Q1 2020 Earnings Call
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Ladies and gentlemen, today's conference is scheduled to begin shortly teams continued to standby. Thank you for your patience.
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Ladies and gentlemen, thank you for standing by welcome to the first quarter 2020, cosmetics Inc. earnings Conference call.
This time, all participant lines on in listen only mode.
The speakers presentation, there will be a question and answer session.
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I would now like the hand, the topics over to your speaker today, pork sandwich, chief legal and privacy Officer. Please go ahead.
Good evening and welcome to Chromebooks first quarter 2020, <unk> financial results call.
Before we begin let me remind everyone. Today's discussion will contain forward looking statements based on our current assumptions expectations and beliefs, including expectations about future financial performance or results.
The anticipated impact of our key priorities on driving growth the timing of the rollout of Wells Fargo growth in F. I may use their monthly active users.
Your true ARPU or average revenue per user.
Expectations regarding adding new marketers and increasing marker spend in 2020.
The timing and evolution of our platform to provide self service.
Impacted kobin 19 on our business and the economy as a whole impact of our rise retained and return strategy and that sufficiency of our capital structure.
For a discussion of the specific risk factors that could cause our actual results could differ materially from today's discussion. Please refer to the risk factor section of the company's 10-Q for the quarter ending March 31st 2020, if we filed earlier today and in subsequent periodic reports that we filed with the Securities and Exchange Commission.
Also during this call we will discuss non-GAAP measures of our performance gas financial reconciliations and supplemental financial information are provided in the press release issued today and the 8-K that has been filed with the FCC.
Today's call is available via webcast and a replay will be available for two weeks.
You can find all the information I've just described on the Investor Relations section of Chromebooks Web site.
Please note that he supplemental presentation to our first quarter results has also been posted to our Investor Relations website.
Joining us on the call today is cosmetics leadership team, including CEO and co founder Scott Grimes, COO and co founder Lin low B and C F O Andy Christiansen.
Following their prepared remarks, well open the call to your questions.
With that let me turn the call over to Scott Grimes, Karlix, CEO and co founder Scott.
Thanks, Kirk and take you to everyone for joining us on our first quarter 2020 earnings conference call.
First we went to acknowledge that the past few months have presented unprecedent challenges around abroad and in the global economy. Our Hearts go out to those affected in card mix has been doing it's hard to help ensure health and safety ever employees in community.
When interfacing to the company has been working from home since early March I'm proud of working for adapting to the is to this evolving situation I mean any business continuity in moving this forward to reach our goals.
And of course, they particularly difficult time is a marketing company one of our real strengths as your digital channel is our ability to drive customers into brick and mortar stores and restaurants. Additionally, our ability to find premium travelers reached and be a digital banking provides a powerful marketing tool for the travel vertical.
But much of U.S., and UK and lock down consumer spending in our key verticals has been dramatically reduced billings from these verticals are down in sitting right away.
But our team remains positive about the future it despite the difficult nature of this crisis for advertising partners, we've seen encouraging signs in the business spending in these vertical jump is improving relative to April.
We're working closely with many marketers across all of her verticals to plan or we could help them restart their businesses. We can do this uniquely well do the nature of our channel our rich dataset and our ability to provide an immediate and profitable return a marketing investments. We're also excited about new client opportunities that have arisen the rapid disruption our economy, then we'll describe.
Our rides retain and return strategy in more detail.
Now, let's review first quarter results.
We delivered a solid first quarter with billings revenue and adjusted contribution in the upper half of our prior guidance here are some of the highlights.
Total billings for the first quarter were 67.8, $9, an increase of 16% year over year.
<unk> revenue, which is equal to bill instead of consumer incentives was $45.5 million up 26%.
Just a contribution was $20.4 million growing 16% year over year.
In the first quarter, we continue to grow the reach of our platform. We increased our average if I am it used to 140.8 million a 6% increase from the quarter and 30% from Q1 2019.
As we announced in our Q4 earnings call I May 15, 2020, My co founder Menlo B, we assumed the role of CEO.
