Q3 2022 Entravision Communications Corp Earnings Call
Good day, and good evening and welcome to the Entravision third quarter 2022 earnings conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero.
<unk> on your telephone keypad after today's.
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I would now like to turn the conference over to Kimberly <unk> Investor Relations. Please go ahead.
Thank you operator, good afternoon, everyone and welcome to Amputations third quarter 2022 earnings conference call joining.
Joining me today are Walter Yellow, Chairman and Chief Executive Officer.
Christiane Chief Financial Officer.
Before we begin I must inform you that this conference call will contain forward looking statements that are subject to risks and uncertainties that could cause actual results to differ.
Please refer to <unk> SEC filings for a list of risks and uncertainties that could impact actual results.
This call is the property of Entravision Communications Corporation any.
Any redistribution retransmission or rebroadcast of this call in any form without the expressed written consent of Entravision Communications Corporation is strictly prohibited.
Also this call will include non-GAAP financial measure the company has provided a reconciliation of these non-GAAP financial measures to their most comparable GAAP measures in today's press release. The press release is available on the company's website endless filed with the SEC on form 8-K.
In addition, all pro forma figures, including revenue operating expenses and consolidated adjusted EBITDA noted throughout the prepared remarks include the contribution of the various acquisitions and investments in the prior year period, I will now turn the call over to Walter Yellow, Chairman and Chief Executive Officer.
Thank you Kimberly and good afternoon, everyone. We appreciate you joining us for Entravision as third quarter 2022 earnings call.
Entravision is solid performance in the third quarter and year to date demonstrates the resiliency and growth of our business in a tough macro environment as we continue to strategically expand our operations throughout the globe. We now have a presence in 40 different countries across five continents.
Net revenue for the third quarter totaled $241 million up 21% year over year on a pro forma basis revenue increased 17% over the prior year period. The continued growth of our digital segment combined with strong political advertising revenue in our television and audio business.
Were the main drivers for our third quarter performance.
For the nine months ended September 32022 revenue totaled $659 9 million up 25% year over year.
Similar to the quarter year to date revenue benefited from growth in our digital segment as well as strong political advertising revenue in our television and audio businesses.
Consolidated adjusted EBITDA totaled $26 million for the third quarter up 12% year over year.
Similar to the first two quarters of the year in the third quarter, we like $5 $5 million of nonrecurring revenue due to three discontinued Univision affiliations that we had in the prior year same period and our television segment. Additionally, like many other multinational companies due to the strength of the U S dollar we.
Undoubtedly drives this EBITDA growth, while also contributing to our ability to provide their turns to our shareholders.
Speaking of shareholder returns I am pleased to announce that our board of directors approved a cash dividend of 2.5 cents per share payable to shareholders on December 15th 2022 with that as a background now let's take a look at each of our segments performance for the third quarter, beginning with our largest digital.
I'm pleased to report that for the third consecutive quarter all of our digital units delivered solid revenue growth and positive operating margins digital segment revenue represented roughly 78% of consolidated revenue for the third quarter and totaled $188 $9 million 20.
29% year over year topped quarterly achievements with a segment included a continued expansion of our client base and two additional territories, particularly through our methods Spotify and tictoc partnerships the growth of our operations in the various continents and strong results mobile, they're a DSP and mobile user acquisition business smacks.
As we discuss on the last call our mission for our digital segment gives to continue building a global marketing sales operations in emerging territories.
A critical mass of connect consumers exists alongside a large and growing advertising industry.
We continued to expand our digital operations across continents, both organically and through strategic tuck in acquisitions.
At present and provisions digital operations service over 7000 clients prune, we provide two main offerings marketing solutions services of focus on strategic commercial representations with companies such as methane Spotify and mobile user acquisition, including Brandy performance and programmatic services to top publishers around the world.
I would like to provide an update on our progress in each of these areas beginning with our commercial representation business. Latin America. This business was formerly known as Entravision Cisneros interacted and is now referred to an intermission lap 10.
