Solera Holdings Management Discusses Q3 2013 Results - Earnings Call Transcript

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 |  About: Solera Holdings, Inc. (SLH)
by: SA Transcripts

Operator

Good afternoon, everyone, and welcome to Solera's Third Quarter Fiscal Year 2013 Earnings Conference Call. Following today's remarks, we will hold a question-and-answer session. As a reminder, this call is being recorded and will be available for replay. Details for accessing the replay will be made available at the end of the call.

At this time, I would like to turn the call over to Kamal Hamid, Solera's Vice President of Investor Relations. Please proceed, sir.

Kamal Hamid

Good afternoon, everyone. Thank you all for joining us, and welcome to Solera's Third Quarter Fiscal Year 2013 Conference Call. With me here today are Tony Aquila, Solera's Founder, Chairman and CEO; Renato Giger, Solera's Chief Financial Officer.

Tony will begin today's call with a summary of our financial results for the quarter ended March 31, 2013, followed by comments on the factors driving those results, as well as business trends and metrics. Renato will then provide you with information about our financial results that is not described in today's press release and finish with a discussion about the company's updated FY '13 guidance. We will then open up the call for questions.

I would like to the remind everyone that our remarks during this conference call will contain forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are neither promises nor guarantees that involve risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements, including, without limitation, those risks detailed in Solera's filings with the SEC, including our most recent quarterly report on Form 10-Q for the quarter ended December 31, 2012.

We disclaim any obligation to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

We also plan to discuss certain non-GAAP financial measures on this call. A reconciliation of Solera's non-GAAP financial measures to GAAP financial measures is included in today's press release, which is available on the Investor Relations section of our company website at solerainc.com.

We measure constant currency, or the effects on our results that are attributed to changes in foreign currency exchange rates, by measuring the incremental difference between translating the current and prior year period results at the monthly average rates for the same period from the prior year. Unless otherwise stated, all period-to-period revenue, adjusted EBITDA and margin comparisons are on a constant currency basis.

When we refer to run rate waste savings or synergies, we mean savings to be realized over each 12-month period following the execution of these efforts. When we refer to analyst consensus during this call, we mean the consensus results on an actual currency basis of certain analysts that cover the company as reported on Thompson First Call. When we refer to advanced markets, we mean those markets in which the majority of claims are processed electronically. These markets are currently located in Western Europe and North America.

Our fiscal year 2013 outlook assumes constant currency exchange rates from those currently prevailing, no acquisition of businesses, no stock repurchases and an assumed 28% tax rate to calculate adjusted net income. Consistent with our guidance policy, we do not plan to update guidance during the quarter, but only at regularly scheduled quarterly or annual conference calls.

To help those of you who track and factor in the impact of a strengthening or weakening dollar throughout the remainder of the year, we would approximate by using the following formula: For each 1% change in the U.S. dollar versus all the foreign currencies in which we transact business, the negative or positive impact to fiscal year '13 revenues will be approximately 0.2%, and the negative or positive impact adjusted EBITDA will be approximately 0.2%.

Amounts and percentages throughout our remarks reflect rounding adjustments. All information discussed during this call and webcast is protected by United States copyright law, may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Solera Holdings, Inc.

I would now like to introduce Tony Aquila, our Founder, Chairman and CEO.

Anthony Aquila

Thank you, Kamal. Good afternoon, everyone, and thanks for joining us today. I'm pleased to report that our -- that for the third consecutive quarter, we exceeded consensus estimates for revenue adjusted EBITDA and cash EPS. Despite the fact that some of the markets in which we operate are experiencing difficult macro conditions, our constant currency revenue growth was 9%, consistent with the second quarter. On a constant currency basis, our adjusted EBITDA margin came in at 43.1%, down 125 basis points year-over-year, but above our Mission 2020 target of 40%.

