Digital Turbine [APPS] Conference call transcript for 2022 q4
2023-02-08 19:30:05
Fiscal: 2023 q3
Operator: Good day and welcome to the Digital Turbine Report Fiscal 2023 Third Quarter Results Conference Call. All participants will be in listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Brian Bartholomew, Senior Vice President, Capital Markets. Please go ahead, sir.
Brian Bartholomew: Thanks, Chad. Good afternoon and welcome to the Digital Turbine fiscal year 2023 third quarter earnings conference call. Joining me on the call today to discuss our results are CEO, Bill Stone; and CFO, Barrett Garrison. Before we get started, I'd like to take this opportunity to remind you that our remarks today will include forward-looking statements. These forward-looking statements are based on our current assumptions, expectations and beliefs, including projected operating metrics, future products and services, anticipated market demand and other forward-looking topics. Although we believe that our assumptions are reasonable, they are not guarantees of future performance, and some will inevitably prove to be incorrect. Except as required by law, we undertake no obligation to update any forward-looking statement. For a discussion of the risk factors that could cause our actual results to differ materially from those contemplated by our forward-looking statements, please refer to the documents we filed with the Securities and Exchange Commission. Also during this call, we will discuss certain non-GAAP measures of our performance. Non-GAAP measures are not substitutes for GAAP measures. Please refer to today's press release for important information about the limitations of using non-GAAP measures as well as reconciliations of these non-GAAP financial results to the most comparable GAAP measures. Now, I will turn the call over our Chief Executive Officer, Mr. Bill Stone.
Bill Stone: Thanks, Brian, and thank you all for joining our call tonight. I'm going to talk about both the macro economic landscape and our micro operational details in my remarks. But before getting into those specifics, I want to summarize our view on the business and begin with the most important takeaway for investors to have versus getting lost in any one specific detail later in the remarks. Our conviction on our strategy and our long-term financial and operational view on the business has not changed. We're also not satisfied with our near-term results. We have work to do to improve those results against our near-term expectations. There are many things for us to do, but one of the things investors do not need to worry about is ensuring we have laser focus on the controllables and accountability for their improvement. As a CEO, I own that. But also want investors to know that we do the macro situation is temporary, and it will change positively in the near future. And the micro situation issues we're dealing with are largely comprised of extraneous, non-strategic things that are not critical to our long-term success, but are nevertheless headwinds when comparing year-over-year results against the past performer results of some of our prior acquisitions. The foundation of the DT investment thesis has not changed. The core building blocks of the moat around our on device platform, the strategic interest advertisers have for monetization on the platform. The ability to leverage the macro secular trends in digital advertising and having a highly scalable and profitable operating leverage for our business are all in place. That's the underlying investment thesis for Digital Turbine that we believe will power long-term results. Successful businesses are built on years of success, not built on any one quarter of results. And we have some short-term macro and micro dynamics to overcome, but our history is dealt with much more challenging times than this and like those prior times demonstrated, our resilience has made us a stronger company as we successfully manage through short-term headwinds. We hope investors see our ability to overcome those prior obstacles as a predictor for our future success. It's part of our DNA. Turning to the macro environment. The past three years have been the most dynamic I've seen in my 30-year career. It's required companies to operate lean while being nimble, flexible and open to change. I'm going to focus my commentary on today's macro operating environment and what we're seeing regarding digital ad spending, devices and operator and OEM focus areas. First on digital ad spending. At the headline level, and as many others have already reported, pricing has slowed anywhere from 10% to 30% compared to a year ago, depending upon the Company vertical survey company being quoted or digital ad type. However, we believe this is both temporary and much more nuanced in the details as many are painting all digital ad spending dynamics with the same brush. We believe this trend is temporary and will rebound for a very simple reason. Since the beginning of the first ad dollar spend hundreds of years ago, continuing