FUBO - NYSE

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fubo First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Alison Sternberg, Senior Vice President of Investor Relations at Fubo. Please go ahead.

Thank you for joining us to discuss Fubo's first quarter 2024. With me today is David Gandler, Co-Founder and CEO of Fubo and John Janedis, CFO of Fubo. Full details of our results and additional management commentary are available in our earnings release and letter to shareholders, which can be found on the Investor Relations section of our website at ir.fubo.tv. Before we begin, let me quickly review the format of today's presentation. David is going to start with some brief remarks on the quarter and full year and Fubo strategy, and John will cover the financials and guidance. Then we will turn the call over to the analysts for Q&A. I would like to remind everyone that the following discussion may contain forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding our financial condition, anticipated financial performance, business strategy and plans, industry and consumer trends, anticompetitive practices among our competitors and our response plan, including our antitrust lawsuit and expectations regarding profitability. These forward-looking statements are subject to certain risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from forward-looking statements include those discussed in our filings with the SEC. Except as otherwise noted, the results and guidance we are presenting today are on a continuing operations basis, excluding the historical results of our former gaming segment, which are accounted for as discontinued operations. During the call, we may also refer to certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are also available in our Q1 2024 earnings shareholder letter, which is available on our website at ir.fubo.tv. With that, I will turn the call over to David.

