Prosus N.V. (PRX.AS) Earnings Call Transcript & Summary

Good day, ladies and Gentlemen, and welcome to the Prosus Edtech Deep Dive conference. [Operator Instructions] Please also note that this event is being recorded. I would now like to turn the conference over to Eoin Ryan. Please go ahead, sir.

Thanks, Chris, and good afternoon, everybody, and thanks for joining us for the fourth call in the series of deep-dive calls we're doing to help drive a better understanding of our businesses and the key growth initiatives within them. Today, we're moving to the Edtech segment to take a deeper look at our thoughts on the sector there more broadly and the stack overflow more specifically. So on the call with me today, I have Larry, our head -- our CEO of Edtech and Food segments; and I have Prashanth, the CEO of Stack Overflow. The team will take you through a quick presentation. And as always, we'll open it up for Q&A. And as a reminder, the deck that we're going through for this presentation is available on the IR section of the Prosus website. And with that, I will turn it over to Larry. Larry?

Thanks, Eoin. Let me kick us off. So starting with Slide 1, the -- you see here the -- just the global education opportunity is absolutely massive. It's a large global category exposed to some really powerful secular tailwinds, including continuing population growth in emerging markets, which is a lot of the wave that you see here and also improving education levels worldwide. And last, this trend of workforce reskilling and upskilling that's on the back of global digital transformation. And on this slide, you see how the demand for education will flow through to specific subsectors. And at the same time, that demand is met with clear pain points in traditional brick-and-mortar education that tell us that the existing structures just won't be able to address this wave of demand. Specifically, we can point to a few things that are not working well in the existing environment. Rapidly rising education costs with no guaranteed outcomes, jobs or certainty of returns post-graduation, not to mention geographic constraints and access as well as pretty uneven quality in education staff and content and perhaps the largest consumer pain point from what we hear is very limited personalization and customization. And in short, we believe the physical institutions in the West won't be able to scale to meet the global demand for education years to come, and that's part of the reason why we find this sector so compelling. And against this backdrop, we think technology holds the promise of addressing those structural issues. If you shift to Slide 2, global education spending is projected to reach $7.4 trillion by 2025. And that's spread across 4 major segments, pre-K, K-12, higher ed and workforce. By 2025, digital penetration is only projected to be about 5.5%. So there's a lot of runway for Edtech to grow. If you compare that 5.5% to e-commerce and food delivery, sectors where, certainly, we spend a lot of time as well, those are each expected to be in the mid-20% online penetration by 2025. So again, you see here, there's a lot of room for the sector to transition online. Now moving to Slide 3. Edtech fits really well in the process investment philosophy of addressing significant long-term societal needs through technology. We identified the Edtech opportunity relatively early, started researching sector in 2014 and made our first investments in early 2016. Here, we chose consumer-facing platforms with business models we knew well, like Udemy, which happened to be a marketplace focused on education, Brainly, a social network for learning and Codecademy, a consumer-facing platform for coding education. Based on our learnings over the last 8 years, we doubled down on in Edtech in the last couple of years with a specific focus on workforce learning. We acquired Stack Overflow, invested in Skillsoft, GoodHabitz and Eruditus, among some of the others featured on the slide. All told, we've invested over $3.8 billion in total and established ourselves as one of the leading Edtech investors globally. And our long-term vision for the sector, this is one that I get asked a lot about how do we think this comes together is to build and scale a portfolio of best-of-breed companies with a focus on workforce while also helping to scale leaders in K-12 learning. Shifting to Slide 4. Edtech has certainly evolved over the years. Many of us on the call can probably remember taking a course at a local Marriott 20 years ago or accessing a static web content posted by the instructor at university to supplement a live cast, that's what we called Edtech 1.0. It's still relevant today, but of diminishing importance to the sector. Over time, and shifting to Edtech 2.0, Edtech business has started to target consumers directly. Consumers demanded a better experience that they're getting from version 1. More engaging content unlocked a large global user base and help Edtech players build mainstream brand awareness. Still, most of the students took sort of a topic specific single course only, and monetization is usually tied to those one-off courses. As a result, user and revenue retention remains a challenge. And now many of the tech companies have emerged, they bet on lifelong learning rather than one-off courses, a deeper understanding of the consumer in that environment unlocks a lot of lifetime value. And as a result, monetization is shifting towards recurrent subscription and content has improved to include a mix of live user-generated content and asynchronous learning, providing a much more complete and engaging consumer experience. It's important to note that in Edtech, the consumer is often not the payer. And for those who speak to me regularly, I emphasize this a lot. The easiest example just as parents buy for children in K-12, employers are the primary buyer for workforce learning, buying on behalf of their employees. So it creates this interesting dynamic where winners in the space will ultimately need a product that resonates with consumers and also to have a relationship with the enterprise buyers. And it's something that we've seen over the years is very hard for companies to pull that off on a single platform, and we're fortunate to be involved in quite a few of those. And now to my last slide, Slide 5. This is our simplified view of the workforce Edtech ecosystem. We've assembled best-of-breed companies that covers significant portion of what we affectionately call this sandwich. On the top, the B2C of horizontal companies like Stack Overflow and Udemy provide a significant amount of consumer traffic on the back of very asset-light and highly scalable platforms. Both companies have global reach and have tens of millions of users every month. And that B2C audience gives rise to B2B sales, as evidenced in Udemy business and Stack Overflow for Teams. Udemy is a unique business model, combines the network effects and brand affinity of a even vibrant consumer marketplace with the recurring SaaS revenue of Udemy business. And Prashanth will talk about it shortly, but we see a similar opportunity with Stack Overflow's massive community of technologists and developers, helping to drive adoption of their team's product within large enterprises. The middle layer of the sandwich includes specialized content or enabling functionalities, call it the meat of the sandwich. In addition to addressing specific learning needs of consumers, these platforms develop relationships with the enterprise where a real recurring revenue sits. Many of them are increasingly solving the enterprise side through commercial partnerships or M&A. And a good example of this is the recent acquisition of Codecademy by Skillsoft. Codecademy has global reach, global consumer reach and a loyal consumer following, but hasn't fully addressed the enterprise opportunity. Skillsoft can solve that right away as Skillsoft will be able to sell Codecademy through to its enterprise clients. And as a reminder, Skillsoft has deep and long-standing commercial relationships with roughly 75% of the Fortune 1000. And now as I wrap up, I'll briefly touch on the bottom layer of the sandwich. Very few companies, and we're talking just a handful are able to properly sell into the enterprise. Many of tech companies over the 8 years that we've been evolving in the space, will flash Fortune 500 logos on their websites. But when we due diligence, we often find that very few really sell at the C-suite and bring meaningful subscription-based recurring revenue to the table. Skillsoft and Udemy are two of the leaders in that regard. And there really are just a handful of folks that do that at scale. With that as an overall frame, I'll hand over to Prashanth to talk about Stack Overflow. And before I do, I want to briefly describe our excitement about the company and what they're building. Stack's not traditionally considered an Edtech company, but rather as an integral part of the developer workflow. Millions of software developers access the site every day and software developers, other than equity research analysts, of course, are the most compelling work force in the world. These users engage on the Stack platform every day to learn how to do their jobs better by engaging with the community and asking and answering questions. From an Edtech lens, we found over the years that the most engaged learners are the ones that ask questions and that stack is the starting point for many learning opportunities. That made Stack, particularly compelling to us in part because the opportunities that it presents for education. And with that, I will hand over to Prashanth.

