Q3 2022 Leafly Holdings Inc Earnings Call
Yeah.
[music].
An audio question you may do so by questioning stall followed by one on your telephone keypad.
Now going to hand over to Keene, Enzo Investor relations with the Blue shirt group to begin Keenan. Please go ahead.
Good afternoon, and welcome to <unk> third quarter 2022 earnings call. Joining me on the call today are CEO yogurt in the Asta and CFO Suresh Krishna Swabi today's prepared remarks have been recorded after which <unk> will host live Q&A a copy of our press release, along with an accompanying earnings presentation can be found on our website at investor.
<unk> Dot com.
Today's call will contain forward looking statements, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995 forward. Looking statements include statements regarding the services offered by leaf Li the markets in which we operate business strategies performance metrics industry environment potential growth opportunities and lately as projected.
Our results and financial outlook and can be identified by words, such as expect anticipate intend plan believe seek or will these statements reflect our views as of today only should not be relied upon as representing our views at any subsequent date and we do not undertake any duty to update these statements.
Looking statements by their nature address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations for a discussion of the material risks and other important factors that could affect our actual results. Please refer to the risks discussed in today's press release, our annual report Form 10-K filed with the SEC on March 31 2022.
And our other periodic filings with the SEC during the call. We will also discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. A reconciliation of the GAAP and non-GAAP results is included our earnings press release, which has been filed with the SEC and is also available on our website at Investor <unk> Dot com.
With that let me turn the call over to yoga.
Thank you Kenan and thank you to everyone for joining us revenue for the quarter was $11 8 million up eight 1% year over year as we continue to expand our advertising products partnerships and the <unk> brand.
Revenue from retail was up five 1% year over year and revenue from brands was up 19, 6% year over year.
On a sequential basis revenue reflected the ongoing challenging environment facing the retailers and brands we serve.
The cannabis industry in particular saw anemic sequential growth with Q3 retail sales estimates coming in at flat to 1% growth compared to Q2.
The volume of products sold as ground, but retail price points have declined.
Clients have put pressure on our retailers and brands to reduce their AD spend as their margins compressed.
This tells us that the macro environment is difficult.
Tumor demand for candidates has not softened and they continue to purchase which we see reflected in our own platform activity.
Although average order value has softened the number of items ordered with each purchase has remained consistent and retailers are placing deals on our platform at a record number.
This is a strong indication that value has become extremely important as consumers are looking for the best prices and deals when they purchase.
With our investments this year to build our subscriber base and increased deal functionality on our platform.
We're poised to deliver choice and value to consumers when they need it most.
We're also helping brands and retailers reach more customers when building their businesses is critically important.
With the market pace of growth declining and the subsequent impact to AD spend from retailers and brands, we announced a 21% head count reduction in October which is in addition to the significant opex savings initiatives, we announced on our last earnings call.
Suresh will give more details about these in a moment.
Both of these actions have realigned our cost structure, enabling us to preserve capital and manage for the long term health of the company.
These measures also gives us greater flexibility in this dynamic market better positioning us to take advantage of opportunities as they arise.
Although this was a difficult decision we are focused on creating shareholder value and it was the right decision given the current macro environment.
<unk> made over the past two years allowed us to reorganize our sales teams and bring on much needed talent in our PD and Ian DNA teams.
This early work provided insight and data to know which investments yield the greatest benefit and information on what we can do to be more efficient.
And what we can prioritize drive the greatest returns.
In addition, we have delivered significant product and partnership launches that we expect will present further monetization opportunities as they scale.
As we look to the short to medium term, we're focused on optimizing what we've already accomplished with plenty of opportunity to generate incremental revenue across the three platforms.
Our teams expect to move as quickly as possible in the areas of the business that we are able to control and will be ready to capitalize when the industry returns to robust growth as we all expect.
As a longtime supporter of a fair and equitable cannabis industry. We are encouraged by the industry momentum seen across the country.
In October we witnessed history, when president Biden reinvigorated federal legalization discussions by announcing cartons and kicking off the process to examine the scheduling.
It's a historic moment and recognition from the highest levels of the executive branch of what the public overwhelmingly already supports.
With the U S elections. This week, we'll be welcoming two more states to legal recreational cannabis, Maryland, Missouri, whose revenues comprised almost 4% of the U S population 18 and over.
