Q1 2021 ChannelAdvisor Corp Earnings Call

Good day and thank you for standing by welcome to the Q1 2021 channel advisor earnings Conference call.

And this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session and I ask that question. During the session you will need the breadth of star one on your telephone.

Part of any further assistance please press star zero.

And I'd like to hand, the conference over to you on speaker today, Raiford Garrabrant director of Investor Relations. Sir. Please go ahead.

Thank you Adam and good morning, everyone and welcome to Channel Advisors Conference call for the first quarter of 2021.

With me on the call today are David Spitz Channel Advisors, Chief Executive Officer.

That's the Gavea channel advisor Chief operating officer, Enbridge corner of the channel Advisors Chief Financial Officer.

This morning, we issued a press release with details on our first quarter 2021 performance as well as our outlook for the second quarter of 2021.

This press release can be accessed on the Investor Relations section of our website.

They are the channel advisor Dot com.

In addition, this call is being reported and a replay will be available after the conclusion of the call.

During today's call, we will make statements related to our business that may be considered forward looking under federal securities laws.

These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date.

We disclaim any obligation to update any forward looking statements or outlook.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.

These risks are summarized on the press release that we issued today.

For further discussion of the material risks and other important factors that could affect our actual results. Please.

Refer to those contained on our most recent form 10-Q as well as our other filings which are available on the SEC's website at SEC Gov.

During the course of today's call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA, which excludes depreciation and amortization income tax expense interest stock based compensation and for 2020, one and only.

And the acquisition related contingent consideration fair value adjustments.

We also refer to the related measure of adjusted EBITDA margin, which is calculated as adjusted EBITDA divided by our revenue.

As well as free cash flow, which is operating cash flows less purchases of equipment and capitalized software development costs.

Our press release that we issued today includes GAAP to non-GAAP reconciliations for gross profit gross margin operating expenses operating income operating margin adjusted EBITDA non-GAAP net income and free cash flow. We also provide of GAAP to non-GAAP reconciliation schedule and our supplemental financial presentation posted on the <unk>.

Rest of relations section of our website.

Finally at times, and our prepared comments or responses to analyst questions. We may offer metrics that are incremental to our usual presentation to provide.

The greater insight and.

And two the dynamics of our business or our quarterly results. Please be advised that we may or may not continue to provide this additional detail and the future with that let me turn the call over to David.

Thanks Raiford.

Q1 marks another quarter of accelerating revenue growth strong profitability product innovation and significant progress against our strategy to expand our business with brands with broad momentum across virtually every area of our business and the best revenue growth we've seen since 2015.

With continued strong sales execution fantastic customer retention and expansion and continued ecommerce films, we delivered revenue and adjusted EBITDA and that both significantly exceeded our guidance for the quarter.

I'd like to touch on a few highlights all of which keep us very bullish about our outlook.

First on top of continued G N V and variable revenue strength. Our continued strong execution produced the third consecutive quarter of accelerating total revenue growth to 22% year on year and subscription revenue growth of 17% year on year base.

Based on the strong trends, we've seen and sales and revenue retention, we're increasing our expectation for year on year subscription revenue growth to the upper teens for the second quarter we've.

We view accelerating growth and subscription revenues is an important indicator of the underlying strength of our business as the year on year comparisons of Dnb and variable revenue and the second quarter and the rest of the year will be harder as we lap the effects of COVID-19.

Having said that <unk> growth was very strong and the first quarter of 56% year on year accelerating in March and G&P volumes remained elevated through April and.

So there are early indications that ecommerce spending has remained robust despite entering a period of tougher year on year comps in Q2.

Second our focus on brands also contributed to the acceleration and our revenue in Q1 revenue from brands increased 39% year on year, a significant acceleration from the 27% year on year growth we achieved in Q4.

Brands represented 36 per cent of our total revenue for the quarter and 42 per cent of our subscription revenue.

We believe that the superior unit economics, we enjoy with brands will continue to positively benefit our long term financial performance as they grow to represent a larger proportion of our customer base.

Third the momentum created by our sales and services team and 2020 strengthened and the first quarter, helping us achieve our highest net bookings on our history evidenced in part by a record sequential increase and deferred revenue and the quarter.

Much of this was driven by record levels of new logo and expansion activity with brands, which continued to represent the substantial majority of our bookings. Additionally.

Additionally, the efforts of our services team and our platform enhancements have yielded outstanding improvements and overall customer retention and recent quarters for.

