Q2 2022 Vizio Holding Corp Earnings Call
In housewares continue to make the living room experience, even more enjoyable and we are already receiving accolades from publications like Newsweek Tech reviewers touting the performance and value of our new lineup.
Turning to our platform plus services.
We're continuing to build on our integrated offering by bringing more content and enhanced viewing experiences to our users.
We recently announced that tech talk one of the fastest growing entertainment platforms.
Brazil now.
Now you can enjoy your favorable dense video March larger screen.
We also expanded our Spanish language content offering this quarter with our new App partnership with Australia.
And broaden our content offerings across a range of categories.
Cooling kits.
Lifestyle.
Reality TV.
And talk shows.
In addition to all of the Great building third party ads, we offered our own App was free plus continues to deliver strong growth.
The growth we are seeing in <unk> plus showcases users is increasing move to free AD supported content as well as the power of our onscreen promotion capabilities.
Once again this quarter philosophy plus was the second most watched.
For the App.
Our platform.
During the quarter, we expanded the Whatsapp plus content with the addition of vivo music channels.
Amy Oliver channel.
Ol network.
And many more.
We also expanded our <unk> plus on demand library was titles from Disney and Sony Warner Brothers.
We have created a content offering that truly has something for everyone from.
<unk>.
Two kids and families.
For multi cultural audiences sports fans and many more.
This quarter, we grew our small class active account base to over $16 million.
15% over this time last year.
Through the strong engagement on our platform.
<unk> hours, where users spend their time streaming grew 22%.
We are seeing seeming once again outpaced all other time spend.
I'll now Tvs.
To align ourselves with this growth in streaming.
Secondly, as for the content.
<unk> continued to invest in building.
Our sales team.
Our investment has led to greater growth and coverage across AD categories as.
As well as growth across new advertiser market sectors.
In EMEA of two years, we have successfully developed repeat customers was largest agency and big brands.
Like Apple Disney Progressive Microsoft and Pfizer.
Our advertising business is growing rapidly.
71% in the second quarter. Thank.
Thanks to growth in large AD categories, such as financial services retail and CPG.
And across those categories.
<unk> to develop new relationships.
Sandoval, Georgia Pacific HP, Little Caesars Lowe's and.
And nationwide to name a few.
Within the media and entertainment category.
Content partners and advertisers frequent E mailed us we had the best platform for search and discovery.
CTV.
And we have to agree.
Everyday millions of consumers turnaround there Brazil.
The power of our homescreen to learn about what.
What's new.
<unk> available.
That's why the biggest studios and streaming services.
Our AD products to promote great content across our platform.
As the streaming wars continues to intensify.
Brazil remains a powerful tool for our content partners to acquire and retain valuable viewers.
We also have a great opportunity to provide our users with a simple way to aggregate and manage their subscription services and this quarter, we launched the deal count.
Our payments platform.
Outside of our popular new collection.
We're currently rolling out this capability across our existing fleet.
And the vast majority of our devices will have this capability by the end of August .
Well it takes some time to get all the major partners up and running and.
And we're excited to bring stars and discovery plus to our platform. This early launching partners.
We're seeing Brazil count.
No later needed to bring new interactions and commerce to a smart Tvs down the road.
We are very encouraged by the early subscriber activation results for starts.
More to come in the quarters ahead of the deal count.
So while our team continues to make great progress in our journey I believe we're still in the very early innings of what a smart TV can become.
We remain focused on investing in the people the software.
Howard.
To bring new possibilities to the larger screen in your home.
As we always done well.
We will invest with.
With discipline.
And the continued focus on efficiency.
As you can see from our second quarter results.
Genesis of Abdul revenue model are really paying off.
And providing us with a strong hand to play as we work to expand our monetization flywheel.
A more spot has active accounts to more engagement.
The more content and more advertisers.
We are driving higher overall value.
Our growing installed base.
I am very excited for.
For what the future holds for Brazil.
It was a strong seasoned team, leading us theres still much more to come.
With that I will now turn the call over to Adam.
To review, our second quarter results in more detail.
Thanks, William before opening the call to questions I'd like to take you through our quarterly financial highlights and discuss our outlook for Q3.
Starting with the second quarter total company revenue came in at $409 million up 2% platform plus grew 69% to a quarterly record of $111 million and represented 27% of total company revenue in the quarter. This strong growth was driven by advertising revenue, which was 71% to $81 million we continue to.
