OTC Markets Group - Earnings Call - Q2 2020

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by, and welcome to the OTC Markets Group secong quarter 2020 earnings conference call and webcast. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Dan Zinn, General Counsel. Thank you. Please go ahead, sir.

Dan Zinn (General Counsel)

Thank you, Operator. Good morning and welcome to the OTC Markets Group second quarter 2020 earnings conference call. Joining me today are Cromwell Coulson, our President and Chief Executive Officer, and Bea Ordonez, our Chief Financial Officer. Today's call will be accompanied by a slide presentation. Our earnings press release and the presentation are each available on our website. Certain statements during this call and in our presentation may relate to future events or expectations, and as such, may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning risks and uncertainties that may impact our actual results is contained in the risk factor section of our 2019 annual report and our quarterly report for the first quarter of 2020, which are also available on our website. For more information, please refer to the safe harbor statement on slide three of the earnings presentation.

With that, I'd like to turn the call over to Cromwell Coulson.

Cromwell Coulson (President and CEO)

Thank you, Dan. Good morning, everyone. Thank you for joining us today. I hope you and your loved ones remain safe and healthy. First, I want to recognize the commitment and dedication of our colleagues at OTC Markets. Our team's exceptional focus on serving our subscriber base has kept our markets open and efficiently operating through these unprecedented times as we carefully navigate the pandemic together. We are fortunate that our businesses can operate remotely. We have had all hands on deck and online this quarter. We rose to survive the unprecedented storm and are starting to learn how to thrive in these new times. The global health crisis and the recognition of social injustices have tested communities and economies. Across our own community and among our colleagues and clients, every individual has had to shoulder difficult work, family, and health responsibilities.

We must be a positive and understanding contributor in helping move our people and the economy forward. As we noted last quarter, and again in our SQ2020 report, our framework for managing through this challenging environment is grounded in four key principles: supporting our colleagues in prioritizing their safety and well-being, continuing to serve our subscribers and our customers, ensuring that we take the measures necessary in the short term to protect our current operations and remain financially strong, and remaining focused on the critical long-term strategic initiatives that position our business for future growth. Our most recent quarterly report and earnings release present the SQ2020 results in the context of broader global events, the current economic conditions, and this framework.

We continue to see good results in the second quarter 2020, with significant revenue growth in our OTC Link business line and solid results in our market data licensing business, offsetting 2% contraction in corporate services. We will cover our financial results in greater detail in a few moments. Throughout the quarter, our OTC Link ATS interdealer quotation system continued to support our broker-dealer subscribers and facilitate their trading needs. At the same time, our OTC Link ECN handled record trade volumes. With this continued volatility, we remain focused on the availability and reliability of our systems to keep our markets open and meet investors' liquidity needs. We met this challenge with the majority of our employees continuing to work remotely through the quarter. I remain impressed and humbled by the contributions of our entire team.

Our BCP planning and IT systems are such that we do not need to have a physical presence in order to operate. Our platform allows us to develop our plans methodically and to slowly and cautiously reopen our New York and Washington, D.C. office. We have adopted a phased-in approach to reopen that prioritizes employee health and safety and has permitted a small portion, roughly 10% of our staff, to return to the office on a part-time basis. We will continue to evaluate the environment in New York and throughout the country and will phase in additional time in our offices for our team as appropriate. System reliability remains paramount, and while we focus our attention on ensuring our operational capacity during this time, we have not taken our eye off our longer-term goals.

I noted earlier that we have placed particular emphasis on the transition from surviving the initial shock of the pandemic and its implications to thriving in a new environment that sees our team distributed across remote and in-office work. Our management, product design, and engineering teams continue to work on initiatives that will improve our technology platform and that, in turn, provide the backbone for our future growth and productivity. The increased usage of our Virtual Investor Conferences solution during the first half of the year highlights our ability to connect companies to their investors and to each other, even when we can't gather in person. Now more than ever, we embrace our strategic vision for a future that is online, data-driven, and social. As we anticipated, our corporate services business line has felt the most acute effects of the COVID-19 pandemic thus far.

While on a quarter-over-quarter basis, revenue has contracted 2%, an uptick in new sales during June provides a positive indication of our ability to engage issuers even during a period of global economic uncertainty. There was a decline in the number of companies on our OTCQB market this quarter. Small and venture stage companies remain among the most at risk of being impacted by the deterioration in economic conditions. We believe that the OTCQB Venture Market plays an important role in giving companies an efficient, cost-effective way to access the benefits of a public market as they address their financial or economic challenges. Our market data licensing business delivered quarter-over-quarter revenue growth from a combination of pricing increases and user growth.

