support them as opposed to trying to disintermediate them. We believe we can build a profitable, successful business without disintermediating our clients. We plan to use our technology and services to help them strengthen their relationships with their clients and sell more properties. Less than 10 years ago, we had literally almost no presence, traffic or revenue in online marketplaces. Since that time, we have grown to be the leader in digital real estate marketplaces with approximately 90 million unique visitors per month, and we’re generating nearly $1 billion in run rate revenue in the third quarter for a 10-year compound annual revenue growth rate of 55%. We have successfully demonstrated our ability to generate leading marketplace positions by curating the best content, offering a great user experience and bringing effective market strategies to bear. Our Belbex business in Spain, which we purchased in 2015, had no marketplace exposure back then and had 1/10 of site traffic of much larger competitors. Within five years, we’ve grown our listing content by 22 times and achieved the top position among dedicated commercial property portals in Spain with about 70% of our traffic coming organically. Realla in the UK has grown listing content 8 times in three years and increased the number of unique visitors to our site by over 4 times. During this time, Realla’s share of commercial property site traffic has increased from 5% to almost 60%. We are excited to continue to expand our international marketplace capabilities with the acquisition of BureauxLocaux, one of the largest specialized property portals for buying and leasing commercial real estate in France. Launched in 2008, BureauxLocaux provides a subscription-based commercial property listing advertising platform, with a client base that includes over 90% of France’s top commercial property agents and brokers. Traffic to the company’s website, BureauxLocaux, has grown by 30% of compound annual base since the beginning of 2018. BureauxLocaux has over 60,000 for sale and lease listings and over 425,000 visits to its website each month. This acquisition is an important one for our international expansion strategy as France has the sixth largest economy in the world and has total real estate valued at an estimated $7 trillion. BureauxLocaux has built a leading commercial property specific platform with national coverage, great brand recognition and an excellent reputation among its clients. Finally, Ten-X revenue grew 20% -- I’m sorry, 27% year-over-year in the third quarter of 2021. We saw a 19% increase in average deal size and a 32% increase in transaction volume. Unique visitors to the Ten-X site grew 230% year-over-year. The average number of bidders per asset in the third quarter was 3.6% versus 2.8% a year ago. The synergistic network effect of improving supply and demand is reflected in Ten-X trade rate, which is the total assets sold as a percentage of the total assets brought to the platform. The third quarter 2021 trade rate remains strong at 71%, which we believe is about twice the average trade rate for offline traditional property sales. On the supply side, the dollar value of assets brought to the Ten-X platform year-to-date grew 37% from $1.7 billion in 2020 to $2.4 billion in 2021. Total gross merchandise value sold in the third quarter increased 92% year-over-year. 83% of the assets by dollar value we closed in the third quarter of 2021 were performing assets, sold by institutional and private client groups. In the third quarter of last year, that figure was only 65%, reflecting the ongoing transformation of Ten-X from a distressed asset platform into a market rate commercial property sales platform. Ten-X is still very capable of selling distress though. And with office vacancy rates at the highest level in decades and only 36% of the leased space occupied, we currently have an absurdly high functional vacancy rate of 70% in the office world. The Castle security access data also shows us that only -- we’re only seeing about a 100 basis-point improvement per month in the percent of swipe cards being used. If this issue results in a significant number of distressed properties coming to market, Ten-X could experience a major windfall selling these distressed properties in the quarters to come or years to come. We believe that these strong performance numbers prove that Ten-X’s value proposition of better speed, certainty exposure, cost and control than using a traditional property sales process increasingly resonate with brokers buying or selling commercial real estate properties. So, at this point, I’m going to turn the call over to our Chief Financial Officer, Scott Wheeler, who is going to share some riveting numbers with you. Scott Wheeler: I know how much you love the riveting numbers. You’re like when you go to the Charlie Brown Show, you know, it’s the teacher, all you hear is wah, wah, wah, number, number, wah, wah, wah, number, number when you listen to me. Andy Florance: I