Expand our presence in the overall AD market and despite some softness emerging in the macro environment. We believe we continue to be a share gainer within a secondly, growing part of the market to that point, we expanded our direct advertising client relationships during the quarter by 74% versus a year ago, adding more than 200 net new advertisers.
Our growth in direct client relationships is key as we saw repeat customers increased their spend by double digit percentages. The sustained growth is coming from big brands in the largest AD categories, such as financial services retail and CPG.
Our advertiser relationships continue to expand and are built on trust and transparency brands recognize the value of direct to device as our owned inventory and ACR data give them onscreen validation and proof of campaign outcomes speaking of data platform plus non advertising revenue led by our data licensing grew 65% to $30 million.
Versus the year ago period.
This was the strongest year over year growth in three years as we benefited from the acceleration in data licensing revenue on the back of our previously announced deal with Nielsen as well as strong pricing trends for brand placement on a remote control buttons today, our first party data helps improve user experience, while enhancing advertising campaign effectiveness through better plan.
And targeting capabilities for.
For these reasons our data is also becoming the cornerstone of the CTV measurement market through some of our licensing partners such as ice spot Comscore video App 605, TV squared in Nielsen, who all rely on our data to fuel their ad currency products.
Turning to our device segment total revenue was $298 million down 11% growth in TV unit shipments of 5% to $1 1 million was offset by lower average selling price driven by sales of our popular value skus and strategic pricing promotions deployed on certain models during the quarter with this our market share of smart TV.
Sales in the U S improved to the number two position for the quarter.
Turning now to gross profit total company gross profit was $74 million for the quarter.
Plus gross profit was a record $70 million up 47% year over year with a 63% margin.
For the quarter platform plus gross profit represented 95% of the total.
Device gross profit came in at $4 million with a one 3% margin.
Given the high contribution margin of our platform business, we remain focused on our strategy of building great products at competitive pricing to continue to deliver exceptional value to our consumers and expand our household install base.
Total company adjusted EBITDA for the quarter was $11 million well ahead of our expectations and down from $26 million a year ago, the improvement relative to our expectations was attributable to more managed growth in SG&A expenses slightly lower marketing and stronger platform plus gross profit.
We continue to maintain a highly liquid balance sheet with no debt cash and equivalents ended the quarter at $336 million.
Which was up quarter over quarter.
Now turning to our key performance metrics. Our Q2 results continued to highlight the growing success of our efforts to drive overall monetization across our platform.
ARPA grew to a record $25 87.
Up 54% over the year ago period.
Our platform monetization continues to benefit from strong demand from home screen ad or promotion placement.
Growth in video advertising revenue, particularly within our luxury plus app where growth in viewing hours again outpaced overall premium growth across the platform.
Total time spent screening also outpaced all other time spent by our users as measured by a 22% increase in smart cast hours versus a 14% increase in total vizio hours.
This growth also translated into a return to growth in smart hours per smart cast active accounts, which grew 6% as we have now lapped the sharp spike in screaming saw due to the pandemic lockdown and subsequent content disruptions looking forward, we expect to see streaming returned to share gains versus linear as viewing trends normalize.
Smart cast active accounts grew to 500000 sequentially and $2 $1 million year over year to a new record level of $16 1 million.
So let me now turn to what we expect for the third quarter.
Like all companies, we are managing the business through heightened uncertainty and market challenges against this backdrop, we are focused on balancing cost discipline and resource support and investment for growth and opportunities that we see ahead.
Given there are significant opportunity for growth in our high margin platform plus business, we intend to prudently invest resources, there while being extremely disciplined about costs in other areas of the company.
Our focus will be on identifying efficiencies and driving productivity to support profitability and operating leverage for.
For Q3, we expect platform plus revenue to be between $120 million to $125 million with continued growth in home screen and video advertising as well as data licensing.
Political advertising remains a wildcard for the quarter with timing and pacing hard to predict while we believe we are well positioned to bring in significant political dollars, we remain conservative within our outlook given its lower predictability.
Expect platform plus gross profit to be between 75 and $78 million implying.
Implying continued margins of over 60% at the midpoint of the ranges.
From a total company perspective, we expect Q3 adjusted EBITDA to be in the range of 8% to $13 million. We continue to expect second half adjusted EBITDA to exceed first half as we benefit from greater operating leverage in our seasonally strong fourth quarter period.
