Q3 2023 Digital Turbine Inc Earnings Call
Good day and welcome to the digital turbine reports fiscal 2023 third quarter results Conference call. All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your <unk>.
Touchtone phone and to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Mr. Brian burst all of your senior Vice President of capital markets. Please go ahead Sir.
Thanks, Jeff Good afternoon, welcome to the digital turbine fiscal year 2023 third quarter earnings conference call joining.
Joining me on the call today to discuss our results are CEO , Bill stone and CFO Barrett garrison.
Before we get started I would like to take this opportunity to remind you that our remarks. Today will include forward looking statements. These forward looking statements are based on our current assumptions expectations and beliefs, including projected operating metrics, which are products and services.
Painted market demand and other forward looking topics.
Although we believe that our assumptions are reasonable they are not guarantees of future performance and some will inevitably prove to be incorrect.
Except as required by law, we undertake no obligation to update any forward looking statements.
For a discussion of the risk factors that could cause our actual results to differ materially from those contemplated by our forward looking statements. Please refer to the documents we filed with the Securities and Exchange Commission.
Also during this call we will discuss certain non-GAAP measures of our performance non-GAAP measures are not substitutes for GAAP measures. Please refer to today's press release for important information about the limitations of using non-GAAP measures as well as reconciliations of these non-GAAP financial results to the most comparable GAAP measures.
Now I will turn the call over to our CEO , Mr. Bill Stone.
Thanks, Brian and thank you all for joining our call Tonight.
I'm going to talk about both the macro economic landscape and our micro operational details in my remarks.
But before getting into the specifics I want to summarize our view on the business and begin with the most important takeaway for investors to have versus getting lost in any one specific detail later in our remarks.
Our conviction on our strategy and our long term financial and operational view on the business has not changed.
We're also not satisfied with our near term results, we have work to do to improve those results against our near term expectations.
There are many things for us to do but one of the things investors do not need to worry about is ensuring we have a laser focus on the controllable and accountability for their improvement.
As a CEO I own that.
But also want investors to know that we view the macro situation is temporary and it will change positively in the near future and the micro situation issues. We're dealing with are largely comprised of extraneous non strategic things that are not critical to our long term success, but are nevertheless headwinds when comparing year over.
Your results against the past pro forma results of some of our prior acquisitions.
The foundation of the DT investment thesis has not changed that.
The core building blocks of the moat around our on device platform. This strategic interest advertisers have for monetization on the platform.
Ability to leverage the macro secular trends in digital advertising.
And having a highly scalable and profitable operating leverage for our business are all in place.
That's the underlying investment thesis for digital turbine that we believe will power long term results.
Successful businesses are built on years of success not built on any one quarter of results and we have some short term macro and micro dynamics to overcome but our history has dealt with much more challenging times and this and like those prior times demonstrated.
Our resilience has made us a stronger company as we successfully manage through short term headwinds.
We hope investors see our ability to overcome those prior obstacles as a predictor for our future success.
It's part of our DNA.
Turning to the macro environment. The past three years have been the most dynamic I've seen in my 30 year career at your required companies to operate lean while being nimble flexible and open to change I'm going to focus my commentary on today's macro operating environment.
And what were seeing regarding digital AD spending devices, and operator and OEM focus areas.
First on digital AD spending.
At the headline level and as many others have already reported pricing has slowed anywhere from 10% to 30% compared to a year ago, depending upon the company vertical survey company being quoted or digital AD time.
However, we believe this is both temporary and much more nuanced and the details as many are painting, all digital AD spending dynamics with the same brush.
We believe this trend is temporary and will rebound for a very simple reason.
Since the beginning of the first AD dollar spend hundreds of years ago, continuing to today and ultimately tomorrow AD dollars have always followed where eyeballs are and today, our eyeballs R&R digital devices, and we don't see that changing in fact, we see that growing so like in this past holiday season, where we experienced a deceleration in the short term.