This visit delivered solid results for the third quarter with revenue increase in approximately 11% over the prior year period, driven largely of our commercial representation partnerships with <unk> and Spotify.
With a track record of strong performance, we believe that our partnership with methane strong employees for continued growth throughout the globe.
Beyond Latin America, Entravision media doughnuts in the Southeast Asia region was also performing strongly during the quarter with revenue improvement 75% year over year.
Revenue growth was largely driven by Entravision media Donuts success, with Twitter and Tiktok, along with strong global acquisition performance.
Also in the Asia region in August we closed our previously announced investment and Jack of digital exclusive commercial partners Tictoc in Pakistan Jack of digital taps into a market over 100 million connected consumers and as part of a vibrant emerging economy was strong advertising spend Jesse.
Just recently Jack of digital released with the digital advertising industry is calling one of the best tick pop campaigns of all time in Pakistan.
<unk> feature of this particular campaign on their inspiration page.
In Africa, Entravision 365 digital revenue in the third quarter increased to 151% year over year on a pro forma basis.
In October after the end of the third quarter and provision 365 digital came the officials authorized sales partner of methane Ghana here Entravision 365, digital will provide training lines of credit in billings for advertisers reinforcing our commitment to connect brands to consumers to local strategic support.
Our operations in Ghana, or just getting started under newly appointed country manager Stephen Sawyer.
A local digital advertising veterans, who is very well equipped to build a world class team for Entravision in West Africa.
And last but not least is smacks, our mobile user acquisition programmatic adtec platform headquartered in Barcelona, Spain, statics perform extremely well during the third quarter with revenue improving an incredible 141% year over year. We continue to be excited about this proprietary programmatic platform this growth.
Was driven by specialized sales teams by industry are strong geographical presence and notable technological performance.
Now, let's turn to our televisions segment, which comprised 15% of revenue for the third quarter <unk>.
Television revenue was $35.7 million in the third quarter down 2% compared to the prior year period. This declining revenue was anticipated primarily due to the discontinuance of three individuals affiliations, Washington, DC, Tampa and Orlando at the end of 2021, excluding those three to play to markets total television revenue was up <unk>.
2% year over year, excluding those three affiliate markets and $6 million in incremental political spent in the third quarter Court television advertising revenue decreased 9% Nash.
National core advertising revenue decreased 14% and local core advertising revenue decreased 6% year over year.
Although the television market is choppy strengthen our political advertising revenue is more than making up for core broadcast revenue. Following a strong third quarter in which we generated $7 $9 million and political AD sales for the company. We now expect full year political AD revenues to be approximately $30 million up from our prior expectations.
Of $17 million to $19 million for the year. This impressive performance was primarily driven by the Nevada, and Arizona elections, along with the South Texas congressional races impacting mccowen in Laredo.
Looking at other add categories, excluding the three discontinued Univision affiliations.
AD revenues were up 3% in the third quarter year over year propelled by the tier two auto segment, which improved by 15% versus the prior year period media and entertainment was up 3% and retail was up 14% compared to the third quarter of 2021, even more impressive with the finance and beverage categories, which improved 86%.
And 490% respectively year over year.
Regards to a range of performance during September of 2022 for adults 18 to 49 and early local news Ah Univision television stations finished ahead of their Tellement, a competitor and nine a 14 markets plus two ties and legs. Local news. We finished ahead of telemeter competitors. Among adults 18, 49, and $6 14 markets plus two ties. Additionally are.
Early local newscasts are ranked number one or two against English and Spanish competitors of nine markets, including ties for late local news or a newscaster ranked number one or two against English and Spanish competitors and eight markets, including ties.
Furthermore, the telecast per unit at his premise Hooven <unk> Awards show. This past July was again among the top five programs at the time period, and 14 markets. Among adults 18 to 49 and in those 25 to 54.
Last thing or audio segment, which comprised the remaining 7% a third quarter consolidated revenue audio revenue total approximately $16 filing for the third quarter consistent with the prior year period, excluding incremental political span of $914000 in the third quarter of 2022, Cor audio revenue decreased 6%.
