Codere Online Luxembourg, S.A. (CDRO) on Q1 2022 Results - Earnings Call Transcript
Operator: Good afternoon. My name is Rob, and I’ll be your conference operator today. At this time, I’d like to welcome everyone to the Codere Online First Quarter 2022 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks there will be a question-and-answer session. Thank you. Guillermo Lancha, Director of Investor Relations. You may begin your conference.
Guillermo Lancha: Thanks, operator, and welcome everyone to Codere Online’s earnings call for the first quarter of 2022. On this call you will hear from our CEO, Moshe Edree and CFO, Oscar Iglesias. Before turning the call over to Oscar, I’d like to remind everyone that during this call we will be referring to a presentation we uploaded to our website earlier today. We encourage everyone to read the disclaimer section, particularly the points around forward-looking statements, non-IFRS financial measures and preliminary information. During today’s call, we will be referring to non GAAP financial metrics, such as Net Gaming Revenue or Adjusted EBITDA, for which you can find reconciliations in the appendix section of the presentation. Finally, please note that a replay and transcript of this call will be available later today on our website at codereonline.com and that if you haven’t done so already, we encourage you to sign up to our Investor Email alerts. Oscar, over to you.
Oscar Iglesias: Thanks, Guillermo and good afternoon to everyone joining the call. This is our first full quarter of operating results as a publicly traded company and we look forward to giving you an update on business trends to add to the information that we have provided in our first annual report, which was filed on Form 20-F on April 29, and which is available on our website. Before moving into details regarding the quarter, I just wanted to remind you that Codere Online is Luxembourg-based and as a European company, our accounting information is prepared under IFRS accounting standards and our functional currency is the euro. As such, throughout this presentation, all monetary figures will be in euro unless expressed otherwise. Also, based on the feedback that we have received from a number of you following our fourth quarter earnings call, in today's presentation, we are providing both consolidated income statements and country level net gaming revenue and adjusted EBITDA on a quarterly basis throughout 2020 and 2021, in addition to of course, first quarter 2022 figures. We hope that this will be helpful to those of you that have either built or are considering building a financial model, but also as further context for everyone that is tracking the performance of our business. Going forward, we will be moving this information to the Annex and focusing more on current quarter and year-to-date results in each case versus applicable prior year periods. With that, I will go ahead and pass the call on to Moshe. Moshe, you maybe unmute?
Moshe Edree: Hello?
Oscar Iglesias: Yes, we hear you now. Thanks.
Moshe Edree: Thanks, Oscar, and thanks, everyone, for joining the call, and sorry for the delay. For those of you who are new to the company, I would like to provide a quick overview of Codere Online. I joined the company in late 2018, when it was a wholly-owned subsidiary of Codere Group, which is a Madrid-based incorporator, with over 30 years of retail gaming operating experience in Spain, Italy and Latin America. This past November 30, we completed a merger with a NASDAQ-listed spec, which resulted if not only Codere Online being a US-listed business, but also in our raising over $100 million to finance the substantial opportunity we have ahead to grow the business, in particular, throughout Latin America. Moving to the highlights of our first quarter 2022. We delivered strong operating results in the period, with net gaming revenue up 24% to nearly €26 million and 15% versus Q4 2021. This growth was driven by a significant increase in active customers and in Mexico with a monthly spend per active at above €100. In terms of customer acquisitions, we continue to see strong volume -- our first time deposit increased almost 50% to 78,000 at an average cost of around €200. Considering that, this is the first full quarter where we have had the benefits of a higher level of investment, we are pleased with the performance and confident that we are on track to meet our full year guidance as a net gaming revenue growth accelerate. Over the next few quarters, this is a year we also have a World Cup, which should provide an additional uplift for fourth quarter results. We are quite encouraged by the long-term growth prospects of our markets, not only be on what we see on the ground, but also based on other industry sources that we have received upwards the growth forecast for a certain market. For example, in Mexico and Argentina, we are now expecting the total addressable market size of 20%, 25% higher than our current projections. And we believe that we are well positioned to capture our share of that growth. Finally, we have put in place a long-term incentive plan for key members of the team, which was approved by the shareholders on March 3. This is a five-year plan that includes restricted share, stock option and deferred payment rights, which will not only further align senior management and directors interest for those, Codere Online and its shareholders, but also strengthen the retention and motivation of CRM management and the rest in the long term. With that, I will turn it back to Oscar. Oscar?
