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

[Indiscernible] European Internet & Media Conference. So I'm Lisa Yang and I cover the European Internet & Media sector here at Goldman. And I'm delighted just to kick up the day with a fireside chat with Ervin Tu, the Chief Investment Officer of Prosus, which as you know, is a largest consumer Internet company in Europe and also one of the largest technology investors in the world. Ervin joined Prosus as actually Chief of Investments, Strategy and M&A in the summer of 2021. This was a newly created position where you're responsible for leading investments and overseeing capital allocation. Previously, Ervin was Managing Partner for the SoftBank Vision Fund where he helped lead investments in Uber and Bytedance amongst others. And actually, Ervin was also a technology banker at Goldman Sachs a few years ago.

Thank you again, Ervin, for being with us today. Maybe you can start by walking us through like how the first 18 months have been at Prosus? And how has it been different versus your expectations and versus your time at SoftBank?

Well, it's been an amazing 18 months, right? We -- on a number of dimensions, of course, the world looked very different 18 months ago. And so -- and it's been changing through the course of that time. So as they think about the -- what -- what I've been doing my day job, it's quite different, right? When markets were ebullient and everyone is investing in growth was the name of the game. And we had a fair amount of that when I joined in the fall of '21. And as things started to shift, the outbreak of the war, the rates rising, of course, at a dramatic pace, then we very much went into managing the portfolio, managing our businesses, managing the firm mode. Mostly people know that we announced a very significant buyback program at the end of June at our annual results. And we've been pushing our portfolio to profitability. We continue to do those things and are focused on that element of how to create value as opposed to planting new seeds in the ground. So as a matter of what I've been doing, it's been very different. And then maybe the how, just a little bit on how the -- the things that I've noticed being here, many people ask us what -- asked me, what's so different? One of the things that absolutely striking is we very much do things we know. And we very much focus on understanding the level of depth that I think is aligned with being operators. We are both operator and investor as many know. So I think that makes us better in both domains, and we are thoughtful and considering every decision we make. So that's a big change. I think you can all read about SoftBank and how SoftBank was, it's a different place. I have great friends still there and some have left. And I owe a lot to Masa and Rajeev and the team, very different place.

You mentioned, obviously, how last year has been quite a turbulent, yet general for the commy -- for the tech sector in particular. So I just wondered, obviously, given your perspective of experience in the space, like how do you think the environment for operating as a tech company and also investing in tech company has changed over the last year? How has that impacted Prosus?

As a matter of operating, right, we have operating businesses. We have significant businesses in classifieds, in food and payments and the like in B2C, we -- e-tail is classic e-commerce, businesses like eMAG and [indiscernible]. I'd say the first thing that comes to mind is we are absolutely very, very prudent in our planning now. We are digging 5, 6, 7 levels deep as operators do to really assess the potential for these businesses, particularly the profit potential and evaluating whether the growth is sustainable? Can it be profitable? Is the OpEx stack truly something that can support profit? What levers can we pull to reduce OpEx? Can we expand gross margins? We were going deep in these discussions and planning. So that's one part of the answer, on the operating side, and we're making decisions as many of you have seen. The autos announcement that -- OLX transactional autos announcement that we made just several weeks ago, I think, is emblematic of that approach, which is to take a hard look at our businesses and assess whether we can continue to generate good returns for us and our shareholders, right? So in terms of operating businesses, that's what I'd say. In terms of investing, we continue to look aggressively for good ideas. I think the valuation environment, of course, is markedly down in the public setting, in the private setting, but for a few high-profile examples of Stripe and Klarna and Instacart and so forth. We haven't, by and large, seen a sustained or even a significant downturn in private valuations. The best businesses raised a lot of capital through early '21, and they're managing through this moment, waiting it out as opposed to pricing down rounds. So we sit here today with a very healthy balance sheet, I think many of you know, which will get healthier at the end of the month due to our friends at Tencent and their distribution [indiscernible]. And we feel great about that. And so as a matter of investing, we are looking hard, but we're staying very disciplined on deployment because even though prices are down and people are encouraging us to why aren't you doing more? Our answer is very simple. If prices are down, it doesn't mean they are good businesses to invest in. And we'd far prefer to be patient, wait for a moment and put more capital behind something that we feel is truly exceptional as opposed to being forced fit by the moment and to just investing in what turned out to be mediocre businesses. That's not good for anyone. So that's what I'd say on the investing side.