Versus the third quarter of 2021 with.
With regards to advertising categories are local audio teams saw growth versus the prior year period in the following categories travel and leisure telecom retail finance product brands and grocery.
Auto advertising continued to struggle and declined 3% year over year with tier three auto local car dealerships seems like growth for the quarter and up 2% year over year.
Looking at our audio segment ratings performance for the summer book among Spanish stations. The Razo electrical out. The show is ranked number one in PM drive and six out of our nine markets, where these for summer among Hispanic adults 18 to 49 and Hispanic adults 25, 54, including ties across are nine Ono stations.
<unk> It took a lot to show reached more than 450000, Hispanics 25 to 54.
Just last month Entravision obtained exclusive syndication selling rights to the roughly electrical out to show beginning this upcoming January and show the Robideau electrical ladder has been on the air for 18 years. It is syndicated 97 cities coast to coast with an average of $2.3 million weekly listeners or roughly 64% of the Hispanic list.
To ship base.
We are thrilled to obtain the exclusive rights to a radio show featuring one of the most influential Hispanic radio personalities today.
Before sticking further I will turn the call over to Chris Young are CFO to discuss our third quarter performance in future detail and provide our fourth quarter pacings Chris.
Thank you Walter and good afternoon, everyone is Walter discussed revenue for Q3, 2022 totaled $241 million, an increase of 21% from the third quarter of 2021.
For our digital segment revenue totaled $188 9 million in the third quarter of 29% year over year end up 24% on a pro forma basis as compared to Q3 2021 for.
For our television segment total revenue was $35.7 million in the third quarter down 2% year over year.
Excluding political core advertising revenue was down 19% year over year. However, excluding the revenue impact from the three discontinued Univision affiliates total revenue increased 14% year over year <unk>.
Retransmission consent revenue for the quarter totaled $8 $9 million, which was down 2% year over year, mainly due to the discontinued Univision affiliates.
Lastly for our audio segment revenue totaled $16.5 million in the third quarter, which was flat year over year, excluding political core audio revenue was down 6% over Q3 of last year.
Operating expenses in the third quarter of 2022 totaled $29.3 million up 14% from $43 $1 million in the prior year period, primarily due to our variable expenses related to revenue growth and increases in salaries corporate expenses increased by 31% to nine 5 million for the quarter compared to seven.
$3 million in the same quarter of last year. The primary drivers were increases in non-cash stock based compensation expenses salaries and legal expense.
Consolidated adjusted EBITDA totaled $26 million for the third quarter of 12% from $23.2 million in the prior year period.
As an increasingly global business Entravision now has more exposure to foreign exchange risk as we build a portion of our clients in certain countries in their local currencies. Given this if we account for the 2 million dollar impact of foreign exchange rates during the quarter adjusted EBITDA on a constant currency basis improved 20% compared to.
Prior year period.
Free cash flow as defined in our earnings release was $15 $4 million compared to $22.4 million in the prior year quarter or a conversion rate of 59% of adjusted EBITDA. The decline in free cash flow is the result of both higher cash taxes and capital expenditures made during the quarter compared to the prior year.
Net income attributable to common stockholders with $9.4 million compared to $12 $1 million recorded in the prior year period.
Alluded earnings per share for the third quarter were 11.
Compared to 14 cents per share in the same period last year.
Excluding a non-cash charge of approximately $734000 relating to a change in fair value of contingent consideration earnings for the third quarter were 12 cents per share. If we also adjust for the impact of foreign currency diluted earnings per share on a constant currency basis, we're 14 for the quarter.
Cash pay for income taxes was $4 million for the third quarter compared to 500000 in the same quarter of last year.
Net interest expense was one 9 million for the quarter up 23% from $1.5 million in the same quarter of last year.
Cash capital expenditures for Q3 totaled $4 7 million, we estimate our total capex will be approximately $10 million for the full year 2022.
