Otello Corporation ASA (OTEC) Earnings Call Transcript & Summary

Good morning. Welcome to Otello Corporation's Q1 presentation. Today's agenda, I will do an executive summary, follow up an operational review. Then our CFO, Petter Lade, will do a financial review. And at the end, we have time for some Q&As. Executive summary. Revenue came in at $5.7 million, up from $51.5 million, equal to 8.2%. Adjusted EBITDA, $2.6 million, up from $1.4 million, 85%, though on low absolute numbers. Both AdColony and Bemobi had a good start to the year. They delivered above the guided 10% revenue growth in Q1. Adjusted EBITDA for both AdColony and Bemobi was up compared to same quarter last year. We saw strong operating cash flow in the quarter, $6.6 million, and positive free cash flow for the quarter. Some COVID-19 impact is expected in Q2 2020, but we are keeping the full guidance going forward. Operational review, we start with AdColony. Revenue growth year-on-year was 12%, could have been more if we have not seen negative impact on Brand spend from COVID-19 in March. However, some of the negative impact of Brand was -- got help from Performance, which is mainly driven by Games, which is up during COVID-19. Very strong programmatic revenue in the quarter, 130% growth compared to the same quarter last year. On the cost side, we are taking some cost initiatives in April. We are basically merging demand sides of Brand and Performance. This basically means that we are -- we will just have one sales team led by the Brand leaders we have today. In connection with this merging on the demand side, then we're also centralizing an ad operation and support service hub in Istanbul. And this will basically give savings around $1 million per quarter going forward. If we talk about the COVID-19 impact on AdColony, then we are still expecting, despite COVID-19, a 10% revenue growth in 2020 versus 2019. The best way to see the impact is probably to look at the April we just finished on revenue. April 2020 revenue was flat versus March 2020. And if we compare April this year with April last year, then it's slightly up. This is a relatively good performance if we compare ourselves with the rest of the industry. If we look at the biggest networks in the world, the leading companies, they have basically reported that April 2020 is down 15%, 20% compared to March, and they are flat versus April last year. So where they are down 15%, 20% against March, we are flat. And where they are flat versus April last year, we are up. So we're doing relatively better than the industry. I think there are 2 main reasons for that. Number one is that we have both a Performance and a Brand business, Brand spend due to cancellations and campaigns being paused when COVID-19 started. Then Performance has been up because people are more on the phones, and they're playing more games when they're staying at home. So the fact that we have a balanced business with the Performance and the Brand business has helped us. And the second reason is probably that if we compare ourselves with the biggest networks in the world, then half of their spend is probably coming from the SMB market, small businesses, medium-size businesses. In AdColony, we're probably more focused on the leading brands, the biggest brands in the world. And we have seen, particularly in North America, that they do not cut out all the spends. And one of the areas where they open up first is mobile video, and we have seen that we are the leaders there. We have been turned on quite quickly when it comes to campaigns we have received from the biggest brands in our network. I think, also, we are quite certain that when it comes to COVID-19 in AdColony, then we have the worst part behind us. We got massive numbers of campaign cancellations in March. But since then, we have got more and more new campaigns, and campaigns which was paused has been turned on again. So we think when it comes to cancellations of campaigns, et cetera, in connection with COVID-19 in North America, then that's behind us. Going forward, and if we take the new cost initiatives into account, then the free cash flow breakeven at AdColony will be below $50 million in quarterly revenue. And when it comes to Q2, in addition to the cost initiatives I mentioned before, we have also made some cost initiatives on bonuses, et cetera, due to COVID-19 simply in order to make sure that we will have a positive EBITDA for Q2. So we are certain that given what we see in COVID-19 and how we see the development in the quarter, that we will have -- despite the negative impact from COVID-19, we will have a positive EBITDA for AdColony in Q2. Let's take a look at the different businesses in AdColony. We start with the Brand business. Very good growth year-on-year in the quarter, up 36% Q1 this year compared to last year. Particularly, programmatic is continuing to do