Lightspeed Commerce Inc. (LSPD) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the Lightspeed Third Quarter 2023 Earnings Conference Call. [Operator Instructions] It's now my pleasure to turn today's call over to Gus Papageorgiou, Head of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Lightspeed's Fiscal Q3 2023 Conference Call. Joining me today are JP Chauvet, Lightspeed's Chief Executive Officer; Brandon Nussey, Lightspeed's Chief Operating Officer; and Asha Bakshani, our Chief Financial Officer. After prepared remarks, we will open it up for your questions. We will make forward-looking statements on our call today that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Certain material factors and assumptions were applied in respect of conclusions, forecasts and projections contained in these statements. We undertake no obligation to update these statements, except as required by law. You should carefully review these factors, assumptions, risks and uncertainties in our earnings press release issued earlier today, our third quarter 2023 results presentation available on our website as well as in our filings with U.S. and Canadian securities regulators. Also, our commentary today will include adjusted financial measures, which are non-IFRS measures and ratios. These should be considered as a supplement to and not a substitute for IFRS financial measures. Reconciliations between the 2 can be found in our earnings press release, which is available on our website, on sedar.com and on the SEC's EDGAR system. And finally, note that because we report in U.S. dollars, all amounts discussed today are in U.S. dollars unless otherwise indicated. With that, I will now turn the call over to JP.

Thank you, Gus, and welcome, everyone. Thank you for joining us this morning. Lightspeed reported another strong quarter to date. Our adjusted EBITDA loss of $5.4 million came in better than our expected loss of $9 million. Our revenue of $189 million came in at the higher end of our outlook range of $185 million to $190 million. GTV grew 75%, much higher than our GTV growth of 10% and on a constant currency basis, GTV grew 17%. I believe our results today reflect Lightspeed's commitment to profitable growth. [ Prior ] commitment is a deliberate effort to pursue larger, more profitable customers. Although customer locations were flat from the previous quarter, we continue to shift towards higher GTV locations. Excluding certain locations, as highlighted in our disclosures, customer locations with over $500,000 in annualized GTV grew by 15% over the same quarter last year and now represent 32% of total locations, up from 29% in the same quarter last year. Customer locations with over $1 million in annualized GTV were our fastest-growing cohort, both year-over-year and from the previous quarter and were up 19% year-over-year. In this quarter, we signed several multi-locations in marquee customers, all with our latest flagship offering including. Soletrader, a British shoe retailer that operates 28 locations across the U.K., adopted our latest Lightspeed retail offering along with payments. CASETiFY, one of the fastest-growing tech accessory brands reaching 1 in 7 millennials chose Lightspeed retail with payments to power their first Australian flagship store. Three Michelin-starred restaurants, [ Laputinis ], located in Provence, will be adopting Lightspeed restaurant and payments. [ Moet NSC ] will be using Lightspeed restaurants in its rollout of one of its initial restaurant projects. The Skyline Club, a Chicago fine dining institution delivering world-class cuisine since 1926 with adopt Lightspeed restaurants along with analytics and payments. In our B2B network, we were happy to add Santoni, the high-end handmade Italian shoe brand as well as Gerber Childrenswear. Earlier this fiscal year, I laid out 3 priorities for Lightspeed, which were: one, to finish the integration of our acquisitions into 2 core platforms and 1 company, an effort we refer to as One Lightspeed; two, expand payments across our global customer base; and three, position the company to reach profitability. Two weeks ago, we announced a reorganization that included eliminating approximately 10% of our headcount. The main catalyst for this reorganization was the near completion of our One Lightspeed initiative.  