We continue to take advantage of the macro volatility to out-invest our competitors, both organically and inorganically and to position our bundled well for Phase 1 of Mission 2020. As a result of our diversification, 30% of our total third quarter revenue came from services such as re-underwriting, vehicle validation and electronic titling, among others. These core extension software and services grew by 23.3% compared with the prior year third quarter, with contributions from recently acquired businesses and continued execution in our operations.

As we continue to expand our addressable markets and diversify our business, 46% of our total business and 55% of our advanced markets business is no longer explained by claims metrics.

To better reflect the evolution of our business and our expanding global opportunity, we are improving our reporting metrics. We are now using revenue per household, a single, more meaningful metric. We believe that revenue per household is a better measure of our performance in advanced markets and more in alignment with Mission 2020 because, one, the household is the basic unit of consumption for most of our products, be it filing of vehicle damage claim, validating a used car's history or issuing a title for a car purchase. Revenue per household illustrates the expanded opportunity to provide additional services such as those for the home that are similar to those we offer for the car. And two, revenue for household reflects the common denominator across our diversified business and improves comparability across our advanced markets.

Revenue per household is calculated by dividing total revenue in the advanced markets by the publicly available number of households in those markets.

Our annualized third quarter revenue per household in our advanced markets was $2.73 and grew by 8.5% compared with the prior year. Growth rates range from minus 3.7% in The Netherlands, the only country with a negative growth rate, to 13% in the U.S. and France. Average annualized revenue per household ranged from $9.46 to $1.69 across our advanced markets. This wide revenue per household range demonstrates the significant upside opportunity as we continue to grow our bundle and diversify into adjacent areas through core extension software and services.

In evolving and emerging markets, the automotive claim is still a major driver of our business, so we will continue to report on claims volumes in these markets. Claims in evolving markets were up 13.5% year-over-year compared with 15.4% in the second quarter. We continue to make steady progress in our emerging markets, with 69.8% year-over-year growth in claims compared to 51.3% growth in the second quarter. Through March 31, we are now processing over 0.5 million claims in our emerging markets on an annualized basis.

Our Q3 results demonstrate our ability to accelerate our growth rates in alignment with Mission 2020. With a strong balance sheet and a disciplined M&A strategy around core extensions, we are once again preparing to accelerate our M&A activities.

To date, we have deployed just under $1 billion in 18 M&A transactions, most of which continue to grow our addressable market, strengthen the core and expand our business to the household. The average EBITDA multiple we have paid at closing was approximately 9x, consistent with our MMC, Management-Margin-Core, discipline for those transactions closed at least 12 months. The average multiple has decreased by about 3.5 turns. The average ROIC is 16%, and we have generated greater than 15 percentage points of margin expansion.

As we come into the final home stretch of fiscal 2013, we continue to perform well by driving our LBD strategy: Leverage, diversify and disrupt. This strategy has positioned us well to take the next step in executing Mission 2020, which is $2 billion in revenue and $800 million in adjusted EBITDA by the year 2020.

With that, I will turn the call over to Renato. Renato?

Renato C. Giger

Thanks, Tony. On a constant currency basis, our third quarter revenue grew by 9% or 8.4% on a GAAP basis by absorbing a 60-bp FX headwind due to the strengthening of the U.S. dollar and a 230-bp negative impact due to the previously announced nonrenewal of a large U.S. customer.

Turning to cash flows. We ended the quarter with $447.1 million in cash, which reflects $24.4 million in purchase price consideration net of cash acquired, $5.6 million in stock repurchases and $8.7 million in dividends paid during the third quarter.

Since our Board of Directors authorized our stock repurchase program, we have purchased 2.6 million shares or about 3.8% of the total outstanding as of March 31, 2013, with an average price of $47.03 per share, giving us a cumulative return of 22% based on the current stock price. We have about 59 million remaining at the $180 million program. Based on our current outlook, we intend to continue our repurchase program.

