Digital Turbine Inc (APPS) 2019 Q1 法說會逐字稿

Good afternoon, and welcome to the Digital Turbine Fiscal 2019 First Quarter Results Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Brian Bartholomew, Senior Vice President of Capital Markets and Strategy. Please go ahead.

Thanks, Kate. Good afternoon, and welcome to the Digital Turbine First Quarter Fiscal 2019 Earnings Conference Call. Joining me on the call today to discuss our results are Bill Stone, CEO; and Barrett Garrison, our CFO.

Before we get started, I would 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 statements.

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 it is my pleasure to turn the call over to Mr. Bill Stone.

Thanks, Brian. And thanks to all for joining us today.

I want to start with our stated goal, which is to build a growing and profitable business. Our June quarter was our fifth consecutive quarter of positive adjusted EBITDA, with 46% revenue growth year-over-year despite several headwinds.

I'm going to break my comments out into 3 areas. First, just some commentary around our new agreement with Verizon. Second is a recap of the June quarter. And finally will be some operational commentary around our 3 growth levers of devices, new products and our media business.

First, I'm pleased to announce we have reached agreement with Verizon on a new 4-year deal that will go through August 2022 and are in process of executing the agreement. This new agreement will not only cover our current products, but also includes new products that Verizon is interested in, such as Single-Tap, folders, notifications and post-install actions. We expect this deal to be accretive to revenue and gross profit over the term of the contract.

There are incentives for us as we achieve higher revenue tiers to improve our revenue share and gross margin percentage. The lowest revenue tiers are identical margins to our prior agreement. In other words, there are no commercial terms that are unfavorable to our prior agreement, only upside opportunities for us.

We are also exploring additional product collaboration opportunities at Verizon's request that would be incremental to this agreement. We are processing some minor administrative details on the agreement and anticipate filing an 8-K in advance of the expiration of the current agreement next week.

Next, our June quarter finished at $22.1 million in revenue, up 46% over prior year and $0.2 million in positive adjusted EBITDA.

If I break out the headwinds and tailwinds from the quarter. On the headwind side was disappointing sales of a key flagship device; our higher-margin international revenue partners performed below our expectations; and finally, a delay by one of our U.S. partners for a onetime expansion of Single-Tap capabilities with a major social media platform.

On the tailwind side, I was pleased to see our revenue per device, or RPD, in the United States of $2, which compares to $1.32 for the same quarter last year. This is a fundamental health metric of our business that showcases advertiser demand for our platform and a key driver of growth.

Other tailwinds included very positive momentum with AT&T, contribution from other products that was less than 5% of revenue a year ago and now over 15% of revenue and strong results from our large social media partner and large U.S. operator.

Now turning to the current and future quarters. We see 3 main growth drivers from our platform: more devices, more products and more and deeper media relationships.

First on devices, we added $24.6 million devices in the June quarter, which now brings us to over $175 million devices in our base. We have recently signed contracts with 7 OEMs that represent an annual opportunity of 15 million incremental devices. Some of these have already launched in the September quarter and all will launch this calendar year. I'm excited about these launches as they will be with multiple versus just a single product.

The pipeline is also very encouraging, with numerous high-profile OEMs very deep in the pipeline process. We have also received greater-than-expected inbound interest for expansion of our platform into other types of screens, and our product and R&D teams are exploring moving beyond just smartphones.

On our second growth lever of products, as I mentioned earlier, a year ago, 95% of our revenues from our O&O business were from dynamic preloads. While that product continues to experience revenue growth, its overall contribution has declined now to 85% as we see ramp in our other products.

In particular, Single-Tap, folders and post-install actions are showing nice growth. Barrett will comment on the margins in his remarks, but over the longer term, as these products ramp, this should be a benefit to our gross margins. We see this as a growth driver for all partners, but in particular, a growth driver for our existing U.S. partners, where their device growth may be muted.

While still early days, we're seeing convergent lifts of 50% on Single-Tap, proving that a better user experience drives better results for advertisers. In particular, we are excited about what we're calling Web to App, where a consumer can be on a mobile website, such as ESPN or Delta or Yelp or the like and get a richer native application driven to their device via Single-Tap while staying in the mobile web if they so choose. This drives higher engagement for the app provider while still not disturbing the consumer experience.

