Q2 2022 Skillz Inc Earnings Call
Yeah.
Good afternoon, and thank you for attending today's skills second quarter 2022 earnings call. My name is Jason and I'll be the moderator for today's call.
All lines will be muted during the presentation portion of the call opportunity for questions and answers at the end.
You'd like to ask a question. Please press star one on your cell phone keypad.
I would now like to pass the conference over to our host Charlotte Edelman with skills.
Good afternoon, and welcome to the scale second quarter 2022 earnings conference call. I will proceed shortly by reading our forward looking statements and non-GAAP measures.
<unk> followed by brief introductory remarks, and then a question answer session.
Hosting the question and answer session today, we have Andrew parity Chief Executive Officer Casey.
Casey Calkin, Chief revenue Officer, and interim Chief Financial Officer at the company we.
We hope you've had a chance to read out our press release, which was published earlier today and which is also available on our Investor Relations website.
Some of management's comments today will include forward looking statements within the meaning of the federal Securities laws.
Forward looking statements, which are usually identified by the use of break such as well expect should or other similar faces are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.
Therefore, you should exercise caution in interpreting and relying on them.
We refer you to the company's SEC filings for more detailed discussion of the risks that could impact future operating results and financial condition.
During the call management will discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance.
These measures should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.
A reconciliation of these measures the most directly comparable GAAP measures is available in our second quarter 2022 earnings release.
With that I'll turn the call over to Andrew for some brief opening remarks.
Andrew.
Thank you Charlotte and good afternoon, everyone and thank you for joining us today to discuss our second quarter 2022 results before we begin taking your questions I'd like to share a few thoughts.
We entered 2022 with the change in strategy to focus on profitable growth, improving our efficiency and driving greater impact on our player and developer experience through product.
But the initiatives I'd like to share my thoughts on what's going well so far what is not and what we're going to do about it.
Let me start with where it went well.
In Q2, we continued to make progress on reaching profitability.
Our net loss by almost $90 million, while reducing regime, our revenue after engagement marketing by only about $8 million.
We lowered our user acquisition marketing spend by 49% quarter over quarter and we also made progress in improving the efficiency of our user acquisition.
This is a business that was running six months payback periods at the precipice of our IPO.
We plan to systematically March our paybacks back towards those levels.
As such in Q2, we continued to reduce LOE overturn engage in marketing initiatives that arent, yielding could you not have indicative data that they will yield.
And we executed a restructuring of our workforce to better align our resources with our changes in strategic priorities.
We're all we reduced our net loss and adjusted EBITDA burn rate.
We improved the quality of our revenue by increasing revenue after it keeps your marketing as a ratio against revenue.
Over these last three months, we didn't make the progress we wanted to see in product development, but we still had a few wins, which I mentioned here more for the sake of balance as opposed to anyone thinking we're pleased with the progress this past quarter.
We launched the public beta of our cloud gaming technology initiatives as we discussed we would in Q1.
We launched the public beta of the refresh core user experience.
Let me go into what didn't go well.
We are positioning the company for profitability had a real cost.
Revenue revenue after engagement marketing paying monthly active users all fell sequentially quarter over quarter. We also have areas, where we can and will get better several they want to highlight here include our H one product initiatives did not achieve our desired results yet.
In fact, we've had slower product development velocity than we would've liked or anticipated we've.
We've had too many new product features that arent, driving LTV and sometimes or even detrimental.
Too many new experiments split tested they didn't yield LTV growth and also have sometimes been detrimental.
On the marketing side, we still more work to do on improving the user acquisition efficiency. Moreover, we have more work to do on reducing low return engagement marketing initiatives.
We're raising the bar across the board on any and all experiments and marketing and product to grow our business.
It's a systematic declining quality of work that all personally address in product development.
The primary causes of the sequential decline in revenue and revenue after engagement marketing was really lower retention for some of the mature cohorts of users on our system and.