really well, up 136% to almost $10 million in revenue. So this is simply just showing that we are succeeding with our strategy to continue to work really close with agencies, but in parallel, at the same time, make sure that the biggest brand we're working with in North America are also starting to buy programmatic from our own Brand programmatic exchange. So that's going really well. This is also interesting to note that we had our first quarter in Brand where we had year-on-year growth in Q4 last year with 20%, and now we are following that up with 30% year-on-year growth in Q1 2020. Brand performance is down in the quarter. This is mainly due to some COVID-19-related cancellations in the retail sector in North America. Just to show the impact of COVID-19 on the Brand spend in March, you see here that mid-March we had a big drop in revenue simply due to cancellations. Since then, they have been -- that has improved. But if we didn't have this in March, we believe that we would actually be on a pace for 50% year-on-year growth in the Brand business. So let's take a look at EMEA and LATAM. Very good development there, 45% revenue increase compared to Q1 2019, and this increase is coming from all the main product revenue sources, Instant -- AdColony Instant-Play, LinkedIn and also Spotify. Going forward, our focus is to -- on AdColony Instant-Play is to replicate what we have successfully done in North America to move our customers to programmatic -- to our programmatic exchange. So a lot of work is going on there, and we also see some good progress on moving customers to programmatic. We continue to work via the partner model in EMEA and LATAM. And we have signed up new resellers in France and Poland, which we hope will increase the revenue in these countries. On the LinkedIn side, we are continuing good growth, getting help from the self-service solution which was introduced last year. And also, going forward, we think we can drive incremental revenue from some new ad formats LinkedIn is launching. On Spotify side, we are doing well in Greece and in Turkey. And we are hoping, this year, we can expand this business to other emerging markets. APAC revenue was flat year-on-year. This is due to the impact from COVID-19. It hit us quite early in the quarter in APAC, but we kept margins at 50%, which is positive. Programmatic is almost half of our business in Asia already, and it also grew 13% compared to last year. We have a lot of focus this year in APAC on, let's say, more mature markets like Japan, Australia, New Zealand, Korea, and we're starting to see positive momentum in Japan and also Australia. If we look at the global Performance and publishing business, as you know, this has been a very, very difficult business for us over the last few years. So we ended up revenue on $13.9 million. It's certainly not the level where we want to be. But what was positive was that we had growth, 8.5%, from Q4 in 2019. And this is actually the first time since Q3 2017 where we see a sequential quarter-on-quarter growth. This is mainly coming from some new segments where we have a growth team that's been very focusing on the segment casual games, hyper-casual games has -- we have had good development there. In general, we also see that the network has had a good KPI development. We saw a 12.5% increase in impression volume on the platform. And also number of uniques on the platform was up 27%. So it's also been quite some while before we have seen a positive development of these KPIs on the platform. So it's, of course, a bit early to conclude too much on this growth we saw from Q4 to Q1, but we are hoping that this could be a turning point for our Performance business. If we compare to Brand, then we had our first good quarter in Q1 2019, so 1 year ago. And since then, we have had 5 consecutive very strong quarters in Brand. So we're hoping that we can see the same development in Performance going forward as we have seen in Brand in the last 5, 6 quarters. There's 2 reasons that give us hope on that. Number one is that we have now our new data science team in Poland up and running. We have spent almost 8, 9 months on that, and we're starting to see good results from their models. Very positive impact on install rates and ROAS, return on ad spend. And we hope this can really help us to drive better data science models on the platform going forward. Another reason is the growth team in Turkey. We have a very hungry team looking for new pubs on the platform. They have been working now 6, 7 months, and we're starting to see really good results from that. If you look at this slide here, you can see some of the new games that were added to the SDK on our platform. So we now have 50 of the top 100 trending apps on the AdColony SDK. So it's been a while since we have seen an increase in number of pubs on the platform. So the work from the