The Wii platform is firmly established in these current medical markets with over 80% of medical dispensaries in Maryland in Missouri already engaged on leased fleet as of the end of Q3.
We look forward to serving the millions of recreational consumers, who will now have access to licensed testing candidates and onboarding, new retail locations, one says rec markets open.
In addition delivery continues to gain momentum in local markets as well.
We're very excited about the partnership with Uber eats we announced in October This partnership brings a seamless shopping experience to life within the Uber eats app.
The partnership is currently limited to Toronto.
It's important for a number of reasons.
John .
It normalizes cannabis and is a recognition of the great potential of this industry and the value of the candidates shopper.
We delivered tremendous value to retailers on our platform, giving them access to ubers as wide customer base.
<unk> penetration across consumers and Toronto are significantly larger than ours and the ability to connect those consumers with retailers is critical in a competitive environment and it's a powerful lever to help retailers grow their business.
Three this partnership lends itself to our strategy of strengthening and building more commercial partnerships through technology integration as we find more avenues to help our retailers reach a broader audience.
Specifically for US we see this partnership as a way to drive new retailer acquisition and order volume growth in Ontario.
New retail leads from the province increased by more than 260% and the week after the announcement.
We also see this as an opportunity to drive ARPA higher in this market.
We are a valuable connector for consumers and retailers and our partnership with Uber is helping to connect even more consumers with licensed tested cannabis products in Toronto.
Delivering against our mission to help more people discover cannabis on such a large platform would not have been possible without the growth and momentum from the investments we've made and our focus on technology integrations over the past two years.
Moving onto other quarterly highlights we saw an increase in ending retail accounts of seven 4% quarter over quarter or 18, 2% year over year.
We saw continued growth in monthly active users with a 4% increase over last quarter.
This was driven by top of funnel improvements, which have continued to bring high quality users to the site.
We are disciplined in our marketing approach to drive traffic through meaningful content, while establishing <unk> as the trusted go to source for candidates.
It is not our strategy to utilize low quality paid traffic.
Instead, we are focused on improving SCO by publishing content that consumers find valuable which has been fruitful and is a key component of our mission to help consumers discover canvas.
As you know one of our four key areas of focus this year has been making improvements to our AD platform to drive lower funnel performance for retailers and brands. We launched some of the largest improvements to our AD platform, including the launch of marquee AD units. The first new AD unit for retailers released in nearly two years across the most.
Valued real estate on weekly our homepage strains constraints list pages, we launched these products on web and October with expansion into native coming as a fast follow we are seeing great interest and strong selling momentum, which adds to our durable subscription revenue and reinforces that retailer.
<unk> are still eager to find ways to connect with engaged we see consumers.
We've also improved our attribution on our menu merchandising product, making it easier for brands to easily understand how deeply drives lower funnel performance through these ad units.
We continue to strengthen the role <unk> plays in the success of our retail and brand clients by reducing friction for our <unk> partners in key areas.
In addition to that Uber partnership, which will expand in Toronto, we completed integrations with blaze and Onfi, making it easier for delivery partners to scale on lately and improving the customer shopping experience.
We believe delivery is a critical growth driver for us in existing and forthcoming markets and with our growth and integrations and new partnerships in this area, we intend to lead in this category.
Our success in California is a compelling proof point, our delivery product is driving growth in revenue and performance in California, with a 24% year over year increase in California revenue and nearly two five times increase in orders almost one third of those orders coming from our iOS App built.
Building and maintaining trust remains a focus as we continue to create an incredible consumer shopping experience, we have refocused our editorial and content efforts to make sure. We are bringing the most valuable and sought after content to consumers through our news and learn channels and premium editorial content.
We also introduced FX based filters and our shopping experience as consumers consistently tell us that is how they want to shop for cannabis.
It's how we are leveraging our unique IP to help consumers in their cannabis discovery journey.
We've strengthened our thought leadership with the release of our second annual harvest reports, the only annual holistic assessment of cannabis as a crop.
A crop that is the sixth largest crop in the United States.
We also released our inaugural opt out report, which highlights the inadvertent ways local municipalities are supporting the illicit market when they opt out or legal cannabis sales.
These are important topics not covered extensively by anyone else.
Also excited by the anticipated opening of New York rack stores before the end of the year, our brand resonance across consumers in the northeast is significant and our penetration across existing medical retailers is strong in those markets, including 100% penetration across retailers in new Jersey and over 90% of existing dispensaries in.