Thank you, Larry. And good to connect with all of you today. So I'll kick off with Slide 8. And even before I get started, I think the best way for me to orient your minds, given I'm speaking to a financial audience, is to use a comparison of an analogy. So Stack Overflow is to developers or technologists as Bloomberg data is to finance professionals, right? So finance professionals cannot do without financial data and the most authoritative source of that data is Bloomberg. So very similarly, Stack Overflow is the most authoritative source of the most correct information on every possible technology topic in the world. So with that, Stack Overflow, we were founded on -- in 2008. We're the world's largest platform and community for technologists and software developers. So we've been building into this for the past 13 years or so. And we have a very, very significant impact around the world, as I'll describe here with our scale. But our mission, which is really what motivates all of us is to empower the world to develop technology through collective knowledge. Moving to Slide 9. So as I mentioned, we are the world's largest knowledge base and pretty much every possible technology topic or vertical, including the ones that Larry covered in his Edtech slide, so cloud and AI and ML and data, et cetera, all that knowledge exists on Stack Overflow, right? So the order of approximately 15 million questions and answers on these topics. And this has been built by the community for the community over the past 13 years. And it's sort of a running joke in the industry that pretty much every software developer or technologist always has a tab of stack flow open on their computers. I didn't, in fact, I encourage all of you to check in with any software developers in your respective financial services companies and chances are more than 9 times out of 10, that they've got a tab open on Stack Overflow on their computer. Moving to Slide 10. So just to give you a sense of the significant scale that we operate at. So we have close to 100 million monthly visitors across our 170 websites -- collection websites. That includes approximately 300,000 new monthly sign-ups from around the world, and that number has only been growing over the past 3 to 4 years, and it's really accelerating given where the world is going with technology. And based on our research, and we do a lot of data collection in terms of polls, et cetera, into our community and we've understood that 80% of the world's developers visit Stack Overflow every week. So we are certainly an indispensable part of their workflow on a daily basis. And as I mentioned, significant amount of content, 50 million questions and answers, and that makes us, depending on sort of the rankings that you look at, top 50 websites based on Alexa rankings or if you look at similar web data, that's about a top 200 website. To give you a sense of that 100 million monthly visitors, 70 million of those folks are technologists, software developers, DevOps people, data scientists and you name it, right? And that 70 million, if you compare it to other sort of communities that are out there, for example, GitHub, we're even larger than GitHub. And GitHub is a community that was a code repository platform, a community that was acquired by Microsoft several years ago. So it gives you a sense of scale again. Moving to Slide 11, this would give you a sense of how we are set up in terms of our company. So I just described this community, right? 70 -- 100 million monthly visitors across these websites, and that creates a very significant competitive moat for the company, right? That base, that foundation is very hard to disrupt and it gives us a tremendous vantage point for us to engage with developers and technologists in a very organic and very relevant way. The 2 products or product lines that we have, I should say, the one in the middle that you see here on Slide 11 is our SaaS business model, and that's called Stack Overflow for Teams. And that is a recurring revenue business that was launched in fiscal year 2018 and is really growing very quickly, as I'll describe. And the second business category that we have is -- our advertising business model are focused, the Reach and Relevance business. And that has a series of products, everything from companies, advertising about themselves as great employers to attract developers to work for them, employee branding products, a series of advertising product that allows tech companies to showcase their products and to educate developers and technologists about various technologies that they're launching or iterating on or even the ability to build -- for tech companies to build subcommunities on top of Stack Overflow with our new product called Collectives, which we launched about a year ago. And that is a really powerful and intimate way for companies and technologists and software developers to engage in very real ways. So that's effectively our company. We have a community to recap, and then we have 2 business lines. Stack Overflow for Teams, our SaaS recurring business, and Reach and Relevance, our advertising business. So moving to Slide 12. One of the things that is very interesting about the company and why we're so excited about being part of the Prosus family is that learning is a common thread across our products, whether it's free or paid, right? So when you think about the technologists learning flow, as Larry mentioned, all technical learning starts with a question on Stack Overflow. And as I've mentioned, that's literally what software developers do every day, 80% of them visit the website to ask a question on how do I do this on Amazon Web Services or how do I do this on Microsoft Azure or any of those sort of topics. Then these companies, the Microsofts of the world and Amazons of the world are advertising on Stack Overflow, which is our advertising business so that they can educate and conversely, our technologists can learn about these technologies from our platform and our community in a very organic sense. As you progress down the chain, you can see Collectives, the product that I mentioned, is a product that is focused on generating the subcommunities for companies like the same big large tech providers, and you see several that I'll mention here in a minute, and that allows developers to learn in a much more intimate way about product launches and announcements, et cetera, and really sort of have a very close iterative conversation or engagement with these companies. As we move along the chain, employer branding allows developers and technologists to learn about companies that are very attractive to workflow. And then once they've actually got the job, then they leverage Stack Overflow for Teams, which is all about learning through collaboration in the workplace, as I'll describe here. So learning and Edtech is sort of implicit in what we actually do across our current products. And we're very excited also to innovate on new Edtech products in the future in collaboration with Prosus. So going to Slide 13. I'm now going to deep dive into our Stack Overflow for Team's product. Sorry, to Slide 14. So I speak to several CTOs and CIOs or heads of technology and these leaders every week, right, as part of my job. And they're all concerned about effectively the same topics. And I can summarize them in these 3 categories, attracting and onboarding and retaining top talent. When we look at what's going on in the industry today, we've got about 300,000 tech job listings that are unfilled, massive supply and demand imbalance there because of the Great Resignation and people looking to get re-skilled, et cetera. And with all this focus on hiring and retention, there's just a significant amount of knowledge drain that's happening and there's a real need to retain and reuse knowledge within these dynamic organizations. The second category is boosting team productivity and collaboration. And this is -- all of that, especially this is fueled by the pandemic, but in general, we know that hybrid work or distributed work is here to stay. It's not going anywhere. It's a one-way road, if you will. And tech leaders are desperately looking to establish sustainable ways for their teams to collaborate just beyond a bunch of Zoom calls and a bunch of ChatOps or Slack messages or -- and so on, just flying around in the company. And they need a capability to do that. So they need asynchronous collaboration tools to be able to do that. And the third category is all about accelerating innovation. So most of -- now that we have access as companies and organizations to very amazing building blocks, the cloud and data and ML and DevOps, et cetera, this allows companies to have the -- they have the potential to move really, really fast and iterate, so they can be competitive and respond to customer needs very quickly. So they really need high -- CIOs and CTOs need high-scale ways to align their people within their organizations to adopt these technologies and really drive common policies and rapid and standardized knowledge sharing within their companies to move really quickly. If you move to Slide 15. So Stack Overflow for Teams, our SaaS business, addresses those 3 challenges headfirst, right? And it addresses literally all of those 3 issues in a very, very compelling way. With the platform, reminding you, that's being