to today and ultimately tomorrow, ad dollars have always followed where our eyeballs are. And today, our eyeballs are on our digital devices, and we don't see that changing. In fact, we see that growing. So like in this past holiday season, where we experienced a deceleration in the short term as advertisers figure out how to best optimize their spends in inflationary and slowing macroeconomic environment the dollars are and will absolutely be there over the mid and long term. Also, we see a lot of nuance in ad dollar spend. For example, platforms that have been heavily reliant upon ad tech tactics like through attribution have been disproportionately negative impacted. Also, platforms that have a difficult time working with advertisers on the return on ad spend or row ad metrics are also having a difficult time. And while we saw year-over-year growth in global devices to nearly 75 million in the December quarter, we are seeing macro slowdown of device growth as consumers pause on upgrades. For example, 2022 saw global device smartphone shipments declined by 12% to 1.2 billion units, which was the lowest level since 2013. And in the U.S., we saw the lowest level of shipments for our DT carrier partners since 2019. And while our revenue shift has moved to revenues over the life of the device versus adjusted activation, it is a headwind, albeit a temporary one as we don't see consumers foregoing upgrades to new devices for a sustained period of time. And finally, it's been well documented in the commentary from many global operators and OEMs and how they're trying to grow revenues in these types of macro environments. This is a tailwind for our business as they look for new revenue streams from companies like Digital Turbine, and I'll provide some specific examples of our success later in my remarks. The takeaway for investors is that we view the present macroeconomic situation is challenging, but also temporary. The macro conditions are more difficult compared to prior years, but not instrumentable and not falling off a cliff. Unlike the macro situation that is currently more supply versus demand driven, the situation in our industry is more demand versus supply driven in the short term. OEMs, operators and app publishers are looking for companies like Digital Turbine that can provide them more dollars while demand sources are being more cautious and deliberate in their spends. The dollars and opportunities are still there, albeit more work and effort is required to capture them compared to prior years. And here in the U.S., I'm pleased to report that we have now extended our contracts with both AT&T and Verizon for three and four years, respectively. Now turning to our second quarter results, we had $162.3 million of revenue, $40 million of EBITDA and $0.29 of non-GAAP earnings per share. In addition, we reported gross margins of 50% and and EBITDA margins of 25%. Non-GAAP gross profit margins were 50% compared to a reported margin of 46% in the third quarter of last year. Many companies struggle to increase margins in this current inflationary environment and the ability for us to continue to show year-over-year margin improvement is something we're proud of. Given the macroeconomic situation, focus and optimization is key. To that end, we've reoriented our capital allocation towards future versus legacy projects. Specifically, we are focused on growing things like our brand business and improving performance on leveraging SingleTap on our DSP and deemphasizing portions of our legacy performance and reseller ad tech businesses. We've also prioritized resourcing our alternative App Store or hub business versus things like our prepaid content media business, which is less than 10% of our revenues and underperforming versus our expectations. Both of these dynamics are having a short-term headwind on pro forma overall top line performance, but the changes should continue to help both our margin profile and sharpen our focus by doing fewer things better. For our on-device business, while our overall devices were up 10% year-over-year, the sale of new devices in the United States was the lowest we have seen in any one quarter since fiscal 2019 despite it being the holiday season. We had expected device sales to be flattish based upon input from our U.S. partners. The disappointing holiday device sales were a primary driver of our quarterly results being behind our expectations. As mentioned earlier, we do expect this to be a temporary issue. In the U.S., our revenue per device, or RPD, of over $5 was up year-over-year. We have RPD work to do internationally as we did not see that same year-over-year growth as the mix of devices was indexed higher in developing versus developed markets where RPDs tend to skew a bit lower. We also made progress on our SingleTap licensing product. We continue to add partners, including being live with high-profile customers like Amazon and EPIC, the creator of the Fortnite franchise, utilizing SingleTap licensing, and we're also gaining momentum with Google as a