Opera - Q2 2023

Transcript

Operator (participant)

Welcome to the Opera Limited Second Quarter 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this period, you will need to press the star one on your telephone keypad. If you want to remove yourself from the queue, press the pound key. Please be advised that today's call is being recorded. Lastly, if you should need operator assistance, please press star zero. I would now like to turn the call over to your speaker today, Matthew Wolfson, Head of Investor Relations. Please go ahead.

Matthew Wolfson (VP of Investor Relations)

Thanks for joining us. As usual, I have with me today our Co-CEO, Lin Song, and our CFO, Frode Jacobsen. Before I hand the call over to Song, I would like to remind everyone that in the conference call today, the company will be making statements about future results and expectations, which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements are based on current expectations and how we perceive the current economic environment and are inherently subject to economic, competitive, and other uncertainties and contingencies beyond the control of management. You should be cautioned that these statements are not guarantees of future performance. You may refer to the safe harbor statement in the company's earnings release for details.

Our commentary today will also include non-IFRS financial measures, including adjusted EBITDA, which are different from our consolidated financial statements that are prepared or presented based on IFRS. We believe that the use of non-IFRS financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These measures should not be considered in isolation or as a substitute for financial information prepared in accordance with IFRS. We've also posted unaudited quarterly historic financial results of Opera on our investor relations website. We will be live posting highlights from the call at Investor Opera, so please follow along there during the call and in the future. With that, let me turn the call over to our Co-CEO, Lin Song, who will discuss our second quarter operational highlights and strategy, and then Frode will discuss our financials and expectations going forward.

Lin Song (Co-CEO)

Sure. Thanks, Matt, and thank you, everyone, for joining us today. So we are very pleased to announce another very strong quarter, which exceeded our previous issued guidance for both revenue and profitability. The first half of the year is off to a great start, and we are happy to be able to raise our 2023 guidance today. Second quarter revenue reaches $94.1 million, an increase of 21% over the previous year. This was our 10th consecutive quarter of over 20% top-line growth. Adjusted EBITDA was $20.5 million, 22% margin. The second quarter builds upon our previous successes and communicated strategy on focusing on growth in the Western markets, with the potential for the greatest value. So to those of you who have been following the Opera story, this is nothing new.

Annualized ARPU was $1.17 in the second quarter, an increase of 25% compared to last year and up 80% relative to the first quarter. While our total user base was relatively stable, we continued our user base mix shift towards higher ARPU users, with users in Western markets representing 15% of the total user base. Advertising revenue grew 25% compared to last year, representing 57% of total revenue, and continues to benefit from the underlying growth in our audience extension business on top of our O&O advertising. Search revenue grew 15% in the second quarter, driven by continued user growth in Western markets. Opera has a track record of innovating ahead of the browsers that come with operating systems and bringing new user-friendly technology to its browsers.

With our long history of giving users direct access to the Internet's most in-demand platforms, we have expanded our existing AI program for our browsers, news, and gaming products, taking advantage of our own solutions as well as new and existing partnerships. To make sure our users get the best technologies and solutions available, we first partnered with OpenAI, maker of the ChatGPT, and our close collaboration has already yielded some impressive results. We have decided to go back to the drawing board and redesign our flagship desktop browser, reshaping the UX and UI to both improve the user experience and prepare the platform for current and upcoming AI features. With Opera One, we managed to create a powerful, feature-rich browser that dynamically adapts to our users' needs.

Designed to embed all the current AI technologies and leave considerable room for more, we are excited about Opera One as a high-quality platform for the future of AI-enhanced web browsing. This redesigned browser was met with overwhelmingly positive feedback from both users and tech media. Opera One was the first of our browsers to include our browser AI, Aria. As a well-connected and current event-aware generative AI service offered entirely for free, Aria marks the beginning of a new kind of browsing experience for Opera users. Aria allows users to collaborate with AI while browsing the web, generating text or codes, or getting their product queries answered. Aria is based on Opera's own Composer infrastructure, which is connected to OpenAI's GPT technology. In addition, Aria is further enhanced by additional capabilities, such as adding live results from the web. The Composer infrastructure is also easily scalable.