already used by 100 million visitors a month, as I just described. So what Stack Overflow for Teams is, it's a private version of that public platform, which looks very similar to what's the public platform that's being accessed by 80% of the world's developers. So that's what it looks like on the right, as you can see here. And the value statement, of course, as a result of this is that developer velocity is moving super quickly. People are getting instant and experts' relevant knowledge. They're able to access that knowledge at their fingertips. They're obviously very fast to adopt the product because it's very familiar in terms of the user interface and obviously distracting -- reducing the distractions rather about all the sort of synchronous tools that are floating around the company with -- and Zoom calls, et cetera, reduces that significantly. And breaks down silos and ultimately enables companies to really ramp up new employees or reskill existing employees rapidly. Moving to Slide 16, just to talk about the opportunity in front of us, and we believe it's a massive total addressable market, right? So if you think about the collaboration market, it's about a $10 billion market, the DevOps market, which is sort of the developer tool chain to move very quickly. And that sort of concept itself, that tool set is about $9.4 billion in terms of size and the collaboration market is growing very rapidly. The number of developers are going very rapidly. Everybody wants to become a technologist these days. And if you look on the -- sort of the bubbles on the right, there are on the right. There are 25 million developers in the world based on Evans research. And if you look at the macro bubble around that, it's about 100 million technologists, right? And we certainly serve, as I mentioned in my opening slide, about 70 million of those 100 million technologists across our website. So we still have a great way to go between 70 million and 100 million. But let's not forget that the knowledge workers' bubble, which is about 1 billion people around the world, and these are folks not just software developers but not just data scientists, but also people in finance and legal departments that are writing code to do their work. And it's not -- previously financial analysts used to write Excel macros to do some of that work, right? But it's also not uncommon these days for finance folks to write Python code, as an example. So the lines are blurring between technologists and knowledge workers. So the TAM here is massive. Slide 17, if you move to it, shows the -- sort of the new stack that companies are leveraging to be able to do the things that I just described. right? So you've heard of these categories, of course, with the cloud, with AWS and Microsoft Azure and code hosting with GitHub and developer tools that you see up here, our project management tools or the much familiar real-time ChatOps tools like Slack and Microsoft Teams and Zoom, et cetera, which are highlighted in the blue box. And that, obviously, came to the forefront over the past couple of years. But what is not entirely obvious until Stack Overflow for Teams showed up is that in terms of asynchronous knowledge sharing and true internal community building and knowledge sharing, there isn't a -- there wasn't, I should say, a default tool to be able to do that at scale, until Stack Overflow showed up. What was existing in companies with wickes and just documents of various kinds floating around the company and other sort of less loved platforms to be able to leverage in order to share information at scale. And this is especially true for technologists who are very particular in how they want to be able to share information. [indiscernible] that default and defacto company for company-wide knowledge sharing. If we move to Slide 18, this shows you a little bit of the traction, at least from a qualitative perspective and some quantitative points over the past few years. So you can see here that pretty much -- this is a small sampling of some of our customers in our Stack Overflow for Teams product. And you can see there are some tremendous names here. And I can tell [ that ] in terms of the verticals, we have pretty much every financial institution: insurance companies, investment banks, commercial banks, et cetera, on our Stack Overflow for Teams product. And they're operating at very large scales, 40,000 to 60,000 users each, across their engineering and technologists organization, their product organizations and so on. So I would urge you, if your company or your operational institution is not on Stack Overflow for Teams, I would encourage you and your CIO to look into Stack Overflow for Teams to drive your large-scale technology transformations that you're trying to drive within your organizations. And our sectors that we cover are quite diverse. Beyond financial services, we've got obviously technology, large-scale tech companies like Microsoft that has 100,000 users on our platform or retail companies, some of the world's largest retailers or health care companies and so on. So literally, no industry is immune from the fact that they need this sort of capability to move really quickly. Moving to Slide 19. I want to explain how we go about doing this. Actually, if I could spend another minute on Slide 18, apologies. Just in terms of the metrics. In terms of how fast we are growing. So in fiscal year 2022, we did move pretty quickly, we grew about 68% and our net retention rate, which is obviously a very standard SaaS metric is about 115%. So fairly close to what would be industry standard. And our enterprise ASP or average selling price is about $289,000, which is a very healthy number. And so very, very, I would say, solid foundational SaaS metrics, and I'll speak a little bit more about this, and we're expecting these numbers to even go much higher this year upcoming. So moving back to Slide 19. Just to give you a sense of how we accomplish this, right? And I wanted to sort of describe 4 different examples, a global financial institution. I'm sure it's somebody in -- a company that's in the audience today and then global software provider with a large number of technologists on our platform, or the bottom left, global telecom provider or a global insurance provider. So what we do is we generally -- all of these companies, all of their technologist, as I mentioned, are already using Stack Overflow. So what we enable them to do is to leverage that same platform by having a private version of it because 60%, 70% of what they want to share is private in nature, not to be shared with the full public community. So that's where the value comes in that -- those 3 issues that I mentioned that they're all grappling with our product addresses and we start typically in a singular engineering team or a DevOps team, et cetera, and it expands very rapidly from year-to-year because of the very familiar format, the value that the users are seeing by reducing the number of noise in the company and really being able to reuse knowledge very rapidly and so on. And it really expands very organically year-over-year. So you can see this explosive growth and net retention rate, as I mentioned, is a great measure of showing how the customer is expanding the usage of the product across and it sort of expands not only across functions, but it expands globally in some -- obviously, these global institutions. So it's a very rapid way to grow. Moving to Slide 20. Now I'll do a little bit of a deep dive into our Reach and Relevance business. So let's move to Slide 21. And in there, you will see this is the range of advertising products that we are able to present to customers. And it's everything from banner advertising to more contextually relevant advertising like direct-to-developers or a bunch of sponsorships, so you can sponsor a very specific technology tag on our platform or you can sponsor an entire website, a Stack Exchange website or site sponsorships or sponsor newsletters or ad podcasts, which are all accessed by literally hundreds and thousands, or millions of people, in some cases, and also our blog posts and so on. So all of this creates a tremendous way for technology companies to gain awareness into the developer base -- or developers to be able to understand who these companies are and what they're building in a very organic way because software developers don't really want to be advertised to, but they're very, very open to sort of listening to very contextually relevant advertising, and we believe that we've achieved that balance. What's also exciting about this business that, especially with Edtech, there are plenty of things that we are innovating on or building at the moment that extends what we do on the public platform with our content to learning content. And so you'll see us look at that and explore ways to do that in the coming months. All our -- many Edtech companies advertise on our platform today to showcase their courses, et cetera, to our audience. Moving to Slide 22. This is a view into the product that I mentioned that we launched last year called Collectives, which is -- effectively, they are subcommunities for tech companies like the names that you see on the right here, GitLab or Google Cloud or Intel or Twilio, all of these are customers of ours in this Collectives program and many more that are about to