Warner Bros. Discovery, Inc. (WBD) Earnings Call Transcript & Summary

This is the TMT Conference. Thank you for joining us, everybody. For our next fireside, we've got JB from Warner Bros. Discovery. We're going to talk about Max and a lot of the changes in growth over the last few years. So thank you for joining us.

Happy to be here.

On the earnings call, I think I wrote your quote down, "It's a material inflection point this quarter." And I think you're referring to Max, just really having a more sustainable profit trajectory, a more sustainable revenue growth trajectory. From a year ago, a lot has changed. I want to talk a lot about the future of Max today. But maybe before we do that, if you could look back a little bit, it's been 2.5 years, I think, now since the closing of the merger. You've been pretty busy over that time frame. So maybe just talk about some of the biggest things that have had to happen to get to where we are today, and then we'll talk about the future.

Yes. I mean, look, part of the reason why we see this as such an inflection point is when we -- we closed in April of '22. In that summer of August of '22, we made our first public commentary around kind of the ambition and our beliefs on growth for the combined business from a streaming perspective. And we -- one of the big things we said then, which is we were going to kind of leave the world of subscribers at all cost behind and move towards a -- frankly, at the time, a slightly revolutionary concept of profitable growth as being our North Star. And -- we also said we'd set out this 5-year -- this 3-year target of 2025, $1 billion of profit, roughly 130 million subscribers and with an ambition over time to sort of be a top 3 global streamer as measured by profit engagement and scale, subscale within 3 to 5 years of when we've launched in any individual market. And frankly, at the time, we had that ambition, we had the belief. We had to figure out how to execute on that. And step one was developing a new platform that was robust, ability to scale globally, ability to perform at -- in a stronger way than HBO Max's old platform had or discovery+'s platform had, historically be able to actually generate and use multi genre content, including live sports, live events, big entertainment and that, that would take 12 to 18 months to do. So a big part of that first chunk was redeveloping the platform, restraining the organization, consolidating the two groups. And from a content and marketing perspective, getting much more analytical around what's working, what's not working versus the previous model, which was essentially keep everything, close all doors to everybody, keep everything on the platform and put everything on HBO Max and hope it works, but saddle it with a ton of cost with not necessarily good analytics on what's productive. And the good news in what happened in the third quarter. And so between them we did all that, we restructured. We rebuilt the platform. We realigned using better analytics and data, what we thought was critical in terms of the content offering, how we market. We came out in May of '23 in the U.S. But we also came out in May of '23 in the U.S. because we felt like we need to get going, but we came out at probably the worst time from a content perspective in the U.S. All of our tentpole HBO series were out of cycle. We'd just literally finished succession right before we launched. We were moving from a world of 3 major studios and pay-1 titles to one, which was WB. And so we went from that to then a strike that further elongated and stretched out content offerings because we had to sort of pull -- move more stuff into '24. So there was 9 months of Max from a content perspective, particularly in the U.S., were not strong. So we sort of muddled our way through it, and we did -- in intermittent quarters, we started to do profit but no growth, and then we did a little growth but no profit. And what I really meant by the inflection point, coming back to that is third quarter was the first one where we actually delivered profitable growth. And as we look forward at the next several quarters, it gave us -- that's the moment where we saw this beginning of being able to actually deliver both of those things steadily, reliably on a go-forward basis after 2-plus years of work, as you said.

So I think you talked about now two growth vectors to drive that profitable growth, content and international. I mean maybe just start with content. Like -- to be watching what happens with HBO and Max is a somewhat personal journey because I've had so much appointment viewing with HBO over the years and recently was watching The Penguin every Sunday night when it came on. And I feel like all of my life is has been punctuated on what's on Sunday night on HBO. So that ties into, I think, what you've talked about, which is that you have to have cadence in this business. And with the strikes last year and maybe a bit of the just organizational churn of the merger, that cadence has gone through fits and starts. So can you talk about where the cadence sits today and how you feel about that cadence for 2025 since it's so important to the way Max and HBO runs?