Following the first quarter introduction of hot sector data and risk flags to our small-cap listed compliance product covering more than 2,300 NASDAQ and NYSE listed securities, in April, we added a hot sector designation for companies engaged in activities related to COVID-19. In June, we added a quantitative risk scoring metric to this robust data set. Last month, we made the U.S. bank holding company corporate structure data more available on our website. This information provides historical data trends and charting functionality on all call report data points for the more than 550 U.S. community banks trading on the OTCQX, OTCQB, and Pink markets. During the second quarter 2020, we continue to work closely with the SEC on significant regulatory proposals impacting our markets.

After filing our third comment letter on the SEC's proposed amendments to Exchange Act Rule 15(c)(2)(11) in April, we continue to engage SEC commissioners and staff on this pivotal proposal. The SEC's proposal includes several positive aspects. However, if adopted as proposed, the new rule would cause significant collateral damage to sophisticated investors, startup and early-stage companies, and broker-dealers participating in the OTC market. As a result, the proposal has brought out differing perspectives from individual and institutional investors, broker-dealers, companies, advisors, and regulators. We have proposed several practical solutions that would modernize and streamline the rule in a more effective manner. We appreciate the SEC's willingness to engage with market participants as they consider how to structure a final rule. During this quarter, we also submitted two comment letters on a proposal by the National Securities Clearing Corporation. We are urging the SEC to disapprove the NSCC proposal.

It would lead to an increase in the costs applicable to trading OTC securities and would disproportionately impact smaller broker-dealers accessing our markets and increase fees for investors seeking to trade and settle and clear transactions in the market for smaller company and OTC traded securities. This would also affect smaller companies listed on national securities exchanges. Finally, I'm pleased to announce that on August 5th, our board of directors declared a quarterly dividend of $0.15 per share payable in September. This dividend reflects our ongoing commitment to providing superior shareholder returns. We remain focused on maintaining operational and financial strength, on prudently navigating these unprecedented times, and on serving our clients, colleagues, and communities while positioning ourselves for future growth. I'm confident that we are in a strong position to do just that. With that, I will turn the call over to Bea.

Bea Ordonez (CFO)

Thank you, Cromwell. Thank you all for joining the call today. I hope that everyone is staying healthy and safe. I want to start by commending the efforts of the whole team at OTC Markets Group, who have continued to adapt to the difficult environment to support our clients and subscribers. I will now spend a few minutes reviewing our results for the second quarter 2020. Any reference made to prior period comparatives refers to the second quarter 2019. As we review our financial results, I will endeavor to provide additional information and disclosure related to how the unfolding COVID-19 pandemic has affected our second quarter results and how it could affect our future performance. For the second quarter 2020, we generated $17.1 million in gross revenues, up 9%. In the aggregate, the COVID-19 pandemic and the current challenging economic conditions did not have a material adverse effect on our second quarter revenues.

In our trading business, we saw strong growth in transaction-based revenues. In our market data business, the impact of price increases introduced at the beginning of the year, as well as growing users, drove quarter-over-quarter revenue gains. These more than offset contraction in our corporate services business. We operate three distinct business lines that generate diversified revenue streams and serve a broad range of market participants and a wide spectrum of U.S. and global issuers. We benefit from a subscription-based revenue model, with, for the six months ended June 30, 2020, approximately 84% of our revenues coming from subscription-based contracts that are recurring in nature. We ended the quarter with a strong balance sheet, $25 million in cash on hand and no debt, and are well positioned to continue to invest in our business and to prudently deploy capital.

We have continued to operate our core businesses, serve our subscribers and customers, and devote resources to enhancing our product suite and to adding subscribers and growing the number of issuers on our markets. We are confident that we are well positioned to navigate the difficult economic conditions ahead. With that said, it is clear that while considerable uncertainty exists, our operations and financial results in the coming quarters are likely to be impacted by the macroeconomic environment. Turning now to look in more detail at individual business lines. OTC Link revenues were up 26%. We continue to see a very active trading environment throughout the second quarter. This drove a substantial increase in the number of transactions executed on our OTC Link ECN, as well as a marked increase in the number of trade messages on our OTC Link ATS.