Very interesting. I'd love to talk a bit more about the operations. What are the latest -- the current trends you're seeing across your different segments? I guess you have, on one hand, macro potentially impacting your consumer behavior and your operations. At the same time, there might still be some post-COVID normalization as well affecting that. So what are you seeing currently?

It's a great question. And this is multi-faceted, right? We can take this in a number of different directions. I think the post-COVID normalization, yes, we are seeing the lapping effects on growth that many businesses are confronting now and so too in our portfolio. So that's point one. We do look at the long-term trend, though, relative to pre-COVID and in terms of activity level orders, order growth and so forth, still stronger than pre-COVID and -- as relative to pre-COVID. So if you leave aside the lapping dynamics of COVID. On the rest, I'd say the answer depends by geography and by business. So this is why it's a complicated topic and a good topic to discuss. And many people say, what about inflation? How are you managing through this inflationary environment and high-yield environment? By the way, we have businesses in places like Turkey and India, which have had higher rates in for a sustained period of time. It's -- so we know how those businesses can still be successful in inflationary environments. They are successful. We have -- our businesses are performing well in those markets. For other markets, yes, the consumer is under some pressure. I think many of you can read or have read the reports coming out of the food delivery sector, which is probably most prominent in terms of is the discretionary or nondiscretionary thing for consumers. And so far, the data is mixed, but by and large, the predominance of this suggests that the consumer is hanging in there, right? Frequency is still stable. Now we're seeing perhaps a little bit of -- if there's a certain basket, maybe someone is removing one item from the basket, okay, they're not deporting 5 things or 4 things, but they're still ordering the big entree. And with inflation, actually, AOVs are up. Now people have been doing things like minimum basket order size, they're increasing those. So maybe that's also contributing. But frequency is stable in the food world. AOVs are up. People are still ordering. We haven't seen a significant result in terms of the pressure that people think about generally with the consumer. So that's food. Our payments business continues to be very strong, healthy growth globally as well as in India. Our credit business in India is growing very quickly. So yes, there are pressures in the consumer generally but actually in our portfolio, and I think you can observe other businesses as well. There hasn't yet been a significant pressure on results.

And actually related to that question, we've seen a number of companies rationalizing the portfolio, exiting markets. Do you think the bulk of it has been done? Or to your point, a lot of the private companies still have cash? Do you expect to see a lot more rationalization to come in? Where do you actually see the biggest benefit for Prosus? In which segment do you think could be the most impacted?

Well, we -- in the general case, of course, rationalization -- you see rationalization when there are a bunch of cash burning businesses, and they benefit from combining the scale of their top line and reducing their OpEx stack, right? That's the general case. So we -- that will continue to happen. That's hard happening a little bit already. As an example, quick commerce in Europe. We know Getir and Gorillas, for example, is one -- they're shareholder of Flink. And so that will -- I'm not making any predictions, but I think that's a healthy development for the industry, and I think that will likely continue, right, not just in Europe, but just elsewhere where that industry emerged so quickly and powered by pandemic tailwind in terms of consumer behavior. Their growth has got skyrocketed, but everyone understands the unit economic picture was never a healthy picture. So that may be one example. We would be -- we believe and I'm not going to comment on specific names, but we believe in that thesis, right, rationalization, consolidation can improve economics and therefore, outcomes returns for all of us. Elsewhere -- if you look at our portfolio, we have very healthy businesses across the rest of the portfolio. So as I consider the question for our portfolio, I'm not convinced we will see much of that in the rest of our portfolio. You consider our food businesses which are profitable or only unprofitable because they're investing in some of these extensions. You consider our classifieds business, which, absent the OLX Autos transactional business, is a very profitable, healthy grower, and our PayU business is a very -- it's a profitable business. So I don't think the rationalization is something we likely will observe in other elements of our portfolio. So I think on the edges, we'll see some in those very cash consumptive businesses.

Great. And how does that change your priority? You said you're going like 5, 6 levels deeper in terms of valuating your businesses. Has this sort of pride in terms of like investments organically has changed? Or are you shifting more towards, as you pointed out, like asset-light as opposed to cash-consuming businesses as we've seen with OLX Autos or...

