Q4 2021 Kubient Inc Earnings Call

Good afternoon, and welcome to <unk> fourth quarter and full year 2021 earnings conference call.

Joining us for today's call are <unk>, founder Chairman and Chief Executive Officer, Chief Strategy Officer, and President Paul Roberts, Chief Financial Officer, Josh Weiss and President of agency and brand partnerships Michael Kaufman.

Following their remarks, we will open the call for your questions.

Before we get started I need to alert you to our safe Harbor statements under the Securities Litigation Reform Act of 1995 join.

During this call, we will be making forward looking statements, including statements related to future events or to our future financial performance and involve known and unknown risks uncertainties and other factors that may cause our actual results levels of activity performance or achievements to be materially different from any future results levels of activity performance or achieved.

<unk>.

Expressed or implied by these forward looking statements.

Listeners should not place undue reliance on forward looking statements since they involve known and unknown risks uncertainties and other factors, which are in some cases beyond our control and which could and likely will materially affect actual results levels of activity performance or achievements.

Any forward looking statements reflects our current views with respect to future events and are subject to these and other risks uncertainties and assumptions relating to our operations results of operations growth strategy and liquidity. These statements are subject to known and unknown risks uncertainties and assumptions that could cause actual results to differ materially from those.

<unk> or implied during the call.

Furthermore, listeners are referred to the documents filed by <unk>, Inc. With the SEC, including our annual report on Form 10-K filed with the SEC on March 32021, our quarterly report on Form 10-Q for the first quarter of 2021 filed with the SEC on May 14th 2021, our quarterly report.

On Form 10-Q for the second quarter of 2021 filed with the SEC on August 16th 2021, and our quarterly report on Form 10-Q for the third quarter of 2021 filed with the SEC on November 12th of 2021 with the understanding that our actual future results may be materially different from what we expect which include.

These and certain other important risk factors, we qualify all of our forward looking statements by these cautionary statements.

Also note that the forward looking statements on this call are based on information available to us as of today's date.

Except as required by law, we assume no obligation to publicly update or revise these forward looking statements for any reason or to update the reasons.

Actual results could differ materially from those anticipated in these forward looking statements, even if new information becomes available in the future.

Please refer to <unk> SEC filings specifically its registration statement on form S. One initially filed on December 12, 2020 for a more detailed description of risk factors that may affect the companys results. During our call today management will discuss adjusted EBITDA, a non-GAAP financial measure in the Companys press release and filings with the SEC.

Both of which are posted on the company's website you will find additional disclosures regarding this non-GAAP measure, including a reconciliation of this measure with its comparable GAAP measure.

non-GAAP financial measures are not intended to be considered in isolation form isolation from a substitute for or superior to GAAP results.

The company encourages you to consider all measures when analyzing its performance now I would like to turn the call over to Paul Roberts. Thank you. Sir. Please proceed.

Thanks, operator, and thanks to everyone, who has joined us today.

The fourth quarter marked the end of a transformative year for <unk> as we continued to make progress in positioning ourselves for success.

The changing demographics in the modern advertising industry.

So there has been macroeconomic and geopolitical issues.

That affected the world economy during 2021.

We were able to garner many encouraging wins and have set ourselves up for an even more exciting 2022.

Our key highlights to mention is that we beat our revenue target for the fourth quarter and full year by achieving approximately $850000 and $2 $7 million.

Respectively.

This is the result of our continued execution across a multitude of fronts within our business.

We are just getting started.

Further propelling our growth trajectory or the Aqua hire of media crossing which we'll discuss in further detail later on in this call.

Additionally, if not for the disclosed legal settlement and associated legal fees incurred towards the tail end of Q4, we believe that we would have also hit our overall cost and EPS targets.

I'll pause there and refrain from further commenting on the financials.

As our CFO , John Schweitzer will cover that topic in more detail, but overall I believe that our organization is moving full steam ahead, both from an operations and financial standpoint.

Despite the numerous external circumstances outside of our control there are tailwind that illustrate the growth of the digital advertising industry, which is the big encouragement.

In particular, a recent study published by Salesforce estimated that 60% of customer interactions will take place online in the next five years of commerce.

A rapid acceleration from the reported 49% in 2019.

We believe that the increasing need for effective advertising spend has never had such a bright and grown spotlight.

Further eliminating the need to cut fraudulent and inefficient advertising engagement.

With a total addressable market rapidly growing we intend to ramp up operations to expand our footprint and capture as much market share as possible.