Yes. I mean -- and I define the cadence as multiple sub sort of vectors. One is obviously we have -- when we got here, we had about 4 series that we're doing bigger numbers, over 10 millions of viewers every -- on a per-episode basis average. And the good news is our biggest tentpole started to come back in rotation this summer with House of the Dragon II, we go into last of The White Lotus, which will come in the first quarter in February next year, then we go into The Last Of Us in the second quarter. Then we have a new Game of Thrones Series, smaller scale series that will come in over the summer. Then as we look out even beyond that, we'll go into the third season of Euphoria, probably in early '26 at that point, then we get back into the House Of The Dragon Season 3. And so we're now in a cadence of having at least 2 or 3 of our major tentpoles every year, which is one big reassuring point. The second piece is, 2 years ago, one of the things -- and credit to Casey Bloys, who is sort of my partner on the content side. What had happened in the original administration was Casey was doing HBO and there was another team that was hired to do Max Originals. The reality is, as Max Originals, that team really was trying to sort of be HBO as well. And so they developed a lot of what I'd call prestige shows that -- things like a Julia, which is a Julia Child Series, very well reviewed, very nice. A lot of these young adult, more female-skewing things like The Sex Lives of College Girls, which is on now, a reboot of Gossip Girl, Pretty Little Liars. But that was at a time design where basically there was a little bit of a machine gun spray of let's try and do everything. The reality is at the core of the service, the service is a great -- something great for adults and families and kids, in particular, in young adult is -- there's too many other offerings out there that are highly appealing and already have user behavior fairly well established. But that's one of the areas we said that's not a priority investment category for us. And so what you're starting to see now and again, to Casey's credit, he said, look, I don't need -- we don't need more HBO. And we don't need to go into categories that are going to be very hard to dislodge behavior where people are already going to other services. So what we can do is we have all of the best IP libraries in the world. Let's mine that IP library because you have existing fan bases, you have lower marketing expense because people know what the franchises are already, and they're beloved and they're global for the most part. And so that's what you're starting to see the fruits of starting this fall, which is The Penguin obviously coming out of the Matt Reeves Universe and the Batman Universe, hugely successful. Dune: Prophesy also coming on the back of obviously Dune 2 earlier this year and the success of that franchise. You're going to see an It series out of the Stephen King world. We're working on things like Crazy Rich Asians, we're in development on series like a Crazy Rich Asian series. And so mining the WB library is the second vector which again has already big installed bases of IP and fan love that will work everywhere around the world, which is a second help. And the third is some of it's just basics and blocking and tackling of getting better at sequencing when we're releasing stuff. And so we ended up having a lot of -- in the first 1 year, 1.5 years because of previous designs, bunching of great stuff for 3 -- for a month or a month, 6-week period and then nothing for 3 weeks. We've gotten much better at the handoffs. And you can just see it in this last 4-month period, between House Of The Dragon in our big tentpoles, House Of The Dragon, going to Penguin, going to Dune, going to The White Lotus, going to The Last of Us. And then we pepper in, obviously new franchises including things that we're experimenting, which will be really interesting, which we'll do coming in January, for example, on something called The Pit, which is more of a procedural -- think of it more like a broadcast procedural show that is a 15-episode series, which is way more than we usually do, obviously, lower cost than a lot of the stuff we do, all about life in an ER and it takes place a little bit like 24, back in the day on Fox, over 15 hours in an emergency room setting. And so anyway, we've got a great lineup coming over '25, '26, and obviously, as you look out in '26 and into '27, you begin a 10-year journey on the Harry Potter series, which we're super excited about. And I'd argue maybe the biggest event in the streaming entertainment space ever by the time we get to that series.

Is there any good way to think about your positioning, maybe content spend on tentpoles versus franchise IP, versus kind of new franchises? And I ask it from the perspective of, I think, equal IP fatigue has certainly become something that media has experienced. It was great when you could replicate everything, then audiences wanted to see new stuff. And I think now we're kind of in version -- version 2 of let's see some new stuff. So how do you balance those?

Look, I think, again, if Casey were here, he'd say two things. One is, we think there is less about superhero fatigue and more about bad story fatigue. And so I think, yes, we're conscious. On the flip side is Marvel or arguably even Star Wars, but certainly Marvel and the Disney+ example, we look at it and say, we've learned from their mistake. You probably don't need -- for that fan base, you don't need 4 series a year or 5 series a year. Probably 2 is sufficient. So in the DC world, if you look at a -- we're releasing Creature Commandos, which is an animated DC series, it sort of kicks off James' new DCU. We have Peacemaker. We're working on [indiscernible]. But we think probably kind of do -- 2 DC series a year is probably plenty. You don't need 4, you don't need 5, because that fan base is already pretty rapid and on the platform. And so I think that's how we think about the DC franchise. The HBO side, again, we have a pretty good sense that the HBO passionate cohorts, and we've now looked at this through our own customer segmentation. The volume we have now and that we have had historically is good. Where we're trying to figure out ways is to the people who are more -- slightly more serial watchers, who come in and out a bit more is -- what is it else that we need to give them. And that's where these other stand-alone IPs -- and one of the advantages we think we have -- again, this is not to say anything -- Disney is incredible in so many ways. But their lanes are narrower. Our library of IP, there is no definite connection point between an It, which is obviously a horror franchise and a Crazy Rich Asians, which is a comedy franchise and a Matrix and -- and so the breadth of what we have to offer, you have much less of the fatigue risk you're talking about when you look at the way that we can mine our library versus others.