As advertisers figure out how to best optimize their spend.
In an inflationary and flooring macroeconomic environment. The dollars are and we will absolutely be there over the mid and long term.
Also we see a lot of nuance and AD dollar spent.
For example platforms that have been heavily reliant upon AD tech tactics like do you through attribution had been disproportionately negative impacted.
Also platforms that have a difficult time working with advertisers on the return on AD spend or ROE ads metrics are also having a difficult time.
And while we saw year over year growth in global devices to nearly $75 million in the in the December quarter, we are seeing macro slowdown of device growth as consumers pause on upgrades.
For example, 20 twenty-two saw global device smartphone shipments declined by 12%.
Two 1.2 billion units, which was the lowest level since 2013 and in the U S. We saw the lowest level of shipments for our T. T carrier partners since 2019.
And while our revenue shift has moved to revenues over the life of the device versus just that activation is a headwind, albeit a temporary one as we don't see consumers foregoing upgrades to new devices for a sustained period of time.
And finally, it's been well documented in the commentary from many global operators and Oems and how they're trying to grow revenues and.
And these types of macro environments.
This is a tailwind for our business as they look for new revenue streams from companies like digital turbine.
And I'll provide some specific examples of our success later in my remarks.
The takeaway for investors is that we view the present macroeconomic situation is challenging but also temporary.
The macro conditions are more difficult compared to prior years, but not instrumental and not falling off a cliff.
Unlike the macro situation that is currently more supply versus demand driven.
Situation in our industry is more demand versus supply driven in the short term.
Oems operators and that publishers are looking for companies like digital turbine that can provide them more dollars, while demand sources are being more cautious and deliberate in their spence.
The dollars and opportunities are still there, albeit more work and effort is required to capture them compared to prior years.
Alright, and EBITDA margins of 25%.
non-GAAP gross profit margins were 50% compared to a reported margin of 46% on the third quarter of last year.
Many companies struggle to increase margins in this current inflationary environment and the ability for us to continue to show year over year margin improvement is something we're proud of.
Given the macroeconomic situation focus and optimization is key.
To that end, we've re oriented are capital allocation towards future versus legacy projects.
Specifically, we are focused on growing things like our brand business and improving performance on leveraging single tap on our DSP and deemphasizing portions of our legacy performance and reseller Adtec businesses.
We've also prioritize resourcing or alternative app store or hub business versus things like our prepay content media business.
Which is less than 10% of our revenues and underperforming versus our expectations.
Both of these dynamics are having a short term headwind on pro forma overall top line performance, but.
But the changes should continue to help both our margin profile and sharpen our focus by doing fewer things better.
Four on device business, while our overall devices were up 10% year over year.
The sale of new devices in the United States with the lowest we have seen in any one quarter since fiscal 2019, despite it being the holiday season.
We had expected device sales to be flattish based upon input from our U S partners.
The disappointing holiday device sales were primary driver of our quarterly results being behind our expectations.
As mentioned earlier, we do expect this to be a temporary issue.
And the U S are revenue per device or RPG of over $5 was up year over year.
We have <unk> work to do internationally as we did not see that same year over year growth is the mix of devices.
Was indexed higher in developing versus developed markets, where rpt's tend to skew a bit lower.
We also made progress on our single tap licensing product.
We continue to add partners in court, including bin live with high profile customers like Amazon and epic the creator of the fortnight franchise utilizing single tap licensing and we're also gaining momentum with Google as a distribution partner for us.
While single tap licensing has not yet material and our overall results the ramp is occurring in the progress as noticeable.
We are now on a run rate of many millions of single tapped licensing installs per month and have already done more single tap licensing install so far in 2023 than we did in all of 2022.
Bigger picture for single tap licensing the product market fit as strong and while we are excited about its prospects I want to remind investors. It will take time to get to material revenue generation.