New York on our platform at the end of Q3.
The operations front, we are focused on optimizing our team's existing products and offerings. We are working to create better alignment across teams drive increased productivity in our sales organization and improve our go to market strategy, we welcomed Carlos Pinto to legally in October to oversee the sales marketing and <unk>.
<unk> here.
His expertise in developing strong cross functional team comes just at the right time.
We've done the heavy lifting consumers recognize the leapley brand as a source for trusted expertise in premium content, we built a robust platform for retailers and brands with some amazing products and key technological integrations and now we're focused on penetrating local markets, adding retailer.
On platform and connecting them with high value traffic.
Today, the legal cannabis market is in its infancy. Despite the current macro environment. The industry is forecasted to grow to $42 billion over the next four years.
Utilization momentum only serves to further normalized candidates and over time this will be a valuable CPG industry in need of technology and support services that we will be here to deliver.
Im optimistic about the long term prospects of the industry and have legally as rebuild a healthy and vibrant marketplace for the future of cannabis.
And now I'll turn it over to Suresh.
Thank you Yoko and welcome everyone.
We are operating in a difficult environment in Q3 was a tough quarter. We saw continued softening in our spend from Q2, and we responded quickly to adjust the business by implementing cost cutting measures, including a head count reduction.
As we look ahead to Q4 and beyond we will manage the business to take advantage of the opportunities ahead of us while staying focused on controlling costs.
Q4 is typically our best quarter of the year due to higher holiday related Aspen.
Our early read for the quarter is one of caution.
October we've seen healthy interest from advertisers and our new marquee and strained feature.
Pickup in retail revenues, however were still seeing brands pull back on their spending.
Now to the results in Q3.
Revenue in the third quarter was $11 8 million up 8% year over year.
Breaking that down revenue from retail was $9 million up 5% year over year revenue from brands was $2 7 million up 20% year over year.
Ending retail accounts grew 18% year over year as the sales team worked to grow our market share in both newer and more established markets.
<unk> continued churn in retail accounts in Oklahoma, a market that has been struggling to strike a balance between supply and demand.
This churn was offset by strong account additions in Florida, California, and newer markets like New Mexico.
Our retail ARPA in the third quarter was $556, a decline of 10% year over year and 4% quarter over quarter.
As we've mentioned on previous calls this number has been trending lower as we grow aggressively in newer markets and work to gain market share in more established markets.
The decline in ARPA from Q2 to Q3 was primarily related to pricing promotions and discounts in British Columbia in Oklahoma and general pricing pressure in Illinois.
Strategically we believe this approach to add retail accounts will benefit our business in the long term, it's part of our land and expense strategy.
We will focus on growing accounts and deepening our market penetration.
At the same time, we're also working to reduce churn and keep customers on our site.
We know that customers come to lease fleet looking for information and product access.
More retailers, we have on our site the more leased fleet helps create a healthy vibrant marketplace that benefits consumers and retailers alike.
Due to the subscription nature of our business the introduction of our new marquee AD units and the important holiday period. We expect continued growth in retail revenue in Q4 on a sequential basis in the mid to high single digits.
Turning to brand on a sequential basis revenue declined 8% compared to Q2 as brand accounts pullback on digital advertising.
Part of this decline is due to the fact that Q2 includes the 420 holiday, which typically leads to a boost in brand advertising.
Our expectation for the near term is for brand revenue to face continued headwinds as these customers have trimmed their budgets even in light of the upcoming holidays, which are traditionally higher spend periods for brands.
We expect brand revenue in Q4 will be roughly flat compared to Q3 'twenty two.
Now turning to gross margin.
Total gross margin in the third quarter was 87, 1% a 130 basis point decrease from 88, 4% in Q3 2021.
Driven primarily by increased business platform and web infrastructure expenses and head count costs.
We expect gross margin to remain at similar levels going forward.
Moving on to operating expenses, our Q3 total operating expenses were $16 3 million.
Which represents a 16% sequential decrease in Opex from Q2, as a result of our pullback in marketing and travel and entertainment spending and reduced head count.
I wanted to take some time now to speak to the restructuring and cost cutting measures that we announced on the 18th of October the items that we have taken will have a meaningful impact on our operating expenses going forward.