For example, dollar churn and the last couple of quarters has been cut nearly in half compared to the levels. We typically saw just a couple of years ago.

As we plan to continue to invest and product innovation enhance our services and grow our brand customer base, we expect to see ongoing strength in this area.

Fourth we've continued to invest heavily and our platform to deliver value and innovation for our customers. For example, we are aggressively expanding our breath of supported channels globally and expect to increase the number of supported marketplaces by nearly 80 by the middle of 2022.

And this matters because of this long tail of marketplaces, comprising channels like the lando target plus shopify and well over 100, others continue to grow aggregate GMP and our platform of triple digit rates year on year, and the first quarter and the offer our customers a broadening array of ways to reach consumers.

Lastly, even as we lean in and increased our growth investments across sales services and product our financial model has delivered a large percentage of incremental revenue to the bottom line.

Year on year adjusted EBITDA for the first quarter was up more than 40 per cent and operating cash flow was up 46% and above even our seasonally strong Q4.

And I emphasize however that as we see continued opportunity and strength of our business. We expect to continue to invest aggressively and our growth initiatives and intend to invest virtually all of our incremental revenue this year into those opportunities we.

We have had a very strong balance sheet solid cash flows and profitability and our focus is on leveraging that strength to drive continued growth to serve our customers as they seek to accelerate their digital plans.

Speaking of customers, we continue to see a nice balance of of new logos and expansions with existing customers.

And Q1, we added notable new customers, including Fitbit few Sonic John West food, Fisler and strategic partner authentic brands group and we expanded our relationship with existing customers like Dockers service, Tumblr Shiseido and get a b.

And finally I'd like to highlight a few recent organizational changes.

First we're pleased to welcome Linda Crawford to our board of Directors Linda was previously executive Vice President and CEO of sales cloud products at Salesforce Dot com.

Oh of help shift and chief revenue officer, and optimize leap as well as a member of the board of directors of demand where with her background. Linda brings over two decades of go to market leadership experience to channel advisor given her credentials as a respected business leader and the software industry, Linda will provide valuable strategic insight to our board and we're excited to welcome first of the channel advisor.

Secondly, and thrilled to congratulate Paul Colucci on his promotion to Chief revenue Officer.

Paul has been with us since 2008, and a variety of sales leadership roles and and the last two years has led a significant improvement and our U S and EMEA sales operations as we posted record results in these regions and recent quarters with this promotion Paul assumes responsibility for Asia Pacific and is now responsible for our global sales and business development function.

And increase and based on global customers and partners, including many with expansion plans and Asia Pacific. We think this is the right time to consolidate our sales leadership under Paul and I cannot think of anyone more deserving of the role so congratulations Paul.

Lastly, I'd also like to say, thank you to Diana Allen, Our General Counsel, who as we previously announced will be transitioning to a senior advisory role on June one day, and that's been a key member of the executive team and a trusted partner since 2014, who has executed her role of the plant for the last seven years as we transitioned from a newly minted and public company to a more mature opera.

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We and I are grateful for her many contributions.

Also excited to welcome Diane the successor, Kathy <unk> as our New General Counsel also effective June <unk>.

He has deep experience of the legal field has been general counsel for several companies and also has substantial experience and the software industry.

Diana will remain a senior advisor for the foreseeable future. So we're confident the will enjoy a smooth transition and our legal function over the next number of months. So Kathy welcome to the team and we look forward to your contributions and with that I'll turn it over to Beth.

Thank you, David and good morning, everyone and sales.

Pleased to be able to report the Q1 was another stellar quarter for us continuing the positive momentum we saw sales of across 2020.

On the customer retention and expansion of side of things. The results remained strong we mentioned last quarter that true measured in dollars was the best and seven years and we maintain a similar performance level again this quarter.

Turning to expansion of our account managers did a terrific job leveraging our understanding of client needs and collaborating with our sales team to drive a record level of new business with existing customers. This is a testament to the numerous ways and which channel advisor is helping customers achieve the online commerce KOL expansion and improve retention are important and dry.

Of course of sustained growth and we're super excited about the trajectory.

This improvement is rooted and actions we've taken control of the customer experience with more initiatives underway.

In addition sustained focus on helping our newest customers on board effectively and realize their ecommerce objective. We have now launched a new strategic initiative called the enterprise level of service, which we highlighted last quarter.

Our success and attracting large global brand customers has created the average entity to expand our business and increase our depth of engagement and cultivate stickier relationship.