Similar to the early days of our dynamic installed business, where we launched on one mobile operator with only a slot or two and then ramps and then added another and so on it layered on nice sequential growth as we expanded the depth and breadth of carriers and Oems.
I expect a similar trend to emerge with our single tapped licensee business.
On our app growth platform, or AGP business or business with roughly flat with a prior quarter.
But down 24% year over year.
The primary driver of the year over year comparisons are macro declines an ad rates and the consolidation of certain add colony business lines.
As mentioned earlier of winding down our Scandinavian reseller businesses. It's our strategic we've also started consolidating the AD colony exchange business into our digital turbine exchange, which means that some of our long tail publisher and partner revenues are transitioning.
This is absolutely the right strategic decision for our customers and partners to deal with one versus multiple companies, but it's creating revenue headwinds and year over year comparison issues in the short term.
But it will be tailwinds for us next year.
And as a reminder, this primary strategic rationale for add colony acquisition was for the brand business.
I was pleased to see sequential growth in our manage brand in private brand marketplace business in the third quarter as we've rebuilt the team acquired one of our channel partners in Europe and sharpen the focus.
It's early days, we are now seeing our approach bear fruit and a very challenging macro environment for brand.
We're seeing strong growth from brands, such as Starbucks, Chick fillet, and Proctor and Gamble just to name a few that are spending more dollars with digital turbine.
From a regional perspective, we continue domain maintained a diversified global footprint.
In the current quarter, we saw impressions relatively flat year over year in EMEA in APAC and modestly down here in the United States.
Looking at AD placement types, we've maintained a balanced portfolio waited between banner interstitial and video.
And across all AD formats, and geographies E cpm's declined between 10% to 20% year over year, which is roughly in line with the industry trends.
And as mentioned earlier, we've made a number of enhancements in the current quarter to our adtec capabilities, such as at rendering new AD formats, new bidding methodologies and so on.
We spent the last year integrating the companies and are now finally building upon the integrations with new products and services.
Early results are encouraging so the combination of the new demand and the expansion of supply types are allowing allowing us to focus on controlling what we can to drive improved performance.
Turning the future I want to spend a few moments highlighting our growth drivers.
I mentioned, both single tapped licensing earlier in my remarks, as a strategic growth opportunity, but also as we've mentioned on prior calls we want to build a shopify for app stores on device.
We believe we are uniquely positioned with our own device technology or publisher relationships and our operator and OEM relationships.
We have launched our first alternatives app store with the U S sailor here in the United States, leveraging our App toyed investment and it is generating revenue today.
We anticipate launching with an additional tier one U S partner in the current quarter.
The carrier feedback has been impressive and supportive.
We also believe that global regulatory environment will provide additional thrust to our vision.
And to achieve this vision there are some market pinpoints, we're solving including making it easier for app publisher support their apps to a new platform managing payments installing the apps and managing the creation of the micro stores.
I'm, making it easier to port the apps and manage payments, we took that first step and accelerating our efforts in this area by taking an equity position and an alternative appstore called App Toyed, which has approximately 250 million users 10 billion downloads and over 1 million applications.
Combining these capabilities with things like single tap will make installs easier for consumers.
And we can further leverage our on device position with ignite to drive AI and machine learning to focus on the right apps to feature on the device versus the customer being overwhelmed by being dumped into a big App store with many millions of apps to choose from.
The alternative App stores will also help us further leverage our adtec assets with applications supported by advertising revenue, but the App stores will also help us with our four first foray into the inept purchasing market, which is $100 billion global addressable market today.
You'll see us refer to this business as our hub business and variance on the hub, whether it be things like games hub App hub and so on.
And the title of this past present and future together because of the exclusivity and uniqueness of our position with our own device and publishers were able to create deeper and more strategic relationships with our partners.
To that end, we have secured many tens of millions of dollars of revenue bookings for next fiscal year across various vertical such as social media, whether gaming and so on.