Turning to our balance sheet cash and marketable securities as of September 30th 2022 totaled $164 8 million.
Total that was $210 million net of $75 million cash and marketable securities on the books are total leverage as defined at our credit agreement was one four times as of the end of the third quarter net of total cash and marketable securities are total net leverage with 0.5 times.
Turning to our patients for the fourth quarter of 2022.
As of today revenue from our digital segment is pacing plus 13% over the prior year or.
Our television segment is pacing plus 11% over the prior year period with court television advertising, excluding political book, thus far in the quarter pacing at a minus 4%.
As Walter noted, we expected our television revenue to decline in 2022 from the discontinuation of three of our Univision affiliates in late 2021 that said, we more than make up for any television revenue decline with our digital segment performance, excluding the impact of our three discontinued Univision affiliates Teevee is pacing Eddie plus.
48%.
Lastly, our audio segment is pacing plus 14% over the prior year period with core audio excluding political pacing at a minus 5% all in our total revenue compared to last year is pacing any plus 13% with this I will turn it back over to you Walter Thanks, Chris.
Let me speak to a few other points before you open the call to your questions.
First the upcoming midterm elections were certainly excited for next week's elections, which should lead to record political AD spend for Entravision as I noted on the last quarter's call. We are seeing an increasing number of political advertisers reserving television spots well ahead of election day with both political parties. This time around locking up inventory early.
And the election cycle. This purchasing behavior is not something that we experienced in the past and it bodes well for continued momentum through election day and into future elections.
We will provide our full year political AD spend numbers on our fourth quarter call. Once we have the final election day numbers, but currently we anticipate approximately $30 million in political advertising revenue this year, which represents accompany record for any election cycle, including presidential.
Beyond political growth the other key areas of our business that we remain enthused about is our global expansion.
Given our solid balance sheets strong cash flow generation and a team of some of the best professionals in our industry and despite the current macro conditions you can expect us to continue to look for opportunities to invest in or acquire companies that will further enhance the digital offerings, we provide to our growing global customer base.
In addition to growing our global digital visits through acquisitions of strategic investments. We also anticipate continued organic growth as ever from our patients for the fourth quarter net.
<unk> has been actively evaluating our Latin American team to support them and other international markets and in each market. We continue to demonstrate strong results efficiency transparency compliance as a result in July we officially expanded our partnership with met the handful endures in El Salvador after testing our services in both regions.
We were particularly excited to hear on Memphis recent earnings call an engagement across her applications. It's the highest it's ever been with the ability to work with method globally. We can leverage this record engagement.
Has been completed 2022 and head into 2023, we will focus our digital segment efforts on continuing to improve our services with a client subject mindset at the forefront our clients in the digital industry as a whole expect that we offer robust brandy strong conversion rates transparency and aftermarket support.
On each of our advertising campaigns. We believe we have the tools reached technology and best team deliver on these expectations.
This concludes our prepared remarks I want to extend my gratitude director vision teams around the world through a contingent dedication to our company's success and I want to thank all of our shareholders for your support person I would like to open up the call to your questions.
Brighter.
We will now begin the question and answer session to ask you. A question you May Press Star then one on your telephone keypad.
If you're using a speaker phone please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then too at.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Michael <unk> novel Capital markets. Please go ahead.
I appreciate it get 30 million number is an extraordinary number and I was just wondering if.
If you can break that down between radio and television or the margins different for each of those are the margins Unpolitical for television about the same as radio or just.
I'm curious about that.
Okay.
So the margins are about the same.
For television radio.
As it relates to.
What percentage of television.
That 30, what percentage of that total with television and what percentage is radio.
Please stay on that number.
Well.
I don't have the exact number of 20.
<unk>, 24th 2020 $4 million as television the balances right. So it's about what the 80 28.
Can you tell us some 80% element in 20% radio or audio you outperformed on both radio and television, though because of your radio radio was four and a half.
Million typically in that range. So it sounds like you outperformed both of them.