Right. The second driver that we'll talk about is the international rollout. So I think Max is in 65 markets as of Q3. I think you're launching in 7 markets, roughly in Southeast Asia right around now, if you haven't already

We did.

And then more to come, I think Australia and others. I know every market is different. It's the go-to-market strategy is different in each. At the beginning, you just talked about profitable growth as kind of the new North Star for the business. Historically, it looks like it's been tough to have a lot of profitable growth and new market launches concurrently. So how are you balancing that? Or maybe a better way to ask it is, what should we expect in terms of the impact on whether it's subscribers, revenue acceleration, profitability impact, those sort of key metrics.

I think a couple of thoughts. One is, you're right. Part of this international growth story is -- we're just in the early innings of it. So you're right, we were in one market, which is the U.S. as of the end of last year. Beginning of this year, we launched LatAm. We launched a number of markets in Europe. And then in -- just a couple of weeks ago, we launched the Southeast Asia and Hong Kong and Taiwan. And so we're now at 74 markets. We look at the addressable market of broadband households in terms of markets where Max is available, is about 350 million broadband households. The total opportunity in terms of markets that we can get to, if you exclude, obviously, China and Russia and even India, which is a different animal. We measure as around 650 million. So we still think we have about 300 million -- almost half the addressable market still to get after in these international launches. So that's why we are big believers that we're in the early innings of a big international growth opportunity for us. And if you look at our penetration in the markets we're in, which today is probably a little less -- around 30% or a little less than 30%. Then we've got a big opportunity over the next couple of years. In terms of the profitability portion, to your comment, I think in the old days -- and this is where we're just trying to be smart and pragmatic about how we launch. The view of start from zero, go only direct-to-consumer and build from scratch had a pretty negative profitability profile. You ended up going from high-margin licensing businesses to very loss-making B2C. Our approach, and we've seen this in a handful of markets, now including France, which is our first new market that we launched since Max's existence, is: A, we do a combination of distribution paths to market. A, partly just to be smart about the economics; B, we realize it's 2024, 2025. People's behaviors in usage, it's harder and harder to get people to try out these new products because they've been habituated by others. So we're -- we want to get the hand -- the product in the hands of as many people as possible. So we do a deal where we launched on direct-to-consumer ourselves. We launched on Amazon PVC, who is also a partner who can get us in front of more customers. We launched on CANAL+, which is the big pay TV operator in France. And boom, you're in front of millions of fans day 1 as opposed to starting from 0 and building. And so the economic profile -- the benefit of that is the economic profile, is not a cliff that you then start to rebuild from. But in some cases, it's a gradual drop that you can go -- or in some cases, it's not even a drop. It's sort of you're able to actually manage a much more continuous curve of profitability. And that's the game for us as we look at all these different markets is trying to figure out how to get to market faster, don't do it by creating this cliff but ultimately smartly by accessing multiple go-to-market paths, make it a much more, much shorter investment cycle.

That's maybe a good segue because I think you've talked about 3 big European market launches in '26. Based on the discussion, things you just mentioned, I don't think France is one of those markets.

France launched this year.

Right. So the other three. And Sky has built a big brand on a lot of that is synonymous with Max and HBO. So you have a complicated distribution relationship with Sky. How do you think about continuing to work with them as a partner as well as accessing those markets with your own brand over time?

Look, I think it's -- to the point of the conversation we just had. There's a lot of opportunities, and there's proof points that we have already done with distributors who are our partners in the linear -- in the licensing world, where we've effectively been able to manage both a D2C presence and a partner presence. And so the same could be true with Sky. They obviously have a big installed base. There -- our content is critical to them. but there's also great alternatives. I mean Amazon is big in that market and certainly eager to be more and more aggressive in that space. So look, time will tell, but we don't look at it at a -- in the old model, I think people would have looked at it and said, "Okay, you have to pull all your content off of Sky and only go direct to consumer," and that's where you end up in this cliff and rebuild. That's not necessarily the case. And particularly, we have obviously a big established installed base with a lot of our fans. There are very collaborative ways we can actually work together as we've proven we can do with people like Canal, Telefonica in Spain, Claro in Brazil. And so there's a lot of different options.