Third quarter cash flow from operations was $59.8 million, and capital expenditures were $9.2 million, resulting in free cash flow of $50.5 million. Our trailing 8-quarter free cash flow conversion rate is 55.9%. Our trailing 8-quarter incremental margin is 45.6%. Our net debt-to-EBITDA ratio was 2x, flat with the second quarter. Aided by synergies we've generated from acquisitions completed in fiscal year 2012, we achieved approximately $4 million in run rate waste reduction during the third quarter. For fiscal year 2013, we are now targeting about $12 million in waste reduction, up from our previous target of $10 million.

Turning to our updated guidance. Despite the $5 million headwind on revenue due to the strengthening of the U.S. dollar since we last provided guidance on February 7, we're raising our guidance for revenue, adjusted EBITDA and cash EPS. Our updated fiscal year 2013 guidance implies a revenue growth rate of 7.5% at the midpoint, up from the previous midpoint of 7%.

That concludes our prepared remarks. We'll now take your questions. Operator, please open the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Tim McHugh from William Blair & Company.

Timothy McHugh - William Blair & Company L.L.C., Research Division

I guess just to start with first on a kind of macro level. The reported numbers show that the European growth rate actually picked up fairly nicely versus the last couple of quarters. Can you talk just broadly in terms of the trends you're seeing either across Europe or by market? Are you continuing to see a stabilization in demand there or is it any different than what you've kind of articulated last quarter?

Anthony Aquila

Yes. Well, I think it's kind of still a bit of a shotgun with respect to the recovery in Europe. And I think we definitely feel, as we've mentioned in the last 2 earnings calls, that things were showing signs of bottoming. And some of those signs are -- we see Germany kind of dealing with some downturn issues as we saw in the last crisis of Europe. They were the last to show signs of difficulty in the market, which meant -- which, in this particular case, again, we think it shows signs that the herd is moving in a positive direction. The U.K. and France performed pretty well. The Netherlands kind of rides along the shotgun seat to Germany, so we saw similar downtrends there. And Spain and Portugal are just complete outliers to the European recovery, from our perspective. But overall, we saw volumes pick up. Some of that was aided by weather. Some of it was just aided by the environment improving. Overall, that, plus the diversification efforts of our investments over the last few years to bring us closer to the household, is opening up more opportunities for us to capture revenue better, less affected by the economics of the situation associated directly with cars.

Timothy McHugh - William Blair & Company L.L.C., Research Division

Okay. And then just on that last point, can we go back -- you said a few of the numbers somewhat quickly earlier. The 30% number that you gave at the start of the call, that was growing, I think, you said 23% in the last year. What was in that 30%?

Anthony Aquila

Well, that is the businesses that are not directly associated if claims are part of our diversification effort. So it's areas such that we have core extensions in the underwriting, re-underwriting areas, the vehicle validation, vehicle electronic titling. That's a big growing area. The addition to mediation of the manual paper, 7- to 10-day steps, we think we can electronify a lot of that. And we're successfully doing that. So it's areas like that, that trade in the same environment where we're able to leverage our core business and bolt these things as well to areas in the claims, like in total loss and/or associating it to the policy like in re-underwriting. So we're expanding our addressable markets. Since the car is part of the household, we started to target the household itself. And that's what's expanding for us and I think that's why we are able to diverge from a lot of the competitive landscape.

Timothy McHugh - William Blair & Company L.L.C., Research Division

Okay. And then just the 50 -- I believe it was like 55% number, what was that just the advanced -- so taking that 30% and...

Anthony Aquila

That's right.

Timothy McHugh - William Blair & Company L.L.C., Research Division

Applying it to the advanced markets. Okay. And then just to clarify one thing, the quick math. If you got 30% of your revenue that's grown at kind of 23% in the last year, that arguably blends to almost a 7% from the top -- contribution to the top line growth. So that's the vast majority of the growth in the underlying business and then kind of the rest is up slightly. Is that fair?

Anthony Aquila

Yes, that's right. It's up a few percentage points in that core. And that's primarily because you've got some puts and takes still going on in the recovery, as well as we've kind of factored in to our views a couple of things. One is the roll-off of the large customer in the U.S. So that hits us for about 1 point or so. Plus we've rolled in there some of the technological impacts or social impacts of kind of the driving environment today until the recovery is in full force.

