Q1 2023 Fiverr International Ltd Earnings Call
During the presentation. Please press star followed by one on your telephone keypad.
Alex I'll hand over to Tianjin Chen.
Floor is yours. Please go ahead.
Thank you operator, and good morning, everyone. Thank you for joining us on fiber earnings conference call for the third quarter that ended March 31 2023.
Joining me on the call today are MEO, Kaufman, founder and CEO , and Ofer, <unk> President and CFO .
Before we start I'd like to remind you that during this call. We may make forward looking statements and that these statements are based on our current expectations and assumptions as of today and Fiverr assumes no obligation to update or revise them.
A discussion of some of the important risk factors that could cause actual results to differ materially from any forward looking statements can be found under the risk factors section in fiber most recent form 20-F, and other filings with the SEC.
During this call, we'll be referring to some key performance metrics and non-GAAP financial measures, including.
Including adjusted EBITDA, and adjusted EBITDA margin fell.
Further explanation and a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP measures is provided in the earnings release, we issued today in our shareholder letter each of which is available on our website at investor Dark fiber Dot com.
And now I'll turn the call over to Neil.
Thank you Ginger and good morning, everyone and thank you for joining us today.
We are pleased with our strong execution for the first quarter of 2023.
Revenue was $88 million up one, 5% and close to the top end of our guidance and adjusted EBITDA was $11 $3 million above the top end of our guidance representing an adjusted EBITDA margin of 12, 8%.
These robust results underscore the resilience of our business under current macro conditions and the consistent cohort behavior of our large buyer base continues to provide us with visibility and defensibility.
We have also demonstrated the operating leverage inherent in the attractive market based model that allows us to quickly drive adjusted EBITDA improvements as soon as we pivoted to focus on efficiency.
All of this gives us confidence to deliver on our 2023 expectations set at the beginning of the year.
As managers of a public company, we are committed to exercising prudence and discipline, especially as we navigate through the current macro volatility and we strive to execute our strategies and deliver business results in a consistent manner.
Today, I would like to dive into two topics that I believe will drive significant long term growth for fiber AI and fiber business.
First let's talk about AI.
We haven't seen AI negatively impact our business on the contrary.
The categories, we open to address AI related services are booming.
The number of AI related gigs has increased over tenfold and buyers searches for AI have Ford over a 1000% compared to six months ago, indicating a strong demand and validating our efforts to stay ahead of the curve in this rapidly evolving technological landscape.
We are witnessing the increasing need for human skills to deploy and implement AI technologies, which we believe will enable greater productivity and improved quality of work when the human talent is augmented by AI capabilities.
In the long run, we don't anticipate AI development to displace the need for human talent.
We believe AI won't replace our sellers, rather sellers using AI without compete those who don't.
As of March base, we consistently surface. The most competitive sellers, who provide the best services to our buyers, which includes utilizing the best tools and technologies available.
Enabling our buyers and sellers to embrace the newest technologies is a feature of our dynamic market base and an essential aspect of our model.
Furthermore, while AI generated content can be well constructed it is all based on existing human created content.
To generate novel and authentic content human inputs remains vital.
Additionally, <unk>.
Terrifying and editing the AI generated content, which often contains inaccuracy requires human expertise and effort.
That's why we have seen categories, such as pop checking or AI content editing flourish on our market base in recent months.
So we are confident that humans will always be a part of the loop. We believe AI technology is designed to help humans be more productive and more creative and it will give rise to many new professions much like how the introduction of computers or big data created the profession of software engineers or data scientists.
At Fiverr, we view generated AI as a key wave of innovation for our platform and we are accelerating our work in this area to ensure that we are at the forefront of capturing the opportunities ahead.
This includes being the first to launch dedicated AI service categories, and we are convinced that fiber will continue to be the go to place for talent in the latest AI technology.
We are also exploring opportunities to empower our freelancer community with the latest AI tools to help them increase productivity and earnings.
We have created products like logo maker and AI auditions in the past and we've generated AI, we see immense untapped potential in this area.
Last but not least as a product led company. We believe we will benefit significantly from AI technologies to improve our product experience.
Our E Commerce market base is unique with end to end user data from preorder matching to post order work.
With our scale data and technology Knowhow.
No one is better positioned than fiber into freelancing space to lean into AI technology to disrupt the e-commerce experience.
500 business and our move up market continue to be key priority and it is essential for our long term growth.
We are making significant strides in our go to market strategy. This year.
