Q3 2023 Ziff Davis Inc Earnings Call

[music].

Speaker 1: Thanks for holding. We appreciate your time and patience. Please stay on the line, and we'll be back in just a moment.

Thanks for holding we appreciate your time and patience. Please stay on the line and we'll be back in just a moment.

[music].

Speaker 2: Thank you for waiting.

Speaker 3: Your patience is appreciated.

Speaker 3: Please hold the line and we'll be right back with you.

Speaker 2: Thanks for watching!

Good day, ladies and gentlemen, and welcome to the Ziff Davis third quarter 2023 earnings call.

Speaker 4: Good day ladies and gentlemen, and welcome to the Ziff Davis third quarter 2023 earnings call. My name is Paul and I will be the operator for the Ziff Davis third quarter.

My name is Paul and I will be the operator, assisting you today.

Speaker 4: At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

At this time all participants are in a listen only mode.

Question and answer session will follow the formal presentation.

Speaker 4: If anyone should require operator assistance during the conference, please press star zero on your telephone.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Speaker 4: On this call will be Vivek Shah, CEO of Ziff Davis, and Brett Richter, Chief Financial Officer of Ziff Davis.

On this call will be Vivek Shah CEO of Ziff Davis, and Bret Richter, Chief Financial Officer of Ziff Davis.

Speaker 4: I will now turn the call over to Brett Rector, Chief Financial Officer of Ziff Davis. Thank you.

I will now turn the call over to Bret Richter, Chief Financial Officer of Ziff Davis.

You may begin.

Thank you good morning, and welcome to the Ziff Davis Investor Conference call for Q3 2023.

Speaker 5: Thank you. Good morning and welcome to the Zip Davis Investor Conference call for Q3 2020.

As the operator mentioned I'm, Bret Richter, Chief Financial Officer of Ziff Davis, and I am joined by our Chief Executive Officer Vivek Shah.

Speaker 5: As the operator mentioned, I am Brett Richter, Chief Financial Officer of Ziff Davis, and I am joined by our Chief Executive Officer Vivek Shah.

Speaker 5: The presentation is available for today's call. A copy of this presentation is available on our website.

A presentation is available for today's call.

A copy of this presentation is available on our website.

Speaker 5: When you launch the webcast, there is a button on the viewer on the right hand...

When you launch the webcast there is a button on the viewer on the right hand side, which will allow you to expand the slides. If you have not received a copy of the press release, you may access it through our corporate website at Www Dot Ziff Davis Dot com.

Speaker 5: which will allow you to expand the slides. If you have not received a copy of the press release, you may access it through our corporate website at www.zipdavis.com

Speaker 5: In addition, you'll be able to access the webcast from this...

In addition, you'll be able to access the webcast from this site.

Speaker 5: After completing the formal presentation, we'll be conducting a Q&A.

After completing the formal presentation, we'll be conducting a Q&A.

Speaker 5: The operator will instruct you at that time regarding the procedure for asking questions.

The operator will instruct you at that time regarding the procedure for asking questions. In addition, you can email questions to Investor <unk> Ziff Davis Dot com.

Speaker 5: In addition, you can email questions to investor at zipdavis.com.

Before we begin our prepared remarks allow me to read the Safe Harbor language as you know this call and the webcast will include forward looking statements such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated results. Some of those risks and uncertainties include but are not limited to.

Speaker 5: Before we begin our prepared remarks, allow me to read the safe harbor line.

Speaker 5: As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated.

Speaker 5: Some of those risks and uncertainties include, but are not limited to, the risk factors that we have disclosed in our SEC filings, including our 10-K filings, recent 10-Q filings, various proxy statements, and 8-K filings.

The risk factors that we have disclosed in our SEC filings, including our 10-K filings recent 10-Q filings various proxy statements and 8-K filings as well as additional risk factors that we've included as part of the slideshow for the webcast. We refer you to discussions in those documents regarding safe Harbor language as well as forward.

Speaker 5: as well as additional risk factors that we have included as part of the slideshow for the web.

Speaker 5: We refer you to discussions in those documents regarding safe harbor language as well as forward looking statements. Now let me turn the call over to Vivek for his remarks.

Looking statements now let me turn the call over to Vivek for his remarks. Thank you Bret and good morning, everyone. Our third quarter financial results reflect solid and encouraging improvement in a number of parts of our business, most notably our organic growth rate was flat in the quarter after six consecutive quarters of low.

Speaker 6: Our third quarter financial results reflect solid and encouraging improvement in a number of parts of our...

Speaker 6: Most notably, our organic growth rate was flat in the quarter after six consecutive quarters of low to mid-single digit decline.

To mid single digit declines.

Speaker 6: We believe our business is turning the corner and it's set up for positive, organic growth in 2020.

We believe our business is turning the corner and is set up for positive organic growth in 2024.

Speaker 6: Let's begin with our digital media segment, where our organic growth rate in Q3 was positive, led by the connectivity business, which grew high single digits in the quarter and continues to be amongst our most consistent performance.

Let's begin with our digital media segment, where our organic growth rate in Q3 was positive led by the connectivity business, which grew high single digits in the quarter.

Continues to be amongst our most consistent performers.

Speaker 6: Our speed test app continues to be popular with users, having reached an all-time high in monthly iOS installs in the US.

Our speed test App continues to be popular with users having reached an all time high in monthly iOS installs in the U S.

Speaker 6: Rukla also claimed the top spot in CC Group's list of most cited sources by Telecom Industries.

<unk> also claimed the top spot in Cc groups list of most cited sources by telecom industry analysts.

Speaker 6: Our Wi-Fi planning tools at ECHTAHOW continue to be market leaders. And we're proud that they're being used for Wi-Fi deployment at the 2024 Summer Olympics.

Our Wi Fi planning tools that ACA, how continue to be market leaders and we're proud that they are being used for Wi Fi deployment at the 'twenty 'twenty four Summer Olympics.

Speaker 6: In our health and wellness vertical, we grew mid-single digits with continued strength in both consumer and professional focused pharma advertising and strong subscription growth at our lose it weight management and nutritional wellness.

And our health and wellness vertical we grew mid single digits with continued strength in both consumer and professional focused pharma advertising and strong subscription growth at or lose it weight management and nutritional wellness app.

Speaker 6: We just passed the one year anniversary of our Lucid acquisition and we are very pleased with its financial results and exciting near-term product development.

We just passed the one year anniversary of our lucid acquisition and we are very pleased with its financial results and exciting near term product development roadmap.

Speaker 6: In gaming, WeGrew High Single Digits, IGN, is experiencing very strong traffic growth, particularly on social and video based platforms.

In gaming, we grew high single digits as IGN is experiencing very strong traffic growth, particularly on social and video based platforms.

Speaker 6: While Humble also grew in the quarter, we didn't see the expected benefit from new game releases as we experienced delays with some launches and underperformance and...

While humble also grew in the quarter, we didn't see the expected benefit from new game releases as we experienced delays with some launches and underperformance in others.

And shopping retail me notwithstanding with year over year increases in usage of loyalty products such as cash back.

Speaker 6: In shopping, retail me not with stable, with the Euroyear increases in usage of loyalty products, such as cash back and our browser.

Our browser extension.

Speaker 6: and we're still working on traffic recovery at offers.com.

And we're still working on traffic recovery at offers dot com.

Speaker 6: Our tech vertical continues to be the outsized drag on revenue. Down high teens.

Our tech vertical continues to be the outsized drag on revenue down high teens organically.

Speaker 6: That's an improvement over the first two quarters of the year, which is a reminder of the headwind that it's been from.

That's an improvement over the first two quarters of the year, which is a reminder of the headwind that it's been for us.

And while it will continue to be a drag on revenue growth for the remainder of the year. We believe it can join the rest of our businesses on the path back to positive organic growth.

Speaker 6: And while it will continue to be a drag on revenue growth for the remainder of the year, we believe it can join the rest of our businesses on the path back to positive organi-

I'll point out that when excluding Tac our advertising revenues grew in Q3.

Speaker 6: I'll point out that when excluding tech, our advertising revenues grew in Q3.

And cyber security and Martech Q3 revenue declined mid single digits year over year and was almost flat to Q2.

Speaker 6: It's cybersecurity and MarTech, Q3 Revenue Decline mid-single digits year over year, and was almost flat to Q3.

Our E mail marketing business continued to grow organically driven by increased usage by customers and strong new business.

Speaker 6: Our email marketing business continued to grow organically, driven by increased usage by customers and strongly built.

Speaker 6: Our largest decline continues to be in VPN, but we are encouraged by the trends in this business.

Our largest decline continues to be in VPN, but we are encouraged by the trends in this business.

For the third quarter in a row, we grew our VPN customer ads and these gains should flow through to VPN revenue in the coming quarters.

Speaker 6: For the third quarter in a row, we grew our VPN customer ads, and these gains should flow through to VPN revenue in the coming quarters.

Now, let me shift to an update on AI.

Speaker 6: We are actively leveraging our AI partnership with Zyla to fast-track opportunities within our connectivity division.

We are actively leveraging our AI partnership with xylem to fast track opportunities within our connectivity division.

Speaker 6: utilizing proprietary Uqua data, we have made fast progress on our now casting capabilities, which use machine learning to showcase the value potential of Uqua's insights for the financial services industry.

Utilizing proprietary liquid data, we have made fast progress on our now casting capabilities, which use machine learning to showcase the value potential of <unk> insights for the financial services industry.