distribution partner for us. While SingleTap licensing is not yet material in our overall results, the ramp is occurring and the progress is noticeable. We are now on a run rate of many millions of SingleTap licensing installs per month and have already done more SingleTap licensing installs so far in 2023 than we did in all of 2022. Bigger picture for SingleTap licensing, the product market fit is strong, and while we are excited about its prospects, I want to remind investors, it will take time to get to material revenue generation. Similar to the early days of our dynamic install business where we launched on one mobile operator with only a slot or two and then ramped and then added another and so on, it layered on nice sequential growth as we expanded the depth and breadth of carriers and OEMs. I expect a similar trend to emerge with our SingleTap licensing business. On our app growth platform, our AGP business, our business was roughly flat with the prior quarter, but down 24% year-over-year. The primary driver of the year-over-year comparisons are macro declines in ad rates and the consolidation of certain AdColony business lines. As mentioned earlier, winding down our Scandinavian reseller business as it's not strategic. We've also started consolidating the AdColony exchange business into our Digital Turbine exchange which means that some of our long tail publisher and partner revenues are transitioning. This is absolutely the right strategic decision for our customers and partners to deal with one versus multiple companies, but it's creating revenue headwinds and year-over-year comparison issues in the short term, but it will be tailwinds for us next year. And as a reminder, this primary strategic rationale for our AdColony acquisition was for the brand business. I was pleased to see sequential growth in our managed brand and private brand marketplace business in the third quarter as we have rebuilt the team, acquired one of our channel partners in Europe and sharpened the focus. It's early days, but we are now seeing our approach bear fruit in a very challenging macro environment for brand dollars. We're seeing strong growth from brands such as Starbucks, Chick-fil-A and Procter & Gamble, just to name a few that are spending more dollars with Digital Turbine. From a regional perspective, we continue to maintain a diversified global footprint. In the current quarter, we saw impressions relatively flat year-over-year in EMEA and APAC and modestly down here in the United States. Looking at ad placement types, we've maintained a balanced portfolio weighted between banner, interstitial and video. And across all ad formats and geographies, ECPMs declined between 10% to 20% year-over-year, which is roughly in line with the industry trends. And as mentioned earlier, we've made a number of enhancements in the current quarter to our ad tech capabilities such as ad rendering, new ad formats, new bidding methodologies, and so on. We spent the last year integrating the companies and are now finally building upon the integrations with new products and services. Early results are encouraging. So, the combination of the new demand and the expansion of supply types are allowing us to focus on controlling what we can to drive improved performance. Turning to the future, I want to spend a few moments highlighting our growth drivers. I mentioned both SingleTap licensing earlier in my remarks as a strategic growth opportunity, but also as we've mentioned on prior calls, we want to build a Shopify for app stores on device. We believe we're uniquely positioned with our on-device technology, our publisher relationships and our operator and OEM relationships. We have launched our first alternatives App Store with U.S. Cellular here in the United States leveraging our Aptoide investment, and it is generating revenue today. We anticipate launching with an additional Tier 1 U.S. partner in the current quarter. The carrier feedback has been impressive and supportive. We also believe the global regulatory environment will provide additional thrust to our vision. And to achieve this vision, there are some market pain points we're solving, including making it easier for app publishers to port their apps to a new platform, managing payments, installing the apps and managing the curation of the micro stores. I'm making it easier to port the apps and manage payments. We took that first step in accelerating our efforts in this area by taking an equity position in an alternative app store called Aptoide, which has approximately 250 million users, 10 billion downloads and over 1 million applications. Combining these capabilities with things like SingleTap will make installs easier for consumers. And we can further leverage our on-device position with Ignite to drive AI and machine learning to focus on the right apps to feature on the device versus the customer being overwhelmed by being dumped into a big app store with many millions of apps to choose from. The alternative app stores will also help us further leverage our