be announced. And you've got people -- in some of these, you've got 20,000, 30,000 users that have joined these subcommunities to engage in a lot more intimate way with these companies to have those companies endorse their answers and endorse them as superusers in the space and the world's best Google Cloud developer, we know who that is because they're in that, Collectives, and that's very powerful for companies and developers to sort of engage very closely. And that gives the companies tremendous market insights and engagement and of course, the developers get recognition for what they're doing and are learning very rapidly about all the innovations that these companies have got going on. Slide 23, as I mentioned earlier, is the -- is our employer branding business, and this is the supply-demand imbalance that you're seeing in the tech hiring landscape these days. And what's very interesting in our research is that 80% of technologists aren't really looking for a new job. And most of them do not want to be approached about new jobs. So what's fascinating is that because Stack Overflow is such an organic place for software developers, it's a great place for companies to showcase themselves as great employers. And that's why it's a very rapidly growing business for us. And also we moved -- this is a newer business for us, which we reimagined, so to speak, because we moved away from a very transactional business, which was a talent job listings business. And that's something that we did over the past couple of years. And we focused and zoned in on this capability because of the insight that I just mentioned around not -- just really organically enabling people to learn about companies showcasing job listings. All right. So I'll spend another one last deep dive on our financials on Slide 24 and then on 25. And this -- I think this is a good summary just in terms of our traction and our momentum, right? So if you look at the chart on the top left, it gives you a sense of the mix that I just have been describing. So our total bookings in fiscal year '21 and fiscal year '22 that just closed in March -- end of March. And so you can see that our Teams business in the blue grew very rapidly and the orange is the consolidation of all the advertising products that I just mentioned. Just to mention up top, the small decline in the orange that you see there is us exiting the talent job listings transactional business because we wanted to make sure that we focused on just advertising and recurring revenue models and our Teams business. So that's really where you see that slight decline. If you -- without that decline, our advertising business is growing close to 30% year-over-year. And so -- and we will continue in that trajection -- trajectory, rather, in the upcoming year. And the bottom chart that you see is our Stack Overflow for Teams business. That's really on a fantastic growth trajectory. And we were -- we only launched this in fiscal year 2018, but as you can see, it cleared close to mid-40s in ARR this past fiscal year. And this upcoming year, we're expecting this business to grow even more rapidly. So it's only gaining traction even and growing faster and faster as time moves on, which is very exciting. The commentary on the right, I'll just sort of summarize a little bit of the investments that we're making across kind of these products. So if you think about Teams, just to mention that at the top, it demonstrates a lot of the hyper growth characteristics that you'd expect the SaaS businesses. So it's a recurring revenue model, which is very powerful. It's got solid net retention rates of 115% because of that land-and-expand motion that I described to you, high enterprise annual selling price or average selling price rather of $289,000. We've closed multiple million-dollar deals just in the past 3 to 4 months just to start out with some of these companies. So those numbers that where we're landing with these companies are only becoming bigger, which is fantastic to see, especially because it's recurring. And all this is being powered by this tremendous secular tailwinds of companies looking to modernize and innovate and really grapple with this distributed workforce and really sort of drive all that cloud transformation initiatives and innovation initiatives going forward. So that's why I think we are sort of at the right place at the right time. Now investments here are really to scale very significantly with sales and marketing and customer success with this business and really both U.S. and international. Just as a quick note, our business is approximately 80% U.S. focused, 20% international. There's a massive opportunity for us for international expansion, especially since our community is global, and our customer base is mostly U.S.-based. So there's huge upside here for us on that topic. And in addition to our sales and marketing investments, we're obviously investing very heavily in our product and with our product-led efforts and bottoms-up adoption and this is all about how you organically get users to adopt the product and really be able to gain -- and give them insights so that they can do that in a very sort of -- in a way that's very value-added and driving also sort of self-serve revenue and influence revenue from our public platform and creating that connective tissue between the public platform and our paid products. So there's a huge opportunity there, and we're putting in several investments there to make sure that happens well. And finally, we're also establishing very large alliances. You'll see us make a very meaningful announcement here in the next 10 days or so with a very large tech provider, which we're very excited about and how we jointly sell into companies together in addition to, of course, Prosus integration. And at the bottom, with Reach and Relevance, a lot of our investment here is to modernize our public platform and we're making a very deliberate and specific effort on the topic this year. And it's to make sure that we can operate at significant scale in the coming years and to welcome not only millions of additional users, but also thousands of additional customers on these sort of -- these platforms. And our ads business, as I mentioned, is growing very nicely, close to about 30%, and that's becoming the preferred destination for technology companies to gain the attention of developers. And of course, our Collectives and Edtech business or those investments are also beginning to show fruit. Collectives, mind you, I just didn't mention this earlier, is also a recurring revenue advertising product. So it's also very, very powerful for us in the context of moving to as much of a recurring model as possible. So customers pay as a platform fee to be able to create their subcommunities. And finally, employer branding, we -- as I mentioned, we've exited that transactional job listings business and we have redefined it to be this employer branding advertising business, which is also growing very, very nicely and close to the -- sort of close to the advertising sort of mean that I just mentioned, so very, very encouraging. One last note on profitability, just to wrap the conversation. We -- as a company, we were profitable in calendar year 2018, 2019 and 2020, which roughly aligns to fiscal year '19, '20 and '21. So we know we can run a very profitable company if we want to. What we are doing at the moment in -- starting this past year, fiscal year 2022, is that we are very specifically investing tens of millions of dollars, and that's a sort of 4- to 5-year program where we want to make sure that we are very deliberately focusing on those technology investments that I mentioned, scaling out our go-to-market efforts on Teams and all our newer sort of products that Collectives in Edtech and all that is a very deliberate motion for us to really think big with the support of our Prosus family, and this is one of the benefits of being part of a long-term [ investment like Prosus ] so that we can really build something massive here and high impact. So we're excited about that. For Teams, by the way, we measure all of the traditional SaaS metrics as you'd imagine, the Rule of 40s and -- which is obviously, for those of you that are not aware, the combination of the growth rate and the profit margin, which needs to be over 40%, so we're nicely tracking towards that outcome. For advertising, it's actually a very high gross margin business and in many ways, subsidizes and funds our teams, investments and business to a degree. And provides fantastic diversification for our products. So we're not sort of a one-trick pony in terms of our product capability, so to give us a tremendous shock absorbers in any environment. And because of this sort of diverse mix of high gross margin advertising and high recurring revenue to the SaaS business and Teams, we're very sort of pleased with sort of that balance and how we're able to really fund our growth and be able to self-accelerate. And I'm also very happy to report, as a final point, that many of the investments that we kicked off on these topics in this past fiscal year 2022 is already paying off in fiscal '23. And we are absolutely outperforming our expectations, as a business, very meaningfully and well ahead of our plan and expect a very strong year. So with that, I'll wrap and we'll take questions.

