Zhihu Inc (ZH) 2024 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Zhihu Inc first-quarter 2024 financial results conference call. (Operator Instructions) Today's conference is being recorded. At this time, I would like to turn the conference over to Yolanda Liu, Director of Investor Relations. Please go ahead, ma'am.

Thank you, operator. Hello, everyone. Welcome to Zhihu first-quarter 2024 financial results conference call. Joining me today are Mr. Zhou Yuan, our Founder, Chairman, and Chief Executive Officer; and Mr. Wang Han, our Chief Financial Officer.

Before we get started, I'd like to remind you that today's discussion will include forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties. As such, actual results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our public filings with the US SEC and the Hong Kong Stock Exchange. The company does not assume any obligation to update any forward-looking statements except as required under applicable law.

Additionally, the matter we will discuss today will include both GAAP and non-GAAP financial measures for comparison purpose only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today.

In addition, a webcast replay of this conference call will be available on our website at ir.zhihu.com.

I will now turn the call over to Mr. Wang Han, CFO of Zhihu. Han, please go ahead.

Thank you, Yolanda. Hello, everyone. Thank you for joining Zhihu's first-quarter 2024 earnings call. I'm pleased to deliver today's opening remarks on behalf of Mr. Zhou Yuan, Founder, Chairman, and CEO of Zhihu.

The first quarter of 2024 marked a significant turning point for Zhihu. Strategically, we concentrated on our core strengths and the most crucial aspects of our development in AI era. This involved a series of tactical adjustments, including resource reallocation and organizational optimization. From an operating perspective, our top priority in the short term is to achieve profitability.

The advent of AI has disrupted the traditional Internet business model, which relied on expanding user base, enhancing user engagement, and boosting user ad value to gain market share. In the AI era, the focus has shifted to high-quality content and user value.

Zhihu's core value lies not only in possessing China's highest-quality content library, but also in our unique content creation mechanism and our community's professional atmosphere, which foster continued emergence of new high-quality content. Zhihu users are not passive recipients of information but are active participants in content creation and knowledge-sharing. These core strengths provide us with a first-mover advantage in exploring new business models and position us uniquely in the market, increasing our pricing power.

Following our proactive reduction in community-related user acquisition cost, the size of our user base declined to some degree in line with our expectations. However, engagement among our monthly active users increased, core user retention sustained its growth momentum, and daily active user time spent also increased significantly.

Furthermore, our efforts to enhance trustworthiness within the Zhihu community continued to drive community prosperity. Our strategy for cultivating scenario-orientated content ensures a continued stream of authentic, in-depth, high-quality content based on users' own experiences.

As of the end of the first quarter, the cumulative pieces of content on our platform reached 804.2 million, including 611 million Q&As, up 15.4% year over year. The cumulative content creators within Zhihu community reached 73.6 million, an increase of 13% year over year. We also observed a notable year-over-year increase in a proportion of highly active users engaged in creation and a percentage of high level daily active creators.

Utilizing the power of AI-driven technology, we continued to equip our content creators with a variety of user-friendly creation tools, offering a professional and supportive environment to help them reap financial rewards. In first quarter, the total number of content creators who earned income on Zhihu grew by more than 25% year over year. Notably, the number of content creators benefiting from our Zhizhi plan was nearly fourfold compared to the same period last year.

In the AI era, we have continually upgraded our cybersecurity capabilities to ensure better protection of user data privacy and intellectual property rights. At the same time, we fully leverage AI models' capabilities to enhance the efficiency of content identification, review, and governance within the Zhihu community. In certain scenarios, AI reviewers can achieve higher accuracy compared to manual identification and review, allowing us to significantly reduce the number of manual reviews while maintaining high efficiency.

We continue to refine and upgrade our existing systems, "WaLi" and "WuKong", leveraging our Zhihaitu LLM. These improvements have further enhanced user engagement and effectively combated fake traffic, leading to a continued decline in users' negative feedback and propelling the Zhihu community's sustainable development.

