Q2 2019 Earnings Call
Welcome to the chorus call leasehold and operator will be with you shortly.
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Ryan Healy.
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Tony now the conference is being recorded and you will be in listen only mode.
Thank you.
Nevertheless, our long term ambitions are much higher in this area.
As our demand generation programs ramp up over the coming quarters. We expect these new client acquisition channel to significantly accelerate net contributions in 2020 .
In Q2, and new solutions, which includes all solutions outside of Retargeting.
Grew 61% on a revenue ex Tac basis to 10% of total up from 6% a year ago.
This exciting milestone is a great reward for all our teams have been working so hard to develop them.
All on your solutions leveraged one of our most valuable assets.
Hi use a graph of 2 billion create new ideas.
As you May recall this unique user graph links highly granular shopping data with a robust assistant ideas across multiple devices and user environments.
This provides the ability to develop highly attractive marketing scenarios in a flexible way.
We believe we have only scratched the surface with our new solutions and there remains a huge potential to sustain strong growth in the years to come.
Within new solutions, we are pleased to see that our new leadership in four weekend media has already started to produce positive results.
In Q2, our retail media business on joy acceleration compared to previous quarters with growth not back to north of 20% on a revenue ex Tac basis.
This reacceleration is happening.
In a fast changing environment.
Retail clients, asking more and more fall turnkey platform that combines both performance and branding products.
To meet these requirements, we are unifying our former sponsor products and come as display product into a single solution.
As a reminder, Klamath display is that solution acquired from the former store retail.
The market is also increasingly demanding full transparency, both in terms of pricing and inventory.
We adapted rapidly to this change by offering large retailers that an innovative transactional SaaS model.
The SaaS model is growing triple digits on a pro forma basis and already represents over 30% of our retail and media business.
Our business grew 21%.
Why solid again this is not on par with ambitions yet.
Even if mobile apps continue to gain more and more share of user time.
We are witnessing that a lot of retailers sale don't invest in apps to fully capture the growing usage.
However.
We believe it's just a matter of time before mobile apps eventually become a must have channel.
Yes, or large and medium retailers.
As a result, we continue to invest significantly in this strategic channel.
In particular.
We are shipping a new bit obvious chernova app installed product as of Q3.
With significant improvements around bidding compared to the product we acquire from managed last year.
We also implementing more client friendly integration protocols to ease the rollout of their product across all the different geos.
We're excited to test this new enhanced version with our clients in the fourth.
Those debts.
Satisfactory.
I've been style could contribute more materially to our overall business in 2020 .
Looking now at our Retargeting business.
We saw low single digit decline at constant currency.
This slight contraction was expected and is mainly driven by the erosion of web browser usage.
As users tend to shift more of their online time to mobile apps.
Two factors make us confidence, we will be able to reverse this trend in the midterm.
First as just discussed every even if many retailers have not yet shift gears to wild mobile apps.
We expect them to catch up at some point and we believe our current investment will pay off.
Second what are Retargeting business with large clients is quite mature.
We are still largely underpenetrated in the lowest also and then not addressing the tail of the market yet.
These segments represent a very significant greenfield opportunity for us.
Thanks to a strong ongoing commitment with that service.
We're confident we'll be able to penetrate these in the years to come.
Finally on the supply side, we further expanded our network of direct publisher relationships.
In addition to that 3800 publishers using a direct bidder on the wedding of entry.
We are now directly connected to 200 developers about 50% more than in Q1.
Further.
The trustworthy Accountability group certified inventory quality and for prevention.
Recognizing our best in class practices in promoting the brand safe on the Rodman flock clients.
I would now like to turn to some of the strategic initiatives, we have implemented recently.
Well lease has no direct impact on our Q2 financials.
The key to the way, we are managing our business going fallout.
Starting with self service.
As you are aware, we are working hard to implement self service capabilities on our platform.
Beyond the abuse productivity benefits those to provide us.
We strongly believe that the ability to have their hands on the keyboards is critically important for our clients and their agencies.
Overall, given marketers control and transparency is a key element of our strategy.
Speaking of this we are pleased that the recent Forrester report on Omnichannel media managements recognized two important investment were making into our platform.
In this survey of the demand side platform markets Forrester included critical as the only pure tech player in the larger vendor category.
Alongside the giant I break can players Amazon Facebook and Google.