Thank you, Alison. Good morning, and thank you all for joining us today to discuss Fubo's first quarter 2024 results. We are very pleased with our strong start to 2024. Fubo again, exceeded guidance with double-digit growth across key financial and operating metrics in North America during the first quarter. We ended the quarter with $394 million in total revenue, up 24% year-over-year and paid subscribers at $1,511,000, up 18% year-over-year. Our ad sales business continues to be an expanding revenue source for Fubo. In Q1, we delivered North American ad revenue of $27.2 million, an increase of 21% year-over-year, demonstrating an accelerating business. We are also pleased to report that the first quarter marked yet another period of steady progress towards achieving positive cash flow and adjusted EBITDA. In Q1, adjusted EBITDA margin reached minus 10%, representing a significant improvement of 796 basis points or an increase of approximately $18 million in absolute dollars compared to the first quarter of 2023. Additionally, Q1 represents the fifth consecutive quarter of year-over-year improvements in free cash flow and adjusted EBITDA, underscoring our forward momentum in the right direction. Notably, we've grown our market share in the pay TV space since our October 2020 listing on the NYSE. In Q1, we achieved our lowest subscriber acquisition cost to average revenue per user ratio or SAC to ARPU ratio, well below the low end of our target range of 1 to 1.5x. This demonstrates our increased efficiency in customer acquisition. Additionally, March 2024 represented the lowest churn rate for any March on record for the company. These results are demonstrative of Fubo's continued ability to grow quickly, efficiently and effectively since our 2015 founding, performing well against benchmark companies across the media and tech sectors. While these statistics are impressive when comparing our growth time line to industry leaders and applying Moneyball metrics, these results are even more about. For instance, Fubo achieved $1 billion in revenue in 2022, just 7 years after it's founded. This achievement is particularly striking when compared to larger scale companies like Netflix and Roku, which reached the $1 billion revenue mark, 10 years and 17 years after their respective launches. In 2023, Fubo generated $2.6 million of revenue per employee globally, a figure we believe we can improve further based on our latest projections. We believe this sets Fubo apart as one of the most productive companies in direct-to-consumer streaming. For context, in the same period, Netflix also generated $2.6 million of revenue per employee, while both Roku and Spotify achieved less than $2 million during the same period. These examples highlight the strength of Fubo's tech stack and management team, which we believe underscore our position as a leading operator in the streaming market. Fubo operates efficiently each quarter, but we continue to be challenged by accessibly above-market content licensing costs and other onerous contractual terms imposed by programmers. In the first quarter, we spent approximately 90% of our total revenue on content. The exorbitant fees imposed on us and consequently on our customers are well above the market. The same is true of other onerous contractual terms such as penetration rates. These issues are at the core of our current litigation against the Walt Disney Company, Fox Corp. and Warner Bros. discovery. We allege that this JV has engaged in long-standing anticompetitive practices aimed at monopolizing the market, suppressing competition and depriving consumers of choice, affordability, pricing and innovation. The pending launch of those companies' joint venture is an existential challenge that we face, one that we are committed to meeting, in part through our suit to enjoying the launch of the joint venture until and unless the playing field in the industry has been leveled. Nearly 90 days after filing our lawsuit, while it remains early, we are encouraged by the progress we have made so far. Notably, we were encouraged by the support received by our competitors, DIRECTV and DISH who have filed declarations backing our motion for a preliminary injunction against the JV. Additionally, the U.S. District Court has granted our request for limited discovery and set a hearing date for our motion. We are eager to present our claims in preliminary injunction motion in court beginning August 7. Equally noteworthy, we have received very strong support from Capitol Hillen. Congressman Jerry Nadler of New York and Joaquin Castro of Texas are also concerned that the JV's control of 80% of broadcast sports content will negatively impact consumers and market competition. In April, the congressman sent the JV CEOs a letter requesting that they address 19 concerns. They also ask that these responses be shared with the Department of Justice. Just this week, 8 cosigners representing companies like Fubo, DIRECTV, DISH, NewsMax as well as multiple consumer advocacy groups sent a letter to Congress requesting they hold the hearing on the JV. And last but not least, we are also encouraged by the DOJ's reported investigation into the JV. At a minimum, all distributors, including Fubo, should receive fair and equitable terms from programmers. We should be able to offer our subscribers competitive pricing, packaging flexibility and the ability to launch innovative products that further enhance the sports streaming experience. This history of programmers forcing unfair deals is the reason why only a few days ago, Fubo customers lost the Discovery networks owned by Warner Bros. discovery. While negotiating a renewal, we also requested to license the Turner Sports Networks and asked for flexible packaging, the same packaging we expect the JV will offer. WBD did not want to discuss terms. Instead, they offered an extension for the discovery content on the previous status quo terms in flexible and above market. Meanwhile, Fubo has never straight from our mission to delight consumers with an aggregated sports entertainment offering that leverages a personalized and intuitive streaming experience. From the outset, Fubo has been committed to tech innovation alongside sports. At this week's advertising upfronts, we announced several new offerings that enable our brand partners to reach passionate sports sands, -- these include interactive ads, pause ads, banner ads with enhanced targeting and what we are calling the marquee, a branded Carousel takeover displayed prominently on our home screen. On the consumer tech front, we are introducing AI-driven playlists in beta within the DVR for basketball content. Imagine a playlist of just the 3 pointers from last night's game or just the fall shots from a game you recorded last weekend. Our plan is to vastly improve for consumers our DVR experience, enabling user controls and maximizing the value of their DVR. With playlists, the consumer could personalize their sports recordings, watching and rewatching the moments that matter most to them. We believe this will also help drive tune-in for our league and programming partners. In closing, Q1 represented another strong quarter of exceeding forecast and making substantial progress. We are steadfast in our execution and proactive in addressing these hurdles head on despite market challenges. Our vision promotes a competitive streaming landscape that offers consumers choice, fair pricing and innovative products. This is the vision upon which Fubo was founded and is only achievable in a truly competitive market. I will now turn the call over to John Janedis, CFO, to discuss our financial results in greater detail. John?