[Operator Instructions] Our first question is from Miriam Adisa of Morgan Stanley.

Just a few broad questions for me. And firstly, just on the overall Edtech market, given the acceleration that you've seen over the last 2 years, why do you think penetration will only be 5.5% by 2025? How do you think about the trajectory of that, beyond that point? And I guess, near term, how you're thinking about growth post-COVID, as the market normalizes? And secondly, on just the customer base and employers, you mentioned that the paying customers are the employers. Can you give us a bit more insight as to why employers are adopting this, and then also how you think about the barriers to entry in onboarding larger businesses because I think you said that only companies like Skillsoft could actually get into these larger organizations. So what do you see as the barriers to entry and how easy is it to engage with the C-suite of these top enterprises?

Yes. So I'll take those both. And thank you for the questions, Miriam. So I guess, first on why is penetration only 5.5% and the trajectory, I think, the -- we tend to describe this sector as very monolithic. And I think it helps to understand that it -- kind of the subsegment level. But it's -- there's a big part of that penetration that sits tied to the government, specifically in K-12. So that brings some friction to the shift to online. And it was actually part of the reason why, historically, we've been even more careful than we normally would be in picking our investments around K-12 because the -- to [ the surprise ] normally governments tend to move slow. The bigger factor is the thing that I alluded to, where the consumer is not the payer. And I think in the early years of Edtech, there was not enough focus on the consumer needs, and that's part of the reason. That's one of the things that we focused on is we've invested in companies, and I think it's changing now, and that's why we've chosen the platforms that we have. We look for ones that have a good consumer experience and an engaged community along with this ability to unlock the enterprise. And then kind of building on that point to your second question, if you focus on workforce learning, the origins of the space and how you get kind of access to the C-suite, it starts with compliance training. And it's really the -- frankly, it's not the sexy part of education, but it's things like anti-money laundering training and slip and fall training, things like that, that are necessities. So those are things that are just part of good governance of large companies, they needed to have programs and training in place. In many ways, that's the birthright of Edtech at the enterprise level. But then it's increasingly shifting to some of these other areas. And the two big pillars would be, generically speaking, kind of leadership in business and specific to the discussion today, tech and dev. And these are table stakes for retaining employees and why employers are increasingly adopting it. The -- this need to upskill workers and in an increasingly tight labor market consumers expect it, workers expect it. So the winners in this space will ultimately have to address, as you're selling into the C-suite, not just the compliance and not just tech -- or not leadership in business, but offer a comprehensive solution. And sorry, I'm giving a long-winded answer, but how that leads to a moat is you end up as a platform, having a lot of data. Some of it necessary, specifically around compliance, but also you can provide information that allows the employer to understand what their people are learning, but also puts the power in the hands of the end user, the employee to shape their learning journey.

The next question is from Cesar Tiron of Bank of America Securities.

I have three, if that's okay. The first one is on the growth potential of Stack Overflow. I just wanted to understand the key driver for revenue growth going forward, is it mainly the increase in paying users as opposed to the price that you'd be charging these users? And is that mainly driven by enterprise-type contracts? Second question, I just wanted to ask, I mean, you discussed a little bit about it, but just wanted to understand a little bit better the key areas of investment needed to scale up the business. And the third one would be on the long-term profitability of the business. Looking at some of the peers, it's probably in the range of 20% to 30% EBITDA margin. Those numbers, do they make sense to you?

Thanks for your question...

Thank you for the questions...

Sorry, they're all yours Prashanth.

