Q2 2022 ChannelAdvisor Corp Earnings Call

Good day, and thank you for standing by. Welcome to the Channel Advisor second quarter 2022 earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during your session, you will need to press star one one on your telephone, and then you will hear an automated message advising you that your hand is raised.

Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your speaker today, Raford Garabrand, Head of Investor Relations. Please go ahead. Raford Garabrand, Head of Investor Relations

Thank you, Hope, and good morning, everyone. Welcome to Channel Advisor's conference call for the second quarter of 2022. With me on the call today are David Spitz, Channel Advisor's Chief Executive Officer, Beth Segovia, Channel Advisor's Chief Operating Officer, and Rich Coronetta, Channel Advisor's Chief Financial Officer.

This morning we issued a press release with details on our second quarter 2022 performance, as well as our outlook for the third quarter and full year 2022. This press release can be accessed on the investor relations section of our website at ir.channeladvisor.com.

In addition, this call is being recorded 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 just find many obligations 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 in 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 in our most recent Form 10-K , as well as our other filings, which are available on the SEC website at SEC.gov.

During the course of today's call, we will refer to certain non-GAAP financial measures, all of which are reconciled in the press release that we issue today. We also provide a GAAP to non-GAAP reconciliation schedule and our supplemental financial presentation posted on the investor relations section of our website.

Finally, at times when I have prepared comments or responses to analyst questions, we may offer metrics that are incremental to our usual presentation to provide greater insight into the dynamics of our business or our quarterly results. Please be advised that we may or may not continue to provide this additional detail in the future. With that, let me turn the call over to David.

Thanks, Raford. Despite the backdrop of slower e-commerce growth, high consumer inflation, and macro uncertainty, we delivered another good quarter in Q2 with solid revenue growth and adjusted EBITDA that again exceeded the high end of our guidance range.

These results demonstrate the resilience of our subscription-based revenue model and brands-focused strategy. Although the macro environment is more challenging, we remain optimistic regarding our long-term prospects.

For that reason, we were pleased to be able to return some of our surplus capital to our shareholders during the second quarter, retiring about 6% of our shares outstanding through our previously authorized share buyback. And in a sign of continued confidence, our board also authorized an additional $25 million in potential share repurchases, which we will deploy if and when we feel our pre-cash flow yields presents an attractive opportunity as part of our capital allocation strategy.

Now I'd like to walk through a few of the highlights from the quarter.

First, our focus on brands continued to pay off with second quarter revenue from brands up 25% excluding currency impacts.

Even more impressive, brand subscription revenue increased 32% net currency impacts.

This represents roughly half of our subscription revenue, an all-time high, and we're getting closer to the point where the majority of our total revenues will come from brands.

Because brands offer greater potential for expansion, we believe the strong need economics we've enjoyed with brands will continue to benefit our results as they grow to represent a higher percentage of our business.

Second, our strong overall subscription revenue growth helped us achieve total revenue above the midpoint of our guidance range, despite slowing e-commerce growth and a more challenging macro environment. We continue to expect our year-on-year revenue growth to improve in the back half of the year, starting in Key 3, as we finish lapping those tough year-on-year comparisons in variable revenue, although our revenue growth outlook has been tempered by the impact of foreign currency rates.

Third, we've continued to deliver strong value to our customers through ongoing investments in our platform.

Our expanding breadth of supported channels has continued to differentiate us, and that's why we maintained our rapid-tape pace of channel expansion in Q2. And we now support over 350 channels globally.

Long Tail GMV in aggregate was again larger than eBay and Walmart for us, second only to Amazon, and again grew much faster than all three.

In addition to channel expansion, we continued to broaden our capabilities in the fast-growing area of retail media by launching an integration with Criteo. Beth will elaborate on this and some of the other product innovations we've recently rolled out in a moment.

Fourth, our disciplined approach to managing the business resulted in an adjusted EBITDA well above the high end of our guidance range and good cash generation. For the first half of the year, free cash flow exceeded $10 million. And while we continue to evaluate opportunities to employ our excess capital, we remain committed to a financially disciplined approach and focus on opportunities where we believe the potential returns align with our objectives.

Since Amazon Prime Day was held recently, we realized there's a lot of interest regarding the trends we saw across categories and how it translated to GMV for Channel Advisor.

