Q3 2023 Blend Labs Inc Earnings Call
Welcome to Plains third quarter 2023 earnings Conference call. My name is Winnie Lang and I'm head of legal for the company.
Joining us today, I mean, like I'm, sorry, I found out and had a friend and a mutual sorry, I'll head of finance and administration.
Often reminded me it to live with their prepared remarks, we will open up the call for questions moderate about Investor Relations slate, Brian Me Colosky.
You can find the supplemental slides on our Investor relations webpage at Investor <unk> Dot one dot Com dream.
During the call we will refer to certain non-GAAP measures, which are reconciled to GAAP results in today's earnings release and in the appendix to our supplemental slides.
non-GAAP measures are not intended to be a substitute for GAAP results.
Certain statements made during today's conference call regarding blend and its operations in particular its guidance for the fourth quarter and fiscal year 2023, maybe considered forward looking statements under federal Securities laws.
The company cautions you that forward looking statements involve substantial risks and uncertainties and a number of factors many of which are beyond the company's control could cause actual results events or circumstances to differ materially from those described in these statements.
Please see the risk factors with identified in our most recent 10-K 10-Qs and other SEC filings, we are not undertaking any commitment to update these statements if conditions change except as required by law I will now turn the call over to Nino.
Yeah.
Thank you Whitney and good afternoon, everyone.
<unk>, who joined US for inaugural Investor Day in September during which we share a deeper look into our growth trajectory and the significant upside that exists as we continue scaling our builder platforms to more customers and into more markets.
As we stand today, we have a market leading platform and incredibly loyal and resilient customer base and an efficient business model that we believe have set our company up for success now and in the long term.
For today's discussion I want to emphasize how it Leverages foundation, our third quarter to better serve our customers and to do so with greater efficiency.
Starting with our third quarter highlights I'm pleased to share that we achieved another strong quarter amidst a very challenging environment.
We delivered $40 6 million and total company revenue well within the narrowed guidance range, we provided at our Investor day.
With creditors to double digit year over year revenue growth in consumer banking as we continue deployments and ramp ups in our builder platform in fact as of Q3 over one third of our customers are now live.
Active deployment with builder enabled consumer banking products.
In addition to these active deployment, we spent or pipeline to 60 opportunities up from the 40, we reported last quarter representing opportunities in both our mortgage suite and our consumer banking suite.
On the mortgage side, specifically our business once again outperformed the broader origination market declined driven by the continued utilization growth of our mortgage product add ons, including verification of income and are closing product in.
In Q3 alone we did put a dozen revenue generating mortgage product or feature enhancements, which we expect to continue to benefit the economic value we receive per loan.
Our continued market outperformance in our loan origination market underscores the impact of one technology and improving efficiency and cost savings across the entire mortgage process and this also remains a key focus for us.
On top of that we've also made significant strides in enhancing our operating efficiency. This quarter. We saw strong resilience in our non-GAAP gross margins, even amidst the declining mortgage market and achieved another quarter of sequential reduction in our cash spend.
Balancing our growth, while making our business more efficient has been a crucial undertaking for us and it's something that we will continue to focus heavily on over the next year with builder now as our primary internal development tool. We believe we are in a much stronger position to continue the pace of innovation with greater speed scale and efficiency.
All of this represents continued execution of both the revenue and operating loss targets.
As we stated at the beginning of the year, we are more focused than ever on delivering to our customers and doing so in a profitable way for our business.
With that we are paying attention to the interest rate environment. We've seen the 10 year treasury yield at 5% for the first time in over a decade and that has had a real impact on our customers and on us in the short term.
Despite that we are optimistic that we are executing well within the areas of our control.
What that means is we will continue to focus on growing our customer base, our consumer banking business and expanding the value we receive for mortgage funding and maintain the high quality of service for all of our customers.
Altogether. These actions will ensure we are best positioned in the short term and add incremental leverage to our business as market conditions improve.
We remain on track to achieve our profitability goals for next year as well as the medium term outlook that we shared with you during our Investor day.
Now shifting gears to talk about our mortgage reinsurance.
It is evident that the mortgage industry is navigating significant challenges, which is continuing to create heightened cost sensitivity and especially among non depository institutions.
As a response to these challenges we're taking action to support this segment of the market specifically the independent mortgage banks, who are more cost conscious than ever with a streamlined version of our mortgage product called <unk> and be essentially.