As we focused on 2 flagship offerings, it was always our intention that this initiative would unlock considerable savings for the company. I believe our new structure gives more accountability and authority to our existing senior management team, while at the same time, removing costs and complexity from the organization. Approximately 50% of the cost reduction will come from management roles. Under the new [ org ] structure, we expect to streamline our organization to leaner working models, focus on key projects and customers and continue to invest in our growth drivers. Deciding to reduce head count is never an easy decision. We are parting ways with many talented and dedicated employees that helped build Lightspeed into the company it is today, but it was a necessary decision that strengthens our foundations for future growth. In terms of payments, as I mentioned, we had another strong quarter. Although our GPV still heavily depends on North America, we continue to see strong momentum in APAC and EMEA where payments was launched just over a year ago. Before I discuss profitability, I want to touch on the current macroeconomic conditions and highlight the dispositions. Given the macro uncertainty, our focus has turned to running the business with a greater focus on profitability. This includes focusing on attracting the right customers, those with over $500,000 in annualized GTV and upselling our existing base, reducing our operating expenses and limiting marketing spend to areas with the highest returns. I know that the macro environment is presenting challenges for our customers, but these conditions only highlights the need for complex SMB to adopt technology. Lightspeed's cloud-based platform could help SMBs better manage their inventory, operate with fewer employees, eliminate mundane tasks, deliver data-driven insights and give managers and owners more time to dedicate to their customers. Over the last 2 years, we have been building the most compelling offering for complex SMBs and have received very positive feedback from our customers. In my view, we have never had a stronger product market fit. In addition, we have a more agile, cost-effective and accountable organizational structure. With costs coming out and accountability increasing, I believe we will be in a better position to address the long-term opportunity ahead of us. And finally, we assembled an exceptionally strong management team with the right experience to take us forward. Through a combination of strong internally developed talent and the addition of experienced and distinguished external candidates, we have the right people in the right position to continue to build Lightspeed into the dominant platform for complex SMBs the world over. The macroeconomic conditions will likely present a challenge, but economic cycles come and go. I believe Lightspeed has never been better positioned. Getting back to profitability. In the quarter, we delivered adjusted EBITDA loss ahead of our previously established outlook, and we took the hard but necessary decision to reduce our overall headcount and cost base. I believe we are on track to meet our commitment of adjusted EBITDA breakeven or better in fiscal 2024. I'm very proud of the company we are building. Our mission of igniting businesses everywhere in the world is an important one. And our suite of competitive products means we have never been in a stronger position to deliver on this mission. But in the end, profitability is a vital part of building a successful business. And to that end, profitable growth will be the key driving force for the company for the foreseeable future. And with that, I will hand the call over to Asha.