These efforts are intended to position us with the appropriate operating structure and resources to deliver sustainable value for our customers and shareholders.
Additional goal of this restructure is to conserve cash and strengthen our balance sheet.
As we announced on May 18, we expect to pay approximately <unk> 5 million in Q4 related to salary and benefits cost for eliminated positions.
The majority of the head count reduction occurred in the sales and marketing and product development team.
As we disclosed in our press release, we expect annualized cash cost savings of approximately $16 million starting in 2023.
While we're not prepared to offer guidance for the full year of 2023 I did want to provide some commentary to help investors understand how we're thinking about cost structure next year and the impact of our realignment of the business.
As I said, we do expect cash cost savings of approximately $16 million in 2023 compared to 2022.
We currently anticipate that our operating expense structure, excluding stock based compensation will be roughly split across our three categories.
With sales and marketing at 40% of total Opex.
20% of total Opex, and G&A and 40% of Opex.
Given the current environment, we are proceeding with a cautious posture.
As Yoko mentioned, there are dramatic changes happening in the industry with respect to legalization that get us excited about the future.
We have positioned our business to capture these future opportunities, while being mindful of the macroeconomic headwinds.
Now turning to the balance sheet.
We ended the quarter with $27 $8 million in cash.
We continue to be prudent in managing our cash.
Cost reductions and business realignment are designed to preserve our ability to respond to opportunities in the market, while also effectively managing capital.
I also want to point out our Q3, ending basic share count of 40 million shares. This was after we repurchased three 1 million shares during the quarter using restricted cash on our balance sheet now to our guidance for the full year 2022, we're refining our revenue guidance and now expect revenue.
To be between 47 and $48 million, while our retail revenue is holding up you see increased risk in brand spending in Q4.
For adjusted EBITDA guidance, we expect a loss of approximately negative $26 million for the year.
At the top end of our previous range.
Lastly, we're planning to give full year 2023 financial guidance on our fourth quarter earnings call in March 2023.
We will now open up the call for questions operator.
Yeah.
As a reminder, if you'd like to register and all your question. Please press star followed by one on your telephone keypad.
In your mind. Please press star followed by two I am please ensure you're on mute when speaking.
Our first question comes from Harrison Veeva <unk> of Cowen. Please go ahead.
Okay.
Great. Thanks, so much for taking my questions.
First one for me.
Pickup in and then retail accounts here, so just given we're halfway into <unk>.
Curious if you could give us any line of sight into what youre seeing in terms of.
Cancellations under new adds to the platforms.
Yes.
Parison, we had a strong quarter in retail account growth.
18% year over year.
We really focus on growing retail accounts following the churn we saw them in Q2, and we're pleased with what we achieved in Q3.
To give you a move science, California has the largest number of account.
Due to introductory promotions and our focus on our new delivery product and experience and overall, we saw growth in over 70% of our markets quarter over quarter, including some of our newer markets, New Mexico, Missouri and within our MSL client base in Florida. So so we're looking for some of the <unk>.
You continue so we're expecting modest account growth going forward.
I mean, we're not giving.
Guidance on on any retail accounts, but year over year, probably in the high single digits.
We know retailers see the value of being on the Wii platform and we're conscious at the same time, a customer segment in their budgets in the current environment.
While at the same time, we are optimistic about the new licenses coming online as well and a number of places.
Okay.
For sure.
Helpful.
No. It's still early days, but are you seeing a pickup in new retail accounts are the direct result of.
The partnerships that you've <unk>.
Done reasonably specifically with blaze and honestly in the U S.
Yeah, let me speak to that one Harrison and Blake honestly critical partners for our delivery experience in terms of reducing friction for our retailers and building a great consumer experience. So we think that's one of the key drivers of our growth in California, and I get your staff on the call in terms of the year over year performance increases were seeing theyre very excited about that we think.
We're in early days, we talked about our new delivery process and launched an H. One of this year, we layered on delivery platinum placements, which are specific AD units that are really catered to that audience.
No.
We'll continue to work on scaling that and excited about what that like what lies ahead from network. I'll also say in terms of delivery that is are these announcements not only did we see the increase retailer needs in the market, but that's had a general halo effect and really that ability to connect consumers.
Really strong top of funnel traffic with retailers is highly attractive in this highly competitive space, where retailers are trying to gain traction.