For instance, we are working on a model capable of estimating key financial performance metrics of telecom market participants based on <unk> unique datasets.

Speaker 6: For instance, we are working on a model capable of estimating key financial performance metrics.

Speaker 6: telecom market participants based on UQA's unique data set.

Speaker 6: We've also launched UQA's first AI copilot, which uses a large language model with global real-time telecommunications knowledge to support our analyst teams in developing customer insights and thought leadership content from UQA's proprietary data and knowledge.

We've also launched <unk> first AI copilot, which uses a large language model with global real time telecommunications knowledge to support our analyst teams in developing customer insights and thought leadership content from <unk> proprietary data and knowledge base.

We are making steady progress integrating AI applications across our everyday health group portfolio, including from our xylem partnership and editorial workflow efficiency.

Speaker 6: We are making study progress integrating AI applications across our everyday health group portfolio, including from our Zyla partnership, an editorial workflow efficiency, new product features, and content personal interests.

<unk>, new product features and content personalization.

Our cyber security business Viper developed a conversational experience for their end point detection and response incident management product.

Speaker 6: Our Cybersecurity Business, Viper, developed a conversational experience for their endpoint detection and response incident management products.

Speaker 6: We expect Viper users to be able to utilize an AI chatbot to swiftly analyze and clarify the actions of potentially malicious scripts, thereby enhancing the detection of actual threats to individuals and organizations.

We expect Viper users to be able to utilize and AI chatbot to swiftly analyze and clarify the actions of potentially malicious scripts, thereby enhancing the detection of actual threats to individuals and organizations.

Speaker 6: We anticipate in deploying the beta of this feature by the end of...

We anticipate deploying the beta of this feature by the end of the year.

Speaker 6: Last quarter we announced that we launched a new AI driven chatbot for game help.

Last quarter, we announced that we launched a new AI driven chatbot for game help starting first with the hit game. The legend of Zelda tiers of the Kingdom.

Speaker 6: Starting first with the hit game, the Legend of Zelda Tears of the Kingdom.

This chatbot was solely trained on IGN expert content and enabled us to engage users in a new way by allowing logged in members to ask very specific game help questions.

Speaker 6: This chatbot was solely trained on IGN's expert content and enabled us to engage users in a new way by allowing logged in members to ask very specific game help questions.

Speaker 6: IGN has now rolled out the AI chat box for Game Help across nine game titles and the early results have been incurred.

IGN is now rolled out in the AI chatbot for game help across nine game titles and the early results have been encouraging.

Speaker 6: These are just a few of the examples of AI enablement taking place at the company.

These are just a few of the examples of AI enablement, taking place at the company.

Speaker 6: At the same time, we continue to closely monitor the role of AI in surf.

At the same time, we continue to closely monitor the role of AI in search.

Speaker 6: Last quarter, we shared that our organic graphical from Bing, which is still the only at-scale search experience incorporating Gen AI, was up. And that continues.

Last quarter, we shared that our organic traffic referral from being which is still the only at scale search experience incorporating gen. AI was up and that continues.

Speaker 6: This time we sought to understand the prevalence of AI-generated responses to search queries.

This time, we sought to understand the prevalence of AI generated responses to search queries.

Speaker 6: To do this, we sampled keywords across our top domains that drive the majority of our search traffic.

To do this we sampled keywords across our top domains that drive the majority of our search traffic.

Within this that just 20% of keywords prompted an AI generated response from Bing.

Speaker 6: Within this set, just 20% of keywords prompted an AI-generated response from

Speaker 6: Meaning that for 80% of the highest value keywords, an AI response was not even

Meaning that for 80% of the highest value keywords and AI response was not even generated.

Similarly, we sampled keywords and Google's SG, which.

Speaker 6: Similarly, we sampled keywords in Google's SGE, which is still in Google Labs, and found that only 23% of our most valuable keywords prompted an AI-generated response.

It is still in Google Labs, and found that only 23% of our most valuable keywords prompted an AI generated response.

Our key takeaway.

Speaker 6: is that AI-generated responses are currently prompted at a much lower rate than some might have come.

Is that AI generated responses are currently prompted at a much lower rate than some might have contemplated.

Speaker 6: We also wanted to understand the click-through rates when our keywords return an AI-generated response versus those that do not.

We also wanted to understand the click through rates when our keywords return in AI generated response versus those that do not.

Speaker 6: On Bing, AI-generated responses had a higher click-through rate compared to those that did not.

On being AI generated responses had a higher click through rates compared to those that did not.

We currently cannot measure click through rates and Google SGA, but don't have any reason to expect a different outcome.

Speaker 6: We currently cannot measure click-through rates in Google SGE, but don't have any reason to expect a different outcome.

Speaker 6: We believe this important analysis confirms our view that fears about AI-enabled search have been over.

We believe this important analysis confirms our view that fears about AI enabled search has been overdone.

Speaker 6: Our SEO experts at Maz share similar views based on their experience and expertise in this.

Our SCO experts at Mas share similar views based on their experience and expertise in this space.

We believe that search operators continue to understand the importance of the value exchange between search providers and publishers access to content for traffic and that they will protect this exchange. However, we strongly believe that non search AI platforms will need to compensate rights holders for their content.

Speaker 6: We believe that search operators continue to understand the importance of the value exchange between search providers and publishers, access to content for traffic, and that they will protect this exchange. However, we strongly believe that non-search AI platforms will need to compensate rights holders for their...

Speaker 6: We are committed to upholding the rights of content creators and demonstrate this through proactive involvement in industry.

We are committed to upholding the rights of content creators and demonstrate this through proactive involvement and industry efforts.

Speaker 6: Participation in the news media alliance, including holding a seat on the NMA Board, an endorsement of their white paper, as well as our contributions to their comments to the U.S. copyright office, reflect our stance on preventing unauthorized and uncompensated use of publisher content.

Participation in the news media alliance, including holding a seat on the Nm a board.

An endorsement of their white paper as well as our contributions to their comments to the U S. Copyright office reflect our stance on preventing unauthorized and uncompensated use a publisher content.

Now just a few words about M&A.

Speaker 6: The overall deal market continues to hover around 10 year lows in terms of volume and value. And this has certainly shown up in our own M&A activity. Where we...

The overall deal market continues to hover around 10 year lows in terms of volume and value and this has certainly shown up in our own M&A activity.

<unk>, we have closed just two acquisitions this year.

We attribute the M&A slowed down to a persistent gap.

Speaker 6: We attribute the M&A slowdown to a persistent gap in the valuation expectations of buyers and sellers.

The valuation expectations of buyers and sellers.

Speaker 6: However, our philosophy on M&A has not changed, and we are optimistic that as new reality settle in for many businesses in our sector, we will be very well positioned to create shareholder value to have.

However, our philosophy on M&A has not changed and we are optimistic that as new realities settle in for many businesses in our sector, we will be very well positioned to create shareholder value through M&A.

Speaker 6: We remain very eager to deploy capital for acquisitions at a time when our powder is especially dry. And continue to believe our patients.

We remain very eager to deploy capital for acquisitions at a time when our powder is especially dry.

And continue to believe our patience will be rewarded.

Speaker 6: Let me provide you with an update on our ESG.

Let me provide you with an update on our ESG efforts.

Speaker 6: As mentioned on our last call, our emissions reduction targets were recently validated by the Science-Based Targets Initiative.

As mentioned on our last call our emissions reduction targets were recently validated by the science based targets initiative.

<unk> defines and promote best practices in near term science based target setting.

Speaker 6: SBPI defines and promotes best practices in near-term science-based targets.

Speaker 6: And we now have comprehensive scope 1, 2, and 3, a mission reduction target in place.

And we now have comprehensive scope, one two and three emission reduction targets in place effectively committing to cut our emissions in half by 2030.

Speaker 6: Effectively committing to cut our emissions in half by 2030.

Speaker 6: We have already been working with our major suppliers, facilities teams, and building managers, and will continue to do so over the next several years to ensure we meet these targets.

We have already been working with our major suppliers facilities teams and building managers and we'll continue to do so over the next several years to ensure we meet these targets.

Speaker 6: It's also worth noting that Zip Davis is obtained independent third party verification of our 2022 greenhouse gas inventory. And we'll do

It's also worth noting the Ziff Davis is obtained independent third party verification of our 2022 greenhouse gas inventory and we will do so moving forward.

Next week, we will host our third annual purpose summit.

Speaker 6: Next week, we'll host our third annual Purpose Summit, a company-wide event where employees hear from colleagues throughout Ziff-Davis who are making a difference through their work and affect change within their communities.

Companywide event, where employees here from colleagues throughout Ziff Davis, who are making a difference through their work and effect change within their communities. It's.

It is a highlight on my calendar.

Speaker 6: With that, I'll hand the call back to Brett to discuss our financial results in greater detail. Thank you for the- Thank you.

With that I'll hand, the call back to Brett to discuss our financial results in greater detail.

Thank you Vivek, let's discuss our financial results.

Our earnings release reflects both our GAAP and adjusted financial results for Q3 2023.

Speaker 5: Our earnings release reflects both our gap and adjusted financial results for Q3 2020.

Speaker 5: We will focus our discussion today and my commentary will primarily relate to our Q3 2023 adjusted financial results and comparisons to prior

We will focus our discussion today and my commentary will primarily relate to our Q3 2023, adjusted financial results and comparisons to prior periods.

Slide four reflects the summary of our third quarter financial results.