In order to execute this goal, which had two and will continue to bolster our roster of talented employees.

For example, we hired Mitch Berg as our new Chief Technology Officer in late November 2021.

Mitch brings more than two decades of technology engineering, and executive management tenure to the Cuban.

<unk>.

It has tremendous industry knowledge and experience in scaling advertising technology businesses made him the ideal candidates as we look to enhance the capabilities of our solutions and ultimately ramp up commercialization efforts.

Mitch has already put into place industry, leading practices for our development strategy and the announcement of his joining Julian has already attracted some incredible talent interested in working with him to accelerate the next generation of online digital advertising.

As I've mentioned in the past few earnings calls.

Supply continues to outweigh demand in the job market.

Nevertheless, our human resources team has meticulously hand picked and we will continue to do so individuals that are not only great on paper, but are a great match to the culture of what our organization is looking today.

That said I'm pleased to share that we now have a total of 38 valued employees.

We're growing each month.

However, as with iterate it in the past we have had contractors based in Russia.

Due to the current international environment, we have decided to no longer work with any contractors based within Russia, and if canceled all contracts with such Russian contractors that remain in the country.

Given the circumstances, we recognize that we must be a fluid and nimble organization and focus on controlling the controllable.

With that said Mitch has been able to replace those contractors with additional resources here in the United States without experiencing any drop in development progress or platform performance.

In addition to organically hiring.

<unk> been very successful growing our team by way of M&A, making the quality of employees of an acquisition target a key criteria in our ongoing search.

M&A has borne great fruit for our personnel expansion and comes in handy during these times where competition for skilled labor has never been stiffer.

This inorganic growth strategy is and will continue to date, a key pillar of our go forward strategy.

Stirring, our vertical and horizontal growth in the advertising ecosystem.

A shining example of our efforts on the M&A front has been the Aqua hire a media crossing accompany that was previously engaged in the business of providing digital media services to agencies and brands advertisers.

Michael Calvin the former CEO and co founder media crossing will soon take the Baton from me to speak further to the role he's playing and expanding <unk> managed services Division.

Later, I will go into greater detail on our operational updates leading into the new fiscal year and discuss our valued and evolving partnerships.

But for now I'll, let Michael take the floor.

Michael.

Thanks, Paul I definitely appreciate the warm introduction I.

I could not be any more excited to be part of this wonderful keeping team.

In less than 45 days, QB and successfully integrated media crossings personnel climb.

Clients vendors and expertise in keeping its managed services division or <unk> for short.

Grateful to everyone that helped us manage through the transition and thrilled that our team was welcomed with open arms into the keeping in community and culture.

As we've already found ourselves seamlessly woven into the company.

Morale is extremely high and we could not be more excited for the extensive capabilities under our belts within the <unk> Division.

From the onset and wanted to utilize <unk> technology to help our clients drive notable outcomes.

Underlying <unk> innovation and solid client service to enhance our advertisers' success, we believe the proprietary technology of coupons Cai acting as an omnipresent fraud tool coupled with keeping its audience marketplace platform offers the prime ecosystem to deliver incredible quality results.

With that in mind, we didn't Miss a beat servicing our clients going to market and explaining what our new partnerships with our new ownership team would provide from a value proposition standpoint.

<unk> managed services has been developing strategies and plans for advertisers to help them win market share increase their share of voice and ultimately quaint gain the client conversation.

He truly believes that the future of the successful digital advertising strategy depends on our brand's ability to work directly and transparently with quality supply sources and other key technology partners.

By integrating our roster of incredible advertisers into the audience marketplace. We believe that we are setting them up for continued success.

Looking ahead as it relates to further inorganic growth opportunities specifically searching for companies that will grow our existing ecosystem of services.

Adding additional direct publishers direct advertising partnerships as well as ones that provided additional technology operational expertise business development and human capital resources.

Furthermore, we are confident that our installed base of advertisers will greatly benefit from the types of M&A transactions, Paul and our leadership team are back.

I cannot emphasize enough how it static our team is to operate as part of <unk> managed services and we look forward to updating you on all of our progress going forward with.

With that said I would like to hand, the mic over to Josh to go through our financials Josh.

Thanks, Michael and good afternoon, everyone. Thanks for joining our call now to our financial results for the full year ended December 31 2021.

Net revenues for the full year of 2021 were approximately $2 7 million compared to approximately $2 9 million in 2020.