Is that kind of the world we live in today, where there are no bad distribution deals if they're incremental? I mean I look at what's going on, and I think you have partnerships with Disney and Hulu, Amazon Channels, DoorDash, the new Warner Bros. deal with Charter, certainly it includes Max as well. In all of these cases, there's customers who may be paying you a higher ARPU directly and then there's going to be a lot of customers who now have access to the product that wouldn't have otherwise. So you mentioned that once upon a time with Sky, many of us looked at it as like it needs to be one or the other, right? You go to market directly or you go to market with a partner. All those waters seems much more muddled today. Like what does that mean for just expanding the revenue base?

I think we look at it as largely 3 variables that matter as you think about those. Obviously, ARPU matters. And so -- there's no question, obviously, if you go direct on a retail basis, it's generally going to be your highest ARPU customers, but it's also going to be your most expensive in terms of your SAC, and your churn profile on those customers. So ARPU matters. And as we think about partnerships and deals with third-party partners, a lot of the discussion is, how big of a discount do you give off the retail price to make it attractive? The second is obviously the LTV assumptions in that, which is how do you think -- what is the churn profile of an existing subscriber through a partner that has probably lower churn than you would have on a direct basis? And how do you measure out that ARPU versus retention benefits of those subscribers? And we look at those, too. And then the third is sort of growth because the other thing that happens sometime is in those wholesale distribution partnerships is there can be sort of caps on your growth potential, either because of pricing or because of their own bases or -- and so it's trying to make sure you don't end up in a captive situation where your growth gets capped somehow. And -- but we found -- again, this is not a theory, this is a practice that we've done. There are absolutely ways in terms of the negotiations that you can have with those partners to be able to manage effectively ways to get all through those. The only other consideration I'd say is we are conscious that you want to be careful of doing a variety of partnerships. But at some point also, we are a premium service. We're a premium brand. We don't want to be to a point where it sort of looks like you're everywhere, including the dollar store. And so I think that's the only other sort of more strategic trade-off we think about.

Maybe switching gears to advertising. So advertising, I'd say, Max as a service is in an earlier stage than some of the peers are in terms of when it was introduced. Technology that you've integrated into it. Maybe just start with the first -- what I think of as the build block for [indiscernible], which is -- what are you seeing in terms of engagement on ad-lite versus your ad-free service? And then maybe we can talk a bit more about monetization.

Yes. I mean you're right that we are -- up until this year, we had an ad supported SKU only in 1 market, which is the U.S. And in the U.S., it was relatively recent because it was within the last 3 years as it was launched. And remember, it was launched off a product that historically, as HBO Max brand would tell you, people are used to thinking about it as an ad-free experience. So you measure all those things up. And I'd say, yes, we are definitely in the earlier phases of that evolution. We've now rolled out an ad supported SKU in a little over 45 markets around the world, all LatAm, a handful of European markets. We don't see the opportunity right now, certainly in the Southeast Asian market, we're not rolling out an ad-supported SKU because we don't see the premium ad -- digital ad market as being vibrant enough yet. And so -- we look at that as a whole new growth opportunity. The engagement numbers are good, our ad load generally compared to some of our peers that have been in market longer is still lighter than most. And there, again, from a growth opportunity, we see 3 or 4 different ways that we continue to grow there. Obviously, there's just -- that is the SKU that we are leaning into, particularly in more mature markets like the U.S. because of its lower price point. So a lot of these partnerships with the DoorDash or others of the world is with the ad-supported SKU because it enables a lower price point -- entry price point for consumers. We know that's where in markets like the U.S., we need to penetrate further. So there's just -- generally penetration growth that will come with that. There is a further engagement opportunity in terms of driving higher engagement. Part of that's product driven, which is another separate growth vector for us. We've spent a lot of time improving the product, but we went from not good to good, but we haven't yet gone from good to great. And we have a long road map of feature improvements that will continue to drive in that direction. So engagement will improve. Our ad load is still light compared to most as we're averaging sort of closer in the 3 to 4 or 4 to 5 minutes for most, where some are in the high single digits already. Our ad formats and our ad tech stack, as you said, we've largely built -- we made some small acqui-hires to help us do this, to build some of that technology in-house, enabling us to actually iterate faster. But some of the ad formats, we just released shoppable ads -- just literally before Thanksgiving, which we're seeing some really great success with brands like Wayfair. And so ad formats are another way. And then obviously, we continue to be a driver of price. Naturally with Max and with HBO as a content category and a brand, we want to be at the premium end of the pricing. And so we want to continue to push price as we go as well.