Within our existing buyer base, we are identifying ideal customers profiles and exploring different avenue across product marketing and customer success in order to expand the usage of those higher value accounts and land more accounts of similar profiles.
Externally, we are broadening our top of funnel outreach in order to penetrate new communities or business customers through partnership relationships.
We see lots of potential in this approach and believe it will be a key acquisition funnel for us that complements the performance marketing and brand investment that we traditionally use.
We are also investing into the long term by continuously rounding out our business product suite.
As part of that effort, we recently announced the integration of Stoke talent into fiber enterprise, which we believe will benefit our medium and large enterprise customers as we consolidate our services under one brand and create a more unified end to end solution for businesses across hiring freelancer management payment and compliance.
The unified brands makes it easier to market to our customers and to drive usage on both market base and freelance management offerings.
In conclusion I'm genuinely excited about the year ahead, we are strengthening the long term modes and defensibility of our business from multiple aspects.
Financially, we aim to significantly improve adjusted EBITDA margin to optimize our growth and profitability profile strategically, we're bringing focus and execution to our core business and investing in long term priorities.
In terms of market positioning we believe AI brings a step function to our addressable market and we expect it will open new opportunities to transform the e-commerce experience on our platform.
We are fortunate to be in such a position of strength and our entire team remains passionate committed and focused in turning these aspects into reality.
With that I'll turn the call now to offer who will walk you through our financial highlights.
We started the year strong as our focus on efficiency for our business paid off.
Revenue of 88 million came in near the top end of our guidance and adjusted EBITDA of $11 3 million.
Our threat.
Presenting margin beat the top end of our guidance.
We are pleased with our progress and expect to continue to steadily improve our operating leverage across all expense line for the rest of the year.
Occupied by <unk> in Q1, with $4 3 million as we continued to see stable occupancy <unk>, driven by disciplined and efficient top of funnel investments as well as consistent and stabilizing cohort behavior among our active buyer.
Overall sales and marketing expense as a percentage of revenue in Q1.
Three 5% an improvement of 560 basis points from Q1 last thing.
The ROI for performance marketing.
<unk> X this quarter the same level as Q hold plenty to do.
By the fact that we typically invest a bit more in marketing in Q1 compared to Q4.
We continue to take a data driven approach and our performance marketing investment.
And we believe this improvement will not only put us in a stronger financial position, while navigating an uncertain environment, but also provide us with the flexibility and capacity to execute our long term strategic play with it.
Santa buyer for Q1 was $262 <unk>.
4% <unk> as we continue to progress and our upmarket effort.
We have also been encouraged by the spending pattern and our large bullet shipped vials.
Among those bio we'll spend over 10-K in 2022, we saw the vast majority of them remains very active in the first quarter of 2023.
We expect to spend per buyer to gradually improve in the second half of the year as we invest farther into higher value buyer and in five of business continued to grow faster than the overall marketplace.
Q1 take rate improved to 34%.
<unk>.
Pension up 80 basis points as we continued to expand our value added services for both buyer and seller on our platform.
Programs, such as promoted gigs and seller plus continue to perform in line with our expectation from the beginning.
Now turning to guidance.
While the second quarter of 2023.
Revenue is expected to be $88 million to $90 million, representing the real growth a full 6%.
Adjusted EBITDA is expected to be $12 million to $14 million, representing an adjusted EBITDA margin of 14, 6% at the midpoint.
For the full year of 2023, we expect revenue to be in the range of 355 to 365 million <unk>.
Representing a.
Growth of 528%.
Adjusted EBITDA is expected to be in the range of $48 million to $56 million.
Presenting an adjusted EBITA margin of 14, 4% at the midpoint.
The stabilizing trend, but we have seen in our marketplace along with our cost disciplined approach gives us the confidence to narrow our full year guidance range by raising the lower end, while maintaining the top end.
We do not see any changes to our current underlying macroeconomic assumption and as such we will remain prudent in our approach.
And as mentioned last quarter, we expect revenue growth rate.
So increased over the course of 2023, and we expect to achieve additional adjusted EBITA margin gain as we progress toward our long term target of 25%.
To summarize we are confident that our strong financial position and are on track to deliver our guidance for this year even in this uncertain environment.
We will continue to make prudent and forward thinking investment.
To help grow our business and capture the opportunity on our platform.
With that we'll now turn the call over to the operator for questions.
Thank you. Thank you very much.
Ask a question. Please press star followed by one on your telephone keypad.
If you would like to withdraw your question. Please press star followed by two.
Unprepared to ask a question please ensure your devices.
Hey.