Turning to our expenses technology expenses increased to approximately $3 1 billion from approximately $2 1 million in 2020, the year over year increase was primarily due to increases in salary expense of additional technology personnel headcount stock based compensation and consulting expenses amortization of software and cloud hosting costs.

Administrative expenses increased to approximately $6 1 million compared to approximately $4 2 million in the full year 2020.

Year over year increase was primarily due to a one off legal settlement and related legal fees incurred in Q4. In addition to increases in salary expense, primarily arising from an increase in recruiting fees as well as increased insurance expense professional fees and taxes.

GAAP net loss attributable to common shareholders was approximately $10 3 million or 75 loss per share and decreased compared to approximately $9 6 million or $1.85 loss per share in 2020 the.

The year over year increase in net loss was due to increases in expenses described above as well as the one time legal settlement and related legal fees.

Adjusted EBITDA, a non-GAAP measure increased to approximately $9 2 million EBITDA loss compared to an adjusted EBITDA loss of approximately $3 6 million in 2020.

As of December 31, 2021, the company had a cash balance of $24 9 million.

This concludes my financial summary for a more detailed analysis. Please reference our Form 10-K , which we plan to file this week I will now turn the call back over to Paul who will discuss some of our major operational updates and provide a general outlook of our business Paul.

Thanks, Josh.

As evidenced by the larger companies, we work with we have discovered that both advertisers and publishers increasingly one one point of entry into the Cuban ecosystem.

Singular full closed loop solution under the umbrella of <unk>, rather than a fragmented approach wherein customers utilized kai and other offerings Ala Carte.

In response <unk> is now focusing on transitioning existing and future proposals into a unified contract approach where in clients receive access and service from all of <unk> technology and offerings, including Cai all through the marketplace.

This decision was made based on direct input we receive from several of our key partners providing feedback on their future roadmap.

As a result, Ty will no longer be offered as a standalone product and will instead be offered in a bundle audience marketplace offering.

Thus the tracking of individual Kai audits will no longer be utilized as a key kpis going forward.

Clients will now benefit from the full package suite <unk> has to offer whether they will save time and money and enhance their overall operational efficiency and the digital advertising campaign.

In the past year the audience marketplace platform has seen a substantial net increase in the number of new publishers plugged in.

It's been a key for us and evaluating existing direct publisher partnerships and this has led us to removing some partners due to the spikes in fraudulent traffic.

In aggregate we.

Maintain our relationship with roughly 14417 publisher partners in the <unk> marketplace with 9932 of those being direct relationships.

The point I'd like to once more Tau is that we provide one of the safest and most transparent advertising ecosystems on the market.

Thanks to the capabilities of Kai directly plugged into the audience marketplace.

We are able to avoid the vast majority of fraudulent activity and provide our customers and partners are pristine marketplace to transact.

That said, we're still witnessing a greater concentration on the publisher side than we do on the direct advertiser or buy side within the chicken and egg scenario with previously alluded to.

Our team is hard at work in bringing this situation to an equilibrium, but for now in parallel with our team's efforts to find new demand side partners.

They've also been tasked with further establishing the relationships with our existing base of partners to ensure they are fully capitalizing on all advertising opportunities.

One large win we had recently is a direct partnership with media math.

<unk> is one of the largest independent DSP in the world.

This new partnership provides access to some of the largest global brands in their digital advertising budgets.

The work now begins for our team to connect with those brands and explain how impactful Cai and the COVID-19 audience marketplace will be for their advertising campaign.

Additionally, another operational highlight I'm pleased to share is that we have extended our contract with Yahoo to also connect kubiak as a supply side partner or SSP opening up <unk> pipeline to every global brand that uses Yahoo has to buy media.

While these partnerships represent some of the largest players in the digital advertising world recognizing <unk> as a true differentiator.

There is additional work to be done before we see the fruits of our labor.

Our team has a full list of all the brands and clients using these DSP and now we're busy setting up meetings to discuss pointing the media dollars into the marketplace.

We're very excited to see our go to market strategy slowly coming to fruition and we look forward to providing you updates.

In a dynamic market of digital advertising <unk> is focused on expanding its breadth of channels across the board.

One area in particular, we continue to see a strong demand from is with connected television or CTV from both the buy and the sell side.

According to E marketer CTV spend will top $19 billion in 2022, representing a 32, 3% increase from 2021 and.

And that number is projected to soar past $30 billion in annual spend by 2025.