Speaker 5: Slide four reflects the summary of our third quarter.

Speaker 5: We reported revenue of $341 million for the third quarter of 2020.

We reported revenue of $341 million for the third quarter of 2023 as compared with revenue of $341 $9 million for the 2022 comparable period, reflecting a decline of three tenths of a percent.

Speaker 5: as compared with revenue of $341.9 million for the 2022 comparable period, reflecting the client of three tenths of a person.

Speaker 5: FX was slightly favorable as compared with the prior year period.

FX was slightly favorable as compared with the prior year period.

Speaker 5: Q3 2023 adjusted EBITDA was $113.7 million, as compared with $120.1 million for the prior year period, reflecting a decline of 5.3%. Our adjusted EBITDA margin for the quarter was 33.3%, which is an improvement as compared with Q2 2020 3's margin of 32.7%.

Q3, 2023, adjusted EBITDA was $113 7 million as compared with $120 1 million for the prior year period, reflecting a decline of five 3% or.

Our adjusted EBITDA margin for the quarter was 33, 3%, which is an improvement as compared with Q2 2020 Three's margin of 32, 7%.

Speaker 5: We reported third quarter adjusted diluted EPS of $1.50.

We reported third quarter adjusted diluted EPS of $1 50.

As Vic noted many of our businesses reflect significant year over year performance improvements in our digital media segment, our gaming connectivity and health and wellness businesses. Each grew organically in the third quarter retail me not was essentially flat year over year with shopping was down collectively our digital media businesses contributed.

Speaker 5: As a VEC noted, many of our businesses reflect significant year-over-year performances.

Speaker 5: In our digital media segment, our gaming, connectivity, and health and wellness businesses each grew organically in the third quarter. Retail Me Not was essentially flat year over year, but shopping was down. Collectively, our digital media businesses contributed positive Q3 organic growth. And while our cyber and martech businesses declined year over year, the quarterly rate of decline decelerated compared with the first half of 2023.

Positive Q3 organic growth and while our cyber and Martech businesses declined year over year, the quarterly rate of decline decelerated compared with the first half of 2023.

Speaker 5: Again, our technology businesses and in particular our B2B technology business had a disproportionately negative impact on our overall performance.

Again, our technology businesses and in particular, our <unk> technology business had a disproportionately negative impact on our overall performance, excluding our technology verticals Ziff Davis revenue would have increased by nearly 2% during the third quarter as compared with our prior year.

Speaker 5: excluding our technology verticals if Davis revenue would have increased by nearly 2% during the third quarter as compared with our prior year. Adjusted EBITDA

Adjusted EBITDA margins were up sequentially, but down year over year, reflecting our continued commitment to investing in the head count that we believe is required to pursue opportunities for growth.

Speaker 5: But down year over year, reflecting our continued commitment to investing in the head count that we believe is required to pursue opportunities for growth.

Speaker 5: The year-over-year margin decline of approximately 180 basis points equals about $6 million, which, while reflecting a number of factors, is equivalent to our year-over-year increase in staff costs and investment in our growth initiative.

The year over year margin decline of approximately 180 basis points equals about $6 million, which while reflecting a number of factors is equivalent to a year over year increase in staff costs and investment in our growth initiatives.

Slides five and six reflect performance summaries for our two primary sources of revenue advertising and subscription.

Speaker 5: Slides five and six reflect performance summaries for our two primary sources of revenue, advertising and subscription.

Speaker 5: Slide 5 reflects the company's advertising revenue performance.

Slide five reflects the company's advertising revenue performance advertising revenue declined by 2% in Q3 2023 as compared with the prior year period. This represents a significant improvement as compared with the first half 2023 decline of 8%.

Speaker 5: Advertising Revenue Decline by 2% and Q3 2023 as compared with the prior year period. This represents a significant improvement as compared with the first half, 2023 decline of 8%. This performance was also heavily influenced.

This performance was also heavily impacted by the challenges within tech excluding tech year over year advertising revenue growth would have been more than 1%.

Speaker 5: Scouting tech, your advertising revenue growth would have been more than 1%.

Speaker 5: Trailing 12-month advertising revenue declined by 7% compared to prior.

Trailing 12 month advertising revenue declined by 7% compared with the prior year as.

Speaker 5: As noted, a number of our non-tech businesses reflect Q3 growth, including gaming and health. Last quarter, we noted that we expected our second half advertising revenue to meaningfully improve as compared with the first half, and Q3 is consistent with these expectations.

As noted a number of our non tech businesses reflect Q3 growth, including gaming and health last quarter. We noted that we expected our second half advertising revenue to meaningfully improve as compared with the first half and Q3 is consistent with these expectations.

Speaker 5: Our net advertising revenue retention, an annual trailing 12-month statistic measured quarterly, was 89%. Primarily reflecting the year-over-year decline in advertising revenue.

Our net advertising revenue retention and annual trailing 12 months statistic measured quarterly was 89% primarily reflecting the year over year decline in advertising revenue.

Speaker 5: as defined in the slide during the third quarter, Zip Davis served nearly 1,800 advertisers with an average quarterly revenue advertiser of more than $100,000.

As defined in the slide during the third quarter Ziff Davis serve nearly 1800 advertisers with an average quarterly revenue per advertiser of more than $100000.

Speaker 5: These metrics reflect a slightly more consolidated set of advertisers as compared with the prior year period with a higher average revenue contribution per advertiser.

These metrics reflect a slightly more consolidated set of advertisers as compared with the prior year period with a higher average revenue contribution per advertiser.

Slide six depicts our subscription revenue performance.

Speaker 5: 2, 3, 2,023 subscription revenue grew 1% as compared with the prior year period and 3% during the last 12 months.

Q3, 2023 subscription revenue grew 1% as compared with the prior year period and 3% during the last 12 months.

The table on the bottom of slide six includes subscription metrics for the last seven quarters.

Speaker 5: The table on the bottom of slide 6 includes subscription metrics to the last 7.

Speaker 5: We had more than 3.2 million subscribers in Q3, 2020, 23 reflecting a modest sequentialing.

We had more than $3 2 million subscribers in Q3, 2023, reflecting a modest sequential increase.

Speaker 5: There were sequential gains within Humble Bundle and lose it, offset in part by a modest reduction in cybersecurity subscribers.

There were sequential gains within humble bundle and lose it offset in part by a modest reduction in cyber security subscribers.

Our Q3 2023 average quarterly revenue per subscriber was $44 84 sets again, a modest sequential increase.

Speaker 5: Our Q3 2023 average quarterly revenue per subscriber was $44.84, again a modest sequential increase.

Speaker 5: Turn also declines sequentially from 3.51% to 3.22%.

Churn also declined sequentially from $3 five 1% to three 2%.

The Companys Q3, 2023, other revenues increased approximately 7% year over year, primarily reflecting higher revenue from humble bundle publishing daily AUM, an eco house sidekick sales.

Speaker 5: The company's Q3 2023 other revenues increased approximately 7% year-over-year, primarily reflecting higher revenue from humble bundle publishing, daily home and echo house sites.

Slide seven provides quarterly organic and total revenue growth rates for the last 11 quarters Red.

Speaker 5: Slide 7 provides quarterly organic and total revenue growth rates to the last 11 quarters.

Speaker 5: Revenues from businesses owned for at least a full 12 months are included in organic revenue. While acquired revenue relates to businesses we've owned for less than two years.

Revenues from businesses owned for at least a full 12 months are included inorganic revenue while acquired revenue relates to businesses, we've owned for less than 12 months.

Speaker 5: Third quarter 2023 organic revenue was flat and as expected reflected a significant improvement as compared with the 6% organic decline during the first half of 2023.

Third quarter 2023, organic revenue was flat and as expected reflected a significant improvement as compared with the 6% organic decline during the first half of 2023.

Turning to our balance sheet, please refer to slide eight.

As of the end of Q3, 2023, we had $661 million of cash and cash equivalents and $170 million of short and long term investments. We also have significant leverage capacity, both on a gross and net leverage basis.

Speaker 5: As of the end of Q3 2023, we had $661 million of cash and cash equivalents and $170 million of short and long-term investments.

Speaker 5: We also have significant leverage capacity both on a gross and net leverage base.

Speaker 5: Our increase in long-term investments reflects our recent investment in Zyla, which, as discussed on our second quarter earnings call, occurred early in the third quarter.

Our increase in long term investments reflects our recent investment in xylem, which as discussed on our second quarter earnings call occurred early in the third quarter.

Speaker 5: During the quarter we repurchased 605,000 shares of our common stock for a cost of approximately $41 million. This increased our year-to-date stock repurchases to nearly 1.6 million shares.

During the quarter, we repurchased 605000 shares of our common stock for a cost of approximately $41 million. This increased our year to date stock repurchases to nearly one 6 million shares.

Speaker 5: We have approximately 4.7 million remaining shares authorized under our stock repurchase program, and we will continue to be opportunistic with regards to future stock repurchase.

We have approximately $4 7 million remaining shares authorized under our stock repurchase program and we will continue to be opportunistic with regards to future stock repurchases.

Our third quarter net leverage ratios reflect our recent stock repurchase activity.

Speaker 5: Our third quarter net leverage ratios reflect our recent stock repurchase activity. As at the end of the third quarter gross leverage was 2.1 times trailing 12 months adjusted.

As of the end of the third quarter gross leverage was two one times trailing 12 months adjusted EBITDA and our net leverage was <unk> seven times and four times, including the value of our financial investments.