Team our partners and our board are all excited for them to drive the next wave aggressive.
And she has done an exceptional job of keeping the company performing at a high level. During this unprecedented environment we're in.
I would continue to be closely involved with the company as executive Chairman Robbie focusing on the unit board of directors driving strategy and innovation in supporting and card mix in any way I can't I.
I'll now hand, the call oberland to provide greater detail and what we're seeing in our business men.
Thanks, Scott, while we're disappointed with the impacts the global pandemic is having a hard business, we see opportunity as we help our advertising partners through this environment.
Our key long term priorities of increasing the number of marketers working with us, bringing our solutions new industries are evolving the card, but its platform and continuing to demonstrate operating leverage in our business celebrating.
Today, I would like to focus on how we're helping our advertising clients navigate these extraordinary Todd.
From the beginning our business has been about driving Congress and the client facing severe slings and spend both up and down the value of purchase intelligence and our ability to reach the right consumer with cashback rewards is more important than it's ever been.
We have a three pronged strategy in place designed to help all of our clients during the cobot 19 crisis, what we call rights retain and return.
First there industries that have experienced a rise in category spending such as home fitness home entertainment streaming milk rapid delivery and direct to consumer E com.
Other industries are experiencing a rise in online spending, including groceries pet supplies office supplies sporting good and beauty.
All of these clients were providing a highly effective platform to acquire new customers and capture incremental fun.
Second we're working hard with France, you've experienced a boost in spend to help them retain the enormous amount of new customers. They just acquired.
We are very good it changing purchase behavior retailing grocery in particular have an opportunity to drive repeat behavior among their new customer base. So they stay with them, even when they pandemic and.
And third for those advertisers, who have been hit hard by drops and consumer spend and if pause there marketing we are using our analytics to help them understand when and where spend maybe coming back.
We believe we're well positioned to be these clients first back in as they returned to us when they read new marketing spend.
Here are few examples.
Tumors are spending more on industries, such as E Com and digital entertainment as a whole we've used our rights strategy to address the spend for a major telco company, helping them to attract new customers. During the pandemic, we drove 10% of all incremental subs for one of their programs in Q1 using our platform.
We continue to grow relationship with this important client by helping them bring in and then retained new customers.
For clients. He spoke is retaining their newly acquired customers, we're helping them defend their customer share gain.
By using our spend dashboard, we're helping a major online grocery player focused on last one time and light shoppers in regions, where operations have begun to stabilize each week, we expand targeting to include designated marketing areas that moved to the stable.
Finally for her clients you'd been hit, particularly hard by the pandemic, we're providing supports with insights flexibility and campaigns that reach consumers still spending in their category.
One of our larger clients paused all of their marketing spend at the end of Q1, except for some of the campaigns they run with us by targeting only consumers actively spending and their category. Our client is still able to provide bank rewards that gives consumers the savings they need right now in a way that doesn't set a dangerous precedent by encouraging consumers to go out of their home.
If they weren't already going.
And despite the spend declines in travel hospitality and many retail sectors. We continue to work hard to be good business partners to these clients. So there will be prepared to come out of the other side of this pandemic as well as they can.
We continue to move fast on the evolution of our platform well, it's challenging building new capabilities from home. The team has embraced a number of new tools and practices and we are confident we will deliver a basic version of our self service by Q3, providing new tools and capabilities for our sales team and Datas for agency.
Moving to the bank side of our business. We moved forward as planned on her wells Fargo launch, which is more than halfway complete and we continue to expect to reach 150 million F.I.N. They use acute you.
As we've said on prior calls we believe this scale places us on equal footing with other major U.S. advertising platform and provides a highly differentiated solution for marketers. We also recently announced a new five year agreement with U.S. bank to begin a phase March for customers.
Despite the challenging economic environment I am looking forward to taking over as CEO and they cookies and continuing to reach the goals that Scott and I set forth. When we started this company we are very glad to be able to help or advertising clients. During these challenging times and equally grateful that we can help or bank partners provide targeted rewards and savings that customers.
With that I will turn it over to answer.
Thanks Lynn.