We will provide the publishers with an alternative route to market leveraging our on device and single tap footprint, whether that is through our new App hub are dynamic installs are DSP and so on.
This is not just strategic benefit and validation of the DT platform benefit, but also financial benefit and Derisks our future revenues.
To accomplish all of these new growth areas allocating resources will be key.
I believe in the competency of our business has been our resource allocation against strategic priorities and.
And unlike many tech companies overstaffed during the pandemic remains we remained deficient in focus given the strong operating leverage of the business model breathing or efficient approach can be optimized further.
We're committed to running the lean sustainable and profitable business and to that end, we've taken steps to reduce expenses.
Our cash operating expenses decreased year over year.
And Barrett will provide additional details in his remarks.
In conclusion, we are disappointed in or near term results and I own improving that.
We believe today marks the trough for our business as we believe the macro and micro issues. We are facing are temporary and non strategic in nature or.
Our outlook for the long term remains unchanged, but I know many investors are short term focused but we're confident in our future and confident in the investments, we're making to drive long term value for digital turbine.
I want to remind investors that we have products that our customers want a.
Favorable regulatory environment, and a profitable business model to drive operating leverage from a revenue and cost structure.
We've been through many more difficult times in this in our past and are using these turbulent times.
To drive improved focus and optimization for the long term.
With that concludes my prepared remarks, and I'll turn it over to Barrett to take you through numbers.
Thanks, Bill and good afternoon, everyone. R Q3 results reflect our continued focus to deliver sustainable profitability.
As we made conscious efforts to expand margins and focus on what we can control during this challenging operating environment.
Revenue of 120 $162.3 million in the quarter was down 25% year over year.
Revenue performance was impacted by deceleration in our advertising spending which was greater than expected during the holiday season.
Also as bill referenced while we solve global devices increase year over year, we experienced material declines in U S devices, whichever greater overall impact given their higher revenue per device that are non U S global operators and Oems.
In addition to the impact from the near term macro conditions. We also continue to experience headwinds from our prepay content media products.
Our margin expansion efforts enabled non-GAAP gross profit margin on the platform to increase to 50% in Q3 up from 46% is reported in the prior year.
non-GAAP gross profit of $81.2 million decreased 18% year over year.
Continued focus on margins enabled expansion year over year across both business segments and as a reminder.
Binder, while gross margin rates can fluctuate from year from quarter to quarter, we generally anticipate longterm margin expansion as we continue to execute on growth and synergy strategies.
We continued remained disciplined with expenses, especially in the light of the temporary worse than expected backdrop in the third quarter.
Cash operating expenses were $41.3 million in the quarter decreasing 3% from prior year and represented 26% of revenues in the quarter.
Total operating expenses were $69.8 million, which were constant compared to prior year.
Given the challenging environment, we continue to examine all of our spending to ensure the best use of our resources. We have executed companywide expense reductions to begin to right size of business for the current environment and to fund key strategic investments, we aim to reduce total cash expenses by 10% and are currently X.
Mchugh didn't against this target in context with the market conditions.
We expect that impact of these actions will become more fully reflected in our results over time and remain highly focused on operating efficiency.
Now turn into profitability.
Our adjusted EBITDA $40 million in the quarter decreased 30% over prior year, and our EBIT margin of 25% compared to 26% in the same period last year.
Given the inherent operating leverage in our business model, we expect the proactive expense measures. We are taking will strengthen the platform when we return to growth and enable a greater portion of those dollars to fall to the bottom line.
In the quarter, we achieved non-GAAP adjusted net income of $32 million or 29 cents per share as compared to a $59 million or 49 cents per share in the third quarter of 2022.
As compared to prior year we.
We encourage increased expense driven by rising rates and higher average outstanding debt on our interest expense.
Our GAAP net income was $4 million or four cents per share based on $103.3 million diluted shares outstanding.
And that compared to prior year net income of $7 million or seven cents per share.