Speaker 5: and our net leverage was .7 times and .4 times including the value of our financial investments.

We did not have any acquisitions during the third quarter.

Speaker 5: Still, we remain very active in sourcing and evaluating transactions in sense that the gap between buyer and seller expectations and the current M&A environment may well be on a path to now.

Still we remain very active in sourcing and evaluating transactions in sense that the gap between buyer and seller expectations and the current M&A environment may well be on a path to narrowing.

Speaker 5: Earlier this year we shared that we were exploring strategic alternatives for our B2B.

Earlier this year, we shared that we were exploring strategic alternatives for our <unk> business, we engaged in active dialogue with numerous third parties, but ultimately determined not to pursue a transaction with any of those parties at this time.

Speaker 5: We engaged in active dialogue with numerous third parties that ultimately determined not to pursue a transaction with any of those parties at this time.

Yes.

Speaker 5: As we discussed on a prior call, portfolio rationalization is an important and healthy exercise for any.

As we discussed on our prior call portfolio rationalization is an important and healthy exercise for any company not all announced pursuits result in a transaction. We appreciate the contributions of so many of our colleagues. During this exploration going forward, we will continue to work to align <unk> activities and priorities to maximize its.

Speaker 5: Not all announced pursuits result in a transaction. We appreciate the contributions of so many of our colleagues during this exploration. Going forward, we will continue to work to align B2B's activities and priorities to maximize its potential.

Potential.

Turning to slide 10.

Speaker 5: We are reaffirming the fiscal year 2023 guidance range that we originally presented in February 2023, as our Q3 results largely reflect the second half 2023 economic stabilization that we were hoping for.

We are reaffirming the fiscal year 2023 guidance range that we originally presented in February 2023, as our Q3 results largely reflect the second half 2023 economic stabilization that we were hoping for of course is noted certain of our businesses continue to be challenged by the macroeconomic environment.

Speaker 5: Of course, as noted, certain of our businesses continue to be challenged by the macroeconomic environment, as well as industry-specific factors, including our technology business and our game publishing.

<unk> as well as industry specific factors, including our technology business and our game publishing business with.

Speaker 5: We currently expect our full year revenue to be between the low and midpoint of our guidance range with adjusted EBITDA and adjusted diluted EPS closer to the bottom end of our

We currently expect our full year revenue to be between the low and mid point of our guidance range with adjusted EBITDA and adjusted diluted EPS closer to the bottom end of our guidance range.

Speaker 5: This reflects the fact that certain of our businesses typically exhibit fourth quarter seasonal strength and that we are still cautiously optimistic that the macro environment will remain stable for the balance of 2023.

This reflects the fact that certain of our businesses typically exhibit fourth quarter seasonal strength and that we are still cautiously optimistic that the macro environment will remain stable for the balance of 2023.

Speaker 5: Following our business outlook slides are certain supplemental materials, including reconciliation statements for the various non- GAAP measures to their nearest gap equivalent. This section includes a reconciliation on slide 14 that reflects pre-cashable.

Following our business outlook slides or certain supplemental materials, including reconciliation statements for the various non-GAAP measures.

To their nearest GAAP equivalent. This section includes a reconciliation on slide 14 that reflects free cash flow year to date 2023 free cash flow was approximately $145 million.

Speaker 5: Year-to-day, 2020 free cash flow is approximately $145 million. Changes in working capital negatively impacted year-to-day free cash flow in 2023 has compared with 2022 when the change in working capital contributed to free cash flow. We continue to work to return-

<unk> and working capital negatively impacted year to date free cash flow in 2023 as compared with 2022 when the change in working capital contributed to free cash flow. We continue to work to return to our normal cadence of working capital.

Speaker 5: Overall, we are pleased with our Q3 2023 results. Our businesses are focused on a strong finish for 2023, and we are pleased with the revenue stabilization we saw this quarter as we begin to plan for 2024. With that, I would now ask the operator to rejoin us to instruct you on how to queue for...

Overall, we are pleased with our Q3 2023 results our businesses are focused on a strong finish for 2023 and we're pleased with the revenue stabilization. We saw this quarter as we begin to plan for 2024 with that I would now as the operator to rejoin us to instruct you on how to queue for.

Questions.

Speaker 4: Thank you. We will now be conducting a question and answer session. In the interest of time, we ask that you please limit yourself to one question. If you would like to ask a question, please press the star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press the star two if you would like to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we begin.

Thank you we will now be conducting a question and answer session in the interest of time, we ask that you. Please limit yourself to one question.

If you'd like to ask a question. Please press star one on your telephone keypad.

Confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to be if you would like to remove yourself from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment. Please while we begin.

And the first question today is coming from <unk> from Evercore.

Speaker 4: And the first question today is coming from Shweta Kajuria from Evercore. Shweta Yura.

Your line is live.

Speaker 7: Thanks a lot for taking my questions. I've got two, please. One for Vivek and one for Brett. So the first one, Vivek, could you please talk about general ad demand trends that you saw through the third quarter and then the fourth quarter so far as the quarters progressed? And then did you see any impact from the Israel War geopolitical?

Thanks, a lot for taking my questions I've got two please one for Vivek.

And one for Brett So the first one could you. Please talk about general AD demand trends that you saw through the third quarter and then the fourth quarter so far.

As the quarter progressed, and then did you see any impact from the war.

From DJ Laurent geopolitical issues going on.

Speaker 7: going on starting in October . And then, question for bread is on M&A. We've talked about the M&A environment. Seems like there's not a lot of change. But at a high level, could you please remind us some of the opportunities and verticals that you think you are thinking about or could be incremental to the ZIS Davis portfolio?

Starting in.

October and then question for Brad is on M&A Vivek talked about the M&A environment seems like Theres not a lot of change.

But at a high level could you please remind us some of the opportunities in verticals that you think.

You are thinking about or.

Could be incremental to the Ziff Davis portfolio. Thank you.

Speaker 6: right thank you shwata so i'll start with your question around the advertising market uh... in some of the trends that we're seeing so again i think always helpful to unpack this by category and so our single largest category as you know about forty

Alright. Thank you sure. So I'll start with your question around the advertising market.

Some of the trends that we're seeing so again I think always helpful to unpack this by category and so our single largest category as you know about 40 plus percent of our overall advertising business is health and wellness and Thats continues to be very strong for the reasons I outlined earlier in the call. So we feel.

Speaker 6: plus percent of our overall advertising business is health and wellness. And that continues to be very strong for the reasons I outlined earlier in the call. So we feel very bullish about where the pharma ad market is in particular, and where our assets and how we're positioned within that market near and long term.

Very bullish about where the pharma AD market in particular, and where our assets and how we're positioned within that market near and long term.

Speaker 6: The second biggest vertical is our retail and shopping vertical.

The second biggest vertical is our retail and shopping vertical which again I think the challenges. We have are not really macro there. It's really just some of the issues. We've had with offers dot com, which is the much smaller of our shopping properties, but where we're really focused on some recovery that reach.

Speaker 8: which again, I think the challenges we have are not really macro.

Speaker 6: There, it's really just some of the issues we've had with offers.com, which is this much smaller of our shopping properties, but where we're really focused on some recovery, but retailing me not is holding up really nicely. And obviously, the all-important holiday season, which it's hard to answer now. What we're gonna see in the holiday shopping season, but we're cautiously optimistic.

Me not is holding up really nicely and obviously the all important holiday season, which it's hard to it's hard to answer now what we're going to see.

In the holiday shopping season.

We're cautiously optimistic and then the next largest category is gaming and again I think gaming has been an area of strength for us.

Speaker 8: And then the next largest category is gaming. And again, I think gaming has been an area of strength for us.

Speaker 8: you know, from an advertising point of view. So I would say that the four categories, main categories we're in, we're feeling reasonably good about three of them. The tech category continues to be a challenge. It is, as I said, you know, sort of a, you know, mid to high teams problem for us in Q3. It is narrowing from a decline point of view as we go through the year and we anticipate it to narrow into Q4, but that's going to continue to be

From an advertising point of view, so I would say that the four categories main categories. We're in we're feeling reasonably good about three of them. The tech category continues to be a challenge is as I said should have.

Mid to high teens problem for us in Q3. It is narrowing from a decline point of view as we go through the year and we anticipated to narrow into Q4, but that's going to continue to be a headwind, but as I've said in the past I view that as largely cyclical and I think it's not uncommon from the other.

Speaker 8: I had went but as I've said in the past I view that as largely cyclical

Speaker 8: And I think it's not uncommon from the other media and advertising players who have large concentrations of tech advertising. Brett.

Sure.

From the other.

Media and advertising players, who have large concentrations of tech advertising Bret.

Speaker 5: Thank you, and thanks for the questions, what I think I'd answered in two ways. I think the first way is sort of the macro view, which is...

Thank you again, thanks for the question, Sean I think I'd answer it in two ways I think the first way is sort of the macro view, which is when we think about M&A across the company and our investable resources and liquidity to deploy we're actually looking at all seven of our platforms for growth and recognizing the markets that they ran in the.