It allows Aria to connect to multiple AI models, and in the future, will expand by integrating further capabilities, such as directing users to relevant services powered by our key partners for monetization. Aria is also available in our mobile browsers for Android and iOS, allowing users to enjoy AI-powered browsing on the go. It has proven to be a hit with users, and they are clearly enjoying the experience, as evidenced by a lift in total time spent, as well as increased search queries and page views per session. Opera is looking forward to developing more cutting-edge AI solutions, first bringing Aria to all our major platforms, with Opera GX on the immediate horizon. But the bar continues to be set high as we strive to be in the vanguard of technological innovation.

Opera GX continues to grow its user base up another 9% sequentially to 24 million during the quarter, with an annualized ARPU of $3.40, an increase of 7% compared to the second quarter of 2022. Monetization grows faster on PC than mobile, given greater Western exposure on the PC side. In addition to being engaged gamers, GX has a very attractive demographic, predominantly Gen Z. With Opera GX, we have enabled those gamers to differentiate themselves from others in the way their internet experience matches both the look and feel of their broader setups and connects them directly to the services they use. For an online native generation, this individualism extends from the physical world to a digital one, and we provide the GX as a key part of that expression and experience.

So in this quarter, we have added even more features to Opera GX, with thousands of new Mods and live wallpapers. And we think some of our users will appreciate the addition of AI to GX in time to help with their homework in the coming school year. The pace of innovation so far this year showcases our ability to react and take advantage of rapidly evolving technologies and offer unique browsing experiences to our users. As we move through the remainder of the year, you can expect this to continue, with Aria coming to more browsers, new AI features, and skills being rolled out, and GX continuing its growth as the leading browser for demanding gamers. With that, let me turn the call over to Frode.

Frode Jacobsen (CFO)

Thank you, Song. I'll then turn to some additional details on our numbers and capital returns within yet another strong quarter for Opera. Our Q2 revenue benefited from solid underlying growth of both advertising and search revenues, in spite of FX headwinds. As a result, we came in just above the high end of our guidance at $94.1 million, or 21% year-over-year growth. On an FX neutral basis, our year-over-year growth would have been about 28%. We do observe examples of volatility among advertisers in the current macroeconomic picture, but our underlying user base mix shift towards higher ARPU users continues to benefit our trajectory, even as Western users still only represent 15% of our total user base.

In line with our revenue performance, Adjusted EBITDA also came in just above the top end of guidance at $20.5 million, or a 22% margin. Overall, our cost categories came in according to our expectations, with a slight shift from marketing expenses to cost of revenue items. We generated operating cash flow of $15.5 million in the quarter, which is net of $3.4 million tax prepayments. Free cash flow from operations, which subtracts CapEx items and lease payments from our operating cash flow, was $13.2 million. During the quarter, we launched a recurring dividend program. The annual dividend is $0.80 per ADS to be paid semiannually. The record date for the first $0.40 payment was in June, with payment in July.

Our first recurring dividend amounted to $36 million in total, of which $11 million was paid in cash to ADS holders and $25 million was offset against our receivable from the sale of StarX. We did not repurchase any shares under our buyback program in the quarter. As previously communicated, further buybacks will be conducted in an opportunistic manner as we focus on dividends as our main avenue of capital returns. Finally, our balance sheet remains very healthy, with $98 million of cash and no corporate debt. In addition, our receivable from the sale of StarX totals $32 million present value, which is presented net of the first dividend offset, and which will continue to reduce our cash expense of dividends until it has been fully consumed.

We continue to value our 9.5% stake in Opera at $163 million, presented as held for sale. In total, that adds up to $196 million of balance sheet value in addition to our cash position. Now, turning to our updated guidance for the full year 2023 and the third quarter. Given our continued strong trajectory, we are yet again raising our guidance for the year on both revenue and adjusted EBITDA. We continue to reflect caution given the broader macroeconomic picture, but the core trajectory of Opera and our products and user base results in a net positive impulse to our outlook and ranges used.

On full-year revenue, we now guide $380 million-$390 million, up from our last range of $373 million-$390 million, which corresponds to 16% revenue growth at the midpoint. For annual Adjusted EBITDA, we lift our guidance range to $80 million-$84 million, up from $77 million-$83 million, representing a 21% margin at the midpoint. In terms of cost expectations, our commentary from prior quarters still stands. We expect marketing costs to be higher in the second half and build in a bit below $120 million for the year. Cost of revenue items will likely remain around current levels relative to revenue, resulting in a percentage in the low 20s.