First off it's a pleasure to join the conversation and help share our unique story and I'm very excited to continue contributing to the growth trajectory as hard Linux and my new role.
As Scott mentioned, we delivered solid first quarter results.
Were consistent with the guidance, we provided everyone in March but I first want to talk about our liquidity does that is top of mind for many of our investors.
Then I can cover Q1 results and discuss our approach to guidance.
We're comfortable that our current capitalization and liquidity will provide us the financial flexibility to fully whether the economic downturn triggered by covert 19 and continuous improvement strategic investments.
We ended the quarter with 102.2 million in cash compared to 104.5 billion in cash at the end of Q4.
We also continue to have access to our Undrawn air facility, which had a total availability of 40 million as of March 31st.
Well, there's a lot of near term uncertainty, we're focused on achieving or long term operational and financial goals I remain optimistic about seizing the opportunities in front of us.
Before I dive into the numbers I wanted to get everyone on the call a clear picture of how the quarter unfolded.
The economic disruption caused by Coven My team has been challenging for many of our customers you can clearly see the impact in our results.
For example year over year billings growth was 12% in January 32% in February and then declined to 5% growth in March as we talk consumer spending dropped precipitously as the nation closed stores.
We saw further deterioration of our consumer spending and are building in April and we expect to see the effects of cobot 19 in our results over the coming months, we're hopeful to see a measured bounce back as the world begins to reopen.
For the quarter billings increased 16% year over year to 67.8 million and revenue increased 26% year over year to 45.5.
Our U.S. revenue was up 28% year over year in Q1, and our UK revenue grew 18%.
Adjusted contribution was 20.4 million in the first quarter up 16% from the first quarter 2019.
Adjusted EBITDA was negative 4 million in the quarter compared to negative 3.2 million in Q1 at 2019.
But in the revenue softness in the back half of March.
As noted we're continuing to invest in our business through the pandemic, which alongside with the effects of the crisis may cause fluctuations in our EBITDA over the coming quarters.
ARPU during the first quarter was 32 cents down 3% year over year, primarily reflecting a 30% increase in and they use stemming from grows at chase and the Wells Fargo launch.
Average I may use grew from 108.5 million in the first quarter of 2019 to 140.8 million than the first quarter 2020.
We'd like to note as we did last quarter, the ARPU will likely experienced some pressure this year due to our and they you gross and as a reminder, we think and they you gross typically proceeds our topline growth.
Consistent with our recent commentary, we expect and they used to grow to 150 million. Once you fully launched wells Fargo and as Lynn mentioned this is on track to be completed in the second quarter.
We expect some additional I mean, you growth through the rest of the year for the natural maturation of our platform our ongoing efforts with outside partners and continued adoption of digital banking.
We had 26.8 million shares outstanding at the end of Q1.
Weighted average shares outstanding during the quarter was 26.7 million, which compares to weighted average shares outstanding of 22.5 million during Q1 at 29 gene.
Now onto guidance.
Given the unprecedented nature of this global health crisis, and its effect on both consumer spending and our advertising partners budgets.
We're unable to predict the effects on our business.
We're therefore, not providing Q2 guidance and our suspending our full year guidance until we have more visibility into the overall health of the economy.
The best Directionally can provide at this time is that we saw about a 50% year over year decline in billings and revenue in April.
In fact, our billings will increase as consumer spending returns and marketers worked restart their businesses.
Echoing Scotland, we're proud of our employees and the response to these difficult times.
Despite the challenging environment, we're encouraged by the progress of our business and continued to focus on achieving or long term goals.
Looking forward to the economy, beginning to reopen and the eventual economic recovery.
With that I'll hand, it back to Scott for his closing remarks before we open the call for questions Scott.
Thanks, Andy.
Q1 was is solid but difficult quarter, we've never been more excited about or opportunities for growth Bill we have strong momentum. Despite the global health care crisis, we're cautiously optimistic that we're through the worst part of the crisis, but we have plans in place to address any scenario.
You know founded the company within 12 years ago, and bringing the company to the point, where it is has been one of the greatest honors of my life.