I just have Ah Ah Ah.
Pretty over 64000 foot question <unk>.
Television radio has traditionally been viewed as more mature business and that was what led you to go into your your digital businesses, which are low faster growing does the influx of the Spanish speaking immigrants that are coming through kind of change that narrowed up a little bit I know that historically you've been.
Really focused more so on Mexican immigrants immigration.
Identified more with that population and your your your Tv's or your television stations and radio stations tend to be in those types of markets border towns and so forth, but now does that kind of change I'm just wondering.
What what you anticipate.
Which it looks like you know with this massive migration, we might see kind of more of a generational type.
Prospect here with some pretty extraordinary growth yet for your Spanish language television and radio stations I was just wondering if you can give us your thoughts about how you would participate in what we're seeing in terms of the immigration issues.
So you are suggesting Michael.
Well for that because.
What we read in the newspapers.
Other.
Reporting.
Media that.
Due to the fact that appears that.
A great many of the current migrants that are crossing into.
The United States or undocumented people.
They are from.
Central America and.
And.
South America, particularly Venezuela.
And that this will fewer Mexican.
Immigrants coming in as well I didn't say that but I'm curious about what your thoughts are about that cause I, obviously, I'm not close to that situation as you might be.
Well the only thing I will say is that.
Our programming or Spanish language television programming is something that.
We threw univision until levies have been doing for.
More than 50 years in the United States and we are.
The approach we use is to create programming that is universal in terms of the Spanish speaking world.
When.
One of the one of them.
Faxes that when.
Undocumented workers arrive in the United States. They don't have a lot of choices as it relates to Spanish language media.
Basically us in.
<unk>.
And so.
They decide to watch us, which is fine that's great but.
I don't I don't believe that.
Because of the patterns of migration at this time.
It is it's reported.
That's affecting.
Our ratings or our business I think as long as.
I'll say it this way.
Believe that.
Two things one that that that Spanish speaking population in the United States will continue to grow.
Through organic and.
Through migration.
And I believe that.
We will continue to produce programming, which is relevant to that audience.
Gotcha and in terms of your digital businesses I was just wondering in terms of just the growth rates are pretty extraordinary.
It seems like such a great market opportunity are you seeing anything of it.
Anything of slowing or anything that might be indicating that there might be the prospect of.
More of a global economic weakness anything that we should just kind of be mindful level and take.
I'll look at just.
Just have on the radar screen.
Well, we did plus 17 in Q3.
This plus 13 for Q4, so there is some deceleration, but but generally speaking the business as a whole is.
Still very healthy.
And is that coming from a little bit of a deceleration white, but.
Is that coming mostly from like Latin America, Facebook or is that just.
I guess I'm, just trying to understand it if that's mostly.
What we're seeing in Latin America.
And any particular pockets of weakness that are more so than others. It's just generally a global phenomenon.
Gotcha, Okay. That's all I have thank you. Thanks, Michael Thank you Michael.
The next question comes from James six with industry Capital Research. Please go ahead.
Hey, Good afternoon, you guys I guess just given the.
Massive political that you're getting this year it should we be thinking about the incrementality of that to your core business a.
A little bit more differently I know in the past.
There have been attempts made too.
And others to try to estimate how how incremental political can be.
When you have displacement of the.
Core advertisers by it and I imagine.
Just traffic management was a pretty big issue in the fourth quarter.
Among others, but any any thoughts you would you would share on just how incremental you're assuming political is when you.
When you talk about the core business.
In terms of the core business.
The incremental so historically since we don't do a lot of political relative to the English language folks, we haven't really spoken to an incremental aspect of political but you turn on our television stations today for next week, you're not going to see many nonpolitical AD. So certainly this year at 30 million Bucks incremental issue is here.
Say James all in for the quarter, probably 50% incremental.
As far as displacements concern there are a lot of the core advertisers who sit on the sidelines while while.
While the political season washes through there is a lot of pent up demand after the election for.