And we think we've not root cause that the main drivers of this are a mix of instances of users cheating us on our platform.
And past product modifications that shouldnt have rolled from our test phase to full rollout.
So when I speak of cheating, let me give you. An example, we've seen instances of users cheating on the platform, including abusing system discounts and incentives and.
In other countries such as in the Philippines.
<unk> are abusing our friend referral program to get financial incentives without delivering real user referrals.
So here's what we're going to do next and what we.
We remain confident about the potential for product led initiatives to drive a better experience for players and developers.
Frustrating, especially the progress in product lately with so many opportunities to improve consumer and developer experiences on our platform.
As I mentioned earlier, when we approached the IPO, we had a six month payback.
I plan to get us back there in the first step to fixing our paybacks is I'm returning to our product development to fix their products to help build a superior paybacks and a superior LTV to CAC profile.
This work has already started.
There is a lot more coming in the days ahead, as we fix some rates skills business.
Repositioning the company for profitability is far from easy from where we were ending last year.
And as such we need to lower our full year 2022 revenue guidance to $275 million.
We're going to share more detail on all of the things that are happening in our business and our Q2 stockholder letter, which will be published Tonight.
Well the scope of our ambitions and the drive of our team is always leaves US wishing we had accomplished more we did make some progress towards our long term goals this past quarter by rationalizing our cost structure.
There is still much more work ahead to do and I'm more determined than ever to do it.
Our focus remains on a path of durable growth and efficiency in the years ahead. This means we're going to continue to reduce costs, we're going to continue to drive improvement in marketing efficiency and we're going to increase the velocity of new product development.
It's incredibly exciting to think about the long term opportunity for this business ahead to transform the existing $92 billion of mobile gaming market through competition.
It's truly a huge opportunity and we're steadfast in our belief that through competition, we can enable everyone to achieve their greatest potential both the player in the developer alike.
I wish I had better news to deliver today I can only tell you that we are pushing very hard to execute the transition strategy that we outlined last quarter and we will outline again this quarter and I. Thank you for your support your patience and your understanding now more than ever as we continue on this journey in this path.
With that let me open up for questions.
If you would like to ask a question. It is star one on your telephone keypad if for any reason you'd like to remove that question. Please press star two.
Once again to ask the question Press Star one.
As a reminder, if you're using a speaker phone. Please remember to pick up your handset before asking your question. We will pause here briefly ask questions are registered.
Our first question comes from Jason <unk> with Canaccord Genuity. Your line is now open.
Yeah.
Yeah. Thanks.
Going back to the guidance and obviously you laid out some of the reasons why the results came short, but just thinking back to a quarter ago.
Reiterating the revenue guide of $400 million and Theyre, just three months later, reducing it by nearly one third just wondering if you can maybe provide some additional color on on what maybe is different now versus three months ago and what gives you confidence that you laid out in the press release, you expect for out of the user that they declined the next few quarters to resume growth next.
Here I'm just wondering if you can maybe touch on that as well. Thanks.
Absolutely so.
First of all thank you Jason for the question, we're lowering the guidance because of the user retention trends, we've seen on the system and the slower than anticipated velocity of new product development and the delay in achieving the expected results from our recent product launches. We're also assuming that the macroeconomic environment is going to be challenging throughout the rest of the year.
Just going back again to next year, you know obviously.
Expecting a resumption of growth there with a much lower base of marketing spend just curious if there was anything specifically you can call out in our product pipeline.
You know that would maybe be give you confidence that youre going to be able to achieve that that resumption of growth as we as we had a typical 23.
Yeah, the primary driver from lower retention from the mature cohorts.
First part is.
We know what's going public I don't think we quite anticipate the level of attention the company would get.
Attention has also landed on the cheating and fraud community and we've seen a lot more bad behavior and bad actors are entering the ecosystem.
Users cheating on the platform I think I mentioned, one in my on my overview, but our friend referral program.