hear something. Scott Wheeler: I can tell. Anyway. Thank you, Andy, for your introduction. Great to have another strong financial quarter in the books, and of course, to see all the increasing number of product, content and marketing investments that, as you can hear from what Andy said, are delivering such great value to all of our clients. So, it is clear that over the past few years, we have established both, CoStar and Multifamily as businesses that are operating within these massive addressable markets and each of them have multibillion-dollar revenue potential. Now similarly, our LoopNet Marketplace and now our residential business also both operate in massive addressable markets and each have multibillion-dollar revenue potential. So, this quarter, we revised how we report our disaggregated revenue to increase the visibility to these $1 billion-plus potential business areas: CoStar, Multifamily, LoopNet and Residential, each of whose revenue will now be reported individually. Each of the sectors include both domestic and international revenue where applicable. So, the revenue sector that was formerly known as Commercial Property and Land has left the CoStar Group and it’s now working full-time from home on a lovely beach somewhere. So, we had to say farewell to Commercial Property and Land and thank them for the sector’s solid five years of performance and exceptional service. So, in its place, we now have a new, and I must say a very creatively titled sector that I personally named, called Other Marketplaces. Now, I didn’t spend a dime of our precious marketing spend to come up with that one, but it does include Ten-X, our Lands and our Businesses for Sale marketplace. So hopefully, I’ll remember to provide the relevant comparisons to all of you this quarter for the old grouping, while we transition to the new revenue sector information, will help everyone come along with the transition. So, I’m sure if I missed something, you’ll probably ask. So, in the third quarter, revenue of $499 million was near the high end of our guidance range. CoStar and residential both outperformed in terms of revenue in the quarter, partially offset by the lower revenue than we expected in Multifamily. Organic revenue growth for the third quarter 2021 was 12%, which is in line with our expectations. CoStar revenue increased 10% year-over-year in the third quarter, ahead of our guidance, marking the highest CoStar growth quarter since before the pandemic. CoStar is definitely on a roll. Renewal rates for CoStar remained their all-time highs and the average revenue size of our contracts has increased over pre-pandemic levels by over 20%. Both are very encouraging signs. The strong sales performance for our CoStar sales force, that Andy mentioned, is expected to accelerate the CoStar revenue growth rate in the fourth quarter to 13%. Now prior to the 2020 downturn, CoStar revenue growth has been between 12% and 14% on both the 10 and a 5-year compounded annual basis. So, we’re now firmly back in our CoStar comfort zone. And we expect to stay there for the foreseeable future. Keep in mind that we only recently initiated renewal pricing increases, which we expect will provide additional tailwinds for CoStar revenue growth throughout next year. Information Services revenue grew 8% in the third quarter of 2021 as our subscription revenue continues to grow in STR and Real Estate Manager. Onetime report purchases and other transaction revenues were slightly behind expectations. We expect lower transaction revenues in the future as we’re now selling CoStar subscriptions to hospitality companies, following the integration of STR hospitality data that we completed earlier this year. So, over time, this is expected to eliminate the need for these customers to purchase onetime report products. This is, of course, part of the subscription model strategy that we employ and that we pursue with all of our acquired businesses. Accordingly, we anticipate Information Services revenue to grow approximately 9% for the full year of 2021. Growth in Multifamily revenue was 10%, slightly below our expectation for the reasons that Andy mentioned. Approximately half of the revenue growth year-over-year in the third quarter is from new properties advertising with us and the other half is from growth in the average rate per property. As we continue to ramp up our new price program in the fourth quarter and beyond, and considering the latest multifamily market trends that Andy discussed, we expect the year-over-year revenue growth rate for Multifamily to be in the mid-single digits in the fourth quarter of 2021. Now for comparison purpose to our sector guidance at the end of the second quarter, the old Commercial Property and Land Group of Marketplaces delivered 53% year-over-year revenue growth in the third quarter, with all the businesses in this sector performing at or ahead of our expectations. Our LoopNet Marketplace revenue sector includes the LoopNet Marketplace as well as the international