Q2 2024 Lions Gate Entertainment Corp Earnings Call
CV group, Kevin Beggs Chairman of the motion Picture Group, Joe Drake and President of worldwide television and digital distribution, Jim Packer and from Starz, We have president and CEO, Jeffrey Hirsch CFO, Scott Macdonald and president of domestic networks Allison Hoffman.
As discussed on this call include forward looking statements, including those regarding the performance of future fiscal years, such statements are subject to a number of risks and uncertainties actual results could differ materially and adversely from those described in the forward looking statements as a result of various factors. This includes the risk factors set forth in Lionsgate most recent Andy.
Our report on Form 10-K, as amended and as also amended and our most recent quarterly report on Form 10-Q filed with the SEC. The company undertakes no obligation to publicly release the results of any revisions to these forward looking statements that may be made to reflect any future events or circumstances. The matters discussed on this call also include the.
<unk> separation of our TV and movie production business for our media networks business. We urge you to read the relevant materials that we in our subsidiary LG Orion Holdings have and will file with the SEC, including our registration statement on form 10, which was filed on July 12, 2023 that includes a preliminary joint information proxy statement.
The information in the joint information proxy statement and will not be complete and may be changed you can find these materials and other documents filed with the SEC free of charge at the Sec's website at Www Dot FCC dot com or on our Investor Relations website, Lionsgate, LG Orion and our directors executive officers and certain other employees.
And other persons may be deemed to be participants in the solicitation of proxies from shareholders in favor of the proposed separation under SEC rules information about participants and their direct and indirect interest will be included in the joint information proxy statement and other relevant documents filed with the SEC as available I'll now turn the call over.
To John.
Thank you Taylor and good afternoon, everyone. Thank you for joining us.
Since this is the first earnings call since yesterday's announcement I want to start by saying that we're very pleased that the strikes are over with a fair and equitable resolution for all parties and we can now all get back to work, making great content for our global audiences.
We had a strong quarter and we're reaffirming our guidance for the full year.
This is despite the negative financial impact of the strike, which is expected to be approximately $30 million a little less than we originally forecast.
Our success in the quarter came from doing the things we do best.
Taking advantage of the diversification of our film and television businesses utilizing new business models to monetize the fast and Avon space Cree.
Creating efficiencies in our infrastructure and remaining profitable at Starz, while using our agility to keep our content pipelines filled despite the strike.
In that regard our motion picture group reported strong financial results the soft franchises back with the return of <unk> and an innovative marketing campaign, driving SAR 10 to more than $100 million at the worldwide box office.
Our multi platform releases together with our library complemented the success of our slate with strong contributions in the quarter and they continue to serve as the ballast that takes the volatility out of our film business.
We continue to grow our franchises with prequel sequel, spin offs and franchise extensions.
We're preparing the first of the John Wick theatrical spinoffs ballerina for release next year.
The prequel event series, the Continental launched successfully on Peacock and Amazon Prime in the quarter and we signed a deal with a leading video game developer for a John with AAA game.
We're launching the first ever hunger games stage play in London next fall and next week, we will open the first new hunger games film in eight years, the hunger games prequel, the ballad of songbirds and snakes for a whole new generation of fans.
Digital revenues for the previous four hunger games are up approximately 500% over the last eight weeks.
Looking ahead, our planning agility and ability to secure interim agreements for a number of films has helped us lock our fiscal 'twenty five theatrical slate with a full pipeline of 14 movies.
Releases like ballerina Borderlands flight risks starring Mark Wahlberg ordinary Angels, starring Hilary Swank imaginary from Bluhm House <unk>.
<unk>, Oh, Mercy and Kerry Washington.
Rupert Sanders re imagining of the CRO and a new film from Sherlock Holmes Director Guy Ritchie are already in the can or currently shooting.
And now that the strike is over we will finished teeing up production for several of our biggest fiscal 2006 tentpoles, including Highlander now you see me three and the Michael Jackson biopic.
In terms of our television division, we've been busy keeping our pipeline full as well three weeks ago Starz greenlit the hunting lives a thriller from Lionsgate and three arts.
And today I'm pleased to announce that Starz has green lit spartacus the reimagining of one of the network's biggest early hits from Spartacus creator writer and executive producer Steven S Tonight, who will serve as show runner.
Beyond these two shows were ready to resume or begin production on over a dozen series, including exciting new properties like extended family for NBC and the Seth Rogen comedy for Apple TV plus.