While this new channel for digital dollars is growing year over year, we are optimistic our fraud prevention technology will be a critical piece in helping advertisers prevent wasting a large portion of their media budgets on nonhuman and fraudulent traffic.

Next <unk>.

A macro shift within our industry that is effectively provided an opportunity for us is with respect to audience identity.

As a result of the shift instituted by Apple and Google with their privacy policies and audience identity via cookies, respectively. There.

There has been an increase in the value of the verified audience data we have built within cott.

They are a direct brands and agencies, who are connected with us asking how the audience data we've aggregated via our SSP can be used to help them continue identifying their ideal audience without the use of cookies in the future.

We always believed there would be a large value in our first party data and our team is discussing how to product ties this offering.

I'd like to now touch on our go to market strategy.

We're very excited that the world is beating to open up again some of the restrictions have been lifted from COVID-19.

We are planning to have a presence at a few of the leading industry events, including advertising week here in New York City, along with numerous did your day events throughout the year.

These in person events are an incredible opportunity to meet with industry leaders on both the brand advertiser and publisher sides of the world and gives US a platform to further evangelize <unk> capabilities.

We have already attended a few industry conferences in the past couple of months and.

And we remain very optimistic encouraged from the feedback we've received regarding our solutions.

The digital advertising industry is constantly evolving creating significant opportunities for accelerated growth from companies that are truly making a difference.

While we have been very vocal publicly talking about the need for an efficient and fraud free audience marketplace.

It has been very encouraging to begin to see large global brands like target into the cart and even Walmart via their Walmart labs begin to build technology to directly address the inefficiencies they find in the programmatic advertising landscape.

With an increasing number of companies, putting more and more mind share into their programmatic advertising strategies and campaigns. It serves as a growing tailwind for us and we intend to capitalize as much market share as possible.

To conclude though we are proud of our accomplishments. Thus far we are realistic and understand how much more work has to be done to fully capitalize on the potential of our company.

We are here to play a critical role as our customers along with every brand in the world accelerates their utilization of our fully integrated advertising technology to better obtained full visibility across their campaigns in a more effective and efficient manner.

In our broader growth effort will look to continue to leverage our technical capabilities in the IP.

Our strong reputation in the industry a loyal customer base.

And a talented energetic team that fuels our operations.

Longer term I am confident that the successful execution of our M&A and organic growth strategy will translate to solid expansion underpinned by a highly scalable global organization.

Now, we'll turn it over to the operator for Q&A.

Operator.

Thank you at this time, we'll be conducting a question and answer session.

I'd like to ask a question. Please press star one on your telephone keypad.

Information total indicate that your line is in the queue. You May press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing any star keys.

One moment, please while we poll for questions.

Our first question comes from the line of Jack Vander <unk> with Maxim Group You May proceed with your question.

Great. Thanks, guys I appreciate the quarterly update.

Thanks for taking my questions.

I'll start with.

A question for Paul on head Count plans and the hiring environment that you touched upon in your prepared remarks.

You said you have 38 total employees.

But also you had contractors in Russia that since like go.

Just for clarity is is that 38 head count our current head count that excludes those contractors in Russia.

Or is that prior to that.

That's 38 full time employees currently so we had more than that.

And obviously due to the world events that are happening.

Times, we have to make hard decisions. So we decided to part ways with those contractors, but.

As I mentioned Jack in the prepared remarks, you know Mitch.

It has been very successful at attracting some new engineering talent here in the states.

And we've also brought on a full time dedicated technical recruiter to help us in this market attract some talent.

Got it and actually that's a nice segue I was going to follow up with.

Just commenting on that with with Mitch coming on board as our CTO. It sounds like you are definitely getting some increased demand from from talent.

Can you maybe just talk a little bit further about your specific hiring near term plans and needs maybe what areas you're currently.

Relatively strong.

And what areas Youre looking to strengthen in the near term.

Yeah, I think obviously, we're always focused on getting more demand side partners and direct advertisers and with the last two years Covid has presented a very interesting marketplace for talent, where a lot of people weren't very open to making moves.

As we're starting to see New York City, and other major metro areas within the U S. Opening up I think that's going to change. So our focus is really around those demand side salespeople people, who have direct brand relationships, they're already at other AD tech companies selling directly to brands and agencies and that's really going to help strength.

And the other side of our market that we talk about you know, it's a lot easier to go out and sign up a new publisher and offer them more revenue its easier to give people money that to ask people for money. So that skill set is somewhat unique.