Cash compensation expense is still expected to increase modestly relative to 2022, and all other OpEx items before Adjusted EBITDA remains expected to come in at just above $30 million for the year as a whole. For the third quarter, we guide revenue to $97 million-$100 million, which is 15% growth at the midpoint. We guide Adjusted EBITDA to $18.5 million-$20.5 million, translating to a 20% margin at the midpoint. Overall, and to conclude, we've obviously never been more successful, and we are very pleased with our product lineup, roadmaps, and our growth strategy. We are also proud to combine healthy growth with healthy profit margins and cash flows, and how that directly benefits our shareholders through our past major stock buybacks and a special dividend earlier this year, and most recently, with initiation of a recurring dividend.

While it's certainly a period of near to midterm macro volatility, it is also one of the most exciting periods for Opera as a company, with the emergence of new technologies and developments of new ways to better serve and engage with internet users. We'll do our best to fire on all cylinders as the year progresses, and look forward to keeping you posted. That's it for me, and I'll turn the call back over to the operator for questions.

Operator (participant)

Thank you. As a reminder to ask a question, please press the star one on your telephone keypad. To withdraw your question, please press the pound key. When posing your question, we ask that you please pick up your handset to allow optimal sound quality. We'll take our first question from Mark Argento with Lake Street. Your line is open.

Mark Argento (Co-Founder and President)

Yeah, good morning, guys, and nice quarter. Just wanted to drill down a little bit on your expectations for kind of ARPU growth going forward. Looks like it was up a little bit here in the quarter, and you continue to kind of increase your exposure to the Western markets. Is that, you know, is that a sustainable trend? You know what, you know, kind of what do you guys, you know, how do you think about strategically about ARPU growth, you know, in terms of your overall strategy, trying to get more exposure to the West?

Frode Jacobsen (CFO)

Hey, Mark, thanks. I can begin in terms of our guidance. We continue to build in the trend of ARPU growth. We see our momentum in Western markets and our growth there. It's happening actually across PC, GX, and mobile products. So that's an important driver for us. And in addition, we have GX, which is indeed a success story, but I think it's still under indexing on advertising relative to our classic PC browsers. It's just newer in its development. So we do see headroom there.

Mark Argento (Co-Founder and President)

Great. And then in terms of the kind of the relaunch of Opera One and the AI and some of the embedded AI tools, any trends you're seeing? Are you getting some decent adoption, utilization of those tools? You know, what you know, what's your goal, I guess, for that, for that product and the opportunity to kind of mainstream that browser for the browser set?

Lin Song (Co-CEO)

Yeah, so it's Song here. I'll chime in also. So yeah, I think, as mentioned, we are quite... I mean, it's still early stage, but it is very encouraging for what we see. More like among the users who have been using it, we have seen that there are actually very interested. You know, like, because we know there are discussions about what the impact is going to be to the whole industry and the user behavior level. So what we see, at least, even from early stages, are that, you know, before we actually introduced AI and afterwards, even for the same group of users, there are very nice upward turnings of both the user engagement, time spent, and even search queries among others, right? So all the numbers are lifting.

We think it makes sense because the more like, you know, because it actually enable users to interact with AI and computer in a more natural way, and in turn, of course, bring more exposure to all the informations. This is, of course, very relevant for us as a browser, because in the end of the day, browser is a gateway, allow user to discover more information. If AI can actually help that, it's very natural that the user have to spend more time on it. So we are very positive.

The other major, I would say, interesting factor, of course, is that is also a major differentiating path, because what we saw is also that is actually, with Opera One, for instance, it's a very good tool to, you know, use it as a way to getting new users, because now people also see that there are clearly more differentiation between Opera and Opera One, with the preinstalled browsers, on the, you know, on the PC, which is, of course, a very positive megatrend, that people begin to get it more, that the browser can actually play a difference, and especially with AI. So all those are playing a very positive factor there.

But again, it's still early stage, so I think we'll see closely how this develops, and we will roll out probably more of the iterations of the AI just to make sure we are moving even faster.

Mark Argento (Co-Founder and President)

That's, that's helpful. And then one more just kind of housekeeping question for Frode. In terms of the dividend, you guys are instituting a recurring dividend. The first installment or the first $0.40 dividend, you guys are netting that against the receivable, or I think it was the receivable. But then going forward, you know, is it a full $0.40 dividend? Or maybe just walk us through that.