A lot of abuse, particularly from from countries outside the U S. Our.
Attempting spoofing and or actually executing on their home country.
Literally tried to steal money out of the system.
Your immediate issue in countries like the Philippines, our continuing to identify and address other instances of users.
In and cheating and fraud.
The second piece I think I've mentioned in past product changes over the last 18 months that really have not been landing the level of LTV that we anticipated we.
We have multiple different initiatives. There that we are modifying that that I think gives us confidence that we will get back on track on our retention engagement and monetization. If you think about skills as a platform trust is a very important part of our platforms promise I think trust and safety and almost any marketplace type businesses.
Important to how it operates.
And you have to look at that she cheating and fraudulent behavior as damaging not only.
Because that revenue is not real.
Even beyond that the the people that are being defrauded and cheated it's damaging their retention engagement platform. So I think to summarize I'd say, it's very top of mind for us to get this under control immediately.
Great. Thank you.
Our next question comes from drew Crum with Stifel.
Your line is now open.
Okay. Thanks, Hey, guys. Good afternoon. So your outlook commentary assumes further declines for paying mouse through the balance of the year.
What type of decline are you anticipating should it be similar to what you experienced in <unk> or something different and Andrew or is there a catalyst you have in mind to Reaccelerate. This metric next year and then I have a follow up.
Yeah.
Okay, great. Thank you. Thank you for the question I'm going to turn it over to Casey to talk about marketing and P MAU growth.
Thanks, Andrew.
Jason.
Sorry drew the way to think about this is.
As we extract some of the discounts from the system.
We are no we have a smaller number of people who are depositing low amounts of money or playing with system incentives who have deposited in the past and so as we as we pull those incentives out that becomes the largest contributor to the decline in paying monthly active users and we're not quite done reduce.
Our engagement marketing spend so essentially what we're doing is becoming more profitable on a user by user level.
The business.
And so the way to think about that and the confidence in the Reacceleration of growth is after those incentives have been completely pulled back the retention profile of our cohorts each cohort never actually.
Dies, we don't we don't see cohorts that can keep that ceased playing at all on the platform. They decline and then level out as we pull out some of those incentives were pulling out lower no value users who are still counted in our paying miu calculation.
And so the way to think about that is it.
Continuing to decline at a reducing rate over the back half of the year.
And then as those incentives are completely pulled out.
Adding just adding new cohorts will drive the user growth in the future.
Yeah.
Got it very helpful. And then and then my follow up pertains the adjusted EBITA margin.
<unk> in your guidance it looks to be the same in the second half as the first half and with the planned reduction to engagement marketing span and presumably some savings from your reward what.
What prevents you from showing margin improvement in the second half.
Yes.
And you know would you like to jump in on that question.
Yeah. Thanks drew I think the focus here isn't really as we mentioned here, we are really focused on continuing to optimize around the marketing spend.
We took the restructuring action this quarter I think continue to just focus on overall operating expense reduction in the second half that expect that to continue obviously with the declines in the top line and revenue and revenue obligation of marketing that is I think going to be a I think where that nets out. So I think we will see what happens.
In the second half again with the reduction in operating expenses very clearly it's focused on again that may be netted out against the declines in the topline as I think that's where the guidance came out.
Sure.
Okay. Thanks, guys.
Our next question comes from Jason Bazinet with Citi.
Jason Your line is now open thanks.
Thanks, I just had a.
A quick question on those.
This paper six months payback, she talked about sort of that.
At that time of the IPO.
Is it fair to say that it's easier to get to.
Six months payback, if you're running a business that does $50 million of revenue of $100 million and if youre doing $400 million of revenue.
And the reason I ask is even if some of the.
Initiatives don't work is theres, some natural improvement in your paybacks that should occur just as the revenue gets smaller.
I think in many businesses that can potentially be true.