Thanks, JP, and good morning, everyone. I will first provide an overview of our third quarter results, highlighting, in particular, our continued focus on operating discipline and profitable growth. Then I will discuss trends we are seeing across our global merchant base and finish with our outlook for the remainder of this fiscal year. Before getting into our third quarter results, I'd like to remind everyone that this quarter's total growth represents organic growth given that our latest acquisition was made at the very beginning of our third quarter in the prior fiscal year. Now turning to the quarter. Lightspeed delivered another strong quarter with adjusted EBITDA loss ahead of our previously established outlook and revenue of $188.7 million at the high end of our range, growing 24% from Q3 last year. Subscription and transaction-based organic revenue growth was 28% year-over-year on a constant currency basis. Recall that in Q3 of last year, we received a onetime payment of $5.5 million from one of our payment partners and in this quarter, an additional $3 million from a different partner. When excluding the impact of these one-time catch-ups, subscription and transaction-based revenue grew 31% year-over-year, again, on a constant currency basis. We exceeded our adjusted EBITDA loss outlook with an adjusted EBITDA loss of $5.4 million, ahead of our previously established outlook of $9 million, our lowest quarterly adjusted EBITDA loss in over 2 years. As you've heard from us before, we continue to exercise prudence in our spend. The result of this is continuous improvement in operational efficiency, which has been driving better-than-expected EBITDA margin. We are happy with our progress here. Turning more specifically to the market environment. We continue to see the impact of foreign exchange rates, inflation and shift in consumer spending on our merchants businesses. I will walk you through some of the specific trends we are seeing across our customer base. Last year, we saw third quarter GTV grew 124% and 53% organically over the previous year, driven by back to physical shopping and dining in many of our regions. This year, our total GTV in Q3 was $22.4 billion, which grew 10% year-over-year or 17% on a constant currency basis. Omnichannel retail GTV grew by 6%, whereas hospitality GTV grew by 16%. In retail, we saw average GTV per location decline in several of our verticals, with bike shops, home improvement and pet stores being particularly weak as these categories spiked [indiscernible] Covid and are now coming back to more normal pre-pandemic level. Hospitality GTV growth was stronger year-over-year, given the impact of the Covid resurgences in the 3-month period ended December 31, 2021, but declined from our previous quarter. Helping to offset this macro weakness is our ongoing rollout of payments. We are fortunate to have a large customer base that remains underpenetrated with our payment solution. Our payments uptake has resulted in our gross payment volume growing 75% year-over-year to $3.9 billion. We launched payments globally in our last fiscal year and although still early in our rollout, gross payments volume coming from outside North America is up 44% from the prior quarter. Turning to locations. We would like to remind everyone that Lightspeed remains focused on profitable growth. As you heard from JP, given the uncertain environment and the fact that we derive our highest ROI from upselling our base, our go-to-market focus has shifted to prioritizing high-value GTV customers from a net new perspective and growing our ARPU within our base, primarily through attaching payments. The result is a quarter where overall net new location count was flat from last quarter, but with larger GTV locations growing within the overall mix. Customers with annual GTV of $500,000 were up 15% year-over-year, and customers with under $200,000 in annualized GTV were our fastest declining cohort, down 4% year-over-year. I think it's worth repeating that not only do larger GTV customers tend to adopt more software and their payment potential is much greater, but they also exhibit less churn. As I mentioned last quarter, customer locations with over $500,000 in annualized GTV represent less than 10% of the churn of our overall base. The higher overall ARPU and lower churn from these customers results in our highest LTV to CAC ratios coming from this customer base. After excluding customer locations attributable to the equity e-commerce stand-alone product, ARPU continues to trend in the right direction, with total ARPU of $348, increasing 20% year-over-year. The bulk of the ARPU increase came from increased payments revenue. The headwinds brought on by a strengthening U.S. dollar relative to foreign currencies was most felt in our subscription revenue line, which was flat quarter-over-quarter and grew 13% from the third quarter last year on a constant currency basis. Transaction-based gross margins improved over last quarter, thanks largely to the one-time catch-up payment of $3 million from one of our payments partners as well as to Lightspeed Capital. Our Merchant Cash Advance business is gaining traction with merchants globally, particularly in today's economy, where traditional lending institutions are becoming more and more selective with lending to smaller businesses. Our Lightspeed capital revenue grew 26% from the last quarter and 221% from a year ago, with our default ratio continuing to remain under 2%. Hardware gross margins continue to bring down overall gross margins as rising costs and supply chain issues continue to drive the cost of our hardware up. We had a goodwill impairment charge in the quarter of $749 million. I'll walk you through the mechanics of this. Goodwill is required to be tested for impairment at least annually. Our annual test date is December 31. Given the decline in the valuations of technology companies broadly and Lightspeed share price, specifically, our net assets exceeded our market cap at December 31, 2022. This was a goodwill impairment trigger for us. [ BISCO ] charge is a noncash accounting entry that does not reflect any current or future cash outlay for Lightspeed. We are also prudently managing our share-based compensation expense and have taken a number of actions to reduce it as a percentage of revenue. Our share-based compensation expense has declined as a percentage of revenue for every consecutive quarter this fiscal year from 22% in Q1 to 18% in Q3. And with the impact of the recent restructuring, we expect this ratio to decline even further. We ended the quarter with approximately $838 million in cash. Our cash decreased by approximately $24 million in the quarter. The largest uses of cash were working capital movements, including the growth of our merchant cash advance business, which we fund from our own cash balances to date. Now turning to our outlook. We expect consumer spending to remain challenged in the near term. And given that our transaction-based revenues are now over half of our total revenues, weaker growth in GTV presents a headwind for us in the months ahead. We expect to remain vigilant on spend and to continue to focus on profitable growth. For the full year of fiscal 2023, Lightspeed now expects an adjusted EBITDA loss of approximately $37 million, improved from previously established outlook of approximately $40 million. The company now expects annual revenue to come in at the low end of the previously established outlook of $730 million to $740 million or approximately $740 million to $750 million on a constant currency basis. We remain committed to adjusted EBITDA breakeven or better in fiscal 2024. With that, I'll hand it over to JP for closing remarks.