We're progressing steadily toward our goal of achieving quarterly profitability within this year. To that end, we have accelerated our loss reduction through two operating tactics. First was to continually improve employee efficiency, further reducing labor costs. Second was to reduce community-related user acquisition costs. Meanwhile, we have maintained a high ROI in our paid membership and vocational training businesses, which extend our reach beyond Zhihu community. With these efforts, the cost of revenue and total operating expenses in Q1 decreased by over RMB130 million quarter over quarter. Notably, we recorded our sixth consecutive quarter of year-over-year growth in gross profit margin and three consecutive quarters of sequential decline in our sales and marketing expenses in the first quarter.

Additionally, we have been accelerating the application of our Zhihaitu LLM to further enhance our operating efficiency across every aspect of our businesses; for example, teaching, learning, and research aspects for our vocational training business. By integrating our own knowledge library, we have driven notable efficiency improvements in AI teaching assistance, sales services, homework assessments and more.

As a leading content-centric community, Zhihu serves as a "landing" platform where professionals engage in the most extensive and in-depth discussions on AI-related topics. Since the beginning of this year, the amount of AI-related content and the number of creators have continued to surge with double-digit, year-over-year growth. Specifically, the number of AI field creators certified by "Blue Label" has increased by 130% year-over-year. Moreover, tens of thousands of specialized terms relating to AI are being discussed within our community.

In 2024, our exploration of an investment in AI will shift to focus on the application layer. Our advancements in AI enables us to enhance the operating efficiency across our existing businesses as well as to unlock emerging potential beyond the Zhihu community, all built on the foundation of trustworthiness.

Since the launch of our AI powered search feature in March, we have observed double-digit growth in app active days, user retention rates and user engagement among the users who are using our new AI search feature.

Now, I would like to delve into more details of the progress we achieved across our multiple business lines for the first quarter.

First, our vocational training business continued to grow robustly, with revenue increasing by 35.9% year over year to RMB 145.4 million. Its contribution to our total revenue also rose, surpassing 15% for the first time.

As of the end of the first quarter, we established more than 30 sub-category courses through both self-operated business and acquisitions. Notably, our self-operated offerings are closely connected to the Zhihu community, allowing us to address users' needs swiftly and precisely while yielding higher profits. Our acquired offerings, on the other hand, meet specific demands and cater to a broader market. Together, these courses complement each other, broadening our offerings and driving the rapid and sustainable growth of our vocational training business.

During the first quarter, our self-operated offerings grew rapidly, particularly AI, AGI, and software exam courses, demonstrating excellent profitability and rapid growth. Importantly, our program tutors are also content creators within the Zhihu community. With this dual role, tutors are deeply involved in course development while maintaining ongoing interactions with students in the community about real course experiences, skill improvement, and other topics. This approach effectively addresses the ever-growing new demands of our users.

Growth from our acquired offerings remained steady during the quarter, further elevating our brand name awareness and service advantages. In April of this year, one of our subsidiaries, Pinzhi Education hosted a dedicated live broadcast inviting executives from the CFA Institute. They provided professional insights into CFA exam reforms, offering firsthand preparation guidance and expert analysis. This initiative garnered significant attention and sustained feedback from both the industry and examinees.

Our paid membership business remained our largest revenue contributor the quarter, reaching RMB 449.7 million. As of the end of the first quarter, our average monthly subscribing members stood at 14.8 million, showing a slight decrease of 0.8% year over year but an increase of 4.1% quarter on quarter. Average revenue per user remained stable compared to the same period last year.

Leveraging the support of the Zhihu community and our unique positioning, our premium short stories continue to captivate and resonate with our users.

In April, 123 historically chart-topping pieces, including Zhihu's exclusive stories "Scent of Time" and "Endless River Seawards Flows", were included in the National Library's digital collection. Zhihu premium content library, including short stories, continued to expand in the first quarter. The total volume of premium content increased by 14% year over year, attracting new subscribers while encouraging increased consumption among existing subscribers.

On the content creator side, we are delighted to see our creators building a solid market reputation and achieving financial rewards on our platform. In the first quarter, the number of content creators who earned income increased by 78% year over year. In addition to top creators earning substantial income, many mid-tier and long-tail content creators within our community also earned significant income through high-quality content creation this quarter.

As a market leader, Zhihu continues to unlock the monetization potential of our vast array of premium short story IPs, spearheading our expansion into the short drama market, and consistently setting new industry benchmarks for growth. In the first quarter, IP monetization revenue increased by 165.7% year over year. In April, another short drama, "Zhibi", adapted from a story in Zhihu's content library, achieved a new record high for popularity on its debut day on Tencent's micro-drama platform.