We believe <unk> essentials is calibrated to exactly what the independent mortgage banks need most in today's market.
It allows for these <unk> to get started with Glen at a low cost with many of the critical benefits of blend and for US. It's a low lift out of the box offering that is quick for our team to deploy it.
As the market recovers these new customer relationships represent an opportunity to expand our offering into more advanced feature sets and more add ons, which will drive incremental value for them something that we've already proven and have a strong track record of executing on.
We're encouraged by the early traction here and already in several active conversations on this offering with new prospects.
One important thing to note is that the cost pressures on the market or what is driving the adoption in utilization of our product add ons like clothes, and income, which drive tangible efficiencies and savings for our customers.
Since this time last year, our add on products have increase the economic value we receive for loan by $5 and our total value received per loan has increased by $9. This places us well on track to reach the over $90 per loan by next year, which we shared with you as a target during our Investor day.
We also remain focused on enhancing our existing products that deliver lenders even more value in a more seamless experience at a time when they need the most for.
For example, we recently expanded our blend income product with my pay which adds more support for borrowers military income.
By focusing on this the largest U S employers payroll data source on our income waterfall, we've meaningfully improved coverage for all our customers.
Investing in add on products as a strategy. We will continue with these are low lift low upfront opportunities for our customers that don't require signing a net new customer and undertaking a very complicated deployment.
It's just about helping our existing customers.
Get the full benefit of our feature set that result, tangible improvements in ROI and revenue capture per transaction.
On the topic of ROI market Wise advisors conducted another annual independent study across more than 100 customers are blends.
And it showed a tangible and increasing contribution to that ROI.
Blends mortgage products increase transaction speed by over 44% in 2023, driving a significant increase in loan closing rates.
And overall the study showed that using our technology resulted in the average impact $914 per loan.
$274 increase over 2022 levels.
Amidst ongoing compression and customer margins. These savings are driving benefits to our customers at the time, they really needed the most.
But we're not just focused on the challenges and now we're also building for the future and staying on offense for our customer base.
One example of that is we've recently begun building and testing blend copilot, which is our AI powered assistant that allows loan officers to be more efficient and offer a far more personalized touch for their perspective borrowers.
I'm thrilled with the early interest we've been seeing on that we have over 50 customers and prospects, who signed up for the waiting list and after he firsthand with the capability and we're continuing to explore with them overtime.
So to recap we will continue to stand by our customers. During this time by delivering leading products that have a tangible return on investment and help our customers continue to outperform the market average and the mortgage industry.
Shifting gears a bit in addition to mortgage we're also focused on growing adoption of our builder enabled consumer banking products, which as I mentioned earlier is generating double digit consumer banking revenue growth for blend this quarter.
This is quickly becoming the biggest revenue opportunity for US next year as we see interest continue to build and as a result, we believe that the revenue growth will accelerate from here.
As we mentioned at Investor day, Thanks, Roy builder platform, we are now able to get customers deployed and lives much faster than before.
Many of our new engagements.
This quarter had been able to kick off with a couple of weeks.
As an example of this we just recently signed a new credit Union and are already tracking towards in early January launch this.
This timeline represents a meaningful acceleration to what we can accomplish even a year ago and some of our customers really love about blend and we're encouraged by the urgency our customers have to deploy this value accretive solution quickly within their business.
On top of that our consumer banking solutions are showing significant uplift and efficiency for our customers one slot.
We recently expanded our relationship with our regional credit Union seeking a unified product experience that has not only simplified their support structure, but also driven increased conversion rates accelerated onboarding and enhance their overall banking experience.
This collaboration has led to substantial improvements most notably it reduce manual processing time for deposit accounts from 11 days down to just seven minutes.
And Additionally, mortgage applications that took two weeks are now completed in under an hour.
So overall the team has been able to save over 9000 manual hours of processing time already facilitated by dynamic real time integrations.
Right experience ultimately, allowing their team to redirect your efforts towards assisting members rather than processing applications.
It is clear that our customers are increasingly recognizing the value of blends platform and blend builder as the single foundation for their entire ecosystem.
Enabling them to leverage the speed flexibility and data across business lines to deliver highly personalized experiences and recommendations faster and better than they have been able to before.
And as we convert more and more of our customers to blend builder there.
They are well positioned with our technology to grow their business and their deposit basis.
Increasing revenue and profitability as a result, which is so important to us to be able to support that kind of success.