Thank you, David, and good morning, everyone. I am pleased with our ability to deliver another quarter of strong results, including top line growth and continued improvement across just about every key performance indicator. The first quarter results serve as support that our operational initiatives around bringing added effectiveness and efficiency to the business are working and that our customer acquisition and retention actions are also having a positive impact. Above all, the results over the past few quarters provide further evidence that our business model positions us well for continued growth. Taking a look at the results for the quarter. We continue to see healthy top line and subscriber growth, with global revenue growing by over 24% to $402.3 million, driven by 24% growth in North America and 7% growth in Rest of World. We are also pleased with our overall subscriber growth, including 18% growth in North America to 1.51 million subscribers and a 5% increase in rest of world subscribers. Our progress is not only reflected in our revenue and subscriber growth, but across key performance metrics as well. As an example, we continue to gain added leverage over our subscriber-related expenses, which decreased from 93% to 90% of revenue in Q1. We expect this trend to continue as we work to grow subscribers, further optimize our pricing and continue to fine-tune our cost structure and mix of premium plans. In addition, ARPU in North America improved to $84.54, a meaningful improvement compared to $76.79 in the prior year period. We also saw an improvement in ARPU in our rest of Rail business to $7 from $6.57. Importantly, we expect this trend in year-over-year ARPU improvement to continue. As it relates to some of the key revenue drivers, let me turn to our advertising business, a segment of our company that has been significantly improving and which we are confident will continue on this path despite the choppiness that the overall advertising industry continues to face. During the first quarter, ad revenue totaled $27.5 million or a 21% increase versus the prior year period. Turning to the operational side of the business. We continue to make progress in lowering expenses and increasing efficiency. Starting with gross margin, we saw a near 600 basis point improvement in gross margin to 7%, marking our sixth consecutive quarter of positive gross margin. Our ongoing progress across the income statement also led to a significant reduction in net loss with Q1 net loss of $56.3 million or a 32% year-over-year reduction from a loss of $83.4 million in the prior year period. This resulted in a net loss margin improvement to negative 14%, favorably compared to a negative 25.7% loss margin in the prior year period. This led to a first quarter 2024 per share loss of $0.19, a significant improvement compared to a loss of $0.37 in the first quarter of 2023. First quarter adjusted EBITDA loss also improved to a loss of $41.1 million compared to a loss of $58.9 million in the first quarter of 2023. We -- adjusted EBITDA margin was a negative 10.2%, a significant improvement from a negative 18.2% in the prior year period. This resulted in an adjusted EPS loss of $0.11, an improvement compared to an adjusted EPS loss of $0.27 in Q1 2023. In short, our results for this quarter and recent quarters underscore the progress we are making across the business. Importantly, we believe the direction the company is moving in reflects the potential and resilience of the business and positions us well to advance on our profitability goals. Moving to the balance sheet. We ended the quarter with $175 million of cash, cash equivalents and restricted cash. Looking ahead, we believe that we have sufficient liquidity to both invest in the business as well as continue to support our path to profitability, setting aside any potential impact of the launch of the sports streaming JV. In addition, our ongoing efforts to identify efficiencies and maximize leverage across the business resulted in a $10 million improvement in free cash flow. We continue to focus on maintaining rigor and discipline around our company-wide cost and are pleased with the progress we made throughout the quarter. Now turning to guidance. Our second quarter North America subscriber guidance is 1.275,000 to 1,295,000 subscribers, representing 10% year-over-year growth at the midpoint. While our second quarter revenue guidance projects $357.5 million to $367.5 million, representing 19% year-over-year growth at the midpoint. This leads to a full year 2024 North America subscriber guidance of $1.675 billion to 1.695 million subscribers, representing 4% year-over-year growth at the midpoint. This reflects our current outlook and in particular, our exposure to potential industry volatility, along with our intention to maintain discipline in subscriber acquisition costs relative to monetization, but does not reflect any potential impact from the JV. And for full year 2024 North America revenue, our guidance is for $1.525 billion to $1.545 billion, representing a 15% year-over-year growth at the midpoint. Our projection of revenue growth at patient subscriber growth reflects our expectation of continued ARPU expansion and improved unit economics. And for Rest of World, we expect 395,000 to 400,000 subscribers in the second quarter, representing 1% year-over-year growth at the midpoint, while our revenue guidance projects $8 million to $9 million, representing 4% year-over-year growth at the midpoint for the second quarter. This leads to guidance of 395,000 to 405,000 subscribers for the full year 2020, representing a 2% year-over-year decline at the midpoint and in full year 2024 revenue guidance of $33 million to $35 million, representing 4% year-over-year growth at the midpoint. Given the many unknowns related to the potential launch of the joint venture, including the outcome of our lawsuit and the DOJ's investigation, our guidance and our planned path to profitability do not reflect any potential impact of the joint venture launch to our business. In summary, we are pleased with our ability to post record revenue and to continue to have success across our operational initiatives while managing through an ongoing challenging environment. Our continued strong performance furthers our confidence in our future success and increases our belief that we are on the right path to deliver value to shareholders. Operator?

[Operator Instructions] Your first question is from the line of Laura Martin with Needham.

Could you first talk on churn lower and customer acquisition costs lower. Could you talk about what's driving that, please?