No, thank you, Larry. No problem. And those are great questions. Thank you for them. And let me answer each one in order. So the first one was around the growth potential and we were asking about is it specific to sort of paying users of price increases. And it's very much the former as in paying users, right? So if you just think about, again, the 100 million monthly visitors we have on our public platform, a small fraction of which -- a fraction of which are coming from, say, companies, right? So there's a huge paying customer potential that we are able to really serve and that's a -- that is primarily the way in which we expect to sort of expand and grow within companies. So we land as I explained in a sort of a particular team within companies or enterprises and very quickly expand from there into and sort of increase the number of seats of these contracts on a year-over-year basis. And so that's -- and that's happen organically. It also happens contractually, so that's that combination. And very much the way we think about our Teams business is split between three different segments. The enterprises, as you put it, and the mid-market and SMB businesses. Now those three segments -- all three are very fast growing and the problem that I described earlier, are trying to be solved by all these technology leaders in these companies. So we see tremendous traction in the enterprise, I would say. I would say that's probably our strongest performing segment only because the bigger the company -- the more sort of transformation that's being driven, the more the need to break down walls between various teams and really bring people together to learn and collaborate and share knowledge and so on. But that being said, we're also seeing outstanding traction in our SMB business, which is a very sort of organic flow from our public website and also our mid-market business that's really ramping up very, very nicely. Now the other avenue for growth, to answer the question is, as I mentioned, internationally, right, because we are growing out a very significant team based in Europe, and we have a second European headquarters in London. And we're hiring just top talent from various SaaS companies that are based in -- because 20% of our revenues, especially in our Teams business and more broadly in our company come from international sources. So even though our community is global. So that's the question number one. In terms of investment, as I mentioned, beyond the public platform, which, as I said, we are a 13-year-old company. So a lot can be done to modernize the platform to really then sort of think about not only serving those users in -- from a sort of public community perspective, which we want to do in a very high scale way and to be able to experiment and innovate with new features, and we have a lot of capabilities, like gamification capabilities, like badges and points and reputation points and so on in the public platform, but we want to do so much more, including Edtech. And so for that to happen, we need to invest in that capability to keep engagement very high and continue to sort of serve the significant increase in the number of visitors on a monthly basis and sign-ups and so on, as I explained. And then, of course, on the Teams side, it's the investments we're focused on, on the go-to-market side, by expanding into international locations, by adding sales reps and account executives and also the ecosystem of folks that you need around that. So you need field marketing, you need demand generation folks, you need -- you also need customer success professionals to serve these customers to land and expand these accounts. And in addition, of course, product investments, which is foundational to make sure that these products are very much sort of tough driving, if you will, within companies when they land and these products are enabling users to say, you know what, answer this question because you're the expert on this topic or it is making sure we've got deeper insights on how to -- how various groups in those companies are engaging or even creating the subcommunities within companies with newer concepts that we can have sort of communities to practice and those sort of things within companies. So a lot of innovations that we are planning for in addition, of course, Edtech and other capabilities that we will focus on. And your last question around long-term profitability, absolutely. We are very much, I would say, we watch and we benchmark ourselves against sort of the best-of-breed SaaS companies. And within that 5-year time horizon 4- to 5-year time horizon is when we expect to be profitable, again, based on the tens of millions of dollars of investments that I was mentioning earlier. But as I mentioned also that we were profitable in 2018, 2019 and 2020, and we're very deliberately now in an investment phase or cycle in the company's history to make sure that we prepare ourselves with this tremendous opportunity in front of us. So hopefully, that answers the question, those various questions.

The next question is from Stefani Spasenoska of Goldman Sachs.

It's actually Lisa Yang. The first one is a sort of broader question on the expected impact of recession or macro slowdown on spending by consumers or corporates across your various Edtech assets. I mean I understand for Stack Overflow, you said there is quite high visibility of the revenue, et cetera. But just wondering like if there is a slowdown, do you see companies to be cutting more on certain aspects like training, et cetera. So how much visibility do you have at this point? And do you consider that as a potential risk? The second question is on the global Edtech market in general. I mean it remains extremely fragmented. And obviously, we see a lot of Edtech stocks falling quite dramatically. Do you think this opens a couple of opportunities in terms of M&A? And what role do you see Prosus playing in that sort of broader consolidation? And the last question is on the overall Edtech portfolio. I know there's a number of different businesses within that. I mean you said Skillsoft should be profitable in 4 to 5 years' time. Could you also give us maybe a bit of a expected sort of time horizon for the entire Edtech portfolio to be profitable? And what sort of margin we should be aiming for over the medium to long term?

Larry, do you want me to take the first one?

Actually, yes -- actually, why don't you start and all, I'll chase, go ahead.

Okay. Yes. So in terms of the -- your question on recession-proof and in terms of the 3 different businesses at Stack Overflow, just to give you a sense of what we're seeing. We're seeing no slowdown in terms of any leading indicators, in fact, sort of the opposite, specifically our advertising and employer branding business. Those are absolutely overperforming at this point despite what you see about more sort of more consumer-oriented news headlines, social networks, et cetera. And the reason for that is because Stack Overflow is the preferred destination for all things technology, right? So if you were to think about a flight to quality, the quality destination to advertise techs products, et cetera, is there only probably Stack Overflow and maybe -- and I'm not sure if there are any sort of other large-scale sort of destinations for companies. And so that's why we have seen no leading indicators to suggest a slowdown. In fact, the opposite we've seen only significant overperformance relative to our own expectations even through this particular quarter. Our Teams business, what's very powerful about a recurring revenue model is that -- and especially given the high familiarity of our product within companies, it is very sticky. And as you can see, our net retention rate is only going up. And what's powerful about and sort of the advantage that we have is that most tech leaders are concerned about this notion of shelfware, which is a product is bought and nobody actually uses it. And so that's typically first on the chopping block when budget considerations are being made. The great news about Stack Overflow for Teams is that adoption is very viral because of the network effects and the virtuous cycles that we're able to generate with our product. And so there's very little sort of -- it's quite a resilient business even in sort of downturn scenarios.

Yes. And I guess just building on that, Prashanth, covered Stack, I think that speaks to what we're seeing across the sector more broadly. And as it relates to the expected impact of recession, I think it's important to separate consumer businesses from enterprise. And these workforce learning platforms are table stakes for large employers now. So on the margin, might they -- if we go into a deep recession, might they tweak their level of spend, perhaps, but we'll see, I think, probably more sensitivity on the consumer side than the workforce side, right? Because these same employers -- they still have to do compliance training in a world where great resignation and challenges, specifically in finding technology talent. The last thing you want to do is remove products that allow you to attract and retain workers. So as we look across not just our portfolio but the global enterprise kind of landscape, we're seeing a far more resilient business than certainly the public markets or businesses than public markets might indicate. And then going to your second and third questions about how we see the fragmentation in the space and what kind of opportunities that we see. I think -- look, we always look for opportunity. And sometimes those opportunities present themselves in terms of new investments or opportunities to facilitate consolidation or even just commercial partnerships. And where we are in the cycle now is an increasing focus on investing in our own companies. Prashanth mentioned how we're investing in Stack to help further scale their business, but we're also facilitating a lot of commercial partnership conversations between our companies and to be clear, the bar to external M&A has risen, and that's where I think we're seeing perhaps the most changes given the external environment. Hopefully, that answers your questions.