Recently, we reach a particularly important milestone in the rollout of our cell salvage platform.
I'm very pleased to share that starting with the us UK and Australia.
So for registration feature for new clients in our life.
As indicated earlier set for registration is a must have to further scale. The addition of new small and medium clients.
We also continue to make good progress with other self service features ranging from the campaign creation and dynamic creative to analytics.
For example in Q2, 70% of campaigns targeting CMF audiences were created and timely in self service mode.
And almost 100% of our clients price coupons were fully mandarins, instead, saudis up from 75% in the pre or quarter.
These achievements are very encouraging for the upcoming rollout of our next features.
Shifting now to our ongoing transformation.
As you May recall, one of my key areas of focus over the past year has been to address the good execution issues slowing down our growth.
One other important levers to improve execution is to ensure we have the right balance in place.
Compare to a year ago I have completely new executive team.
With the exception of revenue on a great CFO with who have been working with closely since 2012.
The general cancer and leaders of corporate communication people are retail media and the APEC region were brought in from the outside.
For R&D operations web and App product lines.
EMEA and Americas regions.
We recently promoted strong tenants from the inside.
I am very excited with his leadership team.
And can already feel the commitment drive an energy these new leaders bring to the long term success of critical.
We have also taken advantage of this management change to strengthen our go to market and improved execution.
First recognizing that we are now a truly multi product company with its own specificities.
We now have three products units with dedicated product and go to market resources.
One focuses on the web and other focuses on up in store and the third focuses on retail media.
We believe this new customer centric organization should allow faster and more effectively durations on our product roadmap and go to market.
Second we took this opportunity to regroup our previously fragmented operations.
Into one single global team to support our product units, whether troms vessel platform marketing and operation team.
Dedicated to best in class services for our clients.
Third we are bringing the large customers and mid market organizations in each of our three regions.
Under a single regional leadership.
To share best practices and maximize execution.
And fourth we simplified our management layers and increase span of control the immediate benefits are faster communication and decision making.
Overall, we are confident this new organization will bring additional momentum for ongoing transformation.
Looking ahead, we are 80 rate 2019 guidance for both the topline growth and profitability margin.
We also remain focused on executing on a key priorities for the next 18 months, which are.
Grow adoption of sets obviously at scale to add new clients.
Grow full funnel solution, including App install and web awareness and consideration.
Continuously invest in retail media and accelerate that transition to while transactional SaaS.
Realm false identity solution, leveraging our key assets and data management.
And effectively manage our expense base to pave the way for incremental gains in profitability margin in the future.
In closing.
Despite the challenges we discussed we feel good about our strategic direction and about our ability to deliver on our plan.
As a matter of fact to underlie our confidence in the future of critical I am pleased to announce a new $80 million share buyback program.
With that.
I will turn the call over to Barnwell will walk you through our financials and provide more color on our outlook.
Thank you Jamie and good morning, everyone on my side as well.
As always I will walk you through our quarterly performance on share our guidance for Q3 fiscal year 2019.
Revenue was up 1% at constant currency to $528 million.
Revenue ex Tac, our key metric to monitor as a business increased zero thought 3% at constant currency to $224 million.
New client business drove our growth this quarter, especially in the B mall.
Offsets are limited decline in our existing client business.
Despite continued adoption of our new solutions across the client base.
Using currency assumptions supporting our guidance revenue ex Tac reach $225 million before a $1.5 million negative foreign exchange impact.
Compared to Q2, 2000, eighteens or foreign exchange negatively impact was 7 million or three points of sales.
Revenue ex Tac margin declined 50 basis points compared to last year to 42%.
In line with our expectation for the margin to normalize from its peak in the first half of 2018.
We grew the number of clients by 4% year over year to close to 20000 clients are maintained client retention at close to 90% for all solutions combined.
From an existing client standpoint, same clients revenue decreased slightly less than 2% at constant currency.
Despite higher adoption of our new products driven by a slight decline in retargeting.
Because of continued softwares softness in the web.
Same client revenue ex Tac decreased slightly less than 3% at constant currency.
Turning to his original performance.
In the Americas revenue ex Tac declined about 3% based on currency, including minus 2% in the us.
On the revenue basis, Americas equity group, plus 1% at constant currency driven by the continued progress of Frito media on our growing mid markets revenue.