Oscar Iglesias: Thanks, Moshe. Turning to the financial results for the full year. We see that the 24% growth and consolidated net gaming revenue was driven primarily by an impressive 56% growth in Mexico and that Spain has recovered the levels we had in the first quarter of 2021, prior to the regulatory restrictions that came into effect in May of last year. As you know, these restrictions imposed significant limitations on advertising, sponsorships and promotional activities. So these operating results are not only very encouraging, but the start of what we believe is a positive trend for our Spanish business. Colombia also performed well in the quarter with an 80% increase in net gaming revenues, and our remaining markets also contributed to the positive results in the quarter. In regards to EBITDA performance by country and as discussed in our prior earnings call, we had a significant uptick in negative EBITDA in the quarter, primarily due to higher levels of marketing investment and furtherance of our accelerated growth throughout this business. The exception was, as has been the case for some time, Spain, which generated €2.5 million of EBITDA in the period, a level has sustained for the last few quarters, despite the regulatory hurdles, which prevented us from deploying our promotional tools in this market. We believe there maybe a read across here for our Latin American operations, where we will be seeking to replicate this path to profitability, whereby promotional activity can eventually be curtailed once we have achieved meaningful scale and are otherwise positioned as one of the leading brands and operators in the markets in which we compete. The same example also highlights the importance of our omni-channel approach as having a retail presence allows you to reach the customers in the way pure online players cannot, especially when marketing and promotional activity is restricted. Adjusted EBITDA in the first quarter decreased to negative $13 million, in line with our expectations, primarily due to this increased level of marketing investment and, to a lesser extent, higher platform content, technology and personnel expenses incurred in the period. But we believe that these higher levels of marketing and operational investment are laying the foundation for the significant growth we are targeting over the coming years. We understand that, the recent sell-off of certain technology and other high-growth stocks is partially driven by concerns about the path to profitability and cash burn. But please remember that, a significant portion of our overall marketing spend is discretional or otherwise uncommitted. As such, we can increase, decrease, or if needed, discontinued marketing spend at any point in time based on what we are seeing across our markets. Also, the upfront investment we make to acquire customers in any given period, what we typically refer to as a cohort is generally recovered and generates a return over the lifetime of those customers. Internally, we define lifetime as five years following our position, and we'll be seeking a relationship between lifetime value to acquisition cost of about three to five times, depending of course, where we are in the growth trajectory in any given market and the applicable unit economics within that market. Turning to the Spanish operating and financial metrics, we see the recovery in net gaming revenue in the first quarter of 2022 to about the same level we had in the prior year quarter despite the lower level of active customers as a result of the promotional restrictions in place. On an LTM basis, we are flatting revenue levels, but with 6% more average monthly actives in the period due to the impact of COVID on sports activity in the prior LTM period. In Mexico, Meanwhile, net gaming revenues reached €10 million in the quarter, an increase of 56% year-on-year and 27% sequentially. The – this strong performance is supported by our omni-channel approach, given the large retail presence Codere Group has in the country with nearly 90 gaming halls and also by the fact that in Mexico, 100% of the retail activity is tracked as required by regulation, allowing for more effective promotions and overall customer management across channels. In Colombia, meanwhile, we have had strong growth in the quarter in terms of both net gaming revenue and actives. But while this continues to be a relatively small business, we are making a number of adjustments that we believe will allow us to continue growing the business and improving our return on marketing investment. Turning to the balance sheet, as of March 31, we had over $100 million available for deployment. As the negative $13 million in EBITDA and adjusted EBITDA in the period was more than offset by a $12 million decrease in net working capital that is a positive cash impact of $12 million, and a positive $1.4 million of foreign exchange impact on the proceeds from the business combination, which we hold in dollars as a result of the strengthening of the dollar throughout the quarter. Overall, the net working capital position of the business decreased to negative $28 million by quarter's end, primarily as a result of the $10 million increase in accounts payable, which was due to both the delay in the invoicing from certain of our Mexican media partners, but also delay in payment of certain services provided by Codere Group. We expect to get caught up in these payments, which amount to about $9 million throughout the second quarter and that the net working capital position of the company will be back to more normalized position by closing. Pro forma for the payment of these 9 million, our cash position as of March 31 would have been around $90 million expressed US dollar terms. On Page 16, we have further details regarding the cash flow statement and the variation in net working capital in the quarter, both of which we are providing for the first time this quarter. That's all from my end. For those of you who might be interested, we'll be attending Stifel's Investor Conference in Boston. We’ll be there on June 8, and will also be available for meetings in New York the following day on June 9. So, feel free to reach out if you’d like to meet in person. I will now hand it back over to Moshe for closing remarks.
