Bemobi Mobile Tech S.A. (BMOB3) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Bemobi's conference call to announce the results of quarter 1 2022. My name is Pedro Alvarenga. I'm the IR and M&A Director of the company. Today with us, we have Mr. Pedro Ripper, our CEO; Andre Veloso, our CFO; and Joao Stricker, our Brazil and LatAm Operations VP. This presentation is being recorded and all participants will listen to us during the company's remarks and also view the speakers and the company's presentation. All participants can also use the simultaneous translation feature for your convenience on the bottom bar, on the right side, there's a button called Interpretation, just click on the button Interpretation and choose your preferred language. Right after the presentation, we will open for questions. We will take questions from analysts and investors. And at that time, further instructions will be given. Before proceeding, we would like to clarify that any forward-looking that are made during this conference call relative to the business perspectives of Bemobi. The company's projections, operational and financial targets are based on beliefs and assumptions of the company's management as well as information currently available. They involve risks, uncertainties since they refer to future events and therefore, depend on circumstances that may or may not occur. Investors should understand that economic conditions, industry conditions and other operational factors can affect the future performance of Bemobi and lead to results that differ materially from those expressed in such forward-looking statements. I'd like to hand it over to Mr. Pedro Ripper.

Thank you, Pedro. Welcome, everyone. Good morning. It's a pleasure to be here once again to announce the results of quarter 1 2022. First slide, please. I always like to quickly recap the current situation of our business. Last year, we had a major transformation through our M&As and internal innovation efforts. That's why I always like to start with this brief recap. We are a B2B2C company focused on emerging countries mostly. We work with largest carriers in the world. And we are gradually expanding this distribution model to fintechs and the utility sector as well. We have different solutions that we are adding to our portfolio. Today, we have basically 4 services. We have Digital Services, we have Microfinance solutions, Payment solutions and some platforms that are sold in the SaaS model, or Platform as a Service. And we reached 2.6 billion users in all these emerging markets where we operate. On Slide #3, we have the levers that help us grow our business. our commercial and product efforts can be broken down into 3 fronts. We can sell new solutions and Digital Services to partners that we already work with, such as carriers or banks, and we have only one offer, we're only selling one offer to them. And we can add more offers, increasing the share of wallet. We can also expand geographically or even in the same geographies with new partners reaching new customers, which is the middle lever here. And finally, even in a market or an environment where we already have partners and we already sell our solutions. Using digital campaigns, we can increase the penetration of the solutions that we have in the addressable markets. So this is a 3-lever game, and each of these levers will contribute to our organic growth. Having said this, now let's go into the results themselves. From the macro perspective, we had very good news this quarter. We expanded to 2 new countries, always focusing on emerging countries where we know the pain points of our partners and our end consumers. We just launched Taiwan and Kazakhstan, 2 new geographies. And we also expanded the size of our addressable market in terms of potential users to 2.6 billion. And we are also increasing our number of active partnerships. We had 5 new launches in quarter 1. We had 3 new launches for our subscription service, one in Kazakhstan, one in Taiwan and one in Pakistan. And 2 new countries -- and we just consolidated Pakistan because we were already working with the other carriers there. And we launched 2 Loop platforms. Loop is our digital campaign platform, which is fueling the sales of all our other services. So in itself, it's not a revenue-generating platform, but it is an enabler that accelerates our sales. So this was an important win for us in Thailand itself and then in Tanzania. And this is a leading indicator, once we launch the Loop platform in those geographies, this helps us late our sales and increase our penetration in these countries. Next slide. Here, we have a brief recap of our current portfolio. Our portfolio is broken down into 4 pillars that I went over very briefly in my first slide. We have some subdivisions. For digital subscriptions, digital subscriptions are practically where the company started, the Apps & Games in a limited use model. The second pillar combined 2 reasonably distinct services under this pillar. We have, what we call, Nanocredits, which is our ability to provide voice data or airtime advances to users that run out of airtime. So this is changing the journey of the customer, whereas we are also monetizing the relationship between these customers and their carriers. And a newer pillar that we have is credit card -- credit scoring solutions, where we use telecom data to provide fintechs and companies in other industries with this data. Our third pillar is digital payments, and we call it Vertical Payment Solutions. And why vertical? Because we are not working around one single industry. Originally, we work for the telecom industry, specifically for the telecom industry and telecom users. But the intent here is to gradually incorporate other industries in this segment. And finally, we have the Platform as a Service vertical. And here we basically have 2 types of platforms. The first one is Loop. Loop is an enabler platform. It's an enabler of the other platforms. It's not a revenue-generating platform