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CoreLogic Inc  (NYSE:CLGX)
Q2 2019 Earnings Call
Jul. 25, 2019, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the CoreLogic Second Quarter 2019 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] I'd now like to turn the conference over to Dan Smith, Investor Relations. Please go ahead.

Dan Smith -- Investor Relations

Thank you, and good morning. Welcome to our investor presentation and conference call where we present our financial results for the second quarter of 2019. . Speaking today will be CoreLogic's President and CEO, Frank Martell; and CFO, Jim Balas. Before we begin, let me make a few important points. First, we've posted our slide presentation, which includes additional details on our financial results on our website. Second, please note that during today's presentation, we may make forward-looking statements within the meaning of the federal securities laws, including statements concerning our expected business and operational plans, performance outlook and acquisition and growth strategies and our expectations regarding industry conditions.

All of these statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For further details concerning these risks and uncertainties, please refer to our SEC filings, including the most recent annual report on Form 10-K and the subsequent 10-Qs Our forward-looking statements are based on information currently available to us, and we do not intend and undertake no duty to update these statements for any reason.

Additionally, today's presentation contains financial measures that are non-GAAP financial measures. A reconciliation of these non-GAAP measures to their GAAP equivalents is included in the appendix to today's presentation. Unless specifically identified, comparisons of second quarter financial results to prior periods should be understood on a year-over-year basis, that is, in reference to the second quarter of 2018. [Operator Instructions] Thanks. And now let me introduce our President and CEO, Frank Martell.

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Thank you, Dan, and good morning, everyone. Welcome to CoreLogic's second quarter earnings call. I'll lead off today with a recap of our second quarter operating performance and key takeaways, including market conditions, progress on strategic initiatives and our efficiency programs. Jim will follow and summarize our financial results and provide updated guidance for the third quarter and full year. I'll wrap up the call today with a Q&A session.

The CoreLogic team is off to a strong start in 2019 from both an operational and a financial perspective. Despite continuing market-based challenges in the U.S. and Australia, over the course of the second quarter and for the first half, we benefited from our continued focus on driving favorable revenue mix, expanding sales of integrated solutions and platform offerings, securing whitespace and capturing the benefits of productivity and operating leverage.

In the first half of this year, we made important strides in a number of foundational areas, including building out our smart data platform and data visualization capabilities; migrating our technology infrastructure to the Google Cloud Platform or GCP; accelerating the AMC transformation program; and enhancing cyber, AI and digital-driven workflows. I'll expand on several of these areas a bit later in my presentation. In the second quarter, we delivered results that were at the high end or above our guidance ranges.

We grew our insurance and spatial, real estate and U.S.-based valuation platform revenues. We also benefited from U.S. mortgage market unit volumes that were modestly higher than last year. At the same time, we aggressively pressed forward with our AMC transformation and the exit of noncore mortgage and default technology units. We also continue to take actions to reduce cost and drive productivity. Jim will provide the details on our second quarter financial results in a few minutes.

You will note that we had 2 discrete items: a revenue recognition benefit in last year's numbers and the impact of the wind-down of our noncore technology units in this year's results that impacted year-on-year comparison this quarter. On a run-rate basis, before these items, revenues and adjusted EBITDA were in line with prior year levels and adjusted EBITDA margins were just over 29%. In my view, this is a very strong outcome, especially when viewed in the context of very challenging prior year comps. This year, we made steady progress advancing key elements of our strategic plan. As you may remember from past calls, our strategic imperatives focus on building market leadership and operating scale, driving revenue diversification and sustained organic growth trends, expanding profit margins and rewarding our long-term shareholders through smart capital allocation.

We are continuing to grow our non-U. S. mortgage volume-sensitive revenues to at least 50% of total revenues in line with our strategic targets. For the full year 2018, our nonmortgage volume-sensitive solutions accounted for about 35% of our total revenues. Over the first half of 2019, this figure rose to about 40%, fueled by our changing business mix and expanded footprint in international spatial solutions plus international.

CoreLogic's continuing expansion into new verticals plus the growth of our international footprint has been enabled, in part, by the scale and market leadership of our core U.S. mortgage operations. Core mortgage continues to benefit from a trend favoring our integrated solutions as well as a greater focus by lenders and servicers on building strategic relationships with fewer key supplier partners. As we have grown our market leadership in core mortgage, we have significantly improved our margin profile through automation and by leveraging common technology in back-office infrastructure and data repositories.

As noted in our release yesterday, we delivered a very strong underlying margin performance during the second quarter. Last December, we announced that we were accelerating the transformation of our AMC operation. Over the past 6 months, we made significant progress, including rightsizing our overall panel of back-office operations, automating critical workflows and upping the utilization of our in-house appraiser panel. As Jim will talk about later, these actions resulted in a significant noncash impairment charge as well as severance cost in the second quarter So far in 2019, the AMC transformation program has resulted in lower revenues attributable to certain customers while at the same time, boosting the current and future margin profile of this operation.

We expect these revenue and margin trends to continue over the balance of this year and into the first half of 2020. As we pilot and roll out our new AMC offering, we are beginning to see improved turn times and efficiencies through the adoption of our new workflow technology. There's more work to do here but so far, the team has done an excellent job. Once fully implemented, our AMC transformation program is expected to result in improved underlying organic growth trends and higher profit margins in this business area.

As our long-term investors know well, we have established track record of successfully driving productivity in our push toward first quartile levels of operational excellence. We are on track to lower run rate cost by at least $20 million in 2019 by consolidating facilities, managing staffing costs, automating certain activities and other operational improvements. As we look forward, we are making strong progress toward building next-generation capabilities with a particular focus on data quality, structures and visualization as well as technology platforms and advanced automation techniques.

These capabilities extend our market leadership, allow us to tap into new growth opportunities across multiple verticals and set a foundation for margin expansion. Our single-largest spend over the first half of 2019 relates to the transition of our technology platforms to the GCP. The GCP migration is expected to generate material savings beginning next year. This is a complex program, and we expect to continue to spend significant time and effort on the GCP migration over the balance of this year and into next year.

The GCP migration and other inflight cost and productivity actions plus the AMC transformation and closure of noncore mortgage technology-related units support our growth of achieving at least -- our goal of achieving at least 30% adjusted EBITDA margins during 2020 based on a stable U.S. mortgage market and after accounting for the transformation of our AMC and the wind-down of our legacy noncore mortgage technology units. Before I close out today, I'd like to make a few comments on recent U.S. mortgage market trends. After 9 straight quarters of significant headwinds, based on externally available reporting, mortgage unit volumes in the U.S. rose modestly in the second quarter from prior year levels.