Yes. It's another good question, and we think about this one a lot. I think it's less about asset intensity. People ask us, is it a CapEx-intensive, asset-light versus asset heavy? We've never been generally fans of asset-heavy, CapEx-intensive businesses anyway. Most tech companies aren't that way, although there's been some evolution towards more physical elements of online businesses. Food delivery is actually sort of a physical business, so there's no heavy CapEx, giving you an example. And so it's less about asset intensity. It's more -- this moment is really pushing us to consider one of the core questions of durability of demand, right? Back to your question previously and what exactly is discretionary versus nondiscretionary, right? We've all been living this. We -- it's not one of our businesses, but is Netflix discretionary? Streaming discretionary, like these -- everyone is asking this question, food delivery. It's actually proven again, based on what we've seen so far to be quite nondiscretionary because it seems to be quite stable. Habits are hard to break. And the consumer now is quite used to ordering from these platforms. I'm not talking about China because China is in a different league in terms of food delivery, but 3-ish times -- 2.5 to 3-ish times per month, and that's what we continue to see. So that question, more than asset intensity is one that we ask ourselves a lot. When we consider the profile of our businesses on the revenue side and growth and then the rest is, as I described earlier, really taking a hard look at gross margins, really taking a hard look at -- on the OpEx lines, particularly the sales and marketing. Sales and market is connected to growth. But how much of -- if we were to tail back some of the S&M, when is that due to our growth? And can we afford to do that? Well, is it discretionary? Is it nondiscretionary? These are things, there is an interplay. So it's a complicated topic, but it's one we think about carefully.

Great. Maybe you can switch to capital allocation, which obviously one of your remit. So the CMD back in December, I think you discussed how the capital allocation strategy of the group has changed. So you mentioned more of these investments, reaching profitability and also looking for further opportunities to crystallization, which we haven't touched upon that yet. I know it's still early days, but can you already talk about the progress you've made against these objectives?

It is early days, I mean, relative to what we talked about 3 months ago. We are working on all of it. And in particular, I'd say on the crystallization side, we're not here to make any announcements, but we are -- I'm personally involved in guiding a handful of situations right now actively, which we hope will ultimately result in a crystallization of some form. So I think I alluded to the fact that this was -- it was a real thing and not just something on the slide in December when I spoke with everyone and it continues to be a high priority for us. So crystallization, yes. I think in terms of the other part of capital allocation, of course, is what do we do with the cash that's sitting on our balance sheet? And you've heard me already in terms of our posture, I'll just emphasize it again. We are continuing to look for high return opportunities for us and our shareholders. We're being patient because we think that things will shake out. They haven't yet fully. And when they do, we'll be ready with some dry power to be opportunistic and make great investments. So that's another part of it. And then we want to remember too that, look, we invest in our organic businesses, right? That takes real capital. That's not -- just something that most investment firms don't have this, but we do. And we evaluate our investment dollar in connection with our organic or operating businesses the same way we do when we think about putting in a minority position in a growth company. And I think that's witnessed. Again, the Autos decision, which we announced. We'd use the same standards, whether it's external or internal. So we are investing. People have to remember in our organic businesses that's real capital, and we feel great about it, but we're being careful.

On the crystallization point, how much of that is under your control as opposed to depending on market conditions on certain approvals? What are we talking about it?

Yes. Look, some of it is listing companies, of course. And that's not fully under our control. But as people know, that process is not one that you snap your fingers and you can launch a company. It takes real work, it takes time. And so by the way, that's not a bad thing when the markets are the way they are. The IPO market last time I checked is not exactly open. So it's okay. I just want our shareholders and people to have assurance that, that is a high priority for us to highlight the value we have in our portfolio and show people what fantastic businesses these are, really shine a light on them. And then, there are active M&A situations that are ongoing, right, throughout our portfolio. And those could happen sooner. But M&A is an uncertain exercise. I was an M&A banker here at Goldman, so...

Exactly.

I know it well.

And you discussed obviously potentials of active M&A situations. Given the discrepancy you mentioned between public and private assets, are we talking more about like M&A with [indiscernible] entities as opposed to the private companies or...

Yes. I'm not going to go there. I think this -- we have public and private positions. I just say that we're working actively across the portfolio.

Great. And obviously, speaking about your portfolio, Tencent is still more than 75% of your NAV. They reported their results yesterday. I think it's quite strongly today. Can you maybe give us an updated view on, firstly, the outlook for Tencent and also how important it is still to have Tencent within your portfolio? And is Tencent basically too big?