Speaker 9: When we think about M&A across the company and our investable resources and liquidity to deploy, we're actually looking at all seven of our platforms for growth and recognizing the markets that they're in and the specific dynamics. Since I've been with the company, which is nearly two years, the concentration of our M&A has been in connectivity and health and wellness, which have been and continue to be two of our strongest performing segments. So we could look at acquisitions like Lose It and Emma's Diary in the UK for our health business. We've done several acquisitions in our connectivity business, including Sell Rebel last summer, where we picked up new data capabilities to round out our portfolio and make our overall proposition for our customers stronger. So to some degree,

Vic dynamics since I've been with the company, which is nearly two years the concentration of our M&A has been in connectivity and health and wellness switch have been to continue to be two of our strongest performing segments. So we can look at acquisitions like lose it in <unk> diary in the UK for our health business we've done several.

<unk>.

In our connectivity business, including cell rebel last summer.

We picked up new data capabilities to round out our portfolio and make our overall proposition for our customers stronger so to some degree.

We.

Play to our strengths and there are opportunities in the market for our strong businesses, but we've also fortified our gaming business, which has an incredible platform through IGN and we've supplemented that.

Speaker 9: Play to our strengths and our opportunities in the market for our strong businesses. But we've also fortified our gaming business, which has an incredible platform through IGN, and we've supplemented that platform with acquisitions like MapGene, which extends our game help and our ability to serve that.

That form with acquisitions like map Genie, which extends our game, helping our ability to serve.

Debt.

Speaker 9: vertical and customer base, but surprisingly, if you look back and we haven't done a lot of M&A obviously in 2023, one of our two acquisitions was in our tech vertical, real life hacker because we saw a platform there that we believe that and you know in the current weekend market protector was opportunity there to supplement its growth and similarly as We continue to see state stability in our

Vertical and customer base, but surprisingly if you look back and we haven't done a lot of M&A. Obviously in 2023, one of our two acquisitions within our tech vertical rely packer because we saw a platform there that we believe that in the current weak market protect there was opportunity there to supplement its growth and similarly.

As we continue to see stable stability in our.

Speaker 9: cyber and martech businesses we can turn and start to look at those businesses to find opportunities for further m&a So while immediately i'll use the word we're frustrated by the current environment to a degree You know, we we know how to do these deals. I think that we are going to ultimately be rewarded for our patience and

Cyber and more tech businesses, we can turn and start to look at those businesses to find opportunities for further M&A. So while admittedly I'll use the word we're frustrated by the current environment to a degree.

We know how to do these deals I think that we are going to ultimately be.

Be rewarded for our patience and.

Our pipeline continues to be robust and it's just a matter of time before we start closing transactions.

Speaker 9: Our pipeline continues to be robust and it's just a matter of time before we start closing transactions.

Speaker 7: Okay, thanks. Thanks Brad. Rebecca, did you see any impact from the Israel war on the advertising business? No. No. No.

Okay. Thanks, Thanks, Brad did that did you see any impact from the Israeli war on the advertising there's no no. Okay. Thank you.

Okay.

Speaker 4: Thank you, the next question is coming from Ross Sandler from Berkeley's. Ross, your line is live.

Thank you. The next question is coming from Ross Sandler from Barclays. Ross Your line is live.

Speaker 10: Great. We've got two questions.

Great Rec two.

Two questions.

Speaker 10: I know it's early to be talking about guidance for next year, but maybe just the framework for thinking about how you guys can grow above or below. The premium display market, let's say the ad market grows 5% next year. What's the equation for your advertising business to be above or below that now that we're kind of lapping the.

I know, it's early to be talking about guidance for next year, but maybe just the framework for thinking about how you guys can grow above or below the premium display market lets say the AD market grows 5% next year, what's the equation for your advertising business to be above or below that.

Now that we're kind of lapping the.

Speaker 10: that the tech issue and the offers.com issue this year.

The tech issue.

And the offers dot com issue this year.

Speaker 10: So how do we think about that? And the second question is, have you guys looked at how AI service who've embedded within retail me not and everyday health?

So how do we think about that and then the second question is have you guys looked at how.

Hi services embedded within retail me not in everyday health.

Speaker 10: might improve the user interface or any opportunity that you see to infuse chat thoughts or other AI-like services in those websites. Any thoughts there? Thank you.

Mike.

Prove cover the user interface or any opportunity that you see to kind of infuse.

Infuse chat bots or other AI like services in those and those websites.

There. Thank you.

Speaker 8: Thank you Ross. So let me start with 2024. Obviously you're right, it's early. But what I will say is that I do view Q3 as an inflection point for us just as a reminder. I mean, we've had six consecutive quarters.

Thank you Ross.

So let me start with 2024, obviously, you're right. It's early but what I will say is that I do view Q3, as an inflection point for US just as a reminder, I mean, we've had six consecutive quarters.

Speaker 8: of low to mid-single-digit organic decline as a company organically flat in Q3 but in the digital media segment actually organically up. So I think that's a very

Low to mid single digit organic decline as a company organically flat in Q3, but in the digital media segment actually organically up so I think thats, a very positive sign and I think an indication of where we think things are going to go for 2024, you also rightly point out that the comps.

Speaker 8: positive sign and I think an indication of where we think things are going to go for 2024. You also rightly point out that the

Speaker 8: or should the cons benefit us from a year over year growth perspective next year. So we're looking for that. And as I said,

Or.

It should benefit us from a year over year growth perspective next year. So we're looking for that and as I said.

Speaker 8: the part of the advertising equation that has been most problematic which is the tech piece is narrow

Part of the advertising equation that has been most problematic which is the tech piece is narrowing so for all of those reasons, we feel reasonably bullish about our ability to grow at or better than market, we think that.

Speaker 8: So for all of those reasons, we feel reason that we bullish about our ability to grow at or better than market. We think that, you know, again, market has to be taken from a category point of view, not from an overall point of view.

Again market has to be taken from a category point of view not from an overall point of view and then also remember we have a fairly even balance between display and performance marketing, but ill also say about our display business is that our display business is 65% health. So the part of the.

Speaker 8: And then also remember, we've a fairly even balance between display

Speaker 8: and performance marketing, but what I'll also say about our display business is that our display business is 65%

Speaker 8: So the largest part of our display business is the category that while we call it display, I actually kind of view it as performance. Remember that the delineation that we make between display and performance is actually a pricing delineation. Is it, do we charge on ad serve or are we charging on click?

The largest part of our display business is the category that why we call. It display actually kind of view it as performance remember that the delineation that we make between display and performance is actually a pricing delineation.

Do we charge on AD serve are we charging on clicks or bounties that is the delineation and our company between display and performance. It doesn't mean that display isn't performative. It is performance driven.

Speaker 8: or bounties. That is the delineation in our company between display and performance. It doesn't mean that display isn't performative and it is performance driven. So look, I think overall we feel good about that. On the AI question, absolutely. So in my own opinion and what's infused in the company strategically.

Overall, we feel good about that on the AI question, absolutely. So in my own opinion and whats infused in the company strategically is AI really is a way to improve user interfaces and it's more than just content. So accessing content like complicated game guys. As I described with IGN are complicated.

Speaker 8: is AI really is a way to improve user interfaces. And it's more than just content, so accessing content like complicated game guides as I describe with IGN or complicated medical information as I described at everyday health or even within kind of stacking savings within retailing not where you take cash back here, a coupon code here, and then a sale, a product on sale here, for sure.

<unk> information as I described at everyday health or even within kind of stacking savings within retail me not where you take cash back here a coupon code here and then a sale a product on sale here for sure but also on the software side of the equation, what you'll find is that UI.

Speaker 8: but also on the software side of the equation. What you will find is that UI and improvements in UI, using AI will make things like MOSPRO.

And improvements in UI, using AI will make things like mass pro campaigner and Viper. Our software business is really I think engage consumers and customers in a different and better way. So I am very bullish on it we talked about a few of them in the in the prepared remarks, but there are a lot.

Speaker 8: campaigner and our and Viper are software businesses really I think engage consumers at sorry customers in a different and better way so I am very bullish on it We talked about a few of them in the prepared remarks, but there are a long list of activities aligned with what you just asked about across the company

Long list of activities align with what you just asked about across the company.

Okay.

Thank you.

Speaker 4: Thank you. The next question is coming from Champatille from Sake. Charm Your Line is Life.

The next question is coming from Shyam Patil from Sig Xiaomi Your line is live.

Hey, guys. Good morning, I had a couple of questions first one.

Speaker 11: Hey guys, good morning. I had a couple questions. First one.

Speaker 11: Lucky deprecation slated to start next year.

Cookie deprecation slated to start next year.

Speaker 11: How are you thinking about this and whether or not you think you're prepared for it and how the industry is prepared for it? And then for next year, just in terms of the revenue seasonality, you expected to kind of be similar to what we've seen in 23, expect to be more back unloaded, just maybe if you talk about that in season, I'll see you next.

I think googles ecosystem.

How are you thinking about.

Yes.

Whether or not you think youre, how youre preparing for it and how the industry is prepared for it.

And then for next year just in terms of the revenue.

Seasonality you expect it to kind of be similar to what we've seen.

23, do you expect to be more back end loaded just maybe you can talk about any seasonality next year. Thank you.

Speaker 8: Yeah, no, it's not. So with respect to cookie deprecation, again, remember that our advertising model doesn't rely on or really involve.

Yes, Sean.

With respect to Cookie deprecation again remember.

Our advertising model doesn't rely on or or really involve the collection of cookies to then target people outside of our properties and thats, where that make a lot of sense or you are using third party cookies to inform the placement of advertising on your property that.

Speaker 8: the collection of cookies to then target people outside of our properties. And that's where that makes a lot of sense. Or...