So overall, we are pleased with the commitment and determination of our team in Q2, which delivered solid results and we remain disciplined and focused on continuing to generate near term profitability, while investing for long term growth with that let's turn the call over to questions operator.
We will now begin the question.
We would like to ask a question. Please press star followed by one of your telephone keypad.
Any reason that you'd like to handle that question. Please press star followed by Tim again to ask a question press Star one.
As a reminder, the speaker phone.
Pick up your handset before asking your question.
Perfect.
Question I would like to stay.
Operator, we'll take the first question.
Thank you. The first question comes from the bandwidth, let Steven your line is open.
Hey, guys. Congrats on the results and congrats on the launch of video accounts now.
Now.
On the streaming side the streaming service side for Vizio account, you've got these early launch partners and stars and discovery plus among some others.
I'm curious what goes into forging that relationship and what might that imply for the timing of additional account partners Vizio account partners.
Yeah, Hey, Nick.
This is Mike I'll take this well look I think we'll just start with Vizio account itself right, we're pretty excited about the rollout.
I think we're excited with the initial results is just starting to come to market now but.
Having a single place to subscribe track payments and managed streaming service for our consumers. We think it's really important for the future and you mentioned, we were able to bring on some some good launch partners I think in total we had over a quarter or roughly about 27%.
All paid apps subscription apps on our platform.
We are now integrated with Vizio account. So I think we've got some good momentum on that front and recently, we just completed actually our first developer conference, which we had over 250 attendees. We educated them about the ease of building for the Vizio platform, but also about features and benefits such as.
Vizio account.
So we've got a good momentum at the start and we expect to continue to onboard partners further single feature.
Very cool.
Any plans, though to entice them to your current.
Vizio active account users to go ahead and sign up for Vizio account.
I think one the benefit of.
Video is the fact that it's backwards compatible so vizio accounts rolling out not only on new devices that we sell but also on legacy smart cast models. We have so we've got a lot of tools.
Two to educate consumers about vizio account and we're utilizing them or we will be utilizing them, obviously normal channels point of sale E mail, social but really on device and the partnerships. We can form with the App partners we have.
We believe we will continue to help drive adoption for.
For example today.
If you go in and want to sign up for stars on the video platform you need to use video account.
And we given offer of seven days free of stars. So we think continuing to work with our partners to drive promotional benefits will continue to increase adoption.
Not only for new models, but for legacy models, we have in the market.
Great Great one more if I could if you don't mind since you mentioned it but maybe.
Any more details here and how you're thinking about political AD spend contribution within that <unk> guide and maybe if you could just frame up your general positioning to capture.
Did the AD spend dollars associated with political thank you.
Yeah, Hey, Nick It's Adam Let me, let me start I think Mike can give some more details here as I said in the.
Third comments, we're looking very closely at political we think we're in a very strong position to be able to take political dollars, but sometimes those political dollars come around in a bus predictable timelines in.
And cadences, so we've been very thoughtful about that and been conservative in our guidance to assume a significant contribution from political and political comes in stronger than we anticipated. Then then that could be a source of upside. So we're going to look at that and what's the pacing of it as we approach the.
Voting cycle, but Mike you want to add color, Yeah I think.
When we launched this business in 2020, the last real election period.
Just getting started so we were able to capture some advertising dollars, but this is our first real political cycle that we're going through so.
We're pretty.
Optimistic about the opportunities we have in front of US I think if you look from 2020 to today.
We obviously have significant growth in terms of our active user base. We've got a large direct sales team out in the marketplace I can educate.
Advertisers across all different categories, including political and I think we've got a lot of tools available to help political advertisers.
Levered leverage our platform, including adding incremental reach so we know there's dollars coming into connected TV.
We're cautiously optimistic about how many how much of those dollars. We can obtain but we think we're positioned really well not only for Q3, but really as we enter into the key political season really to start to Q4.
Awesome, Congrats guys and good luck going forward.
Great. Thanks, Nick Thanks, Thanks, Operator, we will take our next question.
Absolutely. The next question comes from Laura Martin with Needham. Please proceed.
Hi, there okay. So let's start with a philosophical one for yes. So we added $20 million for the platform business with a 63% margin and it did not flow through to the gross profit line because we just subsidize devices. Marshalltown is my philosophical question are we going to basically is your view that as you make more money.
<unk> in the platform business, we're just going to subsidize devices. So that we can get a faster install base and basically have vis vis the second.
Second.