This improvement was largely driven by the recent drop in interest rates. In the short run, lower rates should support more positive mortgage volume trends and somewhat help to offset more pervasive headwinds such as affordability pressures and the lack of available housing stock, which will likely hold home sales and mortgage originations to low levels one would normally expect given the strength of our overall economy. To sum it up, we have a very strong start in the first half, and we're excited about the many opportunities ahead of us to create value for our stakeholders.

I want to thank all of our employees, clients and shareholders for their continued support as the CoreLogic team executes against our vision of creating a scaled, innovative and data-driven enterprise that delivers unique insights and helps millions of people to find, buy and protect their homes. Thanks for joining us today. Jim will now discuss our financial results.

James L. Balas -- Chief Financial Officer

Thanks, Frank, and good morning, everyone. Today, I'm going to discuss our second quarter financial results and provide updated third quarter and full year financial guidance. As Frank mentioned, CoreLogic delivered a strong operating and financial performance in the second quarter. Financial highlights included: first, improved business mix, reflecting a greater proportion of higher-margin subscription, technology and non-U. S. mortgage-based revenues; second, continued strong adjusted EBITDA margin of 29% driven by favorable business mix and productivity, which more than offset the increased investment spend that Frank discussed earlier; third, the amendment of our credit facility to provide for increased financial flexibility; and finally, significant return of capital through the repurchase of 700,000 common shares.

Second quarter revenues totaled $460 million, down $29 million or 6% compared to 2018. The decline in revenue was driven primarily by 2018 revenue recognition acceleration benefit of $23 million, which has no 2019 counterpart. The wind-down of noncore mortgage and default technology units, which decreased revenue by $5 million and an unfavorable currency translation of $3 million. On a segment basis, PIRM revenues rose 1% from 2018 levels to $184 million as growth in insurance and real estate solutions offset lower market volumes in Australia and currency translation. UWS revenues totaled $279 million, down 10% from prior year. The decline in UWS revenue primarily reflects the prior year $23 million revenue recognition item discussed earlier, lower credit volumes and the impact of the wind-down of noncore mortgage and default technology units.

Operating income from continuing operations totaled $15 million compared with $90 million in 2018. Lower operating income was principally driven by noncash impairment charges of $48 million and severance charges of $6 million incurred in connection with the company's AMC transformation, the impact of the wind-down of noncore operations and the prior year revenue recognition benefit. Increased spending on core platforms and productivity programs as well as product, service and information security capabilities was offset by productivity benefits. Second quarter net loss from continuing operations totaled $6 million compared with net income of $59 million, reflecting lower operating income levels discussed previously. Adjusted EPS totaled $0.82 per share. Adjusted EBITDA totaled $134 million in the second quarter compared with $159 million in the same prior year period.

The decrease in adjusted EBITDA of $25 million or 16% resulted primarily from 2 discrete items: first, the prior year revenue recognition benefit for $23 million; and second, the impact of the wind-down of noncore mortgage and default technology units for more than $2 million. Adjusted EBITDA margin was 29%. PIRM segment adjusted EBITDA totaled $53 million compared to $60 million in 2018, reflecting higher spending levels on core platforms and technology as well as the impact of lower market volumes in Australia and currency translation. UWS adjusted EBITDA was $89 million compared to $104 million in the prior year.

Excluding the impacts of the 2 discrete items mentioned previously, second quarter 2019 UWS adjusted EBITDA and margin increased by approximately $10 million and 350 basis points, respectively, compared to the prior year, reflecting favorable revenue mix and productivity gains. Finally, we continue to generate significant levels of free cash flow. For the 12 months ending June 30, 2019, free cash flow totaled $207 million, a 45% conversion rate of last 12 months' adjusted EBITDA. As discussed previously, over the last 12 months, we increased spending levels attributable to strategic initiatives such as the GCP migration, which will generate future savings and margin expansion.

Adjusting for these amounts, our free cash flow conversion rate would be approximately 55%. Our relentless focus on productivity and data-driven insights has resulted in a durable and cash-generative business model. During the quarter, we repurchased 700,000 or approximately 1% of our common shares while continuing to reinvest back into the business. Heading into the second half of 2019, we remain on track to achieve our full year target of repurchasing 2% to 3% of our outstanding share count. I will close my remarks today with a discussion on capital structure and financial guidance. In terms of capital structure, we recently amended our senior secured credit facility, which extends the term of the arrangement to May 2024.

The amended credit facility will provide improved terms and enhanced financial flexibility going forward. Our overall capital allocation priorities remain to fund disciplined reinvestment, return capital through the repurchase of our common shares, pursue opportunistic M&A and to progressively reduce our debt levels in line with our long-term leverage targets. Regarding our financial guidance. We have revised our full year 2019 guidance as follows: we're expecting revenues of $1.7 billion to $1.74 billion; adjusted EBITDA $460 million to $490 million; and adjusted EPS of $2.45 to $2.70 per share.

Our revised 2019 guidance ranges reflect the following updated estimates and assumptions: First, we estimate that foreign currency translation will reduce our full year reported revenues and adjusted EBITDA by $15 million and $6 million, respectively. Second, we expect full year 2019 U.S. mortgage loan origination unit volumes to be in line to modestly better than 2018 levels. With continued softness in purchase volumes and a high degree of uncertainty around Central Bank actions in the forward path of interest rates, we believe our current view on U.S. mortgage volumes is prudent. If more positive trends emerge through the third quarter, we will consider updating our guidance ranges at that time.

It should be noted that our increased full year financial guidance implies a significant acceleration in second half adjusted EBITDA margin relative to our first half results. With regards to the third quarter of 2019, based on normal seasonality patterns and our current view of market volumes, we expect revenue to be in the range of $440 million to $460 million. In terms of adjusted EBITDA for the third quarter, we expect it to be in the range of $130 million to $140 million. The outlook for revenues and adjusted EBITDA I just outlined includes currently anticipated impacts of our AMC transformation and the wind-down of our noncore mortgage and default technology units.

In conclusion, we achieved a very solid operating and financial results in the second quarter and believe we are well positioned to continue to deliver strong financial results throughout the balance of 2019. Thanks for your time today. I will now turn the call back over to the operator for Q&A.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And we'll take our first question today from Darrin Peller with Wolfe Research.