Commercial Property marketplaces. These are Belbex in Spain, Realla in the UK and now BureauxLocaux in France. The addition of BureauxLocaux into our financial results does not have a material impact on the quarter on the LoopNet Marketplace sector. The LoopNet revenue increased 17% in the third quarter, marking the 12th straight quarter of double-digit revenue growth. Signature ads, which grew 50%-plus year-over-year, are up both in volume by 20% and revenue per property by 30%. Once again, the CoStar LoopNet sales team knocked it out of the park for the quarter. They sold over 90% of their output coming from CoStar and less than 10% went to LoopNet. Now, this is great news overall, of course, and even with this trend heavily weighted to CoStar sales, more so than last quarter. We still expect LoopNet revenue growth of 14% in the fourth quarter and 16% growth for the full year of 2021. Revenue from residential business was $25 million in the third quarter with Homesnap providing the vast majority of the revenue as we wind down the legacy Homes.com products. Homesnap pro forma revenue growth was nearly 40% for the third quarter of 2021. We expect residential revenue of $20 million in the fourth quarter with Homesnap revenue growth exceeding 50%, which is higher than our previous forecast. The new direct sales force in Homesnap is delivering great momentum during what is typically expected to be a slower time of the year. We’re successfully winding down Homes.com legacy revenue ahead of schedule and don’t expect a material contribution from these products in the fourth quarter of this year. Because of this faster elimination of the Homes.com legacy revenue, fourth quarter 2021 revenue for residential in total is slightly lower than what was included in our prior forecast. For the full year 2021, continuing revenue in our residential business is expected to be a little over $60 million, which excludes the discontinued Homes.com revenue. Revenue for Other Marketplaces, our newest member of the revenue reporting family, includes Ten-X along with our lands and businesses for sale marketplaces. Approximately half of the revenue in the second half of 2021 in Other Marketplaces is from Ten-X. Because Ten-X revenue is transactional and recognized when the closings occur for properties that are sold through the platform, the Other Marketplaces revenue doesn’t behave in that same friendly linear fashion as our businesses that are fully subscription-based. In other words, we expect a few more ups and downs between quarters, depending on the property sale timing. Other Marketplaces third quarter 2021 revenue grew 21%, with all businesses delivering double-digit growth. There is uncertainty in the timing of when some assets will close in the fourth quarter for Ten-X, which caused a modest reduction in our fourth quarter revenue outlook. Lands and businesses for sale marketplaces are expected to deliver strong double-digit growth in the fourth quarter. The total revenue is expected in the $32 million to $33 million range for Other Marketplaces in the fourth quarter of 2021. Our gross margin came in at 81% in the third quarter, consistent with the prior two quarters and the trend we expect to continue through the end of the year. Net income was $64 million in the third quarter of 2021, and our effective tax rate was 23%, which was in line with the expectations we provided in our last call. Adjusted EBITDA was $144 million in the third quarter, up 8% from prior year and $9 million above the high end of our guidance range. The favorability is a combination of slower ramp-ups in hiring and slightly lower marketing costs in the quarter. Adjusted EBITDA margin was 29%, 200 basis points above our third quarter forecast. Cash and investments approximated $3.8 billion at the end of the third quarter, an increase of $87 million from the end of the second quarter of 2021. Looking at some of our performance metrics, our sales force approximated 850 at the end of the third quarter of 2021, which is a slight increase from the third quarter from the prior year and down around 55 people from the second quarter of 2021. The sequential reduction in sales headcount is primarily the result of the integration of Homes.com and the reduction of the sales force that was not repurposed to sell Homesnap and Multifamily. LoopNet and Ten-X sellers increased while Multifamily sellers decreased modestly during the quarter. Contract renewal rates were 92% for the third quarter, in line with the second quarter and a 300 basis-point increase versus the third quarter last year. Renewal rates for customers who have been subscribers for five years or longer was 97%, consistent with the second quarter of this year and 250 basis points above the third quarter of last year. Subscription revenue on annual contracts accounted for 76% of overall revenue, a 1% decrease from the previous quarter because of the Homes.com acquisition. I’ll now talk through our outlook for the full year and fourth quarter of 2021. Full