I'm, sorry, I don't mean to be rude. Thank you for the question. Appreciate it I appreciate the engagement I think that can be true in many smaller smaller markets and I think that question kind of leads to the consideration is the Tam being dried up if you will and Thats why youre seeing worst paybacks.
You know I pointed out we were I believe $230 million of revenue net revenue at IPO.
And so not that small scale and as we scaled upwards.
Yeah.
I would not say that is what we've been seeing.
Basically tapping out the market driving up prices I think.
For lack of a better way of putting it we have been tripping over on Pete on scaling human capital and Covid.
And it has resulted in an.
<unk> performance and a variety of roles across the company, where we are working very hard on getting the right people in the right roles and a strong understanding of how the system works. So that they are accretive value against LTV as opposed to detriment singer.
And I wish it was a better way a better reason for this.
I guess, the one could each year I think is that we.
We have no reason to believe from everything were seeing that the Tam is.
Been consumed.
Casey do I talked a little bit about marketing and where we see Tam.
Yeah, Yeah absolutely.
And Jason I think that the behavior that you're talking about is.
It is not uncommon in many businesses, though in the case of our business and particularly when Andrew was running product for us in the lead up to our.
Public offering what we saw was that our cohorts.
Becoming sequentially more and more valuable.
Is the opposite of what you see in many businesses and.
As evidence of the real network effects observed in that are observable in the space.
The challenge in the last year to year and a half is that we haven't seen that.
And we don't believe that that's a.
Weakness in the system itself.
So much as operational opportunities that we can and will correct as Andrew has mentioned I think Andrew called the tripping over of the.
But I think getting getting people together for in person collaboration.
Improving the analytical rigor behind.
New product and feature Rollouts that we bring to market.
These are these become operational opportunities for us and so I think it was.
I believe it was she was another adjacent who asked the question about confidence in the future yeah Yeah.
The confidence comes from.
Comprehensive comes from seeing as we as we make those changes we can see the data signatures of the new cohorts that we're bringing onboard.
And if I can add.
I think one of the things Jason with our businesses, we were entirely in person culture, a more than 95 five days in office culture as the as Covid approach and we scaled from 190 people to 750 over these last two years to support the revenue growth.
And to be able to grow from.
$384 million revenue year last year.
<unk> two 1 billion I think what's happened is we've.
<unk> really seen the difficulty of scaling buyback.
Buybacks Forex call it people and.
And culture.
As we've guided down a lot of people remotely and it has not been smooth scaling and COVID-19 and.
To that end at the immediate action we've taken is in our plan.
Plan and execution of getting all of our people back in offices five days a week.
I wish I could tell you that.
Our everyone on our team agreed with that.
We've had we've had a fair amount of turnover at.
The SaaS action with getting people back in person to to work, it's been challenging and.
I talked to a lot of other Ceos of other companies and I am hearing similar statements across the board about the transition.
From a work from home environment or in an office environment, but I really do believe that for our level of creativity in our type of company to generate the kind of results that led to our IPO, we need to get people back together.
It's just too difficult to teach people about a novel system and a novel business area that we're building.
Remotely we can't we can't achieve it fast enough or at a quality level that works for our business. So we thought we'd really taking what might be considered dramatic action going immediately to RTI.
Five days a week in office.
Yes.
Okay. Thank you Super helpful.
Our next question comes from Clark <unk> with <unk> your.
Your line is now open thanks.
Thanks, very much good evening, everyone I had a couple of questions first I wanted to go back Andrew maybe I guess the point around cheating.
You mentioned that you wanted to sort of address the issue.
And still I guess confidence amongst the I guess, if you will cleaner player cohorts on platform and I wanted to see if you could elaborate on maybe the ways in which you might be able to do that moving forward and then.
There was a comment in the release about sort of growing profitably in 'twenty, three and I wanted to see if he can be a little bit more specific on whether that means.
We should expect one quarter of profitability, maybe sort of improving incremental margins you could put a finer point around that if possible and also.
You know as we as we think about skills returning to a place where.