Yes. With so much appointment viewing, I imagine on the service, has that enabled you to get a premium CPM? Do you have any sense that you can talk about as to where you think you fit versus peers in the market on a pricing standpoint?

I mean, again, I know this is going to sound self-serving, but I think based on all the data we said, we have -- we do sit at the premium of the industry. And remembering that up until now, also within HBO content, current seasons and current series, certainly current seasons of current series, we're still only doing -- there's no mid-rolls, this is only pre-roll sponsorship, and those are selling at the most premium prices in the industry where people want essentially 100% share of voice on premium properties. We are in great integrations with brands. We did a big promotion with Cadillac. And these are also premium brands that want to be associated with the premium -- the most premium branded entertainment, which is really still HBO.

And in this drive to profitability, I don't think you've said too much on password sharing at this point. Do you think that's a meaningful opportunity?

I do. We're literally -- I mean the thing we said is that we will kick off literally in about a week, some very early gentle messaging. And this will happen to -- like all things, this is an art and a science of trying to figure out who is actually sharing versus who may be actually at their vacation home or on a business trip. And so it's an art and a science to try and tighten the filter of who's in there. We'll start some early messaging to people who we think are definitely in the higher tier of usage. Now we will offer a way to essentially add a member starting in the first quarter. We will then start gradually, as we get the data and start to figure out with some explicit and implicit signals, whether how good we are at detecting. And then as we go through '25, you're going to see the filters get tighter and tighter. We think that's a meaningful growth driver. Likely more it sort of begins to kick in, in the back half of '25 and into '26 even. Not -- it won't be Netflix. We haven't been in the market for 15 years. Encourage everyone to share Max words. So it's -- I don't want to oversell the scale of it, but it is a meaningful growth driver. On subs and on revenue in -- I think probably beginning in the back half of '25 and into '26 and '27.

And cadence of price increases, at least in mature markets. Is that something you feel like you need to approach with regularity at this point or more as the content swells?

Yes. I mean I think we've done a lot of work in the last -- that's another piece of the efforts we've done over the last year, 1.5 years as we rolled out Max, which is -- we feel like the product was underpriced. And frankly, there were some just poor pricing decisions done by the previous administration that we are getting out of, and we have gotten out of that we're not doing any more. And so we really reset the price, we want to be competitive. We think we may be, from an entry standpoint, slightly under Netflix in certain places. So we look -- we do look at them and others in the market as sort of those benchmarks, but we want to be viewed as a premium product. We are a premium product. And I think on the cadence of it, we don't have that debt model, but I think generally, it will probably be in this 15-, 18-, 20-month, 24-month max kind of timetable, where we'll constantly be evaluating whether we need to move price again.

And then on profitability. So for 2025, I think initially, the guidance was around $1 billion in EBITDA, then it was above $1 billion. Now it's meaningfully above $1 billion.

What does meaningfully above $1 billion mean to you?

Well, we've asked the IR team to give us a quantification of meaningfully above. And while that's been elusive, I mean, I think what I'm curious about is just what's gotten better in the business, number one, that's giving you that confidence? And then two, the other piece. I know HBO linear is within the segment. Presumably, all these international market launches are a drag on the P&L. It would imply to me that Max domestic is getting to some pretty healthy margins. So that's another one would love to unpack.