ad tech assets with applications supported by in-app advertising revenue, but the app stores will also help us with our first foray into the in-app purchasing market which is a $100 billion global addressable market today. You'll see us refer to this business as our hub business and variants on the hub, whether it be things like Games Hub, App Hub and so on. And to tie all of this past, present and future together, because of the exclusivity and uniqueness of our position with our on-device and publishers, we're able to create deeper and more strategic relationships with our partners. To that end, we have secured many tens of millions of dollars of revenue bookings for next fiscal year across various verticals such as social media, weather, gaming and so on. We will provide the publishers with an alternative route to market, leveraging our on-device and SingleTap footprint, whether that is through our new App Hub, our dynamic installs, our DSP and so on. This has not just strategic benefit and validation of the DT platform benefit, but also financial benefit and derisks our future revenues. To accomplish all of these new growth areas, allocating resources will be key. I believe in the competency of our business has been our resource allocation against strategic priorities. And unlike many tech companies that overstaffed during the pandemic, we remain efficient and focused given the strong operating leverage of the business model, but even our efficient approach can be optimized further. We're committed to running a lean, sustainable and profitable business. And to that end, we've taken steps to reduce expenses. Our cash operating expenses decreased year-over-year, and Barrett will provide additional details in his remarks. In conclusion, we're disappointed in our near-term results, and I on improving that. We believe today marks the trough for our business as we believe the macro and micro issues we are facing are temporary and non-strategic in nature. Our outlook for the long term remains unchanged, but I know many investors are short-term focused, but we're confident in our future and confident in the investments we're making to drive long-term value for Digital Turbine. I want to remind investors that we have products that our customers want, a favorable regulatory environment and a profitable business model to drive operating leverage from our revenue and cost structure. We've been through many more difficult times in this in our past and are using these turbulent times to drive improved focus and optimization for the long term. With that, concludes my prepared remarks, and I'll turn it over to Barrett to take you through the numbers.
Barrett Garrison: Thanks, Bill, and good afternoon, everyone. Our Q3 results reflect our continued focus to deliver sustainable profitability as we make conscious efforts to expand margins and focus on what we can control during this challenging operating environment. Revenue of $162.3 million in the quarter was down 25% year-over-year. Revenue performance was impacted by deceleration in our advertising spending, which was greater than expected during the holiday season. Also, as Bill referenced, while we saw global devices increase year-over-year, we experienced material declines in U.S. devices, which have a greater overall impact given their higher revenue per device than our non-U.S. global operators and OEMs. In addition to the impact from the near-term macro conditions, we also continue to experience headwinds from our prepaid content media products. Our margin expansion efforts enabled non-GAAP gross profit margin on the platform to increase to 50% in Q3, up from 46% as reported in the prior year. Non-GAAP gross profit of $81.2 million decreased 18% year-over-year. Continued focus on margins enabled expansion year-over-year across both business segments. And as a reminder, while gross margin rates can fluctuate from quarter-to-quarter, we generally anticipate long-term margin expansion as we continue to execute on growth and synergy strategies. We continue to remain disciplined with expenses, especially in the light of the temporary worse-than-expected backdrop in the third quarter. Cash operating expenses were $41.3 million in the quarter, decreasing 3% from prior year and represented 26% of revenues in the quarter. Total operating expenses were $69.8 million, which compared to prior year. Given the challenging environment, we continue to examine all of our spending to ensure the best use of our resources. We have executed company-wide expense reductions to begin to rightsize the business for the current environment and to fund key strategic investments. We aim to reduce total cash expenses by 10% and are currently executing against this target in context with the market conditions. We expect that impact of these actions will become more fully reflected in our results over time and remain highly focused on operating efficiency. Now turning to profitability. Our adjusted EBITDA of $40 million in the quarter decreased 30% over prior year and our EBITDA