And on profitability for the entire portfolio? Is there any sort of breakeven target or long-term margin target?

No, I think -- obviously, I think there's an interesting lesson, I mean, you will -- for those that see our group across the various segments. We always -- we don't solve for a long-term profit target and work backwards as it relates to specific portfolio companies. Stack was profitable, and we saw very positive NPV projects that could be invested in. So we have chosen to go into a bit of an investment cycle there, which is consistent with our history as a group. So we pay close attention at the company level on the journey they're on versus solving for a long-term profit target. And again, given -- if you look at the diversity of companies that we're involved in, in the Edtech sector broadly, SaaS margins look very different from K-12 consumer products. So some of it is an outcome of very different business models. And not least, some of these are investments where we're just a minority shareholder. So even if we had a specific vision on where we think the sector could land, those companies have their own boards and governance to direct them.

The next question is from Andrew Ross of Barclays.

I've got two, if that's okay. The first one is just to touch on the value that the broader Prosus portfolio is bringing to Stack. And I remember when you announced the acquisition a year ago, part of the argument was so Prosus could open doors with big enterprises and also add value in India, which is clearly a market where Prosus has a lot of knowledge. So can you just give us a bit more color in terms of the value that the broader Prosus have added. And then the second thing is you guys paid $1.8 billion to buy Stack Overflow, and it's very helpful that you've given us some numbers today to help appraise that. But can you just give us a sense in terms of how you thought about the valuation, how you're thinking about a year later perhaps in a world where some SaaS multiples have come down. Just give us a bit of a framework around that would be helpful.

Yes, thanks for the question, Andrew. I think the questions -- first on the value that our group brings to Stack, and actually, it might be better -- we're now many months into this acquisition, it might be better, actually, Prashanth, if you take that first question, talk about at least how you experienced things so far.

Yes, absolutely happy to, and thanks for the question. And we've been very pleased with our partnership with Prosus and on multiple dimensions. Firstly, from an appreciation for what we hold most dear, which is our community, which is the foundation of the company, just the mission statement of Prosus is very much aligned to making an impact for a lot of people. So just in terms of cultural and just sort of philosophical alignment is significant alignment there, which is always important. But beyond that point, the focus on making sure that we are scaling our capability on the platform for both lines of our business, specific and then advertising, of course, Prosus has a tremendous background in that space. So we are able to really think about new and nuanced ways to sort of provide contextually relevant advertising to our users, and that's been a tremendous sort of value for our team. In addition, of course, on the go-to-market side, we have -- Prosus has done a tremendous job of connecting us with the sister companies. So pretty much all the Edtech companies that are in the portfolio are customers of ours now. And that's also -- and that's only an initial start, and there's tremendous upside on those topics because we're only starting with things like every Edtech company can advertise on our platform to showcase their coursework as an example. But as I referenced earlier on, we're working on deeper integrations, for example, imagine if their coursework can be surfaced in a very contextually relevant way when users are asking questions. So those sort of initiatives or high NPV initiatives are something that we are building and researching and working on and all those things will be accretive to the company, which I think are very, very powerful. And finally, I would just say, I think, in terms of access to just a broader sort of enterprise space, of course, we are collaborating closely with all of these sister companies to jointly approach customers together because most companies are leveraging Stack Overflow for Teams and also learning content in somewhat sort of synergistic ways because they are trying to pipe relevant content in the workflow into sort of these technologists and developers. So we're oftentimes selling it to the same persona or executive buyer, which is also helpful to sort of connect the dots when we work together. And India, of course, is a very large base for us, our second largest user base and we continue to see tremendous bottoms-up adoption there. And we are really approaching that market with a product-led approach where we launched our freemium capability, which allows customers to sign up or users to sign up for our Teams product off the website even without salespeople, and we're seeing significant traction on that with our freemium to -- freemium and self-served paid products for teams on that topic.

Yes. And actually, Andrew, to your second question. I think we're really just scratching the surface of the opportunity on the Stack platform. And hopefully, you got a feel for that today, and we're quite encouraged by the progress so far. And I think if we step back, multiples come down in the short term, but we are a long-term investor and true value is created over the long term. And we are very encouraged by, again, the progress that we've seen so far because that's the core of what we invest in. We invest in a big global consumer need with a huge TAM and a consumer problem that's being solved at scale. And if you believe, as I do, that technology companies will continue to be the biggest companies in the world and software engineers will continue to be the most compelling employee base in the world and growing -- Stack sits at the forefront of that. And we step back and we ask ourselves the question, do we have the right opportunity. Stack checks that box very clearly. Does it have a sufficient TAM? If we haven't seen that so far, we wouldn't be going into this investment program. And then do we have -- a do have the ability to monetize this community. And that's why we're encouraged by the progress that Prashanth highlighted around Teams and collectives. And then last, does it have a credible management team that can execute. And we absolutely believe that.

The next question is from Silvia Cuneo of Deutsche Bank.

Thank you for the device. First, I have a follow-up to one of the earlier questions. It sounds like the independent developers users are a way of guiding the engagement on the free-to-use the [indiscernible] to then monetize on the advertising and enterprise the side of the business. So just wondering whether there are any scenarios where you could consider monetizing this user base directly? And secondly, what's your view on [indiscernible] accreditation given this growing impact on in a tight labor market is lending on the Stack Overflow platform in an organic way enough and as you thought of providing some forms of certification? And then finally, just a question about the Edtech segment more broadly with Prosus. In Slide 5, you showed all the areas of the workforce ecosystem. So in some of the segments, you already own more than one asset, why not in others. Can you talk more broadly about how we should think about capital allocation between Edtech going forward?