Speaker 8: You're using third-party cookies to inform the placement of advertising on your properties. That is not what we do. So our advertising is a function of context. We place advertising based on the contextual relevance. When we do use data to further refine targeting on our own properties, it's our own data set. So on that sense, none of what's happening with cookie deprecation has an impact or effect on what we do.

Not what we do so our advertising is a function of contact we placed advertising based on the contextual relevant when we do use data to further refine targeting on our own properties. It's our own data set so on that sense, none of what's happening with cookie deprecation has an impact.

<unk> on what we do what you could start to think as well it may have an impact and effect on what everyone else does and does contextual targeting regain its footing and currency in the overall AD market. If that happens that's only good for US and then remember on our performance marketing it really is about driving.

Speaker 8: What you could start to think is, well, it may have an impact and effect on what everyone else does. And does contextual targeting regain its footing and currency in the overall ad market? If that happens, that's only good for us. And then remember on our performance marketing, it really is about driving click.

Click conversions lead down fee based activity from our property directly to another property, having said all of that one of the things that I think as a company. We've done an exceptionally good job that is building our database of users our database of information around.

Speaker 8: conversions, leads, bounty based activity from our property directly to another property.

Speaker 8: Having said all that, one of the things that I think as a company we've done an exceptionally good job at.

Speaker 8: is building our database of users, our database of information around those users, email addresses, we probably have one of the larger email databases within the marketplace that when you think about the value of email is persistent, it is actually identity and can be used in a variety of ways in which to reach

And those users E mail addresses we probably have one of the larger E mail databases.

Within the marketplace that when you think about the value of E. Mail is persistent it is actually identity and can be used in a very.

In a variety of.

Ways in which to reach.

Speaker 8: customers, whether it's in the inbox or, you know, on other platforms.

Customers, whether it's in the inbox or.

On other platforms. So look I think I think.

Speaker 8: So look, I think, I think, you know, it is...

It is the cookie deprecation issue doesn't affect us, but at the same time I don't want to leave you with the idea that we're not database marketers in mindset. We are we just do it within within our closed ecosystem on the question around quarters. If 2024, it's too early to talk about quarters or probably really too early to talk.

Speaker 8: The cookie deprecation issue doesn't affect us, but at the same time, I don't want to leave you with the idea that we're not database marketers in mindset. We are. We just do it within our closed ecosystem.

Speaker 8: On the question around quarters, if 2024 is too early to talk about quarters are probably really too early to talk about. And so probably wait another quarter to really get into that. But no, the seasonality is a no seasonality. You know it, you know, Q4 is always going to be heavy. Q1s always are our lightest quarter. And you know, the middle quarters are kind of in between. And so it's going to resemble that, I think, again, too.

About and so probably wait another quarter to really get into that but not the seasonality is a known seasonality you know.

Q4 is always going to be heavy Q1 is always our lightest quarter.

The middle quarters are kind of in between and so it is going to resemble that I think again too.

Great. Thank you.

Thank you.

Thank you.

Speaker 4: Thank you. The next question is coming from Corey Carpenter from J.P. Morgan. Corey, your line of eyes.

Next question is coming from Cory Carpenter from Jpmorgan Cory Your line is <unk>.

Good morning, Thanks for the questions I had two on on AI.

Speaker 12: Good morning. Thanks for the questions. I have two on AI. I wanted to dig a little more into the 20% of keywords prompting AI response, as you mentioned on the call. So, two questions here. First, just curious what you learned in terms of…

I need to dig a little more into the 20% of keywords pumping AI responses you mentioned on the call.

So two questions here first just curious what you learned in terms of which of your verticals are properties were being directed or were not being directed to the AIG experience and any learnings there and then second curious if you think this 20% level is perhaps uniquely low does it Davis excuse me or in your portfolio or broadly consistent across the industry. Thank you.

Speaker 12: which of your verticals or properties were being directed or were not being directed to the AI experience in any learnings there. And then second, curious if you think that 20% level is perhaps uniquely low to say Davis, excuse me, or in your portfolio, or Bradley consistent across the industry.

Speaker 8: Yeah, great questions, Corey. And so I'm glad you asked about this because I did think and find it to be a very interesting analysis. So remember, last quarter, the analysis was, well, being is the only at scale generative search product in the marketplace.

Yes, great questions Cory and so I am glad you asked about this because I did think and find it to be a very interesting analysis. So I remember last quarter. The analysis was well being is the only at scale generative search product in the marketplace Hasnt come in for US and the analysis said, it's going really well and by the way.

Speaker 8: has it going for a and and the analysis said it's going really well and by the way that's continued in into this quarter

That's continued into this quarter, but then we wanted to dig in deeper and say, okay, but how often is to serve the search engine.

Speaker 8: But then we wanted to dig in deeper and say, OK, but how often is the SERP, the search engine result page, how often is it actually infused?

Result page, how often is it actually infused by AI versus non AI and I think we were somewhat surprised at the.

Speaker 8: by AI versus non AI. And I think we were somewhat surprised at the low incidence and prevalence levels of that with respect to the keywords that matter to us. Now, the next.

The low incidence and prevalence levels of that with respect to the keywords that matter to US now the next.

Speaker 8: And by the way, we did that for Google also, because that we could see in Google SGE.

And by the way, we did that from Google also because that we could see in Google FTE.

Speaker 8: The next analysis probably, California is what you're asking, which is, is this dissimilar to other keyword categories and to other properties? And we haven't done that yet. So that's an interesting question. It's something we should analyze and understand, but at least with respect to us, the incidence levels were lower than expected and were consistent between being and Google, which I also found somewhat interesting.

The next analysis, probably count Coreys, what Youre asking which is is this is similar to other key word categories at the other properties and we haven't done that yet so that's an interesting question.

It's something we should analyze and understand but at least with respect to us the incidence levels were lower than expected and were consistent between being and Google, which I also found somewhat interesting, but then we looked at.

Speaker 8: But then we looked at, well, when there is a generative search component and non-generative search component, non-generative AI component.

When there is a generative search.

<unk> and non generative search component non generative AI component.

Speaker 8: are there differences in the clicks that we're getting out of that page? And the difference is the generative search was

There are differences in the clicks that we're getting out of that page and.

And the difference is degenerative search was actually higher and so again thanks.

Speaker 8: And so again, I'm not saying surprising to me, based on my own observations, I think, in the past, I would say consistent, but so in some senses, you can say, well, huh, the generative piece might actually be accretive to click-through rates. It's early days. We couldn't do this on Google SGE, by the way, because you cannot separate in reporting.

Thank surprising to me based on my own observations I think in the past I would say consistent but so in some sense is you can say well pump the generative piece might actually be accretive to click through rate. It's early days, we couldnt do this on Google FTE by the way because you cannot separate in reporting.

Speaker 8: the Google SGE experiences from macro Google or from default Google, you can do with Bing obviously because it's now one experience, right, so we can attribute entirely to the Bing experience.

Google SGA experiences from natural Google.

Or from default, Google you can do with being obviously because its now one experience right. So we can attribute entirely to the being experienced look all to say that that and I've said it before and im.

Speaker 8: Look, all to say that, and I've said it before, and I'm, you know, attempting to bring to the marketplace real data around this, which is, I think the concerns that I hear

Attempting to bring to the marketplace real data.

Around this which is I think the concerns that I hear are really overdone, and I think our overly simplistic.

Speaker 8: are really overdone. And I think are overly simplistic and really is not the area that we're really thinking about. I know it's on the minds of a lot of investors, which is why we wanna accommodate this through all of this analysis. But more to come, we're gonna continue on practice. And last thing I'll say on this is just,

And really is not the area that we're really thinking about I know, it's on the minds of a lot of investors, which is why we want to accommodate this do all of this analysis, but more to come we're going to continue to on packages and last thing I'll say on this is just.

Speaker 8: you know, on MAUS, we own a leading SEO authority and essentially think tech. And they confirm everything that I've described. So that's another data point internally that's kind of, you know, we have a, you know, SEO Brookings Institution or something inside of our company and that's always valuable.

On on Mars, we own a leading Seo authority and essentially think tech and they confirm everything that I've described so that's another data point internally thats kind of we have a SCO bookings institution or something.

Right.

Our company and Thats always always valuable.

That's helpful. Thank you.

Speaker 4: Thank you. The next question is coming from Igal Arunian from Citi. Igal, your line is live.

Thank you. The next question is coming from <unk> from Citi. Your.

Your line is live.

Speaker 13: Hey, good morning guys. This is Max on for you all.

Hey, good morning, guys, they've Max on for Yigal.

Just you mentioned the <unk>.

Speaker 13: Just you mentioned the, you know, investing more in headcount and growth initiatives for next year. So, you know, maybe you could walk us through, you know, where you're investing in, you know, what aspect where there is the business you're hiring in, you know, the growth initiatives for next year. And then just want to dial on maybe, you know, it sounds like it's the partnerships going well, expanding into connectivity, but.

Investing more in head count and growth initiatives for next year or so.

Maybe you could walk us through where you're investing in.

What were.

The business you're hiring in.

The growth initiatives for next year.

Just one on dialogue maybe.

It sounds like it's the partnership is going well expanding connectivity, but.

Speaker 13: I think you could share on the first partnership into health and wellness, and then just where you see that going next year. Thanks.

Anything you could share on the first.

Partnership into health and wellness, and then where do you see that going next year. Thanks.

Great. Thanks for the question, Matt I think the macro point, we're making about our head count spending is that we did not view and don't view 2023, as a year, where our marginal point of margin is sacrosanct and then we have to deliver.