We also have some encouraging engagement results from our post-install actions, where we're seeing 30% lift in engagement, which in turn drives higher revenue per slot and revenue per device.

On our media business, we continue to grow our revenue per device as media partners are seeing positive returns on investments from their Digital Turbine spend. We are seeing an encouraging trend with mobile media. As most of you know, the mobile media industry is growing at greater than 30% compound annual growth rate, but we are seeing the law of diminishing returns for advertisers spending on the very large platforms that are now no longer generating the same ROI for them. They're saying that their incremental dollars are better spent on other platforms, such as Digital Turbine, versus continuing to spend more dollars on the same platforms.

In the United States, Digital Turbine is now the #3 distributors of Android applications, only behind Facebook and Google. We saw a number of new advertising brands in the quarter begin spending on our platform, such as Adidas, The Wall Street Journal, SiriusXM and Kroger, just to name a few.

Our focus areas in the media business are to continue, include scaling our demand outside of the United States, leveraging our new inside sales team to help with the long tail of app providers and working on numerous new partnerships that help us scale versus only going direct.

In particular, I've been excited to see our expansion of our old relationship outside of Verizon, and it is now contributing meaningful revenue with our other global partners.

And finally, before I turn it over to Barrett, oftentimes our earnings calls can be just about the numbers, but I wanted to conclude my remarks today with my increasing enthusiasm regarding our improved focus and execution. The past 6 months have been largely consumed with the Content and A&P divestitures, finalizing the European Union GDPR compliance requirement and finalizing our own Sarbanes-Oxley compliance. I want to thank our team for the hustle on completing these things simultaneously as they were material undertakings for a small global public tech company.

Our organization has now been able to turn its attention 100% to the growth levers described earlier, and I'm excited with the execution improvements over the past 60 days I've seen as a result. It's setting us up nicely as we talk about the numbers for the future.

With that, that concludes our prepared remarks, and I'll turn it over to Barrett to take you through the numbers.

Thanks, Bill, and good afternoon, everyone. Before we go into a more detailed overview of the numbers, I wanted to provide a couple of updates.

First, we recently announced the closing of 2 divestiture transactions with our Advertiser & Publisher business and our Content and Pay business. And the teams are now in the process of fully transitioning these business to the new owners.

As a reminder, these noncore divestitures are expected to enable greater organizational focus on our higher-growth and higher-margin O&O business.

Secondly, I wanted to provide an update on the progress with the SEC as it relates to the previously disclosed internal control matter. We are finalizing a proposed settlement of this matter with the staff of the SEC, which is subject to the final approval of the SEC. We expect to provide an update or disclose the final resolution before our next quarterly report in November.

We have included the general parameters of the proposed settlement in our 10-Q filed today, which includes a settlement of $100,000 payable by the company. Based on the proposed settlement terms, the company does not expect this matter to have a material impact on its operations or financial position or any impact on historical financials.

This matter and internal controls are very important to the company, and I am pleased to be finalizing this matter and proud of the diligent efforts of the team to now be SOX-compliant.

Now let me turn to the financial performance in the quarter. As a reminder, the results of our divested businesses are treated as discontinued operations for all periods presented in our financials. My comments today will refer to the results on continuing operations, unless otherwise noted. All of our comparisons are also on a year-on-year basis, unless noted otherwise.

Revenue of $22.1 million in the quarter was up 46%, and as Bill referenced, we delivered this growth despite disappointing sales of a flagship device launched against expectations and a delay by one of our U.S. partners for a onetime expansion of Single-Tap capabilities on a major social media platform.

However, these headwinds were offset by other improvements on the platform, including increased revenue contribution per device and new product revenues gaining increased traction.

As Bill referenced, while our core dynamic preload business is growing nicely, we generated a greater portion of our revenues from other products. In the quarter, other product revenues made up 15% of total revenues as compared to less than 3% in the same quarter last year, illustrating the progress of the new products added to our platform.

Turning to gross profit and margins. Revenue growth enabled non-GAAP gross profit dollars to increase by over $1.3 million year-over-year to $6.9 million in the quarter. Non-GAAP margin was 31% in Q1, down from 37% in the prior year.

Margins in the quarter were lower year-over-year, driven largely by 2 factors. First, one of our largest fastest-growing U.S. carriers has a higher revenue share as compared to the same time last year that they're growing over. This revenue share is based on cumulative volume thresholds achieved at the end of calendar year 2017.