In terms of three arts, we're in final discussions to extend our partnership with our industry, leading talent management and production company, which serves as a source of financial stability and growth for our television business segment.
At Starz.
The renewed availability and performance of first run studio movies from the Lionsgate pay one and universal pay to output deals has reminded us of the importance of movies to a premium subscription platform.
Movies like plain operation Fortune, and John Wick Chapter four which achieved the network's most first title streams ever for a movie coupled with the second season of the original series Force helped to drive stars returned to domestic OTT subscriber growth in the quarter.
That coupled with the recent rate increase drove sequential growth in revenue as well and we expect that subscriber and revenue growth will continue through the rest of the year and as we wind down our stars international business with our exit from the UK reorganize our domestic operations and continue our successful transition.
Towards a more digital future, we have significantly reduced stars overhead and continue to find creative ways to take cost out of our production slate.
We expect the combination of these efforts to create solid margin improvement over the next few years as we focus on preparing stores to thrive as a profitable and successful Standalone company.
In that regard Jimmy will discuss the restructuring charges in the quarter.
Turning to <unk>, one we anticipate closing the transaction by the end of December.
We like what we're seeing as we refine our integration plans and we expect meaningful revenue and cost synergies along with the addition of significant rights and value to our library on the strategic front, we're actively engaged in steps towards highlighting the value of our two separate businesses and expect to update you by the next call.
In closing we are operating in a difficult environment, but the quarter speaks to who we are staying resilient and using every one of the tools at our disposal to keep our pipelines full maximizing our assets concentrating our resources in places, where we know we can win and positioning the company.
For future growth.
Now I'll turn things over to Jimmy.
Thanks, John and good afternoon, everyone I'll briefly discuss our second quarter financial results provide an update on the balance sheet and then provide some details on the noncore charges, we took in the quarter.
The second quarter, adjusted OIBDA was $141 million and total revenue was just over $1 billion revenue grew 16% year over year, while adjusted EBITDA was up nearly threefold.
The year over year increases reflect revenue growth that motion picture and media networks and another quarter of segment profit growth at all three business units reported fully diluted earnings per share was a loss of $3 79 per share and fully diluted adjusted earnings per share was positive 21 per share.
Adjusted free cash flow for the quarter was $133 million, we are reiterating our fiscal 2020 for outlook for each of our business segments as well as our consolidated adjusted OIBDA target of $400 million to $450 million, which at the midpoint reflects nearly 19% year over year growth.
Because of the accelerated recognition of minimum guarantees related to a deal with our Latin American bundling partner fiscal 'twenty four storage International segment profit is now expected to be in a range of positive $35 million to $40 million.
Our adjusted EBITDA target for fiscal 'twenty, four of $400 million to $450 million adjusted OIBDA excludes this benefit as well as any impact from <unk>, one, which we expect to close by the end of December.
Now, let me briefly discuss the fiscal second quarter performance of our studio and media networks businesses as well as the underlying segments compared to the previous year quarter.
Media Networks' quarterly revenue was $417 million in segment profit was $67 million revenue was up 5% as continued growth of domestic OTT and international OTT revenue more than offset domestic linear revenue pressure.
Domestic revenue was down 5% year over year, while international revenue was up nearly 100%.
On a quarter over quarter basis domestic revenue grew approximately 1% as the impact of our June price increase drove a return to sequential revenue growth.
Segment profit growth was driven by international as accelerated recognition of minimum revenue guarantees and soon to be exited territories was partially offset by domestic declines.
As John noted in his prepared remarks, starz will be exiting the UK streaming market by the end of March 2024, we continue to rationalize our international streaming efforts and this decision will be a positive impact on media networks segment financials in fiscal 2025, strengthening and it staff.
And alone segment profit adjusted free cash flow and balance sheet, specifically as we enter fiscal year 'twenty five stores will be primarily focused on growing it segment profit and expanding margins in the U S and Canada, while the studio maximizes monetization of stores is content and international markets through third party licenses.
Arrangements with S bought a bond and fast networks as it relates to Latin America. The company continues to target an exit from the market by the end of December <unk>.
International segment results for the quarter benefited from accelerated revenue, we recognize related to minimum guarantees from our bundling partner in Latam.
While the acceleration of content amortization expenses, partially offset some of the revenue the Latin American business and contributed a positive $27 million to media networks segment profit in the quarter, we expect Latam to contribute a similar level of segment profit in the December quarter, Excluding Latam segment prop.