Great that's helpful.
I guess following up on that can you can you maybe offer more color on the economics of those partnerships.
How we should think about.
The impact of the model, especially because.
Youre asking these partnerships customers free of charge and then I guess, just curious to see how do we think about the ramp in ARPA overtime.
Youre turning months free initially.
Yes, great question.
I can't go into the specifics of our.
Our deal with Uber, what I can say is this this deal has allowed us to essentially raise the entry price points for all new retailers coming on platform in Ontario, It's made.
Our platform that much more valuable.
And that does give us a great opportunity to increase ARPA and market growth.
Currently do as well as existing as we go through renewal cycles.
Our next question comes from Jason <unk> of Oppenheimer. Jason. Please go ahead.
Thanks, two questions so the guidance for revenue.
Minus four to plus 5% year over year, obviously everyone's going to try to re powered from that so without giving formal guidance. I mean, how are you thinking about next year I mean in some cases, we've talked about a weak first half and a stronger second half.
How did you come up with a minus freedom plus 5% range and just.
How do we think about that and then the second.
Was there a catalyst that causes the customer growth.
During the quarter.
So Jason just to.
Just to dive in on that question could you just clarify the minus three to plus five.
But for the next year I think thats the implied if you take the range of your full year.
You gave full year report.
48.
So for this year.
Yes. Thanks for this year. So if you back into the implied fourth quarter revenue change of your guide I think Thats correct. The range if I'm, Matt yes.
And so I guess I'm like how did you come up with the low end versus the high end and just broadly how you're thinking about next year from a maybe a cadence standpoint, because obviously, we're all going to come up with models and people listening on this call we're going to come with their own estimates budgets you can talk about maybe how youre thinking about the arc of next year, perhaps a bit.
Yeah sure. So thanks for clarifying that.
This year as we look at it.
Q4 <unk>.
Large components of our revenue pretty much well baked at this point made especially in retail which is largely subscription like revenue and that's the larger portion of our business as well. So we have a bit more potential variability and brands revenue, we feel our guidance of 47 to <unk> 48 per unit.
What's that.
The midpoint of that range represents 10% year over year growth at the midpoint, which is above market growth for accountants industry. So we're doing everything in our power.
Execute on our plan and make sure that we finish the year strong. So we're yes.
We're pretty confident in that.
Guidance range that.
We've put out.
In addition, especially talking about the EBITDA guidance for this year.
Here in this environment, we've made the hard decisions in the head count reductions and the Opex cuts that were right for the business. We we feel we've got ahead of that.
And we really refocused the teams to prioritize on the most important initiatives.
And as we position ourselves for next year.
Certainly or.
Situations, where the current challenging macro environment continues but at the same time, our position to capitalize when opportunities do.
Come our way and broker turns so as far as 23 is concerned I mean, we expect to provide full year <unk> guidance on our Q4 call in March.
But what I can say is it's been a tough market in the second half of this year.
And you're quite right in backing into the implied growth in Q4.
So you can see that even in this tough environment.
For you to grow so I.
I think that's the best three for next year.
Given.
We haven't yet provided guidance, so we've positioned ourselves with the cost reduction.
And the re prioritization.
For continuing to navigate through the current.
Challenging macro environment, we expect that to continue into next year, but at the same time I can say we are in.
Monitoring industry and local market trends and we're seeing momentum in new products.
Mentioned the marchi adds.
They are off to a really strong start this quarter, we expect to build on that.
Also anticipating additional licenses places like L, a and New York, mainly legalized market. So.
We just continue to communicate the value that we bring through our retail partners, we know that they want.
I want to be on the platform, we're making it easier for them to understand the NOI. So we.
We remain optimistic about the opportunities.
For next year.
We're going to continue to manage the cost side of the business to conservative estimates.
I hope that helps thank you.
There was a second part to your question in terms of our retail account absolute growth and whether that was.
Yeah.
The words in your mouth, but essentially it has to go about getting that and I would say regarding the clock to when we talked about our sales.
Earlier this year really organizing into local market structure has been critical for us to go after and understand the dynamics of each market.
<unk>.
And can we talk about them with great growth that's been a critical driver for bringing new Calpine in California.
I will say, it's structural first and foremost in terms of internal on how we can go after the opportunity and it's been execution.
On the heels of that.
Thank you.
Yes.