First question comes from Ron Josey with Citigroup. Your line is open.
Great. Thanks for taking the question, everyone and Jaime Hi, Hi offer ofer.
I wanted to talk about overall demand Ofer, you talked about active buyers relatively flat we thought divided by there is relatively flat year over year.
But then also stabilizing macro trends and just talk to us a little bit more about what youre seeing overall from a buyer perspective. It seems like cohorts are in line things like you've talked about stabilizing demand trends, but are you seeing any change in that and I'm wondering I believe on the sales and marketing side fiber moderated its performance AD spend in the quarter maybe.
Towards more brand or do you think that may have any change or any impact to overall demand. So question number one is on demand side active buyers question number two you talked about AI, bringing a step function to the addressable market just any additional insights there and help us understand how that might come to fruition would be helpful. Thank you.
Thank you. Thank you for the question.
I'll start with the with the active buyer.
So what we have seen is.
Very stable trends in terms of absolute volume.
Driven by consistent cohort behavior.
And a stable <unk>.
No.
The consistent core zone.
The spending power.
Button.
It's early days.
Pretty similar to what we expected at the beginning of this.
Very strong repeat revenue trend and if you follow the some of those led to a 64% of the marketplace revenue.
Coming from repeat buyers give us lots of confidence.
As we look forward and then on the acquisition.
Position.
We ended up to spend less than less than a typical Q1.
And this is because of the the macro where SMB.
Our spending.
Yeah.
Less than than usual.
So while we are focused on efficiency and higher value buyer.
You can see that DIY on the quarter, which is one nine acts very strong.
Similar to previous quarter. Despite the fact that we actually invest more.
And we saw.
A nice growth in high value buyer.
We will continue to be very robust.
So there isn't any change between.
Our flavor.
Marketing brand.
Performance marketing.
Yes.
Maintain.
Similar strategies.
Throughout the both of them I think the outcome.
The outcome speaks only.
Yeah, Ron I'll, maybe augments are you seeing that.
The strategy around the mixture between performance and brand is something that we've been doing for forever.
And it is proving itself I mean, we continuously are the number one brand in our space both in aided and unaided.
Awareness.
And this also drives both organic traffic as well as consistent cohort behavior.
So from that perspective.
We're just continuing on the same strategy.
Ben.
We've been applying for for many years and working very well for us.
On the AI question.
There is not much to add to everything we wrote in the letter to shareholders and in my opening comments, we're super excited about this.
It's an intriguing piece of technology that provides leap function leap.
Yes.
Progress in terms of in terms of the ability to.
<unk> just to make it available for our buyers and sellers, but also use it internally as a team.
As we said.
We're seeing we're seeing a pretty significant uptrend in terms of the.
The popularity within our catalog and this is why you should expect us to continue investing in widening Dakota totaled around AI services.
Hum are being invented and they are being invented as we speak so there's exciting new professions.
And fiber is the.
The first place.
That you can do you can find those new professions online.
So that gets us very excited.
Thank you Michelle Thank you Ofer.
Our next question comes from Jason <unk> with Oppenheimer Your lunch.
Thanks.
Like do you think.
There was like a leading indicators and when you think about active buyers versus spend per buyer.
That came through kind of like macro dynamics as one of the two of those more of a leading indicator and then.
We've been doing some work and kind of took some estimation that.
40% of the categories could be at risk for AI, but then it's like.
You create new categories on the other hand, presumably.
Pros, who have AI skills would have like in a higher RPM potentially than folks who have non AI skills.
Maybe just I know you probably don't want to put numbers to it yet specifically around this but just how are you broadly thinking about that thank you.
Okay.
Thanks for the question.
So as to leading indicators.
So the one thing we don't control because of macro is top of funnel.
I mean, the amount of traffic that comes other than the traffic that we can influence through.
Through pay channels and through the.
The virality of our product.
And when you think about octave buyer and spend per buyer. It. These are two levers that we play.
Depending on the opportunities and depending on our strategy.
Meaning that if there is better opportunity within the efficiency of our marketing to acquire more customers that will influence active buyers obviously.
If we don't see that and we focus more on high value buyers, then that will influence spend per buyer more so I don't think that these these two kpis are necessarily an indication obviously, if there is more organic traffic, which means that the top of funnel is growing because the market.
It is recovering from macro.
Youll see the agile <unk> dot.
In active buyer, probably first before before spend per buyer.
In terms of your.
Your question about.
AI.
Right, it's very hard to understand.
What categories or how categories might be influenced I think that there is.