And thats the core of our builder driven growth strategy, which will continue to be a focus area for us going forward.
Before passing it over to Omer.
I want to briefly touch on something that's very important to US right now which is the progress we've made on our path to profitability and our cost management efforts.
I'm pleased to share that were ahead of our cost saving targets that we set out last year.
Back then we told you that we expected to reduce our non-GAAP net operating losses to $20 million per quarter by the end of 2023.
We've now reported two quarters below this target, reducing our non-GAAP net operating loss to negative $15 9 million in the most recent quarter well.
Well within our narrowed guidance range.
I also want to call it our title business, which in Q3 returned to the high teens gross margin.
Which this is an encouraging signal because we found the right operating model, even amidst the historically low macroeconomic environment for this business.
While there will be likely headwinds ahead of US is 10 year treasury yields continue to rise or 30 year rates continue to stay high we feel comfortable that we can continue to operate this business with positive non-GAAP gross margins going forward.
I'm really encouraged by the progress we're making on the ambitious non-GAAP net income targets, we set last year.
Establishing momentum and we will continue to trend in the right direction as we leverage builder across more and more customers.
This will enable us to speed up the pace of innovation, which means more value to our customers and ultimately more revenue capture for us.
While the market conditions are sending signs the industry volumes may remain lower in the short term.
We are confident in our strategy and is well suited for the current environment and will make us well positioned for when the industry conditions ultimately normalize.
In closing we remain on offense and we will continue to deliver the best possible experience in a cost competitive way for our customers.
Now, let me turn it over to Amir deduct our key numbers for Q3, and our guidance for next quarter.
Thank you Neil and good afternoon, everyone.
He used to be joining you today to discuss our financial results for the third quarter.
Our third quarter marks another period of strong execution against the challenging economic backdrop, and an important waypoint towards our ultimate goal of non-GAAP operating profitability by next year.
Before I jump into the results. Let me just remind you that unless otherwise stated all results are non-GAAP.
Total company revenues in the third quarter were $40 6 million ahead of the midpoint of our original guidance and in line with our updated outlook from our Investor day in late September.
We reported platform revenue of $28 6 million, which also fell within our revised guidance range.
Our mortgage banking suite revenue declined by 11% year over year to $23 million. Despite the origination environment declining 14% over the same period as measured by the mortgage bankers Association.
This continues a trend of seven consecutive quarters of outperformance against broader market declines.
Okay.
Our mortgage suite economic value per funded loan rose to $86 from $77 in the same period last year.
Representing continued growth in utilization of our value accretive add on products.
As a reminder, we first disclosed economic value for funded loan at our Investor Day in September.
Representing the contractual rates for mortgage and add on products multiplied by the number of loans funded four transactions completed by our customers in the period.
<unk> by the total number of loans funded by customers in that same period.
We continue to believe the progress on this front is an encouraging sign our customers are realizing the benefit of ROI positive enhancements to their mortgage origination process via Brian.
Our growing their adoption of these at an incredibly rapid pace.
Okay.
We saw a slight shift in our market share.
Attribute this to the industry conditions, driving elevated levels of consolidation as well as some customers exiting their mortgage businesses entirely.
As Neil mentioned, we believe our RMB essentials product as well calibrated to the most immediate needs of our customer base today and are encouraged by the level of early interest here.
Okay.
We continue to believe that technology is a key differentiator for mortgage customers, even more so as the industry leans into efficiency while volumes remain depressed.
I want to remind you that in our three year outlook, we outlined in September our base and conservative scenarios considered a market share in the low twenties.
Still believe this is a conservative outlook, even factoring the near term headwinds we've seen within certain segments of our customer base.
Turning to consumer banking, Arkansas.
Our consumer banking suite revenue totaled $6 $2 million in Q3, an increase of 18% as compared to the prior year period.
This growth reflects new deployments and ramp ups across our builder powered consumer suite of offerings over the past year as well as the contribution from incremental platform fees.
We believe we're in the early innings of the oxide unlocked by the builder platform.
We expect to see this growth accelerate even further as we continue to work through our slate of consumer banking deployments and convert more of our sales pipeline.
We expect this to translate into the mid Thirty's compounded annual growth outlook over the next three years, which we first shared with you at our Investor day.
We also generated $2 1 million of professional services revenue up 18% from last year due to fees associated with our ongoing slate of consumer banking deployments.