In the long run, the ongoing expansion of our premium content and diverse content consumption formats will continually drive growth in the lifetime value of subscribing members.

Let's now shift to our marketing services. In the first quarter, marketing services revenue was RMB 330.5 million, representing a decrease of 15.7% year over year. Within this total, revenue from our brand advertising business increased significantly by 40% year over year while our performance-based advertising business returned to a growth on a quarter-over-quarter basis. Our key clients in cornerstone verticals continue to demonstrate healthy improvements in retention rate, consumption, and ARPU. Apart from the IT/3C industry, which maintained its year-over-year growth rate of over 40%, the fast-moving consumer goods sector also experienced high double-digit year-over-year growth.

We're currently in the process of upgrading our CCS products. In addition to proactively enhancing content governance and reducing the distribution of commercial content that negatively impacts user experience. As we are striving for quarterly profitability by the fourth quarter of 2024, we are deepening our efforts to narrow our losses. Meanwhile, we firmly believe the emerging potential of our AI search and the value we continue to unlock across Zhihu's trustworthy community will provide fresh momentum for our sustainable growth and a clear path to profitability for the remaining quarters of the year.

This concludes Mr. Zhou Yuan's remarks.

Now, I will review the details of our first-quarter financials. For a complete overview of our first-quarter 2024 financial results, please see our press release issued earlier today.

We have continually optimized our cost structure over the past several quarters. As a result, we recorded our sixth consecutive quarter of year-over-year growth in gross profit margin. On the expense side, we significantly reduced community-related user acquisition costs while maintaining a prudent level of investment in cutting-edge technology, including AI. These initiatives have effectively optimized our fixed costs, enhancing our commercialization efficiency. With these proven strategic adjustments, we are confident of achieving quarterly profitability within 2024.

Our marketing services revenue for the first quarter was RMB330.5 million, a decline of 15.7% year over year. This decrease was primarily due to the ongoing refinement of our CCS product to strategically focus on margin improvement. However, we have observed a recovery in our brand advertising segment in the first quarter. Performance-based advertising also demonstrated sequential growth. Notably, IT and 3C, as well as fast-moving consumer goods led this growth by vertical.

Paid membership maintained its stable trend in the first quarter, reaching RMB449.7 million. The number of subscribing members grew to 14.8 million, up 4.1% quarter over quarter.

Vocational training revenue for the quarter was RMB145.4 million, increasing by 35.9% year over year. Our self-operated offerings, particularly AI, AGI, and software exam courses, delivered robust growth while our acquired businesses also retained solid momentum.

Benefiting from enhanced operating efficiency, our gross profit for the first quarter increased by 6.1% year over year to RMB543.5 million, propelling a gross profit margin improvement of 5.1 percentage points year over year to 56.6%.

Our total operating expenses for the quarter were RMB768.2 million compared with RMB729.0 million in the same period last year.

Selling and marketing expenses increased to RMB478 million from RMB445.6 million in the same period of 2023. Moving forward, we'll maintain our prudent financial policies and rigorously measure ROI across marketing channels.

Our research and development expenses for the quarter increased to RMB197.4 million from RMB183 million in the same period of 2023. The increase was primarily due to our increased spending on technology innovation.

G&A expenses decreased by 7.5% to RMB92.9 million. The decrease was primarily due to lower share-based compensation expenses, combined with improved operating efficiency.

As a result of all the above, our GAAP net loss for the first quarter narrowed by 7.4% year over year to RMB165.8 million. Our non-GAAP net loss for the quarter was RMB135.7 million.

As of March 31, 2024, the Company had cash and cash equivalents, term deposits, and short-term investments of RMB5.2 billion compared with RMB5.5 billion as of December 31, 2023.

During the first quarter, the Company repurchased 4.8 million Class A ordinary shares for a total price of USD8 million.

In summary, as we continue to optimize our cost and expense structure, our operating efficiency is steadily improving. Throughout the remainder of 2024, we're confident that our strong strategic execution will provide a solid foundation for achieving our quarterly profitability goals in the near future.

This concludes my prepared remarks on our financial performance for this quarter. Let's turn the call over to the operator for the Q&A session.

(Operator Instructions) Xueqing Zhang, CICC.