You are growing at the rate you hope to and seeing the payback periods you'd hope to what sort of capital investments need to be made in the short run I think you talked about in the prepared remarks, one of the hiccups shorter term being.
Product development, I guess sort of efficiency and also the quality of.
A product that was coming out of the development team what I guess can you guys do or what we need to do to get that back to a viable level going forward. Thanks a lot.
Sure.
So I think first.
We're trying to recap that a little bit everyone who is listening.
First.
Cheating can we elaborate and what we're doing to mitigate it.
Second is profitability.
What to expect in 2023 and beyond and third is capital investment.
To build the products that we need to be successful.
So let me let me hit sheeting first.
<unk>.
There are a number of different techniques to to increase the level of identity around a user to ensure that it's more difficult to duplicate accounts.
And defraud the system, which is actually one of the primary ways, we have seen how cheating and fraud as such.
Some level of duplicate counts.
Trying to reset your player Youre player ratings on a given game.
Handing your device off to another person.
Honor duplicate accounts, but kind of think about like multi account fraud, that's one of the top things so.
So we thought we built out an identity team.
That is implementing a number of things but everything.
As kind of industry standard like a.
Two factor SMS authentication so force.
<unk> that we know it's a real phone number not a spoofed.
Account on a laptop.
I can go on and on but there are a lot of ways that we are forcing.
Forcing identity down to a single actual person as opposed to someone being able to more easily.
Tend to be multiple people.
That's one way that we are enforcing and changing.
Changing cheating and fraud capabilities on the system.
There are many others.
In the interest of time that'd be happy to chat more offline on things, we're working on that if there's interest.
Second I can hit profitability.
What do you expect quarter by quarter.
And let me, let me ask Ian if you will.
Like to to talk about the numbers and where we're looking for 2023 and 2024.
Yeah, Thanks, Andrew I think.
I think the key is here that we are continuing to looking to focus and improve to reduce costs and improve efficiency across all of the opex lines beyond 2022, obviously into 2023.
We obviously haven't given a specific guide to that yet.
But the goal is still as we've discussed previously to reach breakeven.
By the end of 2024, so obviously that means continued improvement through the course of next year, but we havent again provide more specifics on the particular margins yet in 2023.
And then third on capital investment that we need in the short run already represented in the financials that we put out.
I think we are very determined to get our business on a meter be culture in terms of our financials one of the most disappointing things.
For Us I think has been moving off of that and Mrs.
Missing revenue forecast I will point out that one of the things we did for the first half of the year as we outperformed on cost.
And what we said we would spend for the first half and I think the first steps that we are looking at is we can control our costs, we can't always control, if our investments into product development and experiments yield.
I can tell you that the capital investment that we are making in our product development I am personally going back and oversee much.
Much closer level, and we will be outlining more details on that in the coming days, but with the level of investment, we're making in our product development and my background in building new products I feel like it's definitely one of the best uses of my capabilities for the business.
Anything you would like to thank Casey.
Just click on the question about cheating.
I think that's a helpful clarification that Andrew is bringing up a I think people often think competing as things like hacking.
Hacking your hacking the game take gained an unfair advantage, whereas the what we're talking about Mis cases is something that we believe is much more controllable in the payments industry. It will be referred to as friendly fraud.
But this is people abusing.
Discount codes intensive marketing programs things like the friend referral programs and so create.
Creating geographic restrictions on those programs, making those programs more targeted these are things that we're already doing to reduce the <unk> expenditure.
What ultimately becomes unprofitable revenue streams.
And likewise, the kind of cheating that we're talking about the most common form of cheating is people trying to game player matching system.
And identity.
Ensuring that it's truly at one user per per device per account.
And one account per person.
<unk> is something that we can very much control and that that will improve both the quality of our of our revenue and the quality of our cohorts on a go forward basis.
Thanks for the color I appreciate it Keith.
Sure.
Just going to add to in case, you said what's yours.