Darren David Piller -- Wolfe Research -- Analyst

Thanks, guys. I just have 2 questions. The first I want to start off is on the mortgage side and then a follow-up on some of the growth in the parts of your business traditionally around insurance and some others. But first on the mortgage, I understand you're applying some conservatism on the mortgage outlook given the refis and rates, and you're applying that to guidance. There's also been, obviously, ongoing reinvestment that's been accounted for now in your numbers.

If we were to get another uptick in volumes or in your outlook on volumes and that flows through to the revenue guidance, maybe in third quarter based on where trends are in originations, should that pass through to EBITDA at a higher incremental margin than what we've seen this increase in guidance passing through?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Darrin, thanks for your question. Look, first of all, just let me deal with the second point first, which is the overall flow-through. If you're looking at the increase in the guidance on revenue versus the higher EBITDA, both are significantly increased. But if you look at -- a lot of that revenue related to the original guidance assumptions around the AMC and the AMC transformation program. So I'd say that we were relatively conservative, assuming that there would be a bigger burn-down of revenue sooner. And that, from an operational perspective, is taking a bit longer. And so that's really the biggest assumption.

You know that revenue largely comes with no EBITDA. So that's really the reason why you don't -- you're not seeing that flow-through as strong. Absolutely, if the revenue -- if the -- our mortgage volumes, any volume uptick were -- is going to be highly accretive to EBITDA.

Darren David Piller -- Wolfe Research -- Analyst

Okay. And so we should still assume something like, call it, a 40% pass-through or something maybe even -- I mean can you just give us some color on the actual? When we think about unit numbers being 5%, up or down, on unit -- on origination numbers, can you just remind us on your sensitivity thoughts on revenue and EBITDA?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. So I would say that the incremental margins should be well north of 40% -- 40%, 50% easily. It could be a little bit higher, depending on the nature of where the volumes come in. But I think that's a correct number, 40% to 50%, maybe a little bit higher. So I think that's -- and I think on the sensitivity, I think you just have to go back to our original sensitivity, which has worked for many, many years, which is kind of that $12 million to $15 million of EBITDA and $25 million of revenue. Some of the other sensitivities that have been floating around have been more related to adding in the AMC piece of it. As you know, with the volatility in the transformation of that revenue stream, I just think it's not easy to apply a broad sensitivity around that number.

Darren David Piller -- Wolfe Research -- Analyst

Okay. Okay. All right. Let me just follow up, if you don't mind. And then on the nonmortgage -- typically, on the nonmortgage-sensitive businesses, whether it's insurance or international or it's to your spatial, or even just data analytics in the U.S., I'd be curious to hear what do you think can be done to really help provide some lift to the opportunity and growth of that when, again, we go back thinking this is an area combined collection of assets that should be able to grow in the mid- to high single Okay. Okay. All right. Let me just follow up, if you don't mind. And then on the nonmortgage -- typically, on the nonmortgage-sensitive businesses, whether it's insurance or international or it's to your spatial, or even just data analytics in the U.S., I'd be curious to hear what do you think can be done to really help provide some lift to the opportunity and growth of that when, again, we go back thinking this is an area combined collection of assets that should be able to grow in the mid- to high single digits. Is there -- are there maneuvers or moves you can make that can help expedite that process and get that back up again?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. Look, I think, by far and away, the biggest challenge this year has been Australia, where the market's down after, I think, it's 25 or 20 straight years of growth. So that's a little hard for us to change, honestly. We're such a big market share there. But I think the volumes are down about 15%. So you're swinging traditional growth market to a compressing market, at least I'd say it's in the short run, honestly. That's a great business. It makes a lot of money. So I think that should turn around. We have actually a lot of growth and a great result in the U.K. Our European business is growing a smaller base, obviously.

So I just think there's one issue internationally at the moment, which is really the market. And that we want to see that turn around. In addition, frankly, FX has also been a challenge over there. So I'd say from an international perspective, I think when the market returns in Australia, I think you'll see us pop back up to more traditional upper single-digit growth. On the insurance side, I think we have -- we brought in Symbility. We're integrating it. I think we're going to the market. We're really excited about the opportunity there.

It's going to take a little bit of time. That's not an industry that moves super quick in terms of moving business around. But I'm excited about the prospects there. I think team has done a nice job of wheeling the offering together and getting out in the market. So that gives me a lot of hope that the -- we'll see growth over time in that business. Traditionally, as you know, we've kind of -- it's been kind of a low to mid-single-digit growth rate in that business, again, highly profitable. So the whole Symbility deal was around trying to accelerate off of that base.

Darren David Piller -- Wolfe Research -- Analyst

Okay. All right, thanks, Frank.

Operator

Next, we'll hear from Bose George with KBW.

Thomas Tedesco -- KBW -- Analyst

Hey, guys, this is Tommy on for Bose. When you think about the low and high end of the guidance ranges, how much of that variability is dependent on the -- more sort of the macro mortgage market versus more company-specific factors, whether it be the GCP migration or the AMC transformation, etc.

Frank Martell -- Chief Financial Officer, Chief Operating Officer

So the revenue, as we've talked about earlier, Tommy, the revenue, I think the biggest assumption right now -- I mean we've obviously lifted our assumed mortgage volume outlook in the U.S. So that's a factor. And again, kind of in line with the numbers I talked about with Darrin on the overall sensitivity. So that's one factor. But then the other one, as I mentioned, is the GCP -- or is the AMC transformation. And we're just -- we're looking at that operationally. We're obviously doing a lot of restructuring on the operation, shutting down certain operations, expanding certain other ones. So that -- it's just our best view at the moment, which is a little slower than the burn-down we assume. So that's really one of the reasons why the guide went up a little bit more in revenue than it did in the profitability side of it.

Thomas Tedesco -- KBW -- Analyst

Okay. That makes sense. And then your 30% adjusted EBITDA margin in 2020 and given that's a normalized mortgage market, does that assume that you've reached 50% nonmortgage revenues by then? And then do you -- with your current mix of business now, assuming after we get past the transformation, do you have the businesses there to get you to 50% through some organic growth? Or is there more that you need to acquire?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

So we're moving toward 50-50. But even with that, I think it's important to recognize that our mortgage sensitivity, that figure of kind of 60% of our business being sensitive to mortgage -- U.S. mortgage volumes, even within that, we have certain, I'd say, not -- it's not daily sensitive. There's trending over time, and a good example of that is the -- is our tax business, where you've got to model revenue stream. So it's not that -- even that's a little bit different. But I'd say that the 30% does not depend on any specific mix. That's with the current configuration gradually trending toward 50%. So that's the line of sight currently.