Overall, while inflation is on everyone's mind and industry expectations were somewhat muted coming into the event, our data suggests consumers are still spending, even in non-essential discretionary categories. Total GMV growth was solid, led by categories such as baby, clothing, shoes, and accessories, home and garden, and computers and networking.

The performance was consistent with our expectations and supports our view of normalizing variable revenue in the second half of 2022.

Lastly, I'm very proud to share that we were recently announced a winner of the Triangle Business Journal's 2022 Best Places to Work Award. This is particularly rewarding because it's our eighth time winning and reflects how deeply we care about our employee experience.

It's especially sweet to be a repeat winner as we adapt to a new normal that has challenged all of us.

To all of our teammates, thank you. And with that, I'll turn it over to Beth.

Thank you, David, and good morning, everyone. Enabling brands to accelerate digital transformation and achieve their e-commerce objectives remains our priority. We do this by helping our customers connect, market, sell, fulfill, and optimize their e-commerce operations to reach more consumers across every stage of their buying journey. The world of multi-channel commerce is constantly evolving and never rest, which is why we're innovating like never before to help our customers keep pace.

The momentum continued to build in Q2 with progress made in releasing new product capabilities, access to more channels, gaining further industry recognition, and earning accolades as an employer. Whether it be our exciting new retail media partnership with Criteo, achieving the distinction of being named an Amazon Ads Advanced Partner, or winning recognition as one of the best places to work in the Research Triangle area for the eighth time, there's a lot to feel good about. Now I'd like to walk you through this in a little more detail.

One way that multi-channel commerce has evolved rapidly is the proliferation of channels where consumers shop online. To help our customers capitalize, we've been building on our leadership position through rapid channel expansion. With the addition of over 20 new integrations in Q2, Channel Advisor now supports well over 350 channels.

News channels added include Bed, Bath & Beyond in the US and Canada, Poshmark in the US, Trendy Hole in Germany, and Shafi in seven Southeast Asian countries.

The Shafi integration is particularly exciting given the strong demand we've seen for greater access to the Asia-Pacific market.

Another way that multi-channel commerce is evolving rapidly is in the area of retail media. With retail media, we're witnessing a refragmentation of digital marketing, and with that complexity comes a need to help advertisers streamline and optimize advertising campaigns across sites from a single platform, which is exactly what Channel Advisor's platform delivers.

Our new integration with the Criteo Retail Media API allows brand advertisers to effectively reach new high-impact shoppers by managing and optimizing their retail media campaigns across even more leading retailers.

This is a fast growing area for us and in fact we now manage more retail media ads spent across sites like Amazon, eBay and Walmart than Google ads. This is something unthinkable just a few years ago.

That helps explain why we were recently named an Amazon Ads Advanced Partner. Advanced Partner status is granted to firms that have demonstrated experience across the breadth of Amazon Ads capabilities and delivered results for advertisers. Advanced Partners are in the top 5% of partner-led investments by country's sponsored ads, and we now qualify for added benefits, including access to select beta programs, tailored training on campaign strategies, and new product releases.

Continuous product innovations like these have contributed to cementing our position as the leading multi-channel commerce platform. To see a case study that ties this all together, please visit our website to learn more about our customer Lexington Company, the Nordic Lifestyle brand. Lexington was interested in leveraging marketplaces to drive growth and new partnerships, but they didn't want to engage channels directly due to the added complexity and time. So they turned to Channel Advisor.

Lexington initially launched on Amazon, La Redut, and Philando, expanding from 1 to 19 markets in just two years. With help and automation from Channel Advisor, Lexington says it can now focus on its core business functions, like products and sales, instead of spending time on error resolution, mapping, and feeds.

By entering marketplaces with support from Channel Advisor, Lexington states that it has seen tremendous results, particularly on peak days. Between 2020 and 2021, they experienced an 83 percent increase in their sales and 400 percent growth on Black Friday. A terrific example of the power of marketplaces.

Our strategy to land and expand with brands was further demonstrated with successes in Q2. We signed new customers such as Brown Foreman, John Paul Mitchell Systems, and McCormick Foods. And our teams grew our business with existing customers like Chanel, Hugo Boss, and Bushnell.