Since this is my last earnings call a CEO I want to think all of the clients partners in investors to bleed minutes, we couldn't have done it without you.
I'm really excited about where men and the team, bringing the company going forward then in our proud of our teams in the workplace and the community.
And we continue to remain focused on their health and wellbeing.
That I'll open up the call for your questions.
Thank you.
As a reminder to ask the question you would need to press Star then one on your telephone to withdraw your question. Please press the pound key again that is star then one if you would like to ask a question.
Our first question comes on the line of Doug and with JP Morgan. Your line is now open.
Great. Thanks for taking the questions Ive to first just on the more recent color you talked about March up 5%, but then obviously the significant deterioration in April to down 50 can you help us understand.
Where you are now kind of off of that deep rule trawl as you as when the first half of May.
And then second you talked about the analytics dashboard that you rolled out just curious on if you could elaborate a little bit how you're using that for customers how much insight you're able to give them on in near real time basis, given your views into thinking courts Brendan. Thanks.
I'm going to take that question.
Question, then I'll let.
Any additional color.
Okay.
So that's where we actually did not.
Seven weeks ago it in a while it might lag a couple of days is a real time daily basis dashboard, where we are tracking at the geographic level, where spend is down an.
At the very detailed category level and so it's not a dashboard that we widely any given client, but we're using it to engage all of our clients whether they're in the right. We can gain or return bucket to help them understand what's happening in specific markets, what's happening with consumers, who are still going out spending in store what's happening.
We are spending online.
Happening there overall spend relative to the vertical in any particular area. So it has been.
We talked about the power purchase intelligence and if there was every time that hours really shining it.
We're engaging with all of our customers, even if they're not spending with us because we're helping them understand what's happening.
While we firmly believe we're going to be first second for many of them because we can spot and very granular level, where they should be spending. So it's a really cool dashboard happy to send you. Some examples of it and even happy if it's not just another question essentially Ah, but with that I'll turn it over to Andy to talk more about me, yes. Thanks Lynn.
It was pretty severely impacted by the initial reaction of the crisis consumer spending dropped pretty significantly starting in March and then we had once you advertisers pooling budgets across really across a lot of their channels.
In late May like tried to really kind of reassess their strategy. So April was definitely a tough tough month.
Our data has lagged about two weeks, but we have seen consumer spending stabilized since that kind of initial shock.
And the shape of the recovery in that.
It is really going to be similar to how we recover.
We're not providing any further guidance on Q2 specially made but we don't see as our billing will be press basically so long as we see depressed spend and businesses remain close but maybe it's a started reopened.
And we expect isn't the pickup in the back in the back half as that happens.
Yes.
Putting more color commentary, we do see it early indications.
And he is absolutely right when it comes back the advertisers come back.
I think we're well positioned to be first back in because we can call every advertiser.
The spend is coming back and coming back in these markets that we should be on.
You know what's interesting in.
Our Q1 guidance one of the reasons, we're conservative because we saw spin they'd be get into drop in the early markets like Hawaii Seattle.
And that's what made us nervous about what was happening in March the same we I think with you we have good visibility about maybe what's been happening as we go into recovery.
One of the thing that we're able to do so well to see this.
Is that we see where it was a spend is strong and where it's going and can adjust and pivot because we see it right and so as we see the spin.
Moving around between different industries as we see the spend recover in.
Areas that have been historical strength, what we're trying to position to be there at those times.
Great. Thank you appreciate the color.
Thank you. Our next question comes on the line of the Wall with Suntrust. Your line is now open.
Hi, This is a soccer author used to two questions. If I may want to will be changed environment have any effects on the dynamics between de consumer incentives at high share and then two can you expand on any vertical or industry exposure.
Last quarter I remember, there's discussion around refunds with specific travel advertisers are just wondering if we get an update on that as well. Thanks.
Sure Hey, this is Andy.
We're not expect any significant changes in the relationships between.
Our billings our revenue adjusted contribution we expect that no what you've seen.
Historically is what you know, we're kind of forecasting ourselves yeah moving forward.
No I don't know.