Figures you'd have to throw something at me depending on what I say and what I can and can't say. But here's what I'd say is, A, I'd say, at the overall level, there are several regions in several markets that are profitable, it's not just the U.S. So A, that's a positive. To your core question of what's changed? I wouldn't say it's so much changed as opposed to certainly our core -- forget about content for a second, our core cost base on the tech and infrastructure side. There certainly will be more investment in the product, but there's also cost productivity coming out of platform migration. We just finished -- I mean, we had an old HBO Gold platform still in Southeast Asia that we just deprecated. Yes. So that's -- so there are savings as much as there's investment in the product, there's also equal amounts of savings coming out of better AWS deals, better leverage, all the things that we did over the last 12 to 18 months in terms of squeezing the cost base. So you're starting to get some price advantage. As you're bringing incremental revenue, more of that money is dropping to the bottom line on the core product efficiency side. On the content investment, again, we -- a lot of the work we did over the last 1.5 years and all the stories about it at the time we did finish the purchase accounting of cleaning up content that we think were working. We've gotten the content offering to be more productive. And then the globalization is just bringing in -- look, this is why it's a scale business and why the global matters, is we're bringing incremental revenue where it is driving more profitability and through the partnership conversations we were having earlier, trying to do it in ways that ultimately don't require you to take a big hit when you launch. And things like the reset on pricing have -- or helped bring in incrementally more margin on a per subscriber basis. So all those things are the helpful where the tailwinds are starting to kick in. In terms of the regions overall, what meaningfully means -- what meaningful means, what significant means, you're the analysts, you tell me what that means. But I just -- I guess the point is more -- what I'd say is back to where we started in August of '22, so 2-plus years ago, we put a stake in the ground, frankly, only 5 months into the deal, saying, $1 billion of profit in '25. When we were losing $2.2 billion that year, just to be clear. And I think as a company, we've gotten a lot of maybe sometimes deserve it, but about overpromise, under-deliver. The reality is this is where we've done the opposite, which we've promised. And we've not only delivered but we've actually outperformed what we said we were going to do, and we'll outperform next year what we said we're going to do. So how much of that outperformance over the $1 billion? I don't know. I think we feel really strongly and really good about the fact that this sort of ambition we set out 2 years ago. We are coming to the end of the second year of that 3-year ambition and you'll see it in our fourth quarter results with a very good tailwind.

Maybe just lastly, so I think investors -- and I feel like DTC has turned this corner to the point you just made about what you're now delivering. I think you also oversee the Games division. Gunnar on the last call talked about, this is one of the parts of the studio that is an area for improvement. What inning do you think you're in, in terms of making those improvements by focusing on the franchise IP at the Games division? And how much -- kind of how much time should we reasonably expect to reposition this?

I think it's kind of a three chapter. Obviously, that -- the Games business is the longest cycle business, I think we have, even longer than the theatrical business. So it's probably -- its real road map is measured on a 3- to 5-year time horizon plus, as opposed to a 1- 2- or 3-year time horizon. This business historically -- prior to 2023 was at an incredible, frankly, 8- to 10-year track record of doing $1 billion, $1.2 billion, $1.3 billion of revenue and being a 30%-ish margin business pretty consistently. It then went into its best year ever in '23 led by Hogwarts Legacy, and then in '24, it's worst year ever. So the bad news is this has really been a terrible year. We had kicked off though a year ago already a strategic refocus, which was really led by 2 key beliefs. Number one is they had diversified into too many IPs, too many franchises trying to do too many things from a games type. And we said we got to get back to basics. And we said we're going to refocus -- in the summer of last year, we said we're going to refocus on 4 franchises. And they're all billion dollar proven existing fan bases, which was Harry Potter, Mortal Combat, Game of Thrones with our Game of Thrones: Conquest game, which is $1 billion plus mobile free-to-play game and DC, but really focused on Batman. And potentially a few experiments outside, but if it experiments, it will be core characters or worlds like a Superman, not a Suicide Squad. So that's what we said, number one. Number 2 is we said we are historically too dependent on single player console, AAA console games. We need to diversify into A, more mobile and B, in the console games, move into a more multiplayer world because if you look at the success, a lot of people, it's more social, people want to be engaged with their friends. And so that's the road that we're on. You'll see us next year, 2 out of our 3 big releases next year are mobile games. The multiplayer dynamic that will take longer to develop. There are some live and live services games, ideas that we have. And so that's sort of the two-pronged core franchises, diversify the base more into mobile and into multiplayer, not just single player. That road map will take 3 to 5 years to fully execute. The flip side is we've had such a bad year in '24. The good news, it will look much better in '25 just by doing comps -- the comps will look a lot better. Meaningfully better. And -- but the flip side is that profile of us saying sort of $300 million to $400 million of EBITDA, that the business had historically been kind of fluctuating in-between. It will probably take, particularly given this is a slate-based business. And so the fact that the slate didn't work this year will hurt us a little bit next year because we won't have a library of sales to keep kicking into it. So the numbers will get meaningfully better, but we won't get back to that level of profitability for at least a couple of years. And then in the outer years -- at the end of that sort of 3- to 5-year time horizon, we think the opportunity is maybe even more significant.

Great. Thank you, JB.

Thank you. Thank you.