Q3 2022 Wix.Com Ltd Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Good day and thank you for standing by welcome to the Wickes Q3, 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 the session you will need to press star.
One one on your phone please.
Today's conference is being recorded and I would now like to handle conference over to your speak today is Emily Liu Investor Relations Analyst. Please go ahead.
Thanks, and good morning, everyone welcome to Wickes as third quarter of 2022 earnings call.
Joining me today to discuss our results.
<unk> CEO and co founder.
So heart, our president and C O L M, New York stomach our CFO .
During this call we may make forward looking statements and these statements are based on current expectations and assumptions.
Please consider the risk factors included in our press release and most recent form 20-F that could cause our actual results to differ materially from these forward.
In the statement.
We do not undertake any obligation to update these forward looking statements.
In addition, we will comment on non-GAAP financial results and key operating metrics you can find all reconciliations between our GAAP and non-GAAP results.
Earnings materials and in our interactive Analyst Center on the Investor Relations section of our web site investors <unk> Dot com.
Tom.
I'll turn the call over to Amit.
Thanks, Emily and good morning, everyone. Thanks for joining us today.
I want to start today's call we didn't a few highlights from the quarter and provide an overview of <unk>.
Some exciting new products, we recently announced.
Neither Leo will then share more details on novel duration and financials results.
Then we would take some questions.
Despite continued uncertainty.
The strong fundamentals of our business along with great execution.
The revenue growth ahead of our expectation.
A significant improvement in profitability.
Revenues in Q3 was $346 million.
8% growth year over year.
On a constant currency basis revenues were $351 million.
10% growth year over year.
Yes.
We consider them.
Our global reach to be one of the key competitive advantages.
However, given the recent changes in foreign exchange rates it has become a meaningful headwind to our financial results.
Free cash flow this year would be more than double if you assume year over year constant currency rates.
One there is a great deal of uncertainty and volatility in the macro economy.
We expect will continue into 2020 free.
We are focused on what is under our control.
We are already seeing the result of the cost reduction plan, we put in place last quarter.
With improvements to margins and free cash flow.
non-GAAP gross profit grew more than 10% year over year.
Okay.
non-GAAP gross margins.
63%.
We jump to positive cash flow, excluding the investment in our U S.
Given the successful execution.
Happy to say that we are on track to achieve our free cash flow margin targets for this year.
And last year that we outlined three years' plan.
We also continue to focus on building a platform to be the leading destination for creating and managing it online presence for shape creators professionals and developers.
<unk> is built to meet the needs of any type of user in any type of business.
And we continue to add products.
Services and solutions to the platform to deliver more value to our users and partners and help them succeed online.
As part of our strategy and Great partners revenue with.
It's more of a platform for design.
And developers, we intend to continue and expand and open our platform to accelerate more powerful solution for developers.
To highlight our commitment to this community in September we hosted our first ever developer conference, which they have got in New York.
Hundreds of developers join us as we introduce new capability and heard of their feedback on how they use wix.
When what we announced wickes blocks are new high velocity ecosystem that enable professionals designers to build responsive and customizable components.
These components again reusable across multiple websites built in weeks.
An editor X, which blocks enable professionals to create an application where the ease of dragon drop.
It allowed them to work concurrently.
Project.
All of these features increase developer productivity and efficiency.
We've been using Wix books internally and I can say it has created a very positive change.
David last year.
We believe that this offering will bring more developers and project wickes and create more and more rich experience.
Put them in August we also announced a new ecommerce vision and your platform that provide developers with the freedom and flexibility to build scalable custom e-commerce experiences for any business needs.
Which blocks in the new weeks ecommerce platform are just two example of.
We are expanding.
Offering for professional coming to wix and driving the value of our platform.
We remain committed to delivering the best in class products and services to all of our sub creators and partners to allow them to create.
<unk> online.
Before I hand, it over to Nir.
I just wanted to thank the entire team here at tweaks for all of their hard work.
And for their continued focus on our users and their needs.
Now I'll hand, it over to Nir to talk a bit more about Q3 and provide an operational update.
Yeah.
Thank you Alicia and thank you everyone who's joining us this morning.
I mentioned the fundamentals of our business remains strong as can be seen in the court bookings data.
As you can see on slide 12 cumulative cohort booking for a Q1 'twenty two court increased to over $47 million through Q3.
This is 5% higher than the Q1 19 court in its first three quarters and 8% higher on a year over year constant currency basis.