In addition, certain new incremental product revenues that I referenced earlier have a revenue sharing component with one of our major carriers that had a negative impact on overall margins based on their existing revenue share structure.

Let me lead the discussion on margins by noting that while we are encouraged about our opportunity to expand margins overall, given our current revenue mix, we will expect similar margins as generated in Q1 over the near term.

As a reminder, gross margin rates can be sensitive to changes in partner mix and revenue type, and these fluctuations may vary from quarter-to-quarter. The opportunities for margin expansion will depend on the timing of launching and ramping higher-margin partners and growth in our new product revenues.

During the first quarter, total operating expenses from continuing operations were $7.6 million compared to $6.7 million in the prior year quarter. As a reminder, since we are now reporting our divested businesses under discontinued operations, all of our shared and corporate expenses are being allocated to continuing operations.

Cash expenses in the quarter were approximately $6.7 million, which were down on a sequential basis from Q4 cash expenses of $7.6 million, despite incurring higher annual accounting and Sarbanes-Oxley costs in the quarter.

During Q1, total adjusted EBITDA was a positive $0.2 million, up from a loss of $0.1 million in first fiscal quarter 2018. And non-GAAP adjusted net loss in the quarter was $0.6 million loss from continuing operations or negative $0.01 per share, as compared to a net loss of $1.1 million or negative $0.02 per share in the first quarter of 2018.

Our GAAP net income from continuing operations for the first quarter was positive $1.5 million or $0.02 per share, based on $76.2 million weighted shares outstanding compared to a net loss of $4.1 million or negative $0.06 per share loss for the first quarter of 2018.

Included in our GAAP net loss for the quarter is a recorded gain of $3.2 million from the impact of the change in fair value of derivative liabilities, resulting from our convertible note, which is highly sensitive to the company's stock price. And as a reminder, the derivative liabilities of our balance sheet will fluctuate as our stock price moves and may have a material impact on our reported GAAP financials.

Now moving to the balance sheet. We finished the quarter with $8.6 million in cash, which was ahead of our internal expectations. We've continued operations, consuming about $2.7 million in negative free cash flow during the quarter, largely driven by timing of working capital changes due to revenue growth in the quarter, combined with the reduction of certain fiscal year-end payables.

Discontinued operations consumed about $1.3 million of negative free cash flow from certain onetime transaction costs and working capital changes as we transitioned these divested businesses.

The debt levels remained unchanged from prior quarter. There were no conversions on our convertible notes during the quarter, and the gross principal amount of the original $16 million notes ended at $5.7 million at the end of the quarter.

Now let me turn to our outlook. We currently expect Q2 revenue of approximately $23 million, representing a projected year-over-year growth of about 45%, and expect sequential improvement to adjusted EBITDA.

With that, let me hand it back to the operator to open the call for questions. Operator?

(Operator Instructions) The first question comes from Mike Malouf of Craig-Hallum Capital Group.

Congratulations on getting Verizon on the finish line. Well done. I wanted to know if we can just sort of explore Verizon just a little bit. So if I understand what you said, if you were to keep the revenues basically flat with Verizon, then you would experience basically the same margins that we have and that any incremental growth adds to the gross profit margin? Is that how I should read it?

Yes. So Mike, how I think about it is that the new deal is identical to the existing deal if nothing changes. But as we add new products, then the opportunity for us to hit higher revenue tiers would result in higher gross margins for us. And so it's really a more holistic deal. So rather than just thinking about the past -- over the past 4 years and rather than thinking about the next 4 years and the things we want to do, how we can think about accreting the margins of our current products as well as our new ones to achieve higher revenue tiers.

Okay. So it is a lot of different than sort of how you were set up from the beginning of the Verizon, where you had -- as your revenue grew to different tiers, your gross profit actually would go down?

That's right. So I almost think of it as reversed revenue tiers is how we are kind of referring to it internally. But it really is contemplating now a much expanded product relationship with Verizon than what we've had in the rearview mirror.

Got it. That's helpful. And then with regards to Single-Tap, can you just give us an update on where we are with that rollout? You mentioned that it negatively affected the June quarter based on a particular rollout, but it sounded like it was a onetime rollout. So I'm a little confused by that.