We know we did see obviously when you look back Q1 of 20 compared to Q1 of 19, you will see obviously, a little bit of noise because of the.
So it's just a reminder, that easy I those investments of enhancements consumer incentives that were made back and last year you really.
With the increase in our incentives and a reduction or if I share, but that is really been kind of that one period, where we saw a large like but sequentially for last couple of quarters, we've been relatively stable there.
And then.
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I can take that one as well sure yeah, we actually have not.
Engage in any material.
Billings relief for our clients, obviously, we work very closely with them to make sure that.
We're providing them the necessary return for their business, but we haven't seen any material.
Activities or.
Okay. Thanks, and is there any other color on just a vertical or industry exposure I know, it's been a little bit of time since Ah, yes, giving some color on that as well.
Sure.
I think historically right, we all kind of know that retail and restaurant really been a the biggest industries that we serve.
Obviously, we've seen a lot of newer verticals.
New industries, where we've moved into like a direct to consumer E Commerce travel and so we have gained additional exposure to to other industries overtime, but those restaurant and retail industries continues to be our largest.
Areas, obviously, a what's happening in travel its all apparent to us.
That that what you read out there is absolutely true that that is a tough place, but that's an area we've been making a lot of progress up until recently.
Okay. Thanks, that's all very helpful.
Thank you next question comes on the line of Chris Shutler with William Blair. Your line is now open.
Everyone. Thanks for taking my question hope that your own well.
First on expenses, maybe just if you give a little bit more detail on how you're managing expenses in the current environment.
And just looking at PNM it looks to me like if we exclude the F I share and exclude depreciation amortization.
You're running at about $29 million of Q1 operating expense, maybe just help us think through how.
Just thinking about that number over the course, the remainder of the year.
Under different scenarios like is that a good run rate number or should we expect to come down.
Yes.
Let me kind of answer it more.
Well standpoint, and then I'll, let you get into more detail, but from a philosophical standpoint right now we see this as a good opportunity for it in how we're spending.
So we are certainly not making any unexpected or unwinding.
Anything else right now, but we also see this as an opportunity to make smart investments.
People in hiring we are fortunate in that we had a strong balance sheet and not work from home and so we've not really missed a beat in terms of productivity in this company and many others and had to lay off an awful lot of talent and so we are very much. Let me at this is an opportunity to get talents that maybe wouldn't have taken our phone call six or nine.
Now and to Opportunistically fill in where we can so I would expect that our expenses. While this is still going on you know we're going to do a good job of making sure that we are below where you know where we've been in the past, but we're not trying to cut cost for save money aggressively.
Because we're doing it because its smart in this time and we're still hiring when we.
Yes.
Yeah, and really when when I look at the Opex trends, if you really kind of look at it acts on stock comp you get somewhere close to about 25.
And certainly as Lynn mentioned there are some a there is something that we are doing that you're going to see some natural kind of savings right from the incentive compensation travel and marketing has been suspended those types of things right, but when I look out into the outcome of the near term, we're not doing anything unnatural that would.
Really the store kind of our run rate of Opex.
And I think you know, we're actually trying to prove to be prudently investing during during the crisis. So that you know really you may not see a lot of movement.
At all in Opex, depending on how how much things come back right one of the difficult things to the model is the level of incentive compensation, that's going to be following our billings performance right. So you can kind of level a washing your firm natural things going on in some instances investments, but I would say by and large we would expect some small.
Kind of incremental Opex go through the new <unk> near future now that being said if it goes on for many many months second debt.
In terms given compensation, but for right now.
Okay. Thanks.
Okay and.
Well continue to follow.
I don't have the here in front of me I believe it would be.
Probably in the.
I was thinking the into the high single digits.
Hi single digit percentage.
Hi single digit million.
Gotcha.
Okay.
And then lastly, just a deal with with terrific partners. Just how are they a is is there anything different that you're doing with them and the current environment.
Well, obviously working very closely with all our partners basically can make sure that content is appropriate for the time. They are understandably concerned that they don't want to incentivize people going into stores when it's not say and so we've done a lot of work with each individually.