Funds principle that we've that I've shared in my opening remarks, which I think is very important and this is how we view this which is.
Dot.
AI technology is not going to displace our sellers.
But sellers who have better.
Grass and.
Better usage.
<unk> AI aren't going to out compete those who don't and this is not really different than any meaningful advancements within technology and we've seen that in recent years.
Every time when there is a.
Cool new technology.
Or device or foreign posture.
Sellers need to become professional at those who become professional first are those who are obviously.
Winning.
And we're seeing the same here.
So I don't think that this is this is a different case, it's just different professions, which by the way is super exciting.
Our next question comes from Doug Anmuth.
With J P. Morgan your line is open.
Hey, this is Wes on for Doug Thanks for taking the questions.
Active buyers who have been relatively stable. So could you maybe just parse out kind of what youre seeing is it looks different cohorts, rather larger businesses versus smaller higher value versus lower value.
And then secondly on margins for the year.
How should we think about seasonality of expenses would be pulling back on marketing and things like that.
Thanks.
Okay.
Hey, Matt.
Also I think on the on the first on the <unk>.
Last question.
I think I mentioned that earlier on the active buyer.
<unk> alcohol.
Seems to be very stable throughout.
The last few months.
In terms of attendance.
And spend.
On the new cohort.
We have a focus over the last few years.
On the <unk>.
<unk>.
What we call high value buyer.
Those will have.
Bigger wallet by definition.
And I think as I mentioned earlier, we see more of.
This buyer.
Joining joining the marketplace.
Then on the second question on the margin for the year.
So now we've been off.
Accumulated the quarter.
The yearly guidance you can realize that we anticipate.
EBITDA and margin are going to be better throughout the year.
This is this was driven by <unk>.
Efficiency and scale of the business if.
If you go back the last few years.
I think we will spending behind <unk>.
Everything we say.
In terms of leverage and efficiency.
This is the plan for the rest of them.
Our next question comes from Matt Farrell with Piper Sandler Your line is open.
Sure.
Thanks, guys. Congrats on the launch of fiber enterprise I understand it's a longer term play on moving up market, but what are some of the near term goals or targets around the adoption of the integration with some of your larger customers.
Good morning, Thanks for the question.
So essentially.
We addressed this a couple of quarters ago, We said that we were undergoing a process of integrating Stoke talent into our product.
Which has tremendous amount of benefits because putting all of our suite of business.
Solutions business tools allows us to actually benefit from the power of the brand.
A unified brand and that allows us to.
Enjoy.
The brand equity that we have.
As a company and expand into into larger accounts now.
A lot of these customers are actually customers of <unk>.
One of our different.
That might be fiber or fiber business.
By creating another tier.
The fiber enterprise that allows us to actually identify those customers in smoothly transitioning them from one product to the other.
Maximizing their potential to use one of our products.
It will just complement on me huh.
And I think.
Now with the.
With the integration one of the focuses.
Go to market.
And our ability to.
To create.
Good unit economy that will allow us to expand like that one.
But those are the those are the kpis for enterprise.
More than anything.
And maybe as kind of the adjacent question you talked about the ability to drive new buyers through partnerships as a new channel of acquisition could you just maybe walk us through an example of that from both maybe an economics perspective, but also what the relationship might look like through through partner.
Thanks, guys.
Yes, I think these are probably partnerships that we're going to announce later on in the quarter I can potentially call out at least one of them, which is our partnership with Amazon.
Since this was not announced yet I'm not going to get into the details of that partnership but.
But obviously, we're excited about the opportunity to cooperate with very large well established brands.
Can benefit from.
Everything we have to offer and again, given the fact that we haven't announced.
Any one of these partnerships yet.
Hub to ask you guys to be patient until we do it. Thank you.
Our next question comes from Andrew Boone with JMP. Your line is open.
Good morning, and thanks for taking my questions.
Wanted to ask about international it sounded like in Germany, we are seeing strong traction given some of the localization efforts. There more broadly can you talk about localization on a on a global basis, and where you guys are in the process of taking some of those learnings and applying them to other markets.
And then secondly on brand.
Really positive.
Stats you guys put out there in terms of brand awareness can you talk about just the brand investment can you help size it for US and then how much more growth do you guys expect in terms of additional investments.
To increase brand. Thanks, so much.
Andrew Thanks for the question.
In terms of international expansion. So this year, our focus is UK, Germany and France.
And it's really focused on on.
On the efficiency.
Of our platform there.
And also.
Some of it is to address also macro conditions that we're seeing in Europe .
Obviously.