TV installer and the theory here.
Yes, Laura.
Good question.
From time to time depends on the market. So Jason we'll decide what we're going to do with the increased gross margin and sometimes we invest in technology and sometime we pass through the price.
Hello investing too.
Hi.
Bigger stronger advertising sales force.
No.
With the.
With macroeconomic.
Headwinds.
Yes.
Is this.
During Q2 with decided to make sure our TV outcome really is affordable.
Due to the.
The inventory challenges in the.
Retail environment. So the whole idea is make more money more money for our shareholders.
We can we will start with ITV SaaS and because of the long term that will produce better results for our shareholders. So.
Answer your question yes.
This is a good year for us we invest into digital TV set sales.
Additional gross profit would generate box different revenue model.
That's super helpful and I sure do like that answer.
And then the second thing is we have the imminent December 8th business.
That is going to launch it adds over here <unk> has been active in share in the market and Netflix.
I think second half next year as those come on board have any of those.
Negotiated that deal to be seen on television and giving you increased your negotiating leverage as you guys cross like $16 million.
Thanks Kurt.
Thank you can cut better deals with the late Congress to be add tier section on the screen.
I think Laura I'll take that.
I don't think will necessarily speak to any specific deals that said look at over 16 million active devices. We're a major player.
Major distribution platform in the space and you are talking about some long term partners, we have but for US we're excited about them coming into the market. We think anything that that drives potentially new eyeballs anything thats going to increase time spent on smart cash anything that can bring new advertisers or larger advertising commitments.
Into the space is really good for us.
So from an advertising share standpoint, not going to comment, but where I think we really stand to benefit is the fact that we understand how to.
Help to help our partners grow.
Whatever it is whether it's subscription or AD supported services on the platform and we've got a lot of tools at our disposal. We have a audience that we know through the data has an appetite for AD supported content. So we think there's good opportunities from there and then I think as more and more.
More and more eyeballs come into the space and more and more partners continue to innovate we have a lot of different ways, we can make money.
And I think we'll benefit where stand to benefit in a lot of different ways from this.
Thanks very much.
Thank you Laura Thanks, Laura operator, we will take our next question.
Thank you. The next question comes from Steven Cahall with Wells Fargo. Your line is open.
Thank you and I joined a little late so I apologize. If this has already been covered or been asked smart cast <unk> is up really nicely year on year, I think maybe youre, even closing the gap against some of your connected television peers, a little bit I was wondering if you could just unpack RFP for us a little bit and maybe talk about trends youre seeing in home screen.
Trends, you're seeing in <unk>, where it sounds like the scatter programmatic market could be a little weaker and then trends youre seeing in.
In data licensing or anything else.
And then maybe just on TV shipments I think you had some nice market share gains in the quarter can you talk about the product development pipeline for your TV sets and if theres any parts of the market, where you are particularly focused.
Focus on to make some investments in.
Take shape market share. Thank you.
Yes, I'll touch on trends in the in.
The market with regards to our.
<unk>.
I think for us where we're seeing the fastest growth is within the video sector.
Continue to continue to grow our relationships with brands and agencies, we continue to push out.
Evangelize, what Sri plus which is the number two AD supported apps on our platform.
Continue to be able to leverage our inscape data, which is the best robust most robust data set in the marketplace.
Increase increase our relationships and increased Cpm's with our partners on the video side, we continue to see success with our home screen media and entertainment continues to be a key category, but but we've grown.
Significantly our what we call non endemic or non media and entertainment clients that are starting to leverage our home screens.
In order to in order to drive more Kpis. So for example.
This past quarter, we rolled out a campaign with geico around prime months, they were able to sponsor.
Series of content for our consumers skip benefit to our consumers, but April was able to bring them a new opportunity to advertise with vizio.
So on the advertising side those are those are important for us and the fastest growing.
We're also seeing household connect continue to continue to grow.
And generate some more tam for us off platform.
So in terms of ARPA growth really on the advertising side thats the fastest trajectory for us.
Yes, so you'd have to Adam and then on the share gains in the quarter.
We're very proud of that and in fact, I think it speaks volumes to the fact that <unk> has a strong brand presence in the marketplace that speaks to the value and has attractive pricing for consumers and Youll know that some actions we took in the first quarter, particularly around some pricing strategies and our <unk> hundred 50 and series quickly vaulted that TV into the number one selling TV in the.