(spoken in foreign language) Thanks, management, for taking my question. My question is about the breakeven target. Could management update with us on your timetable to achieve quarterly breakeven and what's the latest progress? Thank you.

(spoken in foreign language) This is from Wang Han, CFO of Zhihu. Our profitability target remains unchanged. We expect to achieve a quarterly non-GAAP net profit in the fourth quarter of this year.

(spoken in foreign language) At the end of the first quarter and the start of the second, we strategically refined and restructured our approaches, driving a notable reduction in losses. Starting from the second quarter, you will see more pronounced improvements across our metrics.

The core philosophy behind this adjustment is what we shared at last earnings. We will always prioritize user quality over user scale. We're dedicated to protecting and elevating our core users' experience and ensuring a continuous flow of high-quality content or corpus. We believe that our industry is undergoing a fundamental shift as we move from the Internet era to the AI era.

In the Internet era, the dominant logic here is to maximize user engagement through large user bases and the metrics like AD load and eCPM. But currently, in AI era, advancements in LLM and compute power are amplifying the importance of top-tier users and high-quality content. So the most crucial factors for Zhihu going forward are, first of all, having sufficient capital to invest in high-performance chips; second, having the highest quality content and data; and third, having the highest quality and productive content creators.

So Zhihu has been a pioneer in these aspects. First, our substantial investments have made us one of only a select few platforms in China with a license to self-operate LLM. And second, we already have natural advantages, thanks to our abundant high-quality content and high-quality user base. The advent of AI era presents a golden opportunity for Zhihu to return to what we do best. That is high quality Q&As. This has enabled us to make strategic adjustments with confidence and spontaneity. Next question, please.

[Steve Qiu], Goldman Sachs.

(spoken in foreign language) Good evening. Thank you for taking my questions. I would like to ask about the user trends post your selling and marketing disciplined strategy and what are the future strategy to further improve your user engagement? Thanks.

(spoken in foreign language) Thanks, Steve, for your question. This is Zhou Yuan, Zhihu CEO. Our sales and marketing strategy adjustment is based on a quality-oriented approach. Overall, these adjustments are in line with our expectations. While our core user retention rate maintained its growth momentum, our DAU's time spent also increased significantly.

(spoken in foreign language) The sales and marketing strategy adjustment is just one part of our broader community strategy. Our efforts to build and enhance the community's content and atmosphere are also crucial to improve the activeness of our users.

(spoken in foreign language) The trustworthiness of Zhihu is primarily from our professional users. Many professionals and industry experts whose professional value is often underestimated have found a platform for discussion and sharing on Zhihu. We have very high penetration rates among professionals in various industries.

For example, Zhihu has the highest concentration of AI industry professionals and the senior technical executives from leading LLM companies who engage in cutting-edge discussions on our platform. The number of our blue-label certified AI participants grew by 130% year over year as of the latest.

(spoken in foreign language) Thus, one important aspect of community daily operation is to enhance the experience for our core content creators. For example, recently, our Zhizhi Plan in the community in which by optimizing the revenue distribution algorithm, the revenue in broader range of knowledge-related fields such as science and engineering, increased by 30% to 50% quarter over quarter.

(spoken in foreign language) This adjustment has been happening in Q2. Our approach to supporting creators focuses on operations driven, with the enhanced efficiency through product development and research. And accordingly, on the content distribution-wise, we will prioritize professional, in-depth, and authentic content.

(spoken in foreign language) Secondly, it comes from professional, in-depth, and authentic content, Zhihu gathers a diverse range of real user experience and deep insights. For example, the recent incident involving Modelbest in the open source field became a hot topic on Zhihu, with the chief scientist personally responding, AI industry professionals, open-source community operators and lawyers from both domestic and international communities participated in the discussion, generating widespread attention and dissemination.

(spoken in foreign language) The influence generated by this content is not just ordinary traffic from curious onlookers, but rather it empowers more people to gain common knowledge behind the news through professional insights, providing a sense of fulfillment. We will continue to upgrade our operational system in line with our content fulfillment standards.

(spoken in foreign language) Thirdly, but not the last, the community culture and atmosphere, in the second quarter, we began integrating and streamlining our operational system and community governance, including the user service team to enhance our community culture of Sincerity, Expertise, and Respect. For example, the proportion of professional, in-depth and rational content in discussion on trending topics is steadily increasing in line with our expectations. Thank you for the question.