Thomas Tedesco -- KBW -- Analyst

Okay. Thanks.

Operator

Glenn Greene with Oppenheimer has our next question.

Glenn Edward Greene -- Oppenheimer -- Analyst

Thanks. Good morning, Frank, so I guess a couple of questions. I wanted to parse out sort of the -- go back to that revenue guide versus EBITDA guide, and it sounds like part of it is slower wind-down on the AMC and part of it's market. So could you sort of parse out to help us understand that? And also want to go back to sort of you were originally sort of thinking $700 million or $800 million of AMC software wind-downs in '19, and it sounds like the timing of that's pushed out a little bit and dragged into the first half of '20. Can you kind of help us think for the timing of that? How much has been absorbed, is going to be absorbed in '19 versus '20, and then also back to reconciling the revenue guide change?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes, I would say that what's changed because the -- what's rolling into 2020 has always been the case, Glenn. Because as you know, like the -- for example, the legacy business wind-ups, those are contractual run-offs. So that's -- it is what it is time-wise, and that's always been several years. It's smaller than the AMC piece, obviously. The AMC piece is more of an operational. So we're working with the clients that don't want to subscribe to the transformed service.

And they -- so they need to be transitioned. So that's really where a lot of the effort is. So it's us and the clients working together, so the timing is a little bit outside of our control. But when we made the original guide, we assumed a more aggressive rundown than we're seeing. A lot of that again is just the working collaboratively to get the right rundown scenario operationally. And that revenue burn-down we assumed originally in the guide, there's very little EBITDA attributable to that revenue. So that's why you're seeing almost all of the upswing in the EBITDA is related to other factors in the AMC that a lot of the revenue is related to the assumption of the AMC. I don't...

Glenn Edward Greene -- Oppenheimer -- Analyst

Should we be getting a meaningful lift on the revenue on the back half given the -- you sort of took the mortgage market assumption up at least 5 points and conservatively?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

I would say there's other factors obviously than just the market. We talked about the GCP investment, for example. We talked about the cost to transform the AMC. So there's other factors. I think at the end of the day, you're talking about a couple of million here or there. So it's kind of in the round. But the FX, international piece that Jim talked about and the currency, that's a little bit worse than we thought. So there's a number of other factors, but they're all small.

There's nothing meaningful there. I think the market conversion -- and by the way, I think in terms of your characterization of the market, the conservatism, I don't think anybody really knows. I mean everybody has brought up their forecast very -- relatively very recently. But even if you look at the unit perspective, the ranges are still somewhere between 0% to 1% and 4% to 5%. So there's still a pretty big range out there.

We'll see what the Fed does, 50 basis points, 25, staggered, onetime. There's a lot of factors that go into it. Plus, as I did mention in my remarks, you do have persistent headwinds out there on the purchase money side with availability and that kind of stuff, housing stock. So I think the mortgage market, I think, as Jim said, look, if it's better, we'll lift our guide in the third quarter. We don't normally like to do quarterly lifts, but if there's a -- because that should be -- if it happens, it should be a decent amount of upside. So we'll see kind of on-the-fly as we go.

Glenn Edward Greene -- Oppenheimer -- Analyst

Okay. Just one number question for Jim. If you could just sort of give us the organic revenue growth in the quarter sort of adjusted for macro factors?

James L. Balas -- Chief Financial Officer

Yes. The bridge on the revenue line item was -- obviously, we're down 6%. A big chunk of that, about 5%, was the rev rec item from the prior year. And then the international FX and the wind-up activity was about minus 3%, and then you had plus 2% on the M&A side. So that's how you get to the minus 6%. And so organic growth with market was essentially flat and with market and depending on which data point you're looking at, if it's flat to up 1 point or 2 or whatever, we're seeing as the market gave us about 1 to 2 points and then the traditional drivers were down about 1 to 2 that offset each other.

Glenn Edward Greene -- Oppenheimer -- Analyst

Got it. Okay. Thank you.

James L. Balas -- Chief Financial Officer

Great.

Operator

Next will hear from Chris Gamaitoni with Compass Point.

Edward Christopher Gamaitoni -- Compass Point -- Analyst

Good morning, everyone. Could you update us on the revenue contribution from Australia within PIRM?

James L. Balas -- Chief Financial Officer

We don't break that out. It's included in the property insights. It's a good chunk of revenue, but we don't break that out separately.

Edward Christopher Gamaitoni -- Compass Point -- Analyst

Okay. And on the AMC transformation process happening a little bit slower, is that purely operational? Or is it somewhat reflective of more refinance volume came in than expected so their capacity plans are different than they originally expected?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. I'd say that -- Chris, this is Frank. I'd say that it is -- there is a little bit, actually, certainly in the second quarter, there was a little bit more market upswing than we had thought across our client base. So that was a little bit, again, part of this assumption change. But in the main, what this is, is literally we're piloting and then we're demoing the new solution working with each client around pricing and contracting and all that kind of stuff. So it's a case-by-case basis.

And every client has a different cadence in terms of what they can absorb themselves because they get their own business to run. So -- but -- and what makes this important is obviously, it's integral to revenue generation from the client's perspective. It's also an area that is closely viewed from the regulatory side. So you have to be super careful to make sure the transition is handled well if you're going to move appraisal volume from one company to another.

So we just want to make sure that our clients are well protected and that if we do transition volume to another supplier, we do that very, very carefully and very well. So it's just -- it's a month at a time working very closely with the clients. And frankly, it always takes a little longer than you think when you originally plan those things because life happens.

Edward Christopher Gamaitoni -- Compass Point -- Analyst

Understood. I wanted to follow up on some of the comments about other factors in the EBITDA guide, the GCP investment and cost to transform the AMC. Are you accelerating some of those costs beyond what you had originally anticipated into this year that would hit the EBITDA line item? Just trying to understand kind of the nuance that you're pointing out.

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. So for example, just some of the investments are not in the adjusted EBITDA metric because they were called out originally, and we have a bucket for those types of things, extraordinary items, and then some are. So there's a combination of those types of things. And then you have capitalization and expense rules, etc.. So there's a mix of factors there. But in general -- and by the way, I would just remark, we talked about investment levels and spending, but the reality is for data and analytics company, you -- our capex, about 1/3 of it relates to capitalized data, which is the same every year.