For the second quarter, we executed some 552,000 transactions on our ECN, more than double the 205,000 transactions executed during the prior year quarter. This, coupled with the impact of additional subscribers onboarded over the past several months, drove an increase in our quarterly ECN revenues of 211%. We have continued to see a very active trading environment during the months of July, and in the short term, it is likely that our OTC Link business will benefit from increased trading volumes that we are seeing in global equity markets more generally. However, as broker-dealers and others continue to navigate the difficult environment, it is possible that potential subscribers could delay purchasing or implementation decisions. Further, over the longer term, a prolonged downturn in economic activity could depress trading activity and adversely affect our subscribers and, in turn, our trading revenues. Revenues from our market data licensing business were up 13%.

Effective on January 1st, we raised the monthly subscription price for Level 1 and Level 2 professional users of our data, the first such raise since 2014. This, coupled with a 4% quarter-over-quarter increase in the number of reported users, drove a 16% increase in revenues. We also raised the monthly subscription cost of certain of our broker-dealer enterprise licenses, again the first such increase since 2014. This drove a 17% quarter-over-quarter increase in related revenues. Finally, sales of our data file products and sales of and upgrades to premium versions of our compliance offerings drove a 16% increase in data license revenues. As of August 1st, 2020, 44 subscribers use our products to streamline and automate their compliance processes, including almost every institution active in the OTC space.

We have devoted significant resources to growing our subscriber base and believe that we have captured much of the addressable market for our existing suite of products. With that said, we are devoting internal resources to developing and rolling out additional products that better serve the complex needs of participants in the OTC and broader U.S. equity markets. While revenues from our market data business have not thus far been materially impacted by the economic slowdown, it is possible that we could see potential subscribers delaying purchasing decisions, while existing subscribers might look to curtail their spending or cancel services. Revenues from our corporate services business declined 2%. To provide a little more color, revenues from our QX market were roughly flat versus the prior year quarter, reflecting a small decline in the number of companies on the market.

We benefited from a higher starting point at the beginning of 2020, with 442 companies on the QX market on January 1st versus 409 companies at the beginning of 2019. For the 2020 annual subscription period, we saw a small decline in our renewal rate, from 94% to 92%. In the first quarter 2020, we saw a significant slowdown in sales, with 9 companies added versus the 30 companies that joined the market during the first quarter 2019. When compared to that first quarter 2020, we have seen an uptick in sales in the current quarter, with 19 companies joining the market, including 13 sales in the month of June. However, our Q2 sales significantly lagged the 30 companies added in the first quarter 2019. On a quarter-over-quarter basis, the ending number of companies on our QB market has contracted by roughly 3%, driving a 7% decline in quarterly revenues.

In 2019, we raised market standards on our OTCQB market, which had the effect of reducing the available pool of domestic companies. Further, relative to 2018, we saw a much less active cannabis market. As a result of 2019, we saw a roughly 17% decline in sales, driving a contraction in the number of companies on the QB market at the beginning of 2020. We saw a significant drop in new sales during the first quarter 2020, with 28 companies joining the market versus the 68 companies that were added to the market during the prior year quarter. Again, we saw an uptick in sales in the current quarter and actually outperformed the prior year, with 45 new sales versus the 38 sales recorded in the second quarter of 2019. In the early months of the unfolding global pandemic and in respect of both our QX and QB markets, we saw issuers deferring buying decisions.

As the business community has adjusted to the challenges of the current environment, we have seen some encouraging trends in terms of new sales and issuer engagement and have a strong pipeline of prospects. We remain cognizant of the very difficult business conditions that exist for our issuers and are extending relief, including where appropriate by extending payment terms and by providing temporary relief from certain market standards. While we have seen a slight uptick in our OTCQB non-renewal rates for service periods beginning during the second quarter 2020, it has not been significant, a 2 to 3 percentage point increase in our non-renewal rate versus an average in 2019 of 6%. To the extent that the current economic downturn becomes more severe or is prolonged, we could see a continued dampening of demand for our corporate services products.

Further, we are likely to see an increase in the number of customers, particularly OTCQB customers, who choose not to renew their services at the end of their service term. On the other hand, a prolonged downturn would, over the longer term, likely result in an uptick in companies delisting from national exchanges and could expand the pool of qualified companies for our markets. Turning now to expenses. On a quarter-over-quarter basis, operating expenses increased 5%. The primary driver was a 9% increase in our compensation costs, reflecting increased headcount, the impact of annual salary raises, as well as an increase in cash incentive compensation accrued and in equity-based compensation expense. Finally, we are carrying a higher than usual accrual in respect of paid time off for our employees.