We reported title revenue of $11 9 million near the high end of our original guidance and in line with our expectations amidst a challenging environment.
Moving onto gross profit.
Total company non-GAAP gross profit was $22 3 million, which was 3% above the same period last year. Despite a 27% decline in our total revenue.
Our non-GAAP platform gross margins showed continued improvement, reaching 71% compared with 68% a year prior.
For software, we reported non-GAAP software gross margins of 79% up from 76% from the same period last year.
Our gross margin expansion reflects the benefits of increased higher margin consumer banking suite revenues as well as the vendor optimizations, we've implemented within our mortgage suite.
We continue to be optimistic regarding our gross margin performance and affirm our belief that 80% represents an achievable target for non-GAAP software gross margins next year.
Our professional services business margins experienced some headwinds this quarter relating to the timing of certain project milestones.
I want to call out that we are evolving our professional services model away from a fixed scope structure for new contracts and are instead, moving towards time and materials pricing.
Effort is directed towards consumer banking deployments and new pricing is increasingly adopted for key renewals.
We expect our professional services margins to stabilize and generate consistent positive contribution.
Our non-GAAP title margins improved to 17% for the third quarter, increasing meaningfully year over year from 5% in the third quarter. This time last year, and improving six percentage points quarter over quarter.
This improvement reflects the ongoing cost optimization programs, we have undertaken and highlights our ability to align the cost to deliver this service within their current economic climate.
We've made substantial progress aligning our cost base and generating higher positive non-GAAP gross margin from our title business.
This market remains incredibly dynamic.
Two quarters represent seasonally low levels of activity for our title business compounded by elevated 30 year fixed rates.
While our approach to align our cost base remains unchanged uncertainty regarding the level of refinancing activity in the next two quarters could play some modest pressures on these margins.
Earmarked as their margins, we reported this quarter as a benchmark for next year.
non-GAAP operating costs for the third quarter totaled $38 $2 million compared with $58 7 million in the previous year.
This improvement reflects the full realization of the January 2023 cost initiatives and two months of the platform realignment savings program, we introduced during the last quarter.
We remain on track to nearly half our annual non-GAAP operating expenses in 2024 compared to 2022 level.
Our non-GAAP loss from operations was $15 9 million in Q3 at the lower end of our revised range and representing the sixth consecutive quarter of improvement as we progress along our goal of achieving operating non-GAAP profitability next year.
The improvement in our non-GAAP operating loss met our expectations benefiting from resilient revenue in our mortgage business sustained higher margins.
And the adoption of greater financial leverage through continued improvement in our operating efficiency.
We remain on track to achieve our goal of generating positive non-GAAP operating profit by the fourth quarter next year.
While we continue to take efficiency actions that we believe could accelerate this earlier in the year to timing will ultimately remain dependent on the level of origination activity, which is uncertain.
With that we remain committed to this goal and have identified areas to adapt our operating model to achieve profitability should the market environment deteriorate further.
We saw strong renewals and new customer signings that incorporated committed fees.
This translated into growth in our remaining performance obligations this quarter, which reached $58 9 million in the third quarter ever.
Evidence of this of nearly half of our forecasted mortgage and home equity volume that was eligible for renewal in the third quarter was pre purchase under contracts a majority of which were multiyear contracts with annual in advance payment terms when compared to our Paygo model, which is build a month in arrears. This has a meaningful pull.
Word benefit to our cash profile and is accelerating our free cash flow generation, while adding incremental contract length.
We expect to see continued expansion in <unk> as we execute more renewals under our subscription model and as we enter into platform deals with longer and larger commitments. So.
This is particularly relevant in Q4, which has historically been our most active quarter for our sales team.
Q3 marked another quarter of improvement in our cash burn as measured by our free cash flow metric.
Which was less than half of the levels, we incurred this time last year.
Our actions to operate with efficiency in combination with our resilient top line and improve margins are having a real impact as we inflect towards positive cash generation.
Now turning to the balance sheet, our cash cash equivalents marketable securities inclusive of restricted cash totaled $252 million as of the end of the third quarter.
As I mentioned during our Investor day, we are confident we have taken the appropriate measures to ensure our business remains well capitalized and that we have sufficient liquidity based on the current projections and in this macro environment.
Lastly, let me move on to our outlook for the final quarter of this year.