Everywhere, we focus and invest we make our product better and.
Thus the activity within those.
Countries.
Key is increasing.
And I think that.
Focusing on the on those three countries allows us to to create a more tight playbook.
That allows us to really.
Drive improvement, but also then use everything we learned for all other countries as well in terms of the brand.
It's obviously small compared to the performance marketing.
We've been very consistent we I don't believe we've ever broken down exactly what is the.
What is the ratio between performance and brand and it varies between quarters, but again.
Consistent and again.
Smaller obviously than our performance I think that that balance of playing with these two levers allows us to enjoy.
Best of two worlds and obviously the.
They contribute to each other.
Yeah.
Overall, the majority of freelancing spend is still offline so driving awareness.
And getting buyer.
From offline to online has lots of room for growth and if you look at the total addressable market.
Just a number even even if you don't go into the mid market and definitely not to SME or enterprise.
The SMB market.
There are customers we have.
Pretty large is still very small in comparison to the total available number of Smbs. So we definitely see tremendous amount of opportunity there to move the offline activity to the <unk> and brand is one of the.
One of the tools to do that.
Okay.
Our next question comes from Eric Sheridan with Goldman Sachs. Your line is open.
Hi, This is Ben Miller on for Eric Thanks for taking our questions.
I was just wondering if you could talk about any quality or productivity gains that you've been able to track among freelancers because of Gen. AI tools and then second.
Can you just wanted to see if you could expand on some of the initiatives you talked about in the letter to drive better matching and conversion.
Hey, Ben Thanks for the questions.
So.
In terms of productivity.
I think the.
Called out that the.
General principle, which is <unk>.
Our sellers are Super Super quick too.
Adopt any new technology, and so if I don't know chart GPT allows them to.
Come up with.
With dropped ideas for.
Articles or to summarize complex topics or anything that might make them.
Work slightly.
Simpler so they can pick it up from data point and put in park shaking put creative writing authentic.
Or centric writing into it and make it much better than they use it but again. This is not I mean, when Adobe released a new version of Photoshop, everybody runs to learn it and make the most out of it.
It's not different in that sense, it's more sophisticated in some ways, but it is a.
It's an incredible tool and our sellers are among the first if not the first to actually take advantage of it.
In turn in terms of.
Ways of.
Or initiative.
At this point I'm not going to provide more details overseas for many reasons some of them are competitive.
But we will be happy to.
<unk>.
Once they are out.
Okay.
Our next question comes from planning much Shannon from Nathan <unk> Company. Your line is open.
Great. Thanks for taking the questions just wondering if youre seeing new or existing customers engage with with.
With the new AI service areas and just I know you are pulling back in some performance marketing spending but.
Anything you're doing to raise awareness that those two tools are available I know that there is the category on the homepage, but anything you're doing to raise awareness at fibers, a place where people can engage with AI tools.
Yes sure.
So essentially.
By adding specific vertical into our catalog and introducing more categories is definitely the first step.
A lot of what we do in communicating with our customers.
As a second way of doing it.
I think that there is a lot of education.
We put in place.
In our conversation with our community both both the businesses and freelancers and we definitely promote the usage of anything that that can do that can improve the lives of both our customers and our.
Talented community.
And to make the most out of it.
I would say that because of the exposure.
This has been receiving.
<unk>.
They seem to be educating themselves pretty fast.
And obviously there is also differences between how smaller businesses are adopting it and how larger businesses are adopting it.
And.
And I think that this.
It also opens up a really interesting opportunities with the different segments.
Customers.
Okay.
Our next question comes from Marvin Fong with <unk>. Your line is open.
Good morning, Thanks for taking my questions.
That's on a nice execution in the quarter. So two questions I guess similar to the last question. So I know, it's early days in AI, but.
Are you seeing that the buyers who are.
Purchasing those services are skewing towards new buyers for you guys and also are you noticing any other differences with the buyers perhaps the spend per buyer.
Rental or the makeup between SMB and larger enterprises.
Color there and then second question.
On the active buyer count I know in the letter.
That larger cohorts in the past just because of the natural.
Churn is sort of depressing smaller cohorts that you're acquiring right now so I'm just curious when does that affect kind of normalize.
Stabilize such that the larger cohorts in the past no longer becomes a significant headwind.
To your active buyer account.
Any color there would be great as well thank you.
Thanks for the questions Marvin.
Well as to your first question about AI services I think it's I think it's too soon to call any specific trends.
Maybe the short answer is.
Probably no to both your questions.