Offset by limited softness in our large client business.
The EMEA revenue ex Tac growth turned positive improving by six points from Q1 on reaching 4% at constant currency.
This was driven by double digit growth in mid market on high double or triple digit growth in new solutions as well as the anniversary of GDP off.
Only APAC revenue ex Tac declined less than 2% at constant currency as slower business with large clients in Japan, and southeast Asia offset double digit growth in mid market and continued positive momentum in Korea.
Shifting to expenses.
Over cost of revenues decreased 3% driven by a change in our server amortization period.
Saving in power consumption in our data centers on lower expenses for third party data.
Offsetting this were increased operating costs on the provision for the French digital tax on revenue.
We now anticipate that the digital tax in Italy, and Spain will not apply before 2020.
Representing a favorable volumes of approximately $2 billion on a full year basis compare to prior expectations on a non-GAAP basis.
Other cost of revenue increased 22%.
GAAP operating expenses are flat year over year with your headcount costs fully offsetting lower equity awards compensation expense due to the lower stock price over the period.
In connection with our company transformation, we incurred restructuring costs off zero, the $7 million, including.
$2 million related to cash payroll and facilities expenses.
So that were added back to adjusted EBITDA.
On 1 million of facilities related depreciation and amortization expense.
Partially offset by non cash forfeitures of equity awards.
We anticipate this restructuring to generate savings of about $6 million on that on an annualized cash expense basis.
Ed Crunch related expenses represented 72% of GAAP Opex.
Don about 300 basis points compared to Q2 last year.
We ended the quarter with close to 2900 employees, an increase of 7% year over year.
Thanks to stronger Irene on continued decrease in employee attrition.
On a non-GAAP basis, Opex grew 2% to $149 million.
Looking at these by function.
R&D decreased 6% largely driven by an increase in our research tax credit.
Despite a 6% growth in headcount to over 720 R&D on product engineers.
Says on operation increased 7%.
Driven by a 7% increase in headcount to.
1640.
On the 5 million exceptional charge related to an invoicing dispute.
Excluding this exceptional charge says on operation.
Were flat.
Says on the on the constraint digits, our so called quota carrying employees grew 5% to over 740.
On DNA was flat largely driven by several on charges that were incurred in Q2 last year on despite a 10% increase in head count to 500 on 15 employees, including at can transfer from almost all the functions.
As indicated last quarter, we are effectively managing the cost base.
I don't expect non-GAAP expenses for the remainder of 2019 to grow slower than originally.
Plan across all functions.
On the profitability side, adjusted EBITDA was over $56 million.
7% above the high end of our guidance at comparable ethics on 60% below Q2 2018 at constant currency.
This drove our adjusted EBITDA margin to 25% of revenue ex Tac Dong 470 basis points.
As you May recall, adjusted EBITDA was particularly high in Q2 last year as we were significantly beyond our hiring plan at that time.
Excluding the 5 million exceptional charge mentioned earlier.
Adjusted EBITDA was $62 million.
17% a book end of our guidance.
On driving a margin of 28% of revenue ex Tac Dong, only 230 basis point year over year.
Depreciation and amortization expenses decreased 10%, mainly driven by the change in the useful life of our servers from three to five years.
Represented approximately $10 million.
Equity award compensation expense decreased 29% due to the lower stock price on equity for features over the period.
Financial expense increased 75% due to the impact of Forex changes on our hedging positions.
On our effective tax rates was certainly 1% in line with our project tax projected tax rate of 30% for 2019.
In Q2 2018.
The effective tax rate was 77%.
Translating into a 34% decrease in the provision for income tax year on year.
So the difference between the annual estimated tax rate on the effective tax rate relates to the tax impact of discrete items, such as share based compensation in the United States.
Discrete items were immaterial as of Q2 2018.
Resulting in no difference between the annualized estimated tax rate on the effective tax rate.
Net income decreased 15% to $13 million driven by a 20% decrease in income from operation on higher financial expense, despite the lower tax expense.
On a non-GAAP basis earnings per diluted share.
Wire 40 cents seven cents.
Cash flow from operation increased 31% to $53 million.
Largely driven by positive changes in working capital on lower taxes paid.
Our transformation of adjusted EBITDA into operating cash flow remained very strong at 94%.