Operator

And your next question comes from the line of Andrew Jeffrey.

Andrew W. Jeffrey - SunTrust Robinson Humphrey, Inc., Research Division

Renato, could you tell us what the constant currency organic revenue growth was in the quarter?

Renato C. Giger

That's about 3.2%, but it includes the -- also, as I mentioned in my remarks, the loss of a U.S. customer.

Andrew W. Jeffrey - SunTrust Robinson Humphrey, Inc., Research Division

I'm sorry, 0.2%?

Renato C. Giger

3.2%.

Andrew W. Jeffrey - SunTrust Robinson Humphrey, Inc., Research Division

Oh, 3.2%. Okay. And I guess that's probably down a little bit versus the second quarter. Is that just the uneven recovery that you were referencing in Europe?

Renato C. Giger

No, the difference -- it is down. The difference is about 2.5 points, and that's all linked to the loss of that U.S. customer.

Andrew W. Jeffrey - SunTrust Robinson Humphrey, Inc., Research Division

Okay. All right. And Tony, when you think about that revenue for household metric, what's the total addressable revenue per household in your view? I know it's early, but can you give us a sense of just how penetrated you think you are from a potential revenue perspective?

Anthony Aquila

Yes. Well, if you look at kind of where our best performance was, where we have the largest bundle in markets like Belgium, when we look at the car, we kind of -- we saw a limited percentage of growth. But when we look at the household and all the activities, it can nearly double the addressable size of the market for us. So at the top end, we have that. If you look at the bottom end, it's like 10x. So -- but somewhere in the middle, is probably where we'll hunker down as you adjust for microeconomics, cost of goods in the various markets. Does that make sense?

Andrew W. Jeffrey - SunTrust Robinson Humphrey, Inc., Research Division

Okay. So reasonable to say that similar to the prior metrics you got that you're less than half penetrated to what you think the total addressable revenue opportunity is for Solera.

Anthony Aquila

Yes. I mean, that's probably -- it's probably more like we're less than 1/3 penetrated, I mean. It opens up the market quite a bit for us. Well, as time moves on, I think more and more of that will become clear. But if you just kind of look at how things are moving and where there is -- the household for the middle-class family is on the next boom. We're trying to be on top of that boom. I think we're riding the automotive evolution pretty well. But the next purchase for those people are going to be homes. And we want to be supplying software and services to our core customers as they write policies and/or the consumer in that household works [ph] for those transactions, which includes property claims and others, as we've been expanding into those areas for the last 3 years.

Andrew W. Jeffrey - SunTrust Robinson Humphrey, Inc., Research Division

And do you think critical mass in those markets is a function of acquisition at this point or while we get there organically?

Anthony Aquila

No, I think, right now, you can see us kind of buying our way in a bit. If you kind of look at what we've been doing, we tend to like -- we operate like an industrialized private equity firm. So in those areas, that's why we're doing it off our advanced markets because we get a lot of leverage, and we can, as you can see, with the $1 billion we've deployed, we've improved those margins dramatically through distribution and operating leverage. So I think it's saying kind of executing the same expansion strategy we've been doing quietly and just getting more penetration into the household.

Andrew W. Jeffrey - SunTrust Robinson Humphrey, Inc., Research Division

Okay, one more, if I may. I'll jump back in queue. Could you update us on the status of the cloud deployment in the U.S. and whether or not that has the potential to drive margin in '14?

Anthony Aquila

It does have the potential to drive some margin. I think, right now, we're very focused -- we're very happy with the margin position we're sitting in. So everything extra, we're accelerating investments, as you can tell. Our Mission 2020 is 40%. I think we're going to outperform that in the long term as well. But we're investing heavily to kind of get a greater positioning for that household penetration with Explore and other services that we're buying. We bought a lot of things in the U.S. And as we continue to deploy that bundle, I don't think we'll concentrate on driving more margin. I think you'll see us positioning more for penetration into the market.