We then built on that success in Q2 and expanded that strategy into our D series 40 inch which itself became the number two selling to be in the market. So as William mentioned during the prepared remarks during the first.
Second quarter, we had both the number one and number two selling Tvs in the market. So is it consumers are looking for value and they're looking for great products and great solutions to their home entertainment, they're coming to vizio and that's helping us gain share we're going to continue to look at that strategy and look at other possible models in our fleet that could have similar types of results so moving back.
Up into the number two position was something that the team is very proud of for.
For the second quarter, and we're going to look to see how we continue to drive growth throughout the year.
Great. Thank you.
Thanks, Steve Operator, we'll take the next question.
Absolutely.
Next question comes from Tom Champion with Piper Sandler Your line is open.
Hi, guys. Good evening, maybe firm Mike O'donnell.
Mike can you just talk about what youre seeing in the scatter market and.
Also just elaborate on the AD verticals of strength I think you highlighted retail and CPG.
Some have cited those as verticals of weakness so curious why why you're bucking the trend here and then.
Maybe for for William just curious your latest thoughts on supply chain and the consumer.
Curious if the consumer maybe bouncing back a little bit from lower gas prices. Thank you.
Yes.
It's Tom.
Theres no doubt theres, some softness in the marketplace and some key categories, including <unk>.
Automotive and CPG, but we're not feeling it right now just because we're working off.
Smaller base in the past so as you know, we're only two and a half years into this.
Continued to invest in the sales team. We think we've got best sales team in the marketplace right now out there evangelizing all the key capabilities we have.
So we were able to add this quarter I think alone.
Grew 74% in terms of new advertisers on the direct sales side over 240, new advertisers into the fold. So for US we are still growing.
In terms of our advertiser base and Thats allowed us to.
Stan some of the pressure in the marketplace and continue to scale.
We expect to continue to scale and grow our advertising base for the foreseeable future.
Yes.
For your question.
Supply chain.
Our team has done a great job managing the supply chain over the last three quarters and there is no really there's not really a supply chain challenge right now and.
We're dealing with is more.
Uh huh.
Well it has to do with the macroeconomic headwinds and <unk>.
Demand issues.
So far we haven't really seen any significant pickup.
Due to the lower <unk>.
Gasoline prices and we're pretty hopeful that that's going to improve the overall situation.
Gasoline prices continue to fall.
Got it thanks, a lot guys.
Thanks, Tom Operator, we will take the next question.
Absolutely.
The next question comes from Jason prior.
Please proceed.
Great. Thank you guys, maybe first for William if you can just talk about how vizio has performed in past economic downturn cycles, and what you can do strategically to position the company for for share gains.
Yeah.
Jason.
Ever since the beginning has always been known as the best value, Brian the PV industry.
Over the last 20 years.
So we're really consistently deliver great technology and affordable price.
With alcohol by focusing on building the concho.
Any efficiency.
Like I mentioned earlier.
I am very proud of our strong seasoned management teams have done a fabulous job over the last 20 years.
<unk> proven to be resilient.
During the great recession.
We did extremely well and we have become the number one.
Last one you didn't mention any of the USA during that time.
And now that's a level of 40 years later, we added our dual revenue business model. So it was a combination of dual revenue model.
Really strong balance sheet.
Rudy strong seasoned management team was in so Paulo, we are ready to take on any kind of macroeconomic headwinds.
<unk>.
Alrighty.
Okay, and then just a follow up any notable takeaways from the upfront as you've I assume you've.
Wrapped up that process right now.
Okay.
I don't think we're necessarily ready to share a number we are still wrapping up the upfronts on our end, but I think I can share is we will be significantly up over last year.
I think we've had some great. We've closed some great deals in the marketplace and we continue to have some conversations to onboard even more brands, so not exactly ready to share a number but ken sure that it will be significantly up year over year and core to us growing in 2023.
Alright, thanks, guys.
Thanks, Jason Operator, we will take the next question.
Absolutely. The next question comes from Jim Goss with Barrington Research. Your line is open.
Okay.
Thank you a couple.
One I wanted to build on something I think Dan was talking about earlier about <unk>.
<unk> series and the 40 inch T series brings the number one two sets do you have a pattern you think.
You might be implying in terms of the <unk>.
Targeting certain certain categories to make that.
Current users and trying to continue this process it looks like you've done at least a couple.
Do you have a strategy in mind in terms of rolling that out just to continue their process of gaining the best platform usage.