As a reminder, at our Investor day, we shared that we expected 2023 platform revenue to be between 110 and $114 million.
After incorporating our third quarter results. This implies a fourth quarter platform outlook of between $26 3 million and $33 million.
The industry, we operate in remains highly dynamic mortgage rates are cresting, two decade highs and prospective borrowers are seemingly willing to wait longer for rates for pricing to improve.
It's still too early for us to predict how this will impact our Q4 volumes, but we are focused on continuing to execute on the areas that are in our control.
We are continuing to see good traction in our add on products delivering more value per loan, which is insulating our results somewhat from these headwinds.
Our consumer banking revenue growth is pacing well within our expectations.
Given the uncertainty within the macro environment, we are widening our fourth quarter platform outlook slightly and expect our revenue to be between $25 million and $30 million.
Similarly, our title outlook has been revised slightly to be between $9 5 million and $10 5 million.
This sums up to a revised total company outlook of $34 5 million and $40 5 million.
We expect our total non-GAAP operating loss to be between 17% and $14 million in the fourth quarter well below the $20 million target, we set out last year and achieving this in one of our seasonally lowest quarter for industry volume.
The midpoint of this outlook, representing nearly 65% improvement when compared to our fourth quarter operating loss in 2022.
Highlighting the progress we've made this year, how long our path to profitability.
This operating results guide remains within the implied guidance that we shared at our Investor Day. We believe we have built the business and operating model to respond swiftly to the market fluctuations and we will continue to adapt as conditions evolve.
I want to reiterate that we remain confident in the longer term targets. We have shared with you and are encouraged by the strong set of opportunities we have in front of us as.
As we continue to execute we are building resiliency in our model against the short term fluctuations in the market.
Adding further diversification in our business that will serve as counter cyclical offsets in the future.
This is paramount to our strategy within our second phase and we look forward to continuing to update you on the progress here.
With that let me turn the call back to NEMA for his closing remarks.
Thanks Amir.
We're exiting this quarter focused on maximizing the value, we deliver to our customers and optimizing our business to be a lasting partner for them for the future.
I'm incredibly proud of the progress we've made on our 2023 priorities and the execution towards our profitability goals.
We're even more excited about the opportunities ahead of us and I look forward to sharing the evolution of these priorities with you all early next year.
As a preview you can expect to see the same effort on capital stewardship innovation and operating leverage that you saw from US This year to continue to stay in focus in 2024.
While the outlook for origination mortgages may be uncertain, we continue to build our business to excel throughout any macro economic cycle, and we will continue to optimize our model to allow us to emerge through the cycle as a stronger organization.
With that thank you again for joining Brian we are now ready for questions.
Thank you Neal Murphy remarks, we'll now turn to the Q&A portion of the call. As a reminder, please raise your hand with EMEA up to ask a question.
Our first question comes from David <unk> from Wells Fargo. David. Please go ahead.
Can you hear me.
Yeah.
We can hear you.
I appreciate the time today guys.
So as we look ahead to 2004.
Just wanted to think through couple of things first I wanted to focus on headcount planning seeing some great progress in terms of Opex savings.
Particularly interested to learn about go to market team and the focus there in terms of cross selling strategy et cetera.
Thank you.
David is that a question about head count or just our overall strategy and where we're focusing.
Your account planning I know, we've seen saves across lots of different lines, but.
We go to market team has been doing a great job, particularly interested in that strategy and sales and marketing.
Yes, it's a good question.
Just to step back a little bit in vertical software companies like Glenn.
Almost all of our success is.
Begotten, let other success and so the first job of the go to market team is actually to ensure success of existing customers because those customers end up becoming the references for other banks and lenders to sign up with Glenn and whenever we released a new solution and like Glenn income or Glenn close or a consumer banking product they become the first ones that want to sell.
On up for it so first and foremost go to market is always around how do we make sure our customers are getting a lot of return on investment a really successful and we have a great relationship with them and then it's looking for opportunities to help grow and improve their business and it could be the next product from Glenn that we're offering or it could be market feedback, they're giving to us and so we've kind of design.
Our go to market team around making existing customers extremely successful turning to in the case studies, turning to upsell and growth and I think thats. The same formula we're going to we're going to do for the next N number of years as long as we have more product growth ahead of us, which we think we do.
That same formula do going forward in 2024 will be no exception.
Okay, great. Thanks.
Obviously the mortgage market.