Operator

Your next question comes from the line of Gary Prestopino from Barrington Research.

Gary F. Prestopino - Barrington Research Associates, Inc., Research Division

Just looking at some of the -- just the SG&A expenses this quarter, somewhat elevated relative to other quarters. Should we expect that going forward for a couple of more quarters as you guys continue to invest in -- at personnel?

Anthony Aquila

No, I mean, you can tell. When we told you, you probably remember, 1.5 year ago, we said we were going to be staffing up. We're just doing what we told you guys. We're building the team to execute Mission 2020. And we're -- I'd say, it's steady as you goes. I think you'll see some up quarters, some down quarters, as we continue to execute it. But everything within the parameters of what we're guiding to -- and you know how we guide. So...

Gary F. Prestopino - Barrington Research Associates, Inc., Research Division

Right. Is it possible that we could get some metrics on this as spend in advanced market per household on a historical basis? Have [ph] you guys work that out at all or is this just something that we're going to get on a go-forward basis?

Anthony Aquila

Of the $1 billion dollars we've invested, and we generally don't say what we've done until we've done it, but about $600 million of that has guided towards opening up the opportunity for us to address the household. And we think it's now a pretty obvious state. And if you kind of take the numbers I was talking with Tim earlier on, it kind of tells you that the midpoint is somewhere around $10 [ph] a house in a fully penetrated kind of average across the world at a advanced market state. And on the high end, the super big bundle innovative markets that we operate in could be as high as close to $20 [ph] , which is a fraction of the premiums and/or the dollars used by the household for the activities that we're servicing. It's a very, very micro-transaction contribution, if you will, to their spend.

Operator

And from JPMorgan, your next question comes from the line of Andrew Steinerman.

Andrew C. Steinerman - JP Morgan Chase & Co, Research Division

It's Andrew. I wanted to go back to the 3.2% organic revenue growth. I had thought in the second quarter, we had discussed Allstate are rolling off. I guess the answer is that a bigger portion of it rolled off in the third quarter, and attempt [ph] to kind of also move into the comment about insurance carriers revenues being up 3%. Is there anything else weighing on that segment of Solera's business besides for Allstate?

Anthony Aquila

No, just -- that's just -- they fully rolled off. And we work with them to successfully execute that. We just recently had a meeting with them, it went very well. We did the right thing. It was good for them. It was the right thing for us with our long-term mission and where we're focusing. So that's done, and that was the major driver of it. And now the only thing that's pressuring us is just recovery elements and/or impacts to the social driving patterns that we think might be more long term.

Andrew C. Steinerman - JP Morgan Chase & Co, Research Division

And if I could dive into the 7.5% middle of the range revenue guidance, when you think about the implication for implied fourth quarter organic revenue growth, x currency, x acquisitions, what would that 7.5% imply in terms of fourth quarter middle of the range organic revenue guidance?

Anthony Aquila

It's roughly around where we are right now.

Andrew C. Steinerman - JP Morgan Chase & Co, Research Division

Okay. Okay, that sounds good. And also, if I could put in a request for a history on the revenue per household numbers. It's a -- this is a transition for us.

Anthony Aquila

And what we tried to do there, the good news is about what we're shifting to in the advanced markets is there is a ton of publicly available information for you guys to work with on the household. And when you study that and you see that it is the next big boom that will occur, particularly in the evolving markets that start to drift towards advanced markets and have actually, if you look at the advanced markets, some of them have very good housing characteristics, as immigrant workers come in to kind of supply the need for various services that start to be part of a recovery. So I think that you can do -- you got a great research capability there. You can do that. We can compare notes, but we'll be happy to help you, Andrew, with whatever you need.

Operator

And your next question comes from line of Manav Patnaik from Barclays.

Manav Patnaik - Barclays Capital, Research Division

Renato, if you could, the 3.2% organic growth, could you split that between Americas and EMEA?