Healthy free cash flow for the quarter of $29.9 million in Q3 enabled us to exit the quarter was $79.3 million in cash after paying down an additional $25 million in debt using free cash flows from operations to further deleverage our deposition.
Or that balance into the quarter at $42.5 million drawn on our revolving balance.
And our business continues to produce strong free free cash flows as we would expect to pay down our revolver further.
We continue to be confident in our balance sheet and our capital position given our profit model strong cash flows and access to a low cost credit facility.
While we expect these market conditions to be temporary we are well positioned to resume to stronger growth when the macro landscape improve.
Now, let me turn to our outlook.
As we consider the ongoing uncertainties in the macro environment. We currently expect revenue for full year fiscal 2023 to be between $660 million and $670 million and adjusted EBITDA to be between $165 million and $170 million and non-GAAP adjust.
Net income per diluted share to be between $1.15 and $1.20 based on approximately 104 million diluted shares outstanding and an effective tax rate of 25%.
With that let me hand, it back to the operator to open the call for questions operator.
Thank you we will now begin the question and answer session to ask a question you May press northern one on your Touchtone phone.
If you're using a speaker phone please pick up your handset before pressing the keys and Swift draw. Your question. Please press Star then too.
And at this time, we'll pause momentarily to assemble our roster.
And the first question will come from Darren half Die with Roth. Please go ahead.
Hey, guys. Thanks for taking my questions. Two if I may So you mentioned kind of cold out.
Financial myths outside of the macro is just on the device number in particular are in the U S that number coming in kind of lower being down versus kind of flat assumption. So I kind of have two questions regarding that first one it's really how much visibility does that estimate has.
Given to you and my second question is what is the underlying assumption for the March quarter on devices and does that assume declines in devices and kind of like further verified your carrier partner.
Numbers they have given you. Thanks.
Yeah. Thanks, Darren Yeah. So for the first time the December quarter, Yeah, we usually take our forecasts from our device partners in advance and you know and our current court on that path quarter excuse me.
We had already said visibility the October numbers, but I think that our carrier partners were expecting larger holiday season, and it will bounce back and Black Friday shopping.
From Covid, and obviously didn't see that in some of their results.
So I think they were disappointed as well, although I won't paying all of them with the same brush.
And as far as the assumptions in the current quarter.
<unk> haircut those that's baked into our guide.
And as I'm sure you're aware the Samsung S. 23 was announced earlier that will be launching later this month and so our expectations are.
That that will be down from prior quarters. So we want to make that in your guide and if it is lower than that then there might be a little risk, but we've already <unk> upside to it there'll be upside tour guide.
Okay. That's helpful.
One more and.
Your life.
Licensing partners on <unk>.
Single taps.
Like.
You got a spoke to.
The the scale of the downloads I guess as you look.
Further down the road like how does your pipeline luck, even though the macros week is this something that people are chomping at the bit because of conversion and efficiency or it's a back burner issue for them to kind of take on this product.
Yeah, the product market fit a strong you know we don't have a problem convincing people.
Hey, this is a more efficient way for you to run your business you.
Really the largest issue we have are more dealing with last mile operational things and a lot of the companies that we're talking to and working with have made their own.
Huts and so getting them to work and get the data lined up in a lot of the last mile operational issues have been the long pole, there, but I would say the overall interest in the product the opportunity to increase conversions and have a more efficient spend the dollars is absolutely something that we're seeing right now on the market.
Great. Thank you.
The next question will come from Omar <unk>, what the Bank of America. Please go ahead.
Oh, Hi, guys. Thank you for taking my question.
Two questions on single Tap you know just.
Since there's probably a lot of new investors investors that are new to the story.
Just on the the the challenges to the patent by Iron source now could you maybe give us a little bit of like <unk>.
Factual background.
As to how long their spin back and forth between iron stores, whether the latest round of.
Of challenges to Enforceability has anything novel to it you know and some of the puts and takes around.