margin of 25% compared to 26% in the same period last year. Given the inherent operating leverage in our business model, we expect the proactive expense measures we are taking will strengthen the platform when we return to growth and enable a greater portion of those dollars to fall to the bottom line. In the quarter, we achieved non-GAAP adjusted net income of $30.2 million or $0.29 per share as compared to $50.9 million or $0.49 per share in the third quarter of 2022. As compared to prior year, we incurred increased expense driven by rising rates and higher average outstanding debt on our interest expense. Our GAAP net income was $4 million or $0.04 per share based on 103.3 million diluted shares outstanding, and that compared to prior year net income of $7 million or $0.07 per share. Healthy free cash flow for the quarter of $29.9 million in Q3 enabled us to exit the quarter with $79.3 million in cash after paying down an additional $25 million in debt using free cash flows from operations to further deleverage our debt position. Our debt balance ended the quarter at $42.5 million drawn on our revolving balance, and our business continues to produce strong free cash flows as we would expect to pay down our revolver further. We continue to be confident in our balance sheet and our capital position, given our profit model, strong cash flows and access to a low-cost credit facility. While we expect these market conditions to be temporary, we are well positioned to resume growth when the macro landscape improves. Now let me turn to our outlook. As we consider the ongoing uncertainties in the macro environment, we currently expect revenue for full year fiscal 2023 to be between $660 million and $670 million and adjusted EBITDA to be between $165 million and $170 million and non-GAAP adjusted net income per diluted share to be between $1.15 and $1.20 based on approximately 104 million diluted shares outstanding and an effective tax rate of 25%. With that, let me hand it back to the operator to open the call for questions. Operator?
Operator: Thank you. We will now begin the question-and-answer session. And the first question will come from Darren Aftahi with ROTH. Please go ahead.
Darren Aftahi: Two, if I may. So Bill, you mentioned you kind of called out financial mix outside of the macro is just on the device number, particularly in the U.S., that number coming in kind of lower being down versus kind of flat assumption. So I kind of have two questions regarding that. First one is really, how much visibility does that estimate have that's given to you? And my second question is, what is the underlying assumption for the March quarter on devices? And does that assume declines in devices and kind of like further characterize your carrier partner numbers they've given you?
Bill Stone: Yes. Yes. Thanks, Darren. Yes, so for the -- first, on the December quarter, yes, we usually take our forecast from our device partners in advance in our current -- on that past quarter, excuse me, we had already had visibility on the October numbers, but I think that our carrier partners were expecting larger holiday season and a little bounce back in Black Friday shopping from COVID and obviously didn't see that in some of their results. So, I think they were disappointed as well, although I won't paint all of them with the same brush. And then as far as the assumptions in the current quarter, we've haircut those. That's baked into our guide. And as I'm sure you're aware, the Samsung S23 was announced earlier, that will be launching later this month. And so, our expectations are that, that will be down from prior quarters. So, we want to bake that in our guide. And if it is lower than that, then there might be a little risk, but we've already baked some of that in. So there's upside to it, there will be upside to our guide.
Darren Aftahi: Great. That's helpful. And I'll just squeeze one more in. Your licensing partners on SingleTap, like you kind of spoke to kind of the scale of the downloads. I guess as you look further down the road, like how does your pipeline look even though the macro is weak? Is this something that people are chomping at the bit because conversion and efficiency or it's a back burner issue for them to kind of take on this product?
Bill Stone: Yes. The product market fit is strong. We don't have a problem convincing people that, hey, this is a more efficient way for you to run your business. Really, the largest issue we have are more dealing with last mile operational things. And a lot of the companies that we're talking to and working with have made their own cuts. And so getting them to work and get the data lined up and a lot of last mile operational issues have been the long pull there. But I would say the overall interest in the product, the opportunity to increase conversions and have a more efficient spend of the dollars is absolutely something that we're seeing right now in the market.
Operator: The next question will come from Omar Dessouky with Bank of America. Please go ahead.