With this initiative, we are enhancing our ability to serve their needs and making meaningful investments across the services organization, we are increasing coverage and our account management and managed services team to enable us to go deeper with customers and we are adding new roles to create customized solutions managed accelerated kind of expansion plans and provide enhanced guidance.

The cross channel strategy, we've completed the staffing of this new team and launched our first cohort of customers. We plan to continue to deploy this new service level to more customers and Q2.

Let me now share and innovation update regarding new platform capabilities. We've recently released.

Enabling brands to accelerate their digital transformation and achieve their ecommerce objectives remains of our clear priority and last quarter, we shared our plan to significantly expand our breath of support of channel. Many of our customers are telling us they'll add channels as fast as we can enable them.

As a result, we intend to add at least 80 channels by midyear 2020, we got off to a fast start and Q1, adding integrations for 28, new level channel, including 22 in the marketplaces like Amazon, Poland back market U K, NBC, Universal checkout, and Orlando, and the Czech Republic, and Ireland and.

Six new or expanded first party dropship connection with Aldi, and Germany, Best buy Canada tractor supply wave there and Zach on.

We were also busy on the people of France drive this initiative selling many of the positions across the business development product management engineering and services to enable speed of integration and on boarding as well as ongoing support of client.

While this initiative is still on the early stages, the customer responses and encouraging and it's already and moves the needle on bookings.

And our recent case study of available on our website demonstrates how expanding our reach with more channel connections can help drive growth of our brands.

On the Danish fashion brand selling on the land overcame a clear priority and launching the marketplace on their own presented technical concerns notes reported challenges with the level of detail required which made meaning the marketplaces requirements difficult without automation and the.

And the customer also wanted to launch additional channels quickly and accurately and their words with and aggressive marketplace growth plan and channel of either offered the best solution for connecting us to multiple marketplaces as one data hub, while at the same time easing the burdens of daily operations and management after going live in 2020. The result was more than double.

And of sales on Blando and overall performance of almost three times of internal goal now lets now plans to expand to five more and marketplaces across multiple regions.

Our product development and also focus on generating insights to enhance analytics and optimizing success on and across channel and improving the client experience and Q1, we launched third party of stellar analysis on new brand analytics premium feature that allows brands to optimize and support for their retail networks by monitoring the third party seller.

Per client on marketplaces.

You may recall that we acquired Laborde and July of 2020, and this is the second major new capability, we have launched and the first nine months after that acquisition.

Retail advertising continues to be of necessity to generate visibility and compete on marketplaces to help Walmart Sellers' day valuable time and resources by managing the advertising campaigns and the same platform and fair listing channel. Neither now offers powerful automation reporting and campaign management tools for Walmart and connect.

To summarize and Q1, we continued to build on the progress we made in 2020, and we are pushing forward rapidly with new initiatives like our enhanced enterprise level of service and our accelerated marketplace expansion and Q&A of a customer success.

Based on our execution and performance to date combined with getting a fast start on these exciting initiatives for 2021, we believe we are positioned for more good things to come.

With that I'll pass it to rich now to provide a more detailed update on our financial performance rich.

Thank you Beth and good morning, everyone.

Coming into Q1, we felt optimistic about the quarter and the year ahead, given the momentum we saw on the business and the back half of 2020.

And Q1 results exceeded even those optimistic expectations with outstanding financial results record net bookings performance and a strong start to implementing the growth investments. We made we spoke about on our last earnings call.

Continued strength and sales along with excellent customer retention, especially with brands led to the third consecutive quarter of acceleration and subscription revenue growth.

And Paul of the exceptional <unk> and variable revenue performance in Q4, GMP volumes remained strong and Q1 and accelerated in March as.

As a result of the strength and both subscription and variable revenue total revenue and adjusted EBITDA, both meaningfully exceeded the guidance we provided in February and free cash flow for the quarter with the second highest ever achieved in our history.

So let's dig into the numbers.

Total revenue reached $39 $2 million and the first quarter up 22% year over year.

This represents the best year over year growth rate since 2015.

In fact, Q1 revenue was only slightly lower than Q4.

Which represents strong performance compared to the sequential declines we typically see following the seasonally strong Q4 holiday quarter.

Subscription revenue reached another record at $33 million for the first quarter.

Representing an increase of 17% year over year.

The rapid acceleration and subscription revenue growth, we have experienced over the last year highlights. The success. We have achieved from the investments we made and our sales organization in late 2019, and early 2020, the tremendous progress we've made with customer expansion and retention and our services organization and the benefits of continued.