Laura, this is John. I'll start. So, in terms of SAC, what I would say is our marketing team has just done an amazing job -- and so we saw -- it's a reasonably good improvement in churn for the quarter. Our SAC is the lowest it's been, I think, in the history as it relates to a multiple. And so, I think we feel pretty good about it. I would say they've done a really good job of spending at the right time and moving budget around. And I guess that's an that anything else...

Yes. Yes, look, the team has done, I would say, a phenomenal job making sure that we're able to retain that fall cohort. And we've been able to find some overlap with other sports programming and entertainment program. And I think one of the unexpected positives in the quarter was the impact of women's college basketball. That was certainly a driver that we didn't anticipate. At the same time, as you know, we didn't have TNT and so we -- there was no real impact from the lack of coverage on the men's side.

Okay. That's helpful. And then advertising very strong in the quarter. Would you actually relate that to a better -- like you've got the sales force in order? Are you doing better programmatic, very strong ad numbers, which is really helpful to margins. Could you talk about those trends and whether you see them continuing and accelerating...

Yes. We're very focused on our advertising business, and we've strategically invested in our monetization capabilities. As I just mentioned, we're focused on releasing new ad formats to drive value. And I think one of the key pieces of that is our focus on banner ads. As you know, Roku does a phenomenal job selling banner ads on its platform. And we finally productized our new unit, which we call the Marquee, which is prominently displayed on our home page. We've also focused on ensuring that we're meeting the needs of our many advertisers, and we're specifically responding this quarter and next quarter to the growing issues around fragmentation of the media landscape. And so, we've currently signed an agreement with comScore to provide more cross-platform measurements for advertisers. And I think one thing that you and I have talked about several times, I think, throughout the year, what was the importance of the deprecation of third-party cookies on Google side. And so, we've also locked in a deal with TransUnion to pend demo data to the Fubo subscriber and household information. So, we're very focused on advertising. We're focused on new units. -- the banners are actually quite interesting because it doesn't require any improvement in engagement. Although engagement already is very high. On average, our customers are watching over 5 hours per day and on a monthly average, just north of 100 hours, engagement's up about 2%, I believe, year-over-year. So, all that really speaks to our excitement around advertising. We've gone to market. Our go-to-market strategy continues to be strong. We have an audience that has really high discretionary income. As you know, our subscribers pay call it, $80-plus per month. And we're looking forward to continuing to drive our advertising business. We're very confident about that.

Yes. And Laura, I would actually add a couple of points there, too. And I think you touched on it, but our new leadership team started actually exactly a year ago this week. And there was instantaneous type of response to them. And so for 3Q of last year, we grew advertising 34%, and then 4Q was in the mid-teens. And then as you noted, this quarter was plus 21%. And I would say we like what we're seeing as it relates to how April ended up. And I'd say there is a little more visibility today looking ahead versus last quarter looking ahead.

Your next question is from the line of Jian Li with Evercore ISI.

Great... This is Jay with Evercore. So first on just the North America Sabka for the year. I understand that JV impact is not baked in. And how much of the current license negotiation headwind are you factoring in with the discovery coming offline? And any other sort of major content up for renewal that we should keep in mind?

Yes. I'll start, this is John. So in terms of specific content renewals, we don't disclose those. What I've said and we said historically is that we have 1 or 2 a year, clearly, the discovery one was the most recent one. As it relates to the outlook, what I would say is simply that, look, we've never actually disclosed or talk to specific deals in terms of subscriber impact. But what I can tell you is that the -- our full year outlook and also our second quarter outlook does assume an impact from that drop.

Great. That's very clear. And the second one is given just the strong customer acquisition efficiency you're seeing and the tailwind in advertising, would you consider like maintaining at this level or actually leaning a bit more into your target range of fact to LTV?

Sorry, what was that? Are you saying leaning more into what...

Into customer acquisition, just given that you're seeing this tailwind in ARPU distribution advertising.

Yes, very good question. Look, I think our goal from the onset has been about achieving profitability in 2025. And as you know, in subscriber models, marketing is an expense that you have to incur today with potential value created over time. And so we just don't have that much room for us to be able to do that, make those kind of investments. However, you are correct. With this type of efficient acquisition cost under normal circumstances, we would certainly want to invest now versus later. So that makes a lot of sense. But again, we're very measured and very disciplined with a key focus on achieving profitability as we've planned.

Your next question is from the line of David Joyce with Seaport Research Partners.