Look, Tencent -- we feel great about Tencent, and they printed yesterday, as many have seen, growth has returned, modest growth, but growth 1%. And I think particularly promising. I hope people noticed that the segment -- the online advertising segment grew 15%, right? So that's a major thing. And we think -- we feel great about the overall China recovery story. And the consumer is coming back. And so that will power, we believe, the business for some period of time. So as an overall matter in terms of what the business is doing, we feel great. They, of course, have also focused on showing more profitability. Gross margin is up. EBIT margin is up. All of that is goodness and they expanded the dividend. So we're thankful. All of that is very positive, and we feel great about the business. Your question about portfolio construction, I'd say I think over time, right, and I'm not going to be specific what that means, but I think long term, right? Of course, there could be more balance in the portfolio. Our preference -- our strong preference is that occurs via our ability to grow other stuff, our e-commerce businesses or other things that may come into the portfolio, right? We are a firm. If you look at the history of our firm before Prosus when it was just Naspers, but Naspers Prosus complex, we have changed enormously over time, and that will continue as we seek the highest returning investments or businesses we can find. So that will continue and that we hope will create more balance in the portfolio. Would we start -- if we had a clean sheet of paper, would we start with a portfolio that it looks like this, I don't think anyone probably would start that way. But we are the beneficiaries of the great success of Tencent. And so we are where we are.

Great. And speaking about basically this topic of rebalancing your portfolio. How big of a role do you think M&A has to play? Is that do you think it's mostly going to come from the value creation from your existing businesses? Obviously, it depends on the market recovery? Or do you need to [indiscernible] M&A -- capital and M&A in the next few years?

Yes. I think about it this way, Lisa. We -- it could happen through a number of different avenues. One thing we're not going to do though is just do M&A just to become bigger and create balance. That is not productive. Many people know, M&A as a general matter, the percentage of successful M&A is -- it's not high. So it's a big thing, a significant decision to make. So it could be M&A we are looking. It could be growing our businesses organically, although that would be a slower process for achieving balance. Everyone understands that. It could be investing in fantastic growth businesses, minority holders with fantastic growth businesses, which become large. That's also a viable strategy, and we continue to believe in it. We're looking right now. We're not seeing those great businesses. So that's how I'd approach the question. Look, the M&A thing, we are -- we know when we see something -- let me say this, when we see something that from a return standpoint, we love, then yes, we are very -- we have the flexibility and the conviction to deploy big capital behind something. That's true. We will do that, but we're not going to do it just to become bigger.

And does this require further selling down of Tencent to rebalance that portfolio?

Well, we have -- again, our preference is far in the other direction, right, which is to build alongside rather than do things with this position in Tencent, a great business where we have significant confidence in what management is doing in the business outlook from here. We are -- of course, every day, we're selling down a little bit already, so it's rebalancing a little bit already. But I don't think you should anticipate any significant moves. We are -- in terms of the balance question, I think I've addressed it. Our focus is on trying to add as opposed to subtract.

Right. I mean I just wanted to follow up. I mean, I have the impression, and maybe I'm wrong that you have maybe outspoken about M&A than during previous calls. But correct me if I'm wrong. So what we basically pull the trigger in terms of you deciding to make those M&A decisions?

Returns, right? Everything we do is returns oriented.

So you are not seeing the right returns today? Is that why you're not doing it? Or...

Well, I'd say we're thinking carefully about different situations, and we haven't yet -- we have made no announcements I do say that. But we're doing work on a number of opportunities in both private and public. And -- but we're patient. So people are worried about what we're going to do with our balance sheet. Remember everyone, just several months ago, it was a very different picture. And last time I checked, it's a good thing to have some cash around when the world is uncertain as it is. It's pretty demonstrating right now. So we are -- we feel lucky. We feel fortunate we are in this position. We are in a position of strength in terms of our balance sheet and our businesses, pushing towards profitability and delivering what we -- we hope delivering on what we committed to The Street in terms of profitability. We feel good about our position, and there's no need to rush.

Great. And that leads me to, obviously, the must-have question, which is about your discount...

You have a solution.

For the end. So I mean, clearly, obviously, we're getting a lot of incoming news that the discount has widened back to 40%. We get the question very often. Is this the new normal? Like what are the plans to sort of reduce it? Because obviously, you have announced [indiscernible] buyback already, but like what do you think of the discount?