in itself but it's a digital campaign platform that allows us to sell our other services. And the other lines are platforms that are sold in the SaaS model. So this is a summary of how our revenues are subdivided. Using the same breakdown. We have 2 groups of indicators. We have the B2B indicators and the B2C indicators respecting our B2C model. In B2B, we measure our development in the number of partners and contracts. They are enablers so that we can reach end users. So this is another way of showing what we saw in that previous map. The highlights here are the 3 partners -- the 3 new partners, Ufone, Tele2 and MACROKIOSK in Taiwan. And we launched 2 Loops that you can see in the group of Platforms as a Service. And after all this time without traveling, these B2B sales now are more high-touch, different than B2C, which is purely digital. So now that we are going back to -- the travel restrictions have been lifted, you're going to see new partners, new channels and -- for quarter 1. And we already have some good news for quarter 2 as well. Now following the same model, here, we can see the other side of the coin, the B2C metrics. So on top of these partner platforms, this is how we reach our end users. We are resuming our growth after a somewhat flat period in digital subscriptions, which is a good indicator because the quarter 1 is usually not our strongest quarter, but we saw a good recovery in this quarter. And a lot of that came from the international market side of Brazil, particularly Africa and Southeast Asia. We have some headwinds -- we have had headwinds last month. The number -- the average number for the period had some effects of that headwind. Russia and Ukraine felt the effects of the war. In micro finance, we had very expressive growth year-over-year. This is a mixture of organic growth and the acquisition of Tiaxa because this is one of their core businesses. And this slight drop in the quarter was a seasonal effect. Our quarters usually closely follow the results of carrier -- of the carriers. And now we are offering credit to prepaid users, and usually quarter 4 is our strongest quarter. So when we compare year-over-year, we had good growth in quarter 1 despite the slight reduction quarter-over-quarter. And finally, the last B2C indicator is digital payments. Differently from micro finance that we quantify by the number of transactions, here, the attribute that we use is the TPV, the total payment value. We saw a great leap year-over-year, and this was basically due to the acquisition of M4U. They already had a digital payment solutions area. And in quarter 1, this is the first quarter -- this is the first complete quarter after M4U's integration. In the previous quarter, we already had 3 months of Tiaxa, but only 2 months of M4U. So this growth from BRL 1.1 billion to BRL 1.5 billion is a mixture of 2 factors. One side of the curve is the addition of 1 extra month. And regardless of that, even if quarter 1 is seasonally weaker, we had organic growth regardless of the extra month, which is a good indicator for the start of the year. Now when we go into these indicators, we're going to start talking about the revenues and then we're going to go into the other financial indicators. From the revenue standpoint, year-over-year, we had a 116% increase. This is a mix of organic growth and of course, the sum of the 2 new companies. It's worth noting that despite these very solid results, we had in quarter 1, we had some headwinds that we had to deal with. So we had a negative effect of a little less than BRL 1 million coming from the impact of the war in Ukraine. And we also had the foreign exchange impact of about BRL 2 million to BRL 3 million in the year-over-year foreign exchange variation. And this variation is a little higher now because when we report in reals, whenever we have depreciation of the other currencies in relation to the real, this ends up impacting our results, either negatively when you have a negative depreciation or positively when it's the opposite. When we look at our revenue mix, we always do 2 types of breakdown. One, to follow our internationalization process, and another one to follow our diversification process. From the standpoint of international composition, Brazil is growing a little over the rate of last year. And this is basically due to the inorganic effect of the 1 extra month of M4U. And this is more than just M4U. We have all the growth from M4U, which is 100% Brazil. We also have Tiaxa, which is international. So this changes our mix slightly. If you've been following us quarter after quarter, we also lose some percentage points quarter-over-quarter. But all in all, due to these 2 factors, the extra month of M4U and the slight foreign exchange variation, and also, we have a trend towards growing more internationally because in Brazil, we have been maintaining our numbers. And this is natural because we have an underpenetrated market outside of Brazil. Now when we look at the breakdown per family of services, we see that there was a drastic transformation when we look at the numbers year-over-year. And even when we look at quarter-over-quarter, the numbers are more balanced now. So a company that 1 year ago was a subscription-only company just for Apps & Games, practically 70% to 80% of our revenues came from Apps & Games, now we are at 30%, followed by Payment solutions with another 1/3, and the other 1/3 is divided between Platform as a Service and Microfinance. This provides us with much better resiliency. And we saw this when we had these very adverse conditions, the COVID pandemic, high interest rates, high inflation rates. Our portfolio now is becoming more acyclical in its combined effect. So we had growth in our 4 lines of business. But the one we grew the least is in platforms, particularly due to the large revenue recognition that we had in quarter 4 last year. Now I hand it over to Andre, and he's going to go into our financials and in more details about our results. Andre?