Yes, sure. So there's really 2 elements of Single-Tap. One is our integration with a large social media platform and a large operator here in the United States, and that continues to grow nicely. With that, we had an opportunity for a onetime event with them to be able to go out and do something that would generate basically a onetime opportunity for us that was material. That opportunity is still out there. We had thought that was going to come in the June quarter, but it did not, so that was a little bit disappointing to us. But the opportunity still remains to go do that as we go out through the remainder of the fiscal year. And the second part of Single-Tap is integrating with other media partners and platforms, and that is live on a number of operators. It is not yet live on Verizon and AT&T. We expect that to happen in the current quarter. And that will help accelerate the second part of our Single-Tap offering.

Okay, great. And then, just one final question. With regards to América Móvil, I know that you were putting your APK or getting it installed at Samsung. Is that ongoing now so you can start to jumpstart that? And to what extent, if you can get Samsung to install this, could they install this on all their phones to make it sort of ubiquitous so you can cover -- get basically a worldwide coverage?

Yes. So as far as América Móvil goes, yes, we're working on expanding some new technology with them that's going to dramatically improve the install rates and performance, which for you as well as others that have followed the story for a while know that's been a disappointment. So as many of you heard at the Analyst Day, América Móvil commented on that directly that they're excited about some of those technical improvements that will improve the installed rates. Yes, regarding Samsung, yes, I'm very excited and bullish about the opportunities that we've got with them globally right now, so kind of stay tuned for more.

The next question is from Darren Aftahi of Roth Capital Partners.

Also, congratulation on the Verizon deal. I wanted to follow up on a couple of things on the prior question. So on your sort of onetime opportunity with the social platform, is that something you can kind of couch as being a calendar 2018 event? Or should we just -- is that kind of a discounted -- you can't really kind of gauge the time when it's going to happen?

Yes, what we've done in our forward-looking guidance, Darren, is we've taken it out. So if that happens, it would be upside for us. We still think there's an opportunity there, but we'd rather hope for the best, plan for the worst kind of thing on that onetime opportunity. So it's taken out of our guidance, but it's still very much on the table.

Fair enough. And then with your new product lineup as you complete the Verizon deal here in the near future, can you just strategically talk about which of your new products you feel like will resonate with AT&T and Verizon more quickly? And then in conjunction with that, I know you guys noticed the [1000 base] improvement in new product revenue. Can you just kind of give us a sense for where you see kind of that mix going over the next 6 months?

Yes. So I'll break it out into 3 categories. I think, in terms of very short-term performance, I'm really excited about the engagement results we've seen on post-install actions. So that's the type of thing where all of us would see, for example, we have a Starbucks app on our phone and we'll see notifications that say, come on in and you get a free latte, it's your birthday, or one of those kind of things, or you might not have remembered you have a Starbucks app on your phone. And we see tremendous lifts in engagement for that. And yes, that in turns drives better revenue per slot and revenue per device on performance. And so we're really in the process of scaling that real-time right now. So that's quite encouraging in the very short term. In the midterm, yes, we're excited about the opportunities with AT&T and the Time Warner merger as it relates to things like our folders product. Between DIRECTV, AT&T and Time Warner have nearly 200 different applications. They've got to think about how to get the right apps to the right people at the right time. And so there's a tremendous opportunity for us to add value there with our folders product with them, as well as with Verizon and Oath and others. So I think I'm excited about that in the midterm. Long term, I'm most excited about Single-Tap. We're seeing some very encouraging results, and now the next step is to get that launched on Verizon and AT&T in the current quarter and then start seeing that grow. I don't expect to see that deliver material results for us in the September quarter, but as we go forward into the next calendar year, I'm really excited about the prospects there.

Got it. And then just a couple more. On the 15 million incremental devices by the end of the year with the 7 OEMs, can you just talk about the context? Is that being influenced by your Qualcomm relationship you announced earlier this year?

Yes. No, not really specifically with Qualcomm, but it is being driven by our business development activities in Asia, which we've been pretty aggressive in Korea, China and India. So really, this is about cutting our teeth with these new OEMs. It's a new distribution channel for us. They have some different requirements. It's obviously, international. We want to learn from all of our new products with them. And I think it sets us up really nicely for some of the much higher-profile players in the region, which I mentioned in my comments were really deep in the pipeline process. So I'm excited about us really getting to cut our teeth with these longer-tail OEMs, albeit with material device volumes, we're talking about 8 figures of device volumes. But it's really setting us up now to learn, to scale when some of the bigger boys come on later.