That form of innovation.

Variable revenue during the quarter totaled $8 9 million, representing an increase of 43% from the year ago period.

This was once again driven by broad based year on year growth of G. M D and E. Commerce spending showed continued strength in the quarter.

And as David mentioned strong GMP volumes continued into April, indicating ongoing strength and e-commerce spending.

David provided some financial results earlier specific to our brands customers and I'm also like the highlight the outstanding growth, we have seen and subscription revenue from brands, which increased 42% year over year.

In addition brand subscription revenue represented 42% of our total subscription revenue and Q1, which was up 700 basis points and the prior year period.

Lastly over the previous 12 months, we have increased net brand customer count by 46% and average revenue per brand customer has remained significantly higher than retail customers.

As every quarter passes we continue to emphasize and the financial results of shown how brands are becoming a more significant piece of our business.

And we believe that all of this progress along with the strategic investments, we're making and 2021 to support our brands focus provides line of sight to achieving our stated goal of greater than 50% of our total revenue coming from brands by the end of 2022.

Moving on to profitability performance.

Adjusted EBITDA increased 41% year over year to $9 2 million for the quarter generating.

And adjusted EBITDA margin of 23% for Q1.

And the strategic investments, we have made and our product and our services organization as well as incremental investment and sales began to show and our operating expenses during Q1, and we expect a steady increase and expenses throughout the year as we plan to continue to invest aggressively and support of our stronger growth outlook.

More on this in a moment.

And it's important to remind everyone that some of our improved profitability is a result of expense savings such as for travel and conferences that we would not expect to continue as we emerge from the pandemic.

Now turning to the balance sheet.

We had another remarkable quarter of cash generation during Q1 with cash and cash equivalents, finishing at $82 4 million, representing an increase of $10 8 million sequentially and $26 million year over year.

We also saw deferred revenue increase at the highest rate ever of two.

$2 $6 million sequentially, and up $6 $1 million year over year, driven by the strong net bookings performance we highlighted earlier.

And we have shown for an extended period now even with meaningful investments and our sales organization as well as the strategic investments, we have begun to make and our product and services organization.

We have successfully managed our expense profile and continued to achieve profitable growth.

However, on the growth outlook improves and we see a number of opportunities to invest further in support of that growth to that and in addition to the investment commitments of at least $11 million and 2021, we highlighted last quarter, we plan to aggressively reinvest back into our business. Most if not all of the incremental revenue.

And we generated in 2021, focusing on areas such as sales global services and support and ongoing platform investments.

Consistent with our message and February we believe it is advantageous to keep our foot on the gas and expand upon our investment cycle in 2021 with the goal of accelerating product innovation further improving customer retention and supporting top line growth.

Now for our financial outlook.

While overall of GMP levels have remained elevated.

And it's difficult to forecast D N V and variable revenue with any real precision.

Therefore, we are not providing and financial outlook beyond Q2.

So for the second quarter of 2021, we are issuing of revenue outlook range of between $39 8 million and $42 million and and adjusted EBITDA range of between seven and 7 million and $8 $1 million.

And it's important to note that our Q2 outlook reflect subscription revenue growth over the prior year in the upper teens as well as the incremental investments and Opex I spoke of earlier of at least $5 million for the quarter.

We expect the strong growth in subscription revenue to be partially offset by a modest decline and variable revenue and the second quarter due to the difficult comparison to the surge and D&B. We had last Q2, although we did see double digit <unk> growth. This April compared to April 2020.

Additionally, while we are not providing full year guidance, considering our investments designed to support continued growth as well as an expected increase in expenses this year compared to last year such as for travel we anticipate that adjusted EBITDA for the full year 2021 will likely be lower than the full year 2020.

But we are also increasing our estimate for full year subscription revenue growth from low double digits to mid teens, given the strong net bookings performance. We achieved in Q1 and continued to see and early Q2 with potential upside if the performance continues and.

In short our revenue growth has strengthened considerably and our continued investments are designed to maintain this momentum.

And closing Q1 represented another quarter of fantastic execution across all areas of the business leading to record financial results and of promising outlook for the remainder of 2021 and beyond.

Moving forward, we plan to continue to focus on sustained revenue growth and and.

And investing strategically in our product and and our people on <unk>.

Still maintaining healthy margins and strong cash flow.

I will now pass the call back to David for some final remarks.