Thank you, Pedro. Good morning, everyone. So let me now present our other financial indicators. We will start with our adjusted gross margin. This was yet another quarter where we had very solid results. Based on our -- starting from our net revenue, we deduct the cost of services provided, which are the margin acquisition expenses and customer license cost, also charge back, MDR and other expenses related with sales. So as you heard from Pedro, to explain the 126% increase in our gross margin. This is due to the 1 extra month of M4U. That's why we typically have a higher margin than for the other business lines. And in quarter 1, 2022, we reached BRL 95 million, a 126% increase year-over-year. So the margin expansion was nearly 3 percentage points. Now moving on to our adjusted G&A expenses. This quarter, our expenses reached BRL 53 million, a 192% variation year-over-year. And this is basically explained by the consolidation of our higher personnel spending this quarter due to the consolidation of our 2 acquired companies that added about 150 employees to our team basically in products and technology. We closed the quarter at BRL 42 million adjusted EBITDA, a 76% increase year-over-year, with a margin of 31 percentage points relative to the net revenue. Here, it's worth noting that in the end of quarter 1, we started to roll out some initiatives to capture the synergies from our acquisitions. The [ three third ] initiatives were related with people to gain efficiencies in our organizational structure, which was typically concentrated in Brazil. Well, we also renegotiated our hosting contract. And we also leveraged the use of the former M4U headquarters. So we migrated our headquarters to the M4U building. These 3 initiatives will start to show more robust effects starting in quarter 2. And looking forward, we will probably start recovering our EBITDA margin, and we will reach a point between the old Bemobi position and this point where we are in quarter 1, 2022. On the next chart -- Pedro, next chart, please. Here's our adjusted net income in quarter 1, '22. This indicator increased by 79%, reaching BRL 22.6 million, and the margin over net income. The main factors that explain this variation is the adjustment of the EBITDA margin and better financial results since our average cash was higher due to the funds raised with our IPO that have not yet been disbursed and with all the M&A initiatives that we intend to execute. Also the swap operations for share buyback also had a positive influence. And this was partially compensated by a higher financial expense due to the earn-outs, both for Tiaxa and M4U. And the final factor year that attenuates the positive effects over our net income is the higher D&A expenses as well as the start of the goodwill amortization, add value goodwill amortization. And while we are waiting to incorporate the assets acquired, these effects are not positive for fiscal purposes. Now talking about our operational cash. And this is what we use to compare the performance of the different business units. It is composed by the adjusted EBITDA less CapEx. This indicator increased by 86% year-over-year in quarter 1. And the expansion of the conversion was about 72%. This can be explained both by the increase in the EBITDA -- nominal increase of EBITDA as well as the relative reduction of the CapEx incurred in the period. We closed the quarter at BRL 527 million cash position, a very solid cash position, which will allow us to continue with our other M&A initiatives that are in our pipeline. And now I'd like to hand it back to Pedro for his final remarks. Thank you so much for your attention.