This growth is a continuation of the trend we saw last quarter and evidence of our strong fundamental conversion and retention rates remained at high levels.
Average bookings per subscription continues to increase.
Despite the volatile macro environment and unfavorable effects. We are experiencing we continue to improve the monetization of users through data driven marketing and a robust product offering.
Our user additions of $4 7 million in Q3 reflects the current demand environment.
As the global economic slowdown continues beginning in September we adjusted our marketing spend to focus on a high intent users.
This resulted in a slight headwind to new user additions in Q3, while meaningfully improving return on our marketing investments.
We expect this effect to continue through Q4.
Operationally, we continue to execute on our cost reduction plan that we outlined last quarter.
We are hiring new employees only four hype of priority position.
And we continue to drive operational efficiencies across our customer care, R&D and sales and marketing team.
We have also continued to optimize overhead costs through reductions in our real estate footprint software costs and third party advisory Cole.
I'm also excited to report that last month, we moved the first wave of employees into our new headquarters campus in Tel Aviv.
We also consolidated the rest of our Tel Aviv team that was spread out among about a dozen small locations in the city to a single location in the fourth.
In addition to the operating cost savings, we will realize from having a small number of offices.
Bringing our employees in Tel Aviv physically together is already delivering efficiencies to how we work.
Building, our new campus in relocating thousands of people has been a massive project and I'm incredibly proud of all the hard work from our team to make it happen.
The second and final wave Central you will move to the campus next summer at which point all of us in Tel Aviv will be under one roof.
Before I hand, it over to Europe , I also want to take this opportunity to recognize our team in Ukraine.
I'm really proud of our people and how they remained strong during these extremely hard and stressful stressful time.
With all of the hardship they have experienced which is actually intensified recently.
Ukraine team's efficiency and productivity remained high.
Our thoughts are always with them and their families. While we continue to focus on everyone's safety and wellbeing.
With that I will now hand, it over to <unk> to walk through more details on our financials.
Thanks, Nir and welcome everyone.
As Avishai mentioned, we exceeded the top end of our guidance range for revenue in Q3, and we greatly improve our margin this quarter.
Leading to positive free cash flow, excluding our headquarters Capex.
We believe this trend of improving margins and free cash flow will continue into Q4 and next year.
To begin I want to share an update on our cost reduction plan.
The benefit we are already seeing.
Total non-GAAP gross margin improved from 62% in Q2 to 65% in Q3, and we expect another 100 basis points of improvement in 2023.
non-GAAP operating income improved by over 280 basis points from Q3 compared to last quarter and in Q4, we expect to generate positive non-GAAP operating income for the first time since Q4 2019.
We now expect total non-GAAP operating expenses to be roughly flat 2023.
Yeah, roughly flat in 2023 compared to this year driving positive non-GAAP operating income for the full year.
This trend along with improved gross margins means that nearly all of our incremental revenue in 2023 will flow to bottom line.
We generated positive free cash flow, excluding headquarters Capex of $4 6 million.
In Q3.
To sum up we are already seeing significant benefits from our cost reduction plan and sticking to the commitment of cash flow margins, we've made in our <unk>.
Your plan.
Now I'll quickly go through some highlights of our Q2 results.
Revenue was $345 million to $8 million or 8% year over year growth, which was slightly above the high end of our guidance range due to strong performance.
Yes of course.
On a year over year constant currency basis revenue was $358 million or 10% year over year growth.
Transaction revenue, which is subset of business solutions revenue.
And is composed primarily of experiments was $76 million in Q3.
12% year over year growth.
<unk> was $2 $5 billion in the quarter roughly flat compared to last quarter as we continue to see slower growth in online purchase activity.
Our take rate measured as transaction revenue as a percentage of GPC continue to increase.
As the percentage of GPC running two weeks payments growth.
<unk> revenue, which include all type of revenue generated to designers and developers who build sites for others as well as b to B partnerships grew to $86 9 million.
24% year over year on a constant currency basis year over year growth was 26%.
We continue to see more partners building one weeks as we gain more traction in the professional community despite macro pressures impacting project pipelines.
Total bookings in Q3 was $352 5 million and on a year over year constant currency basis was $366 $5 million.
I want to highlight a few things related to this result.
No thats FX rates impact bookings much more significantly than revenue as we collect the cash upfront for subscriptions and renewals.
Slower growth in <unk> also impacted bookings this quarter.