Great. And just last one for me. You talked about expansion into other form factors. Can you just indulge us, are these sort of handheld form factors or perhaps something much, much larger?

Yes. It's something that we've demonstrated at Mobile World Congress and other places that really our platform is screen-agnostic, and we focused on smartphones just because that's the largest opportunity. But what we're seeing now is a lot of inbound interest. It's not us going out trying to create outbound. It's inbound coming to us to say, hey, can you work on these different screens, whether these are large tablets or wearables or televisions, or what have you. People are interested in how they can use our mobile delivery platform to help them with these other screens. And so we're spending some time right now and making some investments on how we could do that. And then is there opportunity to do start looking and sharing things cross-screens. So in other words, you could be on a television watching a golf channel and you see a golf app come up and have that golf app delivered directly to your phone, things like that, that we've seen some inbound interest from. So those are things that we're investigating, not anything for the very near term, for the next quarter. But as we think about the growth opportunity for the business, it's definitely something that's encouraging and exciting.

The next question is from Sameet Sinha of B. Riley FBR.

This is Lee Krowl filling in for Sameet. Congrats on getting the Verizon deal inked. First question, I just wanted to dig in. During the quarter, you guys kind of cited a weak performance from a marquee product launch. That same customer announced a new product for the current quarter. Just kind of curious what kind of expectation you have for that device in light of the last quarter's kind of tepid performance as it relates to revenue guidance?

Yes. I'll take that one. We've obviously considered how the S9 device performed last quarter in our guidance. It was not a strong launch. So I think we've been rather conservative. But we do expect -- we have data on how it performed last year. While we think that it could be an exciting opportunity, I think we've been prudent in our guidance here and factored in how the most recent launch has performed.

Okay. And then switching over to RPD performance. I know you guys said that it was around $2. Just kind of curious what the drivers behind the jump is, whether it's brand-driven or maybe just onetime event? Just kind of curious because it is such a large jump in a single quarter.

Yes. So our commentary was really about, it went from $2 in the U.S. compared to $1, I believe, $1.32 a year ago in the same quarter. It's driven by 2 factors. One is just increased demand from advertisers, and advertisers seeing a positive return on investment from using the Digital Turbine platform. And I referenced in my remarks about how there's diminishing returns on platforms like Facebook and Google. And we're seeing a number of advertisers like the Bank of America and Yelp and eBay and others. They're saying, hey, my incremental dollars are better spent on Digital Turbine than spending more money on those other platforms. So that helps us accrete results, is variable number one. And then variable number two, is we've been able to expand our slots with AT&T and a couple of other providers, so that obviously adds us an incremental revenue opportunity. So it's the combination of those 2 things is helping drive the improved performance. And yes, I really want to reiterate that, that's a fundamental health metric of our business, that advertisers are willing to spend and continue to spend more to be on the home screen. So that's something I'd encourage investors to continue to look at as far as our performance goes.

Got it. And then it's very clear that North America is doing really well, and it seems like that's a little bit offset by international. And we would read that to mean that perhaps India is still maybe a headwind. Just thoughts on when maybe India and a few other geographies can maybe snap back and start to contribute to growth.

Yes. So I'm encouraged in India with both the new OEM deals that we've announced as well as we expect to see Reliance Jio that had initially launched with a smartphone, and they moved to a really low-end feature phone to transition back to smartphones. Again, I think that will really help jumpstart that relationship for us going into the future. And we continue to be pretty bullish on India. But with that being said, we still have some work to do in terms of how we scale our international demand. And that's a major focus area for the business right now, which is a combination of us adding additional local salespeople on the ground, doing partnerships -- I referenced Oath as an example, but other advertising agency partnerships. And then leveraging our global inside sales force for the long tail of apps. Yes, that's really the factor to get a better reach in that particular market as well as Asia Pacific more broadly. Yes, we've got some wood to chop to get where we need to be, but we're excited about it because that's where the growth is. And for most of our Asia-Pacific and Latin America and European accounts, the margin structure is also favorable. So it's a major focus area for us.