I'd like to close by summarizing some important points. This is our sixth quarter since our IPO, and this quarter is showing how consistent we have been. We always have, of course, unpredictable events, but we have been able to maintain our growth rates even in face of many adversities or the COVID pandemic. We're very happy. These are very solid results. And in addition to being solid, we -- practically for the first time now, we have all our business lines pointing in the right direction. Of course, we know that this will not happen always, all the time. But this means we have very good prospects. Despite the headwinds that we face, our business has been behaving really well. This has a side effect, which in addition to providing us with more resilience, this has opened a lot of growth avenues for us. So we are seeing opportunities for growth in all our 4 business lines. We are going to other segments with slightly different offers. And a lot of this is still off scale, so as we gain scale, we will probably recover our margin, as you heard from Andre. And this is in our plans but we will not optimize our costs without understanding the cost opportunity rating -- the cost opportunity ratio. This is not a trade-off that we're willing to take on. But we want to reconcile everything that we can. We are very excited that what -- the lessons we learned so far, the problems we learned how to solve and our end customers in the telecom industry, we saw that everything that we do is applicable to other industries. So we are now focusing on bringing our solutions to other industries after the right adjustments for the right type of customer. We are now working with fintechs. And as you already know, we are now very much focused on working with utilities companies because we see the utilities industry, they are at a very similar transition than the telecom sector underwent a few years ago. We -- they're starting to have direct relationship with their consumers. It's very similar to the dilemmas that were faced by the telecom industry a few years ago, and we are very well positioned to solve the problems of their end users. And finally, considering our very comfortable cash position with more than BRL 0.5 billion right now, the use of this cash will be very similar to what we had been announcing so far. Our priority continues to be M&A. We believe that we still have a lot of companies in our pipeline that will bring positive effects. And in this puzzle that we are trying to build, there are some pieces -- we have found some of these companies in the market already. Some of them are still under negotiation but we still have a lot of companies in our pipeline. It will be the preferred use of the cash that we have and our top priority for cash allocation. And since -- in addition to having cash, we are also generating cash, and the 2 companies that we acquired that are also cash-generating companies. We believe that there's a lot of pressure now in the capital markets due to the macroeconomic changes. So we will expand our buyback program by adding 2 million more shares. And we will gradually recover the value of the company by buying back our shares at least whereas they are at this price level that is not threatening to our business. Now I think we can open for questions. Pedro, how will this work?

Thank you, Pedro. We will now open for questions. We will take questions from investors and analysts. If you have a question, you can send your question through the Q&A window or you can click on Raise Hand if you want to ask your question verbally. The first question is from Bernardo Guttmann, XP. Pedro, can you please unshare your screen? Bernardo, can you hear us?

Can you hear me?

Not so well, Bernardo. Can you turn your volume up a little bit?

Is it better now?

Yes, it's better now.

I have a question about your payment solutions. How are you evolving in this front when it comes to solutions? And how can you scale this to other sectors? Is it a commercial challenge or you also have a challenge related with your product or platform?

That's a very good question, Bernardo. This is one of the areas that excites us the most. We acquired M4U because even if we have the horizontal solutions, they are very -- they are under a lot of now for margin and for the price of commodities. And when you have a solution that will add more value to the -- and a vertical solution, there's still a lot of value to be captured. So let me give you some examples of how we are evolving, and we are very excited in this sense. In the telecom market, we used to offer payment solutions for 2 sub services. We offered payments for top-ups. Historically, it was a physical top-up. They had to go to a physical point of sale and pay in cash. Now we're bringing all this to digital channels. And historically, we have been enabling all carriers to accept all payment means in all channels possible, which allows them to offer more personalized offers to their customers. Of course, this is limited -- this is restricted to the size of the prepaid market. And digitization is very strong today. 70% of the top-ups today are done digitally. Another segment where we historically work -- are -- recurring billing. We -- the carriers are now moving towards more digital plans or purely digital sales with no physical contact with the customer. And now that we have the Pix payment system. And this has been a niche product so far. But we see a huge opportunity for carriers to gain space and digital top-ups compared with other channels. Also, the digital plans are gaining traction now. This used to be a niche product, but I think that in a few years, it will become the carrier's main product or -- because this type of digital recurring payments account for less than 10% of postpaid and recurring revenues. I think it's 5% to 10%. But when you're no longer a niche product and you're becoming a major product, there's a huge growth potential there. And there are some new things coming up. There are other industries, either within or outside the telecom industry, other segments that are not yet using payment solutions. One of them is fixed broadband services. Fixed broadband was typically a higher-class product. So depending on the home space that you had you would offer the services to your customers and then build them in the end of the month. And now this is expanding to all socioeconomic levels. You have more opportunity here and also a higher credit risk. So carriers are now very open to finding a way to transfer this risk scoring to credit card issuers. And as a perfect storm, we have fintechs in Brazil issuing cards at a speed never seen before. So you start to have a good potential for combining these 2 markets. And this is an important prospect for us in the future. This is something new. It's not yet operating, at least not in scale. We have just 1 carrier that is doing a pilot right now. But we believe that most of the fixed broadband providers in the future will have a significant percentage of their business operating in this digital model. And along the same lines, Bernardo, and this has to do with what I said before. With the examples I gave so far are in telecom because this is the industry that we know best. But if we look elsewhere, we see that we have other segments that are very similar. In Brazil, there's another perfect storm going on. You have high inflation, you have reduction in people's income and higher energy costs. This puts a lot of pressure in terms of bad debt to the utilities companies. And this is an industry that's still trying to create a digital channel to relate with its users. So this is something that we can solve with Loop. We can create digital relationships and orchestrate all that to create digital campaigns, or bring analog customers and turning them into digital customers and also create payment solutions to decrease bad debt. This is exactly in our comfort zone, right? So this new solution that we are developing now is for utilities, and it comprises 2 or 3 different fronts, 2 that I call organic and 1 inorganic. Yes, we have a very strong commercial front, a new commercial front. We have new people that speak the language of that industry and are very familiar with that industry and came to add to our team so that we can develop this relationship with another industry with which we have not worked historically. And we -- they have products that have a lot of similarities. They are -- the utilities companies are now focusing on bad debt and telecom companies are doing the opposite, right? They are going for the customers that are good payers. So there are some peculiarities that will require us to develop a new product if we're going to work with utilities companies. And the third front, we always look very diligently to the build-versus-buy thesis, and we decided to concomitantly fire the 2 fronts. We are making good acquisitions, and we hope to have some very good news to share with you shortly in the future. And in parallel, we are assessing some potential acquisitions in this segment that could skip some steps for us. So this is a dual track. The 2 things are moving in parallel, both scenarios are working. So this is a matter of finding the right price and the right companies that would warrant an acquisition. I'm sorry for the long answer.