Also remember that in Q3 of last year, we recognized bookings related to be to be partnership with $48 million.
Which included our largest ever B to B partnership.
Vistaprint, creating a very difficult comp this quarter.
If you remove these amounts from bookings in Q3 of last year, our FX neutral year over year growth. This quarter is 12%, which is the true indication of our growth on a year over year basis.
Changes in bookings related to be to be partnerships do not indicate near term changes in revenue because they have very different revenue recognition schedules.
Bookings associated with those would be to be partnerships are recognized into revenue over multiple years, while bookings associated which are subscription packages typically are recognized into revenue over one year.
Finally, as the macroeconomic conditions remain challenged today, we have seen companies, we speak to about be partnerships Titan project budgets and risk appetite.
Slowing the magnitude of new agreements, we expect this trend to continue in Q4 and next year.
Despite all of these we are excited by the strength of our B to B pipeline and the growing contribution from existing partnerships.
Turning to our outlook for the reminder of the year, we expect total revenue in Q4 to be 349% to $254 million.
Or 5% to 6% year over year growth last quarter, our full year revenue outlook was 8% to 10% year over year growth.
Factoring in FX changes since this summer, we have narrowed our outlook to 9% year over year growth.
Midpoint of our full year outlook has not changed as we increase the bulk of it.
Most of the prior range.
For the full year, assuming constant currency total revenue would be about $20 million higher or 10% to 11% year over year growth.
We expect free cash flow in Q4 to be $47 million to $50 million.
Excluding our headquarters Capex, achieving this range will produce the highest free cash flow quarter in our history.
For full year free cash flow excluding headquarters Capex.
We stated last quarter that our expectations were 2% to 3% of revenue due to FX changes.
We now anticipate free cash flow margin too.
To be at around 2% of revenue for the full year.
Assuming year over year constant currency free cash flow for the full year would be $43 million higher.
Total of 5% of revenue, which is the high end of the range, we presented in our three year plan.
We will provide more detail on 2023 during our Q4 earnings call in February , but I can comfortably say now that with the success of our cost reduction plan.
And the operational efficiency improvements, we expect to achieve the free cash flow margin in 2023.
Consistent with the three year plan, we shared in May with that we will now go ahead and take your questions.
Thank you.
As a reminder to ask a question you will need to press star one on your phone. Please standby as we compile the Q&A roster.
Hello, gentlemen, first question.
Our first question will come from Brent Thill of Jefferies. Your line is open.
Thank you we are just on the cost savings plan, where do you still see the biggest opportunity to drive improved efficiency and maybe for Rob a shot just as it relates to overall <unk>.
<unk> can you can you just give us a sense of where the pockets of strength, you're seeing and where maybe some of the weakness here Youre seeing show up a little more pronounced thanks.
Yes, so I'll start with.
With the first question.
I believe that the cost reductions that we've made will be enough to mix the targets that we set now.
Analyst day.
And I think that it's also very important to understand that we are committed to the free cash flow targets that we outlined in the may.
Analyst day.
So we will adjust obviously the cost accordingly based on the macroeconomics that we see but I think that is very important to mention that we believe that we can reach this goal even without with a low growth in terms of the top line.
I'm not sure I understand how to connect.
A question about.
Cost reduction in demand I can say overall on demand what we're saying is that.
Do you want demand.
As British stable now.
And we're still seeing the same fundamental.
<unk> that was before conversion and retention.
And the output.
And so the total refinery stable.
And the back or beat above pre COVID-19 levels.
So I find it encouraging, but where we sit with everybody.
All of our peers experienced something similar.
Actually on a relative basis, it can be to head so stable.
It Hasnt declined anymore and.
And I think that the.
As the recession.
<unk>.
Continue to evolve we'll continue to see changes there.
Okay.
Thank you.
One moment please for our next question.
Our next.
<unk> will come from Andrew Boone.
Of JMP Securities. Your line is open.
Hi, guys. Thanks, so much for taking my questions can you talk about the demand from partners versus top creators and then I wanted to go to marketing.
I believe the original guide was for no change in acquisition marketing. So can you just help us understand whether.
There is a change as you guys focus on higher intent.
Users is that an adjustment for near term macro or is there something else that you guys are changing in terms of the payback targets. Thanks, so much.
Andrew.
I'll take the I'll take the first question about the demand from partners.
So.
You said how is that related to what we're seeing demand from partners.
