RELI - Earnings call transcript Q1 2024 | Reliance Global Group, Inc.

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Operator

Greetings. Welcome to the Reliance Global Group First Quarter Business Update Conference Call. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, Ted Ayvas, Investor Relations.

You may begin.

Ted Ayvas

John. Thanks, thank Financial Reliance Conference Results and Full Group's Call. for Quarter First and you afternoon, Global joining XXXX Good Business Update

and Chief Financial On Ezra at Reliance. Reliance us with Officer Group; Chief Chairman Global Markovits, the of Executive Joel today and Officer call Beyman, are

the release today, on is Earlier for the company XX, March company's its announced ended the www.relianceglobalgroup.com. posted XXXX. results website, operating quarter The press

and has company company's with filed its Commission on also report can XX-Q Securities as website the the the quarterly the SEC's www.sec.gov. Form be U.S. website addition, Exchange well on which today, at In accessed as

If you any please like the have would company, any questions contact Crescendo call (XXX) or information at about the additional Communications after XXX-XXXX.

trends that and operations, may largely on believes strategy, and operations the such forward-looking statements long-term should, this the company's results operations XXXX, expect, the March historical projections operations in are quarter it statements and statements. financial will, operating contained objectives business Before likely, forward-looking events for intend, for may, may identify These statements. the similar to we current conference than future words our expectations believe, like forward-looking are terms that seek, its might, everyone statements position, regarding Mr. expressions needs. future and results plan, All XX, Beyman expectations short-term based terms words plans conference of estimate, anticipate, remind call continue, financial facts negative statements. and The design and could, of financial to and results our and including other of contain ended the and other of affect project, forward-looking call would future reviews and and condition, statements of about strategy are intended company's

and these Because company's on XX-K conference statements Securities differ X, and are occur, circumstances XXXX. discussed the Exchange several anticipated described uncertainties with this results events could Commission and statements. and to assumptions, as April materially Form the from in in risks, filed not those may forward-looking forward-looking in assumptions actual of uncertainties subject risks, implied call adversely and the forward-looking the U.S. and or These

rely predictions statements as not should upon events. future of You forward-looking

believes reflected statements reasonable, it expectations in level company achievements. that results, the guarantee activity, Although future the forward-looking performance are the cannot of or

assumes any In this conference these addition, update the accuracy the to person by are neither attributable expressly others forward-looking of completeness any statements company statements, to other forward-looking company in of disclaims well and responsibility the their cautionary statements. of made The forward-looking statements. any nor qualified these company as in entirety any for duty All as call. these

in all You should by context of these uncertainties. the the and forward-looking risks statements made evaluate company

Ezra of that, call and Officer Beyman, Executive Global to said like Chief the Group. turn over Reliance I'd to Ezra? Having now Chairman

Ezra Beyman

Thanks, everyone us joining Ted. afternoon, Good and today. for thank you to

the first an our exciting time shared XXXX, we report I'm trend of that share have this solid quarter operations at the is continued we of Reliance and pleased significant marked in It growth. the Group. insights by April, to Global made In steady early into for to organic us performance we press

across approach, our our our entity. States OneFirm owned was This unified our the single which operated and new a integrates emphasis X quarter, into agencies influencing United

significant experience traction, profitability. revenue to continue gain efforts we that and improvement our in these both believe As we will

XX,XXX BenManage Spetner States. employees United agreement company voluntary we As Associates, that Spetner the we recently enrollment benefits is you a acquire benefits throughout provider well-established benefits to company. definitive into through and announced have leading enrollment and know, a of may a entered to over

this prove acquisition point and the significant a pivotal company's be acquisition that history. Spetner to in We turning most will are confident of the

strongly in to future. setting reasons the take delve us to expected into this is our a endeavors. move would benchmark behind for new strategic to The the and enhance for deeper time future acquisition like company's means and market position this it dramatically the capabilities I our what

and extensive expected position, and expand expertise to trajectory. with into base Spetner's our of we aim offering our setting operations goals, market By Spetner's competitive enhance is not services innovative a it's client to to significantly bringing our the strengthen broader audience. a our our our acquisition accelerate stakeholders our new growth, strategic and integration in our This benefits aligning is solutions The create standard growth service more about about and value for just edge in industry. industry enhanced

by This consolidated HR HR efficient and enrollment with and center and call BenManage administration streamlines offers paperwork live with minimizes process applicant Spetner's operations BenManage and user-friendly enhances benefits. tasks. digital tracking, support, benefits a interface, a onboarding Featuring enrolling approach integrating and managing enrollment benefits along employee systems. smooth company payroll for various

recruitment company's payroll improves efficiency new system, also its tracking into with employees a platform system. The applicant seamlessly integrating and one touch onboarding

tax job opportunity facilitating without Additionally, the work input. for credits, processing evaluates automatically credits for BenManage need applicants manual these

double this Spetner not sector represents wider terms anticipated stands competitors. to it vision. in but as size, of of a merely is of acquisition is crucial its revenue. in out and its strategic ahead moment component our deploying more pivotal a position advanced that impact technologies acquisition our This than The by for substantial of Reliance,