Next question is from [ Christian Itau ].

I have 2 questions. My first question is about your user base, the user base for Apps & Games or your subscription business. We saw strong growth year-over-year, I think, 8% year-over-year. So I'd like to understand what is behind this movement. Is there a specific reason for that good performance? Or is it an extra maturation of the latest partners that you announced and the new regions that you announced? And what can we expect in terms of any further impact to the expansion of 2 or 3 more partners in your regions? And my other question is about how you are looking at M&A opportunities. Are you thinking of expanding to other industries in addition to what you have today, subscription, pass and Microfinance? Or if you plan only to leverage the solutions that you already have in these businesses today?

Thank you, [ Christian ], for your question. For your first question, the growth this quarter is a sum of individual effects. There were some countries that we saw a lot of acceleration. These are not our new countries. The cost effect ratio when you enter a new country, it doesn't mean that in the first day you're going to start growing, it's actually a combination of several factors that will bring about growth. The country and the carriers have to be willing to be more active in the offer of services. You also need to have the digital channels and you need to have the Loop platform implemented so that you can gain scale. So sometimes, we look at these new countries, and we think they're going to start growing immediately, but that's not always the case. What truly illustrates this is that we have some countries where we were -- we have present for a while now, but now we are fine-tuning our work with the channels. Africa, in general, was really strong in quarter 1. And this was driven mostly by Nigeria. You're going to hear very soon about what we're doing in Nigeria. And Nigeria is one of the countries with the highest populations in Africa, so they can truly impact our results. We were also very successful in Southeast Asia, particularly in Pakistan. And even before we closed the deal with this -- the whole partnership with this new operator, all the carriers there are very active. So these are the 2 main points. But what we have not seen yet in these numbers. What we have not done yet is to find the right volume of postpaid customers in Brazil. We are seeing good changes, but -- and also the partnership with fintechs. We still have a lot of -- we still see a lot of potential, but this has not materialized yet. Our model is still very much focused on prepaid customers and Loop sales. And we are going to face some stronger headwinds in quarter 2 because the war will be going on for 3 months. And Ukraine -- Russia and Ukraine, I think I mentioned this in our previous call, these are 2 countries that are mostly focused on Apps & Games and accounted for 4% to 5% of our revenue. So we are already -- we already saw an impact of about BRL 1 million this quarter, and it's going to be a little higher in quarter 2. And of course, this goes down everything. But if you look at the curve, accepting this effect, the trend remains very solid. And probably in quarter 2, we're going to give you more visibility about the underlying business regardless of this exogenous factor that shouldn't last much longer. And about your second question regarding our M&A pipeline. We have been looking at all kinds of companies, but I think what we are at more advanced stages are companies that can complement the portfolio that we already have and add knowledge or products about other industries. So as I said, we're looking at 2 players in these segments, but it wouldn't be a new offer. It would fall under one of those 4 pillars, which is payment solutions, but we're also looking at international companies that already have the know-how of those segments. This will provide us with a shorter learning curve, new contracts and a good combination of products that could accelerate our business. We are also looking into other companies in digital services in geographic areas where we have low penetration. And that would be a good fit with our business. And looking at the long-term pipeline, we also have other companies at other stages with completely new solutions, but we always want to tap the synergies. So all these companies have to work on the B2B2C model. Our digital channels will have to be able to boost the sales of that asset. So it's less of a roll-up logic. We want companies that can complement our business because that's where we will get the best organic growth. I know I talked a lot without giving you any guidance because we can't really give any details, but I just want you to understand what is our mindset when we look for potential acquisitions.