Particularly the services industry, the legal firms, they're anxious to get back in the game, but they're not going to wait and waters, where everything is just jammed as far as the inventory is concerned.
Right.
Sorry.
I was just going to say James system.
And I've been doing this a long time in terms of serving the Latino market here in the U S with.
Information news and entertainment and done.
We've never seen.
And this political cycle.
Never happened before where you've got.
Political advertisers seeking our inventory of one in advance.
Placing the schedule.
Paying top rate.
And the other thing that's interesting is that this.
This is probably the first time, we've seen the Republican party.
Step into.
The.
The business of attracting Latino voters to to their party and.
Doing it necessarily in a meaningful way.
Very active in.
In South, Texas in Laredo, Mccowen, they're very active in Nevada.
And it also Arizona, but that's the first that's never happened. So what this tells me is this is the beginning.
In terms of.
The exploding demand for it.
Voters and the willingness of both parties to go out and actively recruit and solicit. These these voters so.
This is I think it's great fantastic that this is happening now and that that it's only gonna get bigger.
Because you thought you see what's happiness in general in terms of the media spin.
Political advertisers, it's never been so big.
So they are looking for every voter they can they can attract and certain and Latino voter is an excellent voter.
And an excellent demographic and so we'll see more and more spin as it relates to bringing Latino voters to either the Democratic party or the Republican Party.
Great and you just wanted to follow up on political.
Do you have any numbers pro form after the change.
Change in Univation affiliations for either last year for the total political number or 2022, just anything to try it out.
Perhaps for Q3.
It could be even for the full year, just something you know.
Taking those affiliations out what would the total political been like last year.
Versus what you reported yet generally speaking Orlando and Tampa represented about a quarter of our political ads and annually. So you can factor that out of our prior numbers accordingly.
Wow, Okay, alright, great.
And then it.
In terms of the.
The digital representation business do.
Do you have a rough share of how much of that business is under what you have what you call. It kind of exclusive partnership agreements. It seems like a lot of the ones you have with meta for example, like the most recent one you announced were are structured as kind of exclusive geographically.
I'm just curious as to have kind of looking beyond that whether it's meta or anybody else because my understanding of stick doctorate by contrast doesn't typically use kind of that same exclusivity.
But do you have any sense roughly.
How much of your digital representation businesses under these types of exclusive partnerships.
While all of last time is exclusive with matter.
Asia is not exclusive and Africa is quasi exclusive I'll put it.
Depending on the region so.
I'd say all in this past quarter about 120 million of our digital business in the third quarter. It was attributable to exclusive deals uh-huh.
Okay and in all right.
Ghana, which we.
Buses, the laundry and we announced.
That will be.
Digital marketing partnership with meta and.
That'll be exclusively method.
Okay, Great do you have any sense as to why matter tends to prefer the exclusive approach.
In their business, perhaps more than tictoc.
Well, there's a training processes involved in.
Investment on Facebook site, and getting us trained to be able to go out to market tick tock doesn't have necessarily that same level of training.
And expertise necessary and I think that's a big driver of it.
Okay, Great and then just one maybe more housekeeping thing how should we be thinking about cash taxes now going forward I think you've indicated in the past that much of your NOL shield is gone.
And do you notice.
For this free cash flow this quarter the impact.
How should we be thinking about cash taxes kind of on a quarterly or annual modeling basis. Yeah. I think what you should do James is just modeling, 2425% tax rate going out the door as far as cash taxes are concerned obviously, the nol's are no longer with us and we'll be we are now becoming.
Cash taxpayer.
Okay. My last one it's just on the digital profitability.
You know I think in my model at least going into the quarter I was not assuming a lot of margin expansion operating castle margin expansion. This year, even though your growth as.
Well north of 20% is that being too conservative is are there any kind of one time costs, which are maybe weighing on the business. This year that might might cycled through next year or something.
Okay.
There are so minimal incremental costs that we are undertaking just to integrate these businesses that may be one off in nature.
Far as putting a number on that.