growth team in Turkey is starting to pay off. So we hope that the data science team in Poland, the growth team in Turkey, the changes we are doing on the sales side can help us to continue the development we saw in the quarter compared to the last quarter. But we also need to see how much positive effect we are getting from the, let's say, COVID-19 where people are staying at home and they are more -- which has helped the gaming and the Performance segment to improve. So when COVID-19 is over, we'll have to see if this increase will stay or it will decrease again. So -- but we are starting to be a bit more positive about the Performance business particularly because we, for the first time, saw sequential quarter-on-quarter growth. So let's move to Bemobi. In Bemobi, we have -- the strategy is quite clear. We have 2 pillars for sustainable, profitable growth in these emerging markets we're operating in. And number one pillar is our portfolio of subscription services we have, what we call Apps Club services. We have different categories there, anything from games to Kids Club, education and health, security. And then the other pillar is our distribution channels where we have different channels, including our own channels. And this is basically -- that makes Bemobi unique is basically what makes Bemobi -- that makes the company scale going forward. So if we look at the #1 pillar, which is subscription services, then obviously, our Apps Club family is our core product. We started with Games Club. Now we have Kids Club, and we have basically in -- particularly in Brazil, succeeded on many other services like education, health, security, et cetera. And now we are moving these also to international. We are also having some stand-alone subscription apps where we distribute apps for other brands like TRUECALLER, busuu, and we basically are the company who distribute these products in emerging markets in our markets. And then finally, we have launched with the acquisition of Novitech for -- like 6 months ago, we started to launch new voice and financial services in Brazil, and this has been a really good development so far. If you look at a little bit on our channels, which is really what makes us unique, then the way it works is that when we launch with a new carrier, we also make sure that we launch in their channels through SMS, other kind of app push notifications campaigns. In addition, we have spent the last 2 years to really work with some, let's say, paid online partners. We're basically partnering with leading apps and web properties in our markets to promote the different services. And this is a little bit trial and error in the beginning, but after doing this for 2 years, we now have a really good partner network, where we can access distribution channels with high-quality users. And then finally, the really strategic part of our distribution strategy is our co-owned channels with mobile carriers. The no credit/no data web portals is something we have done for many years. We are now live with 18 carriers. There's 4 in LATAM and 14 international. And this basically a portal where the carrier will send users to this portal when they're out of data. And half of the real estate on this portal is core products from the carriers, and then the other half of the real estate is Bemobi services. We have also launched a new portal based on our voice products. It's called no credit voice portal. It basically -- if someone -- prepaid users is on the phone and he's running out of voice credits, then we give the user an opportunity to finish the call by buying online while being on the phone, a new voice package. And then next time, the user will top up his account, then we will deduct the money from the campaign he has bought. So this is -- has been a big success for us. We are live with the 4 leading operators in Brazil. And we have also done a lot of meetings, and we've made very good progress international on this product. COVID-19 has been a little bit negative here because it's hard to arrange meetings. It's hard to arrange testing. There's much more restriction on the network to test our new products. So we expect this distribution internationally to accelerate, particularly when COVID-19 and the lockdown is over. If you look at the revenue and adjusted EBITDA in the quarter, then in local currency, we had a very good development. Revenue came in at $14.8 million, up from $12.8 million, which is 16% increase. On EBITDA, it was up from -- up to $6 million from $5 million, a 20% increase. Currency was tough in the quarter. Converted to dollars, we did $13 million, up 2% from $12.8 million. EBITDA, $5.1 million, up from $5 million, 2% growth. So we had a lot of headwind on currency on the Brazilian reals against the dollar in the quarter. But good underlying growth in local currency. On the subscriber side, we had good growth in