Are we seeing are we seeing differences between new and repeat or.
The STB.
But again.
Until we can call out something thats seem to be stable or trend.
We'll have to wait.
We are obviously tracking it very closely.
And then moving onto the second and the second question on the active buyer come from.
We haven't mentioned.
This headwind throughout this discussion or any of the document.
Which is the indication that the.
The lapping period is actually.
Bulk will be over so we don't we don't expect any.
Material effect from from cohort B cohort.
So to impact future head count.
Yes.
Okay.
Our final question comes from Rohit Kulkarni with Roth Capital Partners. Your line is open.
Hey, Thanks for taking my questions.
One is on the comment.
Comment that you have.
<unk> got.
New buyers coming from non paid channels maybe.
Maybe peel back that a little bit maybe talk about how.
Our hosts estimate that is maybe that creates.
Long term Halo N Ho.
How much leverage you can have in your overall marketing spend.
Second is just on the <unk>.
Also encouraging that.
Narrowing the range tweaking it higher.
I would view that as a sign of.
Better visibility confidence maybe talk about how the.
The overall look past three months.
Andrew.
Progressed that gives you greater.
Confidence despite kind of what we're seeing in.
Throughout this discussion or any of the document.
In the market.
Which is a indication that.
Visibility around.
External sources still affecting the drivers.
Lapping periods is actually.
Bulk will be over so we don't we don't expect any.
A lot of Internet companies, such so we'd love to.
Material effect from from cohort B cohort.
Your comments on board these things thanks.
So to impact future head count per player.
Sure Hey, thanks for the questions.
So in terms of organic channel.
Yes.
Okay.
If you if you look at the organic versus paid the majority of our new business is coming from organic so and that has been the case.
Our final question comes from Rohit Kulkarni with Roth Capital Partners. Your line is open.
Hey, Thanks for taking my questions.
Which is great because.
One is on the comment that you have very encouraging.
And that ties in back to the efficiency of our marketing.
And our new buyers coming from non paid channels.
Meaning that despite the fact that we've been increasing our investment in paid marketing.
Peel back that a little bit maybe talk about.
How sustainable that is maybe that creates.
The organic channels continue to grow along with it.
And if a more long term halo and how how.
How much leverage you can have in your overall marketing spend.
Which means that the viral core efficiency of everything we do is high.
Second is just under 23 guide also encouraging that you are.
And I think that if we if we think about.
Narrowing the range tweaking it higher.
Moving into the future.
I would view that as a sign of better visibility confidence maybe talk about how the overall like past three months in.
We've spoken about.
<unk> partnerships.
This is.
This could be this could be a source for further.
You may have progressed that gives you greater confidence despite kind of what we're seeing.
Further traffic.
That is not paid but again too soon to.
In the market around the visibility around the kind of external forces still affecting the drivers.
To talk about this hopefully.
Going to be able to talk about this in the in the next couple of quarters.
And then on the second question regarding our guidance.
A lot of Internet companies as such so we'd love to.
Comments on both these things.
We narrowed the range because we feel more confident.
Sure Hey, thanks for the questions.
As we look forward.
Based on the outcome.
So in terms of organic channel.
And that's fundamental.
Throughout.
The first quarter.
If you if you look at the <unk>.
On.
I'd say from the mental.
Organic versus paid the majority of our new business is coming from organic so and that's been the case.
In the.
The cohort behavior, and we do continue to be.
Which is great because.
I think consistent.
And that ties in back to the efficiency of our marketing.
With our expectation.
And the top of funnel in the acquisition.
Meaning that despite the fact that we've been increasing our investment in paid marketing.
Which have been performing very well.
The combination of.
Both.
The organic channels continue to grow along with it.
Give us the gives us the confidence looking forward.
But we can.
Which means that the viral co efficiency of everything we do is high.
We can raise the.
At the midpoint.
Okay.
And I think that if we if we think about.
Well within the guidance that we've previously.
Okay.
Moving into the future.
We spoke about.
Strategic partnerships.
This concludes our Q&A I'll now hand.
I think that this is.
Dr Kauffman for any final remarks.
This could be this could be a source for further.
Elliot Thanks for moderating the call today and.
Further traffic.
That is not paid but again too soon to.
For everyone participating thank you for joining us this morning, and I Hope you have a great day and see you soon in.
To talk about this hopefully we're going to be able to talk about this in the in the next couple of quarters.
One of the next conferences. Thank you.
And then on the second question.
Ladies and gentlemen, today's call is now completed.
For your participation you may now disconnect your lines.