(Operator Instructions) The next question is from Ilya Grozovsky of National Securities.

I just wanted to kind of go through the gross margins a little bit more. So if you had, had the contract that you will have going forward for the next several years with your largest customer, had you had that in this current quarter, what do you think gross margins would have been like in the current quarter given the volumes that you did?

Yes. So just to reemphasize what Bill outlined as far as the proposed terms in the agreement. The existing level of revenue volumes would be at kind of the current gross margins that we're seeing today in the quarter. And what the contract would allow us to do is when we drive incremental revenue at certain levels with new products or even if we're driving core revenue upwards of levels close to where we are today, those would accrete margins. But based on the volume today, we would, with the new contract, have similar gross margins.

Okay. So that leads me to my next question, which is given how big your largest customer is and where your gross margins have trended over the past several quarters down to the low 30s here in the current quarter, wouldn't that be offset by the new customers that you have and plus the higher-margin new products that you have in terms of the incremental growth that's really from those guys, right? So you're continuing to reduce your largest customer, your dependence on the largest customer. I think last quarter, you were down below the 50% level. And so shouldn't the gross margins be helped by the non-largest customer contribution?

Well, they would be. But one of the things that's important to understand is the product mix and the -- whether it's a licensing or it's a rev share, the product mix has a lot to do with it, as well as the partner mix. And so what we have -- while we've seen our largest partner make up less of the concentration, we also have partnerships that have similar structures to revenue sharing that we've seen -- that we have with Verizon, the contract Bill just outlined, whereby as their volumes increase, they get a higher revenue share. And one of our fastest-growing, as I mentioned in the call, one of our fastest-growing partners had a kind of higher revenue share this year versus last year. And you see that as we grow over that year-on-year. The other thing is depending on the particular product and who it launched with, it could either accrete or compress margins. And in this quarter, I referenced in my comments around the gross margins that we launched a product that had margins below the aggregate for this particular product and for this particular partner, and that impacted margins in the quarter.

The next question is from Jon Hickman of Ladenburg.

I want to add my congratulations to the Verizon deal too. But Barrett, I have a question about operating expenses. As you transition the discontinued operations to their new owners, you seem to indicate that there was further reduction in particularly the SG&A area. Is that true?

Well, I don't think I indicated that today on the call. But what we do see is, because of the way we recognized our expenses when we break out our continuing operations and our discontinued operations, we have -- I mentioned in the call that we've reduced our cash expenses, our cash OpEx, as we call it, for our continuing operations. And so we will evaluate our SG&A and the requirements to support just doing our business ongoing, but right now I wouldn't outline any significant declines in our overall SG&A in the near term.

The next question is from Michael Solomon of Maxim.

Congratulations on the Verizon deal. The margin question was answered. And Bill, this is probably more of an opinion question, but it seems like you've been able to hand these carriers business that basically carries no cost for them. And now you're handing some social media companies the same opportunity. Why do you think -- I'm struggling with the market cap and where the stock has traded. Based on your progression and what you're doing, something doesn't make sense. Did you get a feel for why that's happening or what the carriers are saying? And can we get a bigger piece of the puzzle when you sign some of these deals going forward?

Yes, sure. Thanks, Mike. Appreciate it. Yes, I mean, I can't comment on the stock. I guess, if I had a crystal ball and I knew what was going on with the stock, I wouldn't be doing this job. I'd be doing a different job. I'm a TMT, a mobile person, and I've got a lot of experience and expertise on that. And so what I'd say is that we're just going to continue to execute. We think we've got something pretty special here. The franchise value of what we've built with all of these deals around the globe is something we're proud of. We think we've put ourselves in a really great position for the future. And now we've got platform. And as we add devices and we add products and we add all these advertising partners, those are things that should enable real scale and real exponential growth. And those are things we're excited about. That's why we're here. And we're going to continue to grind it out and execute on that. And my belief is that markets may not get it right in the short term, but in the long term they will. And we're going to continue to grind it out and focus on the strategy that we're excited about. And at some point, the market should be paying attention to that.

This concludes our question-and-answer session. I would like to turn the conference back over to Bill Stone for closing remarks.

Thanks all, and I appreciate everyone joining the call today. We'll be back in touch at our next earnings call later this year, and we'll keep you apprised of our progress. Thanks to all, and have a good night.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.