Frode Jacobsen (CFO)

Yeah, I think the StarX receivable was about $57 million before this dividend. Just as a reminder, we sold StarX, our stake in StarX to Kunlun, which is also the biggest shareholder in Opera, and that is why we use the offsetting mechanism. So, the first dividend, that as a pre-IPO shareholder, their part of it would have been $25 million, and so that reduced the StarX receivable to about $32 million at the end of the quarter. And we'll continue to see at $0.40 per dividend issuance. You'll see about a $25 million reduction in that until it is consumed. So it will last us into about mid-2024.

Mark Argento (Co-Founder and President)

Got it. All right. That's helpful. And then just last, I know you carried on the balance sheet as, you know, available for sale, I think is the classification. Any additional thoughts on that asset, that stake, and any kind of new valuation marks, you know, when you guys think about, you know, what that business is worth? But more importantly, you know, what do you do with that stake long term?

Frode Jacobsen (CFO)

Yeah. So for the first half, we had another look at it. In general, we felt comfortable with the valuation that we set back in March, I believe, for year-end 2022. I think the company is doing well and it's proceeding. We're not in a rush to sell it per se, but if there is an interested buyer, we also no longer really play a strategic role for Opera and its operations. I think our role was more important in the early days as a founding member of the company. So then in terms of just our own simplification, we'd be happy to sell it at the right price.

Mark Argento (Co-Founder and President)

Great. Appreciate it. Thanks, guys.

Frode Jacobsen (CFO)

Sure.

Operator (participant)

We will take our next question from Lance Vitanza with TD Cowen. Your line's open.

Lance Vitanza (Managing Director and Senior Research Analyst)

Thanks, thanks, guys, and nice quarter. I have two questions. I guess the first is back on the idea of how much headroom you think you have in this transition into the Western markets, which obviously is fueling the rapid growth that we've seen. So if I do the math right, it looks like you've got about 47 million users in the Western markets, you know, just 15% of the 316 million user base that you report in the press release. So that works out to about, you know, rough numbers, an estimated 8% penetration, if I just divide that 47 million by the total population of the Western markets. So I'm wondering, you know, I imagine-...

Opera, is it, its goal isn't to be a, you know, a real mass channel brand, but do you think that-where do we think that that penetration rate could conceivably go over time? I mean, is there an opportunity to double that to 16%, or, you know, is that too aggressive or too conservative? What-how should we be thinking about where this could go over the longer term? Thanks.

Lin Song (Co-CEO)

Yeah. So, so yeah, it's, it's only there. I'll comment a bit, and further I can also add, right? So no, I think you are right, that, I think it's, it's functioning more like it's, it's in many way, right? So, so, so first of all, of course, Opera as really one of the biggest European brands, it's just the fact that we have such a huge user base, right? So which is positive, as a total MAU, like, not so many companies actually like us. We have so many users. But I think you're also right, that even though we have been growing and we have a big user base, even in Western world, it's still only 13%, right?

So, we feel that I agree with you, that, we feel we are still at very early stage of penetration, both for GX, for instance, which is always very high ARPU users, wherever they are in. More like, you know, even if, in other markets, game are always very high ARPU, so we are very excited about it. We think it's only very beginning stage. And also for products like Opera One, powered by AI, for instance. It's a very, like, again, a tailored for a very, sophisticated user base, and again, it's also in early stage. So, I think, yes, we still have a lot of, room to grow. And, the other comment, I guess, is just that, of course, be aware that even if those...

We still have a, you know, huge amount of users which are not in the area or categorized by, let's say, Western market, but of course, they are also, you know, have also potentials, especially with AI, both for potential ARPU lift and also for potentially that market is also evolving, right? So I would also say we are in a very nice mix of both. We still have a lot of room to grow for the Western market. We are still at a very early stage, but we are also in a very good position that when those emerging market users mature, we can also capture the right part of it.

So I think from both angles, we are quite optimistic on this, and that's also why I think our number one focus is still to keeps the evolving our product and get more users, because in the end, that would always be key and provide all the basis.