Renato C. Giger

So the figures -- you have the figures in the maturity on the EMEA growth figure, which is 6.6% is coming from the organic side. So that means that the rest is coming from the Americas, which is lower due to the fact of the [indiscernible] .

Anthony Aquila

And keep in mind, Manav, that our Americas is really the true Americas because of our geographic footprint.

Manav Patnaik - Barclays Capital, Research Division

Yes, okay. So I guess another way to ask the question, so most of the acquisition contribution was in the Americas, you're saying, then?

Anthony Aquila

Yes.

Manav Patnaik - Barclays Capital, Research Division

Okay, all right. And then the -- just to clarify from -- just to follow-up from Andrew's question, the -- you said the fourth quarter implied organic growth should be similar to where we are -- or where the third quarter came in. Are you referring to the 3.2% or are you referring to the 9% x FX?

Renato C. Giger

It's about the same or closer [ph] .

Anthony Aquila

We're really not planning for a lot of -- right now, we're concentrating on super-sizing our bundle. And obviously, you could tell by our comments on the evolving and emerging markets, we're doing well there. So I think it's -- we're positioning for Mission 2020 in the advanced and driving leverage in our emerging and evolving markets through penetration.

Manav Patnaik - Barclays Capital, Research Division

Okay. I guess, I was just curious if that 7 -- the midpoint 7.5% you're talking about excludes the acquisition contribution. Is that just x FX? I guess I was just a little confused with that answer.

Anthony Aquila

We only referred to total growth. So we're rolling all this stuff into the bundle. We want it even difficult for us to calculate individually, and that shows that we're really getting a leverage to our customer. And I think you can see 9% total growth is humming along good, and has the potential to improve.

Manav Patnaik - Barclays Capital, Research Division

Okay. And just in terms of the M&A outlook. I mean, you guys are obviously sitting on a lot of cash. And relatively speaking from you guys, there hasn't been a whole lot we've seen in the past quarter. But what is the -- like what should we be expecting down the road?

Anthony Aquila

Well, clearly, I said that we are preparing once again. So we do so many small- to medium-size deals, and then we do one large medium-size deal and in a particular geographic area. We're just kind of doing what we always do, grow, so that's what you're going to see. And we are preparing to do something. As we signaled last quarter, we've looked at a number of deals. Multiples are continuing to rise. They are now, according to kind of where we see fair value, they're -- some of them are trading 3x higher -- 3 turns higher. So clearly, private equity is drifting to -- there's more demand than there is supply. But we'll find the deal we like just like we have in the past when environments existed like this, and we'll take that deal down.

Manav Patnaik - Barclays Capital, Research Division

Okay, fair enough. And one last one, if I may sneak in here. Renato, the acquisition and related cost is $6 million in the quarter. I guess, what should we be -- what should we expect next quarter? And like, is there more cost based on all that you've done in maybe a couple of quarters down the road as well?

Anthony Aquila

Yes, we're not going to tell you what we think that number is right now, obviously. But just stick with deal, that if we do a deal, it will be higher...

Manav Patnaik - Barclays Capital, Research Division

So great. I just mean constant. I mean it just felt like it was a little higher than what I had thought. So I just wanted to know, excluding any other deal you do today, how much left is there to charge I guess...

Anthony Aquila

I don't think it's higher. I think what you've got to do is if you rightsize that to who we are now as a bigger company, it would actually look very consistent. Actually, you'd see some leverage being driven through the business.

Operator

And your next question comes from the line of Peter Appert from Piper Jaffray.

George K. Tong - Piper Jaffray Companies, Research Division

This is George Tong for Peter Appert. I just wanted to follow up on your comment on organic growth in the EMEA. As you mentioned, the vast majority of growth was organic. Correct me if I'm wrong, you had contributions from Mensaelect and CarweB that totals $14 million annually in revenues. Would that imply the contribution from M&A this quarter, is about 2% to 3%?

Renato C. Giger

That's about correct, yes.