year revenue for the year is now expected in the range of $1.935 billion to $1.940 billion for 2021, which represents a narrowing of our guidance range, along with approximately an $8 million reduction at the midpoint. This reduction reflects the more cautious approach to our forecasting to the Ten-X property sale timing, the net impact of CoStar’s strength against lower Multifamily revenue growth and the accelerated elimination of Homes.com revenue in the fourth quarter. This full-year range implies a fourth quarter revenue range of $498 million to $503 million, representing revenue growth of 13% year-over-year at the midpoint of the range. We are increasing our adjusted EBITDA outlook for the full year by approximately $8 million at the midpoint of the range. We now expect adjusted EBITDA to range from $615 million to $620 million, which incorporates the outperformance in the third quarter, along with continued cost favorability in the fourth quarter of this year. Fourth quarter adjusted EBITDA is expected in the range of $161 million to $166 million, for an adjusted EBITDA margin of around 32%. So, that about wraps it up for me today. I will now turn the call back over to Bill and our friendly moderator to open up the line for questions. Bill Warmington: Thank you, Scott. Sadie, would you please give instructions and assemble the roster for the Q&A portion of the call? Analysts, please limit yourselves to one really good question. Thank you. Operator: Thank you. And for our first question, we have Pete Christiansen from Citi. Pete Christiansen: Good evening. Thanks for the question. And thanks guys for the added transparency disclosures on the revenue side, I really appreciate. I think I have to ask this question. I know we’re in just the end of October here. But Andy, I guess, as you look forward to 2022, just wondering if you had a sense on spending as you think about ramping up the residential effort? Any sense of how that will play in, whether there’s any connection there with some of the revenue weakness that we’re seeing in the apartment side? Do you have the opportunity to pivot more spending dollars from apartments over to residential? Thank you. Andy Florance: Yes. So, at this point, what we’re focused on with residential is growing our selling operation of Homesnap. So, Homesnap, we’re having great success there, as you can see from these numbers, good, strong SaaS revenue, subscription revenue, the concierge product. We’re accelerating that growth rate dramatically. We believe there is additional room to accelerate that growth rate of Homesnap. So, the Homesnap Pro product doesn’t have a sales force right now. That product reminds me an awful lot of what LoopNet looked like over the last 10 to 15 years when it was being sold at a $50 a month subscription level. And I think it would be healthy for us to be growing the community of residential agents that regularly connect and log into Homesnap and turn to us as an important marketing tool for them and information tool for them. So, that’s our primary focus. And that does not involve large-scale consumer marketing initiatives. That’s really about salespeople and software. And secondarily, what we’re focused on doing is dialing in exactly the right formula for Homes.com and the right relationship between the professional community at Homesnap and the consumer, the buyers who are going to be on Homes.com and making sure that we’re designing the right tools there for them. So, until we have finished that software, finished those designs, fully flushed out where these two products are going, which we’re working very hard on right now, we are -- it’s premature to be looking at dramatic spending initiatives beyond adding salespeople to Homes.com and little bit of software initiatives and the like. So, it’s still open. Now, could we dial back some of the spending on Apartments.com when so many apartment communities are full, probably, and we’ve already had those discussions, not huge, it’s not something that is necessary to free up some initiative over on the residential side, so. Operator: For our next question, we have Jackson Ader from JP Morgan. Jackson Ader: I’m on for Sterling Auty tonight. The question really is about timing of two things: expectations on maybe the timing for the Multifamily business to begin to rebound; and then, Andy, when you mentioned the potential windfall for Ten-X, with some of the distressed assets may be coming on to the market, any expectation on when that -- when or if that timing might come to fruition? Thank you. Andy Florance: Sure. So, there are two primary factors with Apartments.com, I think I’ve mentioned. One is this unusual volatility. The spike in occupancy levels, that’s unprecedented. I am sort of predicting something that hasn’t happened before. I believe it begins to reconcile in the next two quarters. It could be one to four quarters, but I do not believe that sophisticated operators of apartment communities are going to leave their occupancy levels