Daisy Chen, Haitong International.

(Operator Instructions) I'll translate myself. Good evening, management. Thanks for taking my question. I have two questions about AI. First of all, I'd like to ask about the recent development of our AI application such as the AI-powered search feature, which was launched in last quarter. Do we have any new products and can management elaborate more about how the product empower Zhihu community. And for example, management see any positive impact on the user activity or behavior?

Following that, the second question, we noted that Reddit has announced the partnership with OpenAI to bring its Q&A content into OpenAI's product. And then, they also reached out deal with Google to authorize its data for some AI training. That could bring roughly USD60 million per year to Reddit's revenue. So my question is about whether we consider a similar approach business model to add more revenues to Zhihu. Thank you.

(spoken in foreign language) Thanks for your two questions. This is Zhou Yuan, Zhihu's CEO. In the late March -- sorry, I will just answer the first question. In the late March, we introduced a beta version of our AI search feature named Discovery. The initial results of the testing phase have been very promising. Users utilizing our AI search became notably more active. We regard this as a positive indicator demonstrating a significant expansion in our users' content consumption scenarios.

(spoken in foreign language) So, building on the feedback and usage patterns from the past two months, we are excited to announce that we will launch a new version of AI search by the end of June. This version will have a fresh product name.

(spoken in foreign language) And it will initially be available on our PC platform. We believe that our PC platform is a crucial scenario of productivity and efficiency, perfectly complementing the mobile end.

(spoken in foreign language) In the AI era, the quality of user and content far outweighs the importance of quantity. Our AI search function relies on the high-quality and trustworthy content within our community and it enabled it to provide users with high-quality search results.

(spoken in foreign language) We believe that AI search serves as efficient tool-based scenario while the community offers a multi-user online interaction environment. These two have strong complementary characteristics. Integrating AI search with our community ecosystem will be our central product development focus moving forward.

(spoken in foreign language) And for the second question, indeed, many companies are interested in acquiring Corvus from us, but we haven't made a decision yet. Thank you. Thanks for the two questions.

Cici Cheng, CLSA.

(spoken in foreign language) What's the long-term growth outlook for vocational training business and how could companies differentiate yourself from other educational institutions? Thank you.

(spoken in foreign language) Thank you for your question, Cici. This is Zhou Yuan, Zhihu's CEO. In the first quarter, our vocational training business continued to outperform the industry with a year-over-year growth rate of 35.9%. This is primarily driven by the robust growth of our community-enabled, self-operated offering. Notably, the AI, AGI, and software, and other vocational skills and interests courses mentioned in the opening remarks not only received positive feedbacks but also demonstrated improved profitability.

(spoken in foreign language) Unlike other educational institutions, Zhixuetang is built on the foundation of high-quality content and accumulated knowledge originating from our community, which naturally extends to supervised learning services. This process is primarily driven by the needs of our users who are also potential learners of our vocational training business.

(spoken in foreign language) As we shared in last quarter, Zhihu's community mechanism continuously identifies and rapidly validates users' demands in vocational sub-segments, providing us with a significant customer acquisition advantage. Community users and content creators effectively supports our course development, resulting in high labor efficiency across existing offerings.

(spoken in foreign language) Besides, our community-based approach means that when learners' needs are satisfied, they can in turn contribute back to the community, fostering the development of subsequent programs and extending learners' lifetime value. This helps mitigate the common challenge of low renewal rates in the vocational training industry.

(spoken in foreign language) Our future growth strategy targets enhanced profitability. First of all, we will continue to expand into sub-segments across three main categories, academic improvement, career enhancement, and the vocational skills and interests. Our primary focus will remain on vocational skills and interests, which are with higher certainty and a better profit margins. We aim to enhance our learners' renewal and the repurchase rates by leveraging Zhihu's unique advantages, thereby increasing our average GMV.

(spoken in foreign language) Second of all, we will further improve the ROI of our resource investments and leverage AI to enhance internal operational efficiency. Our goal is to achieve operational breakeven as soon as possible. This is in line with Zhihu's overall top priority. Thanks. Next question, please.

Vicky Wei, Citi.