Probably safe to call it may be a one to one $5 million of incremental expense that.
It's kind of one time in nature, but otherwise no.
Okay.
I lied I'd one lap.
Follow up [laughter] do you have a balance for your contingent consideration.
Both long and short term kind of.
Lumped together I think it was around $77 million.
If I recall at the end of the second quarter I know, what's in your queue, but I just figured while it while you were on yet it's in the queue is about $56 million today.
Okay great.
Thanks, so much. Thank you thanks James.
The next question comes from upload Riley with <unk>. Please go ahead.
Hey, guys. Thanks for taking my question just the payback on Mike's question with.
With them digital is the 13% facing growth is that <unk>.
Inclusive of 365.
Which was purchased in November is that is that a pro forma kind of organic for Ya.
No that's the print on a pro forma basis.
265, not big enough to move the needle.
It's small so that's almost appeared number as far as pro forma.
13, okay.
But that was okay gotcha Q3.
Right right right.
Uh-huh Q force pacing.
13, 13, right Okay Purdue.
Okay.
We look at survival.
Oh, that's okay. Congrats on the.
<unk> partnership.
When when do you expect us to really start ramping up.
Mmm.
Wrapping up now it's starting to we've got executive is going over to Africa. This week.
Will be part of the lunch there.
And in Africa, and so.
It's moving moving fast.
As as we continue to to develop more resources.
And time to.
To the success of this.
This launched.
Gotcha and should we be expecting any more cross platform partnerships.
Forward, maybe looking into fiscal year of 2023.
You mean partnership expansions in June new territory with existing relationships, yes.
Short answer that average, yes, yes, working on Saturday, we are working on all the time.
And continue right.
And continue to build tools to that we'll we'll make our partnership with.
These global digital marketing companies.
More successful.
Gotcha and then the last one for me just just wondering if you could.
Kind of expand on the plan for the the marketable securities portfolio, what's it really consist of.
And if you could give us any strategic direction with with what you guys are planning on doing with that those are short term investments in corporate great.
Great bonds.
Nothing very risky and.
Constantly being rotated.
Just putting our cash to work that's all it is there is nothing strategic about it other than to try to make a buck or two on our existing cash balance.
Okay, great. Thanks. Thank.
Thank you. Thank you.
The next question comes from Robert Mopy with Cingular Research. Please go ahead.
Ooh Walter Hello, Chris.
Good to catch up.
Virtually.
My predecessors very efficient job.
Mark off a lot of questions I was going to ask so just add a couple here.
Regarding Ah first congrats on that top line digital revenue number in a very tough environment that's impressive.
Thank you.
On the acquisition landscape, just generally speaking with the <unk>.
Re valuations that have been going on.
<unk>.
More compelling you seem more potential targets are what's your thinking there.
Well I think that entrepreneurs are.
Maybe the.
Becoming more realistic about evaluation in light of what's happened in the market, both the private and public.
Markets.
So we will continue to skip Devils, but we're looking for.
Opportunity et cetera that are complementary to our existing business strategic and of course that.
At 50 economic model that we built.
To support the.
The rationale for acquiring the business.
Good day again finally on your.
Your net interest expenses.
Are you.
What you are thinking in terms of this <unk>.
Inverted yield curve, we're dealing with and.
What how are you facing the we're planning on on <unk>.
Justin perhaps to this hedwig.
Headwinds with higher interest rates.
We are in a floating interest rate instrument with our debt.
We don't have any plans right now to to rethink that we're going to be refinancing our debt sometime in the near term.
Like at that point, we will look into perhaps.
Some kind of a hedge or logging in interest rates, but but it's still too early to think through all of that.
Alright, Thank you [laughter]. Thank.
Thank you.
This concludes our question and answer session I would like to turn the conference back over to a true vision CEO Walter <unk> when he closing remarks.
Thank you again, everyone for joining us today on our third quarter.
Earnings call, we look forward to sharing our progress with you on our fourth quarter earnings call in March of 2023. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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