Is challenged but just looking at the MBA MBA forecast it looks like hopefully this is the trough year.
Just wondering pipeline trends youre seeing with banking customers.
Looking into next year. Thanks.
Actually I mentioned that we have 60 opportunities in my prepared remarks that are that are in flight right now it does range the full spectrum of.
<unk> two mortgage companies to credit unions.
The bank's homebuilders, but I'd say the majority of where people are looking to transform in the deposits and consumer loan space in the bank and so we're seeing opportunity across the board, that's where we see the most opportunity deposit growth is so important for banks and credit unions right now given the market and so that.
Where we're getting a lot of that.
Primary revenue growth for next year.
Thanks Dana.
Our next question comes from Dylan Becker from William Blair.
Your line is muted please ask your question.
Hey, guys I. Appreciate you taking the question here, maybe naeem, starting with that and Youre thinking about streamlining on the innovation front and managing the cost structure here. How do you think about going deeper in value versus broadening kind of a capability set.
Bill there likely enables a lot of a boat I was wondering how youre thinking about the evolution, ensuring kind of product excellence with further revenue diversification across different product lines.
Yes going back to what I said to the earlier question I think making existing customers more successful almost always leads to more revenue for blend and so going deeper is always the first primary focus because it leads to either deeper add ons or more revenue per unit on the core products and thats because youll have.
Our customers are getting more return on their investment and so going deeper we've shown this historically our revenue per unit, because we've gone deeper and deeper has grown materially in the last two or three years.
That being said I think we are looking at sort of think about it on the cadence of maybe one.
Approximate new product area, a year that will go and extend into that will be an expansive area, new new market opportunity for us and it can range from whether it's small business commercial update or not.
One is we're working on to AI products that we're looking at just something we're going to look at it on a regular basis as a leadership team and make sure we're focusing on where the market needs. The most help in advancing their technology stack.
Our next question comes from Nick <unk>.
W. Mcgill your lines will be muted.
Thank you all if you are speaking we can't hear you.
Hi can you hear me now.
Yes, we can.
Sorry about that thank you for taking my questions. Firstly, just wanted to touch up on what you have discussed earlier regarding the potential to conscious strategic actions to bolster the balance sheet with respect to the term loan art items <unk> Dubai put option can you. Please provide any update on your thinking there in terms of the options are potential.
And then I also have a quick follow up on platform fees.
Absolutely we are going to reinforce the message that we've shared with you which is we continue to emphasize the potential that we have in terms of different actions that we can take we're going to be opportunistic starting first and foremost with the actions that we're taking across the company to <unk>.
Get us to the path of profitability, which actually allow us to have expanded opportunities in front of US. There is nothing for us to in essence comment on say on the term loan or on the put option beyond what we've already shared.
Got it understood and then as a follow up on the platform fees can you briefly discuss the platform fees you have been implementing across the different platforms are there much Ian.
Enough to increase the recurring revenue mix of the business over time and more broadly can you also talk about your approach to decorating lessors transaction revenue models going forward.
Yeah, I think just to give a backdrop of what the platform fees are for.
With blend builder you still get the same amazing solutions that you could get out of the box previously with blend but for people who want to have access to a more powerful platform you get more more API is much more flexibility in the flow has been a lot more integration capabilities and so it basically allows them to do get a lot more from.
From the same product that they would have been getting from us five years ago, because it's such a modern platform.
And so and so.
How material it is going to be to our overall revenue we haven't shared that broadly.
But it is.
A meaningful value to our customers and we charge a fair amount for that value that we provide to our customers.
What was the second part of the question. Thank you.
Was it about recurring versus transaction based revenue, maybe Mary you can take that one yeah.
I think to expand on why BMS had theres a balance for us remember as we go into new products and new.
Strategy is not everything can actually follow a perfectly transaction based approach and this is part of the diversification that we rolled out essentially so for US again, we have not given specific guidance to mix as an example, but what we share consistent with our Investor day is that there will be a diversification by the way you are seeing this play out in our Rps that and Youll continue to see it because as you think.
Consumption versus in essence, the reoccurring models tied to not just platform, but our ability to drive difference in essence.
Unit economic monetization type of new product initiatives and Youll see youll see youll see that continue to play out in the near future.
Understood Thanks for clarifying.
As a reminder, please raise your hand, if you have a question for Paul.
Okay.
Seeing no further questions that concludes today's call. Thank you.