Demand for the South Greater then obviously those two have the relation between them.
Naturally.
When the <unk> are generally small businesses the lease tendency to onboard online to build.
The commerce websites.
Or to expand their business online that will also affect the amount of projects that our partners are getting.
So from that perspective.
We've seen a decline from previous years growth, but still.
Are seeing a very very healthy growth.
Even so.
You have to remember that for US again, we are still seeing the compounding effect on the court of the partners. So a big strength even.
Our growth rate.
And this is obviously something that is going to continue benefiting us as we go forward.
On marketing.
So currently we adjusted our marketing according to market demands.
Yeah.
Well of course is the slowdown in global economy continues.
Seeing that the demand behaves differently in different kinds of channels of demand. So we're seeing that.
Meg very little effect on the high intent users.
<unk>.
And more of an effect on the LOE event.
Or more of a casual interaction and then got into a bit of a more of a commitment.
Of course, we adjusted our marketing.
According to that.
As far as the effects it wherever they are.
Go ahead.
The new cohorts currently it seems to be very small effect. So one.
Optimistic that these actions allow us to be better but.
We'll continue to update as it develops.
Thank you.
Thank you.
And one moment for our next question.
Our next question will come from Ron Josey of Citi. Your line is open.
Great. Thanks for taking the question I wanted to maybe follow up a little bit understanding your comments on macro and the letter I think the letter talks about some delay in new signings of VW partners, but then also a smaller competitive landscape here and so I just wanted to understand that a little bit more both on just the partnerships and then the competitive landscape.
And then Lee or just a question on Capex, because we are getting it from clients, but total HQ capex was $27 million, but it looks like total Capex was 22 can you help us understand the dynamic between the two fleets. Thank you guys.
Ethernet service.
Yes, so I'll start with the <unk> partnership.
So it's actually two two cases over here that we need to understand first of all is.
The obvious one which is due to the macro uncertainty.
Those b to B partners less willing to commit to a long term agreements now, let's remember how exactly we recognize that the bookings will be to be partnerships.
Is based on a multiyear commitment.
Our partner. So for example, restructurings, we recognized $48 million bookings would that with the level of commitment.
That we had in the agreement so first of all we see less appetite to provide a long term commitment.
Which is you know makes sense during an uncertain times.
The second thing is obviously you know this.
Slowdown overall in the market also effect.
Partners because at the end of the day the same users the same end users that they serve.
Sure.
But it's very important to mention that this does not diminish the potential of a deal it's only affect the amount recognized in booking upfront, meaning that the overall potential of the deal is remains the same in terms of revenue is is mostly impact as I mentioned before about the willingness to commit.
So this is with regard to that with regard to the Capex.
Of about $27 million in Q3, I'm not sure exactly what was the question.
What was not.
No.
What was the question.
Sorry, it was more it looks as if the capex.
Total capex was a little bit lighter and then the Capex spent on HQ, we can follow up with that at later okay.
Also anti itch on a smaller competitive landscape is well understood.
The partner side.
Yes.
Asking about smaller competitors that compete directly with US then I think that we've seen that.
There is a slowdown everywhere.
As we had of course.
In a recession the economy of course is not growing as quickly and I think that all of us that provide solutions for.
Formation of new businesses for marketing Department.
Yes.
The two other types of ways to monetize of course experience that.
On a relative basis I think we are actually doing better than most are the ones that we.
So we actually managed to continue to increase our position in the market, which makes me very confident that we're going to see recovery from the recession.
And all the hard work to place into.
Our products and brand.
We bear fruit.
Thank you Avishai.
Thank you.
And one moment for our next question.
The next question will come from Elizabeth quarter of Morgan Stanley . Your line is open.
Great. Thank you so much for the question.
The Q4 guidance implies about 5% to 6% revenue growth year over year exiting fiscal 'twenty, two and how should we put that into context relative to street and 11% growth for fiscal 2013. So my question is do you think the business can accelerate growth into next year and if so how does the factors like BTB contribution of pricing starting that with some of the macro softness.
Thanks.
So again I think that.
We explained before about the reasons for the revenue growth, but I want to provide a few numbers with regard to the FX.
So you know can explain.
At least a big part of the reason the FX effect on.
Nearly basis.
Is about more than $40 million.
And in a lot of it is actually you know happened in the last in the last couple of quarter and also in the last quarter, you know what's happened to the euro and the British pound.