We're also very.

Tuned to the fact that we have multiple.

Any discussions going on where we.

We don't want to necessarily hire somebody on Monday.

Require a business or team.

We have a overlap in the role.

But we're trying to be very careful planning out the strategy for this year.

Again, the key goal is to strengthen the marketplace through those organic hires.

Potential acquisitions.

Got it that's helpful color and maybe just a follow up on.

The DSD partnerships that you mentioned in your press release and prepared remarks, good to hear about the Yahoo contract extension in the direct partnership with media math.

Can you maybe just provide more color on.

I know I know, it's a chicken or the egg scenario here, but no more color on the overall status of <unk>.

Where you're at with your your demand partners strategic outlook I, suppose and then kind of what you realistically expect for that.

Directionally, how do you expect that to ramp up going forward sure.

The first key is really to sell the platforms themselves that DXP is on the need for <unk> in the market, which is challenging because at times they view us as a competitor.

So we have to really show them the technology Cai all the differentiator is that we're out there talking to brands about.

Once we actually get the sign off of our media math, which as we mentioned.

<unk> independent DSP in the World and a company like Yahoo to agree to plug in their DSP. We then request the list of all of the brands Agency media teams that are using those platforms to execute media.

And that's basically our go to our list of go to people to call reach out to we know exactly which media buyer at crafted using this DSP what campaigns there fighting.

We have the opportunity then to connect and say.

Here's why we integrate into the DSP is here's the value add.

You don't have a very clear path to buy media on <unk> marketplace.

So it's a lot of.

Starts and stops and starts and stops, but I think we're making tremendous.

Headway getting these types of Dxp's number wanted to pay attention to the problems and number two to realize that we have a solution that once they integrate their.

Behr brand partners can benefit from.

Okay that makes that makes sense.

And then I.

I think another piece of new information this quarter is the announcement with Cai.

Which is going to be I guess exclusively now bundled into the audience cloud.

No longer offered as a standalone product right. So can you maybe just expand a bit more on the strategy and thought process behind that.

You probably spent a lot of time thinking about why that would be the best approach here.

It's competitive differentiation and gifts.

Focus on your core audience cloud, but I'll, let you take that.

Yes.

Kai it is.

At its core is the ability to remove fraudulent track.

The brands are really the people who care the most about this type of solution.

So our our path so far it's been okay. We're going to do an audit we're going to basically show a platform show up brand how much fraud. There is and there are current.

Their current technical setup.

And then we're going to integrate with wherever that brand is buying media.

Whether that'd be another SSP, another DSP et cetera.

We've been hearing from the brands themselves.

We don't want to really have to wait or we don't have to bring you along to our current technical partners integrate and we just buy the media through your audience marketplace.

So it's the perfect time for this type of feedback with the addition of the immediate crossing team because they are purpose built to service those direct brand advertisers.

Initially we didn't have the resources in house.

<unk> said, we want to buy directly through used Cai.

Here, we go here's our budget, but if you look at the background and experience of the media crossing team, that's really their bread and butter working directly with media buyers at large.

Global companies to say.

Here's my campaign Kpis, here's the budget I want to spend here is the audience I want to reach.

So now its benefits because we're basically taking all of that budget directly through our pipes, whether they plugging through a DSP through their trading platform et cetera.

It's really based upon the feedback we've gotten from the market where people don't want to use somebody else's platform. They want to use it NATO natively in cooking marketplace and based upon that we as a team said with the amount of resources. We have let's focus on what is going to generate the most revenue as quickly as possible.

Gotcha that makes it that makes a ton of sense.

And then so I guess that would that would I would imagine that when you are looking at your revenue growth going forward now it is going to be predominantly are almost entirely through the audience cloud.

Unless you start launching from I know you have some other revenue streams or product kind of solution offerings maybe longer term.

Is that a fair assumption.

It is I think it's really going to be more about the media dollars that are coming through our pipes and being able to demonstrate how impactful Cai is overtime and that's gonna be.

The tool that we go out into the market.

Working for this brand.

You're in a very similar position it should it will.

Worked for you in your media strategy as well.

Got it and then just one last question you mentioned connected Tvs. They are you know pretty secular growth market essentially that's really taken off here track could be $30 billion or self clearing to E. Marketer in 2025 is this a new.

Channel for you that you're focused on now or was this something that you are already targeting if you could just help me understand that dynamic and where where that came into play.