Whether.
It was your strategic position you know would be maintained even if the patent.
Was was deemed unenforceable and then I have a follow up thank you.
Yeah sure Omar.
Let me start with our view on single tap is that we have a moat around this business in the mode is not necessarily because of anything on the IP side. The mode is the fact that we've got many many hundreds of millions of devices already deployed with single tap on them out in the field and then we've integrated that with the AD tech around it that's really difficult to do and.
For investors that have been around our story for a long time, well no that that's taken us many years to perfect and get this into now sustainable business that we're excited about so that's really the mode is I think that it's not just about the okay. I can use the technology in the background to download an app that matters and to that end.
We actually have two patents on single tap not one and there was a ruling on one of the patents that we disagree with and we're in the process of working through the working through right now how to get that squared away, but the second pattern has not impacted so.
Right now is we're going to defend our IP.
And we're proud of our IP and we're going to go after it but I think the message stay I'd keep keep for investors is really one around the mode of getting the technology integrated in with the Adtec any embedded base of devices that that's where I think the real secret sources.
And again just for investors that are new to the story you know have these pattern spin challenged before.
Several years ago or is this the first time. This is happening yeah. This is the first time this has happened and it's actually the patents not.
The company that you referenced is not does not have a pat.
It's actually coming from another third party.
Thank you and then the second question is in terms of early learnings from a single tap licensing is there anything you can share about the economics of these early licensing deals we realize it's still early stage, but wanted to get a sense of how you're thinking about economics, both in the next year or so and going forward.
And we're going to have a variety of different business models with that and it really is gonna come down a reassuring exercise with our partner in terms of do they want to share their incremental revenue with us or do they just want to pass SaaS fee to.
To leverage the technology, and we see a combination of both.
What we've.
Basically guide investors and analysts to us to think about this business is getting a flat fee for every download that leverages technology, Although we'll have very rate variations around the business model as we ramp and scaling.
Excellent. Thank you.
Thanks Homer.
The next question will come from Timothy Horn with Oppenheimer. Please go ahead.
Thanks, guys could you give us a sense of how much probably 25% decline was from pricing.
And how much from volumes and can you just talk about the trajectory on pricing.
Cause it sounds like you you think pricing has stabilized at this point or you know, maybe just talk like monthly what what's happening with pricing.
Would be great. Thanks.
Yeah sure it's him.
Let me kind of breakout are on device business from our.
Our our tech business, what we're seeing right now on pricing on the Adtec side is that's the major driver more so than volumes and volumes are relatively flat.
From quarter over quarter. So the pricing are referenced in my remarks of 10% to 20% is across the board, regardless of bad type or pretty much regardless of geography, whether that's banners interstitial videos or what have you. So it's primarily a pricing story.
On the demand side.
On the on the <unk> side. There are the major drivers is not pricing our revenue per device actually went up.
From December of this past year December of the prior year. So that's something we're proud of that we're able to hang in there.
Pricing the issue there was much more around volumes on the device.
So are the reduction in volumes is really what would hurt us from a macro perspective.
And just the trunk on pricing sorry, you're on both on both second <unk> well you know I guess for me at textile.
Yeah. So our expectation right now is we're in the trough.
Our expectation is we're going to see some rebounding as we get into later parts of this year, but we're dealing with at the beginning of the year a lot of advertisers thinks.
Thinking about their AD sense for the year and we're also seeing variations in verticals I touched on some big brands that we're spending more dollars with us in my remarks on we're proud of that but some of the gaming providers and gaming performance providers have pulled back and that those kind of operating some headwinds and tailwinds against each other.
Thank you.
Thanks.
The next question will come from Dandy with be Riley. Please go ahead.
Oh, Yeah. After you guys I appreciate you taking the questions I didn't hear anything you talk a little bit about challenges with the prepaid contact media I didn't hear anything on the update on the horizon and AT&T content media partnerships that we've talked about so I'm just an update their and when you sort of expect to get that.