$XX over XXXX, the is year in revenue increase fiscal would bring revenue Spetner which expected million for $XX approximately to to Reliance's million. in Specifically, total

Exchange addition $X a boost anticipated lines its with through voluntary projections indicating of comprehensive enhancing EBITDA substantial RELI Spetner the synergy, EBITDA-to-revenue offering in personal benefits basis, uniquely opportunities Moreover, platform. of range present on XXXX ratio. of for through stand-alone thanks significantly to to its our combined high insurance in with for particularly Reliance's cross-selling EBITDA million extensive Spetner's reach, is an programs

integration profitable is infrastructure Whilst into already its its poised our our Spetner BenManage boost substantially existing is own, highly to on capabilities.

for establishing strategic the in a anticipated components, growth and that is individual the Reliance. the exceeds union benchmark fact, new company its create where industry to value In a driving unprecedented collective of

our is our our broaden to our also transforming Spetner, growth way only insurance leveraging substantial dedication reputation also of not as industry. innovating fundamentally portfolio to underscored achieve Reliance integrating leader further a the profitability. and poised solidifying solutions enriching By to to in technology This under acquisition but Global

Our way It industry. acquisitions and beyond standard commitment operational to strategic innovation the to our goes what's strategy. in efficiency, mission embodies technological redefine possible

with opportunities our We Reliance Overall, The enterprise enterprise to unlock that returns align to Global highly multibillion-dollar the value. not to profitability drive acquisition evolve aims delivers will to and our leverages believe strategy. with our into strategic is objective formidable billion $XXX fragmented our enhance market, substantial position agency a insurance profitable, OneFirm a sustainable significant to cutting-edge Group technology Reliance just within brokerage go-to-market perfectly shareholders. presence that global but that this expand shareholder also integration

solid forward-thinking these and achieving our to ambitious are With we confident strategies, that foundation way goals. our are we on well

testament not of success. belief a also sustainable we of our multibillion-dollar I am reminded growth. amassing in by This is embarked to to experience that third reasons and in but a multifamily ensures our and to do expand commitment this My a a our broker mortgage undisclosed path in residential only achieving on vision Reliance but dedication not just stability largest reflect it properties, and manner portfolio I I are growth, -- history country the in forward, building long-term on together. the what As with previous the journey by why firm driven creating

stronger. my As committing my to have over in organization many been building a commitment -- commitment stated of in I'm sorry, never I times with believer the personal capital I'm $X true to invested before, company tech million market-leading my a forward own Reliance, has

on efficiency, about technological the transforming leading. acquisitions that emphasis ensuring and dedication our stays industry, the beyond strategy. market redefine mission mere not This just is the extends possible landscape in of It's to innovation at of Reliance and operational Our forefront It's strategic innovation about what's our industry. dynamics.

bright in belief together, and exciting. a vision. And support make our to and is continued for you reality. vision The going this we're future Thank

Joel? Markovits, I turn who over the to XXXX. Joel of Global, call results March Financial XX, Reliance quarter would for Officer review the will now financial Chief ended like to the

Joel Markovits

everyone. to all much, Good be very with you here afternoon, Ezra. Thank today. Great you

happy All approximate. XX, financial be our March quarter are XXXX. ended presented the share I'll results to for figures

in or driven QX XXXX, XXXX. or $X.X QX the to million in income XXXX. to of QX to increase QX to compared XXXX, in $X.X in increased growth other which expense Our $XXX,XXX by versus of sustained in $X.X by X% is $XXX,XXX have XX% quarters. growth. by revenues, expense organic QX million commission revenues, in $X.X Revenue ratio primarily million commission compared million is increased of by income driven a Commission higher commission Change

by to annual today. $XXX,XXX increases as update first the or slightly higher in compliance-related X% General XXXX. quarter $XXX,XXX costs. this administrative Salaries $X.X expenses And and XXXX, driven increased increased acquisition to compared and in as wages tied million $XX,XXX in adjusted regulatory well by of in typical the quarter versus to last, increase is costs by

Net loss QX net $X.X $X.X impairment Increase noncash is million primarily to XXXX in $X.X $X.X intangible loss a to million charge XXXX, linked of of in million. asset compared was QX XXXX. million of QX

And Additionally, EBITDA, expect by further nominal anticipated our and transaction, the Ezra. post fiscal the Spetner EBITDA we a M&A improve we our at to as closing adjusted EBITDA negative the as year on do throughout metric $XX,XXX especially continue for came quarter. in mentioned

Operator, answer kindly any be questions conclude the lines. open we We'll this, have. or comments With our prepared may to participants remarks. happy

Operator

Instructions] Sobelson [Operator Our question from Jesse with E.F. comes first Hutton.