Thanks, Asha. Before we go into Q&A, I want to welcome a new member to our senior executive team. Kady Srinivasan, Kady is our new Chief Marketing Officer, and comes to us with over 15 years of experience leading marketing efforts at organizations such as Dropbox and Electronic Arts. I'm thrilled to have Kady on our team as we continue to focus on our core customers of complex SMBs, raise our brand awareness and improve our go-to-market momentum. And with that, we'll take your questions.

[Operator Instructions] Your first question comes from the line of Dan Perlin with RBC.

I just had a couple of questions here. Specifically around subscription ARPU being flat over the past several quarters, you kind of touched on it a little bit. But I guess my question is, as you're making this pivot to obviously more profitable clients. I'm wondering what the pricing environment is around subscription. And to what extent do you have to have discounts to incentivize certain merchants to want to take payments.

Yes. So I think the last phrase you said that I think is very much in line is what we look at is net take rate, which is net payments and net software. And on that front, what we try and do is bundle a package that is going to be just positive for Lightspeed. So when you look at the bigger customers, especially the higher GMV, if I attach payments to the software, you'll realize that the bulk of the revenue on a net take basis is the software. So, again, what we try and do is we just try and ensure that we maximize our take rate from when we sell to customers.

Got it. Okay. And then on the -- just quickly on the EBITDA guidance for '24. I look back, it looks like you tweaked the language a little bit. I think previously, it was breakeven, that's breakeven better. But you've got the $25 million now of incremental annualized savings from this workforce reduction. I'm just wondering -- are you suggesting that maybe you're more concerned about the top line to just kind of stay in that breakeven or slightly better range? Or should we be thinking about that $25 million actually potentially falling through as we think about 204 numbers?

Thanks for the question. The $25 million in the reorg, we had already contemplated that we would unlock operating efficiencies from the integration of our acquisitions when we committed to EBITDA breakeven next year. We do anticipate breakeven or better. We anticipate that that's going to happen somewhere in the mid-range of the year given that in Q1, we have our in-person sales and partner and customer Summit, which does drag down EBITDA. And as you know, Q4 is our seasonally weakest quarter. But we do expect adjusted EBITDA breakeven or better for the full year falling within those 2 quarters.

Your next question is from the line of Daniel Chan with TD Securities.

Thanks for all the color on the customer locations. Just wanted to -- I hope you can help me reconcile your comments about targeting larger locations. But if we look at the xx Ecwid locations, those were flat quarter-over-quarter, and then the equity locations actually grew by 1,000 quarter-over-quarter. So just wondering if there's some strategic initiatives that still need to be rolled out or whether there was.

Dan, you cut off there at the end.

Yes. Just wondering if you can just help provide some color on why the equity locations grew sequentially by 1,000 locations, whereas the non-equity locations stayed flat sequentially, whereas you guys are targeting to go after the larger locations?

Yes, when we look at Ecwid. Ecwid's part of Lightspeed omnichannel and inside of the omnichannel strategy, we're going after bigger customers, and we're selling them, call it, a channel-agnostic platform. So with that in mind, that has an impact when you upsell or you sell to existing customers, the omnichannel platform that creates new stores on equity. So maybe that's one of the reasons. But I think, ultimately, we are focused on attracting the larger, more sophisticated, and that's going to continue, and that's going to be the focus for the company, and that really brings us to profitability. And that's really what's the key message is profitable growth, as I said.

Okay. That's helpful. So is it fair to say that when you upsell a brick-and-mortar store to the omnichannel that one location gets counted for the brick-and-mortar store and then the other location gets accounted for the Ecwid?

Yes. When we say stores, these are storefronts. So digital is a store front and physical is store front.

Okay. And any update on getting restaurants traction in the U.S.?

Yes. Look, I think for the U.S. just being very clear. We are going after the more sophisticated segment. We're going off to the more established segment. We gave a few names here in our script. So again, we are going to be deploying marketing dollars and sales teams to ensure that we attract the customers in a profitable way. So, we will not be going off to the entire market, but going off to the more established and on that front, we're happy with the progress.

Your next question is from the line of Andrew Bauch with SMBC Nikko Securities.

[Technical difficulty] Nice to see the location disclosures. Looking at the $500,000 in about 15% year-over-year or 19% is those numbers relatively consistent with what you guys have seen in prior quarters and you see benefits from the shift away from the lower value merchants into those higher cohorts and meaning potentially more growth or a more centralized focus on that in better win rates in that segment.