So if you take that out, we spend about 4% to 5% of our revenue on capex, which is kind of on the low end. So we're not talking about super-duper high levels of capex spending as it relates to other peer data analytics-driven companies, technology-driven companies. So it's kind of a reasonable band. But in terms of things like GCP, honestly, as I said, it's a very complex program, but we're moving to state-of-the-art public cloud, which is going to be part of our 30% margin number next year. So it's a lot more efficient.

The cyber aspects of it are a lot better. Backup and recovery are a lot better. So that's where we're focused a lot on. And frankly, that's where we spent a lot more time on and try to pull forward a bit some of that spending because we want to get there as quickly as we can.

Edward Christopher Gamaitoni -- Compass Point -- Analyst

Thank you so much.

Operator

Our next question comes from Bill Warmington with Wells Fargo.

Bill Warmington -- Wells Fargo -- Analyst

Good morning, everyone.

James L. Balas -- Chief Financial Officer

Hi Bill.

Bill Warmington -- Wells Fargo -- Analyst

So another question on the flow-through calculation. I realize that the EBITDA guidance has been taken up $10 million. The -- but that's a net figure, and I was trying to understand the actual gross figure, if you will, and how much of that -- what you're netting against that gross figure in terms of accelerated investments in the second half to get you to the $10 million?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. Obviously, Bill, I think when you're using figures like $10 million, you're isolating -- I don't know if you're using the top end of the range or the midpoint or whatever, but obviously, we're providing a range. So within that range, people interpolate at midpoint. But clearly, we've provided a range. So I think within that range, it's not as precise as you're talking about. I would say that we've reflected all of the market pickup as it relates to the second quarter on through to the year.

So say that, that's the $10 million, if you want to say that, just rough numbers, $10 million, $12 million. And that's generous because $10 million to $12 million or $12 million to $15 million is a full year number. So if you say $10 million to $12 million for the third -- the 3 quarters, that's all reflected in the upswing in our forecast for the year. And then also, as I said, the AMC revenue largely is marginless because a lot of what we're getting -- we're moving out of, frankly speaking, is why we're making some of this transition.

We're moving to a more premium higher-margin service is the goal, which has a much better turnaround time. So that requires people to value that. Some people do, and some people prefer the more traditional route. So we're just working through that part of it. So there's very little margin contribution there. As I said earlier, you have to put a stake in the ground. Our guidance for this year that we're talking about originally was really built in fourth quarter of last year with our view of this year.

So obviously, we're 7, 8 months into it and have a better view of what's happening this year. So that's a -- that was just a -- we took an educated guess at how that would play out operationally, and it turned out to be a bit slower, which is not surprising. It's not really a problem per se.

Bill Warmington -- Wells Fargo -- Analyst

And for my follow-up question, just wanted to ask how are share shifts in the mortgage market among your largest clients impacting your volume? Are they helping you? Are they hurting? Is it neutral?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

I would say that in the main, excluding the AMC, because obviously, we have 2 clients that make up a big chunk of that. So it's not a market representative revenue stream. I'd say in the balance of the company, I'd say broadly, it's been either a zero-sum game or slightly positive. But we service so many lenders that -- and service all the big lenders and servicers. So we kind of get the volumes either way. So I think from that standpoint, it's kind of a negligible change.

I think in the AMC, though, it's just obviously -- I think that we're seeing some share gains in those bigger lenders. And I think it depends on the nature of where the volumes are coming in the market, but I think that's been -- actually added some revenue that we didn't think we'd have. That was part of the issue on the guide. We didn't think we're going to grow in some of those clients that we end up growing in the second quarter.

Bill Warmington -- Wells Fargo -- Analyst

Got it. Well, thank you very much.

Operator

We will now hear from Kevin Kaczmarek from Zelman & Associates.

Kevin Kazmierczak Merrick -- Zelman and Associates -- Analyst

Hey, guys. Can you talk about momentum with any new or potentially new clients on the transformed appraisal process, like any updated number on the new appraisal customers or their revenue contribution?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Kevin, I think we certainly -- we continue to take new clients on in terms of contracting. As you may recall from past sessions, this is a -- you win the contract, and it takes a fair amount of time to operationalize, more on the client side than our side of it. And that's more infrastructure and systems and that kind of stuff and QCs and whatnot. So I think those new clients -- actually, it's pretty good. I think everybody, even some of the clients that are not willing to pay, are excited about the prospect of the new technology.

We actually have real pilots with some of the clients. So I think those are -- everybody's excited about it. I think it's -- once it's at scale, we'll see what happens. But nobody still look -- it's not an exciting opportunity. I think it's just again more from a client's perspective, is do they have the operations that can work with it and they really value the differential. And I think that's different. But we're getting a lot of clients signing up, and I think that's very encouraging.

Kevin Kazmierczak Merrick -- Zelman and Associates -- Analyst

Okay. Any order of magnitude sense of number of clients? I think you mentioned 10 clients at some point in the past relative to that -- like double that?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

No. We have many more than 10. We have quite a few lenders signed up with varying degrees of volume attached to those. So I'd say that we have -- beyond the 2 major lenders we have, we have probably 2 dozen contracts. So it's pretty significant.

Kevin Kazmierczak Merrick -- Zelman and Associates -- Analyst

Are these generally top 100 lenders or you're going maybe smaller in terms of market share?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Some are top 100. I mean it's the mix, but I think a lot of are -- I'd say a fair amount of them are top 100.

Kevin Kazmierczak Merrick -- Zelman and Associates -- Analyst

Okay. And then one more, I guess, on insurance. If you look sequentially on the insurance revenue, it increased only 7%. Usually, you guys get like a 10% to 11% lift heading from the first to the second quarter. Any reason for the weakness there versus the first quarter? And maybe did Symbility maybe contribute differently than people would have thought in the second quarter? Or was there a drop-off in the rest of the business?

James L. Balas -- Chief Financial Officer

The one piece was there was a little bit of weather in the last year, so that was the main delta on the year-over-year. When you look at the insurance line item, we had growth primarily from Symbility. And the legacy business was essentially flattish.

Kevin Kazmierczak Merrick -- Zelman and Associates -- Analyst

Okay. And the weather form last year in the second quarter, so you're talking -- is that like a hurricane-related?

James L. Balas -- Chief Financial Officer

But we had a little bit of pickup. Wasn't like a couple of years here but just little pickups here and there, not too big.