The discount -- we don't control the discount for a statement. And it's for all of you in the market to trade our stock relative to our underlying asset value. And we, of course, think about it every day. And what we can control are the things that we've communicated our priorities. Number one, delivering on our profit goal for our consolidated businesses by H1 FY '25. Number two, continuing the buyback, which creates enormous value for our shareholders even more so when the discount is high, right? Our NAV per share accretion last time I checked was approaching per share, 5% over the duration of the program already. Number three, the crystallization efforts that we've discussed and is another focus for me and my team and the firm generally. Number four, China and Tencent, we hope the recovery continues. Today was -- is a good day so far for China tech. We hope that continues. We don't control that, but we have good optimism there. And then number five, I know you're going to ask me and everyone ask us about it, simplification?

Simplification?

Yes. Simplification. We are working on it. So...

What does this mean? There's a lot of mix and rumors about it. What do you actually mean by that?

It doesn't mean leave South Africa. I want to be absolutely crystal clear. People still ask us about that, and there have been many misunderstanding. So let me say to everyone that's not what it means. We are working on simplifying our structure in some way, if we can, okay? So that's as much as I can say. We are -- I think it's a -- it's -- our shareholders have been expressing their views to us, and we are actively working, but it's not something that I can go into detail now, and it's -- I can't give you a time line. I know people say, when can you say something? We'll say something when we can say something. And -- but what I hope you'll appreciate is the whole senior team is actively working on something that we hope will create simplification.

Is this like a feedback you're getting a lot from European or South Africa investors the need to simplify, is that a...

It's across the board. I think from our great shareholders in South Africa, we may be getting a little bit more because, as you know, the buyback, which we're conducting both at the Prosus and the Naspers and at the moment on the Naspers' end, we do have a limitation on how we're doing, how we're affecting the buyback. We're doing so through a subsidiary at the moment. There's a 10% limitation on affecting the buyback. So if you play out what will happen over time, of course, the next several months, then that limitation, we will reach. And so part of our effort is to try to solve and fix that. So I'd say, perhaps our South African friends are a little bit more vocal, but everyone's vocal.

[Indiscernible] because the fear you might not get the approval to keep buying back stock or...

I just think I'm not going to speak for them. I just say that people want to buy back to continue, right? And I think our own instinct and you'll have your own analysis is, in recent -- if you look at the discount, both Prosus and Naspers, and the Naspers, the gap has changed, and our discount generally has gapped out a little bit. It's widened and maybe because of these things, who knows. But we understand that shareholders are focused, and we're working as hard as we can. I'm looking at one of our shareholders right now just to make sure he's hearing me.

Speaking about that, I just want to check is there anyone in the room who wants to ask a question or -- - yes, go ahead.

You mentioned Netflix. And I was just curious on that idea of durability of demand discretionary, nondiscretionary. Is it possible -- do you think is it possible to know [indiscernible] more broadly to have a high degree of confidence in whether it is durable or not -- discretionary or not?

You can only know through -- after the fact observation of what happens to behavior, right? When Disney, of course, you all saw raised prices and no one blinked an eye. I think everyone just there was no churn barely. And so you don't really know. Of course, you have strong predictions, but after the fact is when you can observe.

Maybe just a follow-up on that. We see like the 6 to 7 levels of analysis going through that [indiscernible] analysis to sort of get to that conclusion before you get the data?

Well, I don't -- we don't reach to any conclusion before we have the data. So I'm not sure where your question is going. I want to make sure I'm answering your question.

[Indiscernible] opportunities, there's multiple levels of analysis going on, is this some case, we still don't have the data? In that case, you're just not investing. Is it sort of that idea, the confidence where you go in?

Well, I'll answer your question in a general way, we are very data-driven. So we don't like to make decisions without data. And where we don't have the data yet, we realize -- we'll make some decisions, of course, if there's corroborating information. Sometimes there's no direct information on your specific question of durability of demand. That is one where I don't think anyone really knows until again after the fact. But the 5 to 6 level -- 7 levels down, what I'm alluding to is we're not just looking at the P&L, right? We are looking at a number of operating metrics. I sit in on a monthly basis, a metrics review of all of our businesses with -- that includes all our senior team. Bob, of course, chairs that. And we go pretty damn deep on the numbers. So that's what I'm saying.