Yes. So I think I understood, but we could barely hear, but I'm going to address the question. So we are focusing more and more on the 500,000 and plus and 1 million plus. We talked about this at the Investor Day when you look at LTV over CAC and you look at profitable growth, you have to double down in that segment. So what we've been seeing this quarter, like all the other quarters is the vast majority of our churn comes from customers that are under 200,000 of GMV. And what we're seeing here, especially with the economic headwinds or the difficulties in the economy, the smaller ones are much more prone to churn than the larger customers. So I think for us, this 15% and 19% growth is very much in line with what we've been seeing all year. And I think it's just a good reflection of our focus on that segment. So again, yes, this is going to be more and more a priority. And I don't know if you remember, but even at the Investor Day, I said if we have the same number of locations a few years from now, but all of these are within the right segments, Lightspeed will be in a really strong position. And of course, those are the fastest-growing cohorts for Lightspeed.

You just touched upon the one Lightspeed initiative. Are we actually in there yet with the final restructuring announcements you made 2 weeks ago? Or is that still on the come in the months ahead? And maybe any updates on the benefits you're anticipating to see from that?

Yes. So the question, I guess, is with regards to One Lightspeed, are we on track? And we always said, as we hit the end of the fiscal year, the vast majority of all our sales are going to be on the new platforms. We did the restructuring early January because that was the right time because we now have very strong confidence in the product going forward. We are in the final steps of this. We are slightly more advanced with retail than we are with hospitality, but there are still a few little tweaks to do, but we are very much on track with what we said. With regards to the expectations here, and I mean we are going to see, well, we have seen leverage because now we restructured according to these 2 products. And we will continue to see leverage. It will just simplify the business everywhere. When you look at acquisition, when you look at onboarding of customers, support calls, it's going to just -- the fact will become a much simpler business because we'll be just selling one payment platform globally and on retail platform globally and 1 hospitality platform, same-code base.

Your next question comes from the line of Andrew Jeffrey with Truist Securities.

JP, I wonder if you could comment a little bit on sales cycle as you increase your focus, tighten the focus on bigger, more complex merchants and whether or not that's affecting payments attach or if the payments attach that kind of stalled out this quarter a little bit as a percent of total volume is more of a macro impact. And I've got a follow-up.

Yes. So maybe sales cycles we've always had that we always have well understood the sales cycles with the larger segments. We've been doing this forever. I think that's the real -- when you look at the real value [ prop ] of Lightspeed, we really shine with the more sophisticated SMBs. And we know how to sell. We know how to onboard. So it doesn't change much in our sequence on that front. Second piece of the question, attach rates. We are seeing very good attach rates on new customers. And if you look on -- and I think what gets us excited is attach rates and new customers even outside of the U.S. are very strong. So we're not having any difficulties on that front. And maybe just to address the last piece of the question, which is penetration. That is purely a factor of industries and GMV per merchant.

And just as a follow-up, if recognizing that nobody's macro crystal ball is particularly clear. It feels like perhaps we're coming to the end of this normalization period that has seen retail, especially in certain verticals to which light speed over samples perhaps get to a point of normalization and maybe start to bottom out as how do you think -- I understand you're taking an appropriately conservative approach to guidance. But how do you feel about returning to a more normal sort of consumer spend environment where we could see more balanced growth across our 2 primary verticals?

You're absolutely right. We are taking a conservative approach to guidance, especially given what we saw in the third quarter where you're seeing overall GMV pretty flat versus the quarter before. But we are in a position strength in terms of focusing on profitable growth. And if and when the macro does turn around, to your point, we're in a position to take advantage of those growth opportunities as they arise.

Your next question is from Josh Beck with KeyBanc.

Thank you and I appreciate the disclosures on the locations by size. I'm just kind of wondering if we play this forward a couple of years, more or less how much of the change you expect or potentially you could see in the locations with greater than $500,000 of GMP.