So I think that this is something that we need to take into account.
We see the effect of the slowdown.
And it's important to mention that because you know we hope we all hope and assume that it will recover at some point of time, but we do believe that the fundamental of the business are very strong we don't see change in those fundamentals. Therefore once the economy will recover I believe that we will be back to what we said.
At the analyst day in terms of what we see as a potential growth both for <unk>, but also for partners.
Got it and then quick question on retention I know you mentioned it will remain strong through September .
And you rolled out new prices in the spring. So just wanted to have been great. The reaction for customers at <unk>.
Renewed over the recent months and any difference in the ability to absorb higher prices you needed the self greater or the partner channel.
Hey, Elizabeth.
So we haven't seen anything which is significantly different reaction to what we expected obviously expectations were built on our past experience of doing these kind of.
Price changes and exercises.
For our user base.
So.
Even even in this environment.
We didn't see any significant change or impact that came through that.
We've seen the positive impact of <unk>.
Hi.
Rps coming from the price increase.
Got it thank you very much.
Yes.
Thank you.
And one moment please for our next question.
Our next question will come from Trevor Young of Barclays. Your line is open.
Great. Thanks, just dovetailing on that last comment.
But youre seeing some lift from pricing.
Much lift is embedded in the <unk> guide from price and then second question on international with both Latam and Asia continuing to lag in terms of growth I know those are smaller as a percentage of revenue, but how critical is it for you to get momentum going there and what's going to be the strategy to get growth to come back in line with total comp.
Yes.
Okay.
So I will start with.
With the first question.
About the pricing so as you all know we began to roll it out in May.
So a bit more than half of our customer we're exposed.
Already exposed to that obviously it will continue in Q4 and full and full effect halfway through 2023.
There is a positive impact of our pricing we mentioned before that we see a positive in terms of the value of the quarter and this is part of our models.
So for Q4 and definitely for 2023 of them talk about it on the February call.
With regard to Asia Pacific.
Most of the impact was actually on the GP re.
This is why you see that happening.
Meaning that we see a more.
Well kind of a slowdown on online purchases.
And that's affected.
The overall GPC and you know it is reflected in the business solution.
Great. Thank you.
Thank you.
One moment for the next question.
Okay.
Our next question will come from Ken Wong of Oppenheimer <unk> Company. Your line is open.
Great. Thanks for taking my question.
Just wanted to clarify some statements around just cash flow Lee are you.
You mentioned that Youre on track to hit your three year plan. So that would be 10, 20% free cash flow margin. So for 'twenty, three let's say, 10% and Thats. The low end you also mentioned that with the cost cuts that we could anticipate an additional $150 million of operating income. So is it fair for me to layer of that one.
<unk> 50 on top of the 10% margin hypothetically.
Okay.
The $150 million that we indicated.
In the shareholder update.
To provide some kind of understanding about the differences between the operating loss that we assume in the.
In 2023.
During the analyst day.
And the overall operating profit that we're going to have in 2023 as a result of the cost reduction meaning that it's all part of it as I mentioned before we are committed to the profitability targets in our three year plan.
And everything that we've that we've done in the last few quarters.
Is to make sure that we will meet it.
So for your question.
We will meet what we indicated a target it will not.
The 150 is not on top of it.
Okay, Okay, great great, yes that was it.
Clarification, Okay, and then just on the on the.
The <unk> side.
Recognizing that you guys are seeing a little bit of headwinds there.
You guys still grew 12% kind of constant currency excluding vistaprint.
Is that the right run rate to think about that business growing or should we kind of dial that down a little bit because of the incremental headwinds youre seeing.
Yes.
Yes.
12% that we mentioned before.
After you take into account the effect of the tougher comp meaning.
Trying to take out the.
The Vistaprint effect, and then you get to the 12% growth in terminals in terms of the overall bookings.
Look I think that we all understand that it is how this is why we didn't provide the guidance for bookings rather than revenue bookings is more lumpy because of those bits will be partnership. This sometimes is it pushing one quarter.
Sometimes two quarters.
But we still have a lot of belief in this business I think that is.
Even if it's even performing better ones. One you will see the pipeline, but also about the competition that you know many of our competition in this market.
Literally disappeared.
So I believe that we are positioned in a much much better way business wise too.
To take more market share in this specific segment.
With regard to the overall booking and what we see for next few where it's hard to tell I think that on February we're going to share more light on what we believe will be the bookings the revenue for next year.