Yes, you come through the content make sure that we take out content wasn't already told many advertisers.
We've done a lot of mini westward in locations that for example drive here, where kick up option, what sort of have online auction at least on really Nathan program.
Inappropriate for the pandemic and our banks are actually really quite.
The way it would we've been able to do that and they're very much positioning it as it's a way for you to save money at a time when needed.
We have had one or two banks.
Really the board and using a health and try to identify for Kim healthcare workers or essential workers, you may still be spending to figure out a tricky lanky, we can help them. It in the very early stages.
But the banks are generally very supportive partners. During this time understanding that obviously opera content is falling I'm, just making sure that what we do have is.
Okay. Thanks, a lot.
Thank you.
Next question comes on the line of 10, well, even with Wells Fargo. Your line is now open.
Thanks, and good afternoon everybody.
A couple of quick questions. One is just going back a little bit to the engagement of the consumer with the F. I do you have any visibility into how that engagement and log ins et cetera look.
Over the last couple of months just sort of curious if you were seeing.
Consumers more frequently check for offers is I think as you just said when you know it's a way to save money in these times and so I'm just curious if there's anything that you could point to around the consumer and and the bank and that frequencies that that's interesting are worth pointing out over the last couple of months.
Yes, so first but we were tracking it very carefully we actually.
We have to dashboards that we're tracking very carefully when is the spend dashboard that we discussed earlier and then there's an engagement dashboard that we're looking at closely to help the banks I understand you know who is selling agent with the program who might not be and the main reason. We're doing that is there is a bucket of customers who were engaging that have fallen off and we have plans in place.
With the bank for when the content or should we assume that become really strong how do we get them back.
But importantly, while there's that bucket of consumers that have engaged.
Because they're just spending less and they're going online left.
There is a bucket of consumers, who are actually going online quite a bit more and those consumers are engaging quite frankly at higher levels than they were before that so in the n. net net engagement is about this thing if you look at it across the board like on a total percentage level, but you've got some who are engaging warn you.
Likely those who don't have a job right now who are engaging.
And you know again, another place where I'm optimistic the banks are working with us to say, how do we identify that they likely gotten their jobs back and remind them that we now have what other ways, helping save money when they have money.
So I hate to say, it's positive because obviously terrible situation, but it.
It had.
It is trends are very much in favor of our platform.
And what we see and that kind of spend that we drive and the direct benefits that we get.
Okay, Great and then second question I guess, just going back to sort of.
As the economy quote unquote reopens and spending do you [laughter]. It sounds like you expect your market urging or content providers to be a little bit more I guess reactionary once they see evidence that yes, whether it's in the state of Georgia or somewhere else that people are back out spend.
Thing again restaurant wise or other than they will I guess turned back on campaigns, where do you think that there's some.
Some aspect of your content providers that will utilize card, let acts as a sort of their strategy.
To be in the front of the consumers mind when those states reopened if that makes sense.
Well I can think about our free product strategy Ryan retain return for the right and retain category. We are actively working with them now and they are ahead of the curve. So I'll go to that online. Grocer example, that I use we are sitting down with them every week and we're saying what they are starting to show or even DNA or starting.
Do you show signs of recovery and they have their campaign in even before the recovery is only happen. So that's the first time that consumers actually going to say a family, though you know do some online grocery shopping or you know due to store shopping even their stuff is there so for the rise in retain category, they're being very proactive, but it's mainly be.
Because the spend has gone to them and they're trying to make sure they retain that Ben as everything else recovers for the return clients I'm sure, it's going to be a bit of though but for many of the return clients. I think we will not going to guarantee that's what I'm going to confidently tell you I think we'll be first back on for many of them and the first place where they start.
It's been marketing dollars when they start to spend marketing dollars, but they are certainly being a little bit more cautious, particularly because they don't want to set a precedent of advertising people to come in stores and it's not yet.
No.
So it's very different than the rising returns categories, where they're much more incenting the online purchases this live repurchases.
Option purchases you know better.
Excellent.
That's all I had thanks very much.