In terms of other spend, an increase in professional and consulting fees, a result of certain one-time costs, was offset by declines in technology expenses, in marketing spend, and in occupancy costs. Marketing expenses are down as a result of reduced travel and sponsorship spend, while occupancy costs declined as a result of one-time move-related expenses incurred in the prior year quarter. With revenues growing at 9% and expense growth contained at 5%, we delivered 8% quarter-over-quarter growth in income from operations, while net income for the quarter increased by 19%. The company's effective tax rate decreased from 20% to 12% in the second quarter, largely as a result of the release in the current quarter of reserves related to uncertain state tax liabilities, which was partially offset by a quarter-over-quarter decline in excess tax benefits recognized in respect of stock-based compensation.

In closing, we have continued to work diligently to adapt to the new working environment, to support our colleagues, and to continue to efficiently serve the thousands of subscribers and issuers that rely on our public markets. We delivered strong earnings growth while remaining focused on the critical long-term initiatives that position our business for future growth. While we continue to evaluate the evolving challenges of the current environment, we remain focused on delivering for all of our stakeholders and on continuing to innovate to support the needs of our diverse community of clients. With that, I would like to thank everyone for their time and pass it back to the operator to open up the line for questions.

Operator (participant)

As a reminder to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key.

Please stand by while we compile the Q&A roster. Our first question comes from the line of Chris McGinnis from Sidoti & Company. Your line is now open.

Chris McGinnis (Special Situation Equity Analyst)

Yeah, good morning. Thanks for taking my questions and congratulations on a nice quarter in this environment. I wanted to just touch on, I know you mentioned that trends are improving around new additions on the QB and QX. Can you just dive in on the improvement from Q1 in terms of what you're seeing from the new winds? Is that just we're past the pandemic and the economies are starting to open back up? Just provide a little bit more color on that and then also, have you changed your kind of go-to-market strategy at all related to new companies coming on board? Thanks.

Bea Ordonez (CFO)

Thanks for the question, Chris.

Look, I'm certainly not going to be one who calls the end of the pandemic. I think, as we've said throughout, we're continuing to evaluate what is a rapidly evolving and frankly unprecedented crisis that is being felt globally. With that said, we provided some context in Q1. Obviously, what happened in Q1 towards the end of Q1 was that we had limited business travel fairly early on, really by the middle of Q1. We canceled all in-person events at our offices and elsewhere. Both of those represent a significant form of outreach for our sales team and for us as a company. As we transitioned to a fully remote working environment, we certainly had to pivot our activities, pivot our marketing initiatives, pivot our outreach, and really sort of fully transition. We did that really rather quickly.

The other trend, of course, was, as I noted, I think in the early days, what we'll call the early days of the pandemic through late March and April, many folks were sort of in a sort of hold-the-line status quo sort of mentality of thinking that we were all going to get back to some form of normal rather quickly, or at least not knowing. A lot of people, what we saw in our pipeline with customers that we had already engaged with, were pausing on purchasing decisions, were sort of waiting to see, waiting to return to offices perhaps, waiting to see how things would play out.

As it's become apparent that this is not going to be a two to three-month crisis, I think what we saw is people returning to a new normal, to continuing to do their business and operate as they might do only from a remote working environment. What we saw clearly is that obviously the value we provide and the needs that we serve still exist. Public companies still need to access public markets, still need to engage with investors. I think those two trends, if you like, help drive some of the pickup in sales. What we're seeing is, as I said, pretty encouraging. We're seeing strong engagement from investors. We have one of the strongest pipelines, frankly, that I've seen in quite some time. There's some sectors that are driving some of that growth.

The resource sector is obviously pretty active right now, and we're seeing good engagement and good success out of that sector, both out of Canada, also out of Australia and domestically. We're continuing to push with global issuers. No change there, but we're continuing to push that international story and are seeing continued interest from global issuers, especially biotech companies, certainly for obvious reasons. We're seeing some good success there. We're continuing to devote resources to some of those regions where we see those pockets of opportunity. Australia, I mentioned. The Nordics is an area that we focus on, Western Europe more generally. We continue to see, as I say, strong engagement and are pushing our value story.