Lance Vitanza (Managing Director and Senior Research Analyst)

Great, thank, thank you for that. And then, couple other questions, if I may. The next one is on the cash position, which at $98 million, that came in a little bit better than our... I think we were looking for $90 million. And so I'm just wondering, I know you mentioned you, there were no share repurchases, so that was part of the delta. I think we still-- we were still expecting maybe a couple of share repurchases in the quarter. But was there any other one-time items that sort of favorably added to your cash position in the quarter? Anything there that we-- that's worth calling out?

Frode Jacobsen (CFO)

No. I would say the cash flow of the quarter was actually very straightforward. There was sort of increase in AR and AP offsetting one another. Q2 and Q4 will be the same. Those are the tax-paying quarters. So there's a tax component in there, meaning that actually the conversion from Adjusted EBITDA to cash flow is best in Q1 and Q3. So I think it followed our internal expectations. Keep in mind that the dividend that was issued in June was payable in July. So that $11 million is still included in the cash on June thirtieth.

Lance Vitanza (Managing Director and Senior Research Analyst)

Okay, thank you. I had one other question. In the press release, it mentioned something on the non-cash comp that I couldn't quite follow. Share-based remuneration includes grants made by Opera's majority shareholder. I wasn't quite sure what that meant. And it goes on to say that it represents an expense, even though Opera has no obligation in connection with these grants, and that they do not represent dilution for Opera's shareholders. I'm not sure that I've seen that before. Can you expand upon that for a minute?

Frode Jacobsen (CFO)

Yeah, sure, I'll do that. So Kunlun, as the biggest Opera shareholder, has issued grants in Kunlun, and they consolidate Opera, holding more than 50%, to some of our staff members. Opera has no expense with that. Once those grants vest and become exercised, they will not lead to any dilution for Opera shareholders. But at least in IFRS, which we present according to, we are supposed to reflect the fair value of the grants that are awarded to Opera's employees, even though it has no practical implication for us.

Lance Vitanza (Managing Director and Senior Research Analyst)

Okay, interesting. And then last question for me, if I'm looking at it, so the guidance for the third quarter, the 15% revenue growth at the midpoint, that checks out, but then the EBITDA at around $19 million-$21 million, I'm-- Didn't you report a little bit more? I think EBITDA in the third quarter of 2022 was $21 million. Is that right? And so I'm just trying to figure out, you know, 15% growth, EBITDA is not really scaling. So, was there something... Remind me, was there some sort of one-time good guy in the Q3 2022 numbers that we need to be sort of backing out of our math when we think about the year-on-year EBITDA comp?

Frode Jacobsen (CFO)

I think the key thing is to look at our communication around expenses. The biggest factor that changes throughout the year is when and how we spend our marketing dollars. So we have sort of maintained our expectation for our total spend and always communicated that it would be most or we would increase it in second half relative to first half, simply because of our scaling on GX and how that evolves and the launch of Opera One, and sort of having that out in the market and learning the lessons before we before we take out the full potential on the marketing. So I would almost say the opposite, that, I mean, we are increasing our adjusted EBITDA expectations quite meaningfully after the strong Q2 relative to what we had guided for the year before.

So, we actually feel very good about it. It's just a conscious decision about when in the year we spend the marketing and when we think we get the best return on that spend.

Lin Song (Co-CEO)

Yeah. All I said here-

Frode Jacobsen (CFO)

Oh, go ahead.

Lin Song (Co-CEO)

Yeah.

Frode Jacobsen (CFO)

Yeah.

Lin Song (Co-CEO)

Maybe a little bit more, same as Frode, but a bit on a positive note is also that it's almost like we are almost coming, you know, well ahead of our guidance in the first half, that we feel that, of course, if we want, we can have more view, right? Of building up more user base, because, of course, in the end of the day, that well yield even more revenue and profit in the future. So that's. I think that's what we basing our guidance. But then, of course, in the end of the day, you could always, you know, reflective of how, you know, what's our profile and how we actually assess this will benefit from us in the long run. But it's nice to actually be able to have that room.

Lance Vitanza (Managing Director and Senior Research Analyst)

Understood. Yeah, and I guess then just to sort of put a final point on this, are you seeing anything that would make you feel that the sort of the longer-term EBITDA margin targets, you know, are under any pressure?

Frode Jacobsen (CFO)

No, I think this is progressing well according to expectations, and sort of, we feel comfortable about the level that we operate on.