Capex increased 84% to $33 million, representing 6% of revenue.
But only grew 12% on a year to date basis, reflecting a catch up.
From Q1 in Q2.
As a result.
Free cash flow decreased 10% to $20 million, reaching 36% of adjusted EBITDA up from 33% in Q2 2018.
On cash and cash equivalents increased $58 million in the first half.
Two 400 on $22 million.
We are with respect to capital allocation, our last shareholder meeting provided us as requested with increased flexibility around share buybacks.
Im therefore pleased to confirm that our board of directors authorized a new $80 million.
Buyback program.
We intend to execute the program over the next several quarters.
I will now provide our guidance for the third for the third quarter on fiscal year 2019.
The following forward looking statements reflect our expectation as of today July 31st 2019.
For Q3, we expect revenue ex Tac between $219 million on $223 million.
This implies constant currency growth of approximately.
Minus 2% to zero percent.
We expect year over year Forex changes to be neutral to the reported gross.
For the full year 2019, we maintain our expectation to grow revenue ex Tac between zero percent Ong plus 2% at constant currency.
Using current Forex assumption this means revenue ex Tac of bolt.
$947 million to $967 million.
Compared to 2018, we expect for any changes to negatively impact reporting numbers by about $19 million or 190 basis points of gross.
We expect Q3 2019, adjusted EBITDA between $57 million on $61 million.
As for 2019, we maintain our expectation of an adjusted EBITDA margin of approximately 30% of revenue ex Tac demonstrating our commitment to profitability.
As indicated last quarter, we continue to focus on effectively managing the cost base to ensure we deliver on our profitability goals for 2019.
On the deal.
As usual the efficacy the FX assumptions supporting our guidance for the quarter on a year are included in our earnings release.
In closing, we feel good about our strategic direction.
Remain focused on execution on our committed to delivering to leveraging our effective financial model to deliver LC profitability overtime.
With that we will now take your questions.
Yes. Thank you to ask a question. Please press Star then one if you're using a speakerphone. Please pick up your handset before pressing the Hughes.
Turning a question. Please press Star then too.
At this time, we will pause momentarily to assemble the roster.
And today's first question comes from Nick Jones with Citi.
Yes, hi, thanks.
I got a question.
Okay.
Any insight or color into how the self registration features being.
Marci than the us UK and Australia, and then maybe more broadly just how self serve.
There's been received by users.
Hi, and this JV. Thank you for you for the question so.
The the self registration feature is very new so it's probably a little too early to draw any conclusion.
And we had our first clients going through the end to end process with zero touch from our seems so just by itself this was pretty year.
Pretty exciting achievement to see.
To see a first lines.
Validating the whole process back on its own.
Obviously.
To scale this and for this to become a material contribution.
We're going to have not only to add the I would say the technical implementation of this new feet modules, but also the demand generation programs.
So we can we can fill the pipeline with that and as we discussed before this will come this will ramp up.
In the coming two quarters. So we can have.
The metal impact in 2020 .
Regarding other features that are in demo self service as we as I shared during them.
During my.
My first introduction, we already have a number of features that with a very high level of adoption, which is validating. Our net is there there is a strong appetite from the market from clients to have their hands on the keyboards. The market now is more mature that it was a few years ago, and something which was probably a bit intimidating for them. If you years ago. Now. This they are much more engaged and they want to they want to turn the dyes and sales.
Got it thank you.
Thank you and the next question comes from Heath, Terry with Goldman Sachs.
Great. Thanks, I was wondering if you could give us.
Sense.
With the changes that.
That that have been made.
Google within winning from.
To what degree you're seeing.
The numbers that we've seen this quarter sort of reflect that being fully.
Momenta.
The general sense the outcome was.
Better than expected just curious if that was.
Case in terms of what you're actually change and then as we as we look at.
Profitability in the quarter and the profitability guidance for the rest of the year. If you can just give us a sense or sort of what youre seeing.
In terms of the cost of inventory.
Just sort of the underlying cost of being able to.
Whether it's on a on a CPM basis are all cost margin basis.
What's happening on the publisher and of the of the equation. Thank you.
Sure.
Thank you so.
On Google Chrome.
You know that.
There is no material impact that Google has Don.
In.
In the previous weeks.
So there is no impact on our business.
So to speak this is something we discussed.
We discuss at length.