Have we changed our approach beyond the fact that we're all working remotely or by and large working remotely in terms of how we position our story and how we position our product? No, we had to adapt our workflow and our outreach to the environment, but we continue to believe very strongly in the value proposition of our public markets, both domestically and globally. We're seeing a nice pickup in those trends.

Chris McGinnis (Special Situation Equity Analyst)

Thanks for that color. Sounds really promising. Just in thinking of, you've had a few, everyone's had a few months to kind of look at the pandemic. Is there anything that maybe you've changed strategy-wise in thinking about the longer-term growth related to the impact of COVID on the business or maybe better opportunities that you see now to go take advantage of in this kind of environment?

Cromwell Coulson (President and CEO)

Chris, this is Cromwell.

My feeling is the world, every one of these cycles we've been through from 9/11 to the 2008 financial crisis to COVID, there's the short-term A, let's make sure we can survive whatever gets thrown at us, and then the start learning how to thrive. The learning process is something that we have to watch what's happened in the conditions and see where our clients and our community is taking us. That part of it is, and we want to be able to move towards those parts. Where I'd say is, as a feedback loop to my sales team, is that the corporate services, they're having an easier time getting the right people on the phone to talk our value quotient for OTCQX or OTCQB because CEOs and CFOs aren't needing to spend their time.

I think exchange-listed companies spend about one-third of their time going around to conferences and meeting investors. If you look at our platform for public companies, it is really a data disclosure and demonstration of compliance distribution platform. Those places where it can be seen is how do companies tell their story to investors? How do they get their information out to the brokerage industry, into the compliance processes, on online broker screens, into the financial databases? I think those will be much more interesting versus the public companies will really take a look at which is the really important face-to-face meetings they're doing after this, and then what are the other ones where they're really having one-way conversations that they can digitalize. I think our markets are built for that. That side is.

In the trading business, it's really the industry has been about keeping markets open. I think 2021, we're going to see what the appetite is for new products changes and where we push out through there. We also have a lot of interest in continuing to develop smart data around compliance products to help the brokerage industry. Which are the securities that it's easier to whitelist and which are the securities which they want to put red flags on? That's a place where we have a data expertise and a cornerstone of data that we can really help drive efficiencies for the industry.

Chris McGinnis (Special Situation Equity Analyst)

Just a couple more questions. One, just any updates on blue sky exemptions, anything upcoming?

Dan Zinn (General Counsel)

Sure. Thanks, Chris. We saw Virginia come through right at the beginning of the quarter on July 1st. The rule became final.

We've actually seen a lot more engagement. I think maybe driving off of what B and Cromwell were talking about with a new normal and companies sort of readjusting. We've seen regulators, certainly state regulators, do a little bit of the same and start to reengage a bit. We've moved from a place where I think a lot of states were waiting on an official word from NASAA, which is still pending, but they're taking matters into their own hands. We are at 37 now. We're engaged with quite a few others. The effort certainly continues in full. We push with NASAA as well. There are no states that I can say, "Here's their definitive date where a rule is going to go live." It has been encouraging to see a lot of people engage and stay in touch, even again, while everybody's remote.

Chris McGinnis (Special Situation Equity Analyst)

Great.

Thanks for taking my questions. Good luck in Q3, and I'll jump back into queue. I appreciate it.

Cromwell Coulson (President and CEO)

Thanks, Chris.

Bea Ordonez (CFO)

Thanks.

Operator (participant)

Thank you. Our next question comes from the line of Andrew Mitchell from Edison. Your line is now open.

Andrew Mitchell (Analyst)

Thank you very much. Good morning. I think you've covered several of my questions, but just following on from your points about the more recent pickup and the pipeline, is it just the case with most of the companies you're speaking to that they just need more time to elapse and confidence to grow before they would make a decision to join one of the markets? Secondly, on OTC Link, I was wondering whether the elevated volumes you've seen and are still experiencing from what you said are fairly concentrated or whether it's broader and reflecting the general volatility rather than being particular hot sectors.