Available.
Yes, Thanks, Jim.
One of the benefits of us having the extensive data that we do is we know that usage levels.
By television by series. So we have a sense of what units tend to over index in terms of your engagement and therefore opportunities for <unk> for us and so that goes into our thinking about which units we want to be more aggressive with pricing.
Pricing and so it's not a coincidence to your exact question that we started with that that V series 52 things pertaining to that unit, we sell a lot of them and it is a very highly engaged unit. It's about it's likely to be the main television in the home and a lot of cases, one of our customers and so knowing that information we were willing to price very aggressively to move more.
Units are more volume because it feeds right into the flywheel of us growing active accounts and the right active accounts highly engaged active accounts that are using our platform to engage with streaming they tend to use <unk> plus that's where our best monetization occurs. So it is there is a connection between our pricing strategies and how the usage trends.
<unk>.
Translate into a <unk> opportunity.
Okay, and so as not to let this.
Totally trashed your television.
The margins on the hardware do you think at some point you say you, let it be known that.
There might be another couple of months before this there is no longer on sale and we rotate to something else so that it encourages.
The consumers and the salespeople to push those models and then sort of move on to the next thing.
Yes look we work very closely with our retail partners on that merchandising effort and the promotion activities that we put into place we look at timelines throughout the year round around selling events opportunities Black Friday things of that nature and so we work very closely on a schedule.
To ensure that we do that but keep in mind, our fleet is fairly broad and so if we take a much lower margin for example on a couple of these very targeted skus like we've talked about here other skus are generating.
Higher margins to that so on a blended basis, we can help manage the overall gross profit contribution from the TV business, all that being said and back to the point of our dual revenue model strategically we're willing to be at a low gross profit margin on our TV unit sales because they are so valuable once we get those units in homes and generate that recurring revenue.
Stream that comes from our <unk> model and with the useful life of a TV, averaging somewhere around six or seven years is regenerating now as you see over $25 in <unk>.
Per unit on average and these units that we're talking about here are some of the higher indexing units to that.
The customer lifetime value is incredibly high for us and so to have a low margin at the onset of selling a unit to then drive higher margin platform business that strategy works incredibly well and we're now scaled up at a level, where we want to lean into that approach.
Okay and one other.
You spoke about.
Legacy televisions sort of them multi.
<unk> TV households, and.
That could be a way to sort of increase usage within the household and therefore increase the potential value to <unk> within that so how important is that effort and how do you promote it.
Yes, I think overall, it's important right we want to have a wholesale.
Home solutions, we want consumers to see the value in our units, what we're bringing to the smart cast platform meeting their streaming needs, bringing them new features and capabilities to just make that experience that much better hopefully than our competitors and as we continue to do that then they are adding other vizio Tvs.
That household and so it is part of the overall thinking to make sure that.
Have a great user experience that there is no need to go get a dongle or any sort of kind of a plug in device. We're meeting their needs, we're bringing great content to the platform, we're using our data to enhance their search and discovery output. So that they stay highly engaged and are seeing what they want when they want on our great value priced products. So.
Absolutely, we'd love to see consumers continue to add more units in their home and have this youll be their primary entertainment source.
Okay. Thanks.
Thanks, Jim Thanks, Jim Operator, we have time for one more question.
Absolutely. The final question is from lastly, karri ASO with Ken bought research. Please proceed.
Good afternoon, I have a question about your philosophy going into a potential macro downturn, so growing BMS for your advertising units.
Ben.
People have expected you to pull that lever and accelerate revenue and that's part of the Bull cases.
If you saw a softening in demand would you would you give up some CPM increases that you have been able to obtain and.
Gopro.
Higher sell through or would you accept a lower sell through but hope to see BMS.
Thank you very much.
Yes.
I think CPM.
<unk> is it really a function of supply and demand and I think right. Now there continues to be there is softness in the marketplace, but there continues to be demand for connected TV.
And as we've as we've mentioned we are a core player in this space.
Built a really strong business with watch free plus we have the best data in the marketplace.
We have for the media and entertainment community Best UI for search and discovery in the marketplace. So.
Our strategy today is not to reduce CPM. So we still believe there is upside and continued growth on the CPM side.
Thank you.
Thanks, Mythili and thanks, everyone for joining this concludes today's call have a great evening.
This concludes the visa Inc. Q2, 'twenty earnings call. Thank you for your participation you may now disconnect your line.