Omar Dessouky: Two questions on SingleTap. Since there's probably a lot of new investors that are new to the story, just on the challenges to the patent by IronSource, could you maybe give us a little bit of like a factual background as to how long there's been back and forth between IronSource, whether the latest round of challenges to enforceability has anything novel to it and some of the puts and takes around whether your strategic position would be maintained even if the patent was deemed unenforceable? And then I have a follow-up.
Bill Stone: Yes. Sure, Omar. So let me start with our view on SingleTap is that we have a moat around this business and the moat is not necessarily because of anything on the IP side. The moat is the fact that we've got many, many hundreds of millions of devices already deployed with SingleTap on them out in the field. And then we've integrated that with the ad tech around it. That's really difficult to do. And for investors that have been around our story for a long time will know that that's taken us many years to perfect and get this into now a sustainable business that we're excited about. So that's really the moat is I think that it's not just about the, okay, I can use the technology in the background to download an app. That matters. And to that end, we actually have two patents on SingleTap, not one and there was a ruling on one of the patents that we disagree with, and we're in the process of working through right now how to get that squared away. But the second patent is not impacted. So our view right now is we're going to defend our IP, and we're proud of our IP, and we're going to go after it. But I think the message I'd say I keep for investors is really one around the moat of getting the technology integrated in with the ad tech and the embedded base of devices. That's where I think the real secret sauce is.
Omar Dessouky: And again, just for investors that are new to the story, have these patents been challenged before several years ago? Or is this the first time this is happening?
Bill Stone: Yes. This is the first time this has happened. And it's actually the patent is not -- the Company that you referenced is not -- does not have a patent. It's actually coming from another third party.
Omar Dessouky: And then the second question is in terms of early learnings from SingleTap licensing, is there anything you can share about the economics of these early licensing deals? We realize it's still early stage, but wanted to get a sense of how you're thinking about the economics both in the next year and or so and going forward?
Bill Stone: Yes, we're going to have a variety of different business models with that, and it really is going to come down to a risk-sharing exercise with our partner in terms of do they want to share their incremental revenue with us or do they just want to pay us a SaaS fee to leverage the technology. And we see a combination of both. What we've basically guided investors and analysts to is to think about this business is getting a flat fee for every download that leverages the technology, although we'll have variations around the business model as we ramp and scale it.
Operator: The next question will come from Timothy Horan with Oppenheimer. Please go ahead.
Timothy Horan: Can you give us a sense of how much of the 25% decline is from pricing and how much from volumes? And can you just talk about the trajectory on pricing because it sounds like you think pricing has stabilized at this point? Or maybe just talk like monthly what's happened with pricing would be great.
Bill Stone: Yes. Sure, Tim. Let me kind of break out our on-device business from our ad tech business. What we're seeing right now on pricing on the ad tech side is that's the major driver more so than volumes. Volumes were relatively flat from quarter-over-quarter. So the pricing I referenced in my remarks, 10% to 20% is across the board regardless of ad type or pretty much regardless of geography, whether that's banners, interstitials, videos or what have you. So, it's primarily a pricing story on the demand side. On the ODS side, the major drivers is not pricing. Our revenue per device actually went up from December of this past year, December of the prior year. So that's something we're proud of that we're able to hang in there on pricing. Issue there was much more around volumes on the device side. So, the reduction in volumes is really would hurt us from a macro perspective.
Timothy Horan: And just the trends on pricing, sorry, on both segments -- or I guess, more on the ad tech side?
Bill Stone: Yes. So our expectation right now is we're in the trough. Our expectation is we're going to see some rebounding as we get into later parts of this year, but we're dealing with at the beginning of the year, a lot of advertisers thinking about their ad spends for the year. We're also seeing variations in verticals. I touched on some big brands that we're spending more dollars with us in my remarks. We're proud of that. But some of the gaming providers and gaming performance providers have pulled back and those kind of operating some headwinds and tailwinds against each other.