A quarter ago.
I know there was a lot of concern in the beginning of the year, but we will maintain this spring summer some change that could that could be.
Negative for our business and this had a put so price under pressure.
During the spring spring time.
This did not happen and our Q2 numbers.
Don't include any.
Thats good are coming back to us.
Any.
Regarding the cost of inventory.
And so that's always a hard question because not in all inventory has us in value.
And.
What really matters for us is not the cause of a particular impression that the cost of any of the impression that were achieved with the value.
And one of the strength of engine is this ability to predictive value of every impression and to pay the right cost.
So look at the inventory what we focus on is mostly what we call. The win rate, which is as you know we are doing a real time bidding for each impression and we're bidding against other.
Other bidders.
For particular impression and we monitor our win rates to ensure that.
That we keep bidding.
And winning.
Stable fraction of the of the impression which has been the case.
In the last quarter, we didn't see any.
Significant change in our win rate.
So overall I mean, the cause of the inventory has been.
Quite stable as they once more the there is no read averaging the space every impression has its own it's on value and durability of each player too.
To determine this value is absolutely key performance.
Just maybe one one thing is that I would add as you know we reported when these younger age is no treaty meaningfully as just explained by GB, We reported in our Q every quarter.
What's the what's the trend on the we will continue on into Q that will be filed in into the next coming days that we have seen a slight a slight decrease in the average CPM over the period, which is consistent with what we've seen in prior periods.
Slight decrease meaning.
Mid mid single digits.
Great. Thank you Bob.
Thank you.
And the next question comes from Tom White with da Davidson.
I was hoping you could just give us a bit more detail about your key inventory sources for mobile App inventory just.
Specifically interested in which large publishers are networks might be garnering the bulk of that spend or.
Whether there might be.
Specific large publishers are networks that you don't currently.
Tap into and then just a follow up on on retail media.
Kind of brand more branding type campaigns, both from a technology and maybe personnel was thanks.
Sure. Thanks, very much so mobile app.
At a high level that when we apply the on the web.
We are we want to help our clients to buy.
Mobile inventory across the whole open internet swear completely agnostic and.
So.
Applying.
Our usual playbook, we started with the with the exchanges and we are connected and buying.
At scale on all the major changes.
On top of that.
Very exciting.
Progress on buying directly from.
From the mobile App developers as you know when you buy from an exchange you get the.
The middleman, which.
There is a necessary add a lot of value and by buying direct with the to the.
To the publisher, it's it's win win it's it's better performance for the advertiser and more money in their pocket of the publisher. So this is why this is a very attractive value proposition and as a matter of fact and now we are working as we said with them.
More than 200 developers, including more than 420 of the largest global apps and that are not connected to two.
Direct bidder, so it's it's great to see that.
Our strategy to go direct is being of the same way INAP Thenine web we still have a lot of value to capture because we still at very early nap, while wed obviously weve bina.
Speaking of.
We can media so.
That's a very important trend that for retailers they want to they want to partner capable to offer the full suite of product and this is something we recognize.
More than a year ago.
And it's true that's historically critical was focused more on performance then on branding.
That's the reason why we acquired this French company called store retail they were doing the equivalent of the response on product made on the branding side with running formats and we acquired this company last August so exactly a year ago.
And.
And we've been very busy integrating the two the two offers under the same umbrella and into a single solution and as a matter of fact, we see a lot of excitement from the market.
We've been already.
Signing.
One first a very big client in the US on this new single platform and something we are going to accelerate in 2020 .
And we feel we have a product which is really unique.
We've been.
Winning against very big players in this area and people recognize across the industry that offer is way ahead of the rest of the market.
Thank you.
Thank you and the next question comes from Tom Champion with Cowen.
Hi, Good morning, Jamie I'm wondering if you could talk about the pace of growth in new products clearly.
Strong result, it at 60%, but I think a little below last quarter's level and how do you. How do you think about continuing to ramp and accelerate that growth.
And then.
Second maybe you could just talk a little bit about the hiring process in the sales organization.
Now that you're taking a more consultative approach. Thank you.
Sure.
So new product is.
No. We have we are similar or any initiative in the space.
And some are more mature than others.
I would say we too.
To simplify what's kind of three buckets.
We have retained together, we discuss with alerts and we are we're excited to see that perfectly in this area. There is the acceleration of our business.