<unk> from the second quarter of <unk> 24 in the second quarter of 'twenty three results media networks segment profits was still up 45% year over year now, let me discuss our pro forma subscriber numbers, which for comparability purposes exclude the previously exited or to be exited markets of continental Europe. The U K law.
Latam in Japan.
On a pro forma basis, we ended the quarter with $28 million total global subscribers, including Starz play Arabia. This represents net additions of 210000 subscribers driven by a return to domestic OTT growth and growth at Starz play Arabia offset by linear lost.
Yes.
Focusing specifically on OTT subs, we ended the quarter with $18 8 million global OTT subscribers, which represents year over year subscriber growth of 11% on a pro forma basis.
Now I'd like to talk about our studio business revenues of $790 million increased 21% year over year, while segment profit of $131 million was up over 89%.
On a trailing 12 month basis library revenue at studio was $870 million up 17% compared with the second quarter 2020, Three's trailing 12 month library revenue.
Breaking down the motion picture and TV studio businesses, let's start with motion picture.
Motion picture revenue was up 77% year over year to $396 million, while segment profit of $68 million was up 22% year over year.
Revenue growth was driven by the strength of John Wick four home entertainment as well as the impact of an increase in wide releases. This fiscal year segment profit growth was further driven by continued library strength and was particularly impressive in light of 185% year over year increase in P&A spin.
Supporting our expanded release schedule.
Finally television revenue of $394 million expectedly declined year over year on a difficult comparison, given the strike's impact on episodic deliveries segment profit of $63 million increased significantly due to the delivery of the highly anticipated John Wick prequel mini series the.
Continental the Peacock and Amazon as we mentioned on our last earnings call. The strike primarily impacts our television group as you can see we actually navigated the quarter quite well and we now estimate the cumulative impact of the strike for all of fiscal 2024 will be approximately $30 million.
Most of which occurred in the September quarter.
Looking ahead, we expect the lingering effect of the strike in fiscal year 'twenty five debate between $15 million to $20 million. This generally reflects the carryover impact. The strike has had on episodic deliveries and increased cost on continuing productions that were put on hold during the overall industry works.
<unk> <unk>.
Despite these factors we expect the studio to achieve double digit adjusted OIBDA growth in fiscal year 'twenty five before the benefit of the one and.
And to clarify as we prepare for separation, we define our studio adjusted OIBDA as motion picture and television segment profit less corporate overhead now.
Now, let's talk about our balance sheet, excluding adjusted OIBDA from previously exited or soon to be exited landscape plus territories trailing 12 months leverage improved to three two times, we continue to retain significant liquidity with $224 million of unrestricted cash on hand at quarter end.
And one point to $5 billion of an undrawn revolver.
While we remain committed to deleveraging through adjusted free cash flow generation and adjusted OIBDA growth as we said last quarter, we expect a sequential increase of more than a half a turn and the leverage upon the closing of the <unk> transaction in the December quarter.
Finally, I want to talk about the $876 million of noncore charges. We took in the quarter first we took a $494 million noncash goodwill impairment charge related to the carrying value of our media networks asset.
The goodwill impairment and reflects the impact of industry trends, resulting in lower sector multiples as reflected in our share price and prolonged increases in interest rates as of September 30th we're no longer carrying any goodwill from the Starz acquisition on our balance sheet. In addition, we took a $170 million.
Noncash charge related to the storage trade name asset that was recorded at the time of the Starz acquisition in the quarter. We also had a content impairment charge of $212 million related to both our stores domestic and international businesses. This includes $121 million related to the curation of domestic pro.
<unk> as we move towards separation with a renewed focus on the North American market.
The remaining $91 million charge is tied to our international business, including content costs related to our Latam and UK exits.
Now I'd like to turn the call over to <unk> for Q&A.
We will now begin the question and answer session.
To ask a question you May Press Star then one on your Touchtone phone.
If you are using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, well pause momentarily to assemble our roster.
The first question today comes from Keybanc, a hall with Wells Fargo. Please go ahead.
Thank you maybe first one just on the guide so I think you've done about $225 million in OIBDA fiscal year to date.
<unk> sales look like they're accelerating.
<unk> said that this year would be a little bit back half weighted for OIBDA. So can you talk about why the decision not to necessarily increase the guide today is it that you have.
Just got a little more strike impact that you said there are still maybe $15 million to go or is it just some of the.
The marketing expense drag from the films that are opening are you just wanted to be a little bit conservative at this point.
And then.