Lance Vitanza (Managing Director and Senior Research Analyst)

Perfect. Okay. Thanks, guys.

Operator (participant)

Once again, that is star and one, if you would like to ask a question. We'll take our next question from Alicia Yap with Citigroup. Your line is open.

Katrina Chiu (Assistant VP of China Internet)

Hi, thanks, management, for taking my question. This is Katrina Chiu from Citigroup, asking on behalf of Alicia Yap. I have two questions. First, would management be able to provide some color on what level of incremental revenue opportunity we could expect to see coming out from our embedded AI feature in Opera browser in the next 12-18 months? Second, are there any additional investment we expect to incur as related to the AI that will have some pressure in expenses? And how will that be affecting our EBITDA trend going forward, if any? Thank you.

Lin Song (Co-CEO)

Yeah, sure, sure, sure. Yeah, it's only here. I think I'll just take that first, and then Frode can also comment on it, any follow-ups. So, yeah, I think, like, again, the whole industry is still in very early stage, right? So it's almost a billion dollar question, but I think what—from what we observe, at least with that, like, again, so as a tech company, it is a very... And tech, both as a tech company, but also as almost an entry point to the whole web, right? We feel that the, you know, the very obvious use of AI is just that it allow people to have access to more information in a more convenient way in general.

And that we see directly translates to, you know, higher time spent and also more, let's say, high up events that we see. So I guess it's a function of just because they can. It's easier for them to get accurate information and start consume it. So that has already been evident in the current users, our users that we have. We are very optimistic. So that is one factor we can bake in already, right? And then the other factor, as you mentioned, is also a bit that it also actually helps open up Opera in particular. So the first, I would say, is almost a bit industry-wide, especially towards someone which is in our industry, like a browser as an entry.

But then I guess the second benefit is more towards to Opera in particular, because of course, you know, be a third party, you know, being a third party browser, we're always trying to and strive to differentiate it. And now we just saw that with the coming of AI, we are of course, the, one of the browsers which are provide a native but differentiating AI product for free to all the users. So that we see is very attractive, and that we see that has already, you know, like, is very effective, in marketing and user acquisition, and for making sure the, for making user feel that the browser is actually a very differentiating product. So that we see is, very helpful, for the new user acquisition.

In comparison, for instance, we see that it's almost, we're talking about maybe more than 100, like, maybe more than one time difference on user engagement. If user actually coming from the channel, where they actually see AI and come to us, right? It's much more active, almost a time difference between a user which come from normal channels. So that, of course, is very helpful, and that is also well, well, quite optimistic about the development of Opera One. So, so I think those two factors for now are the major ones, which is benefiting and make us, willing to spend more time, also on integrating more AI products, because there are a lot of, potential to be gained from it, and we are quite, positive about it.

But you are also right that there are also a cost factor related with it. So it's like, again, still very early stage. So yes, I think we are aware that there will always be cost factors in association. For now, it's still a very small percent, especially in comparison to, say, marketing costs. So it's still very net positive for us. But in the future, I think that's also why we are working now already with some of the partners on potentially monetization, because on the other hand, of course, it's very nice to be able to associate the monetization with it.

I think that's also what we also mentioned a bit about. We are now already trying to embed many interesting links and many interesting information, which potentially monetizable information already on the answers of the AI, which can, of course, directly leads to a good monetization to compensate for potential cost of it. So for now, the model works, but again, it's still early stage, and we just need to work with our partners to fine-tune that, to see how what kind of opportunity we can, we can create. But I think we are, we are standing positive about how, how this can grow, especially to a company like us.

Katrina Chiu (Assistant VP of China Internet)

Very helpful. I appreciate it. Thank you.

Operator (participant)

It appears we have no further questions on the line at this time. I will turn the program back over to Lin Song for any additional or closing remarks.

Lin Song (Co-CEO)

Yes. So like, again, as said, that I'll just wrap it up with a thank you for, you know, all the continued support and interest in Opera. We are very encouraged by the early response to Aria and Opera One and what's more to come, and also the success of Opera GX and opportunities of verticals more broadly, and how we have been able to attract valuable users and scale our monetization. We appreciate your time, and we look forward to speaking with you again in the future.

Operator (participant)

This does conclude today's program. Thank you for your participation. You may disconnect at any time, and have a wonderful day!