And.
Which is happening in in.
In a market, which itself is changing a lot in a direction, we like a lot because favoring a technical solution, which is our strength. So this is very exciting.
The two other key initiatives we have is.
Upper funnel.
This awareness and consideration product so we still quite early there.
But potentially this is a huge market is at a matter of fact, it's a market, which is growing faster than the Delaware final today, and something where it's almost a greenfield opportunity for us. So if we execute well on that.
There is huge potential and I feel we already we are still very early there. The third one as I discussed is I've install where.
It's a lot about.
Performance at installed about cost and stole something we're very good at performance. So we've been putting a lot of efforts.
Upgrading the product we acquired.
Nine months ago from match this app install company and.
As we discuss we are shipping a new version, including enhanced bidding capability, which is really the strength of Accretable. This machine learning how do you sophisticated engine and we believe that combining the go to market expertise of match with our machine learning expertise, we have the best of the world and a real good shows too.
To make a dent into this very large installed market where today. We are we are we are very very small, but there is a there is a lot. There we have other opportunities which are more I would say early like store physical store, where we have an exciting.
Early success with with.
As our clients, but this is still early in.
And that a very material yet so.
We spend less time on this but it's something that can be promising.
Midterm, so all you know.
It's a very robust portfolio of new products.
And this is why or when or combine its are enjoying a very healthy double digit growth.
Hi, rich.
Hiring process for their go to market.
Can you repeat the second question.
Yes, I was just curious if you could update us on your progress in.
Transforming the sales organization.
Now now that the process includes a more consultative approach I think that was a barrier in the past.
Yes, absolutely so.
This is something we are working on.
And.
As we are selling.
We need to type of profile.
Some of them we can.
We can train from the inside and we have a lot of great talents.
That we are training from the inside of also bringing talents from the outside.
We need experts in specific areas.
I was just discussing about app install which requires a different pitch than a traditional.
Web solution and we are hiring very aggressively app specialists there.
We also.
Need to high people with more exactly what you said a consultant potentially consulting.
The mindset because as we are now engaging in a much higher level in the organization with the CMO is enormous.
On the strategy of our clients, we need people capable too.
And to conduct this high level discussion with a with a threesixty view on the on the needs and the strategy of our clients. So and we are executing this with a good mix of training our.
Our teams on the ground and bring new talents from the outside.
Got it thank you.
Thank you and the next question comes from Lloyd Wamsley with Deutsche Bank.
Hi, Thanks, just wondering if you can talk a little bit about the potential to shift more of your revenue potentially to a licensing model, where you maybe provide access to tools and things like underlying shopper graph. Another data sets in a fee model you've talked about getting some inbound request along these lines.
The CSP business is transition kind of towards this.
How much how much of your business do you think you could move move to a model like this.
And how are you guys thinking about that.
Given the market values.
Those revenue streams, much higher than kind of risk taking.
Revenue streams any any thoughts there would be great.
So as we discussed.
This is just the way the market is going and.
There is no point resisting this as as a matter of fact exactly it's Eric we doing exactly the opposite we are proactively pitching our clients and switching as quickly as possible.
From the old model to the new model.
With them.
Having discussion while one by one with every every client of ours.
Regarding marketing solution.
We have.
We have interesting ideas there.
There are still early stage and that there is a very big appetite for when we call that our insights and more generally for our shopper graph and.
It's still too early you know too.
To discuss this in detail.
Right now we're experimenting issue thanks.
But there are some very promising things happening there. The market also is getting more mature other player has been indicating the marketing. This RL, which is also helpful for us because rather than reinventing the wheel, we can get inspired buys bye.
The best performance model and apply the uniqueness of the critical that assets and could you use a graph to combine the two combined the best together.
Thanks, Jamie.
Thank you.
And our next question comes from Doug Anmuth with JP Morgan.
Thanks for taking the questions.
I was hoping you could elaborate a little bit more just on the drivers of the lighter threeq outlook and your confidence in.
Recovering more in Fourq, you and I know, there's obviously some more favorable seasonality there too as well, but just given that you're maintaining the full year.
Okay.
That we've seen in Q2.
We we expect to see our new solution continuing to to show good traction.
But impacted by by a slow decline in the re targeting Retargeting business as as commented on the on the color earlier, we see that decline primarily driven by the by the web usage.