Maybe specific to the library could we get some color on what drove the strong growth in the quarter I think it's been accelerating nicely over the past few is this a lot of consumer driven home Entertainment did you have some major series deliveries or other platform streaming deliveries of library.
Or kind of all of the above thank you.
Well, thanks, Stephen I'll take the first part of that look I appreciate your confidence.
In terms of why not increase the guide.
Essentially we have if you look at it because we've effectively absorbed the impact of the strike, which both John and I spoke to as well as we're excluding the Latam benefit so.
In addition, it's all without of course, the benefit of <unk> one but in addition, absorbing those look or feel confident in terms of cadence we have a strong second half coming up for sure.
And feel good about where we are but it's still early in the year and we look forward to the second half.
And on Library, Steven I would say it is a little bit of everything I think overall most of our series television library licensing has been very steady.
<unk> market has been better than we anticipated a rev share quarter of this year was this last quarter was the highest one we've had so even with maybe some downtick in the basic cable advertising world.
<unk> seen that in our Avon Rev share.
And we've also been able to pick up a lot of really good high profile third party content, all the Quintin Tarantino kill bills and Jackie Brown have been helpful and the chosen so all of that kind of combined has been very helpful.
I'd add one more thing that with the new hunger games coming out actually our last four hunger games and digital are up about 500% in the last couple of months. So.
Again, good library performance all the way around.
Okay.
Great. Thank you.
Thank you and operator can we get the next question. Please.
The next question comes from Douglas <unk> with Cowen. Please go ahead.
Hey, Thank you.
Wondering if you think that theres going to be any issue now that we've come through this extended work stoppage and people are going back to work.
In the near term does that create any cost pressure or or inability to produce content that you you want to produce given that.
People can only work on one thing at a time and obviously everyone's going to want to ramp production back up.
Any color you can give on that would be helpful.
Hey, Doug Kevin Thanks Lee.
The color I can give on that and then we're back to production immediately we have to network comedies and start shooting again on Monday, we're sprinting to get power.
Power book for raising Kanan back into production as you know is set to start shooting on the Davis Sag strike began.
So.
The new series is going to launch shortly and we're simultaneously getting ready to prep. So we're trying to mitigate the costs, where we can narrow as Jimmy mentioned there are obviously some costs associated with.
Series delays and there are definitely a couple of serious casualties that are due to the strike I think youre seeing that across the board, but we absolutely mitigated those pretty well on the increase and enhanced cost both on the writing in the performing side, we will continue to manage our budgets and find efficiencies and savings wherever we can.
Both.
Mitigate against those and also pass along some of those costs to the buyers in everyone's in the same boat. So everyone knows those costs are coming.
Okay, great. Thank you.
Just very quickly on the motion picture side we.
We were able to just strategically really get ahead of it we were able to secure a number of waivers.
And and really aligned our production's up so that as soon as we came out of the strike we could be running the Michael Jackson movie starts in January.
We've got a re imagination of now you see me ready to go in the spring Highlanders. So it really doesn't have I don't think it's going to really impact us I think we got ahead of it pretty nicely.
Yeah.
Okay, great. Thank you.
Thanks, operator can we get the next question.
Correct.
The next question comes from Thomas <unk> with Morgan Stanley. Please go ahead.
Thank you yeah, just echoing the night video outperformance again, Jamie you gave us some color into that double digit growth outlook for fiscal 2005, I was hoping to get some color on just the drivers of that particularly in the light of some of the industry comments around maybe a more austere spending environment do you expect catalog strength there should we think about.
We have a display and new episodic delivery is building as well.
Yes, I mean look we've got a strong pipeline for sure across motion picture and TV. So we're going to have a lot of carryover from fiscal 'twenty four on the motion picture side. I mean look we're excited about valid of songbirds and snakes, but also have a really strong fourth quarter lineup with ordinary Angels Maj.
Generic and you get into fiscal 'twenty, five theres strong titles ballerina and others. So.
And then in the context of the TV side, Yes. There is a lot of great programming, there coming back post strike and as we move forward notwithstanding the headwinds that we mentioned where there is some carryover impact into 25 kind of one time strike related but we got a very diversified business. There as you know between scripted unscripted debmar.
<unk> III yards, so really feel great about that business, we're glad to be back from the work stoppage and looking forward to second half of the year and going into 'twenty five.
Great. Thank you and then on sorry, maybe just a little bit more on the restructuring I think we're down to Canada, and India as the subscriber base internationally, which still has a pretty healthy $5 5 million subscribers you help with the sizing of the Latam revenue recognition piece.