To summarize, we have the platform, partners, and people to enable success for our customers. We never rest as we continue to lead numerous initiatives to keep the momentum going. By empowering brands to reach new customers, promote their product offerings, and streamline operations globally, Channel Advisor continues to be well positioned to capitalize on the positive long-term trends in our industry. 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. I'm pleased to report that our results for the second quarter of 2022 were better than expected with revenue above the midpoint of our guidance range, subscription revenue growth of 16% on a constant currency basis, and adjusted EBITDA that exceeded the high end of the guidance range while continuing to achieve strong cash from operations and healthy margins.

So let's get into the details for Q2.

Total revenue reached $42.8 million in the second quarter, up 3% year over year, or more than 6% excluding the negative effects of the stronger dollar.

Growth was driven by subscription revenue performance, which increased 13% year over year and as mentioned earlier, 16% excluding the currency impact to another record at $36.1 million.

And variable revenue of $6.7 million demonstrated stability during a volatile market for consumers, as it was similar to Q1 levels and in line with what we factored into our Q2 outlook.

Earlier, David provided some details on the continued strength of our brand's cohort, with total revenue of 20% year-over-year or 25% excluding the currency impact to $19.1 million.

We also recognize record brand subscription revenue, growing 27% year over year or 32% on a constant currency basis to $17.8 million.

Brand subscription revenue represented more than 49% of our total subscription revenue in Q2, also in the record. And this represents an increase of roughly 500 basis points from the prior year period.

Brands customer count, now exceeding 1,000, and average revenue for brands customer continue to increase throughout the quarter, and our strong revenue retention is driven by the strategic cohort of customers.

Our fastest growing revenue cohort continues to be customers with ARR greater than 100k, and these customers represent the majority of our ARR.

We also reached another milestone in Q2, with brands ARR surpassing retailer ARR for the very first time.

Thank you.

Now moving on to Jaipur Ibita.

We finished Q2 at $8.4 million, well ahead of the high end of our outlook of $7.6 million, and adjusted it to a margin of 20%.

The adjustability of its out-of-work performance was driven by OpEx discipline, even as we brought on additional sales reps and continued the momentum in product innovation.

With sales capacity at appropriate levels and the product and services team executing well, we target Optics growth to begin moderating in the back half of the year.

This should leave us well positioned to achieve our objective of balanced growth over our long term financial model.

As mentioned earlier, we had another good quota of cache generation during Q2.

Operating a free cash flow remained very healthy again in the quarter, coming in at $5.8 million and $4.6 million respectively.

And on a trailing 12-month basis, we have generated cash from operations of over $30 million and free cash flow of over $24 million.

As David mentioned earlier, given our view that channel advisor shares represented good value, we took the opportunity to return some of our surplus capital to shareholders during Q2, and repurchased 1.8 million shares for $25 million and an average price of $13.67.

This completed the buyback authorization approved by our board last August , and a new $25 million buyback authorization was put in place that expires in June of 2023.

Even after utilizing $25 million of our cash for the buyback, we ended Q2 with $84 million in cash and no debt, highlighting the fact that our balance sheet remains very strong.

Now on to our Financial Outlook.

For the third quarter of 2022, we are providing a revenue outlook range of between $43.4 million and $43.8 million and an adjusted EBITDA range of between $8.1 million and $8.5 million.

As we've discussed, the strengthening of the US dollar has had a meaningful impact on our revenue growth and exchange rates continue to be volatile.

Similar to Q2, currency is expected to impact our year-over-year growth rate for Q3 by approximately 3 percentage points.

We expect subscription revenue growth for Q3 to be in the low double digits on a constant currency basis.

This represents a lower growth rate than our full year guide due to a difficult count versus Q3 of last year, where a higher than typical number of launches drove a higher than typical release of deferred revenue.

We expect subscription revenue growth to return to the low to mid teens in Q4, again dependent on currency.

As for variable revenue, we anticipate Q3 to be similar to Q2, consistent with the normalization trend we mentioned last quarter.

We believe this past quarter was the low point for revenue growth this year, and we have finally lacked the effects of COVID and stingless tailwinds from last year.

Given the continued headwinds driven by foreign currency, coupled with uncertain macro conditions, we are modestly reducing the high end of our revenue outlook for the full year.