so high and miss an opportunity to churn rents as well as you just naturally are going to have so much musical chairs and churn going on because of these pricing changes and work-from-home changes. So, I think it will break pretty quickly. Second major factor is the fact that we are delivering significantly more economic value to our customers than we’ve ever delivered before. And I believe there is an opportunity to recognize that. We’ve trialed some of that in September, and we’ll continue to ramp that up into the fourth quarter and first quarter and the second quarter. So, I think you’re probably -- you’re not looking for any dramatic changes in the fourth quarter this year, but I think you’ll move into a strong 2022. And again, I want to stress that the product itself is as strong as it’s ever been. And we’ve actually been a part of probably helping the industry to achieve the highest rents they’ve ever achieved. I wish we had options on rental levels, but we don’t. And I guess, the second question was when would we expect to see Ten-X benefit from distressed levels in office, well, it’s not something we can predict the exact data, something like that. It’s just my sense is, as I walk through all these office buildings, and I don’t see a human being, that there’s a potential problem there. And so, at some point, rational CFOs will begin to rightsize some of these properties. I do believe that work-from-home is not an effective long-term solution. So, I think that will mitigate to some degree in the market. I am seeing all kinds of examples of businesses running into trouble because they’re not operating at the same productivity levels from a work-from-home model. But, I think that -- I think it could be a 2022 thing. I can’t believe there won’t be some distress somewhere, especially sort of second-generation office buildings may have a tougher time, but Ten-X is really good at selling, finding the biggest audience possible to find that buyer for some real oddball stuff and some high-quality stuff. So, I would think 2022, but I’d be surprised if there’s not some sort of something coming there. So, these two facts -- this sort of effective 70% vacancy rate is potentially a tailwind behind LoopNet and Ten-X. Operator: For our next question, we have David Chu from Bank of America. David Chu: So, should 4Q then be the trough in Multifamily revenue, given that you get some pricing benefits and then occupancy rates can’t really go higher? Does that make sense? Andy Florance: That likely makes sense. And yes, it’d be really odd if occupancy went -- rates went higher. Scott Wheeler: Yes, not much room left. Andy Florance: That would be strike. So, I think that’s a fair assessment. Operator: For our next question, we have George Tong from Goldman Sachs. George Tong: So, apartment vacancy rates have reached the lowest level in recent history. And you mentioned that that should normalize in a few quarters as yield management systems push rents up. What’s the likelihood that this could be the new norm over the medium term as the economic recovery continues to take hold? And how receptive have customers been to some of your pricing and lead management initiatives to try to compensate and address the prevailing dynamics? Andy Florance: So, I think that -- I do not believe it’s the new norm to have 99% leased communities. I do not believe. It’s sort of like unemployment, like if you get to 1% unemployment, you have a very unhealthy economic situation. If you get to less than X number of days of supply of housing, you get to a very -- you get to a frozen market. So, I believe that it remains in owners’ interest to have enough vacancy that they’re sort of testing -- they had churn in there and that they’re testing the upper limits of their pricing. It’s a -- for these folks, with fixed mortgages, moving these rents up is extremely attractive. Their NOI goes up at a much higher rate than their rental rate does. So, you move 10% up on your rental rate, you might be moving up 40% on your NOI and a cap rate of 3.5%. These folks are motivated to push rents. They may push rents and sell the asset, right? But I don’t think it’s a new normal. So secondarily, the reception we’ve received to the pricing changes has been very positive. Again, I pulled -- met for a couple of hours recently with some of the senior sales leadership on the apartment side and asked, had anybody canceled. And an answer I get back without doing a deep dive audit was no, and that secondarily, overall people were fine with it. Now remember, these people that were pushing these pricing increases too, it’s not that we are increasing their price. We are reducing the rate at which we reduce their cost per lead at a time in which they’re getting tremendous value from these more and more efficient lower cost leads. I think it’s possible that we’re giving some of these communities leases for as low as $30 a lease, when they have historically paid potentially $300, $700 per lease. So, I think it’s a fairly