That last bit of profitability as we navigate what has been an improving quarter to quarter, but on uncertain environment macro and for certain of our businesses. I think Q3 is vivek noted is to a degree a turning point a milestone as we brought organic growth back to flat and we are lean.

Speaker 9: quarter to quarter but on uncertain environment macro and for certain our businesses i think you three as the back noted is you know to to degree a turning point of milestone as we brought you know organic growth back to flat and we you know our leaning in to finish 2020 three strong and throughout the year where we saw pockets of opportunity in our businesses we spent

In to finish 2023 strong and throughout the year, where we saw pockets of opportunity in our businesses, we spent and some of that.

Speaker 9: And some of that spending is concentrated in pockets of our businesses that are growing. We talked about health growing. We talked about connectivity growing, gaming, although tied to the product in the marketplace, strength this year. So we are...

That spending is concentrated in pockets of our businesses that are growing we talked about outgrowing, we've talked about connectivity growing.

Gaming, although tie to the product in the marketplace strength this year.

So we are.

Speaker 6: loosening the reins on the business where we believe there's opportunity to pursue. As we complete 2023, some of that talent's in place. It's a dynamic business. We constantly need more talent. We'll continue to lean in. And then we'll have to find areas of pullback from time to time. But it's really across the business wherever we see that opportunity. And Max, just on your question on dial-out, I'm happy you picked up on the point, which is...

Loosening the reins on the business, where we believe there is opportunity to pursue as we complete 2023.

Some of that talent in place.

Dynamic business, we constantly need more talent will continue to lean in and then it will have defined areas.

Pull back from time to time, but it's really across the business wherever we see that opportunity and Max just on your question on dialogue I'm happy you picked up on the point, which is.

Speaker 8: Xyla as a partner is helping us across the entire company, which has been really exciting. They've got a perspective, a skill set, a set of capabilities that are really helpful for us across all the various businesses and real concrete things are happening. With respect to health and wellness, nothing's been launched yet. We were hopeful that early part of next year we'll start launching and rolling out products. We're very careful in health.

Tyler.

The partner is helping us across the entire company, which has been really exciting.

They've got a perspective.

Skill set a set of capabilities that are really helpful for us across all the various businesses and real concrete things are happening with respect to health and wellness nothing has been launched yet.

We are hopeful that early part of next year, we'll start launching and rolling out product, we're very careful in health and obviously you've seen.

Speaker 8: And obviously you've seen or know of the executive order. We have to be very careful in the health space with respect to whatever we do in AI. So we want to be measured.

Or know of the executive order, we have to be very careful in the health space with respect to whatever we do in AI. So we want to be measured thoughtful and deliberate we're certainly I think on the front edge of this but we have to be awfully careful in this space.

Speaker 8: thoughtful and deliberate. We're certainly, I think, on the front edge of this, but we have to be awfully careful.

Thank you. The next question is coming from Kunal <unk> from UBS Kunal. Your line is live.

Speaker 4: Thank you. The next question is coming from Kunal Medikar from UBS. Kunal, your line is last.

Hi, Thanks, a lot this is Jason <unk> from UBS.

Speaker 14: Hi, thanks a lot. This is Jason on for canal for media. A couple of questions for me as well. The first one is on capital allocation.

Questions from me as well the first one is on capital allocation you guys have been consistently buying back stock year to date and guests and to hear about your capital allocation priority at the moment given that you guys also seeing pretty engaged in any imminent M&A opportunities as well, so where do you guys expect to allocate your capital in say the next six to nine months and on the.

Speaker 14: You guys have been consistently buying back stocks through the date and curious and hear about your capital allocation priority at the moment given that you guys also seem pretty engaging any imminent M&A opportunity as well. So where do you guys expect to help your capital save the next 59 months?

Speaker 14: And on the long term outlook, understand that you guys are focusing on turning the business around to return to growth, but from a long-term perspective, why would you highlight as the main drivers for you to potentially grow more than missing with the geographically, as in in which verticals you see the most attractive opportunities in the Vietnam, or partner in the next.

<unk> term outlook I understand that you guys are focusing on turning the business around that type of work, but from a long term perspective, what would you highlight as the main drivers for you to potentially grow more than mid single digit organically.

In which verticals do you see the most attractive opportunities.

Thank you.

Okay.

Great Jason Thanks for the question and welcome to the call.

Speaker 9: Great Jason. Well, thanks for the question. Welcome to the call. I don't our message on capital allocation. I hope it's been very, very consistent. Four pillars. First and foremost, healthy balance sheet, which I believe we continue to maintain and continue to achieve. We have a tremendous amount of flexibility and liquidity in our balance sheet and

Our message on capital allocation I hope has been very very consistent four pillars first and foremost healthy balance sheet, which I believe we continue to maintain and continue to achieve we have a tremendous amount of flexibility and liquidity in our balance sheet and capital allocation strategies are built on the back of Bal.

Speaker 9: capital allocation strategies are built on the back of balance sheet health. The three areas that we allocate our investable capital are to the business, M&A and shareholder capital returns. Per the prior question, we believe we're giving the business the capital it needs to pursue its opportunities. We're thoughtful about that capital allocation. You can imagine debates within four walls of institutions about where that capital goes, but we like to believe that we're,

She held the three areas that we allocate our investable capital are two of the business M&A and shareholder capital returns.

The prior question, we believe we're giving the business the capital it needs to pursue its opportunities. We're thoughtful about that capital allocation you can imagine debates within four walls of institutions about where that capital goes but we like to believe that were.

Speaker 9: judicious but thoughtful about how we give our businesses the capital that they need to pursue their growth opportunities. And we talked a little bit about how some of that money was spent this year. So then that leaves M&A and shareholder returns, primarily stock buybacks. We've also, if you look back over the last two years, bought back certain debt securities. We're prioritizing M&A. It's been challenging to close transactions in this environment. That's a known dialogue within this group. But we supplement that with

Judicious with thoughtful about how we give our businesses the capital that they need to pursue their growth opportunities and we talked a little bit about how some of that money was spent this year. So then that leaves M&A and shareholder returns primarily stock buybacks. We've also if you look back over the last few years bought back certain debt securities were prioritizing M&A. It is.

Been challenging to close transactions. This environment, that's a known dialogue within this group, but we supplement that with.

Speaker 9: capital returns, particularly through our stock buybacks. We've done that this year. We've bought back, you know, almost 1.6 million shares. So as we move forward.

Capital returns, particularly through our stock buybacks and we've done that this year, we bought back almost $1 6 million share so as we move forward.

Speaker 9: I don't think those dynamics change. The mix may change. You know, it's certainly our ambition to see more capital deployed through M&A. It's beyond an ambition, it's an expectation. Again, you know, rewarded for our patience, but we have the capital, we have the pipeline, we're in the dialogues. The gap between buyer and seller expectations will close and will announce deals, and we'll supplement that with stock buybacks as we think is appropriate for the overall moment.

Don't think those dynamics change the mix may change.

Our ambition to see more capital deployed through M&A, it's beyond an ambition, it's an expectation.

Again.

Rewarded for our patience, but we have the capital we have the pipeline we're in the dialogues.

The gap between buyer and seller expectations will close and we will announce deals and we'll supplement that with stock buybacks as we think is appropriate for the overall mix.

Speaker 4: Thank you. The next question is coming from Rishi Jaluria from RBC. Rishi, your line is live.

Thank you. The next question is coming from Rishi <unk> from RBC, reaching your line is live.

Speaker 12: Oh, wonderful. Thanks, guys, for taking my question. I'll keep myself to one. I wanted to dig a little bit deeper into Moz Group, Vivek, during one of the answers you brought up, kind of the data and usage there. Can you talk a little bit about momentum you're seeing within Moz? Because I got to say, when I was recently at MozCon, I was really impressed with some of the enterprise traction that you're getting there, and the opportunity both to continue to move Moz upmarket, as well as the opportunity with Gen AI and Moz, because I think there is a little bit of a misnomer that generative AI is going to completely replace SEO, and you and I know that's absolutely not true, but maybe expand a little bit on kind of your opportunity there with Gen AI. Thank you.

Wonderful Thanks, guys for taking my question I'll keep myself to one.

I wanted to dig a little bit deeper into Mas group during one.

One of the answers you brought up kind of the data and usage. There can you talk a little bit about momentum youre seeing within Mas because I got to say what I was recently at Monte Carlo is really impressed with some of the enterprise traction that youre getting there.

And the opportunity both to continue to move up market as well as the opportunity with Gen AI and Mazda I think there is a little bit of a misnomer that generative AI is going to completely replace SCO and you and I know that that's absolutely not true, but maybe expand a little bit on kind of your opportunity there with <unk>. Thank you.

Speaker 8: Yeah, no, thank you, Rishi, and I'm glad. I know you've taken the time and energy to attend MozCon, which we really do appreciate. And sometimes seeing some of our brands in live give you a sense of their power. And again, I'll say we have multiple different ones across different events. So if anyone's ever interested in witnessing themselves, they should reach out to us and we can be helpful there. What I will say is that I think all of the attention

Yes, no. Thank you Rishi and I'm glad I know you've taken the time and energy to a 10 month gone, which we really do appreciate and sometimes seen some of our brands in live gives you a sense of their power and again I'll say, we have multiple different ones across different events. So if anyone's ever interested.

And witnessing themselves they should should reach out to us and we can be helpful. There.

What I will say is that.

I think all of the attention.