Moshe Edree: Thanks, Oscar. I just want to highlight that the first quarter results were in line with our expectations. A trend that continued throughout the month of April and we believe that we are on track to meet our commitment to the investor for the year. We continue to believe that the opportunity we have in the front of us is amazing and we are more focused than ever on executing our plan. We look forward to speak with you again in late August, when we will publish our second quarter results and we'd like to wish everyone a safe, healthy and happy summer. With that said, I will turn back to the operator to open up the call for Q&A. Thank you, everybody.
Q - Jeff Stantial: Hi, good morning, Moshe, Oscar. Thanks for taking the question. First off, I wanted to drill into the returns on your ongoing marketing plan. It looks like CPAs were up about 30% quarter-on-quarter, now trending about $200 per customer. Is this kind of the right level in the near term? Should we expect it to keep climbing a bit – if you have your marketing plan? And then what are you seeing with respect to the LTV on this CAC? I think when you first went public, you talked to a 4x target, is that consistent with what you're seeing? Thanks.
Moshe Edree: Hi Jeff. Oscar, I will take it. So yes, you're right, Jeff. I mean we see increase in the CPA, but that was expected. I mean, as you increase the marketing spend and you acquire more customer, the blended cost of the customer – the cost per customer is increased. But at the same time, we are modifying and we're optimizing our CRM activity. So, I think that overall, what we are doing, we are stabilizing the formula between the amount of customers that we need to acquire in order to accommodate the growth. At the same time to optimize the bonuses in VIP level. So, we receive the same return that we expected in the business plan. So, all-in-all we think that we're on the right track. So, we see that the value in growth in the CPAs growth. And if we see that there's some decrease in the lifetime value, we will adjust it on the CPA level as well. So, we're -- fine on the slide that's what we're doing.
Jeff Stantial: Okay. Helpful. Thank you. And then I know, I think in the deck you rearrange your goal to be EBITDA positive by 2024. Just curious, how should we think about the timing for peak EBITDA losses, given your plan? I'm assuming sometime in 2022, but just kind of what quarter perhaps should we think about the cadence there?
Moshe Edree: Oscar, do you want to take it?
Oscar Iglesias: Yes, it's a good question, Jeff. I think that this is a steady build in the peak EBITDA loss will be something you see in the current year period, so in 2022. And then the business will start tracking, as we start having the cumulative effect of that marketing investments from all the incremental cohorts that are coming into the mix here, you'll start seeing that moving in the direction of 2024 both EBITDA positive and cash flow positive. So 2022 would be from a full year standpoint the trough year in terms of the low point EBITDA.
Jeff Stantial: Understood. Thanks, Oscar. And then just in Spain, it looks like you're adapting really well for the regulatory restrictions that were put in place. Can you just talk about some of the things in more detail that you're doing to navigate these headwinds? And I would assume, take market share -- it sounds like you're leaning even further into the omnichannel -- advantage or just anything else that you're, kind of, executing just to adapt to some of these changes around marketing? Thanks.
Moshe Edree: Yes, Jeff. So Oscar, will take it. Yes, it's challenging. I mean, in markets like Spain, ethically when we are facing like a full ban of advertising, obviously, our ability to acquire Polaris is quite limited in terms of the advertising spend. But having saying that, its a matter of branding. And Codere is a very well-positioned as a brand in Spain both because of the retail presence. We have hundreds of shops, which out of them are at least, I think, and Oscar can correct me around 60 or more are branded as Codere on shops that. So that is an omnichannel strategy is a very strong position. At the same time, we see some reduction in marketing spend from our competitors. So just by that, we are gaining some market share. And at the same time, as any other markets, we invest quite heavily on the product side to add more content, to add more sports event, to optimize the funnel of the player experience. And that by itself it increase the player value as well. So I think that if you combine everything together by having a strong branding position on the back of the Real Madrid sponsorship that we had for years, the retail omnichannel strategy, the product, the CRM and the long-term engagement with the players, I think that we'll see an increase. And anyhow, the expectation or target in Spain is to increase in a single digit year-by-year. So I think that we're aligned with that plan.