the quarter as well. Total number of subscribers is now up to 35.4 million, which is up 9.4 compared to last year. LATAM up with 5.5 million, particularly driven by our new voice and financial services subscribers. International, up 3.9 million, which is due to the global rollout of the traditional Apps Club services. Despite we now are live with 69 operators globally and we have 35 million users, then we are only serving a very small part of the addressable market for these operators, actually under 2%. So big potential upside there. When it comes to the channel mix in the quarter, it was quite healthy. Our owned -- co-owned channels was 32%, which is an acceptable part. Operators was a bit down, and paids went up from 56% to 64%. And this is simply due to that we have some really good partners there. And when it's working and scaling, then we put more money into these channels. Also, a new agreement with Opera Mini, where it's more incentivized, hence giving Opera a motivation incentive to give us more traffic and higher-quality traffic. And so far, that's working really well. We hope that we can launch another 2 for no data/no credit portal agreements in the next 4 to 6 months. So all in all, we are happy with the development, particularly that we now have established voice - new voice credit portals with 4 Brazilian operators, and it's going well. And also, we are really excited about this year to take more of the successful application from the Brazilian market and then taking them international and replicate the success we have seen in Brazil. So this is a focus going forward. When it comes to the Bemobi IPO, we are still aiming to carry out a separate listing of Bemobi. Our -- in the last 3 to 6 months, we have done quite a number of road shows in North America but also in LATAM, in Brazil. And right now, it seems like Brazil is the strongest potential listing venue for Bemobi. However, due to COVID-19, these potential IPO plans has been temporarily -- be on hold until the market will open up again and be more supportive. And the way we look at that is that as soon as the market is ready, we will also make sure Bemobi is ready to list if we can achieve good listing. The currency was strongly affecting Bemobi in the quarter. Brazilian reals lost against the dollars, almost over 35%. So that was working against us in the quarter. When it comes to Bemobi and COVID-19 impact, then it's -- compared to AdColony, it's a bit more uncertain. In order to understand the impact, it's important to understand the background in the markets we operate in. Bemobi's revenue rely heavily on mobile lower-income prepaid users in emerging markets. And many of these markets, they only started to see the impact in late March, beginning of April. And in these emerging markets, then, let's say, unauthorized or informal work represents often half of the economy in the population. And that basically means that many of our users, they're very impacted by the lockdown because they will basically not have income, and there is not the same welfare programs in these countries as we're used to in the Western world. So what we have seen from the carriers which we work together with is that they have seen a reduction in their prepaid revenue of 25% to 35%. And this is simply due to the limited income of a big part of their user base but also to the fact that many users in these markets do not have credit cards. And then the only way to top up their mobile phones is to go to shops, and these shops are closed. So it's simply difficult for people to top up their data accounts. So this come in addition to the fact that when these -- a big part of these users are -- have limited income, then the basic needs they spend money on is not necessary data on the phone but more maybe food, electricity, et cetera. So, so far, the carriers in these markets have seen a big impact. We have not seen the same impact on Bemobi, where they're down 25% to 35% and Bemobi has only been down 5% to 10% if we compare, for example, April with March. So at the same time, we estimate the impact from COVID-19 to be around 10%. We are monitoring this development very closely. But I think it's important to mention that we think we will have -- that we are really well positioned to capture a very positive rebound as soon as the lockdown is over. As soon as the shops open up and people has a chance to top up the account, it will have a very positive impact on Bemobi. So all in all, 10% impact on Bemobi, but we think we can bounce back really quickly. And it's good to see that we have not been hit in the same hard way as many carriers has been. So then move from Bemobi to Opera TV. There's no big news on Opera TV. The court case was postponed in March due to COVID-19 and is now rescheduled for the first week of October 2020. This ends my presentation and give the word to Petter Lade.