But again, one thing that I can mention that excluding.
The overall.
Economists the macro economy, a figure that we see right now we are we believe that the target that we set in our three year plan for the long term is the one that we really believe it.
Okay Fantastic. Thank you guys.
Thank you.
One moment. Please next question.
Our next question will come from <unk> Khan of <unk> Securities. Your line is open.
Yeah, Hi, Thanks, a lot two questions from me.
First one on the on the cost side.
We saw the Israeli currency weakened versus the dollar and considering that.
All of your R&D.
I didn't see a dollar impact on the on the cost side in Q3, how should we think about that and then you talked about going after the higher value customers.
Where are you seeing opportunities is that.
That is it mostly NGL focus meaning of finding those customers here in the U S versus other markets give us support staff.
Yes.
So we took that would easily shifted its a great question.
Usually because we are exposed so deeply to the Israeli shekel and dollar.
As we pay most of the salary and Israeli shekel, we do on hedging program.
It was approved by our board of directors so.
We did it at the beginning of the year in order to make sure that we can meet the budget. So therefore, most of the year all of the year actually even part of next year is already hedged.
In a less favorable dollar to shake out as we see right now so there is literally no difference.
When we need to go up and down because of those hedging program.
About your second question his Nir.
In terms of the opportunities for the higher intent users.
And actually.
We do not share for competitive reasons. The details of how we operate our marketing I can generally say that the opportunity.
Our global.
Obviously, we go after them wherever we see them.
Thank you.
Thank you.
One moment please for our next question.
Our next question will come from Deepak Matthew Danon of Wolfe Research. Your line is open.
Hey, guys. Thanks for taking the questions.
Two so within the partner business can you help us a bit more on the agency side, you've added a lot of people over the last few years to kind of.
Onboard more agencies and now professionals how are the returns so far what are the kind of best way for investors to track. It and then a second question maybe for Lee are the heart of our $50 million cost savings is a good start, but if I kind of look at your fixed cost base in areas like customer support and then head count than SaaS et cetera.
It's still somewhat elevated with its 2019 levels, where do you see more opportunities to reduce costs, if macro continues to weekend and.
Returns on some of these investments that you've made in the past 12 months are may be slow to come by thank you. So much.
So.
So with regard to the I will start with the second question.
About the cost yes.
Yes, the cost still extreme.
They are still elevated from the 2019, obviously because our business is also.
Elevated.
I believe the Ducks, we took a $150 million cost reduction decisions.
And it's shown on a run rate basis, meaning the sampling that if youre going to repeat.
What we actually created and we mentioned that is that in 2023 for example, the entire growth in revenue is going to be shown as profits.
Because we are not going to increase the expenses.
2022 in some cases, we actually decreased it now there is no kind of differences when you look at the year overall expenses for example, we.
Still are investing in R&D and something that we will continue to do but I believe that.
In terms of the efficiency you know as a company we always look for efficiencies and we will continue to do that for example, with the care. It was not just about headcount reduction, but also developing new technologies in order to support our customer in a much more efficient way. So to your question we will continue to.
Do that to find more ways to be more efficient and by doing that.
To create more leverage on our expenses.
This is juan.
With regard to partners I believe that you can answer that yes. So in terms of the partners to the agencies.
As we highlighted in our analyst day, obviously, we've invested in.
Into the product as well as the <unk>.
<unk> as well.
The people who support that business.
We've done so because well because and we demonstrated that when we broke out.
The partner cohort is that we're seeing that compounding.
Revenue retention that is unique and so special for those specific cohorts.
Obviously with the slowdown there.
Our own pipeline has slowed and to some extent, but we assume that once there is a recovery.
We benefit from that.
Like everyone else.
In terms of the.
One of the things.
Things that is worth mentioning is that we do believe that the cost reduction measure that <unk> mentioned.
Will probably accelerate the margins of partners.
Even better than what we thought about before.
Got it okay. Thank you.
Thank you.
And I'm seeing no further questions in the queue I would now like to turn the conference back to the company for closing remarks.
Thanks, everyone. Thanks to everyone, who asked the question and thanks, everyone for joining and have a great day.
Yes.
This concludes today's conference call. Thank you all for participating you may now disconnect and have a pleasant day.
Yeah.
The conference will begin shortly.
As Johan during Q&A, you can dial star one one.
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Okay.
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Okay.
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Yes.