Kevin Kazmierczak Merrick -- Zelman and Associates -- Analyst

Okay. Alright, thanks for taking my questions.

Operator

Next we'll hear from Andrew Jeffrey with SunTrust.

Andrew Jeffrey -- SunTrust -- Analyst

Hey, good morning, guys. Thanks for taking the question. I really just have one for you. Around your property tax business, if I normalize for the $23 million last year, it looks like that business might have been a little soft. I wonder if you could talk just a little bit about sort of what the competitive environment is like. Whether pricing has come into play? Or given the sort of relatively more recurring nature of that business side, I might have expected to see some growth this quarter.

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. So Andrew, thanks. Yes. So look, I think a part of it obviously, as you know, is that we actually have a very strong pipeline in that business. And you're going to see, I think, that flow through in the next couple of quarters. You onboard the loans, a lot of them are life of loans so you've got an amortization of revenue streams. So it's a little more muted in that business. We had -- I'd say, there was -- there could have been some shifting of volume between servicers.

But I think that the big picture in that business is that I think there's a tremendous amount of pipeline, and you're going to see it. Obviously, when you win stuff there, you've got to onboard it around the tax cycles themselves. So again, just when it gets on boarded and when it flows through is a little bit more muted than -- like an instantaneous thing on a flood surge or something like that. So no, I'd say that business is not weak at all.

I think it's very, very solid. And that's where we expect one of the businesses that we are putting a lot of money into new services and digitization, and I think you're going to see continued improvement in the profitability in that business as well.

Andrew Jeffrey -- SunTrust -- Analyst

So just I guess to put a finer point on it from a timing standpoint, should we expect that business to accelerate a little bit in the back half? Or are we thinking about more 2020 from a timing standpoint?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

No, I think you should see an acceleration this year.

Andrew Jeffrey -- SunTrust -- Analyst

Okay. Thank you very much.

Operator

We'll now hear from Ashish Sabadra with Deutsche Bank.

Ashish Sabadra -- Deutsche Bank AG -- Analyst

Hi, thanks for taking my question. A quick question on PIRM margins. So you talked about investments and volumes weighing on the EBITDA growth there. And given the investments may continue for some time, how should we think about the inflection there? Like at what point do we start to see the EBITDA growth in the PIRM business?

James L. Balas -- Chief Financial Officer

Yes. What we saw in the PIRM in the second quarter was continued investment impacting the margin. There were a couple of other components to that. You had stronger FX in the quarter. And then also Australian market volumes were down about 15%, which is -- which was weaker than originally expected. I think on the last call, we articulated it was around 10%, so you did see more softening there. So that did hamper the margins there, and that's higher-margin revenue.

Ashish Sabadra -- Deutsche Bank AG -- Analyst

Okay. That's helpful. And then...

James L. Balas -- Chief Financial Officer

The good news is that the expectation in that market will improve exiting this year due to credit standards loosening up a little bit, and then also they've cut rates there recently. So exiting 2019, we should have an improved market there.

Ashish Sabadra -- Deutsche Bank AG -- Analyst

That's helpful. And maybe just on the corporate expense side, that was like you're higher on a year-on-year basis and you called out there. How should we think about that for the full year basis? Anything in particular.

James L. Balas -- Chief Financial Officer

It gets to be a little lumpy with the spend levels and timing, so nothing unusual to model out consistently.

Ashish Sabadra -- Deutsche Bank AG -- Analyst

Thanks, that's helpful.

Operator

Jeff Meuler with Baird has our next question.

Jeff Meuler -- Baird -- Analyst

Yeah, thanks. Could you just help me understand kind of the timing and the progress on the GCP and platform investments, like how much is left to go? And when it's done, what does the business look like? Like do you go back to 55% free cash flow conversion? How does it impact adjusted EBITDA margins? How does it impact organic innovation?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. So I think, Jeff, the question on the cash flow rate is yes, it's a short term. I think the durability of the cash flow has been consistent over many, many, many years. I don't see that changing. So I think in terms of the progress, it is -- I would just say that it is a complex program. Basically, we're converting our platforms. It's not we're changing the platforms. We are converting them to a public cloud platform, which requires certain replatforming and recoding and that kind of stuff.

But by and large, it's taking the existing platforms and upgrading them on to a more efficient system. And with that, comes some benefits around cyber, not insignificant, frankly speaking. But -- so I think all of that is under way. Most of that spending is going to be this year or next year, but the vast majority this year, hopefully. And so we'll see that -- we'll clear that hump this year. I'm just trying to get as much of that done as quickly as we can because then we can enjoy the benefits.

I'd say, initially, the big benefit will be in operating performance and in cost efficiency. That's the expectation. It is part of our, as I mentioned earlier, our 30% goal. We are going to save a significant amount of run cost based on the estimates and the initial numbers that we're seeing. So I think it's a very positive move. Some of the other investments we've talked about, I would just say to step back -- there's collectively a number of them. But they're not in and of themselves gigantic programs. It's not like the data center migration a couple of years ago.

They're more enabling the infrastructure. I'd say the biggest other investment area that we're looking at, which is very exciting, is around digital property record and the visualization of the data property. And that is where you'll see more impact on the PIRM side, where I think that will access more verticals and allow us to get more efficient in the distribution of the property records and the data. So I think that's where again you see a little bit of the margin pressure in the short run in PIRM. A lot of that is related to the fact that a lot of these platforms, the smart data platform fundamentally is driving their revenue.

So that's what you're seeing there. And I think that's very exciting. I think the revenue benefit will unfold over a bit longer time horizon. But this year and next year, we should see significant improvement. You may recall, we bought a company called HomeVisit last year, which takes visual imagery of the properties. Great opportunity to take that across our footprint nationally. We're very excited about how that also plays into the data. So those investments really should result in both efficiency and revenue gains.

Jeff Meuler -- Baird -- Analyst

Okay. And then maybe just continuing on the line of thought on the overall organic growth right now is tough, market's tough. But just other than those, I guess, 2 that you just called out, what are the other new products that are selling well or where you see the most opportunity in the next few years if and when the market firms up?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. Look, I think that there is -- we're doing a lot -- credit has been a pinch point for us, as you know. That's one of the things and that's compressed the organic growth rate a little bit. And so that area is just the tough one because, as you see from some of our other peer groups, we actually outperformed on the credit side over a lot of the other peers in this space because there just is compression around some of these lenders, and we've had a lot of price increases over the time. And there's just a natural kind of counter-reaction to that.