Thank you, Lars, and good morning. So let me take you through the numbers for the quarter. So obviously, as Lars said, we're pleased with Q1. We delivered revenue growth of 8% versus last year. FX adjusted, this would have been a revenue growth of 12%, ahead of our guidance for both AdColony and Bemobi. Look at the cost side. While revenue grew 8%, which would have been 12%, expenses only grew by 4%. And the only real increase in expenses was linked to revenue share costs and publisher payouts, again, closer-linked with our revenue growth. So the combination of that leads to an increase in adjusted EBITDA, which nearly doubled, although from a low number last year. We also had a very large financial gain in the quarter. This is linked to FX. We are a dollar company, so strong dollar tend to prop up our P&L. So that swung us to a profit of $8.4 million in the quarter compared to a loss of $9.8 million last year. If you look at the trend, we've clearly seen improvement over the last 4 quarters. Keep in mind that AdColony in particular, where we have the vast majority of our revenue, is a very seasonal business. So the right quarter to compare Q1 with is Q1 last year. And we saw solid growth from Q1 '19 to Q1 '20. At the same time, we've kept our OpEx base very stable. We do this while we, at the same time, are investing into our people and to products. And finally, on adjusted EBITDA. This has also been moving up very nicely last year. And we start the year off better than last year, and we continue to see further improvement as we move through 2020. Digging into AdColony. AdColony had another good quarter, 12% revenue growth from last year, particularly 2 strong points in the quarter. First of all, programmatic business was up from about $4 million to nearly $10 million in the quarter, 130% revenue growth, very scalable, very profitable part of our business. And as Lars said, we've been able to move customers over to spend programmatically, which is very good for our bottom line. The second positive thing is the Performance business. After 9 quarters in a row with sequential decline, we actually saw a revenue uptick from Q4 into Q1. Some, of course, is benefit from COVID-19, we have -- where people are staying at home, people playing games. But underlying, we're also seeing -- we're seeing a healthy trend that we hope will continue post the pandemic. On the OpEx, as you can see, this is very flat. But what we are doing on the OpEx side is actually investing quite a lot. If we look at headcount in Q1 this year compared to headcount a year ago, we actually grew by 46 people. So from around 350 people to close to 400 people. So we're able to do this because we are, at the same time, moving people from a higher-cost location to a lower-cost location, such as Istanbul. And by moving the way we deliver ads to programmatic and reducing the costs on our back-end services, we're able to take out costs so we can reinvest into people, into tech, into product, which will give us a greater capability to deliver revenue going forward. And the same is for the merging of the Brand and Performance delivery organization. Again, it's the tweaks that we do that should enable us to deliver more revenue instead of less going forward. Gross margin has been very, very stable in the 34% to 35% range. This is a range that we expect to be able to deliver on going forward. And finally, on adjusted EBITDA. It's negative for the quarter, which we're never going to be happy with. But it's still an improvement -- significant improvement over last year, and we expect to be back in black in Q2 this year. For Bemobi, Q1 was another strong quarter. We delivered, again, revenue growth over last year. But this was, as Lars said, heavily impacted by FX. So the $13 million in revenue would have been $14.8 million had FX rates not moved. And this is particularly the Brazilian reals versus the dollar that weakened in the quarter. But underlying, again, a very -- a continuation of a healthy trend that we've seen for quite some time. On the OpEx side, that's relatively stable, again, adjusted for FX. And we built an organization that we believe is ready to scale, just taking the new services that we have, not only in Brazil and Latin America but also pushing them globally. Clearly, this is somewhat delayed due to COVID-19 because we can't really have a lot of customer meetings. We can't roll out services into the network. But we have the tech, we have the people and product to be able to deliver that once things normalize. On gross margin. That has been moving up quite a bit from the mid-60s to over 70% in the last couple of quarters. What really drives the gross margin is the mix of channels that we use, the mix of services that we sell and the geographical mix. So there's going to be a little bit up and