Any other question?

That was quite a bit [indiscernible] on the risks and potentials around generative AI? Is there anything you guys so far have looked at, I would say, potentially around the AirTech business that you think is an opportunity or a threat to the existing businesses you've got?

Look, generative AI is an exciting development, and we have a dedicated team who is evaluating for us. We even have a -- we have our own version of ChatGPT internally, which we've all been using, and this is all before the craze broke out a couple of months ago. So -- and so we're looking at it very carefully. We continue to monitor. We have also met some of these companies, and we're assessing our approach. With respect to our portfolio, which I think is a focus of your question, we believe the effect is differential across the portfolio. There will be some segments where there's more potential impact, threat or opportunity versus others. We see that as well. EdTech, you mentioned it. Yes, that's one that will be affected, and we are thinking through actively how we respond and how we deploy in our favor. So yes, we've noticed and it's important.

Maybe I can ask you. I think you said several times, the bar to invest in a new area is really, really high. But I'm just wondering, obviously, there's still a lot of innovation, a lot of entrepreneurship. Is there any sort of very exciting like segment like you guys are looking at, like you might be thinking of entree, maybe not now, but on a multiyear view, which you think is interesting?

Yes, we've done a lot of thinking about that. I'm not here to announce any new areas today. So I think we continue to believe our current portfolio, the segments we have in place actually still offer a great growth. And we are at that stage where we've scaled these businesses. In general case, we've scaled these businesses. We're tuning them for profitability and they can produce great returns for us. So we are very focused on delivering on the promise and the thesis we had with respect to our current portfolio as opposed to really spending too much time considering new things at the moment. We're thinking about it. Of course, we have people who work on that. Our Ventures team is organizationally doing that every day, right? They're investing in new stuff in smaller checks, but it's not a priority at the moment. We are very much focused on what we have and delivering against what we communicated.

Amazing. And maybe last question. I make clearly, I think the conclusion of today is that we should be buying Prosus. It's appreciated. So what do you think is still like misunderstood by the market?

What's misunderstood by the market? I'm not going to use misunderstand, that's a...

Mis -- underappreciated?

Underappreciated perhaps. I think people -- these sessions are, I think, are useful because people have an opportunity to see how we, as managers, think about the world. The team -- first of all, forget the team, the firm sits in a good place right now, right? We have considered -- if you consider where we stood 1 year ago, when the war broke out in late February, we didn't know what was going to happen to our very strong Avito business. And our food delivery, the sector had traded down significantly. Tencent was not trading well. It was not a happy time. And we've made a number of moves that have strengthened our balance sheet. We've really delivered so far on pushing our portfolio into that profitable zone, and we'll continue to deliver that. We have -- we announced the buyback program, right, which I think has made a big difference in creating value for our shareholders. So we made a number of decisions to strengthen our position. We've been also beneficiaries of the Tencent announcement of the May 1 dividend we didn't anticipate. So that's good news for us. But I hope people appreciate the position we're in. Very uncertain world with an outlook that no one can predict. But we sit here with a strong set of businesses, a great balance sheet to take advantage of opportunities and a buyback program that delivers value to shareholders every day. That's good. And so as I look out at the rest of the companies in the -- not at the audience, but the rest of the companies in our sector broadly define our technology. That's not a picture that exists. Back to the team, I hope people appreciate that from some of our decision-making, we are utterly focused on creating value, utterly focused on returns. You can see that these decisions that we are making, I credit -- Bob is not here, but he's behind some of these big decisions, of course, the decision on autos. That's not an easy decision, not an easy decision, but I think it's a testament to our uttered focus on returns. And as operators, investors, sometimes they participate in a follow-on round, they put it in a structured instrument, and they hope for an outcome. We're operators. Operators shut down businesses or sell businesses and make difficult decisions because that's who we are. So I think that's emblematic of our approach as a management team. And I think -- I hope that that's appreciated as well as people consider what we've done in our performance over the last 12 months.

I actually forgot to ask you because I think on the OLX Autos, I think the exit was probably much earlier than what people were anticipating. So has anything happened there for you to exit at this point? Or...

We're working on it. We're working on it. My team is actively engaged there. But I -- we can't talk about it further. There's nothing to announce.

Okay. Amazing. Cool. Thank you so much, again, I think, for being with us.

You're welcome.

Very, very helpful. Thank you.

Okay.