So we're working through that. But I think if you look at what we're doing in that area around borrower verification, a more broad kind of VOE, VOI solution, that should, I think, produce the higher value, higher margin and get some adoption over the next couple of years. So that's one example of another area that is not only growth but also a little bit of a transformative value play for us. So that's a good example of another area. I'd say, though, when I talked in my prepared remarks, fundamentally, we are seeing success in the integration of our existing solutions in a more seamless kind of offering, which is closing the whitespace that we may have with some clients.

So that's good traction there, I think, as well. So there's a number of those. And that one, that's an area where we -- it's more commercial in contracting and servicing versus developing a new product from scratch. So I think, again, that's another area that is a good opportunity for us. We had a tough comp the first half of this year versus the first half of last year, as we talked about. We had a super tough comp. I think as you get into the back half of this year, it kind of inverses and we have a -- back half of last year was not great for the market.

So I think we'll see a better market this year in the U.S, in particular, than we saw last year. So those comps are going to flip on us in the second half, hopefully. And I think that's a good thing for our organic growth trend coming out of this year.

Jeff Meuler -- Baird -- Analyst

Okay. Thank you, Frank.

Operator

Stephen Sheldon with William Blair has our next question.

Stephen Sheldon -- blair -- Analyst

Hi, thanks. It seems like, yes, trends in insurance and the spatial business continue to be a little choppy, excluding the boost from Symbility, and some of that sounds like it's weather. But was just curious how results there over the last few quarters had come in relative to your expectations. Has there been any distraction from the integration between your existing solutions and Symbility? And how quickly could that business get to the low to mid-single-digit potential growth that you talked about?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

I think that if you look at the underwriting platform business, I think it's performing well. It hasn't been a super-duper double-digit grower, but it's certainly been a solid kind of price and kind of increased low to mid-single digit. It had little bit of a flurry of activity a couple of years ago, where we got up into the mid-single digits. But it wants to be in that mid- to low single digits, I think without substantial product changes. I think the addition of Symbility, which, by the way, we're very pleased with, I think the Symbility team is a terrific team, it's a terrific platform. And so the idea really, Stephen, is to get those 2 businesses seamlessly connected so that we are, frankly, more competitive in the North American marketplace.

And I think we present a very credible alternative to some of our competition. That's going to take time to try to secure some market share in that area, but I think that that's the goal there. And I think we have the tools to get there. It's a distraction. These things are always a bit of a distraction. Has that materially hurt the organic growth? I don't think we've taken the eye off the ball. That's for sure. I think the team has really done a good job. It's just going to take a bit of time. But again, I think the addition of Symbility has been a great add to the insurance vertical.

It gives us a complete offering. It gives us a state-of-the-art claims processing solution. So I'm optimistic as we get into next year, the growth will likely accelerate, but we do need to get adoption by some of the client base in North America to make that a reality.

Stephen Sheldon -- blair -- Analyst

Okay. That's helpful. And then it's good to hear that you're continuing to improve the utilization of the internal staff appraisers. Can you provide any detail on the overall utilization rate for your staff appraisers and maybe how that's trended over the last year or so? And additionally, how do you plan to manage internal staff versus using third-party providers? Is the plan to give the staff appraisers as much work as they can reasonably handle and then using third-party resources for the overflows? Just any detail there.

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. So the utilization, when I say utilization, it's in the broader sense. If you're thinking about a traditional consulting business where you're looking at 65% or 70%, we look at that. But when I -- the way I'm using it in the context of the call this morning is around the mix of external and internal appraisal -- appraisers and how we utilize those 2 groups . We're trying to drive more volume more consistently in an automated way around our staff panel, which we have more control of and we think we can get automation more quickly. So I think that's what I'm kind of talking about there.

And I think then when it gets into geography, to be quite honest with you, where you utilize people, obviously, in more rural, lower-volume states, you tend to use third parties more. Some of that will depend on the ultimate mix of where the revenue is coming from. But the basic model is the same, which is really using the automated workflow tools that we have adopted from really the eTech platform, which we bought a couple of years ago, which is really could materially change the throughput and the efficiency of the appraisal process.

And that's what we're piloting right now. So if that's the case, then I think we'll drive -- we'll be able to drive consistently more profitable volume across our staff appraisers than use the -- supplement it with the third parties.

Stephen Sheldon -- blair -- Analyst

Great, thanks.

Operator

John Campbell with Stephens Inc. has our next question.

John Robert Campbell -- Stephens Inc. -- Analyst

Hey, thanks. Most of my questions have been answered. But Frank, I've got a higher-level one for you. I'm just curious about your thoughts on the GSE reform efforts. And then if there was privatization, how would that impact you guys? I'm guessing it's a net positive over the long haul, but I just want to get your take.

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Oh, boy. I think -- John, I think it's early days. I think we have -- we are monitoring. The MBA is providing a lot of input. Mark Calabria is new. You probably know his kind of thought pattern pretty well. I think there's -- I think clearly people think there's a better chance for GSE reform. I think we play well either way, current versus new. But I think clearly, there's probably room for some progress on the GSE reform front. But I don't know how that's going to play out and win. My guess is inevitably it will take a longer than currently thought.

But clearly, there was kind of time couple of months back where people thought the train might actually leave the station. I'm not sure if it's the same enthusiasm right this second, but I think there's been some recent reports about delays. So -- but look, it's certainly not going to hurt us.

John Robert Campbell -- Stephens Inc. -- Analyst

Got it. I tend to agree with you. And then lastly, I just want check with DOJ probe and then, I guess, the CID you guys received. I don't think you guys are part of that probe, but it's probably just matrix data. But anything you can discuss there? Any kind of update?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Not really. I mean we're not a target of the probe. So that's a -- there's -- I don't really have a concern on that at the moment. We're just cooperating obviously like we need to.

John Robert Campbell -- Stephens Inc. -- Analyst

Could you maybe just shed some light on what they're looking at maybe?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

I can't really, obviously. No.

John Robert Campbell -- Stephens Inc. -- Analyst

Okay, fair enough. Thanks, guys.

Operator

Jason Deleeuw with Piper Jaffray has our next question.