Oscar Iglesias: Jeff, I would also add that just on the Real Madrid front that the sponsorship is still an effect that even though we can utilize it the same way we could free pre-marketing and promotional restrictions that we still can leverage that sponsorship for hospitality and other things that are useful to us and further into our business, especially with some of our higher end customers. So that's another point that's a little bit differential, I think.
Jeff Stantial: Okay. Interesting. That's helpful. Thank you. And then just on Brazil, we have heard some news flow since the last time we spoke at Q4 earnings. Can you just talk about what you're doing here in terms of timing and any details on structure? And then just how should we handicap the odds that you think this could get passed?
Oscar Iglesias: Moshe, do you want me to start and then you can jump in, in terms of assessing kind of the…
Moshe Edree: Okay. Go ahead.
Oscar Iglesias: Okay. So suggest -- as everyone knows, there's been some recent legislative developments on -- specifically in the sports betting from in Brazil. We had understood that this legislation was going to be taken to the President of Brazil for a signature on May 10, but I’m not aware that this has actually taken place. We understand that this contemplates an unlimited number of licenses, but it would be a single license for store setting in both the retail and online channels. Five-year term, the upfront license acquisition cost of a little in euro terms, it's €4 million, I think it's like BRL22 million. The gaming tax rate seemingly will be based on similar to most other regulated markets based on wind and not as initially contemplated announced wager, which is good news. And also they're contemplating a window for existing unregulated operators to begin complying within the new regulatory framework. There's also some other things here about a possible -- I think some people have referred to it as a sandbox or a pilot program where they may be selecting certain operators to get started with to start establishing what I imagine is the detailed regulatory framework that will apply going forward to all licensed holders. In terms of what we're doing, we're obviously evaluating options, including one or more local partnerships or obviously, if Codere Group are controlling the majority owned shareholder moves forward with retail sports betting, obviously, we will be interested in a coordinated omnichannel approach. Codere Online strategy, I think we have to give a hard think on that. It's not something that's off the table, but maybe Moshe can chime in with his view and what his expectations are for the market?
Moshe Edree: Yes. So, obviously, Brazil, it's one of the biggest market -- will become one of the biggest regulated market in the world and the third in Latin America, maybe the biggest one in Latin America. So, we will need to be there in a certain point. I mean, as being like Latin American operators and our aim to become the biggest one overall the continent, the way to do it is -- it's very careful. I mean, we have to do it very carefully because the size of the market and the fact that it's a different language, the Spanish that we're using in any other jurisdiction to be well modified both in terms of the product, but both in terms of the approach to the market. I would say that it's most likely that during 2022, we will not start any actual operational activity in Brazil. We are more aiming to 2023. We will start, obviously, by preparing the operational activity and the product itself. And then as Oscar mentioned, our preferable route is to go through a partnership -- local partnership. There are several options that we are checking right now, which I think that it's too early to -- that was a lot of--
Jeff Stantial: Thank you for that.
Oscar Iglesias: Sorry, you broke up a little bit. Feel free.
Moshe Edree: Can you hear me?
Oscar Iglesias: Yes, we can.
Moshe Edree: So, I think that at the beginning of next year, we'll start with slow marketing spend. It's -- as I said, it's a big market, expensive market. We'll do it very carefully. And we are very committed to our shareholders and to our business plan to stick to the six core markets that we're operating now. So, we are focusing on that. We will look on side what's happening in Brazil. From my experience, the same we've seen in other big markets like North America in the past. Those rush to the market and start spending millions in marketing didn't have a lot of chance to succeed. So, we started very carefully, preferable to a local partner with a good product, with a good operational team on ground, and then we'll take it from that.
Jeff Stantial: Perfect. That's super helpful. One last housekeeping one from me. You reiterated your three-year net gaming revenue targets. Just a reminder there, do you need any new markets to open up to hit those targets? Are those predicated on..
A – Oscar Iglesias: It’s a clear – it’s a market plan only, Jeff. It's just the existing markets that go
Q – Jeff Stantial: Perfect. That's all for me. Thank you all for all the color.
A – Moshe Edree: Thanks for the questions, Jeff.
Operator: And your next question comes from the line Michael Kupinski from Noble Capital Markets. Your line is open.
Q – Michael Kupinski: Yes. I was just wondering if -- thanks for the additional financial metrics, by the way. I was wondering, can you talk a little bit about your cash burn and what your outlook is just for the upcoming quarter, and I have several other questions here.