Yeah, the connected TV market the numbers speak for themselves, but what youre seeing is a lot of brands move money from traditional TV inferior new medium.

For us we have to kind of follow where the brand dollars are going so we basically had a hard conversation internally about we need certain integrations with the work we need connections into roku, and Hulu et cetera, so that our audience marketplace and deliver the audience that these brands are asking us for.

The good part about CTV is that B C P M or cost per meal.

Pricing would be.

AD units are very.

A much higher premium than traditional desktop or mobile traffic.

So we think it's the right place for us to be because there's also a huge issue with digital fraud within CTV.

Criminals, Jack they'll typically follow where the dollars are being spent so that their efforts I think it's still the most money possible.

I think it's very good for us that brands are moving into the newer area of the market. We can use Cai we can connect directly in and again delivering that promise of the efficiency and the fraud prevention for our partners.

Awesome well great great to hear the update I appreciate the time I'll hop back in the queue. Thanks, Paul Thank you Sir.

Our next question comes from the line of Ben Jen with $14 35 capital you May proceed with your question.

Oh, Hi, Paul Thanks for all the updates from there.

Our earnings call.

Great to see that you guys have made a significant progress in the past year, just curious from an M&A perspective.

You know what I guess, what do you guys have.

The pipeline.

In terms of potential acquisitions coming up or.

Anything.

Sure. So obviously there is certain information I can share and thanks for the question Ben.

The reality is is that the market.

The public market and the private market for capital have changed significantly in the last few months, even more so now with the world events that are happening.

So being a publicly traded company.

With proprietary technologies, such as <unk>, such as our marketplace.

It's really opened up the door to some very very unique conversations recently much.

A much larger companies that.

We're potentially exploring the public markets this year or potentially exploring funding and those those opportunities might have closed for them.

So we have been.

Very very diligently looking at what is going to deliver the most value for our shareholders and I think.

The opportunities out there that are presenting themselves.

Our exciting on numerous fronts one it is from a partnership head count.

Our revenue, but the size of the opportunities have somewhat changed in my opinion.

The recent.

Development so.

Having the public.

Vehicle, having this technology.

We're a well known entity within the programmatic space. So there are a lot of companies that have reached out to us.

Really partner and see what more strategic can be done so.

Hopefully that answered your question without.

Stepping over any lines there.

It was extremely helpful.

Thanks, Paul.

I'll go back into the queue.

Okay.

As a reminder, if you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue and you May press star two if he would like to remove your question from the queue.

One moment, please while I pull for additional questions.

Our next question comes from the line of Jack Vander <unk> with Maxim Group You May proceed with your question.

Great. Thanks, Hey, Paul just one follow up for you on on the head count.

And expansion plans.

To around 38 total full time employees.

Last quarter, maybe two quarters ago, you had some I think like an informal target of hitting around 50.

Total employees or so is there an update to that target.

Correct me, if I'm wrong, if that wasn't the target but is there is there a sense of where you're trying to move for a.

Like a magic number here for total head count just I can have an idea of how opex will also track with that.

Alright, so that.

The 50 number obviously included some of the fees that we had jack including along with the FTE.

Dependent contractors Nfpa's, we felt would add up to about 50.

Again, the biggest challenge for us as we way some of these potential M&A activities and the resources they can bring versus what we're out there in market looking for.

We've had a lot of compensation for our board and our comp committee around do we put the job rack out there and potentially higher the person and then we have.

Duplicative roles within the organization. So we're trying to be very thoughtful of the opex.

But I think realistically, we're probably going to be close to that 50 number.

By the beginning of Q4 of this year and that'll be primarily driven by FTE is here in the U S.

Okay, Great. That's helpful. Thanks, Paul that's it for me.

At this time this concludes the company's quite well.

At this time. This concludes the company's question and answer session. If your question was not taken you may contact <unk> Investor relations team at QB and at Gateway IR Dot com.

I'd now like to turn the call back over to Mr. Roberts for his closing remarks.

Thanks, operator.

Obviously, thank you everyone for joining us today on our Q4 and full year 2021 earnings call.

Especially you want to take a moment and thank our employees our partners, our investors and customers for their support.

We appreciate your continued interest in <unk> and look forward to updating you on our next call.

Operator.

Thank you for joining us today for <unk> fourth quarter and full year 2021 earnings Conference call. You May now disconnect. Your lines have a great rest of the day.

Okay.

Yes.

Okay.

[music].

Okay.

Okay.