down here as that changes from quarter-to-quarter. But kind of the -- in the high 60s to the low 70s gross margin, that we believe is a sustainable level. EBITDA grew from $5 million to $5.1 million in the quarter, so a growth of 2% but that would have been 20% had it not been for the adverse FX impact. Over to cash flow. We grew our cash position in the quarter. We are very, very happy with the operating cash flow, $6.6 million. This is due to strong Q4 in both AdColony and Bemobi, which then has a delayed effect. So we collect a lot of that money now in Q1. And Q1 itself was also positive and better than we expected. A good cash collection is always encouraging to see in the midst of a pandemic. And we also had positive free cash flow for the quarter, so that's something that we'd like to see. We -- if we look at the financing activities, which increased our cash position, we drew down $10 million on our RCF in the quarter. This was partly offset by lease obligation and share repurchases of $0.4 million that we did. The reason we do it is just to have ample cash when we go into an uncertain world. And also, we have quite a bit of cash in different -- in our different markets. And over time, we expect to be able to take this cash home, and then we'll be able to reduce the RCF. The cash that we have outside of USD decreased in value in Q1 is really -- the majority of this is cash that we have in Brazil. Bemobi is generating a lot of cash. And that cash, most of it, sits in Brazil. The value of that cash decreased in dollar terms in the quarter. Of course, had we'd reported in NOK, 90% of this effect would not have been there. On the overall financial position, we're very comfortable where we are. We are -- find ourselves in a position where we have net cash and a very healthy balance sheet. And then finally, over to the outlook, the most exciting part of the presentation. So let me start with AdColony. So Lars has been through the details and the drivers why we're doing better than the market. We see this as continuing. We had a good start in April, also a good start in May. We see that we have some COVID-19 impact but probably a lot less than our peers. So we are, for sure, gaining market share. We see that our Q2 revenue would be relatively flat compared to last year. We also expect our gross margin to be flat. We're doing more programmatic revenue, which is slightly lower than our average margin, but at the same time, we're now seeing improvement in our Performance margin, which has been in the high teens and is now in the mid-20s. So that is encouraging and also a testament to the beginning, hopefully, of a turnaround in the Performance business. If we look at our full year numbers. Despite what's going on in the world, we keep our guidance. After the first quarter, we were ahead. After the second quarter, we're probably going to be slightly behind, but we are seeing a very positive momentum. So we're keeping the guidance for the year with about 10% revenue growth. We expect gross margin to be flat and overall OpEx to be flat. Just for Q2, we see OpEx going down slightly because some of the initiatives that we do. And also, we do, of course, spend less on travel, on marketing, on events and also on bonuses in a time like now. And then over to Bemobi. Very much the same story. The Q1 was strong. It was better than we expected. So we are kind of ahead of where we expected to be after the first quarter. Going into Q2, has started very similar to Q2 last year. So we believe that we're going to be able to deliver the same top and bottom line, give or take, as we did last year. So there's some COVID-19 impact, but all it does is basically take away the growth that we would have seen had it not been for the pandemic. And the same rationale as for AdColony, we have guided for a full year top line growth of 10% and bottom line growth of 10%. And after first quarter, we are ahead. After second quarter, we're probably going to be slightly behind. But we know that both for AdColony and Bemobi, these are businesses that tend to recoup really fast. We saw, on AdColony, quick actions by advertisers. But also coming back, we expect the same thing to happen on Bemobi with consumers. Once they have their jobs and their money back, they're going to go back to their usual spending patterns. So that concludes the presentation. We have a Q&A. And if you follow it on the webcast, you'll see that there's a link that enables you to ask questions. We've been getting quite a few of them already. So as long as you ask questions, we're going to answer them.

So let me start with the first one. It's coming from the DNB analyst, Christoffer Bjørnsen. The question is why we are continuing to do cost cuts in AdColony when the business is obviously back to a double-digit revenue growth path.