A – Oscar Iglesias: Yes. Hi, Mike. Good afternoon. Yes. Hi, Mike, we've given full year guidance on the net gaming revenue standpoint, we're not yet in a position to give quarterly expectations either on net gaming revenue or EBITDA. But let us give a think if in subsequent quarters, that is something that we want to incorporate and then potentially include in our Q2 call. But right now, we're not giving any quarterly guidance in terms of EBITDA or cash burn
Q – Michael Kupinski: Yes. It just kind of goes to the question about the cadence of the cash burn in upcoming quarters. I appreciate that. And then the other question is, can you talk a little bit about the competition for customer acquisition, at least here in the states, the companies are obviously spending significantly. You mentioned that Moshe about how the spend has been. And at least in the States, there's been a shakeout among some of the players that have exited online sports betting or at least significantly cut back on marketing spend because as you mentioned, the capital markets have kind of closed for some of the smaller players. Can you talk about the trend line in terms of cost of acquisition and your thoughts about the trajectory of those costs, have they increased to a point in some cases where you would necessarily want to cut back on marketing spend just because of the return that is expected? And have you seen competitors exiting any of your markets or coming back on marketing?
A – Moshe Edree: Hi, Mike. So, yes, so it depends obviously on the market. So in Spain, we're quite consistent with our CPA level, and we see some withdraw from big international nonlocal brand operators, like we have here, for instance, that we know that the Crisa bidder spend in Spain and other big operators, a bit of bet365. So in Spain, we're quite aligned with our spend. We see that we keep, as I mentioned in the previous -- in previous discussions that we see that return on the investment and the ratio is steady and we don't see any big problems in terms of new competitors entering to the market. In Mexico and Colombia, it's a bit different, and then I will touch a bit about Panama in Argentina that those are market that we are operating. In Mexico, it's -- we adjusted as this earning presentation, we adjusted the TAM for Mexico. And now we understand that the market, based on the last publication of our competitors and mainly Playtech and bet365, but the market is bigger than we envisioned. And so we see that -- and we feel quite comfortable with our expectations, with our plan. There's a lot of room to grow. Although there are some small and midsized competitors entering to the market, we don't foresee any related competition for us. It's a very complicated market. It's both on the terms of the regulatory, both in terms of the processing, the payment, cash in, cash out for the players, AML, KYC. So we feel quite comfortable that us, as local operators, with a very strong omnichannel approach, we can deliver our plan. We don't see any, I would say, disturbance from the competition side in Mexico. On the opposite, we're quite surprised that we managed to not just acquire the amount of players that we had in the plan, but also we can grow with the same amount of CPA and with the same ratio of lifetime value and to increase quite dramatically the spend in Mexico on the marketing side. That's not the case in Colombia. In Colombia, the market is much more challenging. We see that the return on the investment and the clear value is not build up. It's something that all the sectors suffering from, not just us, not just Codere. And there, what we're doing, we're adjusting both, our marketing spend, but also some modifications in the product side that will allow us to monitor more closely some of our fraudulent account activity that there are in the market that we know, that everybody is suffering from. And we see that our voice of share in Colombia is getting a bit higher, because we keep the same amount of activity, while the competitors were growing from this market. So we’re expecting that, that would be the trend continue in Colombia, because it's the first, I would say -- it’s the second, I'd say, the second year after the COVID that there's a lot of competitors, they’re trying to go for this market, including Rushbet , the online operator the tender to the market. And everybody now is trying to see how we can build the player value. In the City of Buenos Aires, one we just started, we believe that, again, based on our local omnichannel and the retail experience, that will not suffer from any competition in the City of Buenos Aires or clear the competition that we have with those that obtain the license, will not disturb our growth as planned, and the same is in Panama. So just to summary it up, in Mexico, we feel very comfortable about our ability to grow without any disturbance from any competition. And if there's any -- there is competition and as new comer to the market, we don't see that, that will anyhow can prevent us from growing in the way that we want to. Colombia is challenging, and we’re doing some reevaluation into the market. In Argentina and Panama, we feel quite comfortable, the same as in Spain.
Oscar Iglesias: Moshe, if I could just add. In Spain, specifically, we have, based on the latest regulatory data that we have, which is from Q4, we are. There is a sign that we're picking up meaningful share, particularly on the space bidding side, but also on the casino side of the business. We're waiting to see -- with the first quarter data to see if that is a trend that consolidate here in the first and then hopefully into the second quarter. But we are starting to see some of that improvement and the benefits from the strategy we have in Spain, which obviously is our home market and the market where we've been operating for quite some time. So there are some positive things happening there. We want to see how the Q1 numbers come out from the regulator to see if that solidifies, but a positive trend taking hold in Spain.