George K. Tong - Piper Jaffray Companies, Research Division

Okay, that's helpful. And then just a follow-up on the revenue per household questions earlier. Could you discuss what your expectations are for long-term growth in terms of revenues per household in total households, what your target growth numbers are?

Anthony Aquila

Yes, I'd say, excluding acquisitions, we like to see the growth rate somewhere between 4% and kind of go historically, we're running somewhere between 4% and 2% [ph] at any given period. We think that's digestible. We kind of hit certain regions, penetrate those regions. So growth per household will back off for a while as we penetrate, and then we'll shift to another region where we've either done an acquisition or rolling out something from another region. So it just kind of moves around. We're running a global business in 63 countries, and we're driving to be in 100.

Operator

[Operator Instructions] The next question comes from the line of Eric Boyer from Wells Fargo.

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

Yes, could you just give us the organic growth of the ancillary services that you mentioned, that 30%?

Renato C. Giger

It's 23.3%.

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

Organically?

Anthony Aquila

Compared to last year, yes, that's right.

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

Okay, great. And then with the multiples continuing to rise that we just talked about with the M&A and the economy potentially getting better, any thoughts to increasing the multiple ranges that you're willing to pay?

Anthony Aquila

Yes. We definitely -- we know we are going to, just like we did when we bought Explore in a very competitive process. That particular deal was about 5x higher than our average -- I'm sorry, 5 turns higher. So I think we'll be somewhere in a similar situation when we find that right asset that we're willing to pay for because we know what we can do with that asset. So until then, I think you'll see us continue to provide those things that kind of fit our model adjusted for the present, as you will, fair value today. And then the bigger deals or the more competitive deals are clearly trading at 3 turns higher.

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

Okay. And then -- and Tony, could you help us understand the rationale of introducing that new household metric today, not at the Analyst Day a couple of months ago when we talked through the longer-term strategy of the company, in great detail?

Anthony Aquila

Yes, so we kind of teased you guys to we were migrating beyond the car. We talked to you about that we were focusing in on the driver and the family. And as we continue to, and continue to, since then, execute on getting our increased confidence around the household, our target was to deliver that with our fiscal '14 strategy. And it's -- we feel confident to deal with a little early. But if you go back and analyze your notes, you can kind of see us. And if you remember, I discussed kind of around the household, the property.

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

Right. Yes. Okay, you did hint to that. And then for the -- what percentage of your revenue today is not related to the car?

Anthony Aquila

That's not related to the car today, I would say, we are probably entering in the high double-digits that is directly unrelated to the car. There's a connection -- the car is a bridge to the household. So things on the bridge, we connect it, which gives us about 1/3 of our business is outside of the car. It's in that bridge to the household.

Eric J. Boyer - Wells Fargo Securities, LLC, Research Division

And then the -- okay. And then finally, so just to be clear, you are not going to provide the transaction metrics anymore, the volume or the revenue per claim?

Anthony Aquila

We are going to do that for evolving and emerging markets. But since it's now in the advanced markets, it's all rolled together. And if you look at all the products and services we're rolling out, they're on that bridge to the household. If you remember at Analyst Day, we talked about the customers' customer. If you start to think about all those things, it tells you that we are trying to service all the needs around that family unit. And we're successfully doing that as we've been deploying about $600 million of the $1 billion deployed is on that bridge to the household. And so it's sustainable, we like it. We see the growth opportunities. It lines up with our customers' vision. And we're going to continue to execute that, and our confidence level is to now roll it out in advance of our fiscal '14 product announcement.

Operator

We have no further questions at this time. I will now turn the call back over to Kamal Hamid. Please proceed.

Kamal Hamid

Thank you all for joining us, and I look forward to speaking with you next time. Operator, if you can read the replay instructions, please?

Operator

A webcast replay will be available until 11:59 p.m. Eastern Standard time on May 21, 2013. To access the replay, please dial (888) 286-8010 or from outside the U.S., (617) 801-6888, and enter the following access code when prompted, 13402845.

Thank you for your participation in today's conference. This concludes the presentation, and you may now disconnect. Have a great day.

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