Thank you. Our next question comes on the line of Josh Beck with Keybanc capital markets. Your line is now open.
Thank you for the question Im glad to hear everyone is doing well.
Yeah, I just wanted to ask.
A bit more from the API side has there been much of a.
Impact on C checks and how they're thinking about the importance of online banking and also the associated implementation, obviously, they're reprioritizing things internally quite a bit. So im just wondering have you seen any change in you know the importance of your type.
Oh solution from the five point of view.
Well I mean.
Here's what I would point to the Wells Fargo launch remains on track in the mid to make level pandemic, which I think is.
Fairly telling.
You asked bank and we announced in the last quarter earnings call is Ford heavily and has very aggressive timeline, which I'm not going to share I don't know still make them or not but very aggressive timeline from their perspective.
So I think you know.
Look if it's a good program it drives good bank and bank behavior bank customer behavior and at a time when people are trying to save money at the paper performance channel for marketers again like I said I hate to say that pandemic is playing in our favor, but its playing in our favor.
Yeah, I think thats really consistent at least how banks are thinking about the importance of digital.
Some of the comments, we've heard from them on their earnings call. So so that makes a lot of so.
Maybe you mentioned that but.
So there were some early signs.
I realize it's very early.
Of spend coming back and I'm, just wondering if there's any other.
Color you can provide either you know within a certain vertical or any other way to double click and provide a bit more color on about a comment.
Sure happy to so probably the most tangible example, Georgia is one of the first date that has opened up and we all happen to live in Georgia. So we are watching that pretty closely in Georgia, we have seen an uptick in spend in just about every category with the exception of travel that it's still pretty down, but you know restaurant.
Reopened a week and a half ago and we're already seeing it noticeable.
Level in Georgia terms and the impact on sensing now.
So now we're watching you know the impacts another state as they start to return, but like I said, the only place I believe correct me if I'm wrong right. That's the only place where we had not starting to see signs are they coming back in states that have opened its travel and it's still pretty down there.
Okay very helpful. Thank you.
Thank you. Our next question comes on the line of Aaron Kessler with Raymond James Your line is now open.
Great. Thanks, a couple of questions. Maybe just first on E. Commerce, obviously lot of consumers have shifted more towards ecommerce curious maybe how you benefit from that shifted the contracts work. The same if a consumer purchases on E commerce versus.
Store and there are many advertisers pause just because they're getting me a lot of organic traffic right now obviously grocers.
One example is getting more organic traffic I may not need to advertisers much. Thank you.
Yeah, I mean, so we have had a few advertisers paused because they don't meet the traffic right now whether it's a combination of they don't have the supply chain ready in their stores or they just don't have the staff and the people will handle the volume we have had some advertisers thought because it's too much versus not.
Uh huh.
Well that plays right into our retained strategy right. They were saying you know an enormous ups wells in certain areas and we're going to be there to help them retain those customers and enriching that market share. So that is definitely one of the what are the three prongs, absolutely you know ecommerce at big spring, whereas where a lot of our largest advertisement uses so what we what we apply.
Now on is that when somebody is a customer of retail store and also ecommerce customer your overall spend with the brand to eggs and so where we've been doing a lot of work wait before the pandemic. It. It's how do we make your brick and mortar customers also your E commerce customers, it's an even more powerful time to be doing that now and well.
We're being very importantly names there.
As it.
Got it monkeys me quickly comment on for restaurants me the QSR is versus the more dine in restaurants minor differences that you're seeing there.
No it off the top of my head.
Everybody's telling me QSR [laughter], probably because of the drive through options. So.
Yes there.
None of them I guess.
Don't make us a slightly less but obviously I think all restaurant generals, yeah trying trying to adapt.
Got a great. Thank you.
Thank you as a reminder to ask the question you only need to press Star then one on your telephone.
Our next question comes from the line of chasing fire with crack along your line is now open.
Great. Thanks for taking the questions. Just a question just what the consumer side of things a little bit slower right. Now are you seeing any opportunities to like accelerate the R&D pipeline internally or potentially accelerate things that you do with the financial institution to get kind of updated platforms pushed out to them quicker than you would've thought.