And we see opportunities.
The.
As the take up of our self service channel automatic automated channel that would show. Your result at scale in 2020 as the two factors that could allow us to to offset that decline.
On stabilize a decline on the re targeting sites. So that we expect very very similar type of dynamics in in Q3 than what Weve observed in Q2 on with respect to the strategic initiatives that were discussed.
In more detail on the call those strategic initiative.
Expected to producing more result in 2020.
So regarding.
Self registration.
The key benefits.
They are they are several benefits this is flat white.
Makes me so excited about but said for a distraction. The first one which is the most obvious is the productivity of our of Onboarding.
When when Klein on gauge on the loan with a platform and.
The other setting on the phone and start the campaign on the loan.
You need less people to turn the dial.
Behind the scene. So it has an immediate improvement on the productivity and allow our own team to engage more strategically with our clients and more into upselling.
Them and rather than just.
Turning to dice. So that's the first benefit offsets registration.
The second one which is more.
I would say less known very very important is that.
Surprisingly some client trust more machine, then you would need beings in a way that they can find it intimidating to speak to says rep, while going on they own and doing their own thing in front of the screen somehow there and just more comfortable to do this they are used to do this on many other platform and this is something some are very comfortable to do and we see we see this in in many many aspects.
The third one.
Which is equally important is that as we are working more and more with agencies.
Adjacencies are really.
Adding a lot of value for their own clients for the one that I don't have the expertise to turn the data on their own.
And they are getting trained on now in two hours by and they can operate on behalf of the clients.
The critical platform and this is really a win win value proposition that we are having with agencies and it's part of our agency strategy.
So all in this set frustration is really exciting because not only its targeting the lower torso and the tail of the markets, but as you can see the benefits that applies across all all type of clients big and small.
And as we as we shared we.
We are confident that this should have a metal impact next year on our net adds.
For this to fully.
Fully leverage this this momentum we going to at the same time have to ramp up our marketing.
We have enough prospect.
On gauging with our self registration.
Modules and this is something we are working very hard on.
Great. Thank you JB im going on.
Good morning, everyone. Thanks for taking the question.
GB.
I want to ask a little bit of course, the manner in which major internet technology platforms operators always an important issue for cardiology business lives on top of those platforms oftentimes and.
We've talked a lot about chrome and the changes going on in googles ecosystem lately, but.
I wanted to ask a little bit about Apple.
I don't really want to dwell on the initial impact of GP, which are now of course sort of ancient history, but.
More look forward as sort of public comments and consumer marketing from Apple They continue to focus on differentiating through.
Privacy.
Could you speak sort I just high level about the company's relationship with Apple and more importantly, sort of how you see that ecosystem evolving and what that means for your business in the years ahead. Thanks.
Sure so.
Its full year.
Finally in our numbers.
It's been there for for a while.
Steve speaking more generally about privacy.
And.
It's a major trend in the markets in a very good one and we are very supportive about.
Having an open internet, which is a privacy friendly because your teammates here. If you want to do a targeted advertising you need to do it in a transparent way otherwise the users that they lose trust.
And just as a remainder we pay for the inventory no matter, what and we get paid only when the users engage with our ads.
So we have absolutely no incentive to show not to a user who is that fleet.
Fully comfortable to see this so we've always been very proactive to ensure that.
Every user had the right level of control and they can decide on they own them when and how they want to see targeted.
Ads.
That's probably the difference we have with Apple that is deciding on behalf of their own clients.
What is.
Well they can see are nuts, we want the end user to have the choice and to make the choice and we see in reality and we're not afraid of that because we've seen in the already see that when you gave the twohg to choice to the user the vast majority of them they'd rather see a relevant ads that then to see random ads.
Because the user they're perfectly understand that no matter what they are going to see ads. That's just the way the internet a neat economy works, but.
Seeing as Youd, rather see ads that are of some interest rather than things that address visual pollution.
And I think this is our.
This is a big vision something with a share where the vast majority of the market. There are some players that are one to decide on their own. It's their choice. We believe in the open internet and letting the end user community in control.
Great. Thank you.
Well, thank you JV and law. This concludes our call today, we thank everyone for attending the IR team is available for any follow up you may have.
We wish you a very good day, thank you and goodbye. Thank you. Thank you.
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