Yes. Well, look, again, just to talking about a big theme here, the company is focusing on this. So just maybe 2 years ago, we would probably be much broader in our fishing net with marketing. We would be much broader with sales, and this has changed. So right now, we are hyperfocused when it comes to every function in the company, even on our road maps, to creating more and more value to that segment. That segment is really important to us. And I think it's very important to the SMB space because when you look even at the GMV, the total GMV, it's hyper concentrated into the more established. And so because we are doing suppliers, we're doing payments. For us, it's just -- it's just going to continue to be the focus as we go forward. And so what we are hoping is that as we continue to focus on that segment, we will see the numbers in the segments that matter do better for like to be. Yes. So I don't know how much more do you want that. Again, what is really great for us and when we look internally is we are attracting more of the established. We are looking at churn. The churn is decreasing in that front. When we look at payments attached. We're now focusing more and more. And even when we're looking at up selling the base, there's a lot of initiatives internally around getting the more established customers. And I think, finally, what you can expect is with what we're doing with suppliers and verticalization here, you can expect us to see better attach rates as we go forward and better close rates because we'll be helped by the brands and suppliers within those industries to sell. So yes, feeling good about the strategy and very happy with the results on that front and with the progress with the more established merchants.

Okay. Great to hear. And maybe just a related follow-up. So when you look at really the marketing and advertising budget, has it been fully recalibrated, which I imagine, involves a shift from digital and performance more so towards outbound and field sales and that type of thing. Has it been fully recalibrated? Or is that something that will continue maybe to shift as we exit fiscal '23 and go into fiscal '24?

Yes. So we are in the midst. We just hired a new CMO, and that is probably her #1 focus today is to try and recalibrate even you'll see updates on the messaging. But I think just to be clear, more established SMBs for Lightspeed doesn't mean field sales. The majority of our motion is still going to be inbound is going to be marketing led and is going to be -- I mean, the majority of our deals are still going to be closed with Zoom and onboarded with Zoom. It's -- and I think that's what's very exciting to Lightspeed is that even though these are much more established merchants, and you look at the cohorts and they're much more profitable. The good news is the cost of acquisition is very similar and most of it is done inbound and with a recipe that we understand very well.

Your next question is from the line of Raimo Lenschow with Barclays.

Obviously, you can only control what you can control in this environment, but can you talk a little bit about the churn levels on the lower end? Is it just what we're seeing now? Is that just kind of you deemphasizing a little bit? Or do you see elevated churn coming from the recession already? And how do you see that playing out?

I think maybe just overall churn for the company is in line. And so there's no major changes there. But what we are continuing to see, and we started exposing this, is we are seeing very much higher levels of churn in the lower end. And under 200,000, that's really -- I think, if I remember correctly, was 84% of our churn coming from under $200,000, whereas if you go up and as you go to the 500 plus and 1 million plus, that's where your churn really becomes almost inexistent, and that's because there is no business failure.

Raimo, if I can just add on to that. JP used the fishing net analogy when you -- when that net isn't cast is why to catch that cohort of customer quite as much as we're now focused less on. You're not replacing that cohort in that churn as much as we would have in the past. So you're seeing it come through a little more. Does that make sense?

Yes. Okay. Yes. No, makes sense. And then one follow-up on the -- so you adjusted the cost base now you're adjusting your program. Like how long will it -- like what do you anticipate like in terms of the impact that will have on the organization in terms of people in the right positions, people with the organization settling down? Is that part of your thinking as well? And when do you think we kind of done with that?

Yes. So first of all, as you know, we did a big restructure and the goal of this restructure was to really remove a lot of management, remove a lot of overhead, become much leaner and also focusing on the right segment of customers. And so there's a number of initiatives that we now narrow to, okay, now we know this is what we're going after. What are we doing that is not in this segment that makes no sense. What part of our org chart has people working on this segment that is not vital to us. So I think highest level, we are going to be automating as much as possible for our existing smaller customers, and we're going to focus our people, focus our attention on in the segments that matter for us. So it is a journey, and we started the journey at the beginning of the year. We are now well progressed with this. But I think in my mind and that's the only way forward is to look at where is it profitable? And then you start digging there, and you remove the nice-to-have and you just focus on the must-have. The real answer is there. And so just a simple example is if I know that 50% of my customers are the more established, that means instead of having all my support agents just focus on every customer, I'm going to always privilege my highest GMV customers. When leads come in and they are under 200 and we know that, we we'll probably actually not even try to serve them and not onboard them. So I think we need to just remain hyper-focused. And as I said, for me, the store counts are not the driver. The driver is for every dollar of marketing and every dollar of spend, what is my return. And that's the only way for it. And so as we go forward, we're hoping to get better and better numbers in the more established and we're hoping that the entire company is just going to be focused on that.