straightforward conversation. We’re delivering value. And I think folks want us to continue to delivering that kind of value. So, it’s something people are responding to. Now, I’d be disappointed if some owner -- property managers somewhere didn’t bring out their procurement officer and try to beat us up. So, I expect that to happen. But, no cancellation so far is pretty good. Operator: For our next question, we have Ryan Tomasello from KBW. Ryan Tomasello: It’s clear that apartments will continue to be a bit of a drag on growth, heading into next year, depending on how these unprecedented occupancy levels of all. But I wanted to give you an opportunity, Andy, to walk through some of the bright spot tailwinds for the business in 2022 and where you think there’s room for growth acceleration. For example, at LoopNet, where the sales force is ramping, Residential, where you’re making investments and also CoStar Suite with these new product enhancements in the upsell for -- I guess, without tipping your hand on guidance, how are you thinking about the organic growth power for the business progressing through 2022 and even beyond, if you’re willing to get out that crystal ball? Andy Florance: Sure. So, first of all, bright spots in just the Multifamily and Apartments.com, it’s important to keep looking at those penetration rates overall. So, there’s two factors. What your revenue is per unit with your existing customers and then also your ability to add new customers. So, we still remain at very low penetration rates, we are proving our ability to sell, not only at the 120, 150-unit communities, but we’re proving our ability to sell successfully at the 75-unit community, the 50-unit community, 30-unit community, 10-unit community, 4-unit community. So, it’s all greenfield for Apartments.com. We have -- we can double, triple, quadruple, grow tenfold the number of communities participating with us through time. So, that’s an important growth driver that remains there in 2022 and certainly, we remain very-focused on, so. And then, the other thing is that these pricing initiatives and rightsizing also I believe could generate -- may well generate some good momentum moving into the middle of 2022 for Apartments.com. LoopNet is, as I said, doing really well, you see in the traffic numbers. I really do believe that digital marketing is the new norm in commercial real estate. And I believe we have an extraordinary opportunity there because of our incredible share of traffic and eyeballs in that industry. I think there are a lot of folks in commercial real estate, who are still operating on 1985 marketing paradigms, largely based on print or digital substance of print. And I think that there’s going to be more and more awareness and awakening there. I am thrilled with what’s happening in Homesnap. Everyone was looking for us to go out and spend $1 trillion on marketing and do sort of exactly what REA Group is doing or what Rightmove is doing. We will develop in pace something like that. But, we have a great product there in Homesnap that residential agents like. And it hasn’t been widely marketed or sold to that community, and we’re pretty good at doing that. So, I think there’s a lot of revenue that can be built there, that’s great revenue because it’s strategic revenue that builds the base platform that’s unique to us to be able to also be a leading player in the consumer marketplaces. CoStar, you heard our discussion of all these new sort of initiatives beyond the upsell process, but just the lender, STR, that sort of progression of new features, it’s going to be -- I am blown away by how well our sales people are doing on that side, just the individual productivity rates I’m seeing are unprecedented. And the whole reason we’re doing this upsell initiative, the whole reason we’ve been launching a successful upsell initiative, is to prep the field for the next revenue growth initiative, which is unlocking the value of cross-border information with our gradual expansion into Europe, continued expansion in Canada and the fact that the vast majority of investing of institutional-grade assets crosses borders. We want to be able to provide solutions there and then actually drive revenue for our shareholders there as well. So, no shortage of stuff going on across all these businesses we’ve got. We are going to get some market anomalies, some odd things happening here and there, a black swan event here or there, but a lot of tailwinds overall. And thank you, Mark Schwartz and Drew Davidson for just killing it and your sales team there in CoStar. Operator: For our next question, we have John Campbell from Stephens Incorporated. John Campbell: On the RBNY partnership in Citysnap, I mean, obviously, StreetEasy has kind of dominated that NYC market in recent years. We’ve heard a lot of pushback on the kind of daily listing fees. I think, they started with a freemium model, but the pricing has gone from, I think it was $1.50 to like $6 per day, and that’s happened in a handful