Michael Kupinski: Great. Thanks for all the color there. I'll let others ask questions. Thank you.
Oscar Iglesias: Great. Thanks, Mike.
Operator: And there are no further questions at this time. Mr. Guillermo Lancha, I turn the call back over to you for some final comments.
Guillermo Lancha: Okay. Before we do have some questions coming in from the webcast, so, I will just read them and Moshe and Oscar can answer. First one is around the long-term incentive plan that we just passed, and we are being asked if we can briefly describe the triggers for the LTIP. So, I don't know, Oscar if or Moshe if you want to take this one?
Oscar Iglesias: Yeah, I can jump in. Yeah. As we mentioned earlier in the presentation, the program is a five-year program and has really three baskets, three types of awards, the first being restricted stock units. These are upfront grants that vest pretty much linearly over the course of the five-year period, about 20% per year. Those are fairly straightforward. The next basket is stock options. And I think the key there is that they're struck at $10 per stock option. Obviously, the $10 being the price of HR, the private investors invested in our transaction and our business combination to the type last November 30. And the last piece is the deferred payment writing. This is effectively a deferred cash payment at the end of the five-year plan. It's based on value creation. It's the only component of the plan that's not linked directly to the evolution of the share price. And it's based on a similar -- similar to the variable compensation bonuses that we have on an annual basis is based on the year five performance and the value creation, the equity value creation of the business versus the baseline has established in the business combination itself. I think the target to achieve 100% payment under the deferred payment rights is $300 million of equity value creation effectively a doubling of the equity value of the business. So, I think that's kind of the high level from -- in terms of investors having a view of how directors and managers will be aligned with shareholders.
Operator:
Guillermo Lancha: Okay. We have another question on the webcast. The target market -- target addressable market increase in Mexico and Argentina, does this refer to H2GC estimates or also to cover online in-house estimates for these markets?
Oscar Iglesias: I'm sorry, go ahead Guillermo.
Guillermo Lancha: I was going to address it to you, sir.
Oscar Iglesias: Yeah. I think in Mexico, our TAM, we have a -- it's a combination, the updated. I believe these are less than a month old, H2GC forecast through 2026, and then we take an estimate, we try to anchor around 2027 as the target year from a TAM standpoint. But largely, the evolution in the upward revision is H2GC. In the case of Argentina, it's a number of different sources, but I think generically would be more accurate to say that it's an internal estimate that we formulate as it relates to expectations. And, obviously, that's going to be evolving over time as we and other operators in the city and the province and elsewhere, start learning a little bit more about the Argentine customer and the potential for growth in the market.
Guillermo Lancha: Okay. So we don't have any more questions on the webcast. I don't know, operator, if we have anyone else through the line.
Operator: There are no further questions on the phone line. The floor is yours, Mr. Lancha.
Guillermo Lancha: Okay. So if there are no further questions, we will leave it here for now. Thanks again, everyone for connecting. And, of course, feel free to reach out to myself or Oscar -- hold one, we have a last minute question that’s coming from the webcast. So let's do it. While you obviously need to preserve most of your cash for growth, even as well as stock repurchases at current prices will be very accretive over the long term? Any thoughts?
Oscar Iglesias: Yeah, I can take this one. I mean, we had this question at the -- on our prior earnings call, and I think it's a very valid question, and it's something that we always -- we will have to have on our minds, especially where given current levels where the stock is trading, but it's not something that today we have contemplated the business is performing. It's performing in line with our expectations. I think our expectations, as you've seen with our three-year guidance in terms of revenue growth is ambitious. The focus continues to be on those core markets. The focus continues to be preserving that cash to invest in the business so long as both those dynamics as long as the unit economics continue to hold, as so long as the opportunity continues to be there. So I don't think there's any change in terms of what we would be recommending from a management standpoint of what our majority shareholder may be thinking as it relates to the utilization of that cash.
Guillermo Lancha: Okay. Thanks Oscar. So no more questions on the webcast either. So thanks again, everyone, for connecting today. And feel free to reach out to myself or Oscar, if you'd like to discuss anything further. Otherwise, we will speak again at the end of August for our Q2 2022 results. Thanks, everyone, and hope you have a nice summer. Thank you.
Operator: This concludes today's conference call. Thank you for your participation. Everyone may now disconnect.