(spoken in foreign language) Thanks, management, for taking my question. My question is related to the membership business, how should we think of membership business competition landscape and business strategy? Would you please share some color about Yanyan Stories paying user behaviors, and also other businesses such as IP operation business updates? Thank you.

(spoken in foreign language) Thank you, Vicky, for your question. This is Han, Zhihu CFO. In terms of the competitive landscape, we remain the leader in this segment. And while we have experienced competition from other big Internet companies, as well as some fluctuations in content creator numbers and the submissions, a significant number of content creators have returned to Zhihu notably, confirming that Zhihu provides the best environment for short story creators to thrive.

(spoken in foreign language) And I would like to share two points on our strategic plan.

(spoken in foreign language) Zhihu's excellence in short-formed story segment has been widely recognized. However, some view this negatively, as if the presence of stories on our platform dilutes the quality of our content library. So on this, we would like to share some insights.

We believe that literature itself is undeniable valuable content. After all, the Nobel Prize has a literature price and New York Times has a bestseller list of novels. But we have to conclude that by separating the display and distribution of story content from non-story content, we can provide better experience for users with different preferences.

The best libraries and bookstores globally also categorize fiction and nonfiction separately to enhance users' experience. Therefore, we launched the standalone Yanyan Stories app. Yanyan Stories achieved a nearly 40% quarter-over-quarter increase in MAU for Q1 2024, reaching millions of users. This segmentation allows us to optimize each domain for specific user preferences without affecting the experience of the other group of users.

(spoken in foreign language) Second of all, Zhihu's short story, "Zhibi" has become the most popular premium revenue-sharing drama on the market. The premium short drama "Zhibi", adapted from Zhihu's short story has achieved excellent market results, becoming the highest-revenue-sharing short drama to date. Its success has raised major leading platforms awareness of the value of Zhihu's short story copyright. Premium channels are approaching us for collaboration, further elevating the value of our IPs.

How should we understand short story IPs' value? So in our recent discussions with the academic community, they shared that short stories may represent the most advanced format of content evolution as they precisely and quickly showcase the latest aesthetic and value trends. Short stories may be as much as five years ahead of novels, which in turn are five years ahead of film and television production. We look forward to sharing more Zhihu IP content success stories with all of you in the future. Thank you for your question.

Fiona Fan, Jefferies.

(spoken in foreign language) Thanks, management, for taking my question. My question is about our marketing services. So I want to ask about our revenue outlook and our long-term strategy.

(spoken in foreign language) Thank you for your question. This is Wang Han, Zhihu CFO. As we mentioned in last quarter, Zhihu is committed to enhancing the community's trustworthiness even at the cost of sacrificing some short-term, low-quality revenue. As such, we proactively refined our commercial content and distribution mechanism resulting in an expected CCS decrease.

However, our brand advertising increased by 40% year over year during the non-peak seasons and performance advertising delivered the quarter-over-quarter growth compared to Q4 2023. For the rest of 2024, we will focus on improving performance advertising through enhancing AI and data infrastructure.

(spoken in foreign language) In long term, we believe that Zhihu's commercial potential should be assessed with Zhihu's brand premium instead of only focusing on in-platform traffic. Let's take an example, many emerging domestic 3C tech brands showcase their R&D technologies. And the principles on Zhihu, they believe that only on Zhihu can be popularize their technology in a sufficiently professional and in-depth approach and establish market awareness for new product categories. They even iterate and upgrade their products based on Zhihu's data and user feedback.

(spoken in foreign language) In the consumer industry, most products on the market are actually quite similar. The main difference is the level of investment in advertising and promotion. However, products that can earn a solid reputation among professional users within Zhihu community likely have a genuine competitive edge.

You might have seen phrases like "Zhihu High Praise" followed by the rest of the title or "Zhihu KOL" plus the rest of the title in many articles. These validate the trust premium and endorsement value of Zhihu's content compared to that of content from other Internet platforms. We are quite confident that in commercial area, Zhihu has great potential to further enhance brand credibility. Thank you for your question.

Thank you. That concludes today's question-and-answer session. At this time, I will turn the conference back to Yolanda for any additional closing remarks.

Thank you, operator. Thank you, all, once again for joining us today. If you have any further questions, please contact our IR team directly or Piacente Financial Communications. Thank you.

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