of years. But Andy, I think you said this is going to be free to list. So, I’m just curious about Citysnap’s kind of approach to pricing, or are we thinking about this more of like a strategic move for you guys, maybe something you can build off in the future? Andy Florance: Sure. So, remember, Citysnap is Homesnap. And there are over 1 million agents. And those agents, when they start using Citysnap, when the MLS buys it for them, it might be free, it may not be -- but when they subscribe to the enhanced functionality of the product, they may begin spending $50 a month with us, similar to what we use to get for LoopNet. Then if they start using us for concierge marketing services, they might spend $500 a month with us, $600 a month with us. And when you start thinking about 1 million agents spending $500, $600 a month, then you start to get to an interesting number, right? Because that’s not a year, that’s a month, $500 a month. So, we’re selling a lot of that right now, and that’s going well. So, we don’t really have to do anything like what StreetEasy is doing, which is so unpopular in order to be financially successful. So, yes, I’m aware that like folks are pretty annoyed at StreetEasy and the fact that the prices are going up so rapidly, it’s all pay to list. And some of the functionality where they’re using other people’s listings to try to get brokers fees for agent fees for other people. So, like we have to pay to not have a different agent’s name on your listing is kind of -- blackmail is too strong a word for it, but it’s zillamail or something, I don’t know. It’s a little offensive to the industry, which is why you’re seeing stuff like such an unprecedented thing that’s never happened before. There’s never been an MLS before in New York City. This is the first time the agents have all gotten together and actually created something together. And we’re honored to have the chance to try to serve that. Initially, the fees are on Homesnap Pro+, which is sort of Citysnap Pro+ and the concierge marketing products and then ultimately over time, it will be marketing revenue very similar to what we do with Apartments.com, LoopNet or REA Group. These are marketing solutions that allow almost all the brokers to participate, not just a small selection of them. It’s something we do that allows them to participate in a way in which they feel that we’re their ally, not their disintermediation enemy. So, there’s a whole bunch of ways we can do this. Now, we don’t minimize the challenge of building an audience in it. But, we obviously have experience in building audiences, and we like taking on these challenges. I’m not sure if I answered your question, but that was that. Scott Wheeler: Sounded good. Operator: For our next question, we have Andrew Jeffrey from Truist Securities. Andrew Jeffrey: Andy, I just want to understand the dynamic in Multifamily pricing. And I appreciate the fact that you’re lowering apartment owners’ and managers’ cost to generate leads, and that’s the key. Can we think about perhaps because of the value proposition, a period at some point in the next 12 or 18 months as vacancies normalize, where we see demand increase on top of the pricing increases you’ve put in place? I mean, I don’t -- in other words, I wouldn’t expect prices to revert, right? And so, you could get some leverage coming out of this, timing uncertain? Andy Florance: Absolutely. So, the value proposition we’ve delivered is really incredible. So, when we bought Apartments.com, like five, six years ago, they were generating, I believe, sub-20 leads per property per month, maybe 10 to 15. We’re now generating 175 leads per month. The pricing hasn’t moved anything like that. And so, rerationalizing that pricing to effectively slow the rate at which we bring the cost per lead down, is separate from what’s going on in these super high occupancy levels. So, we might see revenue growth associated with more rational pricing of lead delivery, recognizing that some communities pull many more leads, some communities need less. But we may see pricing revenue acceleration from that. And then you may see a return to people needing to move up our tier levels to drive more listings as they see vacancies as people move back and forth and play musical chairs in rentals with all this work-from-home stuff and as well as potential changes in the economy and then also changes then get higher rent growth. So, if these folks pull another -- if our clients pull another 10% rent increase, they may see occupancy levels fall still at high levels, but our leads will become worth 10% more than they were before. And again, from an NOI perspective, our leads become worth 30%, 40% more, right? So, I think you’re right, it could be a double whammy. But, Mr. Wheeler here has to play the role of Eeyore and he’s going to see it before he’s ever going to talk about it. Scott Wheeler: Well, there are some positives like you mentioned the renewal pricing increases in your comments, but we’re selling new ads