Thank you for the questions. Prashanth, why don't I take the last question first and then you take the first two about Stack. So as we think about the sector, ultimately -- and I'm sure for those that study this space closely, you see how fragmented and global that space is. And ultimately, we think the winning solutions are going to have some element of what we tee up on Slide 5. And ultimately, I firmly believe that there are going to be a handful of companies that will try to build, but ultimately, the winners in the space, and there will be multiple, will be assembled. And that can be assembled through M&A or commercial partnerships. But some of these -- some of the verticals, some of the features and functionalities will have to be brought into either consumer-facing platforms that build functionality, be it labs that help software engineers write code or data scientists study data, increasingly like the consumer platforms will build out some of these other verticals and functionalities. Or similarly, the enterprise leaders will find ways to work their way up the ecosystem and find new areas that are being new interesting sectors that are attracting consumer attention. In terms of where we play in that landscape, I mean, obviously, you see the footprint we have. And we start with this frame and then we look at the company-specific opportunities. The -- in some cases, when we work with the Stack or Udemy or Skillsoft, it's about fleshing out their own consumer and enterprise experience as it relates to this landscape, but then we're always looking for opportunities within specific areas, but that's assessed at a company-specific level versus solving for any kind of end game and how something there might be assembled? And then Prashanth, do you want to take the first two?

Yes, absolutely. Thank you. So your first question around our public community and is there an opportunity to directly monetize, if I caught your question correctly, versus just the enterprise B2B model. So we believe across our 2 product lines, if you look at Teams and our Reach and Relevance business, our Teams business, the closest that we come to directly monetizing the traffic in our user base is our freemium or self-served products for Teams. So what that means is that rather than us as a team and salespeople going into companies and making the case for them to buy our private version and pay an annual contract for that, we also enable users on the website, 100 million monthly visitors, which sign up automatically with their credit card on our website to buy Stack Overflow for Teams for any initiatives that they might want to drive. So they may be part of, let's say, there's a developer that's on Stack Overflow, like the 80% of the world's developers are on every -- on day, and they're working for a company perhaps one of the old companies, they might consider taking in Stack Overflow for Teams off the website, straight paying for them using their credit card and using it for their immediate team. And when that happens at sufficient scale, then we know where these hotspots are, so to speak, and we're able to have a much more strategic conversation with the CIO and CTO and more from a top-down perspective as we think about sales motion. So that's the closest that we come to directly monetizing the traffic. Everything else, of course, our Teams business for the vast majority is a traditional B2B, SaaS model and then -- SaaS sales motion rather. And on our Reach and Relevance business, it's -- again, it's a two-sided marketplace where companies pay us to be able to engage with these developers and technologists on the platform. So that's to your first question. Your second question, if I -- unfortunately, it broke up on my end on what you were asking, but I think you were saying in this tight labor market, how -- what is happening in terms of learning and on our website? And do you think that there are other ways in which people are learning beyond just the organic ways on the website. Is that correct? Just to clarify your question?

Yes, it was on when the -- for them to say that they have learned on Stack Overflow even ask or what they're thinking that you could provide some sort of certification to accreditate these [indiscernible]?

Okay. Got you. That's a fantastic question. So that's very much where we're going next in terms of our public platform. As I mentioned earlier on, with our partnerships with our sister companies in the portfolio, Prosus portfolio, we are working on various product initiatives to be able to service education Edtech content, think about sort of course recommendations. So if somebody has asked me a question on Amazon, about Amazon Web Services, they are landed on an answer on Stack Overflow, imagine us presenting that user with a recommended course from one of our Edtech partners. And that's what we are thinking about at the moment on the public platform that could very much lead to things like you're describing like certifying the user of -- beyond all the existing certifications we already provide them. We provide plenty of badges and recognition to these developers as great contributors and experts on various topics already on our website on Stack Overflow, but we can very much see that as a possibility in the future, and it's just an organic part of how we're thinking about this new sort of product capability.

I think We have time one more question.

And the last question is from Thomas Singlehurst of Citi.

Tom here from Citi. I work with Catherine O'Neill but I cover the global Edtech sector, including some of your portfolio companies. You sort of addressed this in your last question. I suspect this might be more of a question for Larry. But when we look at the Edtech space and the enterprise learning side and lifelong learning, there's a sense I feel that companies need to be able to span a wide range of content. I think the sort of phrase is, from free to a degree. Two questions off the back of that. Can you just sort of directly address again whether it's better to try and form partnerships between your portfolio companies or ultimately, should we expect them to sort of vertically align. And there's slightly mixed messages with Skillsoft, Udemy, which is a partnership but then Skillsoft, Codecademy, which is an acquisition? And then the second question off the back of that is university sort of partnerships and degrees. I mean obviously, you do have Eruditus, which is a fantastic asset. But do you feel the need to have something more substantial in the OPM space?

Thanks for the questions, Tom. I think on -- the enterprise and so this kind of wide range of content that's required. I think this is, again, where the -- that tension emerges between the customer, which is the enterprise and the consumer, which is the employee. Consumer -- the employee wants a diversity of content. Fundamentally, if you sit in the CEO or CFO chair, you sit back and you say how many different pipes am I going to have into my company and so they increasingly want that there is this tension where CEOs and CFOs, they absolutely need to have the compliance and leadership training check off, but then employees are clamoring for tech and dev and lifelong learning. So we're seeing an increasing [indiscernible] on the question earlier. In the C-suite [indiscernible] can you just solve this wide range of needs for me. We don't want to have multiple contracts coming. I think you can see more and more of that as we enter [indiscernible] climate. And then in terms of how we work with our companies here, the companies follow their own destinies. They have their own sort of governance and boards. And to the extent that we can facilitate, we do. Sometimes that means we help partnerships with sister companies. We have a -- as one of the biggest investors globally, we're not directly involved in the space. Hopefully, we know that many of the key players, and we can facilitate introductions but it doesn't have to be an acquisition per se, but it can be a commercial partnership that sort of brings that consumer experience together. And then last on the university side, I mentioned before to your second question, how we think about university partnerships and degrees. We're super excited about what Ashwin and team are building at Eruditus. We've been intentionally careful about where we get involved in the -- some of the more traditional areas of the space, K-12 or even traditional universities because we want people that are thinking about the next generation and being very consumer focused and consumer-led. And in the case of what's been done at [ Eruditus ], that's absolutely true. And so we're open to opportunities with university and, obviously, the Tier 1 brands travel very well and will be part of the future of this space, but we want to make sure that we're -- as we do in all of our spaces, really focused on end user needs. Hopefully, that answers your questions. And just to close things out, just want to say thank you very much for taking the time to listen in. I know we've been greeting with your time today. I hope this was helpful. And please feel free to follow up with our IR team. And if there are any further questions, and as a reminder, a transcript and replay will be available on the website shortly.

Thank you very much. Ladies and gentlemen, that then concludes this event, and you may now disconnect.