However, despite this reduction, our revenue outlook adjusted for constant currency exceeds consensus for Q3 and the full year.

We now target revenue to be in the range of $177 to $179 million for the full year 2022.

We anticipate full year subscription revenue growth to be in the low to mid teens, dependent on currency.

As for Adjusted EBITDA, we are reaffirming our full year Adjusted EBITDA outlook to be in the range of $37-39 million.

So in closing, our focus remains on our capital allocation framework, which emphasizes generating returns on our invested capital above our cost of capital.

Over the last two plus years, we have prioritized investing for growth through sales and services resources and product enhancements.

We also completed an acquisition to enhance our platform capabilities for brands. And more recently, as mentioned earlier, we purchased our common stock at what we believe to be an attractive price.

We believe these actions, along with our brand strategy, position us well towards achieving our long-term targets and increasing shareholder value.

With that operator, we'd like to now open the call to questions.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to click star one one on your telephone and wait for your name to be announced.

Please stand by while we compile the Q&A roster.

Our first question is going to be from Joshua Riley with Needham. Joshua, your line is open.

Hey guys, thanks for taking my questions and nice execution here in the quarter. I'm going to be starting off with probably one of the questions everybody is thinking about.

How should we think about the puts and takes on e-commerce GMD in the market right now? It seems that Amazon's third party GMD outperformed a bit better than expectations here in the second quarter. But then we've also seen some profit warnings from Zalando, which as we all know is exposed to Europe . So what are you seeing right now there? Let's watch these things coming up.

Hey, Josh, I would say overall, pretty stable trends on GMV. I would characterize Amazon as continuing to be a juggernaut and a strong channel for us as you would expect. Zalando also continues to perform well for us. A logical conclusion is that we're probably gaining continued share of Zalando GMV relative to their overall performance.

Obviously, there's a lot of noise from currency, which is just a reality. I'd say overall, consumer seems fairly resilient just given the...

inflationary environment. So it'll be super interesting to see how the next couple quarters play out.

Right, and then with Prime Day in July this year versus the June quarter last year, how much of an impact does that have on variable revenue year over year here in the third quarter which is potentially offsetting some of the, you know, slower just general e-commerce trends?

It really doesn't have that much of an impact. It's a couple of days total out of the quarter. We saw solid strong performance out of Prime Day, but given that it's...

literally just a couple of days and it's a portion of our GMB and it's for the, spread across the entire quarter. I would say it's not something that has a significant impact on variable revenue.

Got it. Thank you guys.

Thanks, Josh.

Thank you. Please stand by for our next question.

Our next question comes from Colin Sebastian with Baird.

Your line is open.

Thanks and good morning everybody. Good quarter. I guess first I just wanted to drill down a little bit on the retail media segment. Obviously, you made the announcement with respect to Criteo and the Amazon advertising. You've achieved that nice partner status there as well. So putting that into more context for us, how incremental is this in terms of whether you look at it as a take rate or as additional subscription opportunity.

And is this something that can be a meaningful portion of that revenue growth as you look out the next two or three years? And I have a follow-up. It really is.

Hey, Colin. Yeah, I think it's not unlike our channel expansion strategy with marketplaces. So this opens up what has already been a pretty fast growing area for us in retail media and significantly expands the size of the network of retailers that we can help our customers advertise on. So, you know, it's a fairly recent partnership and integration. So I think it's probably too early to call the ball on it per se, but, you know, our.

Our significant channel expansion on the marketplace side has been a huge differentiator for us and has helped us win customers. So I would expect on the retail media side it should be a positive impact for us.

All right, and then bigger picture question, I think, on the follow-up. I mean, a lot of moving parts and changes in the kind of industry. And I mean, if you look out towards your 2025 goals, balancing everything that's within your control and those macro and industry factors that are out of your control, how should we think about the implied acceleration of revenue growth? I mean, obviously, there's a shift towards brands. But beyond that...

What are the levers you pull there and how might that impact profitability in the medium term as you execute on that acceleration? Thanks.