The next question, we have 3 questions from Carlos [indiscernible]. He is asking after gaining the synergies and merging the offices, what is the EBITDA margin that you expect to reach? The second question is about scoring. So how is your scoring operation evolving? And how many customers are you covering currently? And the last question is about M&As. What are the segments that we are looking at?

For your first question, I think Andre already talked about this, but I think in the midterm, as we gain scale -- because there are 2 dynamics here, 2 different dynamics to see where the EBITDA recomposition would come from. One of them is cost optimization. We still have room to optimize our costs. So we have contracts that we are unifying. We have other optimizations that are being led by Andre and his team. But that's not where the greatest gain will come from. We have some things that are no regrets that it's worth doing with low downsides. But when we talk about the team, since we have many new fronts, we have to reallocate our staff to more promising areas. So the impact will not be so strong because we will focus on the areas where we can grow faster. So how do you recompose your EBITDA? We still have room to grow materially. So in our cost line, perhaps we'll have a 1 point or 1.5 point increase. And in order to recompose another 2 or 3 points, we're going to do that as we grow our volume as we grow our TPV, our subscriptions. So this is the formula that we're using right now. And we think that our current structure has -- still has some scalability without us having to materially grow. So it's a nonlinear growth, growing more in the volume and revenue than our cost structure. Andre, would you like to add anything?

No, I think you covered it really well, Pedro.

All right. Thank you. Now with respect to our scoring operation. The answer is, it depends because there are 2 ways to look at this margin. We have to understand the dynamics of this business. Usually, the B2B2C business that we do with carriers, the revenue flow is the opposite. So what is the usual revenue flow? Usually the carrier or the utilities company or the fintech will charge an amount for a subscription or for microcredit from the end user. They keep their revenue share and our share of the transaction is passed on to us later. So we have a lower revenue entering our balance and a high margin because they already took their share in this transaction. Now when we do credit scoring, the revenue flow is the opposite because we are selling to fintechs. We are selling the scoring service to the fintechs, and we will pass on a share of this amount to the carriers who own the data. So if you look at the x margin, it is a higher margin than we pass on to carriers -- to the fintechs, but the carrier's margin is lower. The gross margin is around 35% to 40% for the carrier. So whereas our gross margin is more close to -- is closer to 70%. So here, you have the opposite revenue flow. It is a good margin if you look at the part that concerns us. So which are our customers today, this is restricted to Mexico. We have about 7 or 8 different fintechs that we work with concomitantly, and primarily we have 2 scoring products. One is identity and security, which is much more focused on fraud, and we have our credit scoring offer, which are usually for companies that are granting credit either through a credit card or another means. And this product accounts for more or less 90% of our revenue. What we expect from this business, even in Mexico, we still have a lot of room to grow. I think we still have room to grow 5 or -- 4 or 5 fold in Mexico, and we also chose 2 other countries that we are working towards launching this service. Of course, there's a delay because you have to work in the 2 fronts. You have to work with the operators to have access to the data lakes and create scoring system, and you also have to sign with the different fintechs. And maybe some of the customers that we have in Mexico are also present in Brazil. So the first country is Brazil and another country is in Southeast Asia, and it really makes sense to use this data for this purpose in that country. Neither Brazil or this second country, we won't be seeing any material contributions this year. I think that our -- the time line is that we want to have this running and escalating in 2023, so that we can try to double the business again. And finally, your last question is about the segments where we're looking at new M&A opportunities. As I said, we're looking at a mix -- considering the solutions that we currently have, we're looking for players that have better penetration in geographies or industries than us and also solutions that can complement our solutions. So it's a mix of these 2 strategies. I think I answered all your questions right, Carlos?

The next question is from [ Andres Santana, ] an individual investor. And he's asking about the implementation of the Loop platform and the data monetization, which you were talking about just now, and if these dynamics can result in any JVs with the carriers?