Yeah.
Our next question comes from Eric to Lawrence of Craig Hallum, Eric The line is yours.
Great. Thanks for taking my questions.
First one for me just to follow up on me Uber eats partnership. Congrats there can you help us understand the ability for that partnership to expand beyond Toronto is there something specific with the Ontario Province.
I'm assuming that this is obviously limited to Canada for now, but just talk about the ability to potentially expand beyond Toronto.
The trial phase.
Yeah.
Hopefully my commentary suggests we've been Super excited about how that launch has gone up.
In terms of partnerships that we've been able to develop with <unk>. There are obviously reasons as to why we carry the Mccann Canada first.
Both of us.
We will focus on the expansion in Toronto through the rest of the year, we will be excited to share more information about that and I think what we're really looking at is the engagement.
Activity that disk drive so I can't really speak to expansion beyond Toronto at this stage, but we'll be certainly happy to share on the water.
The partners develops.
Okay great.
And then just onto the strategy of using promotional pricing to help drive ARPA gains certainly seems to make sense in this macro environment.
I'm wondering I guess, just kind of maybe two questions here do you have any early insight into the ROI of that strategy and can you just help us understand maybe some of the risks or opportunities.
Really accelerating that strategy.
Sort of what's stopping you from lowering prices further to continue capturing.
Greater share.
Presumably it would still be.
Incremental to revenue and gross profit dollars. So just wondering how you think about that that strategy. Thank you.
Okay.
Yes, Thanks, Eric.
Our strategy overall is to build a robust platform and marketplace that delivers value to consumers and retailers. So we've really been focusing on account growth over ARPA.
And on the value to customers through improving the consumer experience, adding more deals on our site.
Spanning the successful start of our delivery gateway experience.
So all of those things have contributed to the success, we've had in really focusing on adding retailers to our platform.
On the <unk> side.
We report as an average of what's playing out at the local market level. So thats also.
I will draw attention to that we're in growth mode and we are building the business in your market and is it based on rig deepening our penetration in more established markets. So this is our land and expand strategy. So the ARPA number has been trending lower.
As we grow in newer market and we worked to gain more market share and that's something that we're going to continue.
At the local market level. So you also just mentioned that we reorganized the sales team last quarter and so I think we're seeing these dynamics really played out very differently across markets.
And our view is as we add retailers to the platform, we start to understand the value and we've seen that their willingness to pay for that value increases.
<unk>, specifically talking about some of the decline in ARPA in Q3 that was related to pricing promotions and discounts and we saw that in in British Columbia, Oklahoma.
Pricing pressure in Illinois, but at the same time, we're also seeing ARPA growth in some of the newer markets like New Mexico, Missouri.
So.
Yes, let me early then.
Yes.
I misspoke.
Yes.
By.
Focusing on ARPA I didn't mean made promotional pricing you are helping to drive retail account gains and I guess my question is ultimately sort of how much room, you have to continue leaning into that strategy.
How much we should expect that to accelerate versus youre sort of comfortable with the current level of promotional pricing that you're offering.
Yes.
I mean, we're really tailoring our strategy to each market. So we're not giving guidance on ARPA, because we're really looking at it in the local market level.
But in the near term I mean, we're certainly focused on adding retailers and that means that our carnival continues to trend.
Lower right, we're going to continue to focus on retail account growth, we feel like that's the right strategy and that from what we've seen as we continue to add retailers onto the platform at prices that make sense for them and allow them to really understand the value that we're bringing.
Seeing them participate in newer products.
Talk about the marquee asset so we feel that once they are on the platform.
Okay Man.
We expect some of the newer products to contribute to ARPA growth.
In some of these markets.
Let me use an example, there.
<unk> was actually a market in which we use introductory pricing earlier this year.
We've been able to bring sufficient numbers of retailers on the platform. We have this new offering in the form of <unk>.
That allowed us to drive a higher in that market, we're no longer offering thermal pricing in Ontario.
That level of granularity on which we're looking at the market dynamics to adjust these and how we approach a specific market and the right strategy for us.
Yes definitely makes sense.
Yes, it seems like a great strategy at this point thanks for the color.
Alright.
Thanks very.
Great questions over the phone lines.
With that we'll conclude today's call. Thank you for joining you may now disconnect your lines.
Okay.
[noise].
Yeah.
Alright.