Thanks, Rich 2021 is off to a terrific start for channel visor is our strong execution has enabled us to capitalize on the large and Underpenetrated opportunity. We believe is in front of us the lasting impacts of the COVID-19 pandemic have ushered in a new era of e-commerce and strong tailwind for our business and our strategy of empowering brands digital transformation is.

The pay offs and we remain excited about our growth prospects going forward.

Finally, I'd like to close by thanking every one of our employees around the world for stepping up to the challenge and once again delivering exceptional results for the quarter you often hear me say that this is our time and you've demonstrated that it certainly is so thank you and with that operator, we'll open up the call to questions.

Thank you Sir as a reminder to ask the question you will need the press the star one on your telephone to withdraw your question press the pound key.

The reserve time and to enable everyone on the cost of participate please see meter periods to one question and one follow up.

And our first question comes from the line of Ryan Macdonald from Needham Your line is open.

Yes, good morning, David Beth and a rich congrats on a great start to the year.

The first question for me really around the the GMB trends that you're talking about obviously a really impressive.

The first quarter with the acceleration of March, but maybe even more so the double digits that youre seeing in April.

And how you're thinking about sort of what that flow could potentially look like in the second quarter here given that that's where you start to hit the tough comps, but also realizing now that the Amazon appears to be setting of Prime day potentially for late second quarter I would just love your thinking about how youre approaching the outlook for <unk>.

Thanks.

Hey, Ryan and I'll make some qualitative comments and then rich may have some debt.

So it's as I said on my remarks, we continue to see strong E. Commerce volumes, we did see double digit growth in April.

And lastly, if I look back at last year, we started to see <unk> accelerate towards the end of last March and then in April as you know we had the first round of stimulus last year and so.

If I if I were to sort of characterize the shape of April I would say the growth was stronger in the early part of April year on year, because it was sort of.

Free the stimulus checks compared to last year.

And then a little bit slower in the back half of April although still still saw the saw growth. So so to me that's pretty bullish the fact that towards the towards the end of April we were still seeing solid year over year growth.

I think is a positive indicator now may of last year. It was was actually our strongest.

I believe it was our strongest growth months.

Last year in terms of at least pre Q4, and so whether whether we see that strength continued through this may is frankly hard to say right I mean, there's.

The uncertainty around various stimulus programs Theres, just a lot of moving pieces in terms of the economy and consumer strength and all of that but.

I think.

I expect that <unk> will remain solid I think.

Just a question of how strong.

Rich I don't know if you have anything to add to that relates to the guidance.

Sure. So the only thing I'll mention the obviously Ryan he focused on the fact of how Q2 will be a tough comp a valuable revenue last year was up 88% year over year and the the.

The quarters that followed ranged and the in the 40% range.

But we mentioned on the on the last couple of calls.

The variability in any given quarter.

The rate of <unk>, how the way your converts to revenue it really does depend on customer mix. So every quarter that passes GMB doesn't.

Absolutely correlate to two variable revenue performance, but if you look at it.

The outlook that we put out there.

And the midpoint of about $40 million.

Subscription revenue up and the high teens.

You would.

And the numbers you would you would generate variable revenue.

Most of the $10 million around that range and that would still represent about 10% or roughly $1 million increase over Q1 and.

And it represents nearly $2 million over Q3 of last year. So again, we continue to see.

Growth across subscription revenue, which is where we're focused on and the jumped from from 8% growth in Q4 to 17% and Q1 really really.

And really sparked a lot of excitement here.

The company and.

And Ryan one thing I'll add to that is that long tail of of marketplace's rate continues to be of increasing importance to us so as.

As I mentioned in Q1 grew again at triple digit rates and as I've said in previous quarters.

<unk> started to eclipse, our other larger channels and aggregate GMB. So.

To the extent, we see continued strength on that on that long tail.

That is a nice tailwind for us and of course, we are adding significantly.

Significantly to the to the number of supported marketplaces over the next 12 to 18 months. So so that's a really interesting story for us and I think is a nice diversified source of GMB strength.

And that's great.

Helpful. And then on my second question is really around the incremental investments planned for the remainder of the year clearly the investments you've made over the past 12 to 18 months of really started the bear fruit really nicely with the strong billing, but can you help me understand where you think you can get the extra sort of incremental value in terms of return on that investment.

And whether it's between.

And increasing sales capacity and expanding coverage versus maybe some account management adds or or is this more going to be focused on sort of R&D and innovation spend thanks.