That's a great question. We created Loop to boost our digital subscription sales. but it is gaining relevance more and more. As we manage campaigns and we offer more services, this requires more intelligence. When you have 1 product, your intelligence is to always try to sell that product to your end customer. But when you start having multiple options, when you start to have voice, data, airtime advance, microcredit, top-ups, recurring plans, game services, when you have these multiple offers, Loop gains relevance so that you can choose well what you want to show your customers since now you have many options. So Loop is becoming a more and more critical part of our business. It is also evolving in intelligence. We're spending more energy and making the algorithm smarter. And this will certainly push other businesses -- drive other businesses such as Microfinance. I'm very positive that the lifting of the travel restrictions now and going back to traveling, particularly for the international market. In 2021, we launched fewer channels that we had launched in 2020, and now we're going to resume a level of activity that we have not seen in the past 12 months. And this will continue to be a very strong investment area for us. And regarding the JVs. You know that we have partnership in our DNA. When you have a B2B2C company, you have to be very sensitive about how to create value in the 2 ends, how to create a nice solution for end customers and recognizing that you have a middle partner and having their profitability in mind. And also, we have to do something that will be profitable and positive for us as well. So despite us having the know-how in partnership, partnership that you truly -- where you truly share the value at the end of the day. We are a globalized player, and we have to always try to work with all carriers. So we are open to JVs. But this would have to be a multi-party JV. It would make sense, for example, to be allies with an entire part of the market and not just one carrier. So when you start a JV with one carrier, what usually happens is that you will eliminate all others. So we are not against it, but there's this caveat. We have to make an arrangement that is good for everyone. And it has to be a virtual JV, right, because we have to share the value with the carriers. So this would -- but if you're talking about an equity-based JV, it would be an extra complication, but it's not an issue necessarily because carriers are competing in the telecom market. But in adjacent businesses, competition doesn't make much chance. So the combination of 3 carriers with a specialized layer may indeed make sense. So we are totally open for possible JVs but there's a caveat that these JVs have to be targeted at being a multi-carrier or multinational JV. I hope to have answered your question.

And we have 1 last question from [indiscernible]. We'd like to know how a possible extension of the Russia-Ukraine war could impact your results? And what would be the strategies to attenuate this impact?

So my straightforward answer is yes. While this war is happening, there will be an impact on our business. I was surprised to see that our revenue was not 0. We were prepared for an even more adverse scenario than actually took place. We still -- we see that having their cell phones working and having access to entertainment or is still relevant in these countries. But we also had challenges from the foreign exchange variation. So we do believe that until the war is over, we will continue to see an impact on our revenues. If we had the most extreme scenario, if we had 0 revenues from these countries, this would account for about 4% of our results, but we had -- we did not see that level of impact. And we will give you more information so that we can compare apples-to-apples. And in order to mitigate this effect, something that we already did -- well, actually, it has less to do with the direct impact of the Ukraine war. But we had -- we have an office in Ukraine and we have a team in Odessa. And to mitigate the impact of the war, we were focusing on maintaining the continuity of our business because we were not just working at Ukraine. We were working for other geographies from the Ukrainian office. So first, we tried to do everything we could. We tried to bring our team to a safer place. So we got 60% of our team out of Ukraine. This was before the Martial Law. And we were also able to reallocate their roles to other geographies so that wouldn't impact the rest of the business. So in the -- when we look in the rear mirror, we see that these negotiations were very well done despite with the reallocations of different roles to different geographies. And even with the people that still remain in Ukraine, even with the very adverse conditions, they are keeping active and very productive. They're in the middle of a war and they're still working. So this is very admirable. So this is how we mitigated. And the mitigation of the impact, the direct impact from Ukraine, what we're doing is trying to stop the spending with media or -- because now the billing is not working really well right now. So we will continue to do what we have been doing so far, and we will continue to pray that this ends as soon as possible. But we will continue to see an impact of about 2% or maybe a little over that while the war is going on.

I think this was the last question.

Thank you very much for attending this call. I think the final takeaway is that although this is a very complex year from the macroeconomic standpoint, we haven't been impacted -- that impacted by the headwinds and this makes us very positive that 2022 will be a pretty good year for us, and we will probably share with you some positive surprises this year in addition to the ones we have already shared. So this is the end of this call. I stop here, and I hope to see you soon.

Thank you all for attending, and have a great day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]