Jesse Sobelson

Congrats to I my acquire questions focus on here. agreement wanted this definitive signing Spetner. to

sign deal a to timing asset on the just maybe And closing? of do definitive basis, a expect on in you the is close? Firstly, $XX million to to or timing, you $X guidance expected million agreement. in be how that much When given fiscal the of given this EBITDA on generating contributed revenue this year, go-forward so, did

Ezra Beyman

of -- -- about guess, the far when forward run. to looking depending as question, it but as And is, the of quarter that. it's the already it, first already It's The about close. half part third to the we're in I

speak It's watching the we time boarded numbers yet, it and it's Another seeing expected. haven't way, way watching and the where it's running the that target. acquisition the right we've we've are and been we in live as been but we deal on

Jesse Sobelson

so there Great, to go is off, Sorry cut seasonality? ahead. please you no

Ezra Beyman

year. but words, speak. close to depending be just to the about give half other third since what ground us -- far hits a we as hope and up as running, in It's -- of is, running, should in So time It's already. sort it it so quarter

Jesse Sobelson

the Right. guiding sales Or the front? this financials, be On business realize to the is you're efforts the to with either for stand-alone entity? would to that numbers to, cost guided a need there the on synergies, as any that order realize or just point, front in

Ezra Beyman

is the on synergies. that's This as but the No. of is, any do we before

already It's place cross-selling We look that. As on what's the of and as of in synergies should X, with it's Day for just lots now, right it be track gravy forward to there. turnkey. the but

Jesse Sobelson

to the Is a $XX.X And that sure that the make note. I acquisition make understand remainder just Great. cash and was Xx I about translates consideration, in correct? in just $X in to to, numbers, I'd then so want Okay. forward sales think million I then about say, the Xx I'm sure EBITDA. and right, And million promissory roughly forward

Ezra Beyman

That's correct. pretty the Which are know you industry, numbers. good if those

Jesse Sobelson

me. to to good. for Pretty the position shares debt, that it's that I wanted and Can going then last would what Net balance then you ask cash forward. share like? sheet And going thing is Yes. outstanding, on be the it look just

Ezra Beyman

It's a question. Joel

Joel Markovits

Yes.

of up terms just I will the there's Spetner in think they of time amount to will going revenue on receivables deal. tell based pick that significant post be have. Obviously,

So an goodwill. acquire assets. uptick to we'll as in will well, increase going assets see intangibles our basically we're and as Fixed definitely

each all see in business substantially very is of definitely that cash because cash revenues that flow will through increased we commission millions So be high this churn cash improved a dollars year.

views to things That's existing but the accounts the books. anything for that side. in go is expect [indiscernible] promissory discussed. any of -- don't be typical nothing terms expect orderly we to Liability Spetner definitely going might significant. note too an we was payable, the vendor except in really be And So asset that

Ezra Beyman

significant. to expected be not That's

Operator

The Alan [indiscernible]. question [Operator next Instructions] comes from

Unknown Analyst

You you're vision is mentioned call your you on vision? with provide materializing. progress Can your any the OneFirm additional on the that making OneFirm context

Joel Markovits

course, I'd Of question. expand happy great that. on to be

well. casualty, capabilities. consolidating have systems and contracts strides our will X reporting our Also one expected with in property our for agency where one Group benefits, management of enhance and Health made P&C as for the currently carrier [indiscernible] and tremendous making Health our with So and and we just headway that administrative begun group unifying processes life which excise and to have is streamline

across costs, to shave side, enables our locations. revenue contracts, pooling us aligned expense irrespective individual group We're our all out the our to capital. to location. what often discounts. roll which contracts On human we redesigning office best-in-class of volume and systems streams, certain We're together with teams into of OneFirm in provides more also vendor be used also by our continue geographical off

This robust will likely culture, collaboration spur cross-selling environment cost it's and also is offices, opportunities. corporate additional encouraging enhancing our satisfaction generating continue revenue employee corporate our on between and to

again for at this the question. provides today. Thanks of summary we're good Hopefully, a where

Operator

queue. I the like call management would We turn have no for back questions closing to further in to remarks.

Joel Markovits

company we forward. call. you participation We of Reliance be team, behalf for the business of as update about the Ezra, couldn't and entire excited our thank continue this On Sure. journey more your in prospects

then, very until the And time. all next to forward best. Looking

Operator

and Thank participation. your today's you. conference, may you this lines for concludes your at disconnect Thank you This time.

Reliance Global (RELI) 20 May 242024 Q1 Earnings call transcript