Yes, that's of Great question, and I would say the answer is all of the above we would expect to continue to increase sales capacity.

As we prepare for 2022.

There are multiple areas of investments on the post sales side and our services organization, because we continue to grow our customer base. We continue to sign large strategic global brands that are the.

And the need help and they need help and different areas of the world and we think that we can accelerate those those plans with those customers by increasing.

The increasing our services capacity and then of course last but definitely not least is on the R&D side.

Theres, just a lot of opportunity for us to continue to innovate and deliver value for customers. So I would say, it's really it's really and all of those areas, where we see opportunities to invest and maintain the momentum we've got.

Excellent.

And congrats again on a great quarter.

Thank you Brian.

Yeah.

Our next question comes from the line of Zach Cummins from B Riley Your line is open.

Yeah, Hi, good morning, David Rich and death, and it's nice to speak with you and and congrats on the strong start to the year.

Richard I just wanted to ask around the subscription growth guidance that you gave for the full year and I mean, we're kind of seeing that sustained a high teens growth going into Q2, but just given the full year outlook. It implies a little bit of a deceleration on the second half so.

Just hoping you could kind of.

Be able to kind of speak to some of the dynamics. There that maybe you would see a little bit of a slowdown and in the second half of the year versus the growth that we're going to see here and the first half.

Sure sure it's of Great question, So yeah.

Yeah.

Just keep in mind that our comps get a little bit more difficult in Q3 and Q4, given the fact that.

We.

Of the customers.

Sure absolutely. Thank you for the questions that you know we've focused on our first quarter efforts on putting the team and place and getting all of our communications and and job growth defined and all of the execution pieces and place and then and late March we began launching the new level of of service to customers.

So we have had you know direct conversations with our customers to share with them and the new structure that will be supporting them and to introduce their incremental resources and the response from customers have been really wonderful. It's also been collaborative customers are getting very excited about the concept of of solution architect now working with them proactive.

The late to optimize the integrations with channel of either and look for ways to make that more efficient and look for additional ways to capitalize on those integrations and it's just one example, so we're directly collaborating with customers to even iterate on the concept as we deploy him.

And as you mentioned, we will finished appointment as we execute true Q too. So our plan is to the on board. The plan set of customers for this year and the next couple of months. So you know we have additional thoughts around how we can continue to scale of the organization as we continue to win additional large fran.

So you know we're planning for the second half for additional investment to continue to scale out of this capability, but really strong start to the year and our execution that I couldn't be prouder of the team.

Understood and and the final question for me, David and just focused around the strength and you were saying with brands of.

<unk> and if there's any one particular area that you know you can point and for the strength.

And there's a lot of the growth being driven by the expansion on the new market places out of different capabilities of just be curious to hear and put on that.

Yeah, I think it's marketplaces, certainly one of them. The the fundamental theme here is the for for a number of years now brands of scene digital of transforming the way they reach consumers and and just really changing the paths of the consumer and of course of the last year just was the significant catalysts to accelerate those plants.

Traditional retail will shut down and and consumer behavior and it made of stuff on some change towards the towards digital. So so we really seeing strength of the number of areas are shuffled. The media platform, obviously brand name of loads between card last year.

Marketplace expansion on that even things like digital marketing, helping with things like Amazon advertising of reaching consumers on social media like Instagram. Those are those are all areas, where brands and it and and I would say the the where of brand starts their journey with us depends a little bit on where they are and their own digital transformation you're of journey. So the different capable.

Been a strategic partner of ours since they launched their marketplace at our show and 2016 so.

So we've worked with them for a long time, we consider them a really really important channel for our customers and.

Part of part of the channel advisor of philosophy is we want to have the best and deepest and most capable integrations on the market. So as Walmart has continued to improve and mature the platform and add capabilities of the platform.

We're not gonna, we're not gonna wait to make sure that those are expressed through through our capabilities. So it's really just making sure that we keep up with.

The the the the changes and improvements the day that a strategic channel partner like Walmart and is for us.

Great. Thank you so much thanks for taking my at all and and good luck this quarter.

Thank you.

Once I get the feel of links to ask the question can scratch the star one and your phone against Dar one.

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There are enough of your questions at this time speakers and he's hinting.

Great. Thank you everyone for joining us today, and and look forward to speaking with you again soon.

Thank you.

Goodbye.

Maybe the gentleman and that that's a good area kind of friends for today and thank California getting you may now disconnect.

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