Yeah, I think there's a couple of key levers in there that are more in our control. I mean, obviously things like currency, it's unpredictable and try not to spend too much time thinking about that. But I would say sales capacity, which was a challenge for us at the beginning of the year and a gap that we had largely closed by the end of Q2.

you know, that's an important input into our overall ability to generate bookings and ultimately revenue growth. And so we just have to continue to execute on that. I will say related to that, that we've seen employee retention improve over the last few months. Like a lot of tech companies, you know, we saw higher than normal attrition towards the end of 21 and at the beginning of 22. And that feels like it's moderated and kind of come back down to normal levels, which makes it easier to kind of maintain the staffing levels that we want. So sales capacity is important.

And then you touched on customer mix, which I think is also important. You know, the fastest growing cohort of customers for us is customers with over 100k in ARR. They tend to have superior retention characteristics. And assuming we can continue to drive that favorable improvement in customer mix, that should yield either a stronger revenue growth or give us the opportunity to maintain a certain growth rate and maybe put a little bit more on the bottom line and invest a little bit less in sales and marketing to drive the same growth rate.

COVID kind of notwithstanding, we see continued share of wallet gains of e-commerce over the next few years. I don't think it's going to kind of stop where it is and just stay flat. I think it's going to continue to grow. So I think as long as we execute on product innovation, as long as we execute on capacity and continuing to focus on the right kinds of customers, I think we should be able to continue to drive good revenue growth. And as you point out, hopefully faster revenue growth as we get closer to 25.

And Colin, further on the bottom line, we've proven that we've been able to manage expenses through any sort of environment. And we have reaffirmed our EBITDA outlook for the full year of this year. We continue to manage discretionary spend, make decisions that are looking for the future in support of revenue growth, but also understanding that there's flexibility in our expense profile and we'll continue to manage that.

Great, thank you very much.

Thanks, Colin. Thank you. Please hold for our next question.

Our next question is from Zach Cummins with B. Riley Securities. Zach, your line is open.

Hi, good morning everyone. Thanks for taking my questions. David, just given the current environment, have you seen any elongation in sales cycles with some of your brands customers?

Hey, Zach. Yeah, I'd say sales pacing has moderated a bit in the last few weeks. I think that

there's a fair amount of macro uncertainty. And so I think everybody's taking a little bit of a breather and trying to assess what the back half of the year looks like for them. So I wouldn't say it was entirely unexpected. The urgency that we saw in the last couple of years, especially when traditional retail channels were shut down or you had lockdown type of orders drove a particular kind of urgency. So we don't quite have that at our back like we used to.

But I don't expect this to go on forever. I expect as we go through the back half of the year, I actually anticipate some improving macro conditions. But I would say, yeah, I would say we've seen some moderation in pace. Pipelines are really strong, so pipeline continues to be good. It's just, I think, pace that's been a little bit softer over the last few weeks. I understand. Another question from me, Rich.

What sort of assumptions are being made on the variable revenue line in the second half of this year? Any sort of insight into kind of relative GMB assumptions that you're making?

Yeah, you know, as we mentioned and David mentioned earlier, we've seen GMV moderate, you know, more recently and we built in that moderation into our remainder of year forecast. We expect Q3 to be similar to Q2. Obviously with the seasonality of our business, you should see a pop in Q4 with variable revenue. But you know, what we said longer term is that with our focus on brands, variable revenue will become less of a contributing factor to our top line.

Our next question is going to be from Matthew Fowle with William Blair. Matthew, your line is open.

Great, thanks for taking my questions, guys. Wanted to follow up, David, on your comments around becoming a more challenging operating environment. And how is that manifesting in your business? Or I guess, where are you seeing it? Because it seems like variable revenue in line with expectations, pipelines good, XFX, it seems like you're trending in line with plans. Maybe just help us understand where you're seeing some of those macro impacts perhaps hit your business if they are.

Matt, I really meant it more as a generalized climate commentary, not so much specific to our business. On a prior question, I did note that we've seen some slowing of sale cadence over the last few weeks or a moderation of cadence. Pipelines are strong, but I think there are prospects who, a year ago, their first order of business was to get something in place. Now I think you see folks that are having a little bit more of a measured approach, thinking about what does the back half of the year look like for them.