Segment back to great. Thanks.
Yeah, so not gonna make any comments any one specific partner on the call Dan here today, what I'll just say as we got we have some work to do and we've got a lot of interest from partners and doing a lot of different things on content media, but we're not where we need to be right now it's a focus area for us to get improved but at the same point in time, we're not prioritizing AD above other thing.
<unk> like the potential with things like games up and.
And getting their alternative appstore things launch, but we've got some work to do there were not satisfied where we need to be and it needs to get better.
Yeah understood. Thanks for the clear answer another one I've heard from investors lately and I'm, just curious and it's mostly an issue for other at Tech companies I think but curious if you're seeing any concerns people are starting to talk more about the S. D. K runtime changes and how that's created some.
Challenges for the kind of mobile AD Tech networks out there and that might be driving some of the weakness that we've seen in recent quarters. Just curious if you're running into any challenges with that is that is that gets rolled outfit to more and more devices or if there's any and I think it would be confined mostly with a legacy add colony assets, but just curious in general if you're.
10.
Yeah. So no we're not seeing that as a headwind in our business right. Now you know as you mentioned down the add Tony side, we are in the process of consolidated our exchanges.
So you know given the overlap of publishers in some cases and not in other cases, that's putting a little pressure on short term revenues, but it's the right thing to do for our partners not to have to deal with multiple exchanges. So I think that's something there'll be a tailwind force next year, but not right in the current quarter.
What we're actually doing though is putting in a lot of different type of adtec enhancements, whether those are new renderings, new billing methodologies and so on and that's starting to bear some fruit for us and that's something I'm excited about because it's commonplace in the industry and your things at the legacy companies required had not done. So argue right now is that will provide.
Some nice thrust an opportunity for growth in our business.
Alright, Thanks, that's all I had I'll turn it over here.
Thanks, Dan.
The next question will come from Anthony sauce with Craig Hallum. Please go ahead.
Even though I wanted to follow up on your comment about helping launch App store you said one to live in another one's Gonna go live sometime this quarter.
Can you help us understand like perhaps your goals by the end of the year Homie, you think are gonna be up how big a business like this could be calm and what's the business model for asked to get paid on helping folks launch these app stores.
Yeah. Thanks, Thanks, Tony.
We're excited about it it's clearly early days, we just you know just recently launched with our first partner as.
As I mentioned in my remarks on some of the macro issues that there is tailwinds right, you've got a lotta operators and Oems that are looking for new revenue streams in these environments and this is obviously provides that.
So for US, we really see three revenue streams for us it would be you know increment.
Incremental opportunities one is just being able to get a new way to get access to the phone and get paid on C. P is for that I am in other ways for us to extend their adtec assets.
Into more publishers on more devices. So that's a nice synergy from our acquisitions, but the third one and then one that probably has got the most attention right now, especially I'm a regulatory perspectives on the payment side.
$100 billion market today and.
And if you think about the marketplace where.
I pay a 1% for my visa pays three per cent for my Amex, and you're paying 30% with the current App store environment.
So our view is that is gonna get disrupted.
And that's just the wind question not a if question and I think we've put ourselves in a really good position to go do that.
And there's a lot of interest out there from a variety of stakeholders. So that's.
That's our first foray into it and hence the investment we took an app toyed, who already has a lot of these capabilities Bill. So something we're excited about strategically early days, but there is a lot of interest out there that's for sure.
Alright, Thanks Bill.
Oh.
This concludes our question and answer session I would like to turn the conference back over to C. E O Mister Bill stone for any closing remark. Please go ahead Sir.
Yeah. Thanks for all joining our call today, we look forward to reporting on our progress against all the points that we made on today's call and we'll talk to you again on our fiscal twenty-three fourthquarter call in a few months.
And have a great night.
The conference's now concluded. Thank you for attending today's presentation you may now disconnect.
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