It's a great [laughter], we are doing our best to accelerate our product road map. The road map itself is it.
But accelerate the timeline.
It is challenging building things working from home.
So we've had to go out to place a new tools to help make that happen remotely on those tools are deployed so what I would say is we are we continue to remain remain very confident that we will for example, deliver a self service tool for the back half akin to what our ability or fight back half of 20 point our ability to accelerate.
It is still being tested we very honest with you.
Don't underestimate how hard just to get the developer.
Oh coding together at one virtually but we're still confident and moving forward at best and.
I'll behind you just not you may not just be able to accelerate though.
Sure Fair enough and obviously you guys have access to a lot of data you shared some of that with us last quarter, but you know you're seeing some states that never went into sheltering orders. Other states have already open things up and you just commented on some of that but is there any timeline towards those volume.
Bouncing back that you've seen whether it be are getting those states that didn't go into sheltering or all like you know your home state. It did that open up pretty quickly was found accelerating or was there any delay there.
You know I mean, I can go up what I know the top of my head like I said in Georgia.
I thought in less than a weekend in terms of QSR in restaurants, then starting back up so did not take long other states you never really had a sheltering play on there.
There are spending so.
Pretty significantly I don't think you see a material difference between now not having a formal shelter and their spend impact I think they were all down pretty equally it's the recovery I think that it's going to be very different by state.
Okay and just the last one I know, there's obviously there remains a focus in bringing an advertiser just wondering what those sales cycles are like right. Now you know what are you engaging with those people in it are you, making productive progress towards agreements or or is that tough to.
Combined this kind of an environment.
You know again, it's another place where we're really advantage our clients, even if they're not spending with us want to talk to us because we have this amazing inside that nobody else on the planet Huh, which is where our people starting to spend how can we get in front of it and how can we get ahead of it. So if our head of sales were on this call. He would tell you that our phones or anything.
As much as they ever were if not more with people who want her insights which is why we're pretty confident that we're going to be first back on for those not shut off and for those who haven't many of those rise and retain customers that I talked about our brand new customers, they weren't spending with us and coupons.
And then I think it's probably fair to say, we have more senior relationships to.
Great insights didn't get senior people really trying to get their arms around three point, that's a great point, we had seen you're not a lot of her relationship.
So.
I don't you know again, we were down 50% in April I want to be clear, but we are really really optimistic that.
Things are moving in our favor and it's been a pretty pretty good way.
I appreciate the color. Thank you.
Thank you. Our next question comes from the line of Nat Schindler with Bank of America. Your line is now open.
Yes, Hi, I'm, sorry chance you could kind of detailed maybe remind us what the breakdown by industry. Your advertisers fell into kind of let's say at the end of 2019, and then as you look at our you're making them out of common. So travel hasn't returned is aware that you can kind of.
Predict where those are going to go in Q2 out as we hit these got away through these bottom.
Yeah. Thanks now this is Andy.
So yeah, we provided in the past I think a little bit of color around retail and restaurant really being our largest industries and out certainly coming into this we've been making a lot of progress and the travel space and we we've seen.
You know the a significant decline there and really I've not seen any any material bounce in travel.
So that's really obviously hard to predict when that may come back, but that was that was obviously a little bit smaller industry than than say retail restaurant left that's about as much.
Well on the Industrys everywhere.
Okay. Thank you.
Thank you. This concludes today's question and answer session I would now like to turn the call backup that Guam cycles and remark.
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Yeah, right first of all the for joining the call today won certainly challenging times, we continued to be Super impressed with how our team is operating draw. This.
And.
Well I feel is weird to say it I think the company's probably that's best position ever and really well position to grow I think as much to realize also this is my last earnings call as CEO.
I think it's Richard Simon It was time for the company to upgrade the talent as CEO and CFO and Oh, we've done that would mean and Andy and I couldn't imagine the company being better hands. So.
Thank you, everyone, who supported us over the past.
A few years and we're really excited about what's coming over the next few years.
Thanks, everybody.
Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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