Operator: The next question will come from Dan Day with B. Riley. Please go ahead.
Dan Day: Yes. I didn't hear anything. You talked a little bit about challenges with the prepaid content media. I didn't hear anything on the update on the Verizon and AT&T content media partnerships that we've talked about. So just an update there and when you sort of expect to get that segment back to growth?
Bill Stone: Yes. So I'm not going to make any comment on one specific partner on the call, Dan, here today. What I'll just say is we have some work to do. We've got a lot of interest from partners and doing a lot of different things on content media, but we're not where we need to be right now. It's a focus area for us to get improved. But at the same point in time, we're not prioritizing that above other things like the potential of things like Games Hub and getting our alternative app store things launched. But we've got some work to do there. We're not satisfied where we need to be and it needs to get better.
Dan Day: Yes. Understood. Another one I've heard from investors lately. And I'm just curious -- and it's mostly an issue for other ad tech companies, I think, but curious if you're seeing any concerns. People are starting to talk more about the SDK run time changes and how that's created some challenges for the kind of mobile ad tech networks out there. And that might be driving some of the weakness that we've seen in recent quarters. Just curious if you're running into any challenges with that, as that gets rolled out to more and more devices or if there's any I think it would be confined mostly with the legacy AdColony assets, but just curious in general, what you're seeing anything there?
Bill Stone: Yes. So no, we're not seeing that as a headwind on our business right now. As you mentioned on the AdColony side, we are in the process of consolidating our exchanges. And so given the overlap of publishers in some cases and not in other cases, that's putting a little pressure on short-term revenues, but it's the right thing to do for our partners, not to have to deal with multiple exchanges. So I think that's something that will be a tailwind for us next year, but not right in the current quarter. What we're actually doing though is putting in a lot of different type of ad tech enhancements, whether those are new renderings, new bidding methodologies and so on, and that started to bear some fruit for us. And that's something I'm excited about because it's commonplace in the industry. And there are things that the legacy companies we acquired had not done. So our view right now is that will provide some nice thrust and opportunity for growth in our business.
Operator: Your next question will come from Anthony Stoss with Craig-Hallum. Please go ahead.
Anthony Stoss: I wanted to follow up on your comment about helping launch App Store. You said one is live and another one is going to go live sometime this quarter. Can you help us understand like perhaps your goals by the end of the year, how many you think are going to be up, how big a business this could become? And what's the business model for apps to get paid on helping folks launch these app stores?
Bill Stone: Yes. Thanks, Tony. It's a business we're excited about. It's clearly early days. We just recently launched with our first partner. As I mentioned in my remarks on some of the macro issues, there is tailwinds, right? You've got a lot of operators and OEMs that are looking for new revenue streams in these environments, and this obviously provides that. So for us, we really see three revenue streams for us. It would be incremental opportunities. One is just being able to get a new way to get apps to the phone and get paid on CPIs for that. Another way is for us to extend our ad tech assets into more publishers on more devices. So that's a nice synergy from our acquisitions. But the third one and the one that probably has got the most attention right now, especially from a regulatory perspective is on the payment side. That's a $100 billion market today. And if you think about the marketplace where I paid a 1% from a Visa paid 3% from Amex and you're paying 30% with the current app store environment. So, our view is that's going to get disrupted. And that's just a when question, not an if question, and I think we've put ourselves in a really good position to go do that. And there's a lot of interest out there from a variety of stakeholders. So that's our first foray into it, and hence, the investment we took in Aptoide, who already has a lot of these capabilities built. So something we're excited about strategically early days, but there is a lot of interest out there. That's for sure.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to CEO, Mr. Bill Stone for any closing remarks. Please go ahead, sir.
Bill Stone: Yes. Thanks for all joining our call today. We look forward to reporting on our progress against all the points that we made on today's call, and we'll talk to you again on our fiscal '23 fourth quarter call in a few months. Thanks, and have a great night.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