Degenerative AI has generated I actually think puts <unk> in a very interesting space, because I think with change and questions come opportunities and so I think mark and others in this space and there are a few other really good players in this space will all benefit so I think theres going to be a rising tide phenomenon will also say is that the broader Mar tech portfolio.

Speaker 8: that generative AI has generated, I actually think puts Moz in a very interesting space because they think with change and questions come opportunities. And so I think Moz and others in this space, and there are a few other really good players in this space, will all benefit. So I think there's going to be a rising tide phenomenon.

Speaker 8: What I'll also say is that the broader MarTech portfolio of Moz and our email marketing assets really are a powerful set of entities, and we're really excited about all of those because look, I think.

Ahmad and our E mail marketing assets really are a powerful set of entities and we're really excited about all of those because look I think we say, we say E mail a lot of this means basically using software tools and content to extract traffic versus pay.

Speaker 8: We say SEO, we say email, a lot of this means basically using software tools and content to extract traffic.

Speaker 8: versus paid media where you're buying traffic and so for f&Ds and even enterprises, you want to do the first before you get to the second, right? You want to get quote unquote earned media before you get into paid media. And so we think that the MAH's group really has an opportunity around earned media and driving or media. And then the last thing I'll just say is that

<unk> media, when youre buying traffic and so for Smbs and even enterprises you want to do the first before you get to the second right you want to get a quote unquote earned media before you get paid media and so we think that the modest growth really as an opportunity around earned media and driving earned media and then the last thing I will.

Just say is that <unk> is a unique entity because it is both a business for us but it is an internal resource for us as a company that is always focused on earned media and ways in which we can drive earned media whether that search whether that's social whether that's E mail months' becomes a strategic resource.

Speaker 8: Moz is a unique entity because it is both a business for us, but it is an internal resource for us. As a company that is always focused on earned media and ways in which we can drive earned media, whether that search, whether that social, whether that's email, Moz becomes a strategic resource for us. So it's kind of interesting, and I will say that it was part of our underwriting thesis, our acquisition thesis was, this would be good to have in-house, to have the modest scientists, frankly, on our side.

So it's kind of it's kind of interesting and I will say that it was part of our underwriting thesis of our acquisition thesis was this would be good to have in house to have demand scientists frankly on our site.

Wonderful thank you.

Speaker 4: Thank you and the next question is coming from John Tonwamping from CJS Securities. John , your line is live.

Thank you and the next question is coming from John <unk> from CJS Securities. John Your line is live.

Speaker 15: Hi, good morning. It's just one of a quick clarification on one issue and then a follow up after that. Vivek, just the 20% AI enabled search at ratio, were you surprised by how low that was in kind of, does that imply you that there's more upside as the AI experiences is rolled out some more search terms and capacities upgraded? And is that more than AI is already just choosing the ones that are going to return more and get a better evaluation of the store?

Hi, Good morning, I just wanted a quick clarification on one issue and then a follow up after that.

Vivek, just the 20% AI enabled search that ratio.

Were you surprised by how low that was and kind of does that imply to you that there is more upside as experienced.

Experience is rollout some more search terms.

And capacity is upgraded and or is that more of that AI is already just choosing the ones that are going to return more.

And get a better ratio to start with.

No I think what here's what I'd say John so the.

Speaker 8: So I think what here's what I'd say, John , so so the the queries that not all queries generate AI, right, an AI, a gen AI result.

Queries that not all queries generate AI and AI.

Hi.

Result.

Speaker 8: My own experience, I thought it would come up more and it had

Mike in my own experience I thought it would come up more and it hasn't but remember when it does it actually has a higher click through rate. So I'm not and this one is good versus one is bad one is positive versus one is negative. It is what it is that the.

Speaker 8: But remember, when it does, it actually has a higher click-through rate.

Speaker 8: One is good versus one is bad, one is positive versus one is negative. It is what it is. That the incidence rate of AI is less than I thought. And the click through rate on AI is higher than none. That's just the fact that why it is, how it is...

The incidence rate of AI is less than I thought and the click through rate on AI.

Higher than not that's just the fact that why it is how it is not entirely sure. We have our own theories. This is this is honestly, we're using our own scientific method around trying to understand it and verify causation and correlation. So it's early days I guess, what I will say is that I think the <unk>.

Speaker 8: Not entirely sure. We have our own theories. This is, you know, this is, honestly, we're using our own scientific method around trying to understand and verify causation and correlation. So it's early days. I guess what I will say is that I think the search operators are very careful to not just inject AI every time if it's not going to make something more productive and better.

Operators are very careful to not just inject AI every time, if it's not point to make something more productive and better and I think thats, what theyre probably seen in fact, I would say in some of our analysis, but don't go to the bank with this that the rates of AI injection are actually.

Speaker 8: And I think that's what they're probably seeing. In fact, I would say in some of our analysis, but don't go.

Speaker 8: to the bank with this, that the rates of AI injections are actually coming down.

Coming down that if we looked at this earlier it was higher I am sure. They were looking at it and wondering where does it have click throughs better where does it not what is the right success metric is a non click a success metric because they got the answer is a click a success metric I'm sure. The search operators are spending a lot of time thinking through.

Speaker 8: that if we looked at this earlier, it was higher. I'm sure they were looking at it and wondering where does it have click-throughs better, where does it not? What is the right success metric? Is a non-click a success metric because they got the answer? Is a click a success metric? I'm sure the search operators are spending a lot of time thinking through all of this. All we wanted to present was data based on our properties where we have perspective to just give a sense of scale and content.

All of this all we wanted to present.

It was data based on our properties, where we have perspective to just give a sense of scale in context.

Okay, Great. That's great color. Thank you and then just second I wanted to ask about your pharma businesses.

Speaker 15: Okay, great. That's great color. Thank you. And then just 2nd, I wanted to ask about your pharma businesses. I was wondering how much of the momentum you're seeing. There's is related to these new weight loss. One drugs and 2nd. Is there a risk for other drugs to be disintermediated by that over time? And is that a net positive or net negative in your view, or is it related to.

I was wondering how much of the momentum you're seeing there is related to these new weight loss GOP one drugs.

Second as there are risks for other drugs to be dissinger media buy that over time and is that a net positive and net negative in your view or is it too early to tell.

Speaker 8: Yeah, so look, I think the GLP-1 category is an interesting opportunity for us in two ways. One, I think it's gonna unleash a significant amount of spend as there's now competition for customers. So I think that's only going to be good for us, but I also believe it's going to actually drive our loser.

Yes, so look I think the G. L. P. One category is an interesting opportunity for us in two ways. One I think it's going to unleash a significant amount of spend is theres now competition for customers. So I think thats only going to be good for us, but I also believe it's going to actually drive our lose of business and the reason for that.

Speaker 8: And the reason for that is that nutrition is an important companion to these.

Is that nutrition is an important.

Penguin to these <unk>.

Speaker 8: And what you don't want to have happen is weight loss for bad nutrition. Then different knock on effects.

And what you don't want to have happen is weight loss, but that nutrition and different knock on effects. In fact, I think there is a lot of momentum around.

Speaker 8: In fact, I think there's a lot of momentum around.

Speaker 8: you know, using an app like Lucid and others and attaching it to a GLP1 prescription to ensure nutrition and ongoing weight management because if you get off the GLP1, you can have a rebound very quickly. If you can change behavior and habit.

Using an app like lucid and others and attaching it to a <unk> one prescription to ensure nutrition and ongoing weight management, because if you get off the <unk> you can have a rebound very quickly if you can change behavior and habits.

Speaker 8: then good things happen. And so there's an adherence piece to it too. So it's actually, it might even seem counterintuitive, which is, well, do you need, do you need, eluse it when you have a GLP one of the answers? Actually, yes.

And then good things happen and so theres, an adherence piece to it too. So it's actually it might even seem counterintuitive, which is will be a need do you need a lose it when you have a <unk> one and the answer is actually yes, and I think thats also seen by the pharma industry as well so I think there's some interesting.

Speaker 8: And I think that's also seen by the pharma industry as well. So I think there's some interesting ways in which we're going to benefit.

Ways in which we're going to benefit from the <unk>.

Speaker 8: from their new therapies today, a new one was got FDA approval. So I actually think this is gonna be a good opportunity for us.

And there are new therapies today anyone was got FDA approval. So I actually think there's going to be a good opportunity for us.

Okay, great. Thank you I appreciate the commentary.

Speaker 4: Thank you. There were no other questions in queue at this time. I would now like to hand the call back to Brett Richter for closing remarks.

Thank you there are no other questions in queue. At this time I would now like to hand, the call back to Bret Richter for closing remarks.

Speaker 9: Great, thank you very much Paul. And of course, we appreciate all of you joining us today for our Q3 2023 Earnings Call. We'll continue to participate in conferences. We announced some upcoming ones are on our website. And as we work through the next couple of months and the winter will continue to inform you of our participation. Thanks for joining us and have a great day.

Alright, Thank you very much Paul and of course, we appreciate all of you joining us today for our Q3 2023 earnings call. We will continue to participate in conferences, we announced some upcoming ones are on our website and as we work through the next couple of months.

Winter, we will continue to inform you of our participation. Thanks for joining us and have a great day.

Speaker 4: Thank you, the Stokes Conclude. Today's conference, you may disconnect your lines at the time of how to walk today. Thank you for your participation.

Thank you. This does conclude today's conference you may disconnect. Your lines at this time and have a y.

Thank you for your participation.