Maybe help us think about what the appropriate run rate on profitability potential there for the remaining market and then domestically.
The guide for a return to revenue growth in sub growth is that informed by a content play now that we have moved past the price increase has turned and growth.
Yeah, Hi, it's Jeff. Thanks for the question if you look at the domestic business we continue to.
To look at the business and try to drive up to a 20% on a steady state long term margin. What you saw in the company wide restructuring included the closure of the UK, but we really focused on moving resources of the business to where we see growth in the industry and as the industry moves will move resources around there and so I think we can get it out about grow 17%.
Of.
G&A in the business and the restructure as part of many.
<unk> to try to get up to that 20% margin and I think you'll see in the back half of this year, you'll start to see that the margin growth. We feel very good about returning to subscriber growth even in a quarter, where we had a rate increase I think the paywall and pay two movies that came online coupled with force really with a full complement of content for the first time.
Since the second quarter of 'twenty, one and I think we had we forget that PE has always been premium pay has always been about big original and big first run movies and that came back online. So even in the face of a rate increase we saw subscriber growth return on the OTT side, we saw sequential revenue start to grow and I think as that way.
It increased settles into the subscriber base youll start to see that sequential revenue accelerated through the back half of the year. So we feel very good about that.
The business moving toward that profit kind of portfolio and setting up for a good stand alone business post spin.
Thanks, Kevin.
Hey, Tom this operator can we get the next question. Please.
The next question comes from Barton Crockett with Rosenblatt. Please go ahead.
Okay. Thanks for taking the question.
I guess, one just kind of definitional.
When you guys are talking about strike impact some of your peer set.
Youth.
As part of that box office impact because actors cat market picking market movie.
You guys aren't doing that I just want to clarify are you really just focusing on television shows that we're a packet is that correct.
Yes, that's correct Martin I mean these are costs that are really one time they happen to fall over the course of two fiscal years, but theyre directly related to the strike and not not anything other does not include box office impact or anything else all of that.
A separate not factored in.
Okay and.
On that front.
So we've got the hunger games movie.
Coming out.
There's obviously some early talking about what the opening weekends have looked like.
Obviously, we're kind of in a different era than <unk> originally with hunger games, but can you give us any guidepost for how to think about.
How you've risked mitigated this movie.
<unk> kind of puts and takes.
Given that historically, a larger production cost.
You guys typically do and then.
That front also.
The library has been strong.
And I understand like the strike.
This impacted your TV production, but it has a strike actually helped the library.
And.
I know you've said hunger games has helped but I'm wondering if.
The strike might help it.
Hey, Joe why don't you go first.
Yeah, you bet, so look on the hunger games itself.
You've heard me say on prior calls how the economics of film are better than they've ever been and that's partially driven by the international side of our business, where we are getting.
15% to 30% more in value from every title than pre pre pandemic, which is really just the result of supply demand as well as really being the.
Premium sort of remaining large supplier of big broad IP released films available in the marketplace. So.
On a risk and opportunity basis, we've done really really well.
On the international front, the domestic economics are better than they've ever been as well in terms of the way, we can spend PNA to dollars and the like and I would just say that.
Tracking right now it looks really strong with some interesting.
Theres, a new younger female audience, that's showing real enthusiasm as our men.
I'm actually I actually left the world's premier here in London to come join you all so.
Feeling really good about where the movie lives in terms of an economic model and how it can perform in a week or so here.
Hi, and this Barton this is Jim I would also say on the library side, there's been a couple of things first of all if you look into 'twenty three half of Netflix top titles have been licensed titles, 50% of it. So it's kind of like they've really been aggressive on the licensing side from third parties, a little bit of the suits. The fact that I'm sure you've seen.
Also one thing in addition to what John was saying about hunger games. This year, we had work expandable and saw 10 in all all three of those movies have other films that not only draft up with theatrical.
They dropped up in licensing and they dropped up in transactional in that transactional team had a great year. So all of that really combined is really what is helping us. In addition to just people being.
In a mode, where they're using our content.
Yes.
Okay. That's great. Thank you.
Thanks, Martin operator can we get the next question. Please.
The next question comes from David Kelly Seaport Research partners. Please.
Go ahead.
Thank you.
Couple of questions on the strict related effects first I was wondering if you had any similar Tvs.
The content is quote unquote in the can.
<unk>.
That helped you.