I would point out that the per account cheating and fraud technologies that we built are actually working quite well.
Multi account and spoofing is.
A different type of attack and.
Clearly our defenses are not strong enough.
Of course, we're rectifying immediately.
Thank you.
Our next question comes from Brad Erickson with RBC capital markets.
Your line is now open.
Hi, there thanks.
I guess first just on the.
Path to profitability, maybe setting aside the cheating commentary and all of that can you just talk about some of the new products or maybe characteristics, even if new products, you're working on where you think you can drive this better retention over time.
Sure. Thank you for the question Brad.
So in terms of.
How were changing and improving our retention I think actually one of the things. We're doing first is we're reverting and removing.
Experiments and product features that.
No.
The data does not support their broader rollout so it's not actually building new products.
Its product features and experiments that were rolled out that we're really we're really not supported by a deep data analysis. So rolling those back actually is already showing improvements and LTV.
I hate to say, where we're paying to undo work that we paid to have done but that is the reality of what we.
We're seeing and what we're doing first.
I think.
When I left.
A very direct engagement on product development to really focus much more on taking the company public as CEO .
We have not been able to invest our dollars into product development as efficiently as we used to.
New features that we've been working on such as so.
Social.
Such as improving our leaves technology given the scale were at now such as refreshing our core loop of our product experience.
The execution of each of these things is as critical to improving LTV.
As actually building this thing.
It's I hate to say such a detail oriented.
Problem, but it is a it's a doubling of the details problem with product development, where I think we are missing some of the key product needs and each of these features and they need to be revised carefully to to generate the level of LTV that we'd expect from these fees.
<unk> and <unk>.
I am I'm in there and doing it with the teams and we are we are solving the problems on.
I would say.
Somewhat back to the basics product development.
That needs to happen right now in our company and.
I think the best way to think about that is our plan right now is to return our cohorts strength to where we were pre IPO in March 2020.
And.
Pre pandemic.
Pre pandemic pre IPO cohorts strength is what I and moving us towards that.
That is that's an achievable goal in the next.
The next 12 months.
But it's.
Quite a lift from where the product has evolved to.
Yeah, Yeah got it and then maybe a question for Ian.
And I think you know the filing isn't out yet, but I guess, you guys and every quarter with maybe $4 million to $5 million on the balance sheet of customer.
Funds and I think its something like 80% or so of the GMT comes from existing customer accounts. So I guess that implies the customer balances turnover like something like 100, plus times a quarter can you explain sort of how that works how that math works anything we may have wrong in there.
No I think that's.
You officially question.
The question on that one so I think we've discussed before that people.
People are playing obviously with new funds they are playing with.
Funds that are already in the system, as well and probably winnings and entering into more games continuation from that so.
The funds that you mentioned Theres, a feeling limited balance on the balance sheet as you mentioned about $45 million because people tend to possibly then actually use that funds to go play games. So again, they using that plus probably winning us on the platform to enter it and continue playing games, but it wasn't up again for a case you Andrew we get more and you want to add on that.
Yes, so Brad the way to think about it is not so much of the turnover of funds multiple times so much as the fact that.
Players today are not using skills as a long term stored value account. So players arent, putting a lot of money into their skills account and then leaving it there for a long period of time, they're adding money to their account and then consuming that through the competitions. They play and then adding more money theyre kind of consuming that through the competitions that they.
Play and it's something that people have actually highlighted and we believe as a one.
One of many long term opportunities for the business is having people hold on to a larger account balance inside their accounts over time because of course, then we could make.
Make money off of that money in the same way that insurance companies do.
But the way to think about it is that people are are depositing money with their credit cards and playing through it in real time.
Got it that's helpful. And then maybe one follow up and I apologize I jumped on the call late so I missed some of Andrew's opening comments, but on this cheating issue.
I guess can we take the any part of the guidance reduction is a proxy for how much of the business that represented and I guess, maybe percentage wise sort of how far ROE do you think through that call. It a cleansing process.