under our new pricing structures that are being sold for 15% to 20% prices higher than we were selling them for in July. And we’re getting hundreds of properties that are coming in, paying those prices. So, to your point, Andrew, we’ve typically seen 10% volume growth over the years, and we have plenty of room to penetrate with volume growth. If you had a nice volume growth kicker on top of a 15% new price card, that’s interesting. Coming from Eeyore. The new Eeyore. Operator: For our next question, we have Mario Cortellacci from Jefferies. Mario Cortellacci: Just given all the dry powder that you guys are still holding, I’m just wondering how we should think about the potential timing and maybe even sizing of deals over the next 12 months, or maybe even asked a different way, I guess if your current pipeline -- or with what’s in your current pipeline, could you just give us a sense for how many deals do you think you can close that are maybe more tuck-in in nature? And are there any chunkier deals out there that maybe we’re not seeing in the private market? Andy Florance: Sure. I appreciate the question, Mario. But -- and as you know, we’re not going to tell you anything that really identifies anything. I can tell you anecdotally, 15 minutes before this call, I picked up the phone, I called Martin Johnson, our Head of M&A, and updated him on 4 or 5 thoughts we had of relatively small companies, but could be nice tuck-ins, they’re strategic. There’s always a big pipeline of strategic things. There’s some that are a little bit bigger. There’s some I think that will get a -- that I think is pretty straightforward and positive that we’re working on, that has nuances that are challenging, but could be interesting. We just turned down a pretty significant deal because -- after due diligence because we felt it was ultimately not the right value and had too much hair on it. But, I think it’s more of a -- right now, what we’re looking at is more deals that sort of enhance the sort of general initiatives you’re well aware of. We’re not looking at anything right now that really jumps us out of the things you’re familiar with, the general strategic themes that our investors are well aware of. But, there are a lot of things that can help us strengthen what we’re already doing. Operator: For the next question, we have Jeff Meuler from Robert Baird. Jeff Meuler: For Apartments.com, can you give us some perspective on how the business is performing in any metro areas that are closer to the median for vacancy rates? And I’m talking relative to the historical median or within 1 standard deviation or something to the extent to which they’re out there. And then, historically, how sensitive has the business been to new apartment construction? I recognize that there’s interplay with occupancy rate, but just in terms of the need to advertise to lease up the new builds, and any update on those trends or sensitivities? Thanks. Andy Florance: Sure. So, just keep in mind one thing, as you consider what’s going on here. If you ever think about the unemployment -- the job creation numbers, you might -- people might be expecting 280,000 new jobs this month. People forget that that is 5 million jobs lost and 5.2 million jobs gained. So, the 200,000 is -- and that’s the same thing here. You might have a relatively small movement in people downgrading, which causes a softness in the apartment sales because they’re so occupied, the under construction side of the business is solid and cranking, and we are at a near all-time high of supply. And those communities always -- I mean, most typically look to Apartments.com to fill up their communities when they hit the market fully vacant. So, that business is as good as it’s ever been. And it doesn’t take a Nobel laureate economist to know that with rents climbing 12% and cap rates going down to 3-point whatever percent that there, you’re going to see more supply, especially in apartments as an inflation hedge. So, I think you’re going to see a lot of activity in land. And I think you’re going to see a lot of activity with people bringing apartments to market as quickly as they possibly can. So, I think that business is going great. In terms of anecdotally, one market versus another, these different markets are gyrating -- doing these spikes in occupancy at slightly different pattern. So, at the beginning -- early stage of pandemic, you saw spikes in say like secondary tertiary cities, like a Richmond or San Diego, and you saw vacancies rise in markets like New York, then you see New York shoot up and occupancy levels down in vacancy. So, they’re all moving around with pretty good volatility. So, we don’t have -- we aren’t really identifying clear cut different trends from one market to another. Just generally, the overall theme is demand for apartments right now is an unprecedented high. And the supply is high, too, but demand is super high, and it’s across the country. Operator: For our ne
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