Well, so it has been a very big turnaround in AdColony over the last 2 years. I think our OpEx budget for 2017 was $185 million. And now our OpEx budget is below $60 million. So you can imagine, it's been a very challenging time. But at the same time, also, we feel very good about this turnaround. The entire leadership team has been with AdColony for many years. So we kind of decided to solve this internally. And we are getting to a cost level which is efficient for the company. The change we did in Performance in April is something that's quite natural to do because we had a structure in the Performance team where we had people very close to the different pubs globally. But at the same time, we have, for the last 6, 8 months, been very, very focusing on a growth team working out of Turkey. A global growth team. And also, we see some synergies not to have demand people or salespeople doing separate Performance and separate Brand. So what we're doing here is basically just to basically centralize or support an all-growth team in our centralized support and hosting center in Turkey. And then we are getting synergies out from strengthening the one sales team approach. It's something we could have done earlier, but we decided to make sure that the growth team was working really well and also that the Brand people were ready to take over the sales also from Performance. So this is a very planned operation, and it's mainly driven by how can we serve our customers in the best way and secondary costs.

And just to add to what Lars said, we did actually increase headcount. We're up 46 people from a year ago. But we do that with a lot cheaper, so it's actually a lower expense. So our -- what's important here is that our capability to deliver revenue is not something we want to reduce. There's another question linked to -- also to somewhat the same. The question is what are we seeing so far in April and May for AdColony and Bemobi that makes us keep the guidance for the year. And I think we -- both me and Lars have addressed that partly. But the -- what we saw on AdColony was a pretty quick pause once the kind of pandemic hit. But what we've seen so far in April is that we don't get any more cancellations and we see customers are getting back to spend again. And I think this will be linked very much to the fact when U.S. start to open up again, when Olive Garden, when BestBuy when Starbucks, when they're opening their shops again, we expect their spend to come back, and we've seen some of that happen already. With Bemobi, it was hit later, so it didn't really impact Q1. But what we've seen so far in April is relatively stable. We see that we do better than our peers, and that gives us comfort for not only the quarter but also the full year. Let's see. We have one more question from Christoffer, and that's for you, Lars. You can take that. It's the -- what we've done on the supply side and what the result of that work has been on AdColony.

Yes. So basically, this is a little bit the question I answered before that when it comes to working with supply partners on the Performance business, it's all about delivering results, meaning that we have traditional -- in the old days, been very close to them, visited the pubs with local people, et cetera. What matters is just the results you deliver, right? So we are basically just making sure that we have centralized resources, which works more efficient. Where we have -- we only need local people if there's language issues, mainly in countries like China, Japan, et cetera. Otherwise, it's really all about just making sure that you deliver on the campaigns you get. If you deliver well, then you'll get bigger campaigns next month. So it's just more efficient for us to centralize people. This is something we have done already. And we have seen good results on new supply, and this is fully due to the growth team we have working out of Turkey. So we're just going all in on that. There was a question on supply. Then there was a question on the sales side. It's the same. It's all about the campaigns you deliver. So we think that we can be more efficient if we have one sales team. And this will, in the future, be led by the Brand responsible globally. Then there is a question about -- there was a -- question is there was a significant year-on-year improvement in Vewd's EBIT despite a flat year-on-year development in revenues. Can you reflect on that?" We are a minority shareholder in Vewd, so we have very limited access to what's going on in this company. But they did change a lot of their accounting and also -- and they -- in how they capitalize their R&D, et cetera. So I think that's the main reason for the change on the bottom line.

Okay. Then we have one question from a private investor on FX. So the question is if we do anything on FX hedging and such. We've not really looked into it. We run businesses that are, for AdColony, predominantly USD, which is the same currency we report in. And for Bemobi, we run a business that has both the revenue and cost in the same currency and with very high gross margins. So we don't see a need to hedge the FX. And of course, by hedging, it can go both ways. So we're not currently looking into that. But what we are looking into is to make sure we have the vast majority of our cash back in dollars as soon as possible. So that's something that will change going forward. And also, an agreement has been struck with Bemobi to make sure that we have full autonomy of their cash and can take everything back into USD.

Okay. We're checking if there are any more questions.

That looks to be it, thank you all for joining.