And your guidance for the year and.
Secondly related to.
<unk> started up again next week already we've heard from other industry sources. It could take about three months until the whole industry is really up and running I'm. Just wondering if theres anything different with your business model, how you were able to kind of yeah.
Get back started immediately.
Hey, its Kevin again, just speaking to the last part of that question just the three months I mean, you got to think about where shows are in their lifecycle. So the ones I was referring to extended family at NBC, We had shot six out of our initial order.
Many of those scripts were done in the writer's strike has been over for a while so we've been writing, but not been able to go back to production goes.
Big hit for Us and BBC studios for CBS.
And we have been writing before the strike began so in that case those shows we're kind of ready to go in there.
Go to the.
Certainties and show if Youre talking about a drama that has not written it will take two months or more.
No.
Get going on at Writer's room, and then move into perhaps and then start shooting. So every every genre has a slightly different timetable that you will see the broadcast stuff that has chosen its third fourth and fifth season moving faster than <unk>.
The streamers are the premium cable because they operate on a different timetable on the urgency of getting back on in the broadcast cycle is what helped bring the strike to an end and is what's informing some of the urgency around that.
Joe you want to talk a little about your pipeline.
Yeah sure so our.
For fiscal 'twenty five we actually went into the strike with a full pipeline with a couple of.
With a couple of.
Waiver movies that will fill the back half of the year. When you look at our forward looking production pipeline, where is loaded as possible. We'd been we have a content strategy that sort of relies on a couple of big branded all audience IP movies every year, and then want to be on that face banks state space.
The action space leaning into hard as well.
We've got a fantastic mix of that in 'twenty five, but when you look into how we're going to fill our pipeline after that as I said earlier.
We are launching Highlander with chats to help SKU, who is behind obviously are big with our whiskey universe and he is now setting off to deliver that movie for 'twenty six we re imagine now you see me with Reuben Fleischer, who is an absolute master.
At shepherding franchises that you think you did denim in uncharted couldnt be happier about that that is going to start in the spring.
On the West side, we've got multiple.
Spin offs and with five that we started we started to work on right. When the writers strike started and we've gotten back to work as soon as it ended.
Our faith business is fully loaded with some with some of the best brands in that space.
As we as John mentioned earlier, we got our first Jason Bourne movie and hope we can do more there so very very excited and.
And that pretty much everything we need to keep hitting our stride.
I think you've already.
I was going to say I think you've heard us say before we have all of the ability to do anything else. The major studios do but we do tend to pivot a little bit more.
Quickly and I think we've pretty well for this in film and television.
Frankly, we're up and running already and have full pipelines in all of our businesses.
Well, that's great I appreciate it.
I was also wondering if you have any kind of insights as to how the economics of the business might change given the strike resolution.
And if that was starting to be contemplated in our industry.
Deals are being priced because while there used to be full content sales that like cost plus 20 or 30, but.
But now there's less exclusivity but.
Because he might be the selling content and a couple of Windows I was just wondering if there's anything any kind of change in that.
The industry dynamics that way.
Yeah, I think we're going through right now the agreement there is no question about it.
There's going to be some cost attached to this and that's okay maybe.
Work, a little harder to take some costs out of.
The business things that we can actually manage one of the things that's going on right now is that.
Kevin on the studio side, and Jeff are really working to be really smart about the slate for stars that theyre, putting together and again, we've just got to be continue to be really thoughtful about the business and we and buyers other than.
Stars are outside buyers were going to just have to be smart about how we pay for things.
And again, I think that they've come up with something Thats really equitable for all the participants and so we've all just got to figure out a smart way to pay for it.
Great. Thank you very much.
Thanks, David Operator can we get the next question. Please.
As a reminder, if you do have a question. Please press star one to enter the question queue.
Your next question comes from Matthew Harrigan with benchmark. Please go ahead I'm, sorry, I didn't puts us in the QR is also going to ask you about the long term.
Effects of the strike on the on the cost.
Cost side, so I'm fine congratulations on the quarter and all of the momentum you have.
Thank you Matthew I appreciate that.
Thank you Matthew operator are there any more.
Okay.
There are no further questions at this time that concludes our question and answer session I would like to turn the conference back over to Neal Shah for any closing remarks.
Thanks, everyone. Please refer to the press releases and events tab under the Investor Relations section of the company's website for a discussion of certain non-GAAP forward looking measures discussed on this call. Thank you.
Yes.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yes.
Okay.
Yes.
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Yes.
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