And when you think that might be complete.
I'm sure if I can get that.
Thank you for the question and a great question.
I think we are not done with cleaning I do think we have a very good idea of the size of the problem and how to deal with it.
I think the first step.
Engaging us.
<unk> size and understand the problem before we try to solve.
And as such I think the guidance were giving out the revised guidance, we are accounting for removing.
Everything back down to a normal level.
There's always some level in any business of bad actors and you just need to be managing it below a certain threshold and our threshold is far too high.
And I think if you take our retail business for example.
Strength in retail goes over 1% you may bankruptcies store and I think we are looking at our business right now and there are a number of bad actors and not only that they're disrupting experience of the good ones of the good paying customers. So I think you have two effects.
In solving this problem.
Duplicate account and.
Duplicate accounts fraud.
And cheating, which is you can have both.
Remove what is unprofitable revenue.
And simultaneously you can improve the retention and engagement of your good customers, who are actually just trying to sharpen your store to use the analogy.
So.
I think.
It would have been great. If we could have a corpus faster and certainly in the next step after solving this problem is improving our systems for faster to detection of this kind of issue as we scale upwards and onwards.
After we finish cleaning.
Got it that's helpful. Thank you.
Once again, if you'd like to ask a question. It is star one on your cell phone keypad.
Our next question comes from Ed <unk> with Jefferies. Your line is now open.
Hi, everyone. Thanks for the question.
I wanted to dive in a bit deeper on the payback period.
That's kind of where exactly that's coming from is it on that.
Yes.
Side, where I know, it's a challenging over last few years or is it more on roofing.
The spending itself.
That's great.
Hi, Ed.
Thanks for the question I think I heard you is a little bit challenging to hear you, but I think you said.
Yes.
Ask your questions were on the payback period, and where exactly is the opportunity is it lowering CAC or improving LTV, if I'm, saying it correctly.
Exactly.
Okay.
Actually we think both so we've got we've been cutting.
Cutting back inefficient user acquisition programs.
We are now actually at the best CAC, we've seen in years and I think we will continue to get better and better CAC.
The LTV decay has primarily been from from disruption and retention.
And we.
I think I think we've talked a fair amount about cheating.
We've also been talking about product features.
That have led actually unfortunately too.
It's a lower LTV as opposed to higher where there is data integrity around the testing of the product features.
And that led to a test feature rolled out and so what we're doing is we're looking at any feature any program that was rolled out as we've seen the decay in LTV and we're basically rerunning, the data and verifying whether or not it is.
As a valid.
Good change to our products.
And that's enabling us to quickly move our LTV.
Back to where to levels that we were very proud of as a company as we are approaching our IPO.
So I think there is opportunities on both sides.
So really appreciate that question and see if you like to comment on either particularly on Tac I think.
So that's your business, yes, it might be.
I was actually going to say just that.
That's what is particularly exciting for us at this moment in time, Ed is that R. R.
Our CAC is.
Our taxes around our local low point from that we haven't I haven't really since the beginning of Covid and we still think there is a big opportunity to drive it lower through apps or optimization through investment into organic channel development and continued media optimization, we think we can bring our customer.
Kathy that lower.
And on the LTV side.
While the development of new features such as leaves continued investment in social is the things that Andrew has been talking about.
Represent attractive upside that we still very much believe in.
Simply getting back to the user programs that we were running.
12 months ago.
Will give us an increase in LTV and move that that return on investment calculation and payback in.
Thanks, Ed.
Mhm.
There are no further questions waiting at this time, so I'll pass the call back over to the management team for closing remarks.
Well. Thank you everyone for joining our Q2 2022 earnings call.
Much appreciate your support and as always we will be vigilant on building towards the future of competition, we will.
Talk to you next at our Q3 earnings call until then thank you.
That concludes the conference call. Thank you for your participation you may now disconnect your lines.