Jason Scott Deleeuw -- Piper Jaffray -- Analyst

Yes, thanks for taking the question. Just on the PIRM segment and specifically on property insights, I'm just trying to get a sense for the components of the revenue in there. And I know there are a lot of different types of clients across different industry verticals that use that property data. And I'm just trying to get a sense for where -- what client buckets are growing in their usage of the property data where the revenue is growing and where it's not. Just trying to get a sense for how that is trending along by the customer types.

James L. Balas -- Chief Financial Officer

Yes. In terms of property insights, that has not only our domestic business but also the international business. So when you're looking at the revenue streams in that revenue supplement, that's where you have all the FX in the Australia market volumes impacting it on a year-over-year basis. And in terms of new categories, it's beyond our traditional banking, mortgage and so forth. We are finding new use cases in other market verticals, energy, telco, retail, other types of use cases for the data.

Jason Scott Deleeuw -- Piper Jaffray -- Analyst

Got it. And then just a high-level question strategically, in thinking about the collection of businesses and data assets that you have, how are you thinking about things right now? I mean do things need to be trimmed? Does anything need to be added through M&A? Just kind of some high-level thoughts on what you're thinking there.

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. Look, I don't think we have -- we don't have separable businesses. We have a data repository, a common IT stack and we have product lines, Jason. So I think -- and really, the model is most of the product lines collect data. We collect data on behalf of those and utilize them across the business lines. So it's pretty integrated. I think that we have a really profitable business in that area. That's been an area, honestly, that I think is -- has held its own despite 9 quarters of tremendous pressure. I mean if you look at the lender side or the servicer side, insurance side, everybody's trying to cut costs. So I think the growth is not easy to come by.

We've done some innovation with some of the offerings. We have a very exciting advance in the AVM area that we're rolling out. So I think they're -- those kinds of things will help us to grow that business there. I think we don't have anything that doesn't fit. So I don't think we're looking to dispose of a lot of stuff. I think we're on the hunt for data assets, obviously. But we have to be smart about the ones that we add. I think if you look at HomeVisit, for example, that's a very smart deal where we can take a technology and a workflow and use our existing backbone to expand that across the nation.

So that could be many x times the current size by just taking the capabilities and synergizing that across the platform. That's really what we're kind of looking for at the moment. Most of the multiples in the M&A world are -- as you know, are extremely high. And I think that's -- it's not -- we don't want to chase stuff that has had no growth, but it's projected as super growth because it's going to pay high multiple for it. I think those areas we're not looking at. We're looking at synergistic data capabilities. And I think we're finding those, albeit smaller, the last couple of years.

Jason Scott Deleeuw -- Piper Jaffray -- Analyst

All right. Thank you very much.

Operator

Next we'll hear from Geoffrey Dunn with Dowling & Partners.

Geoffrey Murray Dunn -- Dowling & Partners -- Analyst

Thanks. Good morning. Frank, to better understand how the PIRM margin has transitioned this year and could transition next year, can you frame the incremental investment spend in some form or another? How this year's run rate compares to last year? Or how much could peel off in '20, just so we can get a better idea of the lift that you can get next year?

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Well, I think, Geoff, if you look at the -- I mean just take the lift question. So obviously, we're going from the margins that are implicit in our guidance this year to the 30% target margin next year. So there's a significant lift there from a profitability perspective. That's being underpinned, as I mentioned, a lot of our investments are around foundational items like the platform efficiency, the cloud and that kind of stuff. So I think those are I think just -- they're not rocket science. I mean every company has looked at the public cloud. So we're just trying to drive there quickly. I'd say our incremental spend this year, if you look at traditionally, as I mentioned, we don't -- we spend 5% of revenue.

I'd say most companies, if you look at a lot of companies, companies that I've been at before would spend 6%, 7% pretty consistently. So we're not a super high -- even now, I'd say that our spending, if I had to say, I'd say it's probably this year it's going to be up kind of mid-single digits-ish in terms of totality of the spend. As I mentioned, if you look at our capex line, got to take about 1/3 of that off for capitalized data. So -- but it's not dramatic per se. But we do have a big lift, Geoff. I mean if you look at next year, to get to 30% margin, I mean, we're 29% this quarter, which is pretty good.

We've got the AMC. Once the AMC thing plays through, you're going to have a different mix shift there with profitability -- it's going to impact profitability. So all those irons are in the fire, everything is kind of -- the railroad is set and the trains run down the tracks there. So we're pushing toward the 30%, and that should be a substantial profitability increase.

Geoffrey Murray Dunn -- Dowling & Partners -- Analyst

I understand that. It's challenging because on the UWS side, we can look at incremental margins when the market is volatile, but a lot of the story is about that lift in the PIRM side. So to get any kind of better framework for understanding that would helpful.

Frank Martell -- Chief Financial Officer, Chief Operating Officer

Yes. I wouldn't say a lot of the lift is dependent on the PIRM side, honestly. Because I think if you look at the UWS side, I mentioned the automation in the tax business, for example, you're going to see lift there as well -- continued lift there as well. Some of those businesses are highly automated already. So I think from that perspective, we're not riding on margin lift in the PIRM per se. But certainly, if you look at PIRM, I think right now, this quarter, it looks -- because we're only talking about $50 million, $60 million of EBITDA, $3 million or $4 million percentage-wise looks bigger than the dollar implications of it are.

So I think -- but you're going to see that investment spend should trend down as it relates to PIRM as we get into next year. So you will see a benefit there for sure. But I think if you look at the overall margin lift of the company, it's going to be distributed across the segments in corporate, etc. So it's not one segment is required.

Operator

[Operator Closing Remarks]

Duration: 73 minutes

Call participants:

Dan Smith -- Investor Relations

Frank Martell -- Chief Financial Officer, Chief Operating Officer

James L. Balas -- Chief Financial Officer

Darren David Piller -- Wolfe Research -- Analyst

Thomas Tedesco -- KBW -- Analyst

Glenn Edward Greene -- Oppenheimer -- Analyst

Edward Christopher Gamaitoni -- Compass Point -- Analyst

Bill Warmington -- Wells Fargo -- Analyst

Kevin Kazmierczak Merrick -- Zelman and Associates -- Analyst

Andrew Jeffrey -- SunTrust -- Analyst

Ashish Sabadra -- Deutsche Bank AG -- Analyst

Jeff Meuler -- Baird -- Analyst

Stephen Sheldon -- blair -- Analyst

John Robert Campbell -- Stephens Inc. -- Analyst

Jason Scott Deleeuw -- Piper Jaffray -- Analyst

Geoffrey Murray Dunn -- Dowling & Partners -- Analyst

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