You had some significant outflows of cash in the first quarter, even though free cash flow was trending a bit better. Could you help us understand, was that just an unusually heavy quarter because you were standing up this Fubo free tier and you're prepping us the technology for the new the new ad units that were unveiled at the NewFronts.

Yes, David, this is John. Thanks for the question. Look, I'd start by saying that our cash usage is highly seasonal, I think, as you know. And so 1Q was our highest cash use quarter as a result of that. But I'd say going back to our Investor Day in August 22, what I said was that we would see improving cash usage on a year-over-year basis going forward. And that's what we've done. So, for modeling purpose, I would not use 1Q as a run rate. And I would also add that 1Q cash usage came in better than our internal forecast. And so, for the rest of the year, cash usage will improve on an absolute basis. And then as a reminder, I'd say, our cash usage in the fourth quarter of last year was very modest. So, there's nothing to call out in terms of investments for the quarter. And I would add that our investment too premium, again, was very modest.

And are there other products that you're still working on, on the advertising front beyond what was announced this week?

Yes. Look, I think this was our first full year of actually really focused on monetization. These are significant number of units that we've just released -- there are other areas that we're focused on. And there are some things that we're really looking at sort of very forward-looking opportunities. And the use of AI to me is an area that I think we can really have positive impacts on monetization. So, think about a situation where the AI can actually read what's happening on screen at the end of an episode or whatever content you're watching and to be able to then call an ad that is relevant to that piece of content that you just watch. So, we think that there's many, many areas in which we can continue to innovate around monetization, particularly around ad units and ad capabilities. And obviously, data becomes a key component of that. And I think what's most important Put the engagement level of the platform is extremely high, which is really sort of an area that most advertisers are focused on high-quality content, high levels of engagement. I believe Netflix has also highlighted the fact that engagement is a key area in which they're focused to really drive advertising interest and brand awareness.

Your next question is from the line of Darren Aftahi with ROTH MKM.

If I may. Just can you kind of give your thoughts on the free tier ahead of the launch later this year? And then just talk about the SaaS channel. I think you guys said you have 16 channels now, just the contribution to the ad business today and how that may change going forward.

Yes. Darren, this is David. Look, I would say a year ago, maybe 1.5 years ago, we started adding fast channels behind our paywall. And I can tell you, they've actually performed quite well. Just looking at the most recent numbers, I think that fast channels now account for about 9% of viewing. So roughly, call it, 9 hours. I mean, that's a tremendous amount of hours for content that some folks believe may not be as high quality as cable content. So, we're -- we've been sort of monitoring that very closely. Part of that calculus is tied to our discovery negotiation. We've attempted to negotiate in good faith with them. As you know, that didn't really work out very well. But the fast channels have really absorbed some of that viewing. So, we're very happy about that. And with the number of trials that are coming into the platform and people testing the service, we also want to make sure that we are engaging consumers along the demand curve. And so having that free tier, we think, will allow us to continue to monetize users both in the sort of -- in the subscription realm as well as when they're pausing their subscriptions and waiting for the next sport season to start. So again, we're very bullish on that. As we've just said, we're very focused on introducing new advertising units, interactive ad units, and we're going to do our best to continue to monetize that. And as you know, we have a goal of really growing our ad ARPU, and this sort of helps us get to that next level.

And Darren, I would just add a couple of things and metrics as it relates to that, that may help you a bit in terms of thinking about the opportunity -- for March, on the fast channel side, hours per sub far over indexed our growth in overall sales in terms of the Fubo platform. The fill rate was, I'd say, fairly consistent with the overall for the company and broadcasting transmission despite that significant increase in ours and also channels was actually down year-over-year. So from a profit perspective, it's turning into a pretty good profit driver for the company.

Your next question is from the line of James Goss with Barrington Research.

Okay. A couple of things. First, in terms of the personalized DVR strategy and playlists, clearly, the technology is there. Is the issue that there is an unwillingness to provide the rights to do the sort of things you're trying to do? Or are the -- is the incremental rights fee so high that there is not room for negotiation or something else? And I talk about that? And then my second question would be Molotov was noted to have a $7 ARPU and -- and it seems like it's a fairly robust service and an important brand in France and in the European Union. I wonder what are the issues there in terms of competitiveness and the potential for a higher price point on that service, which is not very largely penetrated at this point.