Bea Ordonez (CFO)

Thanks for your question, Andrew. On the first part, yes. I mean, look, I think that's certainly part of it. We see some cyclical trends within sales more generally, obviously, around resources or, sorry, sectors that are performing well or not, IPO market health more generally. I think here what we're seeing, as I noted, was, yes, a lot of folks who were waiting to see, perhaps waiting for a return to normal before making those decisions. In terms of Link, look, as we noted, certainly the U.S. equities markets more generally are seeing a very active market environment that's across the spectrum of stocks, both OTC stocks and NMS stocks more generally. We saw a massive uptick in Q2. It's continued through July, which was another record month, and we've continued to see it in August, which traditionally is perhaps a quieter month.

Obviously, the very active market environment is a big contributor here. It is worth noting that we have increased the number of subscribers on our ECN very significantly. We have 65 subscribers connected as of August 1st of this year, and we had 45 connected at the end of last year or at the end of, sorry, August 1st, 2019. We have seen significant growth there. While it is a little challenging to tease out what drives the increase in terms of those new subscribers as well as the volume, certainly the presence of more liquidity providers and the presence of more participants in the market is definitely contributing there. We are going to remain focused. We cannot control volatility in the market or how active the trading market is.

We see it continuing at least in the short term, and after that, we'll see how the broader economic factors play out in terms of trading activity and volumes more generally. What we'll do in the short term and beyond is remain focused on continuing to onboard additional subscribers and winning more flow.

Andrew Mitchell (Analyst)

Great. Just on the cost side of things, looking forward, I imagine based on what you've said in the statement and just now on the presentation, there aren't any particular factors to look out for in forthcoming quarters and longer term, are there? I mean, wondering whether something like Virtual Investor Conferences, which is obviously an extraordinarily timely acquisition, as it turned out, I wonder whether that needs some more investment to provide volume or whatever. I guess that's a fairly platform which you can just use more fully.

Cromwell Coulson (President and CEO)

Andrew, this is from a big picture. I think the Virtual Investor Conference has been a fantastic tool to connect companies and investors and also a few other key stakeholders of conferences, AR banks have used within our community of key players. It has really been about getting having it out there today because where there were these face-to-face meetings and we were doing conferences in our offices and others did the face-to-face side. We now have an online product that is fitting the short-term need. Over the longer term, our strategy is clear that the future is online, data-driven, and social. Connecting companies with investors with digital platforms is something that we will be supporting for our issuers.

It is part of the package which goes from data distribution, disclosure, compliance demonstration, all of this information that is part of a public company's commitment to provide continuous information into markets so the price-setting process is efficient.

Bea Ordonez (CFO)

Just to jump in on the expense side, Andrew, I think Cromwell has covered the VIC and certainly were, as you said, timely perhaps, and were pleased with the performance of that business. We have seen a really nice uptick both in terms of the number of events that we are able to host just based on demand, in terms of the number of participating companies on each of the events, and importantly, because that is what drives the future engagement, in terms of the number of investors who are tuning in both live and who are clicking through to engage with those companies in an online environment thereafter.

We'll continue to invest there and to drive that product forward because we think it's certainly ripe for the moment, but also for longer-term trends around how companies effectively and efficiently engage with their investors and reach new investors. In terms of expenses, look, as you noted, and as I've noted in past, percentage of our operating expenses are broadly fixed, meaning that they're related to compensation and technology and infrastructure, close to 80%. We're a small company. As you know, we're just a shade over 100 people, and we run pretty lean. We're fortunate that we benefit, as I said in my remarks, from a subscription-based business model, and we're even more fortunate that our business is proving to be very resilient through these unprecedented times. We're at a point now where certainly we don't feel any need to do anything dramatic.

We don't need to contain our spending to respond to the pandemic. We'll just continue to monitor the situation. We make every effort just through our ordinary course of business and managing the business to align our expenses with revenue growth so that we can deliver strong performance and strong earnings growth. As Cromwell noted, we've remained focused on weathering the storm and also now continuing to sort of grow the business and position ourselves for the longer term.

Andrew Mitchell (Analyst)

Great. Thanks very much.

Operator (participant)

Thank you. As a reminder to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to Cromwell Coulson for closing remarks.

Cromwell Coulson (President and CEO)

Thank you, Operator. I want to thank all of you for joining us today.

As always, we remain committed to supporting our clients in this challenging time. I say this from our offices in downtown New York. It is a great city that was at the center of the storm. After so much gloom, the city is today showing rays of light. With resilience and ingenuity, it is a comeback story I look forward to. On behalf of our entire team, I would like to wish you and your families continued health and safety, and we look forward to connecting with you next quarter.

Operator (participant)

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.