So that's probably the one area where we've seen a little bit of an impact. And again, I expect that to be transitory. I think my sense, I'm an optimist as we get into the back half of the year, I do expect inflation to moderate. I do expect sort of business sentiment to improve. And so therefore, I think this is a temporary phenomenon. I think one of the other comments I made earlier, which I'll reiterate here.

is that I think in a good way, I think the macros actually helped in terms of employee retention, right? So we, as I said earlier, we did see higher than the normal attrition at the end of last year and the beginning of this year, which is kind of ironic. We just won the Best Place to Work award for the eighth time. But, you know, there was a lot of crazy money out there in startups that were offering sort of unsustainable salary packages to folks. And I don't blame them for.

for taking the lead, but I think a lot of that in the tech space has reversed pretty quickly. We've seen some folks even come back to Channel Advisor, and I would say just the hiring and the retention environment around employees is actually significantly better than it was even three or four months ago. So in that sense, I think it's a positive for us. So really more of a general business comment, Matt, not so much Channel Advisor other than the sales cadence comment.

Got it.

Great to hear. And then Beth called out the Shopee integration as being something that you're excited about in the APAC market. I believe you hired a managing director there recently as well. So maybe you can just update us on what you're seeing in APAC and what are your growth plans there in that area.

Yeah, absolutely, and we've been talking about this for a little bit here as we've talked about channel expansion being a big priority. As we've executed over the last 18 months, Asia Pacific has represented a pretty large percentage of those new channels that we've added. We launched Lazada not that long ago in a number of markets and now Shopee in a number of markets, and we're continuing to work through a list of pretty major integrations in the region. That's what we've been driven by.

major client requests. So we work with a lot of large brands that are global in nature, and they've implemented Channel Advisor as part of their infrastructure. And as they expand and focus on the Asia Pacific markets, they want Channel Advisor to be there along with them. And so we've had partnership with customers as we've taken on those major channel integrations. So Shopee is just the latest in the mix, and we're very excited about that partnership. We've seen a great level of relationship building with that channel.

James with D. A. Davidson Victoria your line is open.

Good morning. Thank you for taking my call. My question is, at a high level, what are your thoughts on the e-commerce landscape, including the impact of consumers spending more of their discretionary income on things like travel or experiential things, and then also consumers managing high inflation on food and energy costs?

Hey, Victoria, this is David. I think there's definitely a narrative out there that after a couple of years of not being able to travel and go out to enjoy a meal and even go to the mall, although personally that's not something I completely understand, fighting traffic and crowds, I think it's kind of a rebound effect. We just took our kids out of the country vacation for the first time in quite a while. And you can definitely tell walking through the airport.

into next year. You know, on your on your inflation question, there's no doubt that has an impact. I mean, when when people are paying four or five dollars a gallon for gasoline and food prices have been up considerably. There's you know, there could be no doubt that that has some some effect on discretionary spending, particularly at lower income levels. So but as I said earlier, I'm an optimist. I.

probably reduces a little bit. And again, I still think people probably, there's still some pent up demand for travel and experience and dining out that probably continues to drive some higher than normal spend in the back half of the year. But as we get into 23, I kind of think that we're gonna be back to the sort of normal e-commerce growth rate. I think everything just kind of normalizes at that point. That's my gut sense.

Thank you. And then if I can just ask for a slightly different angle of a question that I think we've bandied about a little bit as far as...

your sales cycle for, you know, talking to brands interested in selling on marketplaces. Have you changed your approach to talking to them? It seems like you have a pretty strong pipeline regardless of those sort of slightly soft and pace. Have you had any changes, I guess, as far as chatting with brands? That's a great question. I don't think there's been a significant change in our messaging. I think if you went back...

two, three, four years ago, pre-COVID, there was a little bit more of a evangelistic element to our pitch in the sense of your brand, you have a minimal sort of direct to consumer exposure, why should you sell on marketplaces? More sort of convincing about the why. I think COVID eliminated that, right? So it was really, it then became a question not of, why should I do this, but how do I do it?

And I don't think we're going back to the why. I think everybody's eyes were open during COVID, brands in particular about the need to get closer to the consumer, to focus on their digital channels. It's an area of strong growth for them. And I think it just made clear to everybody that this part of their business is not gonna be successful over time, it's gonna be bigger. And so it needs to become a strategic focus. So I would say we really haven't changed our messages. We've gotten in, as we went through COVID and coming up with the...

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