Yes, sure. I think I'll see if I can answer all of your questions. With respect to the playlist services, well, this is a sort of a very unique feature. Recall that this is a DVR feature. So, this is within the realm of what consumers control they own. And we've built this feature in a way, and I think we referred to it earlier as a user control. This is user initiated. It's a user control. It's a way to really increase engagement and give our subscribers the control within their DVR to really watch things that are exciting to them, relevant to them and then sort of improve their user experience. So again, I'm not sure that there's anything that needs to be discussed with any of the programs given the fact that it is within the DVR. That being said, there obviously are difficulties in our ability to reach our programmers in a way that allows us to really maximize the service. And our goal has always been to improve our service for consumers as well as ensure that the -- that we're driving tune-in for their programming and obviously, the lead IP. So we'll continue to do that. We'll look for ways to be able to work within our agreements, and I think this is our first attempt to do that. And I will mention as part of our alleged claims is the fact that we are unable to offer features that others offer, as you know, YouTube TV offers highlights. And Hulu has stacking rights, which we don't have. And other distributors are allowed to offer ESPN Plus as part of their service. So we're dealing with it the best we can. But again, we believe that we're really focused on consumer quality and building a product that people love. And that, again, is reflected in the strong subscriber growth, strong revenue growth and the strong advertising growth. As it relates to Molotov, again, that's a service that -- again, just to level set everyone, we took over that service when it was back in 2021. In 2020, Malta delivered about $7 million of revenue. That business now is north of $30 million. We've been very efficient. We're very excited about their gross margin profile, which is just south of 40%, which really speaks to the opportunity in a large market. We have been very efficient there, cutting costs, and our attention is to get them to profitability. And at the same time, we've been very focused on really building out a unified technology platform, which I think so far, Fubo in the United States has been able to take advantage of, and we haven't really provided Malita the resources they need to be able to drive that business forward. But what's really exciting about that is as you said, was the fact that it is a scale player in France, and we've been able to drive growth without a marketing budget, which I think is also pretty -- speaks to the potential opportunity there. I'll pause there for any questions.

Okay. Now that covers it for now.

our next question is from the line of Brett Knoblauch with Cantor Fitzgerald.

On the Warner Bros discovery, I guess, contract negotiations. I was just curious from a pricing perspective now that I guess you're not going to be paying those distribution fees. Will that alter your pricing strategy? Or is that something where you're going to leave pricing the same and the savings will flow to the bottom line?

Yes. Well, as you know, it's not like we have that much room in our current pricing. We have been under pressure by the defendants for a long period of time. We're dealing with pernicious tactics that they continue to apply on our business, onerous terms that make it quite difficult for us to reach profitability quickly. And so at this point in time, we believe our pricing will remain status quo and this should flow to the bottom line.

And is it possible for you to quantify the savings fees from that, I guess, termination of service?

Yes. Well, I think the short answer is we don't disclose our content deals and the impact of those content deals on our business. But I'm sure you would probably see that reflected in the next quarter or begin to be reflected in the next quarter.

Thank you all for your questions. I will now turn the call back to Alison Sternberg.

Thank you, everybody, for your thoughtful questions this morning. Before we conclude, I did want to take one question from our SA shareholder portal. This -- I'm going to direct to you, David. The question is what measures is the company currently taking to ensure sustainable long-term growth and shareholder value creation.

Thank you, Alison. Well, I think it's been evident over the last 5 quarters that we are really focused on creating shareholder value. And we've been very focused on cost cutting. If you look at our operating leverage, you'll note that the 2 key areas, gross margin drivers are subscriber-related expenses, which is down this year year-over-year as well as continued improvement on our broadcasting and transmission lines. So those 2 lines are continuing to help drive operational costs down, leading to greater value. And then we've been really focused on doubling down on our content strategy. As you see, we're very much sports first. We have over 35 regional sports networks. We're continuing to look for more content opportunities in that area. We're very focused on continuing to develop our technology and product capabilities, featuring our AI-powered capabilities. And you'll probably see more of that as the team starts to experiment with more features. And then in terms of reach and distribution, we're looking to continue to drive engagement across the demand curve, as I just mentioned. And we're looking forward to the forthcoming 3 tier that will be launched in the next couple of quarters.

Excellent. Thank you, David. Back to you, operator.